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The Impact of Cultural Difference on Sino-American Business NegotiationCONTENTSAbstract1Introduction2Chapter 1 Analysis of Cultural Difference Between China And America5 1.1 Individualism vs. Collectivism51.2 Inductive Thought vs. Deductive Thought61.3 Low-context vs. High-context71.4 View of Time 8Chapter 2 The Impact of Cultural Difference on Sino-American Business Negotiation112.1 Impact on Goals: Contract or Relationship?112.2 Impact on Communication Style: Direct vs. Indirect122.3 Impact on Conflict Resolution132.4 Impact on Agreement Building: Bottle-up vs. Top-down142.5 Impact on Risk-taking Propensity152.6 Impact on Decision-making: One Leader vs. Concensus16Chapter 3 Suggestions for Effective Cross-cultural Negotiation3.1 Enhancing Cultural Awareness173.2 Preparing Well before Negotiation183.3 Overcoming Communication Obstacles in Business18Conclusion20Notes22Bibliography23Acknowledgements24 Abstract：With the rapid development of economic trade between china and America , the business contacts of the two countries become more and more frequent , the importance of business negotiation gets obvious gradually. However, the huge cultural differences between the two countries may give rise to potential cultural conflicts and unnecessary misunderstandings. So it is imperative that negotiators should learn the cultural factors in Sino-U.S. business negotiation. The thesis emphasizes the importance of taking cultural sensitivities into consideration during business negotiation to make proper negotiation tactics. In view of such a situation, this thesis makes an effort to highlight the cultural impacts on negotiation and puts forward several suggestions in reconciling cultural differences in order to make the negotiation develop smoothly.Key words: cultural differences; Sino-U.S. business negotiation; impact 摘要:中美两国间经济贸易飞速发展，双方商务交往活动越来越频繁，商务谈判的重要性也日渐显现。然而，由于中美两国之间存在着巨大的文化差异，中美两国谈判者之间很可能出现文化冲突以及不必要的误解。因此，两国商务谈判者了解中美文化的差异显得十分必要。中美双方在商务谈判中必须增强对文化差异的敏感性，制定出合适的谈判策略。本文重点讨论了中美之间的文化差异及其对商务谈判的影响并提出了化解文化冲突的几点建议，使中美贸易谈判能顺利进行。关键词: 文化差异;商务谈判;影响Introduction Nowadays, due to the rapid development and integration of global economy, international business contacts and activities are increasingly frequent and complex. The unprecedented growth of international business has resulted in an increased volume of face-to-face negotiation between members of different culture. While pursing the success of international business negotiation, it is imperative for negotiators to know the cultural difference of negotiating parties. As we all know, China is one of the largest economic country in the world, and America is our biggest trade partner. Since the normalization of relations between China and America began 25 years ago, Sino-U.S. business relationships have been growing at a fast pace. Negotiations have often been a difficult process for both sides, for cultural and other reasons. Cultural differences of China and America constitute an enormous challenge for cross-border negotiation. Negotiation is a kind of basic human activity that were involved almost everyday. International negotiation is the process in which two or more entities from various cultural backgrounds discuss common and conflicting interests in order to reach an agreement of mutual benefits. It is clear that international business negotiation refers to the negotiation that take place in the business world and deals with business relationship. It may be understood as encounters between firms(or economic organization) with the goal of reaching agreement to gain economic benefits. It is no surprise that when business people negotiate across cultures, the process is often more difficult than within their own culture. Culture differences and communication barriers in how the negotiation game is enacted can lead not only to simple misunderstandings, but sometimes a complete breakdown of the process and relationship between the parties. When negotiating internationally, there are a variety of factors contributing to the result of business negotiation, such as geographical distances, political situation, economic factors and foreign cultural backgrounds. However, the most crucial factor is the negotiators sensitivity and responsiveness to the new cultural context. But in fact, members with different cultural background may behave quite differently, and may focus on different aspect of business. Therefore it is better for both negotiating parties to understand their cultural difference well. Culture, in humans history, has been defined in a variety of ways, and there is no agreement on a single definition of the term. More than a century ago, “culture” was defined as that complex whole which includes knowledge, belief, art, morals, laws, customs and any other capabilities and habits acquired by man as a member of society. More recently, “culture” was again treated as the collective programming of the mind which distinguishes the members of one human group from another. As America is a typical Western country while China is a typical Eastern country, there exists huge cultural differences between this two countries. In the Sino-U.S. business negotiation, cultural difference must be paid much attention, or a lot of impacts will be produced, such as impacts on negotiating goals (business or relationship) and attitudes (win/win or win/lose). This thesis focuses on the impacts of cultural difference on Sino-U.S. business negotiation. It is divided into three chapters. Chapter one is the analysis of cultural difference between China and America. For example, Chineses collectivism vs. Americans individualism; low context vs. high-context; time perception. Chapter two highlights the cultural impacts on Sino-U.S. business negotiation. It includes the following six impacts: goals, communication style, conflict resolution, agreement form, risk-taking propensity and decision-making process. Chapter three presents some suggestions according to cultural difference for effective negotiations. Chapter 1Analysis of Cultural Difference between China and America As is known to all, China is a typical Eastern country, while America is a typical Western one. There is no doubt about their big cultural differences. In view of business negotiations, many researchers have found some core values concerning business cultures of China and the United States.1.1 Individualism vs. Collectivism“Individualism-collectivism is the major dimension of cultural variability used to explain cross-cultural differences and similarities in communication across cultures” 1. Individualistic cultures emphasize personal rights and responsi- bilities, privacy, voicing ones own opinion, freedom and self-expression. Collectivistic cultures emphasize community, collaboration, shared interests, harmony, tradition and public good. Chinese culture is collectivism-oriented. The Chinese people think that harmonious relationships are the basis of our society, they place high priority on collectivists interests and values. In their minds, a “we” consciousness prevails: identity is based on the social system; the individual is emotionally dependent on organizations and institutions; the culture highlights social organizations; organizations invade private life and the clans to which the individuals belong. Different from Americans, when in business negotiation, Chinese people always choose mutual self-benefits, seek to advance the interests of the group and group rewards. Obviously, individualism is highly prized in the United States. In American culture, individual achievement, sovereignty and freedom are the virtues most glorified and canonized. The value of the individual is supreme and it is the individual who has the capacity to shape his or her own destiny. They believe that “God always help those who help themselves”. In terms of business negotiation, American negotiators tend to be self-motivated and their business relationships are based on self-interest.1.2 Inductive Thought vs. Deductive Thought “Thinking patterns refer to forms of reasoning and approaches to problem solution. Thinking patterns differ from culture to culture, a logical, reasonable argument in one culture maybe considered as illogical and undemonstrated in another culture”2.Sino-U.S. differences of thinking patterns mainly reflected in the inductive and deductive thought. Deductive thought is observing and considering everything in the world as a whole, paying attention to the overall function, complex relationship and operation process but not care about the internal structure of something. Chinese peoples thinking patterns belong to this orientation. For a thing, they would like to consider from general to detail, from abstract to specific. Therefore, at the very beginning of a business negotiation, Chinese negotiators would like to discuss the general rules which both parties should obey and mutual interests. They think that, once the general rules and cooperation willingness are determined, all the other questions are no more questions. They always emphasize the details must come after general principles. American culture is towards inductive thought. It is a kind of thinking pattern that focuses on analyzing complicated things into several simple elements and then study one by one. As Americans are affected by linear thinking and analytical thinking patterns, they pay more attention to the logical connects of a thing, in their minds, details is far more important than those abstract rules. So at the start of a negotiation, they will not act just like Chinese negotiators. Instead, they attach importance to specific aspects. They treat contract just as a set of clauses with legally binding that should be comply, that is to say, only real specific issues can make negotiation go smoothly. Americans are pragmatists, from their perspective, the beginning of negotiation process is a form, the world is made up of facts but not some concepts.1.3 Low-context vs. High-contextThere is another effective means of examining cultural similarities and differences by categorizing culture into high or low context. It is the information that surrounds an event, it is inextricably bound up with the meaning of the event. In other words, it refers to the amount of information that a person can comfortably gain. Chinese are in the high-context culture, and American people are in the low context culture. People in high context cultures prefer to communicate indirectly. Meanings are internalized in the context of message and must be inferred to be understood. There is a large emphasis on nonverbal clues, such as facial expression, movements, speed of the interaction and other subtle forms of nonverbal communication. Low-context communication is like a computer program, everything must be specified in the coded message or the computer will not run. In the United States, common expressions and sayings such as “get to the point” and “say what you mean” reveal the Americans emphasize on the content above context. For them, the environment is less important and non-verbal behaviors are often ignored, communication has to be made more explicit. Feelings and thoughts are expected to express in precise words, and information is more readily available. Such culture usually values a direct, blunt style and dislikes ambiguity. In contrast, China, which has a relatively high-context focus in communications, has sayings “Be aware of peoples faces and observe the color hue of their voices” stress the need to see beyond the obvious and to be discreet rather than plainspoken.The difference in communication style explains why American negotiators often consider their Chinese counterparts overly rhetorical and “inscrutable” in the way they speak. On the other hand, the Chinese are likely to consider Americans somewhat simplistic and nave. If the negotiation parties dont understand the context culture difference of each other, misunderstanding will occur.1.4 View of TimeTime, as an invisible but basic concept in cross-cultural study has showed its importance and diversity in the international business negotiation. Chinese and Americans have rather different time perceptions, which often result in the communication misunderstan- dings. In the thesis, I classified their time orientation differences into the following two groups.1.4.1 Mono-chronic vs. Poly-chronic SystemAccording to peoples understanding of time, Edward T. Hall divided time orientation into monochromic time system and polychromic time system. Generally speaking, Americans have the characteristics of monochromic time system, and Chinese hold the features of polychromic time system.Mono-chronic time system means doing only one thing at a time. People just concentrate on the special work for the specific time and spare no efforts to finish the task well. Sticking to the plan strictly and unable to stand to be interrupted are their consistent working styles. In American culture, people view time in a linear sequence and will start, carry out and complete any activity or task before they move onto the next one. They emphasize the speed and efficiency of what they have done and wish to establish the short-term relationships with others. Poly-chronic time system perceives time in the opposite way. People holding this concept regard time as separated and tend to do more than one thing simultaneously. For example, a Chinese manger may be on the phone, having a conversion with someone else in the room and taking notes, all at the same time. To polychronism, time plan is just a goal that maybe available in the future, it is allowed to be interrupted frequently and easily. So, in a Sino-American BN, Americans often appeared to be impatient and pursuit quick result. Relatively, as Chinese dont care bout how much time consumed in order to establish satisfied cooperation, they will have longer time to keep silent. Sometimes, they even perceive silence as a means of persuasion. 1.4.2 Past-oriented vs. Future-oriented Time orientation can also be divided into two categories: past orientation and future orientation. In America, people show great interest in the future, what somebody has achieved in the past is not that important, the past has gone, it is more important to know what plan they have developed for future. Chinese have a strong preference for past time orientation. They make more of an impression with their past accomplishments than those of today. Past-time orientation highlights past. Mostly, Chinese people admire the history and care about the past things, they prefer to explain the present through past experience. So when in an international BN with a Chinese negotiator, it will get better results if some past achievements or excellent aspects are referred to.Chapter 2 The Impact of Cultural Difference on Sino-American Business NegotiationCulture, as we said in previous parts, is a powerful factor shaping how people think, communicate and behave as well as negotiating styles. Different cultures have different values, attitudes, behaviors and linguistic styles, all of which can greatly affect the process and result of negotiations. Cultural differences of Sino-U.S affect the two countries negotiations in the following aspects.2.1 Impact on Goals: Contract or Relationship? Different cultures view the purpose or intention of a business negotiation variously. As we have discussed earlier, Chinese culture inclines to collectivism. Thus, Chinese culture can be regarded as relationship-orientated. A business negotiation is a time to develop a business relationship with the goal of achieving long-term mutual benefits in the eyes of Chinese. Contract, for the Chinese negotiators, doesnt mean finality but is generally a starting point. There is an old Chinese saying “you can hook the big fish with a long string.” Chinese business people are more willing to commit financial and human resources to develop a new potential market because they believe that their long-term investment will eventually lead them to large profits. American negotiators, on the contrary, generally tending to attach great importance to the result. To be precise, contract is everything. They prefer to devote their energy and time to the contract itself and attempt to achieve the finalization of the deal. Viewing the interpersonal relationship as incidental, they think of the signing of a contract between the parties as their primary negotiating aim. To them, contract is a binding agreement that outlines the roles, rights and obligations of each party.2.2 Impact on Communication Style: Direct vs. IndirectPeople from certain cultures tend to adopt direct and simple ways to communicate, such as Americans; while people from other cultures incline to choose indirect, more complex methods, such as Chinese. The difference in communication style, to a certain degree, also refers to how much people rely on nonverbal cues to convey and interpret intentions and information in dialogue. In business practice, what is actually said carries only part of the meanings of a message. Nonverbal cues, such as facial expressions, eye contact, gestures, touching pattern, silence can provide additional meaning.Chinese negotiators are more sensitive to and reliant on non-verbal cues. They will tend to use language that is indirect. A frequently quoted example to support this argument is the ambiguity of Chinese way of saying “yes” and reluctance of saying “no”. Indicators such as “maybe”, “difficult”, “Ill try”, “inconvenient” all carry implicit meaning of “no” in Chinese context. Silence is another weapon often used by Chinese negotiator. Silence cues may be interpreted either as evidence of agreement or disagreement. It can also be interpreted as demonstrating seriousness and sincerity in considering the matter. However, it may also be understood as evidence of a lack of interest, showing disagreement without directly expressing a negative opinion and injured feelings. American negotiators are less likely to notice non-verbal cues. They prefer to express their opinion directly and to the point; the choices of their words are precise, open and frank. They send their message in an exaggerated way, rather than simplifying them. In a conversation, compared with Chinese way of showing interest and agreement by nodding or smiling, Americans prefer to use verbal response to directly show them out. Silence in American context can be interpreted as negative signal showing disinterest or boredom, thus they try to avoid silence in communication, and are more willing to express “I dont know”, or “I dont agree with you” rather than silence.2.3 Impact on Conflict Resolution Conflict is very common in a business negotiation, not to mention in a cross-cultural business negotiation. On the whole, individualistic cultures meet confrontation actively while collectivist cultures tend to avoid direct conflict. For the collectivistic Chinese negotiators, the way they resolute the conflict is to ask for a third party, do their best to avoid the people concerning the problem and minimize inter-personal conflict. Under the influence of Confucian, Chinese people value harmony over conflict. It would be extremely rude and cause a loss of face to meet the conflict openly. On the contrary, conflict is regarded as an integral part of life by the people of individualistic cu
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