The preparation of German entrepreneurs for the different cultural peculiarities of negotiations with Chinese business partners E-Book

Monika Koeckeritz

• Herausgeber: Books on Demand
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 123

Veröffentlichungsjahr: 2015

Beschreibung

Today People’s Republic of China is emerging as one of the major global economies. But a lot of negotiations between German and Chinese businessmen have failed in China because German entrepreneurs have not been sufficiently prepared for the different cultural peculiarities of negotiations with Chinese business partners. This dissertation will analyse the cultural peculiarities of negotiations with Chinese business partners. Different theories about culture, communication and negotiations and their interactions are examined. The researcher will analyse differences between the German and Chinese business culture including the values influencing the German and Chinese business behaviour and communication style. A comparison of the German culture and negotiation skills with the Chinese culture and negotiation skills will be drawn. Prerequisites to commitment in China will be investigated and the Chinese framework of communication will be identified. Furthermore the Chinese bargaining and negotiation tactics as well as the purpose and format of Chinese negotiations will be discovered and the importance of “guanxi” and “mianxi” and their effects on business behaviour will be identified. The researcher will also advance the hypothesis that China has faced and will face the influence of materialism as a force undermining traditional values. To prove this hypothesis, she will analyse potential factors and forces that influence Chinese culture and with it the negotiations with Chinese business partners.

Leseprobe

TABLE OF CONTENTS

PREFACE

ABSTRACT

LIST OF TABLES

LIST OF FIGURES

CHAPTER 1

INTRODUCTION

1.1. Background of the Problem

1.2. Problem Statement

CHAPTER II

REVIEW OF LITERATURE

2.1. Culture

2.1.1. Introduction to culture

2.1.2. Definitions of culture and its dimensions

2.1.3. Cultural change; its factors and forces

2.2. Communication

2.2.1. Introduction to communication

2.2.3. The spoken language – verbal communication

2.2.4. The unspoken language as nonverbal communication

2.2.5. Barriers of effective communication

2.2.6. Improving communication

2.3. Negotiations

2.3.1. Introduction to negotiations

2.3.2. Types of negotiation

2.3.3. Elements of negotiation

2.3.4. The negotiation process

2.3.5. Improving the effectiveness of negotiations

CHAPTER III

METHODOLOGY

3.1. Aim of the research

3.2. The choice of the topic

3.3. Methodology and data collection

3.4. Data analysis and interpretation

3.5. Validity, reliability and limitations

CHAPTER IV

ANALYSIS AND PRESENTATION OF FINDINGS

4.1. The Chinese culture

4.1.1. Historical backgrounds and their business implications

4.1.2. The people and their values

4.1.2.1. Some remarks

4.1.2.2. Characteristics of people

4.1.2.3. Hofstede’s cultural dimensions

4.1.2.3.1. Hierarchy – Power Distance

4.1.2.3.2. Individualism vs. Collectivism

4.1.2.3.3. Uncertainty avoidance

4.1.2.3.4. Masculinity vs. Femininity

4.1.2.3.5. Long-term orientation vs Short-term orientation

4.1.2.3.6. Confucian Dynamism

4.1.2.4. Trompenaars’s cultural dimension

4.1.2.4.1. Universalism vs. Particularism

4.1.2.4.2. Neutral vs. Emotional cultures

4.1.2.4.3. Specific vs. Diffuse cultures

4.1.2.4.4. Achievement vs. Ascription

4.1.2.4.5. Attitudes towards time

4.1.2.4.6. Attitudes to environment / nature

4.1.2.5. Other concepts

4.1.2.5.1. Gender role

4.1.2.5.2. Space concept

4.1.3. Most important social values in China

4.1.3.1. Guanxi

4.1.3.2. Mianxi (Mianzi)

4.1.4. The idea of communism

4.1.5. Bureaucracy, corruption, legal security

4.2. Communicating with Chinese

4.2.1. The spoken Chinese language as verbal communication

4.2.2. The unspoken language of Chinese people as nonverbal communication

4.3. The art of negotiation in China

4.3.1. Preparation of negotiations

4.3.1.1. Some introductory remarks

4.3.1.2. The choice of foreign company names and their product names

4.3.1.3. Time

4.3.1.4. Relationships

4.3.1.5. Gifts

4.3.1.6. Statistics and commercial documents

4.3.1.7. Business documents and presentations

4.3.1.8. The last option

4.3.2. Behaviour before and during negotiations

4.3.3. Negotiations themselves, negotiating strategies and tactics

4.3.3.1. Negotiating from start to finish

4.3.3.2. Negotiating strategies and tactics

4.3.3.2.1. Chinese strategies during negotiations

4.3.3.2.2. Chinese tactics

4.4. Changes of Chinese culture and negotiations

4.4.1. Introduction

4.4.2. Factors and forces influencing the Chinese culture

4.3.4. How could cultural changes affect negotiations with Chinese

CHAPTER V

DISCUSSION

5.1. Relationship of the results to the proposed objectives

5.2. Relationship to published literature

5.3. The role of theory, grounded or otherwise

5.4. The appropriateness of the methodology and data collection

5.5. The effect on professional practice

CHAPTER VI

SUMMARY AND CONCLUSIONS

6.1. Summary

6.2. Conclusions

6.3. Recommendations for future research and practical suggestions

REFERENCES CITED

BIBLIOGRAPHY

APPENDIX A

PREFACE

In 2005 I submitted my MBA-dissertation about the subject “The preparation of German entrepreneurs for the different cultural peculiarities of negotiations with Chinese business partners” at the University of Liverpool (Specialization: International Management).

The two markers and my instructor John Unruh from the United States recommended me the publication of my dissertation. In their opinion the material was a very useful guide to German entrepreneurs wanting to do business in China. They stated that my thesis was well-written and full of excellent information that entrepreneurs could certainly benefit from it. In their view the dissertation was a first class piece.

In 2005 I took a leadership position. I worked 12 to 16 hours a day. Therefore I have had not enough time to publish my dissertation. But I was always interested in that subject. I have been following the media to economic relationships between German and Chinese entrepreneurs. Now, ten years after my graduation, I could recognise that cooperation between entrepreneurs of both countries are still difficult and can fail because of different cultures and traditions. In particular, older Chinese businessmen are committed to traditional values and behaviours. The problems of cultural differences between German and Chinese people are still of current importance.

That is the reason, why I decided to publish the findings of my dissertation 10 years after my graduation.

Thank you!

ABSTRACT

The preparation of German entrepreneurs for the different cultural peculiarities of negotiations with Chinese business partners

by

Monika

Koeckeritz

Today People’s Republic of China is emerging as one of the major global economies. The country’s reform, opening - up, vigorous economic development as well as its transition from the planned economy to the market economy have attracted more attention from German entrepreneurs. But a lot of negotiations between German and Chinese businessmen have failed in China because German entrepreneurs have not been sufficiently prepared for the different cultural peculiarities of negotiations with Chinese business partners. There is an increasing demand for lecture and training courses as well as literature relating to that subject. Until now German publishers have not paid enough attention to both negotiations and Chinese culture.

This dissertation will analyse the cultural peculiarities of negotiations with Chinese business partners. Different theories about culture, communication and negotiations and their interactions are examined. The researcher will analyse differences between the German and Chinese business culture including the values influencing the German and Chinese business behaviour and communication style. A comparison of the German culture and negotiation skills with the Chinese culture and negotiation skills will be drawn.

Prerequisites to commitment in China will be investigated and the Chinese framework of communication will be identified. Furthermore the Chinese bargaining and negotiation tactics as well as the purpose and format of Chinese negotiations will be discovered and the importance of “guanxi” and “mianxi” and their effects on business behaviour will be identified. The researcher will also advance the hypothesis that China has faced and will face the influence of materialism as a force undermining traditional values. To prove this hypothesis, she will analyse potential factors and forces that influence Chinese culture and with it the negotiations with Chinese business partners nowadays and in the next future.

LIST OF TABLES

1. Common grounds and major differences between Chinese and German culture, communication and approaches to negotiations

LIST OF FIGURES

1. Hofstede’s “Onion Diagram” : Manifestations of culture at different Levels of Depth

2. Trompenaars’s model of culture

3. Outside influences, origins, societal norms, consequences

4. The communication process

5. The communication model by Claude Shannon and Warren Weaver

6. Americans and Japanese Communicative Conflict in Negotiations: A Conceptual Model

7. Chinese course of negotiations

8. German course of negotiation

CHAPTER 1

INTRODUCTION

1.1. Background of the Problem

“The whole world’s gaze is fixed the on People’s Republic of China – not just because the country is vast and growing rapidly, but because it profoundly affects the fortunes of companies everywhere.”1 Since China’s accession to the World Trade Organization in 2001 foreign companies have been much more interested in relations to Chinese companies. China’s market potential is huge, and there are a lot of foreign entrepreneurs (including German ones) who want to seize the promising commercial opportunity. Foreign direct investment and international trade are the preferred business activities.

The economic reforms began in China at the end of 1978. Deng Xiaoping introduced a policy of opening up to the outside world. Since then China’s trade with other countries has increased steadily.2 The Chinese government has moved the economy “from a sluggish, inefficient, Soviet-style centrally planned economy to a more market oriented system.”3

China’s economy boomed past years. According to the National Bureau of Statistics of China (NBS) the gross domestic product (GDP) grew even faster in 2004, expanding at a blistering pace of 9.5% after 9.3% the previous year.4 The spokesman for the National Bureau of Statistics in China, Zhen Jingping, said that China’s economy is expected to maintain stable and rapid growth in 2005.5

Consequently China is attractive to foreign investors. The foreign direct investment grew steadily from $40 billion in 2000 to $60 billion in 2004. China’s relatively stable and increasingly transparent investment environment has become a competitive manufacturing base as well as a lucrative and promising market. Nowadays China is an export base as well as a key market and site for research and development (R&D), too.6

The Chinese President Hu Jintao commented in November 2004 that China is committed to continued opening up and active participation in economic globalization. China would remain a responsible player in the global economy and make efforts to push forward greater cooperation in global and regional trade. The country would be ready to contribute its share in advancing win-win cooperation for sustainable development.7 In that way foreign investment could remain a strong element in China’s remarkable economic growth.

In 2004 Germany was China’s largest trading and technology co-operation partner in Europe while China was Germany’s biggest trading partner in Asia. The bilateral trade volume grew to $41.8 billion in 2003.8 Until 27th November 2004, 1470 German companies were registered in the Directory of German Companies in China. Large urban areas are the primary locations of these companies. About 500 of them are located in Beijing, 22% in Shanghai, 12% in Guangdong (including Canto n). Tianjin, Sichuan, and Shanghai have each 3%.9 More and more German medium -sized companies are considering investments in China. They want to use China’s huge potential of cheap labour and the huge Chinese domestic market. More than 80% of Germany’s 2002 China FDI went to manufacturing. According to a survey of the Deutsche Bank German investment in China could more than double by 2010, rising from a total of 7.9 billion euros ($9.6 billion) at the end of 2002 to about 20 billion euros ($24.2 billion) in 2010. The survey also indicates that China is an essential part of the business strategies of about a third of Germany’s largest companies.10

1.2. Problem Statement

According to Schlevogt the “entrepreneurial revolution” is taking place in China.11 This coinage expresses the dramatic growth in private economic activity, fuelled mainly by the success of domestic private enterprises, with foreign direct investment producing less uplifting results from the investors’ point of view. In Schlevogt’s opinion the scale and speed of this revolution are unrivalled by any other enterprise boom in the world – nothing comparable has happened at any time in human history. But the management of Chinese private enterprises and its techniques differ from management techniques used in German businesses.

Chinese sophisticated techniques are cultural artefacts, influenced by long-standing Chinese cultural traditions. Thus, these cultural differences affect negotiations.

Sung -Hee Lee has discovered that about 70% of all negotiations between German and Chinese businessmen have failed in China because German entrepreneurs have not been sufficiently prepared for the different cultural peculiarities of negotiations with Chinese business partners.12 Now there is an increasing demand for lectures and training courses as well as literature relating to that subject. German publishers have not paid enough attention to both negotiations and Chinese culture until now.

This dissertation will analyse the cultural peculiarities of negotiations with Chinese business partners in order to enable German businessmen at different educational institutions to negotiate in China successfully. A comparison of the Chinese with the German culture as well as negotiating skills will be drawn.

Nevertheless, culture is not stable. A number of forces have already changed and will change the Chinese culture in the next future and with it the negotiations with Chinese business partners. The dissertation will also include an analysis of factors and forces that influence the culture in China and their effects on negotiations in the long term.

1 Anon (2004) Behind the Mask. The Economist. Vol.370, No.8367 (20th March) p.3

2 Anon (2004) China’s Exports & Imports, 1952-2004. from http://www.chinability.com/Trade.htm

3 Anon (2005) Economy: China. CIA-The World Factbook -China (10th February) from http:www.cia.gov/cia/publications/factbook/print/ch.html

4 Anon (2005) China’s economy grew 9.5% in 2004, fastest in 8 years. CHINAdaily (25th January) from http://www.chinadaily.com.cn/english/doc/2005-01/25/content_412071.htm

5 Ying, Wang (2004) Economy to maintain fast, stable momentum. CHINAdaily (4th December) from http://www.chinadaily.com.cn/english/doc//2004-12/04/content_397289.htm

6 Anon (2005) China bucks global foreign investment trend. Chinese Academy of Foreign Trade and Economic Cooperation. Asia Times (15th February) from http://www.atimes.com/atimes/printN.html

7 Hu, Jintao (2004) Hu: Economy to grow about 9% in 2004. CHINAdaily (21st November) from http://www.chinadaily.com.cn/english/doc/2004-11/21/content_393388.htm

8 Wen, Jiabao (2004) Wen ends German visit, arrives in Brussels. CHINAdaily (6th May) from http://www.chinadaily.com.cn/english/doc/2004-05/06/content_328404.htm

9 Rose, T. (2004) German firms increase China investment. United Press International (26th August) from http://www.upi.com/view.cfm?StoryID=20040824-041834-4367r

10 Rose, Thom (2004) German firms increase China investment. United Press International (26th August) from http://www.upi.com/view.cfm?StoryID=20040824-041834-4367r

11 Schlevogt, K.-A. (2002).The Art of Chinese Management. Oxford University Press

12 Lee, S.-H., (2004) Interkulturelles Asienmanagement. Expert Verlag. Renningen

CHAPTER II

REVIEW OF LITERATURE

2.1. Culture

2.1.1. Introduction to culture

“A fundamental shift is occurring in the world economy. We are moving away from a world in which national economies were relatively self-contained entities, isolated from each other by barriers to cross-border trade and investment; by distance, time zones, and language; and by national differences in government regulation, culture and business systems. And we are moving toward a world in which barriers to cross-border trade and investment are tumbling; perceived distance is shrinking, due to advances in transportation and telecommunications technology; material culture is starting to look similar the world over; and national economies are merging into an interdependent global economic system. The process by which this is occurring is commonly referred to as globalization”.13

These sentences serve as introduction to the following literature review and belong to C.W.L. Hill. But the differences between the various countries still exist and will exist for a long time. In this dissertation the culture of China and Germany will be considered in more depth in order to create a guideline as a potential means of preparation of German entrepreneurs for negotiations with Chinese business partners.

2.1.2. Definitions of culture and its dimensions

The word “culture” comes from the Latin culture, which is related to cult or worship and refers to the result of human interaction in its broadest sense.