Guanxi in Jeopardy Responses

Question 1:
1) The biggest difference I see is with the individual vs. collectivist aspect of the Hofstede model that can
affect negotiating. China is a highly collectivist society which means that they act in the interests of
groups rather than themselves. When negotiating, a person from the US might want to get straight to
business while a Chinese person will want to build personal relationship before proceeding to
negotiating. The massive difference in this aspect could also call for misunderstanding. A Chinese might
perceive an American acting in the interest of him/her self rather than in the interest of a group or the
company. They wont be willing to negotiate with somebody that is acting in their self-interest. Also
while negotiating, an American might single out a person from the group, which can create conflict
because the group is part of ones identity in China.
2) Another big difference that can impact negotiating is that of short vs. long-term orientation. The US is
a very short-term oriented country whereas, China is long term oriented. This means that when it comes
to negotiating, the Chinese might be thinking far into the future long term impacts while the Americans
would only think with a short term mentality. A difference in performance reports will also be in
conflict. The US produces reports on a quarterly/short term basis whereas China would be producing
them on a yearly basis. This has to be accounted for while negotiating.
3) Power distance will also impact the negotiating style. China thinks that is acceptable to have
inequalities between people whereas in the US all people are equal in the eyes of the law. When
negotiating, a Chinese executive might not see it just for a US person to ask someone of lower rank for
his or her thoughts. They might start thinking why the American is asking this person. A US company
might also want to consider who they send over to negotiate. If the Chinese see that that person is of a
lower rank, they will not want to negotiate with that person.
4) The fourth difference that would impact the negotiating styles and strategies is that of indulgence. China
scores really low on this, which means that they might be cynical or pessimistic when negotiating. They
dont like to indulge themselves because it is restrained by the societies norms. The US will show
greater indulgence, like visibly celebrating a great deal they just made, which can come off as
offensiveness to the Chinese.
5) The last but not least difference that will impact negotiating styles is that of uncertainty avoidance. The
Chinese like to avoid uncertainty more than the US Americans. This means that while negotiating, they
might ask for more details than the US can provide. The US will be more tolerant of uncertainty in a
negotiation while China wouldnt be as much.
Question 2:
a)
Team Member

Standpoint
Business

Pros

Deng Zang

Ai Hwa Chew

Cultural

Business

B.S. in Business
Administration
Factory Director (10
Years)
Knew his culture well
Wanted to build
strong relationships
with the US team
Taken some post high
school classes

Cons
Poor English

Took their time as they are culturally

raised but maybe they should have
prepared for the western culture as
well and acted accordingly
High school graduate
He is one who lost educational

Guanxi in Jeopardy Responses

Serious, Diligent &

competent deputy
director
Well respected

Cultural

Business

Cultural

Business

Wang Yoo

Tom Sherman

Cultural

Barb Morgan

Business

Cultural

He understood his
culture and acted
accordingly

B.S in Accounting
Fluent in English
Minister of Finance
for 15 years
Cousin of Deng Zang

B.S. in Mechanical
Engineering
Highly
knowledgeable and
technical about
industrial operation
32 years at
Electrowide

Accepted the gift

(eventually)
Played along with the
Chinese culture in the
beginning even
though he didnt
understand the
meaning behind it all

B.S in Psychology &

Computer Science
Speaks
conversational
Chinese
Project manager of a
venture in Sweden
Affable with the host

opportunities
Poor English
Distributed no agenda for the
business meeting
Changed the meeting place and time
the night before at 11pm
Didnt understand Western gift giving
and got irritated when Top refused
Didnt attempt to understand the
western culture
Rigidly Commissioned the objectives
for Motosuzhou with an
unwillingness to change
Didnt understand the American
context in terms of language even
though he was fluent in English
Plans to retire at the end of the year
Went behind the back of the Chinese
and created a contract IN English.

Only international experience was a

symposium in Canada
Didnt understand the Chinese way
of negotiating
Decided not to apologize for
irritating Hwa during gift giving (the
Chinese were hearing no but the
heart aspect wasnt there)
Grew restless and forced smiles
Seeking overseas assignment to cope
with divorce.not to help the
organization

Took offense to the male counterparts

Guanxi in Jeopardy Responses

Business

Mark Porter

Cultural

initially
Enjoys a night of
quyi
B.S in Finance
Well rounded in
experience but fast
paced
type-A personality
focused on excelling
no matter what the
cost or sacrifice

not interacting with her

Enthusiasm diminished after being
offended by the males not engaging
in conversation
Fast tracker rotating jobs every 1.5
years
No international experience
Young comparatively
Stopped attending events
Didnt show interest or appreciation
Preoccupied thoughts with business
related matters when on outings

b) I do not believe either team was suitable for the negotiating task. I would also say that the Chinese team
had less preparations to make since they were the hosting country and still were not able to. The US
team was not suitable at all but just because China was the meeting place, does not mean that China
shouldnt have done research on western culture and ways of doing things. The Chinese team pushed
their customs and acted according to their culture without considering how the Americans did things.
Their team was older and very much rooted with the Chinese culture. I think because they were the
hosting country, they were more suitable than the US team in comparison. The US team was not suitable
at all. They had one person (Tom) with no international experience and highly technical/knowledge
based person as the leader of the task. One person on the team (Mark) was very fast paced, young
comparatively, and again had no international experience. The one person (Barb) with some
international experience was working to cope with a divorce and had other responsibilities within the
company while on the assignment. They all hadnt researched the country, their culture, their language,
their business etiquette or anything. They saw an opportunity and they took it but they didnt make any
preparations other than develop their business plan. Both teams could have prepared better and came to
a middle ground in terms of understanding each others culture because that is what negotiation is all
about; coming to a middle ground.
Question 3:
1. The US team started thinking that the Chinese team was going to accept the terms and that they
understood the concessions by the expressions they were giving. The US team was using the selfreference criterion where they were using their own culture to assess the Chinese culture. The Chinese
not asking questions led the US team to believe that they understood because that is what the norm is
here. Obviously this was a big misunderstanding because it turned out that they had many questions and
disagreements between the two.
2. There was a language barrier between the two teams as well. Not understanding the language, one of
the five elements of culture, can create many misunderstandings. For example, when the Chinese team
nodded or said yes, they were not agreeing with the terms, they were simply being polite and saying ok,
we get it. They value relationships more than confrontational disagreements that might ruin the
relationship.
3. Another cultural conflict was that of gift giving. In China, gift giving is a sign of trust, strengthening of
a relationship and part of their culture. It is a mean of communication for these things in China.

Guanxi in Jeopardy Responses

However, Tom was unable to understand that and rather refused tactfully to accept that gift until Ai
Hwa seemed to get irritated. Again this is a culture mistake that the US team failed to recognize and it
could have hurt the relationship as well as make thing awkward.
4. In the beginning when the US team was touring China and visiting their scenic places also created a
culture misunderstanding. Tom wanted to get right down to business and thought thats how the first
couple of weeks would be spent. They were really disengaged and disinterested in the outings. He again
failed to acknowledge that the Chinese like to build relationship through these outings/dinners because
they are a collectivist society. They would like to get know the people/company and trust them before
they even start discussing business matters.
5. The last misunderstanding between the two teams was that of not knowing that the Chinese like to
demand at extreme points to start off and then lay off a bit by bit. They are not the ones that get straight
to the point in what they want and what they can potentially give away to the other team. The cultural
reason behind this is that the Chinese are a high context society. With this misunderstanding, the US
team decided to keep arguing and then to visit a lawyer to draft a contract, which was not the right way
of going about it.
Question 4:
Toms strategy to present the contract to Ai Hwas team was inappropriate from the cultural and business
standpoint. From the cultural standpoint, he broke the trust they had between the two teams. The Chinese team
was completely unaware that Tom and his team were going to go to a US based law firm. The Chinese team had
spent weeks trying to build this relationship of trust and it was broken in a matter of hours. They took offense to
that because this is not something you do when negotiating. Another thing inappropriate from the cultural
standpoint was that of being direct when he entered the room for the meeting with Ai Hwa. Tom didnt ease the
Chinese team into the contract and then present it. The Chinese are never direct about anything because they are
a high context society. They will never be straightforward like Tom presenting the contract immediately. The
last thing to take into account is that contracts are not enforced in the Chinese culture. It is the relationship
that matters there, not a piece of paper outlining what they can and cannot do. It was clear that Tom didnt know
this aspect of the Chinese culture. From the business standpoint, it was inappropriate because nothing was
agreed upon. They were still discussing and Tom took the initiative to make a contract based on what the
American team wanted. That is not what negotiating is about. It is about fulfilling the needs of both companies
and coming to a middle ground with their concessions. Another inappropriate thing about the strategy was that
the contract was in English and only in English. Tom didnt bother to take into account that the Chinese team
primarily didnt know English. This was extremely inappropriate and offensive. Not only did he break their
trust, but also he managed to be offensive and only create the contract in a language they didnt understand. The
last thing to that was inappropriate is that within the contract, Tom thought of every possible contingency and
addressed them in the contract. He left no room for negotiation/loop holes/questions, which is what they were
there for. To negotiate, ask questions, determine a middle ground and a way of implementing those that they
agreed on. There was never a consensus on how the agreements would be honored. Tom took it upon
himself and decided a extensive detailed contract in English was the way to go about it.
Question 5:
1. I think the first thing both teams need to do is research both cultures. Who did what, How did they do it,
and more importantly why did they do it. This is a starting point to salvaging the negotiation. The both
teams need to understand what went wrong and how and why so they can avoid making the same
mistakes again.

Guanxi in Jeopardy Responses

2. Once they do this, the American team should send them a letter of apology and ask them to meet again
for dinner as their treat. At the dinner, treat them appropriately and even buy them a gift while
apologizing for their actions.
3. Try to build that relationship that the Chinese party seeks. Go out on outings and have dinners and
regain their trust. The second time around is going to be much harder so the American team should
really prepare for each thing. They should be careful not to rush into business matters and avoid being
direct with them. The American team should be aware that this time the process is going to take much
longer than the first time. Some sacrifices will need to be made if this negotiation is really going to work
out.
4. When the relationship is established once again and the time is appropriate, both teams should sit down
and discuss task related information. Maybe before even starting that, establish how the agreements that
will be made are going to be honored. This is crucial to in the beginning rather than the end when all
agreements have already been made. Also, both teams should try to understand each others viewpoints
on the task related information.
5. The American team should now understand that when the Chinese are nodding, they are not agreeing
with the terms they stated.
6. Afterwards, persuade each other on what each team wants. Dont take it upon each other and assume
that one team can do it better than the other. Already know which concessions you are willing to give up
and which ones you want for sure. Knowing this beforehand will be beneficial when it comes to
negotiating.
7. Lastly, when agreements are made, both teams should already know how those agreements are going to
be honored. Implement that. Whether thats a contract or something else.
8. Once the negotiating is done, dont pack up and leave. Celebrate with the Chinese party and leave on a
good note to strengthen to relationship. Always keep in mind the relationship aspect when making every
move and act accordingly.
9. Enjoy the benefits of the deal!