Business in China

Doing Business in China

Week I.

White face = bad person
Good and trusted person have red face
Always answer yes when someone asks have you eaten
(toujours attenuer ses propos : frequently, sometimes, usually..)

Yes doesn’t mean yes
Importance of the hierarchy

Culture overview
The cultural Bell Jar
(ordonnée ‘’number of person’’ / abscice vers la gauche ‘’reserved’’ (chinese for example), vers la droite ‘’emotional’’ (italians for example)

When we speak about culture: we must generalize but we mustn’t personalize

Article: “Chinese face 101” (face = mianzi) The importance in the west of self image and self esteem
Chinese face = showing respect to the other person

Face, idiomatically meaning dignity/prestigeLin Yutang considered the psychology of "face: "the psychological face makes a still more fascinating study. It is not a face that can be washed or shaved, but a face that can be "granted" and "lost" and "fought for" and "presented as a gift. Here we arrive at the most curious point of Chinese social psychology. Abstract and intangible, it is yet the most delicate standard by which Chinese social intercourse is regulated. * Losing face" means that one has lost his dignity, social standing, honor, and trustworthiness. * Traditionally, the most common insult in China is "You have no face." |

Chinese face * Primary method of social control * Powerful influence on behavior * Social relationships are defined (If you take someone’s face, he will use his network to push you out) * Personal responsibilities are maintained

* Following standards of address * Do nothing that’s face-threatening * Seek consensus * Use appropriate formality

Face in the workplace * Vagueness * Excessive formality and politeness (for example, au lieu de me critique mon boss va faire l’éloge de mon collègue) * Indirect or implicit speech * Conformity to social norms * Use of intermediaries * Chinese are extremely sensitive to criticism

Face is often the reason that * Employees won’t ask questions. * Sales people don’t probe. * Employees won’t follow through on complaints * Managers won’t correct employees * Negotiators are intransigents on contract terms. * Teachers are expected to have every answer (Chinese teachers never ever say ‘’I don’t know’’ or ‘’let me get the answer and we talk about it the next week’’) * Subordinates to foreign managers fell worthless

How do Chinese people feel about face?
A lot of Chinese want to move to global culture
‘’Having face makes you happy. If you don’t have face, you’re no different than an animal’’

WEEK II:

Review
The cultural Bell Jar
Face (Mianzi)

THE DOCTRINE OF THE MEAN (the golden mean)

In philosophy, especially that of Aristotle, the golden mean is the desirable middle between two extremes, one of excess and the other of deficiency. For example courage, a virtue, if taken to excess would manifest as recklessness and if deficient as cowardice.The Doctrine of the Mean (Chinese: 中庸; pinyin: zhōng yōng), is both a doctrine of Confucianism and also the title of one of the Four Books of Confucian philosophy. The text is attributed to Zisi (also known as Kong Ji), the only grandson of Confucius.The Doctrine of the Mean represents moderation, rectitude, objectivity, sincerity, honesty and propriety. The guiding principle is that one should never act in excess. The Doctrine of the Mean is divided into three parts: 1. The Axis – Confucian Metaphysics 2. The Process – Politics 3. The Perfect Word/Sincerity – Ethics (The Great Digest and Unwobbling Pivot, 1951). |

Represented by moderation, objectivity, sincerity, honesty
This is mean with the signification of average
Don’t try to be heroic, just try to get the middle, to be modest
Taking the middle path, the Middle way
Concealing oneself rather than standing out

Some principles of the doctrine of the Mean: * The nail that sticks out is hammered down * The tall wheat is the first to be cut * The lead duck is the first to be shot

Traditional Right manager global
No Chinese in this part
30% 20%

Corporate culture meets national culture * An unwillingness to excel * Passive outlook * ‘’it is enough’’ * ‘’it isn’t my business”

A Chinese philosopher “Maoz” said a quote that means : les gens devraient laisser les problèmes se regler par eux-mêmes (passive attitude)

How to change this (passive attitude, the doctrine of the mean)?
Introduce incentive? Jeep was the first company which introduces this. Some problems between the colleagues (red eyes..)
Mixed Chinese people with western workers?
Send Chinese people to Europe to learn how to work. BUT : western brain and Chinese bones

3 categories * The champions : people who want to change and have the skills the change * A massive middle : they could be better if they are encouraged * People who never change and don’t want to change

Catch people doing something right and reward them unexempendly (sans promettre des choses, strass et paillettes, they will not trust you). You have to get them to trust you slowly and slowly.

Chinese people prefers train than money

Examples
Performance management * Appraisals: Chinese people really don’t like it. It goes against the face; it goes against what Zhong yong said. * Rewarding failure: the idea in China is that everybody should have a bonus, even people who don’t work.

RITUAL POLITENESS

‘’ There are a great benefits to be derived from the Chinese custom of ritual politeness. It forces people to remain aware of the feelings of others and to conduct themselves at a higher standard’’.

‘’ It is a well-established fact that ‘familiarity breeds contempt’, particularly among close friends and spouses. Confucius observed long ago that this common human galling can be avoided simply by maintaining a degree of formal politeness in all of our personal (and business) relationships.

Positive and negative (politeness strategies)

Sometimes, ‘’thank you’’ is concerned offence.
To thank them means that they are not your friend.
Because a friend should do this for you.

Formal politeness is culture-laden
-please, thank you
- Bu you xie

Codes of behavior
-Welcoming, sending guests off
-Eating and Drinking

Chinese people use positive politeness (express concerns about the others) whereas western people use negative politeness according to Strategies for politeness and disagreement

* Hinting is a major strategy * Chinese use positive politeness * Concern for other party * Especially health and convenience * We use direct, negative politeness

When foreigners don’t ‘’get it’’ * Four hints and foreigner still didn’t understand * Finally, Chinese asked a clear question. They are very embarrassed when they have to ask directly. Chinese continues to deny his real concern

Cultural sensitive responses: getting things done * Need to think and do differently * Fuzzy objectives and unclear tasks don’t work set clear objectives and specifics tasks * Don’t give too many instructions at one time * Prove written support for instructions * Repeat your communication take care with words * Summarize meetings and actions * Allow an imbalance of numbers * BUT don’t be patronizing * Adapt to others

RELATIONSHIPS Guanxi

Chinese Business CultureGuanxi, An Important Chinese Business Element“Guanxi” literally means "relationships", stands for any type of relationship. In the Chinese business world, however, it is also understood as the network of relationships among various parties that cooperate together and support one another. The Chinese businessmen mentality is very much one of "You scratch my back, I’ll scratch yours." In essence, this boils down to exchanging favors, which are expected to be done regularly and voluntarily. Therefore, it is an important concept to understand if one is to function effectively in Chinese society.The importance of "Guanxi"Regardless of business experiences in ones home country, in China it is the right "Guanxi" that makes all the difference in ensuring that business will be successful. By getting the right "Guanxi", the organization minimizes the risks, frustrations, and disappointments when doing business in China. Often it is acquiring the right "Guanxi" with the relevant authorities that will determine the competitive standing of an organization in the long run in China. And moreover, the inevitable risks, barriers, and set-ups you’ll encounter in China will be minimized when you have the right “Guanxi” network working for you. That is why the correct "Guanxi" is so vital to any successful business strategy in China.Although developing and nurturing the "Guanxi" in China is very demanding on time and resources, the time and money necessary to establish a strong network is well worth the investment. What your business could get in return from the favors for your partners are often more much more valuable, especially in the long run, and when you’re in need. Even domestic businesses in China establish wide networks with their suppliers, retailers, banks, and local government officials. It is very common for individuals of an organization to visit the residence of their acquaintances from other organizations, bringing gifts (such as wine, cigarettes, etc.). While this practice may seem intrusive, as you spend more time learning the Chinese culture, it will become easier to understand and take part in this practice that is so central to successful Chinese commercial activity.
To start, pay close attention to your immediate Chinese network, and try to establish good "Guanxi" with them. They can indirectly link you to new acquaintances and information resources, thus helping you to develop other right "Guanxi" you need.How business is conductedThe Chinese culture is distinguished from the Western culture in many ways, including how business is conducted. For example, the Chinese prefer to deal with people they know and trust. On the surface, this does not seem to be much different from doing business in the Western world. But in reality, the heavy reliance on relationship means that western companies have to make themselves known to the Chinese before any business can take place. Furthermore, this relationship is not simply between companies but also between individuals at a personal level. The relationship is not just before sales take place but it is an ongoing process. The company has to maintain the relationship if it wants to do more business with the Chinese.How relationship is establishedFirst of all, it does not have to be based on money. Treating someone with decency while others treat him/her unfairly could result in a good relationship. Second, it starts with and builds on the trustworthiness of the individual or the company. If a company promised certain things and delivered as promised, the company is showing trustworthiness and the Chinese would be more inclined to deal with them again. Third, being dependable and reliable definitely strengthens the relationship. It is like being friends, and friends can count on each other in good and tough times. A good example is related to the 1989 political instability in China. Companies that stayed found their relationship with the Chinese strengthened as they were viewed by the Chinese as friends who did not abandon the Chinese when they needed friends. Fourth, frequent contacts with each other foster understanding and emotional bonds and the Chinese often feel obligated to do business with their friends first.
"Guanxi" or relationship with high rank officials are still important for doing business in China, though declining to some extent. Political and administrative interference in business have declined. More and more companies have found themselves on their own surviving without government subsidiaries. If they are not getting any help from the government they are more reluctant to be influenced by government officials. So government "Guanxi" may have less influence with these companies.Since "Guanxi" and relationship could function as an information network, companies with wide "Guanxi" and relationship networks often have much higher performance than companies with little or no relationship with the Chinese.Final Words on "Guanxi"Keep in mind that "Guanxi" can take on many forms. It does not have to be based on money. It is completely legal in their culture and not regarded as bribery in any way. So, there is no need to feel uncomfortable about it. Trustworthiness of both the company and individual is an important component. Following through on promises is a good indication of this. Treating someone with courtesy while others treat him or her unfairly is another aspect. Frequent contact fosters friendship as well. Chinese feel obligated to do business with their friends first. There are risks with this system, as well. When something goes wrong, the relationships are challenged, and friendships quickly disappear. "Guanxi" can also be very one-sided. When "Guanxi" is involved, there is a risk of obtaining an invoice of twice the amount that you bargained for. |

* Key factor in doing business * Months or years to establish * Typically involves
- developing friendship and trust
- hosting meals
- doing favors
- giving gifts
- showing attention to private concerns (ask only about children NOT wife)

Guanxi the inner and outer rings

What happens next and why?
GUANXI IN THE MARKET PLACE * Inexperienced middlemen * Poor quality hired * Patronage
People are good in guanxi are just taken and taken and taken whereas people who are not involved in the guanxi network give and give and give…

Beware * My obligation is your obligation * Ranking
- New friends bearing gifts (that has no value for you but you have to do a favor in return). Regifting is a totally normal in china (you give the gift you receive to someone else)
- Unbalanced accounting

Traditional practices are breaking down

International competition * Exposure to best practice * Tighter laws, but no body to enforce them * Better accounting * Merit-based rewards * High profile prosecutions

Cultural models
Cultural Bell Jar
Cultural Iceberg

5 phases of culture clash * Excitement * Disorientation * Reflection * Adjustments * Adaptation

* Don’t react, reflect.

Danger of oversimplification

Homework

Week IV:

Communicating with the Chinese

To look in one thing
To see what you look at is another
To understand what you see is a third

Understanding the way Chinese people communicate is fundamental to do business in China

Greetings and introduction

Typical Chinese introduction
‘’Good morning. My name is Zhang Hao Wei. You can call me Mr. Zhang’’
They not try to look superior with the ‘’Mr’’, it’s just a question of respect according to them.

If a Chinese say you ‘’I’m sorry, my English is too poor’’, you should reply ‘’No, no… your English is very good.

* Modesty is a required formality * Giving face is a very good idea

When Chinese people tell you that your Chinese is very good, you should answer: ‘’No, no… my Chinese is very poor/ But I love Chinese, it is very interesting to learn this language’’.
Characteristics of Chinese communication * Formal politeness * Indirectness : directness is face threatening * Ambiguity * Time * Silence

Indirect communication strategies
Don’t use: ‘’no’’, ‘’I can’t’’ or ‘’I’d rather not’’
Use:
* It is trouble for you * Maybe you are busy * I have something (to do) * Maybe * I’ll study the matter * Silence * Criticism by proxy * Disappearing

Ambiguity – Vagueness * Few details * Incomplete instruction * No extra information
“Do not spell out everything, but leave the unspoken to the listeners’’ characteristic of Chinese communication (Gao & Thing-Toomey 1998)

* Expect the unexpected

Time
It is said that Chinese are punctual. FALSE
Time is not that important to them.
When it is a matter of slow action, then they expect immediate response.
Chinese won’t to be rushed. They won’t make appointments.

Silence
Negotiations are full of long silences
Collect thoughts, formulate response
Important not to break a silence indicates: * Flexibility in the offer * A weak proposal
Subordinate’s silence is good manners.

Reading between the lines
Chinese assistant has much more loyalty towards their Chinese colleagues than to western.

Chinese (generally): * Don’t defend their actions * Won’t tell you when they are following orders * Won’t correct you when it’s not their fault
But even more confusing, they won’t tell you that they are helping you or protecting YOUR face.

Week IV:

Uncertainty avoidance is not related to level of development
Low context culture (Edward T. Hall): * Individualism * People value fact, logic and actions * Direct communication style

Taux d’epargne en Chine : 50% en 2013 25% en 2010

US : taux d’épargne négatif
Uk : 8%

You can’t be direct in China, workers look every time to underlying meaning

Pour prouver que la Chine prend des risqué (contrairement aux idées recus), prendre l’exemple de l’argent, de l’achat d’une maison. Quand il s’agit de leur argent, ils prennent de gros risques, quand il s’agit de l’argent de l’entreprise, il ne prenne aucun risque. Tout dépend du contexte. En revanche si le quenchi est mis en jeu, c’est totalement différent.

Meeting dynamics * Round table discussion (half chineese half foreigners) * Chinese and French partners * A vigorous exchange * Kicking ideas around * Offering quick solutions * Throwing up fragments of ideas * Debating the value of each contribution * Everyone is open and contribute to the discussion * Chinese partners not contributing * Sit quietly * Listening * When you seek to engage them * Slow response, Vague, off the point

Why ? * Histoty : avant, si les ministres se trompaient ou s’ils étaient corrompus, risquaient non seulement leur vie mais aussi celle de leur famille * Education * Culture : * it is not used to offer an opinion if it isn’t properly-formed opinions (comprehensive idea and sufficient evidence) * standing out (Zhongyoung) * don’t wish to contradicted (Mianzi) * discomfort with the dynamics (Directness) * After on others? (Guanxi/Mianzi) * Their manager’s opinion? (Authority)

Conclusion : Don’t react … Reflect

AWARE :
It easy to misjudge * Shyness * Lack of knowledge * Lack of cooperation * Disagreement * Agreement

What can you do in order to optimize the meetings?
How does the W.H.O manage these meetings in China? * Organize a series of meetings. Chinese may be more comfort meeting after meeting.

Rules for communication 1. There are no simple rules 2. Assume nothing 3. Use uncomplicated language 4. Listen and watch

Smart foreingers make adjustements
Content : less ‘’me’’, more ‘’you’’
Expression: ‘’big’’ on the relationship, ‘’smal’’ on self and company, fulsome praise
Humility

Be able to identify potential conflicts between various stakeholder’s interests and conflicts between those interests.

CHINA BUSINESS ENVIRONEMENT

When China wakes, the world will tremble. Napoleon Bonaparte
In China: nothing is simple, nothing is easy, but everything is possible.

Historical background
1949: China became a republic * Nationalized businesses * Took away legal independence * Quickly became bloated and inefficient: profit was not their priorities, the purpose was to take care of people.

The three old irons * Iron Rice Bowl: unmotivated because it was very difficult to lose your job * Iron wage: everybody at the same level, no rewards, no incentive, the same salary for EVERYONE. * Iron Chair: everything is defined by your family, social background

* Dependence, equality, rigid and inflexible system

1979: Deng Kiao Ping and the reforms begin. Banni deux fois du parti communiste, puni severement, et finalement président du parti. He said, it’s matter the cat white or black…
Before him, people were starving; they ate the inside of their coat to stay alive. * Efficiency * Equity * Flexibility * Competition * Responsibility * Accountability * Incentives * profit

Chinese aspirations

1980 4 status symbols: bicycles, watch, sewing machine, radio.

Barriers to reform * traditional cultural values * traditional behavior patterns * industry / government structures * incentive for executives to change * lack of management skills * lack of adequate training * webs of relationships

1990 Six big things: computer, TV, washing machine, camera, electric fan, refrigerator

Reform really begins * consolidation * western practices * directors * shareholders * management responsibility

Structure of SOEs
‘’companies have no clear beginning or end’’ (Wharton Business School)

Now middle class aspirations: car, apartment(s), children studying overseas..

2000s: Hypergrowth * industry restructuring * ‘’The Iron Rice Bowl is broken, forever’’ * State funding only to ‘national security’ industries : military, power generation and networks.

Within 30 years * Fatest-growing economy * 2 GDP * Largest forex reserve in history * 2 of largest 6 employer companies * Most university graduates * 3 or 4 busiest ports * Biggest merchandise exporter (75% of world’s toys, 45% of world’s clothing…) * First in car manufacturing * 2 oil importer and energy consumer * Most cell phones in the world * Most internet users * 4 in film production * 3 in video piracy
Most spoken language
3 in christen populations
9 in muslim populations.
Structure
Practices
Other market dynamics

WEEK VI
Humain Capital
Back ground

The three Irons * Iron wage * Iron chair * Iron rice Bowl * Total dependence on the company * Cradle-to-grave * Equality –no incentive; little opportunity

However, some old mindsets persist * Traditional leadership * Entrenched corporate cultures: students want to work in some company just for money, caring of family.. * Employee expectations: they don’t like to talk about their bonuses (very significant), foreign company tries to break it down (the bonus) because it is nothing to do with performance but with relationship. Expectation that the company should take care of him, the big SOE are very good with their employees. * Poor hiring practices Labour law – effective 01/01/2008 Main objectives * Establish fair employment conditions * Ban employment discrimination Three ttypes of contract * Fixed term * Project-based * Open After 2* 5 year contract: employee entitled to an open contract All workers to have contracts Limitations on probationary periods Overtime payment and ponalities : people working in public holidays and week end don’t receive penalities, now the government pay 1.5 time for week end work, 3 times for public holidays and they made it restroprective. Thus, people who didn’t pay their employee should pay them double for week end and holiday (*3 and *6) Seniority-based lay-offs discouraged: LIFO Severance pay Right to organize, bargain collectively and strike : in fact, trade union are considered just as social club (they just give gift) they now that they don’t have result (peine perdu) Minimum wage and safety regulations (650 RMB but people get free food, so on peut pas connaitre la pauvreté des gens) Companies to consult with the ACFTU before downsizing Ambiguities to be interpreted in favor of employees. Right to bring a lawsuit for employment discrimination (premier cas de descrimnaiton en 2001, pour harcelement sexuel) Fair or Unfair? Protections are modest compared to other markets Opposition to new labor law AmCham Criticized changes for ‘’rigid’’ restrictions that make it harder to fire workers. “…We doubt wether it is necessary to carry out such significant changes’’ – China Business Report 70% of rural workers, 15% of urban workers, 40% of construction workers did not have a contract or basic protections. The changes bring China in line with world standards of employee rights. Us & European MNCs opposed * Wal-Mart * Google * UPS * Microsoft * Nike * AT&T * Intel * General Electric * Procter & Gamble * American Chamber of Commerce * US-China Business Council * The European Union Chamber of Commerce Some Chinese companies also demonstrated poor judgment Hua Wei technologies, les occidents étaient réticents à l’idée que la société s’installe chez eux (espionage). Ils virent les gens et les Embauche à nouveau le premier jour de l’an pour des raison d’argent. Hua Wei s’en fout de leur réputation EEO Law: Equal Employment Opprtunity EEO laws in place * Depth * Monitoring * Enforcement Employees becoming more aware * More cases * Something fairly * Something unfairly Discrimination – What differences would you expect to find in China? * Women : Glass Ceiling, Harassment * Older people * Disabled * Minorities & Migrant workers: big contribution to the growth of China, they are threated pretty poorly in most of case. * Appearance & height: it is still difficult to hire attractive people (les petits managers sont complexé) 85% Of Chinese employees claim discrimination (faut faire gaffe avec ces chiffres parce que les chinois ne definissent pas la discrimination pareil) Little affirmative action

WEEK VII 2 months is too early in a company elle ne connait pas assez la boite et elle ne peux pas se permettre de faire des changements aussi tot Context is very important : dans ce cas, ce sont des ouvriers, très peu d’éducation Fear (punishement) c’est le standard, c’est le seul truc qui marche, En chine, at work, praise c’est la classe, les workers responde very well to praise Supervisors don’t know how to encourage their team Les supervisors agreed, meme s’ils n’ont pas compris,c ‘est comme ca en Chine Grosse erreur : elle interompt la production pour un meeting Alien concept : reward instead of punishment She got to train les workers, elle peut pas simplement leur demander de prendre part dans une decision No punishemnt no concern Advise : don’t be on a hurry, change process takes time, tout le monde n’est pas prêt à changer ses habitudes, trois catégories de personnes : ceux qui sont prêt a changer (champions), ceux qui sont capable de change mais ont de besoin de training, ceux qu’on ne peux pas changer Faire attention a comment on reward les un par rapport aux autres. On dit souvent : praise in public, punish in private. M ais en chine, peu etre praise in private pour ne pas créer de jalousie entre les collègues. Don’t make big announcement ‘’on va tout changer’’ bla bla bla, just do it and reward them quietly and prendre en consideration le fait que le praise de l’un impact sur les autres. L’argent n’est pas le seul moyen de les retenir : training and the feeling that they constently advance Business trips are very important. Si tu t’occupe de leurs enfants, (college fund), ils restent or English teacher for their children Most important management principles : praise, MBWA (Management by walking around) to emprove your enterprise performance * No simple solutions. * Identify the context before everything * Incredible cost to retain people NEGOCIATION First advice to the westerners: don’t change your way, your style. All negocitions are not the same: it’s not one context, one situation: * M&A/JV/Parternship * Buyer/Seller * Long term / One-off * Large/Small deal * Who has the power position Simple prescriptions applied broadly simply won’t work THE PROCESS Market analysis * Partner selection Agreement in principle * Initial proposals, discussions * Relationship building * LOI (Letter of Intent) * Government approvals Negotiation Due diligence Contract In Europe, 75% of negociations ends with a reasonable contract In China, only 25% “The Chinese think in terms of process that has no culmination. Americans think in terms of concrete solutions to specific problems” “The Chinese approach is impersonal, patient and aloof’’ Getting started * Generalities over specifics * Show of public harmony * Signal their need to meet policy * Ambit claims (Unmovable obstacles) Exaggerated expectations * Outrageous demands at beginning * Find your bottom line (this strategy is called Anchoring * Move median price in their favour Relationship first, business last * Pre-negotiation period is critical * Banquets, gift giving, sightseeing, karaoke * Connect and build trust * Form over substance Beware Wine and dine you into exhaustion INFLUENCE STYLES The Chinese won’t adapt Foreigners over-adapt * Over-sensitive * Kowtow * Lose sight of business issues * Act like desperate buyers * Signal their inexperience Foreign negociators’ first problem: time It is said that the Chinese * Need time to digest information * Have a long-range view and therefore can’t be hurried * Distrust fast talkers who want to make quick deals Time is money but not in China Gracious and insistent hosts * Find your deadline.. and use it to advantage * Expect prolonged periods of inaction * Control the agenda and pace * Uncertainty in agenda arrangements * Put off response until deadline * Create anxiety and awkwardness Influence styles: Control Let you talk (and put the information away) be very careful Use your mistakes and misstatements Use information selectively (out of context) Multiple negotiators … Varied locations * After days or weeks in negotiations finally... you arrive at agreement * Now, they must check with a superior…who may begin the process all over again * Government agency approval (involve themselves in the details, may redirect the entire deal) Win win strategy * In any situation there must be a winner

The uneven playing field Foreign side * A set of rules or standards * Gentlemantly conduct * Objective: ‘’Win-Win’’ * Contract is everything * Fail to optimize outcomes Chinese side * ‘open rules’ * Flexible behavior * Negotiation: a Zero-sum Game * Contracts are a starting guide * Single minded objective (maximize outcomes)

WEEK VIII Influence styles: ‘’You need us.’’ * Scale of opportunity * Market size * Connections * Future opportunities “you should be honored” Influence styles: Silence * Negotiation are full of long silences * Collect thoughts, formulate response * Important not to break a silences, indicates: flexibility in the offer or a weak proposal * Subordinates’ silence is good manners Influences styles: limited authority * Lines of responsibility: envoyer des gens qui n’ont pas bcp d’autorité pourqui’l puisse jongler entre toi et leur boss * Decision maker: sometimes, on ne sait pas qui prend la decision Influence styles : Relationships * Using impressive connections * Friendship Influence styles : ‘oh, by the way,..’’ * Meetings ending on a negative * Doorstppers * Smart in dumb and dumb is smart Chinese buyers * Often tasked unclearly * Negociator appear unfazed by lack of expertise * Points out deficiencies and problems that make no sense * Complex proposal… you may lose the deal * Price.. Price… Price….Evertyhing is about price * Ultimately, deliver a product not to your standars… and you receive less than you feel you should Chinese sellers -outrageous excuses “..only see the scratches at night”

Chinese quote: “Muddy the water to catch the fish” * Left-field, illogical, or unreasonable demands * Irrational objections * Keeping you off balance (change of negotiators) * Citing regulations The devils is in the details * Product characteristics * Contract terms * Legendary vagueness * Due diligence Double standards * Your displays of emotions are ‘’inappropriate’’ * They will use anger as a gambit * They say yes without conviction * They don’t honor previously agreed point * Change contract preparation unilaterally * Break contracts routinely * They try to build relationship but you will be always an outsider It isn’t over until It’s over * Doorstoppers * “by the way….’’ * ‘’of corse, next time…’’* * Contract with different terms * After finalization.. * Change to circumstances.. expect to renegociate * Once you are commited, it’s never over Ten things to know about negociating in China 1- Chinese won’t adapt Foreign response Definer les vrai problems, parce qu’ils ont tendance a se concentrer sur des problems secondaires pour vous fatigue Definir nos limites avant meme de commence (acting performance) Pas dexpression born off Dans certains cas, ils repetent avec d’autres concurrents (competitors) 526000 patents in 2011 (1st country in registring patents) 3 type d’intellectual property : copyright, patent, “When China wakes, the word will tremble” Napoleon Bonaparte Complaints Traditionally, few complaints * Bu Hao Yisi : “I’m embarassed’’ * Face * Expectations * “this is Chine” : on peut pas avoir trop d’attente, More affluent, Higher expecations * Assuptions Quality fade : * deliberate and gradual reduction in quality : on essaie de baisser les prix au maximum et dans ce cas la, le fournisseur essaie de baisser les couts la ou il peut (packaging..) * suppliers push the limits (until caught, or until disaster strike) causes of quality fade * blind pursuit of lower princes * suppliers quote low and cut corners * honest suppliers can’t compete who’s to blame ? c’est les foreigners qui cherchent a tout prix les bas prix. Governement intervention Priviliged access * foreign comapnies * chinese private companies E.g. Film distribution

RESEARCH (marketing, cultural, social..) Reshearch shortcomings * lack of quality data & services * definitions vary across studies * attitudinal (vs) Behavior * age od the research * unpresentative samples (Demographics -18 and over, regional vs First-tier cities) * faulty (selective) reporting * generalizing across product categories More methodolical challenges * socially desirable responses * modesty bias * E.G. Chinese subordinates rate their performance less favorably than their supervisors do * Chinese respondents sometimes favor or avoid certain numbers on a rating scale * Tendency to use the mid-point responses.. * Translation problems Price wars Avoid price wars… Everyone loses Chinese companies have: * Know have advantage * Structural advantages * Local advantages * Fewer stakeholder ‘disadvantages’ La rumeur est très très utilize en chine pour détruire l’image de marquee Exemple de coca cola : la rumeur comme quoi il y a des produits chimiques nocifs pour la santé/