Guanxi in Jeopardy

Guanxi in Jeopardy

Case Question

1. What are the main characteristics of Chinese culture? How do they differ from the predominant characteristics of U.S. Culture? How do these differences relate to negotiation process?

Characteristics of Chinese culture

* Higher value placed on group cooperation

* Believe in long term social relation

* They take time in making decision.

* More attention to the past and to the longer-term future.

* Hierarchical structure is more preferred

* Women still not given more preference.

Characteristics of American culture

* Higher value placed on individual

* Instant decision are made

* Direct on dealing with their business partners

* More democratic structure where everyone is involved.

* Women and men treated equally

Cultural difference affecting negotiating process

* In Chinese culture first relation is built rather than directly going to the specific topic but on the contrary in American culture, they prefer to jump to the topic.

* Likewise Chinese people take time to make decision because they follow strict hierarchy and decision making is top down in nature, while Americans have the authority to make decision by the negotiating members hence the decision could be prompt.

* Chinese culture prefers Chinese language than other language so this could be problem during negotiating process.

2. What are the criteria that should be used in selecting a joint venture partner? Have those criteria been met in this situation? Why, or why not?

Joint venture is the contractual agreement joining together two or more parties for the purpose of executing a particular business undertaking.

Criteria for selecting joint venture partners

* How well do they perform?

* To understand each other organizational as well as country culture.

* Their attitude to collaboration and their level of commitment

* Do both business share same objectives?

* Understanding the economic condition if it is in different countries.

* Understanding the laws and regulations.

Personally I think the criterion that is required to a joint venture to be successful has not been met because both the counterparts were still unaware about the cultural differences. Likewise they do not like the working style of each other.