Canwall

Canwall, Failing To Cross The Cultural Great Wall Of China

Cross-cultural differences have a significant effect on the output of business negotiations across borderline. Failure to understand and appreciate these differences can render hard work and preparation unfruitful, and result in serious consequences for negotiations. During the meetings between the executives of Canwell and their Chinese customers, both parties demonstrated their willingness to cooperate. Yet due to the lack of acknowledgement in cultural discrepancies, every one behaved only in accordance to the code of their own culture, therefore failed to reach an agreement. In total, the Canadians neglected 3 major points of cultural differences: goal of negotiations, risk preferences

For a typical western businessman, trades means win-win situations, where everyone earns what he deserves. However, in Chinese philosophy, there is victory and defeat in trading. When the Chinese gave the Canadian executives the grand reception and costly accommodation at arrival, they were expecting the Canadians to feel indebted to their kindness. Furthermore, they were expecting that the Canadians would repay by demonstrating ‘kindness’ of same level, such as favourable prices and extra supplies, in the negotiation. It is like the idiom ‘if you scratch my back I will scratch yours’, but demanding more in return. Such expectation is an unspoken rule in Chinese culture, which the Canadians by themselves could never realise, and therefore never abide by within the short period of time of their visit to China. As the result, the Canadians were more than astonished when they were asked to offer a price discount of 20%. But on the other side of the negotiation table the Chinese were also surprised because they found the Canadians were completely ‘ungrateful’ for what they had