Tag Archives: Chinese culture

Negotiating with the Chinese: Lesson One

You’re sitting across the negotiating table with your Chinese supplier. Your agenda? (1) Lower your cost per unit by 8%, (2) Speed up production time per 40′ container by one week and (3) Get them to accept more favorable payment terms (e.g. 30% down, Net 90 on the balance).

His agenda? To make as much money as possible and (this is very important), to gain as much face as possible. Hence, your request for lower cost per unit, despite quantity increases, isn’t going to go over very well if you ask for it directly. Secondly, your request for increased production speed will reduce his flexibility in scheduling his jobs. Finally, your request for better payment terms means he’s got to pay more in interest on his operating capital.

Note: If you’re Nike, GM, or Wal-mart, none of this applies. If you’re a medium or small enterprise, read on.

If you say something like “We’ve increased our quantity to nearly three times what it was last year, so we’ll need you to cut your costs by 8% per unit,” you’re going to get this response: The boss will furrow his brow, scratch his chin, and say “That will be very difficult” or alternatively, “That is very inconvenient for us.” What that means, in plain English, is…..NO!

The boss will then explain the fact that his own costs have increased over time. Labor, materials, equipment, rent. Everything has gone up. He was thinking about asking you for a price increase! Also, you don’t do things very efficiently. You send POs, then make changes to them. Some of your preferred suppliers are difficult to work with. Etcetera.

Why did you get this response? Perhaps the more cogent question is, how do you get the response you want?

If you’re a typical American, you won’t really like the answer.

You’re going to have to throw yourself at his mercy, and in doing so, appeal to his social obligation to save your face and to his desire to increase his face.

This is why saying to a Chinese supplier “You know, there are several other factories we could work with here?” will only stall and complicate negotiations. You’ll just irritate them by saying this.

So what do you say? You give him the opportunity to help your business as a bona fide partner by saying something like this: “I’m facing serious competitive pressure in my market. You are my partner–without you, I couldn’t get anything done. If I don’t find a way to decrease my costs by 8%, I don’t see how I can stay in business long-term. Please, Mr. Wang, can you take a closer look at your production costs and find a way to lower my cost per unit?” If you can manage to tear up and let your voice shake a bit, even better.

I know it seems counterintuitive for a Westerner to talk like this (it seems like butt-kissing to most of us), but this is what works in China. You aren’t butt-kissing. You are appealing to a very powerful sociological force: The obligation to give face to a customer who has humbled himself before you, and the desire to increase one’s own face by playing the traditional role of the hero. In this case, the damsel in distress is your company.

One of my consulting clients was a company whose boss refused to adapt to local communication styles. He comes from an aristocratic family, and could never understand or countenance the need to humble oneself and ask for help. He treated his Asian suppliers the way he treated his American suppliers: You work for me, so get in line, or else. His Chinese suppliers felt insulted and unappreciated, and after a time, did everything they could to rip him off. I had all ten fingers and all ten toes in the dam, trying to keep the relationship from breaking, but after a few years, it did indeed break. The relationship ended messily, with threats of lawsuits back and forth.

Do you want to do your manufacturing work in China? Then you’d better learn to communicate with the Chinese. You’ll be leaps and bounds ahead of your competition, who are thinking “Culture? Schmulture! A supplier who won’t do what I ask can kiss my red, white, and blue butt!” Meanwhile, you’re getting the unit pricing, delivery schedule, and payment terms you want.

Now, do you want to sell your products in China? I’ll write about that in Lesson Two.

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Chinese Teacher Experiences Culture Shock…in Alabama

I saw this little item on a regional news website (first four paragraphs):

Chinese teacher has culture shock at Elberta school

ELBERTA, Ala. (AP) – A small school in south Baldwin County has become the only one in Alabama and the first Catholic elementary school in the country to be chosen for a guest teacher program designed to teach students Chinese.

The program at St. Benedict Catholic School brings in a guest Chinese teacher and is co-sponsored by the College Board and Hanban, China’s Office of Chinese Language Council International.

St. Benedict, which has 158 students in pre-kindergarten through eight grade, decided to add Chinese to its foreign language curriculum, augmenting a Spanish program that launched a few years ago.

The article goes on to describe the culture shock felt by the Chinese teacher, a Shanghai native.

While I feel for this fellow, who is indubitably confused as all hell, I have to appreciate the humor of this situation. There is nothing in this world that will fully prepare a Shanghai native for life in any village, town, or city in the United States. By the same token, there is nothing in this world that will fully prepare an American for life in most parts of Asia.

I wonder what, if any, sort of training the Chinese teacher had before he left for small town USA. I wonder what sort of training, if any, the school had in hosting a visiting Chinese teacher. Probably none.

What’s the problem, you may ask? What exactly are the differences between Chinese and American culture?

Start with this idea:

EVERYTHING IS DIFFERENT!

Nothing is the same. Food, style of dress, communication styles, value systems, religious beliefs, political environments…the list of differences is endless. Which is why, of course, I live in greater China. Still, even those of us who have sense of the differentness between the cultures of East and West are sometimes frustrated by the cultural differences we encounter.

My advice to both the teacher and the school: Patience, openness, and tolerance. Judgment and an overweening focus on cultural differences will make you miserable. Teacher Wang, think of your colleagues and students and their strange behavior as “ke ai (loveable),” and parents, teachers, and students at St. Benedict Catholic School, give Mr. Wang the gift of acceptance. Let him eat his fried fish and rice, drink his green tea, wear his slippers in the faculty lounge if he chooses to.

In closing, I quote the Principal of the school:

“We felt like children who have Chinese language are going to be able to write their own ticket when they get to college,” Principal Kendall McKee said.

I know that reporters typically aren’t able to communicate all of the thought and planning that precedes a decision to implement a Chinese language program in a school, but statements such as these concern me a bit.

Why? Because you’ve got to learn a language like Mandarin in the proper cultural context. You can’t just learn some vocabulary, tones, and sentence structure and expect to have any idea what is going on. Chinese is nothing like Spanish. Or French. Or German. There are huge cultural gaps here, and from a linguistic perspective, it would be easier for a native English speaker to learn all three of the aforementioned  languages than it will be to master Mandarin.

Is there a program in place to bring the students to China, or to make some effort to bring China to the students? What sorts of cultural activities are built into the language program? Does the principal himself know anything about Chinese culture? Does the Chinese teacher know how to communicate his own culture to the kids? I hope there’s more going on here than just a Chinese teacher spending a year teaching kids the difference between the tones and the first few hundred words in Mandarin. Otherwise, this project has the potential to turn out to be an exercise in waste and frustration for all involved.

I wish both sides well. I hope the news station reports on progress made on both sides in six months or so.

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