example paper for students - 大连东软信息学院2016～2017学年第一学期大作业范例

Case # 0

The Negotiation between Canadian and Chinese Wallpaper Company (case study in week 14)

Part I Case Study

I Case Brief

Two Canadians (Burton and Raines), representing Canwall, came to China to negotiate the sale with a Chinese wallpaper production company in a small town in Jiangsu Province. The Chinese treated Burton and Raines with hospitality but the meeting was delayed for 2 days because of banquets and sightseeing.

The Canadians were not comfortable with the slow pace of the negotiation while the Chinese weren’t sure if Canadians really wanted to make a deal with them, because it looked like the company didn’t have enough maintenance service and they weren’t willing to bargain the price.

Another reason of discomfort was that while the Canadians were doing their presentations some of the Chinese left the room or the new people came in – which forced Canadians either to change the pace of their presentation or start from the beginning. The Canadians also observed some of the Chinese members playing with their phones and they thought the Chinese didn’t pay enough attention.

Eventually, cultural differences lead to conflicts concerning negotiation style and business protocol details between the two parties, which resulted in a failure of the negotiation.

II. Identifying the conflicts

There are a few differences concerning the negotiation styles of the Canadians and the Chinese.

➢The Canadians are direct while the Chinese are indirect.

➢The Canadians are focusing only on the contract while the Chinese care more about the long-term business relationship.

➢The decisions are made by authorized Canadian managers while in China the decision cannot be made until a consensus is reached. (leadership style difference)

The key issues include the Canadian side failed to provide required after-sale

maintenance and refused to compromise on the bargain.

III Analysis

Cultures have very different personalities when engaging in intercultural negotiations. There are negotiation style differences between Chinese and Canadian businessmen, including being direct or indirect when speaking, working at a slow pace or a rapid pace, working collectively or as individuals.

Influenced by Confucianism, Chinese usually look for setting up long-term relationship with the business partner, while the Canadians, according to Hofstede, are often concerned with short-term results and seek quick gratification of their needs. Because of this the Canadians failed to recognize hospitality of the Chinese and they didn’t understand that the Chinese were actually trying to be long-term, trustworthy business friends. The Chinese, on the other hand, didn`t see the Canadians` concern for time and their being task oriented rather than relationship oriented.

Since bargaining is not really a part of Canadian understanding of business, the Canadians stuck to their original price (with only 3% discount), which was perceived by the Chinese as “not showing enough commitment and sincerity towards the cooperation”. The Canadians, on the other hand, might have thought that the Chinese were trying to take advantage of them.

Also there are differences on business protocol details between the 2 parties, for example, the Chinese left the meeting room without any explanation, which was considered being rude by the Canadians, who are from a Monochronic-time culture.

PART II – Action Plan

First of all, both parties should have been well prepared for the negotiation. They should have known the negotiation style differences of the Canadians and the Chinese to avoid the misunderstanding caused by direct and indirect ways of expression.