Avoiding CrossCultural Misunderstandings Manuela Reintgen Business Development Associate

Avoiding Cross-Cultural Misunderstandings Manuela Reintgen Business Development Associate Dezan Shira & Associates www. dezshira. com

Agenda 1. The Experiment 2. Cultural Dimensions 3. Potential Conflict Factors 4. Specific Characteristics 5. Where to adopt this knowledge? www. dezshira. com 2

The Experiment ØTwo groups: 5 Chinese vs. 5 Germans Ø Ph. D. candidates/Young professionals Ø Pretest: One strong negotiating position Ø 600 Yuan guaranteed return One weak negotiating position Ø 150 Yuan guaranteed return ØTask: Divide additional 3000 Yuan Ø Amount only available if they form a consensus www. dezshira. com 3

Cultural Dimensions (Geert Hofstede) 1. Small vs. Large Power Distance 2. Individualism vs. Collectivism 3. Masculinity vs. Femininity 4. Weak vs. Strong Uncertainty Avoidance 5. Long vs. Short Term Orientation www. dezshira. com By Yang Liu 4

Cultural Dimensions (Geert Hofstede) Small vs. Large Power Distance By Yang Liu www. dezshira. com 5

Cultural Dimensions (Geert Hofstede) Individualism vs. Collectivism By Yang Liu www. dezshira. com 6

Cultural Dimensions (Geert Hofstede) Masculinity vs. Femininity www. dezshira. com 7

Cultural Dimensions (Geert Hofstede) Weak vs. Strong Uncertainty Avoidance By Yang Liu www. dezshira. com 8

Cultural Dimensions (Geert Hofstede) Long vs. Short Term Orientation vs. www. dezshira. com 9

Potential Conflict Factors Time China US/Europe Polychrome time perception Monochrome time perception Negotiation as a long-term process “Don’t care if they are in time or not” Focus on short-term success “Time is money” www. dezshira. com 10

Potential Conflict Factors Relations China US/Europe No differentiation between business and private life “Don’t mix business with private life” Character of business partner really important Try to focus only on business www. dezshira. com 11

Potential Conflict Factors Dealing with Conflicts China US/Europe Want to “ensure Harmony” “Confrontational” Counterpart Reaction: Lack of understanding & Provocation Retraction www. dezshira. com 12

Specific Characteristics Chinese Group Discussion leader at beginning = Leader during negotiations Phenomenon of hierarchy Strategy without considering the nationality of the opponents Clear allocation of roles Try to communicate on personal level Veiling of own opinion/plan Postpone important parts to the end Interested in long-term relation www. dezshira. com 13

Where to adopt this knowledge? Ø Agent/Local Distributor Ø Freelancer Ø Representative Office Ø Wholly Foreign Owned Enterprise Ø Joint Venture www. dezshira. com 14

Joint Venture Typical Use: ØCan engage in special manufacturing, processing & assembling, services & consulting and/or trade Advantage Disadvantage Able to enter a restricted market Same bed, different dreams New network or sales channels Contract negotiation timeconsuming & eventually expensive www. dezshira. com 15

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Dezan Shira & Associates The Asian Practice Ø 19 years in China Ø 10 Offices in China, 5 Offices in India, 2 Offices in Vietnam Ø 2000 clients from 81 countries Ø Provide business incorporation, tax & accounting, legal and HR services www. dezshira. com 17

Publications Magazine Website www. dezshira. com Books 18

Discussion manuela. reintgen@dezshira. com Mob: +86 136 9353 4146 THANK YOU FOR YOUR ATTENTION! www. dezshira. com 19