Intercultural Negotiation Case.pdf

Intercultural Negotiation Case.pdf - Two Canadians...

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Unformatted text preview: Two Canadians representing Canwall, a manufacturer of wallpaper printing equipment. went to a town north of Shanghai in the province of Jiaogsu. China, to negotiate a sale to a new wallpaper production companv. Charlie Burton. the president of Canwall, was trav- eling with his Marketing Director, Phil Heines. The companv had never before sold its equip- ment outside Canada, and the two Canadians were delighted with the warm reception thev enjoved in China. This wasn*t the first meeting between the Canadian companv and the Chinese wallpa— per factorv. The manager of the Chinese companv, Mr. Li, had been a member of a delega- tion to Canada- He had met with one of Canvvall's senior salespersons and the director of manufacturing. Subsequentlv, a trade representative from Canada had been in China rep- resenting Canwall's interests to the Chinese manager. after those meetings and numerous letters and faxes, Canwall‘s top people were now readyr to negotiate the sale. The dav thev arrived thev were met at the airport in Shanghai bv Manager Li himself, and transported in a chauffer-driven car BU miles to the town. Their accommodation was in a newlv built hotel. a few hours after their arrival thev were treated to a l2—course ban- quet given by their host, with several high-level municipal officials present. This red—carpet treatment made them feel optimistic about the sale. The nest dav, thev were taken to see the sights nearbv; a large part for container ships and several factories that indicated the prosperity' of the region. Thev were eager to begin discussing the sale, but after lunch thev were given time to rest. In the late afternoon, one of the manager's English—speaking emplovees came by with news that they would be taken to see a local dance companv's performance that night. Do the third dav, thev finallv sat down to meetings. Progress seemed verv slow, with each side giving generalizations about itself that seemed to the Canadians to be unrelated to the sale. Thev used an interpreter supplied bv the Chinese, who was eager to please them, so the Canadians felt comfortable with her, but translation slowed down communication. The Chinese also spent a lot of time talking about the Canadian trade agent who had been in their town earlier and asking about him- Burton wasn't able to tell them much about that person since he had never met him. When the Canadians at last were able to make the presentation they had prepared, they were surprised at the number of people who showed up: ten Chinese faced them across the table. The Canadians were a bit disconcerted when seyeral people at different times answered mobile phone cells, without leaying the room and without apologies. Still, the Chinese frequently nodded and smiled and said ”yes.“ Burton and Raines had prepared sales data and showed, effectiyely they thought, that within fiye years the factory could double its current production. At the end ofthe day, the jubilant Canadians returned to their hotel rooms confident they had sold the equipment. The next day, they were asked to explain once again things they thought had been coy- ered already to a Chinese team with four new faces in it. They were confused about who their negotiating counterparts really were. Their jubilation began to eyaporate. They were asked to explain the technology in minute detail. Neither Burton nor Flaines had been inyolyed in the engineering of the high-tech component that was the heart of the equip ment. After doing the best they could. they returned to the hotel exhausted. Their interpreter also seemed to be unfamiliar with technological terms, since she and the interpreter for the factory spent some time discussing the terms between themselyes. Because the Canadiansr interpreter was a women, they had to meet with her in the hotel lobby to discuss their plan for the next day. The two tired men would haye preferred to sit in their room while they talked with her, ratherthan in the noisy lobby where they were the object of curiosity, but she requested they remain in a public place because as a woman she could not meet with them in their room. The next day one member of the first—day Chinese team pointed out discrepancies between what they had said and what the manufacturing director. an engineer, had told them in Canada. Burton and Haines were chagrined. The Chinese were reproachful about the discrepancies, as if the Canadians had been caught out. At lunch, the two Canadians quickly faxed Canada for specifications and explanations. The afternoon session was uncomfortable, although eyeryone was polite. Burton and Haines were a bit unsettled when a middle-aged woman suddenly burst into the negotiating room and whispered in the ear of one of the key Chinese speakers, who immediately got up and left the room. The Canadians expected some explanation for the emergency, but none eyer came. The Canadians didn't receiye some of the documentation they needed by fax until the following day, because of the time difference. Discussions resumed with the same ques- tions being asked yet again. It all went yery slowly. The Chinese appreciated the high qual- ity of the Canadian product but worried they wouldn't be able to fix the equipment if it broke down. They suggested—delicately, to ayoid implying that they expected breakdowns— that perhaps the Canadians could giye them some help with maintenance training. The Canadians pointed out the expense and difficulty of keeping someone in their city for say- eral weeks or months and expressed confidence that there wouldn't be any problems the manual didn't coyer. They confidently asserted that Chinese would be able to look after the equipment just fine. Finally, the technical discussions gaye way to the issue central to most business nego- tiations: price. This proyed to be the most difficult of all. The Chinese began by asking for a Eff—percent price discount. The Canadians thought this was simply an outrageous negoti- ating ploy; they stuck to their price, which they knew to be fair, and offered a 3-percent discount on the printing cylinders. Althnugh Burtnn and Fiaines had heard that negntiatinns tnnk time in China, they had thnught a week wnuld be ample. an time was running nut, and they were due in Beijing i'n twn days. The Canadians began tn ask pninted questinns abnut what the Chinese were unhappy with and where they needed tn gn nyer issues again. During the last twn sessinns, the Canadians tried tn get the Chinese tn fncus nn the unresnlyed pnints, but the Chinese seemed reluctant tn dn sn. Things were still unresnlyed when the farewell banquet was held the fnllnwing nnnn. The questinn nf price seemed near snlutinn, but net the methnd nf payment. That was the final, apparently insurmnuntable hurdle, since the Chinese cnuldn't guarantee the payment schedule; it seemed tied tn deadlines and requirements nf the municipal nfficials. Nevertheless, Manager Li smiled and spnke nf mutual cnnperatinn fer the future, and past Chinese—Canadian relatinns, and the great amnunt he and his factnry cnuld learn frnm the Canadians. They signed an expanded yersinn nf the letter nf intent that had been signed nine mnnths earlier in Canada. The Canadians left disappninted but with espressinns nn bnth sides nf willingness tn cnntinue tn discuss the sale by mail and fax. The Canadians were stunned tn learn twn weeks later that the factnry had decided tn buy frnrn a Japanese equipment manufacturer. They knew their prnduct was gnnd and their price was fair. What had happened tn derail their sale? ...
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