1. Avoiding Cross-Cultural Misunderstandings
Manuela Reintgen
Business Development Associate
Dezan Shira & Associates

2. Agenda The Experiment Cultural Dimensions Potential Conflict Factors
Specific Characteristics
Where to adopt this knowledge?

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

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

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

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

7. Cultural Dimensions (Geert Hofstede)
Masculinity vs. Femininity

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

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

10. 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”

11. 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

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

13. 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

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

15. Joint Venture Typical Use:
Can 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 time-consuming & eventually expensive

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

18. Publications
Magazine
Website
Books

19. THANK YOU FOR YOUR ATTENTION!
Discussion
Mob:
THANK YOU FOR YOUR ATTENTION!