Examining China and the USA through Hofstede’s 5D Model one can find huge discrepancies between the two countries with regards to Power Distance, Individualism and Long-Term Orientation. The US has a low Power Distance score which is very much a manifestation of the American premise of “ liberty and justice for all”. On the other hand, China has a high Power Distance score, which can be explained through the influence of religion and the notion of acceptance believed by the population. The US has a high Individualism score and China has a low individualism score. That means that China, being a collectivist society will have groups that take care of people in exchange for loyalty. This collectivist characteristic besides being explained by the influence of communism, also has the influence of the traditional Chinese agriculture, in which is communal. Also, there is the notion of a fat government in societies with communist or/ and socialists ideologies. Graham and Lam (2003)
Talking about Long Term Orientation, the US has a low score and it is seen as a society in which its business people measure their performance on a short term basis. As opposed to, China has a high Long-Term Orientation score, which means that the society has a persevering attitude towards time and difficulties. Negotiating with people from another culture or the same culture requires adjustment and flexibility.
Personally, I would not rush the negotiation in order to accomplish a contract with a Chinese company. Before even starting, I would research about the national culture, in this case China, the organizational culture and the people I would be negotiating with. When already in contact with them, I would try to establish a relationship, exchanging ideas, having small talks, observing the Chinese business’ etiquette and listening to carefully the other party. Maybe one of the most important adjustments I would have to do, is not delegate the continuous negotiation process to the sales or purchase team and if done, I would definitely empower them. As Hupert (2013) highlights American front lines should be given more power when negotiating with Chinese. They should not only try to accomplish a recent signed contract, but also make efforts to establish network growth and relationship growth . One should not incur great mistakes such as taking a negotiation for granted just because the company has a contract signed or taking the risk of arising conflict and mistrust between the enterprise and the counter-parties. The negotiation approach is quite different from what one would do in the US due to all the cultural differences mentioned above and the notion of time. One should have to be more patient when negotiating with a Chinese company, trying to forge a long term relationship.