Managing a cross-cultural negotiation is tricky and complicated affair at the best of times. When these negotiations occur in a foreign language environment it can be even more so, particularly if you allow yourself to become lost in the discussion. It is easy to feel left out of the loop when those around you are in discussion in a language you don't understand. You can feel distanced and become distracted, and it can impact on your natural communicative flow. Many challenges arise from the use of translators in business and it is how you manage these challenges that may well determine the ultimate success of your business negotiations.
When was the last time you heard a business leader suggest that they were going to target Asia, and Japan would be the key market of entry? It would probably be a while. Australian companies still do business with Japan, but new business is not growing as fast as it probably should be, and perhaps that is down to the besotted nature that Australia and the various federal, state and local governments have had with China. Its hard for Japan not to be swamped and overlooked in favour of its bigger East Asian neighbour. But is this a fair comparison?
The education demands of China are continuing to grow inline with the ongoing development of the economy. As demonstrated in previous articles, Australia has succeeded in attracting a range of Chinese university students over the past decade and this has continued to grow, although at much smaller levels than in previous periods. China still remains the most important education market for Australian Universities. But are Australian education institutions reaching the opportunities inherent in the Chinese market?
Academic studies and many airline business books on China have long acknowledged the importance of Guanxi or ‘Social Capital’. Guanxi is a confusing term to many business people in the West, but it is important to take time to understand how it works and why it works. Guanxi is essentially the level of status or respect that is accorded to a person based upon their level of social capital or personal connection which they hold within a given group of people. It is related to trust and trustworthiness, but it is much more. In the West we tend to not worry so much about this aspect of the business deal because we use legally binding contracts to ensure the other partner is kept to the agreed bargain (and in some cases even this is not sufficient to ensure ethical behaviour).
The importance of relationship building to the Chinese is paramount. Apparent social functions like banquets are held in very high regard by Chinese businessmen and government official due to the ability for one to get to 'know' their potential business partners. This knowledge is achieved through watching foreign businessman’s behaviour during the formal and informal drinking and eating rituals that are performed during every formal banquet. It is therefore important to be aware of these rituals, drinking strategies and how to ensure you leave the banquet in higher esteem than when you arrived.
Conducting business in China can be a confronting affair, with the rules of engagement vastly different from what we would expect in many western countries. The number one rule when conducting business in China is to take it slow, develop your reputation or Guanxi, and build your relationships with the people you meet, whether they be business or government officials.
China has attracts a large amount of attention, and is perceived by many in government, business and the broader society as synonymous with Asia. The Asian Century that we often hear discussed, could very well be replaced with the “Chinese Century” in the eyes of many business and government leaders. But how much of this sentiment is based in reality? Can we distil the Asian Century into a story about China?
There is a lot of discussion amongst the media, business and government about the need to “go to Asia”, however it is often difficult for business owners and executives to know what is realistic and achievable when exploring Asian markets, and even more difficult to know which market to focus your attention, time and financial resources. Every day there are articles in the news media about the importance of Asia to the Australian economy, and regularly stories of the huge potential for Australian products in Asia. All of this is very true, however, its important to ask the question: Where is the best market opportunity for my company, my product/service mix, and what is a reasonable timeline for achieving results?