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.
Those experienced in conducting business in North Asia will tell you that relationship building is paramount to a successful business outcome. Relationship building in Asia is often in direct contrast to standard business practices expected in Anglo-Western cultures such as North America, Australia and the UK. These business practices will effect the way negotiations are conducted, and so when you are negotiating in Asia it is important to consider the differences from your standard negotiation protocols.
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).
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.