10 11 negotiation Economics_Study_Cards

Question 1

What is Guanxi and why is it significant in negotiations?

Answer 1

Guanxi refers to personal relationships and networks rooted in Confucian values, emphasizing trust, reciprocity, and mutual obligations. It plays a critical role in assessing partners and building long-term relationships in Chinese negotiations.

Question 2

What are the key differences between Australian and Chinese negotiation styles?

Answer 2

Australians value low power distance, individualism, and contracts. Chinese negotiators prioritize high power distance, collectivism, relationships (guanxi), and group goals.

Question 3

What are the five stages of cross-cultural negotiation in Chinese contexts?

Answer 3

1. Preparation 2. Non-task stage (relationship building) 3. Exchange of task-related information 4. Persuasion 5. Concession and agreement.

Question 4

What are two major mistakes often made in negotiations with the Chinese?

Answer 4

1. Failing to understand the complex political and social contexts. 2. Lacking proper relationship-building efforts, leading to choosing the wrong partner.

Question 5

What is BATNA and why is it important?

Answer 5

BATNA stands for Best Alternative to a Negotiated Agreement. It is essential as it defines your fallback option, giving leverage and clarity during negotiations.

Question 6

How does Confucianism influence Chinese negotiation behavior?

Answer 6

Confucianism emphasizes patience, hierarchy, face (mianzi), and harmony, shaping negotiation strategies toward building trust and fostering long-term relationships.

Question 7

What is ‘Zhengti Guannian’ and how does it affect negotiations?

Answer 7

‘Zhengti Guannian’ is the holistic approach in Chinese negotiations, where all issues are interconnected and discussed simultaneously rather than sequentially.

Question 8

What challenges did Tesla face in its negotiations with China?

Answer 8

Tesla faced challenges like data privacy concerns, adapting to local consumer preferences, and maintaining quality standards in a competitive market.

Question 9

What are the key motivations for forming International Joint Ventures (IJVs) in China?

Answer 9

Motivations include sharing costs and risks, accessing local knowledge and resources, gaining market entry, and facilitating technology transfer.

Question 10

How can the yin-yang principle apply to Chinese negotiation strategies?

Answer 10

The yin-yang principle emphasizes balancing competition and harmony, fostering flexible strategies that address conflicts while seeking mutual benefits.

Question 11

What are the characteristics of a negotiation situation?

Answer 11

1. Two or more parties with conflicting needs and desires. 2. Expectation of a ‘give and take’ process. 3. Interdependence shapes processes and outcomes. 4. May involve zero-sum (win-lose) or non-zero-sum (win-win) situations.

Question 12

What is the importance of ‘Face’ (Mianzi) in Chinese negotiations?

Answer 12

Mianzi represents personal and collective reputation. Protecting face is critical for maintaining respect and harmony, and losing face can undermine relationships and agreements.

Question 13

What are the four mindsets in Chinese negotiations?

Answer 13

1. Cultural context (e.g., Confucianism). 2. Guoqing (Chinese characteristics). 3. (De)globalization contexts. 4. Historical context and strategies (e.g., 36 stratagems).

Question 14

How is mutual adjustment a key aspect of negotiations?

Answer 14

Mutual adjustment involves both parties influencing each other throughout the negotiation. Understanding and predicting adjustments is critical for effective strategies.

Question 15

What is the role of technology transfer in Chinese negotiations?

Answer 15

Technology transfer is a priority for Chinese negotiators. They often insist on acquiring Western technologies as part of agreements, e.g., in joint ventures like Tesla and AT&T.

Question 16

What are the stages of planning and managing International Joint Ventures (IJVs)?

Answer 16

1. Establish JV objectives. 2. Conduct cost/benefit analysis. 3. Select partner(s). 4. Develop a business plan.

Question 17

What are the strategic uses of IJVs?

Answer 17

Strategic uses include accessing technology, diversifying markets, establishing long-term relationships, and aligning with local and global business strategies.

Question 18

How does the holistic approach differ from the sequential approach in negotiations?

Answer 18

The holistic approach (e.g., Zhengti Guannian) considers interconnected issues simultaneously, while the sequential approach addresses issues step-by-step.

Question 19

What are the major cultural dimensions influencing negotiation behavior?

Answer 19

Key dimensions include power distance, individualism vs collectivism, uncertainty avoidance, and masculinity vs femininity, based on Hofstede’s framework.

Question 20

What are the common pitfalls in forming international partnerships in China?

Answer 20

1. Poor planning. 2. Choosing inappropriate partners. 3. Structuring deals poorly without aligning mutual goals and expectations.

Question 21

How did AT&T prepare for negotiations in China?

Answer 21

AT&T prioritized building guanxi by engaging with high-level officials, using patience, and adopting a long-term strategy to establish trust and collaboration.

Question 22

What was a key outcome of AT&T’s negotiations in China?

Answer 22

AT&T secured a joint venture with Shanghai Telecommunications in 2000 and extended the partnership to align with China’s Belt-Road initiatives in 2017.

Question 23

What challenges did Tesla face during its negotiations in China?

Answer 23

Tesla faced issues like government concerns about data privacy, adapting to Chinese consumer preferences, and local market competition while setting up its Gigafactory in Shanghai.

Question 24

Q4: What strategies helped Tesla establish its presence in China?

Answer 24

Tesla built strong government ties, leveraged incentives, and aligned its goals with China’s push for electric vehicles and carbon neutrality by 2060.

Question 25

How did cultural understanding benefit AT&T’s negotiations?

Answer 25

AT&T’s understanding of guanxi and the importance of reciprocity enabled effective relationship-building and successful joint venture agreements.

Question 26

What role did reciprocity play in AT&T’s success in China?

Answer 26

Reciprocity allowed AT&T to foster trust and collaboration by offering benefits and aligning its strategy with the interests of Chinese stakeholders.

Question 27

What were the main pitfalls Tesla encountered after its initial success in China?

Answer 27

Tesla faced reputational challenges, including quality complaints and privacy concerns, which impacted its market share despite early success.

Question 28

What lesson can be drawn from the Google-China case study?

Answer 28

Google’s conflict with censorship laws highlights the importance of understanding and adapting to the local regulatory environment in China.

Question 29

How did Tesla align its strategies with China’s goals?

Answer 29

Tesla supported China’s focus on electric vehicles and carbon neutrality, establishing its Gigafactory and adapting to Chinese market dynamics.

Question 30

What is a common theme in successful negotiations, as seen in the AT&T and Tesla cases?

Answer 30

Both cases underline the importance of aligning with local government priorities, building strong relationships, and maintaining cultural sensitivity.