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When negotiating with traditional Chinese organizations, Time is NOT Money.
By andrew | March 1, 2007
One principle of negotiating in China is that your most deeply-held assumptions do not necessarilly hold true here. Hard-driving western managers believe that there is a strong correlation between TIME and MONEY. While young, modern Chinese business people in big cities tend to share that opinion, traditional Chinese managers in State Owned Enterprises (SOEs) and smaller companies are less “time sensitive”.
Dates can mean nothing. Schedules mean nothing.
Maybe at the start of your discussion in China your counter-party started out with a time frame you considered to be a bit slack. You may have even thought that you had successfully negotiated a much more favorable schedule, and that the matter is now settled. You probably haven’t, and it isn’t. Delays mean nothing here, and neither does a missed target. In traditional Chinese business, there is very little connection between success and one’s ability to manage time. Schedules change frequently here, and there is often very little pressure or importance attached to them. People will consider it odd that you are so concerned about it.
Working frantically through the night is considered a fairly routine option.
That factor is included during the INITIAL, optimistic phase of planning. There is much importance attached to these all-night efforts. When successful, the team members are heroes. When unsuccessful, oddly enough, they are still heroes.
Everything stops before and after at least 3 major holidays.
The winter slowdown now starts around Thanksgiving, in late November and doesn’t really end until March. Don’t expect people to know when the holiday actually starts, or when their offices are closed. Expect dates to change frequently. There are certain weekends when people are required to work, which can be occasionally chaotic. Much business tends to get done in the brief periods between festivals and holidays. Can be quite frenetic.
(Note: This situation is improving in Shanghai and Shenzhen, but can still cause problems. Always double-check schedules, and build in slack time when you are waiting for SERVICES to be performed. Manufacturers are getting better at following timetables and schedules.)
No service contracts, no ongoing deals.
This common decision solves 2 problems. 1) Reduce expense, and 2) Reduce work. A drastically shorter useful lifetime for the equipment or a failed product launch doesn’t really seem to matter much with local counter-parties. You will do one-off deals here. Maybe there will be a next deal. That’s long term. Don’t rely too much on one supplier, one customer, or one service provider.
Oh, and if your standard guarantee has “normal maintenance” language, you might want to check with people in the legal department about tightening that up. As always, check on local laws.
Missed targets, technical inability, lack of skills.
All considered pretty much ok. The failed project is problematic, of course, but in an abstract sense. That salesman who lost the contact information for the potential client? Yeah, that was unfortunate. Terrible. But it will be terrible next time as well, and the time after that. Routine business here is sometimes marked by the lack of pressure to improve. Every time can be like the first time. It’s difficult to get used to, but is still a fact of business life outside of major cities.
Local ‘common-sense’ solutions may surprise you.
Traditional Chinese solutions are still often based on shortage strategies. When I told a friend that my bicycle was stolen, they told me to get a cheaper bike. Then no one will want to steal it. Practical, but it involves dropping standards to achieve a secondary goal. In fact, the advice you receive tends to be a little TOO practical. Yes, the office towers are going up around us, but here on the ground there are a lot of million-dollar telecom systems held together with scotch tape. And it’s not real scotch tape.
Tendency to be satisfied with 80% results.
Solutions that approximate roughly 80% of the intended function are considered a sign-off. Sometimes this is fine, but sometimes it really isn’t enough. Choose your battles carefully. Every yard you move will cost you.
“I know” generally means nothing.
Often counterparties, professional service providers and high level staff will look you right in the eye, and with no apparent motive, will convincingly declare that they know exactly what you are talking about. They are finishing your sentences, gliding effortlessly over details. Their confidence is infectious, and you decide it would be silly and condescending to press the matter.
You return 4 weeks later to discover that there has been exactly zero progress. They had no idea what you were saying. Looking back, you figure that maybe 20% of your meaning was transmitted. They don’t even understand your general goal.
“We are good at it” can have a surprisingly wide range of meanings.
It can mean “I have no idea” or “we are good at approximating short-term patches”. Or, it can actually mean “we are good at it”. You will probably want to make a determination about this quickly.
Topics: General China |
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