Conflict Management in Chinese Business, Part 3: Paths to reconciliation

Now available on Kindle, iTunes, and other eBook formats: In The Fragile Bridge Andrew Hupert, publisher of ChinaSolved, shows you how to avoid disputes in China when you can, minimize damage when you cant, and manage conflict when you must. Copyright 2012 Best Practices China. ltd. All Rights Reserved.

When you find yourself in a serious business dispute in China, your onlydecision may be whether you stay the course or abandon ship. Trying to get him to change his behavior, attitude or methodology generally doesn’t work well. Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Introduction to Conflict: Western Perspective Western managers sees conflict as double edged sword Paths for emerging leaders, trial  Good to reconciliation by combat.  Bad when destructive, warping corporate culture.It’s necessary, and generally non-fatal Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Westerners and Chinese resolve conflict in different directions Westerners look back at the cause of disputes.  Uncover the truth.  Reconcile past issues. Chinese look forward to the next opportunity.  Take a more fluid, less moralistic view towards disputes.  Believe that things will even out on the next deal. Neither approach is wrong, but they don’t coexist naturally. Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Westerners investigate and reveal Westerners take a “law and order” approach to conflict resolution.  Investigate  Assign responsibility (blame).  Settlement /Restitution Tend to stop the clock and suspend future business until disputes are resolved. Westerners believe everything is somebody’s fault. Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Chinese look past the present conflict Chinese put harmony above justice.  Even when they acknowledge that you did poorly on a deal, the solution is more transactions.  Don’t like to assign blame or responsibility.  Will submit to a mutually respected 3rd party. As long as the relationship is still intact, there is no reason to stop doing business. A breakdown of established order and existing relationships is worse than any dispute or conflict. Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Introduction to Conflict: Western Perspective Western managers sees conflict as double edged sword Structure your deals trial  Good for emerging leaders, for success, not failure by combat.  Bad when destructive, warping corporate culture.It’s necessary, and generally non-fatal Copyright 2012 Best Practices China. ltd. All Rights Reserved.

What happens if your deal works? Western risk-management techniques tend to rely on contracts, formal agreements, penalties and a civil court system.Chinese risk-management techniques tend to rely on relationships, overlapping networks and mutual obligations. These are in direct conflict with one another. Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Their learning curve is much steeperWithin 6 months of successful operation, the Chinese side will know everything about his business and 90% (or more) of yours (at least in China).After 6 months, many Western managers still can’t tell a Shanghai cab driver how to find the office of his JV. Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Structure for successWhen the deal is negotiated, the Western side is in a position of strength. Usually owns the technology. Often has more capital. Understands branding, marketing and soft skills.When the business is up and running, the Chinese side is in a position of strength. Now knows everything the Western side knows. Can make the product a success in China. Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Structure for success (cont.)When the Western side signed the contract, they were justified in demanding advantageous terms (in their minds). Their money, technology and brand.When the business becomes profitable, the Chinese side is justified in demanding advantageous terms (in their minds). Their market, their networks – and their laws. Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Conflict often ensues – but is not inevitableIt is often easier for the Chinese side to dump the Western partner and pursue the local market on their own.Structure your deal in such a way that your Chinese counterparty has more to lose than you do from a failed deal. Rising payouts, incentives, exclusivity and growing equity stakes can be effective if used properly. Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Introduction to Conflict: Western Perspective Western managers sees conflict as Best Practices double edged sword  Good for emerging leaders, trial by combat.  Bad when destructive, warping corporate culture.It’s necessary, and generally non-fatal Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Best practices for conflict management in Chinese businessKnow your own goalsChoose the right partner for the right reasonsBuild strong business relationshipsManage your utility valueConflict management begins at home Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Introduction to Conflict: Western Perspective Western West tough guys say, as In the managers sees conflict double edged sword “What have you done for me  Good for emerging leaders, trial by combat. lately?” In China even the nice guys say,  Bad when destructive, warping corporate culture. for me “What will you doIt’s necessary, and generally non-fatal tomorrow?” Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Introduction to Conflict: Western Perspective Western managers sees conflict as To order The Fragile Bridge: Conflict Management double edged sword in Chinese Business for Westerners: click here  Good for emerging leaders, trial To visit the Fragile Bridge site: click here by combat.  BadTo see the previous slideshow: when destructive, warping corporate culture. Sources of Conflict in Western-Chinese business: click here 3 Approaches to Conflict Management inIt’s necessary, and generally non-fatal Chinese Business: click here Copyright 2012 Best Practices China. ltd. All Rights Reserved.

Order here: The Fragile Bridge The Fragile Bridge:Conflict Management in Chinese Business Developing relationships withChinese partners, suppliersand clients is hard work — butprofiting from them can beeven more difficult. Thebridges you painstakingly builtto cross the cultural divide aremore fragile than you thought. Copyright 2012 Best Practices China. ltd. All Rights Reserved.

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Conflict Management in Chinese Business, Part 3: Paths to reconciliation

by ChinaSolved on Aug 09, 2012

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