Case study : An American in Shanghai The chief executive officer (CEO) of a North American electronic equipment manufacturing company pays a visit to a well-known Chinese manufacturer based in Shanghai to explore the possibility of the two firms forming a busi- ness partnership. The Chinese company is very willing to discuss a possible link between the two companies. It is keen to acquire new technology to meet increasingly sophisticated customer demands, which will enable the company to boost its already strong position in the Chinese market, as well as to tap into regional and international markets. When the American CEO arrives at the Chinese manufacturer’s office in Shanghai, he finds that a formal presentation has been arranged for him, the foreign visitor. During the presentation, the Chinese general manager gives a brief introduction to his company. The Chinese interpreter translates what the general manager says word for word. The company is one of China’s second- class enterprises, the general manager says. On hearing this, the CEO’s enthu- siasm for a business partnership immediately evaporates. Accordingly, as the presentation ends, the CEO leaves the building without requesting any further discussions. The next day, the American complains about the Chinese company to a local official who has been acting as his unofficial culture guide. He is taken aback by” “the CEO’s unfavourable comments, and explains that in China a “second-class enterprise” is a locally owned major state enterprise. The official goes on to say that it could be difficult at this stage to arrange a follow-up meeting to discuss a business partnership. The reason is that the Chinese general manager has lost “face” due to the CEO’s abrupt departure from the presentation which was specially arranged for him
Review the Mini-Case: An American in Shanghai (found on pages 17–18 of the textbook). Answer the following questions:
To what extent were the Chinese interpreter and the Chinese general manager responsible for the situation that has arisen?
How should the CEO have handled the situation immediately following the Chinese general manager’s introduction?
Discuss other complications that could arise when trying to negotiate in a foreign country when one has limited knowledge about local customs and business practices and steps that negotiators can take to increase their cultural awareness and avoid misunderstandings when dealing with international counterparts.
Please refer to the Case Study: An American in Shanghai Guidelines and Rubricdocument to complete each rubric to earn the maximum grade