Abstract
This chapter examines the cross-cultural issues that Australian managers experience when they negotiate with Chinese counterparts. The literature on Western negotiations with the Chinese is reviewed, and it reveals that understanding cultural values, guanxi, face, and hierarchy are important issues to consider when negotiating with the Chinese. Six major themes evolved following interviews with 25 Australian managers experienced in negotiating with the Chinese. In particular, it was found that it was important for Australian managers to do their homework before negotiating, in order to truly understand the fundamental Chinese cultural values that impact negotiations. The interviews revealed that it was important for the Australian managers to build guanxi and trust with their Chinese counterparts; once trust was established, it was assisted with overcoming challenges and successful completion of negotiations. Similarly, using culturally appropriate communication styles demonstrating respect was important, so that Chinese counterparts did not lose face. Face was also preserved by trying to achieve a ‘win-win’ solution for negotiations, as opposed to ‘win-lose’ outcomes. Considering hierarchy and paying respects to senior Chinese managers at the negotiation table were also assisted with success. The study also indicated that Australian managers’ negotiations with the Chinese could involve a long and cyclical process composed of many stages, which at times can be iterative. A best practices framework is articulated, on how Australians can better negotiate with their Chinese counterparts.