Endure the Tiger

Negotiating to gain ground

Leonie McKeon

• Publisher: DoctorZed Publishing
• Year: 2020
• eBook ISBN: 9780648131519
• Edition: 1
• Topic: Personal Development
• Subtopic: Negotiation

With over three decades of experience as a China-Educated Strategist and business owner, Leonie McKeon has helped hundreds of business owners and executives understand how to do business with Chinese people and to be better negotiators. Based on The Art of War, Leonie shares her deep understanding of the 36 Strategies used in Chinese culture and business. She provides invaluable practical tips for any business person looking to improve their overall negotiation skills, as well as become better negotiators in China. More Control, More Success, More Wins!Endure the Tiger: Negotiating to gain ground contains ancient Chinese negotiation secrets that are part of everyday Chinese business practices. Discover how you too can use this ancient wisdom so you can have More Control, More Success, More Wins!•Understand the rules of the game of negotiation •Become a great negotiator anywhere, any time•Learn how to respond when Chinese negotiation tactics are used on you •Master the ancient secrets of negotiation so you remain in control•Implement culturally appropriate strategies for doing business in China•Avoid the traps of classic Chinese negotiation strategies•Take more control of every negotiation •Get more success in business•Win more in business

Strategy Twenty-Six

Point at the mulberry tree but curse the locust tree means “to convey your intentions and opinions indirectly”

To discipline, control, or warn others whose status or position excludes them from direct confrontation, using analogy and innuendo. Without directly naming names, those accused cannot retaliate without revealing their complicity.

Sun Tzu was a famous strategist in China. In fact, the 36 Strategies are attributed to Sun Tzu’s – The Art of War. Emperor He Hu was very pleased with the progress of the development of Sun Tzu’s war strategies. He wanted to see a demonstration of how Sun Tzu’s strategies would work when training a new group of army troops. For this demonstration he presented Sun Tzu with a group of 180 women who were not familiar with army behaviour, and said he wanted to see how the strategist would train these women to march in an army formation. Sun Tzu was confident he could do this. He divided the women into two troops and appointed one of the emperor’s concubines to lead each troop of women. Sun Tzu gave the two women explicit instructions on how to lead their troops in formation. Then the drums played loudly, which was a signal to commence marching. The concubines had not followed Sun Tzu’s orders at all and laughed when the drums played. He repeated the drums playing to signal the leaders to lead the troops of women. They laughed again and did not commence the marching. The next time this happened Sun Tzu applied Strategy Twenty-Six – Point at the mulberry tree but curse the locust tree. He was determined to show the emperor he was an excellent strategist. To ‘discipline, control, or warn others’, he had the two concubines beheaded. This action was done ‘without directly naming names’ - although all the women were fully aware this had happened. He then appointed two more women to lead the troops as they marched in formation. He again gave explicit instructions on how to lead the troops to these newly appointed women. These new leaders explained the orders to their troops in detail, resulting in all the women marching in perfect formation. From this situation Sun Tzu had demonstrated in front of Emperor He Hu that he was an extremely competent strategist. The emperor was very pleased and appointed Sun Tzu as his own army’s commander-in-chief.

As indirect communication is mostly the way Chinese business people communicate, Strategy Twenty-Six is often used in communicating a point of view as a way of saving ‘face’. It is also a method used to make an example of those who do not comply with cultural rules, so others in the group will be intimidated into submission.

Negotiating with Chinese People

EXAMPLE ONE

Strategy Twenty-Six in action (against you)

Lobster is a popular high-value product to export to China. China’s middle-classes are becoming accustomed to eating lobster at high-class banquets. A foreign seafood company is exporting their lobster to China. This is a family business and they have been dealing with a Chinese distributor for one year. The lobster product has been selling well in China. The senior members of the foreign lobster company do not see the need to learn the cultural rules when dealing with China. They perceive that their product is in such high demand there is no need to learn any of the cultural rules when working with a Chinese company.

Representatives of the foreign company have visited China twice since they started exporting their lobster. There are three managers from the company who conduct these visits. Two are senior family members. The third, a junior manager, handles the administrative details of exporting and is not directly involved in the business discussions such as price and delivery dates. The Chinese distribution company is aware that anything they tell this junior manager will go back to the rest of the team.

The Chinese company have ten senior staff who conduct trade negotiations and host dinners for this seafood company. The foreign company is visiting China for the third time, and their cultural skills are the same as they were on their first visit. The Chinese distributors are not impressed with the behaviour of the company’s representatives and are reconsidering purchase of their product.

The foreign lobster company is complacent and under the impression that they do not have any competitors. They have caused ‘loss of face’ through not understanding Chinese cultural rules. When they first visited, the foreign company representatives were given business cards, which they merely glanced at before putting them in their pockets. When given a Chinese business card it is important to carefully read the card and to be seen doing so. During their second visit, when they were hosted at a dinner by the Chinese distributor, the foreigners consumed their drinks whenever they liked, as they would in their home country. At formal Chinese dinners it is culturally appropriate to wait for the host to make a toast and then everyone drinks together. The foreigners also sat where they wished around the banqueting table, ignoring the hierarchy. The hierarchal nature of Chinese business culture means there are appropriate places for everyone to sit, and guests must wait for the host to tell them where to sit at the table, in accordance with their status.

To ensure these cultural blunders do not reoccur the distributors applied Strategy Twenty-Six ‘to discipline, control, or warn others.’ A member of the Chinese team met with the junior manager from the lobster company, telling her that her colleagues must be more culturally appropriate because their behaviour last time caused ‘loss of face’. Prior to the next hosted banquet, she told her two senior managers that they needed to act in a more culturally appropriate way. Not understanding the application of Strategy Twenty-Six, these comments caused embarrassment and annoyance. They did not like hearing criticism so indirectly. They believed the quality of their product was enough and that they did not need to change their behaviour. At the next banquet they acted in the same way they had at the two previous dinners.

After this third dinner, the Chinese distributors chose to work less with this company. As time went on, they eventually located another foreign supplier of lobster, and chose not to work with the foreign company at all. By not understanding the application of Strategy Twenty-Six the foreign company lost their business in China.

EXAMPLE ONE

Guarding yourself against Strategy Twenty-Six

Strategy Twenty-Six is not to be perceived as a strategy against you, rather a strategy to assist you in getting a message through a third party. If you observe the applications of Strategy Twenty-Six, it is a great way to be warned before you make a mistake. The main thing is for you to know how to react when this strategy is applied on you. Chinese people are concerned about saving ‘face’, and because ‘face’ is so culturally important, they also want to save your ‘face’. In this scenario it would have been a good idea for the foreign company to learn some Chinese cultural rules before conducting business in China. Even if you have a sought-after product you cannot rely on Chinese business people to be interested in your product when you continue to behave in a culturally inappropriate manner.

It is also a good idea to understand what your competitors are doing because you can be sure you are not the only company exporting your product to China. When Strategy Twenty-Six was applied on this company, instead of acting in a Western way, they could have taken the message as a prompt to learn and change their behaviour to be culturally appropriate.

When the message was sent to the foreign senior managers, the Chinese distributors were still keen to import this foreign company’s lobsters into China. It was culturally appropriate to use a third party with lesser authority to help the two senior managers achieve a successful outcome with the Chinese distributors. The advice is to go with Strategy Twenty-Six without questioning its application or feeling judged.

EXAMPLE TWO

Strategy Twenty-Six in action (against you)

Chinese parents can be obsessively concerned about their children’s safety and academic progress. Chinese parents will go to great lengths to have their children educated in a reputable place. Additionally, entry to a Chinese university is hugely competitive, and it is believed the more skills a child has acquired at a very young age the better their chances will be when they are older. Early childhood education is therefore very popular in China, and especially in kindergartens offering a contemporary Western curriculum.

In this scenario a foreign company specialising in English-language early childhood education established a high-quality kindergarten in Chengdu, capital of Sichuan Province. To do so, the set up of a joint venture with a Chinese company with solid guanxi in Chengdu. Guanxi is explained in Book Two – Deceive the Dragon: Negotiating to retain power. The closest translation to guanxi is ‘relationship’ or ‘connections’. The kindergarten, in an upmarket area of the central business district, has been operating successfully for three years. During its first year there were considerable setup costs. In the second year the centre was fully operational, and by year three they had 200 children enrolled, with solid relationships and a good reputation among Chinese parents.

The foreign company had sent a general manager from their own country to oversee the operations in Chengdu. This person spoke little Mandarin Chinese. However, they were able to get by with the help of the bilingual Chinese office staff, employed by the Chinese joint venture partner. The general manager worked closely with Chinese office staff and felt no need to understand the language or the culture.

The company rented a three-storey building, with the kindergarten on the middle, or second floor, which had large rooms and copious natural light. The foreign company wanted high-quality fixtures, so they spent a lot of money on infrastructure. The ground floor was dark with no natural light and poorly shaped rooms, so it was used mainly for storage. In China, the first floor is at street level. The third floor was used for the company’s administration.

To get to the second floor where the kindergarten was situated, the children had to climb a small flight of stairs. Even though there had been no accidents, the parents considered these stairs unsafe. Also, the parents did not want their children to touch the handrails as they climbed the stairs because they considered this to be unhygienic.

Not wanting to complain to the general manager directly, the parents let the Chinese office staff know about their concerns. In this way the parents applied Strategy Twenty-Six ‘to discipline, control, or warn’ the general manager. The Chinese office staff raised the parents’ concerns over the location of the kindergarten with the general manager. Lacking deeper cultural knowledge, the general manager only partially understood what the Chinese staff were saying, and decided better cleaning was the answer. When it was clear that the general manager had not understood the full significance of the message, the Chinese office staff went to the Chinese joint venture partner for help.

They informed the joint venture partner about the parents’ concerns. The joint venture partner then delicately discussed the issue with the general manager ‘without directly naming names.’

The general manager was shocked and quite annoyed that what seemed like a small matter had gone from a group of parents to the office staff and then to the joint venture partner. The Chinese partner told the general manager that the parents involved in this complaint had high-level connections. The Chinese partner suggested the best option was to move the kindergarten to the first floor while they improved the infrastructure. The Chinese partner was concerned that the general manager did not listen to the concerns with enough seriousness. The parents’ strong connections with officials could result in the kindergarten being forced to move to the first floor with little warning.

As things would not happen in this way in the general manager’s own country, they refused to move the kindergarten to the first floor, citing costs and the unsuitability of the rooms. They heard nothing for five months and then received notice from the government that they had to move the kindergarten to the first floor within a month. With little time to organise everything for the kindergarten to be fully operational in its new location the company ran into numerous difficulties. As a result of the disorder many parents were unhappy, and felt they were not getting value for money. The number of children attending the kindergarten dropped from 200 to 100. For the next year the kindergarten ran at a loss.

EXAMPLE TWO

Guarding yourself against Strategy Twenty-Six

In this situation it would have been beneficial for the foreign general manager to have developed an understanding of how Chinese business culture operates. Then they would have reco...

Table of contents

• Cover
• Title Page
• Copyright Page
• Contents
• Acknowledgments
• Leonie’s Journey Continues
• The Pinyin System
• Strategies for Gaining Ground
• Strategy Twenty-Five
• Strategy Twenty-Six
• Strategy Twenty-Seven
• Strategy Twenty-Eight
• Strategy Twenty-Nine
• Strategy Thirty
• Your Next Steps
• Back Cover