WHAT DOES HOLISTIC THINKING MEAN IN CHINESE BUSINESS ?

        As Confucianism is the philosophical foundation of the social code of conduct shaping the Chinese culture, there are some other values originating from this ancient ideology deeply rooted in the Chinese society, like the holistic thinking, because the Chinese way of thinking is in terms of the whole, in a sense that the Chinese are willing to discuss all issues haphazardly and simultaneously, while westerners think sequentially, separating the different tasks of the negotiation one by one( J.K Sebenius, C.Qian, 2008). 

        Things are usually discussed in the order they are outlined in the contract. The Chinese have a preference for the quite well-known technique, where the buyer wants to discuss and decide on every clause separately since you can then negotiate a low price in every issue, which is something that MNCs try to avoid. They do not mind discussing item by item, but when it comes to deciding on the different issues, western companies prefer to do that in conjunction with the other issues in order to form a package deal. For example, foreigners will tell their Chinese counterpart that they are willing to give them X but then they want Y in return, hence they prefer a certain reciprocity. If you decide on each issue separately, it is easy to get into a situation where you feel forced to cave in on every issue. Consequently, it seems like western companies prefer also a holistic thinking in this type, not only the Chinese.

      Empirical data does not comply with the literature, which rather states the opposite. J. Sebanius and C.Qian (2008) declare that the Chinese think in terms of the whole and not sequentially. However, breaking up complex negotiations into a series of smaller issues is essentially avoided by many international companies as well, this is mainly due to the amount of concessions that one could give in this type of approach. In the end, while exerting cross-cultural negotiations, the holistic thinking is rather an advantageous typical Chinese cultural trait which seems to gain more influence within Western companies.

PRIOR KNOWLEDGE TO CROSS-CULTURAL NEGOTIATIONS

      In a cross-cultural environment, if we look at the vast literature written on negotiations, we find that many different fields had been proven to be enriching to the topic, such as marketing and sales, communication and organisational behaviour and even social psychology. Negotiation is one of the highest challenges in business due to the need of communications skills, Gilsdorf (1997), while McCall and Warrington (1989) found that any negotiation is a mutual involvement from both parties to achieve an outcome, hope needs to be retained to achieve an acceptable one, a varying degree of power belongs to each party, as they have different interests and objectives. Banas and Parks (2002) do agree when they say that a business negotiation is trying to reach a mutually beneficial outcome meeting individual goals. Although, negotiating is considered to be a problem-solving exercise in the West, as Fisher (1980) stated that almost the whole literature on negotiation, dealing with tactics and strategies is emanating from Western scholars, while D. Whetten et al.(2000) distinguishes two predominant types of negotiation structure perception, the distributive approach where the negotiators are opponents, which leads to a win-lose result, and the integrative approach where negotiators are collaborating, which leads to a win-win result. 

       Furthermore, an interesting negotiation perception which is BATNA (Best Alternative To a Negotiated Agreement) is seen as the best outcome a negotiator can have if the negotiation process had led to an impasse (Fisher and Ury, 1981; Jaeger et al., 1999), so that the availability of better outside alternatives places the negotiator in a position of power (Lewicki and Litterer, 1985; Pinkley et al., 1994; Raiffa, 1982). As a result, these two perceptions of negotiation behavior will inevitably affect the negotiation process.

      In a mono-cultural environment, the obstacles of language and cultural differences does not exist, thus, negotiators can predict and understand easily the negotiation process using individual perceptions on negotiation behavior. Whereas in a cross-cultural environment, the impact of ethnic heritage (Hawrysh and Zaichkowsky, 1989), customs and attitudes (Shenkar and Ronen, 1987) determines individuals’ behavior and their way of thinking, reacting and feeling within their cultural background (Simintiras and Thomas, 1998). Therefore, an international business negotiator should, in addition to his basic skills, understand the cultural differences, and adapt his negotiation style accordingly. Carl Rodrigues (1996) observed that the idea of “what works in the home country is good enough for the rest of the world” is simply misconceived, far from the truth, and will result into failure. Actually, the main obstacles to overcome in an international business negotiation are:

1.  Learning the language or select an effective translator at least, 
2. Learning the local culture, its business practices and ethics or select an effective translator which is quite hard to do,
3. And having a thorough knowledge of the business matter being negotiated.

         It is not easy to learn the foreign culture, due to the multifaceted structures of any culture that are much too complex to understand. In this perspective, Usunier (2003) sees three facets of cultural differences affecting international negotiations, with binary oppositions for each element:

1. Behavioural predispositions of the parties:  whether the interpersonal orientation is either in harmony or in self-interest, the power orientation is formal or informal, and the willingness to take risks whether it relates to delegated decision-making or uncertainty.
2. Underlying concept of negotiation: whether negotiation strategies are based on trust or mistrust, and where the strategic time-frame is logical or an ongoing dialogue.
3. Negotiation process: whether the styles of negotiation follow concrete goals, or principles and concepts, and whether the outcome orientations are iron-cast deals or less explicit agreements.

      Eventually, we should be aware of these cultural facets in order to not fail in cross-cultural business negotiations.