A study of Chinese cultural factors affecting negotiation outcome in China

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A study of Chinese cultural factors affecting negotiation outcome in China

 

Author: Kwong, Kam-yin Roy
Title: A study of Chinese cultural factors affecting negotiation outcome in China
Degree: D.B.A.
Year: 2005
Subject: Hong Kong Polytechnic University -- Dissertations
Negotiation -- China
Trust -- China
Interpersonal relations -- China
Department: Graduate School of Business
Pages: xii, 179 leaves : ill. ; 30 cm.
InnoPac Record: http://library.polyu.edu.hk/record=b1841494
URI: http://theses.lib.polyu.edu.hk/handle/200/5528
Abstract: China has achieved an averaged GDP growth of over 9% in the last two decades, and is becoming the economic locomotive of the new century. As such, the country has attracted enormous sums in foreign direct investment, but both scholars and practitioners find negotiating in China extremely tough. While the literature offers a large number of studies on Chinese cultural factors affecting negotiation outcome in China such as xinyong (personal trust) and guanxi (personal relationship), an integrative model linking the related factors appears to be lacking. Moreover, there have been few attempts to statistically test the relationships between the relevant Chinese cultural factors and negotiation outcome. Therefore, the purposes of this thesis are to identify the Chinese cultural factors, to propose a conceptual model integrating the relevant factors, and to empirically test the resulting six hypotheses in a Chinese context. Xinyong and guanxi are both hypothesized to positively influence negotiation outcome, and guanxi is also supposed to have a direct relationship with xinyong. Meanwhile, face, favor and empathy are hypothesized to positively influence guanxi. The design of a Chinese survey questionnaire was largely based on the pre-existing literature, and was slightly revised according to expert judgment and advice. After the pilot test of the survey instrument with a few items reduction and minor modifications, a 40-item questionnaire was produced for data collection in Guangzhou. A total of 199 valid and usable samples were obtained for statistical analysis. SPSS 10.0 and Amos 4.0 software packages were employed to perform the data analysis using the techniques of exploratory factor analysis, confirmatory factor analysis and structural equation modeling. The assessment results tended to support the measurement models, constructs reliability and validity. The goodness-of-fit of the proposed structural model was subsequently assessed together with the testing of the hypotheses. There was satisfactory evidence to support the model fit of the proposed structural model. A comparison between the proposed model and a competing model reinforced the model acceptance.
The testing results indicated that five out of the six hypotheses were supported, that is, all except for H5 (Favor positively influences guanxi of the negotiating parties). Both xinyong and guanxi were found to be positively and significantly correlated with negotiation outcome. The results imply that business negotiators should pay more attention to personal integrity and trustworthiness, and guanxi remains a major contributing factor in the Chinese business community. Guanxi was also found positively and significantly related to xinyong. In particular, the results show that favor has a positive but insignificant relationship with guanxi, but face and empathy both have a positive impact on guanxi. This implies that business negotiators should not over-rely on favor to establish business relationships because excessive favor is costly and may lead to corrupt activities. As empathy has a positive and significant relationship with guanxi, it is suggested that business negotiators should be more concerned about the feelings and emotions of Chinese people by showing patience and empathetic care. Thus, empathy should not be ignored if we want to establish and reinforce guanxi with a Chinese counterpart.

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