An American in Shanghai

1. To what extent were the Chinese interpreter and the Chinese general manager responsible for the situation that has arisen?

a. In this situation both the interpreter and general manager would share the responsibility. In the presentation that was prepared for the CEO, the general manager describes the company as “second class enterprise”, to anyone not familiar with Chinese customs and cultures would assume that this is not a good thing. It means a locally owned enterprise. The presentation should have included foot notes or a much better description to this reference. A better choice of words to describe would have been Private Enterprise or what is known as Non-State Owned Enterprise / Civilian Owned Enterprise.

2. How should the chief executive officer (CEO) have handled the situation immediately following the Chinese general manager’s introduction?

a. Once the CEO heard the description he immediately lost interest. He also made the rash decision to immediately leave after the meeting. He did not provide any feedback or have any further discussions regarding the material presented. He was relying on a local official to potentially save some capital in arranging the meeting with the manufacturing firm. If at any point in the presentation he was unclear of the material questions should have been asked, however the CEO should have some working knowledge of the corporate structure in China before looking to form a partnership with a local company. He specifically should have requested a further explanation of the “second class enterprise” description.

3. 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