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The Daily

Study: Americans More Willing to Use Underhanded Negotiation Tactics on Chinese Companies

Chris Gaetano
Published Date:
Jan 11, 2016
'Defense.gov photo essay 120823-D-NI589-007' by Glenn Fawcett. Licensed under Public Domain via Wikimedia Commons A recent study published in the Journal of Business Ethics has found that Americans are more willing to use negotiation tactics that could be considered morally questionable when dealing with a foreign company, in this case Chinese, than with an American one. These tactics, progressively escalating in their ethically ambiguous character, included: 
  • "Make an opening demand that is far greater than what you hope to settle for;" 
  • "Attempt to get [the other negotiator] fired from his position so that a new person will take his place," 
  • "Promise that good things will happen to [the other negotiator] if he gives you what you want, even if you know that you can't (or won't) deliver these things when his cooperation is obtained," 
  • "Intentionally misrepresent information to [the other negotiator] in order to strengthen your negotiating arguments or position," 
  • and "Gain information about [the other person's] negotiating position by paying your friends, associates and contacts to get this information for you." 

What researchers found was that, overall, American test subjects were less likely to use these tactics than Chinese ones. However, when faced specifically with a scenario saying they were negotiating with a Chinese company, Americans became more likely to use these sorts of tactics, "particularly those related to false promises and inappropriate information gathering," than their Chinese counterparts. Indeed, the Chinese research subjects were found to be less likely to use underhanded tactics when dealing with an American company than with another Chinese firm. 

In negotiations, people adopt different models of what is ethically acceptable for themselves in intra-cultural versus inter-cultural situations," said the paper. 

But why? The researchers said stereotypes may play a role. The paper noted that, whether or not such claims are actually true, Americans perceive Chinese companies as being less ethical in negotiations, while Chinese perceive American companies as more, and so both sides might be inclined to change their behavior to fit the image they have of their negotiating partner: 

In line with these perceptions, the American participants may have adjusted themselves to the image of their Chinese counterparts, thereby becoming less ethical in their negotiations. For instance, with or without actual evidence, many Americans (and other Westerners) believe that bribery is commonly practiced in the Chinese market. Therefore, they are inclined to practice bribery when negotiating with their Chinese counterparts. Similarly, the Chinese participants may have adapted themselves to the image of their American counterparts and become more ethical. For instance, many Chinese may believe that bribery is strictly prohibited both by the law and tradition in the U.S. market. Therefore, they may be inclined to abide by such law when negotiating with their American counterparts," said the paper. 

The researchers, however, noted that this is only a tentative hypothesis and there isn't enough evidence to conclusively say that this is why they got the results they did. Another possibility raised is that the Chinese negotiators felt less confident in dealing with American companies, and so were less inclined to use ethically ambiguous tactics that would contribute to uncertainty. The paper also said there could be cultural factors at place, such as individualism vs. collectivism, or valuing procedure vs. valuing results. More research would be needed, said the paper, before a definitive "why" could be teased out from the results.