Abstract:The case is related to the development of machinery for Trilliamp Process for an ethylene producing facility in China. The core of the negotiation is the price. The parties involved are the Chinese officials and representatives from 3 different companies - Auger-Aiso (headed by negotiator Todd Glazer), Federal Electric and Pressure Inc.-Mitsubo.

Insight into Chinese Culture:Interpersonal relationships are one of the most important factors in Chinese culture. The Chinese use different tactics during negotiations, depending on the kind of relationship they share with the foreign party. If the Chinese sense unwillingness of the foreign party to commit, they pursue distributive form of negotiations.

Strategies used while dealing with the companies:1. Marwin Inc. had developed the Trilliamp Process and had recommended Auger-Aiso to the Chinese. Auger-Aiso was unaware of this.

Citing their “customs,” Chinese made the visitor Glazer speak first in the morning. He quoted an upper-range price to allow flexibility. In the afternoon, the Chinese held sales-meetings with the other two companies. By the end of the day, Federal Electric had dropped out. The Chinese would speak about the competitor offering a lower price and ask the company if they could present a better offer. They made no comment on the price or their position and indicated that they would call the next day, which they never did. This made the competitors panic and visit them without notice to present a lower bid.

2. In the following meeting, the Chinese assumed a Good Cop - Bad Cop strategy. A certain member would behave as a bad cop, criticising the quality of the machinery. Another member would behave as a good cop, apologizing for the rude behaviour of his colleague. This was done to make the good cop appear more trustworthy to the foreigners.

3. Finally, Mitsubo-Pressure and Auger-Aiso were put in adjacent rooms at the same time. This was similar to the first tactic - they were called one at a time and informed about the competitor’s offer, and asked if they could offer a better price. When the companies could not drop the offer, they would add something to the package.

On the final day, the Chinese made a counter-offer after Auger-Aiso presented their quote. An agreement was reached, and the deal was signed.

Conclusion:The Chinese are masterful negotiators. Patience, orientation towards harmonious relationships, and survival instinct are the guiding principles of Chinese business negotiations. Business in China is not between organizations, but between people, as they rely on interpersonal contact to resolve business issues.