When your supplier is not arguing to "win"

UPDATE 20.07.2011:  Same conclusion, much larger scale.

Is China becoming a country where rioting is the best way to get anything done?

____________One of the things that I’ve learned (through painful experience) while working in China over the years is that Chinese and Westerners (Americans at least) don’t argue for the same reasons or in the same ways.Americans tend to argue to resolve specific points (words, dates, statistics, etc.).  Ideally those individual points will be acknowledged and eventually the argument will reach a “logical” conclusion—each side’s specific points have been resolved to some mutual agreeable level.  I guess you can say that you “win” an argument by getting as many of your specific concerns resolved to your satisfaction as possible (without giving up too many to the other side).  This interpretation doesn’t preclude win/win either—you still want to get as many of your personal issues resolved as you possibly can, you’re just going about it by allowing the other side the same goal in the hope that it’ll actually get both of you a better resolution in the end.But in 12 years in China, I can honestly say that I’ve only had this progressing-to-a-logical-conclusion type of argument a couple of times (and no, I’ve NEVER had a win/win type factory relationship—even when we’ve consciously tried to structure it—there just isn’t enough mutual trust on either side).  It seems to me that both the point of and the process of arguing is completely different in China.If you’ve ever argued with individual Chinese about non-business related issues (car accidents, personal issues, politics) they are almost never about specifics (unless it’s historical dates of when “the West” abused China).  I think that the point of arguing for Chinese is to get a reaction.  After decades (centuries?) of dealing with layers of frustratingly inert bureaucracy that typically don’t want to do or be responsible for anything this is the best course of action; just getting someone to acknowledge your issue is half of the fight.  Because of the lack of attention, a specific resolution is not the point, rather just getting some action taken is the best that can be hoped for.Arguing with a factory that has your money and your product is similar—you may have no leverage whatsoever, you’re just hoping that by making a big enough stink, you’ll get something (anything!) done—we see this all the time with employees who think they’ve been wronged by an employer.The way that many Chinese women (and children) argue is also similar—they throw a loud emotional fit, and often throw things too.  In a male dominated culture that tends to devalues both honesty and commitment, women are asked to hold up ½ the sky but certainly don’t get half the benefits/accolades.Another example.  Trying to argue points in the law about the responsibility of a traffic accident, for example, is near futile.  Neither the other party involved nor the police know the law and neither want to point fingers if they can avoid the loss of face, piles of paperwork and still reach some level of resolution (a lowest common denominator usually) that gets both parties out of the middle of the road as quickly as possible.  And besides, why argue who’s right and who’s wrong if you have more friends (standing in threatening poses) and a language advantage over your foreign antagonist?!Certainly for westerners this not the ideal climate for business to be conducted in: sweeping emotional generalities and a loose adherence to details.  And while I realize that not everyone is dealing with a behemoth state-run bureaucracy all the time, tradition dies hard.

Side Note: I was once negotiating the final benefits in the end of a contract with my employer in Taiwan.  I wanted to talk about specific dates and compensation.  But before we even started to talk about the specifics, in Chinese and right in front of me (they didn't know I had been studying Chinese) the boss asked his assistant if they had any dirt on me--when was my visa due, did I drink, sleep around, have anything illegal that they could exploit in these discussions.  When I answered their questions they both lost face and I got all that I wanted (more than I expected) and the discussions ended almost immediately.  I'm not saying that all Chinese are like this.  But this is an example of what I'm talking about.  Their first response was to look not at the details but what leverage they had outside of the details--they wanted to use emotional power/shame to resolve the entire discussion in one fell swoop rather than look at each specific date/amount and run the numbers.We've also had the complete opposite experience in China where we've argued with manufactures about specific measurements and they've decided that we were just being jerks.  Their ploy then was if we're going to check this one item then they have to have us check everything.  This of course will cost them some more money but it make us late too.  (The assumption being that being late will be more expensive to us so we won't take the deal and they can get out of the discussion on specifics.)  We almost always agree to these tactics knowing that within a day or so it will be so onerous in terms of man hours and customer relations and costs that eventually a higher-up will hear about it and call it quits.

Yet despite the fact that the specific business environments have changed, the same traditions that inform arguing with bureaucracy manifest themselves in project management with private companies (no one reads your contract but you, no problems are ever shared, no QC, nothing is fixed/done right unless you pitch a fit).  So it’s not a stretch to see a strong cultural influence crossing over into business negotiations.Specifically, these are some cultural issues that we’ve repeatedly seen in discussions with private factories—some small or large—all seem to have many of the same habits.1. Chinese talk about problems in circular, non-direct inferences.  This means that when you say “I’ve never heard anything about this problem before,” it’s not exactly true.  And while you’re saying this, your Chinese supplier is thinking, “We told you about it a couple of times, you just never followed up so we didn’t think it was a big deal to you.”  Honestly, they probably did mention it.  Chances are they dropped a comment about something similar that happened to another client/project and you just didn’t get that they were ALSO talking about your project.  The combination of ESL or CSL and hints/innuendos means that there is a great deal of information that most westerners are just not even aware that they are missing.  If you were Chinese you’d get it and the fact that you’re not picking up on their hints is either never even a consideration to your Chinese supplier or they know you don’t get it and they’re too embarrassed (because of the of or the individuals involved in the problem or because of your lack of understanding) to bring it up directly.  Which leads to point number #2.2. Never underestimate how much information is being kept from you to save YOUR own face.  And assume that at least that much info is also being kept from you to save someone else’s face.  Face isn’t just being polite and it’s more important than anyone from a non-face-saving culture can imagine.  Just know that there are very strong reasons for hiding mistakes and these reasons will trump personal and business relationships as well as money.  When you realize this, your arguments with factories may not make any more sense, but you can at least consciously try to figure out what the other motivations are.3.  The corollary to this is that there isn’t ever any one to blame.  Either the materials were bad/wrong, or the weather affected the production, or “we’ve never done it like this” or whatever else can be used to not have any one person take the fall.  If push comes to shove, a sub-supplier is usually the first one hung for problems (regardless of if he had anything to do with it) followed next by a low level line individual.  As the specifics go unresolved and the argument drags on the finger pointing will climb up the factory hierarchy.4.  Because there is no one to blame, no one has to be responsible.  The truth is, most employes are not paid enough to care as much as Westerners are used to have "customer service" people care.  And in addition to the lack of assigned responsibility, most employes are not supposed to deal with problems.  Job descriptions are VERY VERY narrowly defined.  The authority to resolve concerns is limited to a very select few (since it usually includes financial commitments).  Further, most employes are not used to resolving concerns or problem solving anything!  They never learned these skill sets in school and are definitely not hired to do this job now.5. Unlike the West that has 250+ years of legal culture to ingrain the idea that specifics and details mater, China has less than 20 years of this “culture” and almost no personal level experience with the law.  Most Chinese business people have never worked with a lawyer for any reason and even fewer have any experience with contractual agreements of any kind.  Only a few people in any given factory will ever work with and sign contracts with foreigners and certainly there are even far fewer contracts signed with Chinese clients.  Chances are the only “legal” activity anyone in China has ever had was the signing of a mortgage.6. Instead of the legal, laws-are-more-important-than-people environment of the West, China for the last 100 years has been a radically changing uncertain environment dominated by competing armies, political parties and political movements.  Not to mention the fact that there wasn’t even a functioning legal system until sometime in the last decade.  You don’t rely on the law if that law changes (180 degrees in some cases) regularly.  You work with people you know (and can hunt down when things go south).7. There is no trust.  You can't resolve concerns and fix issues if you think that your counter part is actively trying to rip you off.  Everything becomes either a fight or a conscious exercise in doing as little as physically possible to appease the other person without actually doing anything.  If you're convinced that the other party is lying to you even before you start negotiations, the chances of a healthy relationship and a mutually beneficial outcome are slim to none.  We usually get to a "trusting" relationship with factories during order 3 or so.8. A massive and overwhelmed bureaucracy.  In China most people can’t even honestly hope to get what they really want, but maybe if they put up enough of a fuss, if they annoy enough people for long enough, you might get some one to do something.  Like a single child with 6 adults caring for him, if he makes enough racket chances are one of the adults (ironically) is going to give in.  Or, equally effective, if you pay a single well-place individual enough you’ll get (some of) what you’re asking for.  Either way, you have to make your case un-ignorable.  Not right, not technically exact, not morally overwhelming, not sympathetically compelling.  Just not ignorable.9. Lack of individual rights.  It really goes without saying that individuals don’t matter.  The all too common “there are too many people in China” sentiment, I think, affects the attitudes of everyone here.  The reality is that there are literally so many people waiting in line just behind you that no one really has time or desire to treat anyone well.  Ditto for factories with thousands of customers from all over the world trying to order.  If there is a problem and you’re throwing a fit and threatening contractual penalties, it’s just much easier for them to wait to have you leave than deal with you.  If you’re already threatening to make it a legal issue then ignoring you is better than talking with you and acknowledging your concerns (only to have those acknowledgements used to apply legal penalties later).10.  China is both an immature and fast-growing market.  This is true for factories as well as retail.  The general attitude in China, except for a few exceptions (Starbucks, some hotels and a limited number of first rate suppliers), is: “So what if you never come back and order again?!  That’s just one less person with problems that I’ll have to deal with!”  And neither the retailers nor the factory owners believe they can operate in China the way their counter parts operate in more mature markets (with many times fewer potential and actual customers)—they all claim they would lose money here because of the unsophisticated clientele.  I agree.All of these factors contribute to the response that you’re given when you try to argue about contractual specifics.  The reality is that you have to win the cultural, emotional and relationship battles with someone in authority first.  Once you’ve won the support from the top then you can start talking about the details with the people actually working on your project.