Combining my interests in German cars, international relations, and general management, I recently read the book, 1000 Days in Shanghai, by Martin Posth. The book is about Volkswagen’s initial journey to become the first international automobile manufacturing partner in China. I found several interesting themes in the book, particularly the patience and vision which the VW crew exhibited when things didn’t go as planned. When factory workers appropriated factory supplies shipped in from Germany meant for the new joint venture factory and instead used them in their own Chinese car factory, for example, Posth philosophizes (and it was probably easier doing so years later in his book than it was at the time) that when the Chinese workers saw the potential success of their new company, these kinds of behaviors would stop. Time after time, the Germans felt the Chinese violated the terms of their contract agreement while the Chinese felt the Germans weren’t living up to their word and doing what they could to improvise in a changing environment. Yet both side persevered and the VW/Audi story in China is a huge success.
Then, in a recent airplane ride, I read a brief article in the in-flight magazine that was offering advice about doing business in China. The article echoed a theme I’ve also uncovered in working with the Japanese astronomy community: the Japanese/Chinese business relation is built first on personal relationships (giri on / guanxi), then on the written agreement, whereas in the West/USA, the contract is the basis of the business relationships. The people may change, but the contract remains. Our contracts are often very detailed and precisely worded. Their contracts are broader and talk more about intentions and partnerships. We use contracts to tell us what to do when conditions change. Our Eastern partners view changing conditions as natural reasons to renegotiate the contract. Both approaches make sense, but both are fundamentally different and ripe for misunderstandings if these differences aren’t recognized up front.
So, besides knowing a bit more to expect when partnering with some of our Eastern colleagues (something increasingly common these days), this situation reminds me of another simple, obvious, yet valuable point. Any time you’re interacting with another person, whether from your own culture or one very different, it’s important to understand their environment; it’s important to state and understand each other’s expectations and assumptions. Without this understanding, there would never be a Volkswagen in China. Without this understanding, it is much harder to reach true harmony and agreement in any of your human relations.
When negotiating one international agreement, Scot remembers being frustrated while his negotiating partners complained they didn’t understand a certain passage of text. After failing at multiple attempts to figure out what wording was confusing and getting maybe just a little bit frustrated, Scot remembered that not everyone is as direct as Americans. What “we don’t understand” really meant was “we don’t like”. He could have spent all day going through the text word by word without addressing the real issue at all. With that bit understood, the problem was recognized and then fairly quickly dealt with and resolved. International negotiations are full of such fun opportunities to learn how others think.