Project Management in China

This thesis gives an overview of Project Management in the People’s Republic of China (PRC), with regard to soft skills as success factors. The reason for writing my thesis in China was to experience the effects of globalisation with a practical orientation. China seemed to me the most interesting and challenging country for the assignment. To learn more about the success factors which are essential for the collaboration with the Chinese was a further motivation for me to write this work in China.

During my assignment I learned that soft factors and social competence are key requirements to be accepted and successful in daily business. The intercultural difference and the social behaviour of the Chinese are very different from what Westerners are used to at home. To handle these differences, soft skills become essential for successful collaboration.

After introducing the background knowledge of Project Management in China, several situations which require soft skills are addressed and discussed. Not only ways to improve our own soft skills are stated but also ways to recognise and react to certain situations in the dialogue with others. The role of soft skills is extremely important in modern-day business life and in all divisions of a company. With the following work I want to arouse the reader’s interest and awareness of soft factors in business and convince him of the importance of such a fundamental topic.

Annotation: This work is written in British English with the exception of original quotations. Please note that ‘he’, ‘his’ etc. refer to both genders.

Chapter 4.5.1, Overview of rhetoric and negotiation with the Chinese:

„Negotiating with the Chinese is like negotiating with German unions.” To be exact, we negotiate every day: With colleagues, our superiors, customers or our own family. This chapter focusses on rhetoric and negotiation skills in the tendering and award process and claim or addendum reviews with Chinese suppliers. Rhetorical skills are part of the negotiation and vice versa, they influence each other as they are applied at the same time in a conversation. Rhetoric has influence on the success of a negotiation.

Historically, rhetorical knowledge was developed by the ancient Greeks. The skills were predominantly used to train and optimise thinking, rather than to achieve business success or higher positions. Due to increasing complexity and competition in business, the importance of rhetoric was discovered for business purposes as well. It became obvious, that the words in language play a decisive role in negotiations where smart arguments and precise information exchanged. Rhetoric enables us to achieve success in negotiation by identifying the counterpart’s strategy – even in ticklish situations and with difficult partners.

There are direct interdependencies between rhetoric and charisma. A person who appears sympathetic towards us, will more likely obtain acceptance than someone who is unappealing. Crucial success factors for business negotiations are self confidence and controlled application of one’s own personality.

The overall goal must be a mutual negotiation respecting both points of view. The statements made in the communication chapter also count for this chapter. Four rules for successful negotiation should be observed:

It is an important ritual in Chinese negotiations, to exchange business cards prior to starting negotiations. The main reason is to identify the decision makers. The card is offered with both hands to the counterpart. After the business cards are exchanged, people take a seat at the table. Persons with the same rank sit mostly opposite each other. Cigarettes are then thrown to all participants sitting at the table. Giving around these cigarettes is a sign of respect and comfort. These cigarettes are no regular cigarettes as one pack is very expensive (100 RMB; 10 Euro) and for business purposes only.

Preparing for negotiation:

Like in all negotiations, the success depends on the preparation. Negotiations are seldom won in the negotiation itself but always in advance. People who are famous for their effective success in negotiation prepare themselves better than others. They define their goal, prepare an attractive alternative and identify the intentions of the counterpart and their options.

By utilising the fourth of the 36 Chinese strategem „expecting rested the exhausted enemy”, the duration of the negotiation can be affected adversely. As we know, Chinese have nothing more important than their lunch and dinner times which are at around 11.30 am and 5:30 pm. These times are ‘holy’ to the Chinese. They get very nervous and unfocussed when it comes close to eating lunch. Their work and everything is forgotten immediately if the lunch bell rings. Therefore it is a good strategy to invite the hungry Chinese for the negotiation at around 11 am. This has the affect that they often go into the negotiation only thinking about the impending lunch break. During the negotiation they will persistently press for a lunchbreak but if you stay steady and do not let them have a break, a faster conclusion is likely to occur. After one or two hours they are completely shattered and ready for the signature – because they are not used to performing negotiations during their lunch break. Another aspect has an influence on the success of negotiations. Since Harvard Business School discovered the components of negotiation skills, we know:

Negotiation excellence depends exclusively on the negotiation pressure. Applying too much pressure to yourself results in convulsive negotiation with no satisfying results.

We must ask ourselves: What is the reason that many negotiation experts stay calm and sovereign even under enormous pressure? The answer is, they have an attractive alternative in mind which they will use in case it is needed. For instance: „If this negotiation fails, I can still do...”. The more authentic the attractive alternative is, the more sovereign and successful is the negotiation.

A model for successful negotiation can be described in 6 phases (Table 4.4).

In Chinese negotiations, pressing too much for a quick decision is sometimes likely to backfire. The Chinese need a lot of time to think about their decisions and often come up with another proposal, even after a given deadline by the project team or client. Fighting for every RMB by using all possible arguments is part of their gambling game.

Another reason for the artificially overstated claims being made by the Chinese is the fact that the „inexperienced” foreigners are regarded as beginners to be played with. It is an extreme challenge to stick to the facts when the Chinese bring forward these absurd claims. Being humorous in difficult situation leads to better results than telling the Chinese off for their high claims. Highly overstated claims are also just part of the negotiation game.

The age of a person plays a decisive role in China’s business. Older people are more respected than younger ones. Their word also has more power and influence in negotiations and can open new doors. The older the person, the more trustworthy and respected he is usually from a Chinese point of view. Moreover, respect is also earned in the negotiations if the PM is able to use professional arguments for justification.