Teacher’s guide

Case 06: Negotiating in Shanghai, Discussion


1. This not a good choice. The Chinese company would be unlikely to break off negotiations on a multi-million dollar contract for the sake of a few hundred dollars.


2. Also not a good choice. Bob’s use of Li’s family name is correct in the Chinese culture.


3. This is the best choice. Criticizing or correcting a Chinese person always risks causing loss of face. The offense is much worse if it is done in public — and far worse if the person corrected is the boss!


Bob could have ignored this minor issue at the time and later found a way to help Mr. Li understand the way his company is using the term FOB, perhaps with a reference to Incoterms.


Or he could have called for a tea break, apologized to Mr. Li for the “confusing” wording in the agreement, and then clarified the confusion.


The best solution would be to handle this issue at a subsequent meeting with a junior member of the Chinese negotiating team, thus avoiding any chance of confrontation with Mr. Li.