Developing High Affect-Based Trust in U.S.-China Business Negotiations

Introduction

“Affect-based trust is grounded in one’s care and concern for the other party’s welfare and interests, and in the belief that these caring sentiments will be reciprocated” (Jiang, Chua, Kotabe, & Murray, 2011:1151). Today, many Chinese executives are hired by American multinational enterprises for U.S.-China business negotiations to cultivate affect-based trust with those who share a similar ethnic background (Jiang et al., 2011; Lam, 2000, 2013) and to enhance creative collaboration (Chua, Morris, & Mor, 2012). A higher level of affect-based trust with appropriate monitoring processes, including the reciprocity of care and benevolence concerns in the relationships with cultural-sensitive social control mechanisms, is more important in U.S.-China business relationships now than it was twenty years ago. The objective of this paper is to equip American corporations to know how to effectively work with their Chinese executives and enable these Chinese executives to develop positive economic gain through affect-based trust for both parties in business negotiations.

These Chinese executives hired by American corporations in U.S.-China business negotiations have to work with their American teammates who value independent self-concepts and cognitive-based trust while also working with Chinese counterparts who value interdependent self-concepts and affect-based trust. They also have to work both in the American corporate system and in the Chinese bureaucratic system with Chinese characteristics. These Chinese counterparts are working in a power-driven, complicated, and ill-defined legal system (Hofstede, 1980; Hwang, 1987; Lam, 2013; Pye, 1982; Triandis, 1972; Wilhelm, 1994; Yang, 1994). When U.S.-China relationships become increasingly hostile to each other and the formal institutions governing the agreements are weaker, these Chinese executives also have to rely more and more on interpersonal trust that results from guanxi (i.e., Chinese networks of relationships) in China to facilitate negotiation activities (Puffer, McCarthy, & Boisot, 2010; Tan, Yang, & Veliyath, 2009). They must face many tensions and constraints created by organizational, social, political, and economic differences. They also have to compartmentalize their identities to cultivate high affect-based trust with their Chinese counterparts, express interdependent self-concepts, and adopt sincere and appropriate monitoring processes while simultaneously being assertive, maintaining independent selves, and earning cognitive-based trust from their American teammates. The high-stress levels caused by these tensions easily lead these Chinese executives to be ineffective and disrupt the expectations of both their Chinese counterparts and their American teammates (Downey, van der Werff, Thomas & Plaut, 2015; Ferdmann & Sagiv, 2012; Thomas, 2006; Vaill, 2007).

These are three key research questions addressed in this paper:

• 1.

  How do Chinese executives hired by American corporations develop affect-based trust with their Chinese counterparts in U.S.-China business negotiations?

• 2.

  Will these Chinese executives hired by American corporations foster affect-based trust relationships between their American teammates and Chinese counterparts in U.S.-China business negotiations?

• 3.

  Under what conditions will affect-based trust relationships between American and Chinese business negotiators thrive?