Li Ping from China and Fabio Carvalho from Brazil, two brilliant busineessmen, were ready to do business – until they met in person.
Their CEOs arranged for them to meet in Rio de Janeiro, where Mr. Ping’s Chinese company had started to set up offices for their copper mining executives and managers. It was Mr. Carvalho’s job to find suitable office space and furniture for the business offices, plus housing for the Chinese executives.
At first glance, it seemed the major points had been agreed upon, such as how many executives were coming and the locations for their offices. The trouble in negotiations started when the issue arose regarding the cost of setting up the Chinese business people in Rio. Many people assume that Chinese and Brazillan business executives can work out agreements easily despite cultural differences simply because they have aligned goals. It is not always the case, as Mr. Ping and Mr. Carvalho found out.
Let us examine the cultural backgrounds, to contrast similarities and differences.
Guanxi is the personal connection that one builds through a lifetime, meaning trust and exchange of favors, either in personal life or in business. Brazilians understand guanxi very well; it is one of the pillars of Brazilian society. Brazilians often say that one has better chances to find a good job when he has a great “Ql.” QI means “Quotient of Intelligence,” but it also means “Quem Indica” or “who indicates” the person for the job.
Jeitinho means a little way to fit anything, anywhere and it would be the equivalent of zou hou men, the use of back door methods. In Brazil, Jeitinho also means flexibility, or corruption. There is a famous TV show called *O Bom Jeitinho Brasileiro,” meaning “The Good Brazilian Jeitinho,” where the theme is creativity and flexible solutions to combat tough problems.
The amount of time needed to do business in China and Brazil is longer than that necessary for North Americans. One reason for this is that people want to know and trust the individuals and companies involved in a meaningful way. In Brazil, the judicial system is very slow. If a business deal develops a problem requiring litigation, businesses need to be prepared for court battles lasting many years. This means delays and losses for the business. People prefer to be cautious rather than sorry. In China, all relationships need to be understood through a system where guanxi is crucial, and where all favors done must be retured. Such relationships take time.
Loyalty to friends and acquaintances is also important in both societies, and it may take precedent over profitability. With globalization, standards for doing business are changing, and the standards are higher than ever. When choosing between a competent friend and an unknown business candidate, in China and Brazil both, the chosen person will be the friend.
Bureaucracy may drive international clients a bit crazy in Brazil and China. Overcoming the slow pace of bureaucracy requires patience and good contacts. Since bureaucracy is deeply connected to politics, connected people can give you a hand along the way.
Despite the similarities between both cultures, there are also significant differences. The negotiation styles are different, such as the concept of time. In China, time spent reaching an agreement does not always result in finalizing the contract at the same pace to which Brazilians or North Americans are accustomed. It is not unusual that when one believes he or she has reached a final agreement, the Chinese will start negotiations all over again.
Very long dinners and spending many days getting to know each other are established Chinese methods for building relationships. The same should not be expected from Brazilians. Although having meals together is important for Brazilians, it does not have the same value as for the Chinese.
In China, exchanging business cards has a precise ceremony versus the Brazilian style, where it is just a way of exchanging information.
In the Chinese culture, a relationship develops with a person representing the relationship with the entire company. Rather than individuals, the international colleagues are seen as representatives of their company. For Brazilians, on the other hand, the individual they deal with is more important than the company.
In the Chinese culture, it is unacceptable to interrupt someone who is speaking. In Brazil, on the other hand, it is tolerated.
Among Brazilians, hugging and backslapping are common greetings if business people are close friends. Also, this would be acceptable behavior if they have been business partners for a long time. It would never be acceptable in the Chinese situation.
Chinese society is collectivist. Individuals are more willing to subjugate their own feelings for the good of the group. In Brazilian society, it is more focused on individuals.
Body language is quite different. In China, direct eye contact is disrespectful, whereas in Brazil it is a sign of honesty. While Brazilians are expressive with hand gestures, Chinese business people are quieter and more subdued during negotiations.
When doing business, each country has its own distinct cultural style: a mixture of attitudes, values, and social expectations. Being aware of these cultural differences is a precondition for success. Business representatives need to be provided with an understanding of these differences in order to be sensitive to them when conducting business in Brazil and China, as well as in other countries. What may be considered confusing or offensive in the workplace in one country can be considered acceptable in the workplace of another because of the culture’s decisive role in this context. To excel in business, one must understand cultural differences and play to these strengths.
For both Mr. Ping and Mr. Carvalho, their business meetings taught them valuable lessons. They leared much about Brazilian and Chinese business protocol through awkward and initially unsuccessful negotiations. However, their common respect for each other and corporate goals ultimately won out. I am happy to report they did come to a number of agreements. Today, both men call each other “friend” and often get together for Brazilian barbecues. Mr. Ping takes samba lessons and has learned more about Brazilian history. Mr. Carvalho is taking Chinese language classes at night.