Apr 12, 2012

The April Newsletter is up; you can read it here

Here’s an excerpt:
Of Beads and Streams

Imagine: you get a quote from a Chinese manufacturer and place a P.O. Everything is in writing; the price, payment terms, every special requirement you can think of to make the product down to the tiniest detail, and more.

Your Chinese supplier says they’ll deliver the order in 45 days. Everything sounds good, and you move onto the next thing.

Or not.

A week later, your Chinese supplier comes back and says “we need a little price
increase.”

“What?” you ask in frustration. “We just signed a deal and you’re already changing it?”
“Factory can’t make product to your price; they found X detail in your drawing and it will cost more,” they explain.
“Why didn’t you look more carefully the first time?”
“Factory just now studied the drawing in detail.”
By now, steam is pouring out of your vents; you want to brain them for incompetence.

In our western culture, once we sign on the dotted line we expect no changes to the deal. If our supplier made a mistake in calculating the price, it’s their problem. If it’s a company we’ve dealt with for years we might work something out where we take a little of the increase, but in general most of us expect our suppliers to keep their word.

But what just happened isn’t necessarily about incompetence, but the differences
between East and West.

Roderick MaCleod, a businessman who spent years in China explains it best:
“Westerners are offended when they have signed a contract, sometimes with elaborate ceremony and some Chinese champagne, and immediately after, sometimes over the champagne, the Chinese start talking about bending the terms a little. Apparently, Chinese see life as a flowing stream and we see it as a string of incidents, much like a
string of beads. We finger one, finish with it, and want to have it tidily
counted off so we can go on to the next; they see every incident and personality
as simultaneously blending into each other before and after, and so nothing ever
ends. This view comes out of the whole context of Eastern philosophy—in China,
the Buddhist and Taoist philosophies in particular. With Westerners’ impatience,
individualism, and transaction-focused attitudes—and Chinese patience, familial,
and pattern-focused attitudes—most clashes of these different philosophies end
badly. When the Chinese attitudes prevail, it can be for the best; on three
occasions, I followed my Chinese counterparts’ willingness to continue in an
apparently lost cause, and the perseverance paid off in a retrieved
opportunity.”1

Recently, I submitted a product for a quote to one of my Chinese partner companies. After
discussing it with several factories, they said they couldn’t source it. I
thought the project was dead, until, a week later, out of nowhere they came back
with a quote…

See the link above for the rest of this article.
Roderick Macleod quote is from his book “China, Inc.”