homework 16

Hypocrisy, Ethics, and Deception in Chinese/American Cross-Cultural Business Negotiations

Steven J. Clarke, Global Management Group

Peng Chan, California State University-Fullerton

Abstract

The formation and evaluation of hypocrisy, moreover moral hypocrisy is synonymous with deceit, deception, lying, fraud, unethical, dishonest, and misrepresentation of information, all leading to bad faith or mistrust. This paper endeavors to dissect key elements of motivation and relative issues influencing the use of deception and/or morally hypocritical behavior in cross-cultural negotiations whether a result of cultural diversity and/or ethical relativism. These divergences are magnified when comparing the cultural multiplicity between Chinese and American business negotiators. Because cross-cultural negotiations are divergent and pivotal in strategic alliance development, such questionable conduct of deception and hypocrisy suggests a current gap in the critical knowledge of ethical interactions during Chinese and American negotiations, currently leading to a significant high rate of failure in negotiations. As a result, motivating potential researchers to close the breach, by way of theory development, by pinpointing for future inquiry, poses the following questions: What role do Sun Tzu’s Art of War and Confucian teachings have in cross-cultural ethical negotiations strategy? How does Sun Tsu and Confucian ethical teachings relate military strategy and business strategy? To what degree does deception affect military strategy in an unalike way than business strategy? Are hypocrisy and/or deception therefore inherently present in Chinese/American cross-cultural business negotiations creating an imbalance?

Keywords: hypocrisy, deception, moral hypocrisy, ethical relativism

Introduction

“China is a society in search of virtue instead of truth” Geert Hofstede

The two Chinese characters, Fu (復) and Dan (旦), literally mean, “Heavenly light shines day after day”. China, throughout most of history, as recently as 150 years ago, was the largest global economy. Then Deng Xiaoping spawned the march towards a reappearance back to the zenith, as China continues to “shine”, whereas The World Bank projects China will overtake the United States as the world’s largest economy in 2015 (Stiglitz, 2015). At the current level of GDP per capita, China is already the largest market in the world for numerous consumer products including cars, and voluminous luxury goods; and consumer services, comprising agriculture, health care, technology, and financial services. With another doubling of China’s GDP projected over the next 10 years, the market for these consumer goods and services will be unmatched in global economic history, founded on an additional 750 million people joining the domestic consumer demography (Forbes, 2012).

The opportunities for expanding business in China by foreign and in particular, US corporations appear unlimited, incorporating factors such as: (a) a large and capable workforce; (b) and entrepreneurial culture; (c) a strong university system; and (d) exponentially growing middle class. However, challenges exist including: (a) lack of raw materials; (b) environmental issues; (c) immorality and corruption; (d) income inequality; (e) social stability; and (f) legal issues (McFarlan, 2008). American executives recognize that Chinese business negotiators are arduous and can be a traumatic and stressful endurance test. Chinese negotiating strategies and tactics have been depicted as being analogous to guerrilla warfare: "Strike hard, retreat, seize a position, reject compromise, and strike again” (Brahm, 2011, p. 22). “Deep cultural differences have created seemingly incompatible contrasts between Chinese and Westerner’s approaches to negotiations” (Graham & Lam, 2003, p.2). "Yes" in China may be the first word of the negotiation or agreement nonetheless is not always the last word in negotiations. "Yes" is often simply another way of saying, "Let's begin to talk seriously“. American culture is goal-oriented. Negotiations are straightforwardly a progression through which the final goal-the contract-is reached (Brahm, 2011). Success in cross-cultural business negotiations between Chinese and American managers is dependent on understanding the cultural diversity and perceptual elements of ethical attitudes and business strategy. Chinese often see Americans as aggressive, impersonal, and excitable, while Americans see Chinese as inefficient, indirect, and even dishonest (Akgunes & Culpepper; 2012; Graham & Lam, 2003). Research reflects that the perception by westerners of Chinese are that they are more likely to consider it appropriate to use ethically inappropriate negotiations strategies as compared to western ethical strategies creating uncertainty, ambiguity, and an imbalance in cross-cultural business negotiations (Ma, 2010). Is this the result of Chinese negotiators employing military strategies of Sun Tzu, or social and ethical elements of Confucian theory? In addition, is Sun Tzu strategy and Confucian teachings ethically compatible? In either case, does this necessarily lead to hypocrisy or deception? China is a vast land; dynamic, ethnically diverse, and growing economically suggesting cross-cultural negotiations are complex instead of stereotypical, and require future research for promising abundant market opportunities successful outcomes.

Hypocrisy and Deception

“Wouldn’t the social fabric come undone if we were wholly frank with everyone?” Molière

Hypocrisy, from the Greek word hypókrisis, is described as “play acting”, ruminated as an antediluvian art, and the original Hypocrites were, in fact, classical stage actors. For hypocrisy is not simply lying – that is, a non-coincidence with the truth. Hypocrisy is, rather, a question of character, or better still, a question of whether the persona constructed, the role one plays, provides a false impression of one’s actual beliefs and practices. The practice of claiming to have higher standards or more noble beliefs than is the case (Oxford Dictionary, 2015). Furthermore, hypocrisy is “the assuming of a false appearance of virtue or goodness, with dissimulation of real character or inclinations, especially in respect of religious life or beliefs; hence in general sense, a pretense, or sham” (as cited in Monin & Merritt, 2010). To sum up, hypocrisy is synonymous with deception, unethical, dissimulation, dishonesty, bad faith, guile, phoniness, duplicity, fraud, and trickery (Dictionary.com, 2014; Thesaurus.com, 2013).

Double standards, or the development or expansion of a working definition of hypocrisy beyond a behavioral inconsistency is offered by Monin and Merritt (2010). Where “practicing what you preach” is how Stone & Fernandez (2008) define hypocrisy, the authors contend, hypocrisy also mingles inconsistency, and deception with dishonesty. Individuals can be moral hypocrites, additionally, cultures can support various psychological devices; As a rule, human societies are unequal (Leavitt, 2005; Magee and Galinsky, 2008); that enable cultures to substantiate and rationalize their own immoral and unethical behavior (Bandura, 1999; Bandura, Barbaranelli, Caprara & Pastorelli, 1996; Valdesolo & DeSteno, 2007).

Another approach to understanding the role of hypocrisy and deceit in cross-cultural negotiations offered by Lammers, Stapel, and Galinsky (2020) suggests we explore the ethical failures in negotiations because of the decision to trick, fraud, withhold, or misrepresent facts, details, and/or overall information. Their underlying assumption was that doing so, is not mutually beneficial and/or does not builds trust, and is destructive towards the long-term relationship and joint success. A key element of their study was the enablement of the negotiators to enhance their power position while increasing their personal success by misrepresentation as a strategy. The study utilized Hofstede’s high and low power context methodology. The major conclusion of this slant is that trust and deception had a negative impact on negotiations, leading to bad faith, distrust, and the appearance of hypocrisy, also resulting from in-equality of social groups of varying degree of power. Analysis of contrasting negotiation strategies between Chinese and American business executives obliges cultural foundations of honesty. The problem of culturally dissimilar perceptions of ethical honesty and hypocrisy between Chinese and American business managers during negotiations is informed by a conventional theory that Chinese are motivated by Sun Tzu (War is the path of deception) and Confucian strategies of negotiations as a zero-sum, correspondingly, as a competitive win-lose game, and that the marketplace is a battlefield. Americans are bound by modern adversarial, aggressive, win-win, individual and humanistic ethics (Al-Khatib, Vollmers, & Liu, 2007; Ma, Liang, & Chen, 2013).

Ethical Relativism

Ethical relativism is the theory that suggests that different societies have different morality, which is relative to the deep influences of one's own culture, and that are no unanimous moral yardstick. That is, whether an action is right or wrong depends on the moral norms of the society in which it is practiced (Velasquez, Andre, Shanks, and Meyer, 1992, para 4). The issue then becomes, who judges this morality, that is, which culture prevails, as it may be that there is no common framework for different societies relative to resolving moral disputes, or what is then perceived as hypocritical “assuming a false appearance of virtue” in nature. If moral customs and principles vary among cultures, are ethical and moral uniformity even possible as to a universal definition? Can it then be a requirement? Is it then even possible in Chinese/American negotiations? Around 2500 years ago, the philosopher Socrates debated the question with his colleagues. Socrates' stance was clear: “Ethics consists of knowing what we ought to do, and such knowledge can be taught” (Velasquez, Andre, Shanks, and Meyer, 1987, para. 2). Would not Socrates encourage us to explore the reasons underlying each other’s ethical values, and teach ourselves and each other, how to best negotiate for mutual success?

Moral Hypocrisy

What are the intrapersonal incongruities between what negotiators think is moral hypocrisy as an adaptive strategy, and how they comport themselves based on their views. Research by Wu and Shu-Ling (2012) provide one interpretation, which is the assumption that moral hypocrisy is a combination or blend of cognitive dissonance, psychoanalysis perspectives, deceit, and self-deception, resulting in attitude or behavior modification. Further, moral hypocrisy is then fashioned by perceptions and judgement, entailing emotions, power, consistency, and other greyed variables. Wu and Shu-Ling tends to confirm the element of cross-cultural perceptions relative to hypocrisy and deceit, which result in judgement and behavior that influences attitude resulting in lesser trust and leading to bad faith. Potential research on moral hypocrisy needs to be done from Chinese and American perspectives, such as emotional intelligence and cultural variables.

Emotion

Another element of hypocrisy incorporates the stimulus of emotion; how it influences moral judgement and honesty. Starting with another view of hypocrisy as that of “personal double standards”, with an explanation of differences between immoral behaviors that are done by others, versus those done by ourselves as recounted by Polman and Ruttan, R. (2012). A key element of this study suggests that while significant literature has been developed on the subject of moral judgement, much less so, concerning emotional influences affecting moral behavior. Assumptions include the element of emotional ubiquity in social and moral activities, including anger, guilt, and envy. The contribution that can be derived from analysis comprises and highlights the importance of emotions in ethical judgement during Chinese/American negotiations in an effort to develop cultural theory as to what these emotions are, why they occur, and how others might adjust or deal with these strategies, tactics, planned or unplanned for.

Language

Additionally, language plays a role in the assessment of hypocrisy as it is a primary delineator of cultural groups because it is an important means by which a society’s members communicate to each other. Language organizes the way members of a society think about the world, and it filters observations and perceptions and thus affects the unpredictable messages that are sent throughout cross-cultural negotiation, and provides clues to cultural values and attaches to acculturation. (Griffin and Pustay, 2013). Additionally, translation is more than a simple substitution of words, but requires sensitivity to sub-titles, connotations, ideas, and body language. “The use of language to deceive appears to be a universal human trait. As Molière suggests, a world of absolute transparency and frankness would probably be unbearable. People find many reasons to conceal truth. Some of those reasons might be considered legitimate while others not, and judgments about the legitimacy of any particular deceit often are themselves contestable” (as cited in Bukovansky, n.d.). “A supreme moment in the life of Confucius: When asked the ultimate political question, if elected, what will you do first? Confucius replies; Correct language! Correct language, Tzu Lu queries - what are you saying? What a stupid questions Confucius retorts: A chün tzu never speaks when he is in ignorance. If language is inaccurate then hypocrisy abounds; if hypocrisy abounds then nothing is completed; if nothing is completed then ritual dies; if ritual dies then law is unjust; and if the law is unjust then the people have not on to trust” (Kramer, 1986, p. 103-104). If Chinese and American cultures have different values and moral principles, which require significant continued investigation, we are able to develop theory, learn, and clarify how to help resolve disputes in our cross-cultural negotiations.

Approach and Specifications

The goal for this study is theory development towards cultural elements of hypocrisy and deception in cross-cultural Chinese and American business negotiations, and establishing the agenda for future in-depth phenomenological research. Significant questions for consideration include:

1. What are the perceived differences of hypocrisy and deception in cross-cultural negotiations relative to strategy, with a focus on Chinese “styles” when compared to American “styles”?

2. Do cultural negotiators present a moral inconsistency without essentially feeling like hypocrites or perceived by others as bad faith participants?

3. How does intentional and/or unintentional behavior generate hypocrisy and/or deception, and if it takes place, is it then always immoral?

4. Are hypocrisy and/or deception therefore present in cross-cultural business negotiations, and is it then inevitable?

We need to understand the meaning of hypocrisy, deception, and its foundations if we wish to understand the context of culture and to assess or estimate the power of dishonest dynamisms and the inevitability of the continuing imbalance created in the exchanges between Chinese and American cross-cultural business negotiation styles. Chinese or American cross-cultural business negotiations individually are not right, or wrong, better or worse, ethical or unethical. Respectable scrutiny expects and requires research into diverse cultures as complicated, and not straightforwardly measured by a human scale: excellent, good, not so good, fair, and medium, or below medium, (Rosaldo, 2014).

Sun Tzu and Confucius in War and Business “The Art of Negotiation”

“China is a society in search of virtue instead of truth” Geert Hofstede

In order to investigate further into the contrasting negotiation styles incorporating deception and/or hypocrisy requires supplementary analysis of cultural foundations for business practices and war strategies. Do either or both Chinese and American business executives treat business like a war? Individual theory: Chinese are motivated by Sun Tzu (War is the path of deception) and Confucian strategies of negotiations as a zero-sum, correspondingly, as a competitive win-lose game, and that the marketplace is a battlefield. Alternative theory: Americans are bound by modern adversarial, aggressive, win-win, individual and humanistic ethics. Another theory offered by Fang (2006) suggests the Chinese negotiator does not adhere to one negotiating style but rather incorporates an amalgam of different styles including “Maoist bureaucrat in learning”, “Confucian gentleman”, and “Sun Tzu-like strategist”. In examination of negotiation theories, when trying to contrast Chinese and American culturally relative elements of hypocrisy, deception as to moral and ethical inconsistencies, emerge adjoined questions:

1. Are strategies for war and business tactically identical?

2. Are strategies for war and business ethically identical?

3. Is Confucian philosophy and Sun Tzu compatible with a “war like” cross- cultural business negotiation strategy?

4. Is there an inherent cultural hypocrisy in trying to appear Confucian while negotiating like Sun Tzu?

Sun Tzu “The Art of War” Strategy

Cicero defines war broadly as "a contention by force"

In the 1989 movie Wall Street, Bud Fox says, “Sun-tzu: If your enemy is superior, evade him. If angry, irritate him. If equally matched, fight, and if not split and reevaluate” (Cantrell, n.d.). The word strategy comes from the Greek word – stratggos: “stratos” – meaning army, and “ago” (leading, guiding, and moving) – which signifies “the general sought to defeat an enemy”.

Sun Tzu’s “The Art of War” strategy for business is taught at major universities in China and the United States respectively: Peking University, Shanghai Jiao Tong, Fudan University, Xiamen University, Sun Yat-sen University and more: Harvard & Yale Business Schools, Stanford Business School, Wharton, University of Southern California, Thunderbird School of Global Management, and more. Additionally, the Sun Tsu Art of War Institute (suntzuinstitute.com) founded in 2007, offers Sun Tzu strategic management courses in English and Chinese. Carl von Clausewitz (1968), a Prussian military theorist and author of the archetypal “On War” suggested that business was a form of social competition that greatly bears a “resemblance to war”. As a result, business and academia apply Sun Tzu to strategic management, project management, innovative management, quality management, marketing, e-commerce, human resources, organizational behavior, leadership, negotiation, and international business (Dimovska, Maric, Uhan, Durica, & Ferjan, 2012). However, does this mean ancient war strategies, even though dynamic and constantly evolving ought to form current strategic ethical negotiation tactics towards successful cross-cultural ventures?

Conversely, a central question for this research; “is the marketplace a war zone”? Are ethical elements of war the same as those for business, while business “resembles” war? According to Sun Tzu: “War is a matter of vital importance to the State; the province of life or death; the road to survival or ruin” (Sun Tzu, 1971). "War is constituted by a relation between things, and not between persons…War then is a relation, not between man and man, but between State and State…” (The Social Contract). Leaders in the military and business are entangled with competition, and share the issue of how to succeed in the face of resolute adversaries. The basic purpose of business is to make efficient use of capital, labor, and material resources to produce goods and services that meet society's needs and wants. As profound and aggressive as competition among business may be, it is irrational to compare it unambiguously to warfare. Executives and military leaders intensely emphasis creating advantages represented by profits and commercial survival in the marketplace, and victories and physical survival on the battlefield, allowing “life and death” real in war, figurative in business (McCann, 2012), in essence, a different “bottom line”. Further, Sun Tzu approaches war with a “shih”, the term for “zero-sum”, or only leading to victory or defeat. Legitimate business relies on a “win-win” quality. In war, it then follows that the role of deception and lying are within moral limits. Chinese literature is replete with heroic tales that describe and by association, support deception when dealing with inimical opponents and diverse interpretations of what is ethical that is different in social interactions including negotiations (Sebenius, 2006). In business, the unrestricted use of deception and lying as a strategy and/or tactic are inappropriate. The specific military stratagems that reflect tactical degrees of deception from Sun Tzu’s 36 stratagems in Appendix A include:

1. "Deceiving the heavens to cross the sea" (mask your real goals)

7. "Creating something out of nothing" (a plain lie)

8. "Creating something out of nothing" (deceive the enemy, take a long time, surprise, and sneak up.

10. "A dagger sheathed in a smile" (Charm and ingratiate yourself to your enemy. When you have gained his trust, move against him in secret)

20. "Catching a fish in troubled waters" (Create confusion and use this confusion to further your own goals)

27. "Pretending to be insane but remaining smart" (Hide behind the mask of a fool, a drunk, or a madman to create confusion about your intentions and motivations.)

“The Art of War makes Sun Tzu's lessons readily transferable to business strategy… The fundamental principles of strategy are the same for all managers, all times, and all situations. Only the tactics change — and tactics are modified to the times” (Michaelson, 2009). Additionally, Sun Tzu offered a military and political view of leadership, which can be applied to business; “Leadership is a matter of intelligence, trustworthiness, courage and sternness” (Cleary, 2000, p. 44). It can be therefore constructed, using the Art of War translation provided by Lionel Giles (1910) with the acknowledgement that Sun Tzu’s strategies (13) could adapt mental activities for business level equivalency as seen in Appendix B. These strategies (13) recognize that business is like war in that both are a contest of wills, dealing with efficient use of scarce resources, dynamic and ever advancing, one can conclude that while war and business utilize these mental activities as a way to characterize winning, which is then termed as the process of “strategy”. Sun Tzu is ideally suited and valid as to the competitive business global environment (McNeilly, 2012).

However, future research needs to focus on and better understand the perceptions of both Chinese and Americans as to the exploitation of Sun Tzu’s military strategy as a model for cross-cultural negotiations. To what degree do managers employ ethical behavior relative to deception when tactically implementing Sun Tzu strategies, whether they are defined as military or business? Forthcoming research would also address the level or gradation of ethical transference from military strategies dealing with hostility, to the business strategies application to mutually successful commercial relationships.

“Theory becomes infinitely more difficult as soon as it touches the realm of moral values” Carl von Clausewitz

Confucian Strategy

Confucianism is acknowledged as both a religious and philosophical convention in China, delimited by, Taoism, Chinese legalism, and military strategy. Confucianism and Taoism, for over 20 decades have fashioned the political, economic, and educational systems in China, influencing personal, group behavior, and belief archetypes. “At the center of Confucianism lie relationships” (Rarick, 2012). Confucianism extends to a form of moral ethics and values, is a rational code of interpersonal relationships or connections (Guanxi). Further, Guanxi is based on trust and is rooted in Confucian beliefs (Crombie, 2010), and incorporates the element of reciprocity, defined as the custom of exchanging things with others, influencing, giving, and taking between individuals, for mutual benefit (Oxford Dictionary, 2013).

Confucius contemporary was Lao Tsu, the creativity for Taoism, the harmonious relationship between life and nature, as Tao is “the way”, suggesting balance between the Yin and Yang, negative and positive. Eight Tai Chi (Tao) negotiators stratagems includes: (1) integrity; (2) caring and compassionate; (3) non-contention in problem solving; (4) avoiding deadlocks and long term; (5) spontaneity and direct; (6) harmonious and gradual build-up; (7) learning and creative; (8) manage stress; Further particulars of each can be seen in Appendix C. Overall, the Tai Chi negotiator is a view of the entire negotiation process, long-term oriented, constantly improving one’s self, employing integrity, caring, win-win, positive attitude, patience, and creativity. The mindset regarding ethical behavior and personal perception of customs strongly influence ethical behavior in Chinese dominated business organizations (Rarick, 2012). Additionally, Han and Altman (2010) put forward that Confucian values are perfectly consistent with the Western concept of citizen’s social rights and responsibilities are mutually dependent. However, one can argue that a “contradiction” exists in the value of Confucian ethical teachings embracing positive business dealings, corporate social responsibility, harmonious relationships, and those of his disciple, Sun Tzu’s concept of strategy through deception, bribery, and corruption to defeat the enemy (Low & Ang, 2012).

American Cross-Cultural Negotiation Strategy

Culture & Strategy

The golden rule is an ancient principle to attain a win-win, treating people fairly, much-admired by Confucius, Tao-tzu, Buddha, Hinduism, and Jesus. “He who sows hemp will reap hemp; he who sows beans will reap beans”. Chinese proverb (Cheng, Low & Patrick, 2010). It is incumbent on both American and Chinese executives that each has a significant understanding of the other’s complex and ambiguous negotiating techniques to negotiate successfully. The main steps in a negotiation model, according to Mujtaba’s (2013) can be abridged under four categories, which are: (1) initiating or pre-planning; (2) negotiating; (3) closing; and (4) maintaining the relationship and renegotiating if necessary. In an effort to understand these categories and process, evaluation of various cultural negotiation factors is required, as seen in Table 1.

Table 1 The Impact of Culture on Negotiation China and United States

Note: Adapted from Salacuse, 2004. It should be noted, these factors are comprised of Salacuse and this researchers experience. It should also be noted that different views exist as to elements such as Win/Lose when evaluated based on history and the military, versus the more contemporary adaptation of strategy from these historic foundations.

Deception as a Strategy

A fundamental question for this study’s focus on deception; is the result of these natural cultural elements of negotiation factor diversities, might lead to a divergence in ethical behavior between Chinese negotiators and US. Are there differences in perceptions of the application of Sun Tzu’s military use of deception as strategy, a cause for the imbalance and resultant high failure rate in negotiations? In previous research, we found that Sun Tzu’s military strategy, when adapted to business, requires a level of modification as to the exploitation of deception, but the question is, to what measure? While Sun Tzu is taught in business negotiation courses in both China and the United States, is there a difference in the ethically marginal tactics resulting from the education and adaptation of these military strategies to business and the marketplace?

Just as Chinese executives reflect their culture in negotiations, so to do American executives conduct business negotiations based on culture, history, economic national maturity, and ethnocentric beliefs. Further, while business necessitates the need for negotiations as a method of resolving differences and/or developing successful business relationships, some executives are ambivalent towards, and even resistant to the process. Negotiations by definition require compromise, cooperation at least in theory, and are not always comfortable or enjoyable for all bargaining parties. In particular, when Americans negotiate with Chinese, suspicion as to motives adds complexity, just as Chinese find Americans arrogant and ethnocentric (Benjamin, 2012). Based on these negotiation approaches by Americans, do Chinese executives view American arrogance as a form of ethnocentric deception?

Ethnocentrism, Deception & Hypocrisy

Negotiations in business communication conducted between Chinese and American cultures surface when participants either culture are unable to understand culturally governed contrasts in communication practices, including language, ethnicities, and meditation processing. Ethnocentrism is the belief that one's own society or ethnic group is by some means essentially superior to others. Ethnocentrism is deceptive precisely because members of any culture perceive their own behavior as logical, since that behavior works for them, which some argue is self-deceptive, hypocritical, and/or arrogant. Supplementary, self-deception involves allowing you to believe something about yourself that is not true, because the truth is more unpleasant. One of the manifestations of self-deception is arrogance. The prophet Obadiah (1:3) identifies arrogance as one of the roots of self-deception. Are Americans then indulging in hypocrisy via self-deception when negotiating with Chinese? Do American executives express judgmental bias in terms of arrogance in their view of the China government, communism, and human rights when negotiating? Further, do Chinese negotiators then view American egotism manipulating negotiation strategy to include a “hard sell” and/or “bluffing” as acceptable and consequently unethical forms of deception?

Reciprocity – a Form of Deception?

In China Guanxi is a Confucian rooted legacy covers centuries and is principally a set of morally correct courses of action, bonding two persons through the custom of reciprocity, which is, exchanging favors rather than an attitude. Friendship is not required however, it is preferred. The connections formed through the performance of reciprocal understandings tend to be seen as perpetual and implies a continued exchange of favors. Guanxi is not automatically equally reciprocal (Dunning & Kim, 2007). The Chinese have evolved Guanxi into a judiciously gauged discipline.

The qualms by American executives regarding Guanxi tend to view reciprocity with negative connotations. American tends to view international negotiations in terms of exchange theory, motivated by the prospect of mutual gain, or equal in nature. Reciprocity refers to exchanges, which are mutual and perceived by the parties as fair. Further, timing of repayment and of obligation is an important dimension of exchange that varies by issue area and relationship. In progressive exchange, the negotiators that moves first risks being exploited and must therefore trust the other. Norms and customary expectations determine what is considered fair when there is no standardized measure of value, which appears more prominent in Chinese culture versus American expectations. In other words, Americans think of reciprocity more in terms of concessions that are matched.

If then, these differences of perception of reciprocity are not equalized, Americans then incline to view favors given as potential corruption, or deception regarding what is given and taken in the negotiation process. Americans formalize meetings with questions, answers, hurdles, agreement, timing, and equal responsibility to perform as per the negotiation, what might be called a contractual approach. In a more informal approach, open reciprocity issues can be perceived as a form of unethical elements of the negotiation, or a form of deception.

Discussion

This study ascertains that China will continue to be a progressively evolving economy and opportunity for American businesses that includes not only new strategic alliances and a new marketplace, but also a plentiful source for mutual intellectual and cultural knowledge to expand and enrich current and future business theory and practices. China strategic knowledge, which derives from enduring Chinese communal philosophies, in various cultural elements, but focusing on ethical elements of deception and hypocrisy runs counter to the American transactional and existential fundamentals that characterize contemporary American cross-cultural business custom. Specific future research should include the factors of the use of deception, and the potential resultant hypocrisy in strategies, based on ethical perceptions and extents of application of military strategy to business strategy. Future research should also include the evolution of increased understanding by both American and Chinese negotiators, that is, to continue to evaluate history and current trends in negotiation strategies and tactics. This study suggests the need for future phenomenological research into the cultural elements of hypocrisy, and honesty in cross-cultural negotiations between Americans and their Chinese counterparts, with a particular focus on perceptions of adapting military tactics to business tactics. Imminent enquiry for added knowledge must incorporate elements of Guanxi, Sun Tzu, language, and the levels of each as to the influence they have on adoption and use of deception and hypocrisy in Chinese/American negotiation strategies.

This study suggest a proposed qualitative phenomenological hermeneutics approach, utilizing purposeful sampling, which will explore the lived experiences of Chinese and American international business negotiators focusing on the cultural and social elements that may influence their perceptions of deception and hypocrisy. Examples of overall research questions as follows:

• What are the perceived differences of hypocrisy and deception in cross-cultural negotiations relative to strategy, with a focus on Chinese “styles” when compared to American “styles”?

• Do cultural negotiators present a moral inconsistency without essentially feeling like hypocrites or perceived by others as bad faith participants?

• What conflicts exist between Confucian and Sun Tzu negotiation strategies, addressing the acceptable levels of deception and hypocrisy in military for commercial relationships

• How does intentional and/or unintentional behavior generate hypocrisy and/or deception, and if it takes place, is it then always immoral?

• What perceptions exist of the elements of ethnocentricity and arrogance of each culture

• Are hypocrisy and/or deception therefore present in cross-cultural negotiations, and is it then inevitable?

References

Akgunes, A., & Culpepper, R. (2012). Negotiations between Chinese and Americans: Examining the cultural context and salient factors. The Journal of International Management Studies, 7(1), 191-200.

Al-Khatib, J., Vollmers, S. M., & Liu, Y. (2007). Business-to-business negotiating in China: The role of morality. The Journal of Business & Industrial Marketing, 22(2), 84. doi:http://dx.doi.org/10.1108/08858620710730203

Bandura, A. (1999). Moral disengagement in the perpetration of inhumanities.

Personality and Social Psychology Review, 3(3), 193–209.

Bandura, A., Barbaranelli, C., Caprara, G.V., & Pastorelli, C. (1996). Mechanisms

Of moral disengagement in the exercise of moral agency. Journal of

Personality and Social Psychology, 71(2), 364–374.

Benjamin, R. (2012). The natural history of negotiation and mediation: The evolution of negotiative behaviors, rituals, and approaches. Hamlin University School of Law. Retrieved from http://www.mediate.com/articles/NaturalHistory.cfm

Brahm, Laurence J. (2011-07-26). Doing Business in China: The Sun Tzu Way (p. 22). Tuttle Publishing. Kindle Edition.

Bukovansky, M. (n.d.) Deceit – The uses of transparency and concealment. Retrieved from http://www.smith.edu/kahninstitute/deceit/deceit.php

Bul-Godley, E. (2013). Why Wall Street loves “The Art of War” – A 13 point plan to mastering business strategy. Retrieved from http://tweakyourbiz.com/global/2013/01/14/why-wall-street-loves-the-art-of-war-a-13-point-plan-to-mastering-business-strategy/#disqus_thread

Cantrell, R. (n.d.). Sun-tzu and Hollywood. Retrieved from

http://www.artofwarsuntzu.com/suntzuandhollywood.htm

Cleary, T. (2000). The Art of War: Complete Text and Commentaries. Shambhala

Craven, R. (2013). The 36 Stratagems Applied to Business. The Directors Centre Business Club. Retrieved from http://www.directorscentre.co.uk/articles/36-strategems

Crombie, B. (2010). Is Guanxi social capital? Journal of International Business, 1(2), 1-28. Retrieved from http://www.ism.edu/images/stories/publications/ism-journal-of-international-business-v1-issue-2-emerging-china.pdf

Dictionary.com (2014). Retrieved from http://dictionary.reference.com/browse/deceit

Dimovska, V., Maric, M., Uhan, M., Durica, N., & Ferjan, M. (2012). Sun Tzu’s “The Art of War” and implications for leadership: Theoretical Discussion. Organizaija, 45 (4). doi: 10.2478/v10051-012-0017-1

Dungan, J., Waytz, A., & Young, L. (2014). Corruption in the context of moral trade-offs. Journal of Interdisciplinary Economics, 26 (1-2), 97-118. doi: 10.1177/0260107914540832

Dunning, J., Kim, C. (2007). The cultural roots of Guanxi: An exploratory study. The World Economy, 30 (2), 329-341. doi: 10.1111/j.1467-9701.2007.00885.x

Fang, T. (2006). Negotiations: The Chinese style. The Journal of Business & Industrial Marketing, 21(1), 50-60.

Forbes. (2012). Opportunities in China: The next 10 years. Retrieved from http://www.forbes.com/sites/jackperkowski/2012/11/19/opportunities-in-china-the-next-10-years/

Graham, J. L., & Lam, M. N. (2003). The Chinese negotiation. Harvard Business Review, 1-12. Retrieved from http://hbr.org/product/chinese-negotiation/an/R0310E-PDF-ENG

Han, Y., & Altman, Y. (2010). Confucian moral roots of citizenship behavior in China. Asia Pacific Journal of Business Administration, 2(1), 35-52. doi: 10.1108/17574321011028963

Kramer, K. (1986). World Scriptures: An introduction to comparative religion. JM Dent & Sons Ltd. Publishers. London, EN

Kim Cheng Low, Patrick (2010). Successfully Negotiating in Asia. Springer Berlin Heidelberg. Kindle Edition. doi: 10.1007/ 978-3-642-04676-6

Lammers, J., Stapel, D., & Galinsky, A. (2010). Power increases hypocrisy: Moralizing in reasoning, immorality in behavior. Association for Psychological Science, 21 (5), 737-744. doi: 10.1177/0956797610368810

Low, P. K., & Ang, S. L. (2012). Confucian ethics, governance, and corporate social responsibility. International Journal of Business and Management, 8(4), 30-43. doi:10.5539/ijbm.v8n4p30

Ma, Z., Liang, D., & Chen, H. (2013). Negotiating with the Chinese: Are they more likely to use unethical strategies? Group Decision and Negotiation, 22(4), 641-655. doi:http://dx.doi.org/10.1007/s10726-012-9285-7

McCann, D. (2012). On reading Sun-Tzu: The promise and perils of appropriating a Chinese classic in international business ethics. Journal of International Business Ethics, 5 (2), 26-37.

McDonald, P. (2012). Confucian foundations to leadership: a study of Chinese business leaders across greater China and South-East Asia. Asia Pacific Business Review, 18(4), 465-487. doi: 10.1080/13602381.2012.693770

McFarlan, T.J. (2008). China: Opportunity or Challenge: Harvard Business School The Centennial Global Business Summit. Retrieved from http://www.hbs.edu/centennial/businesssummit/global-business/china-opportunity-and-challenge.pdf

McNeilly, M. (2012). Sun Tzu and the art of business. Oxford, NY. Oxford University Press, Inc.

Michaelson, G. & Michaelson, S. (2010). Sun Tzu – The Art of War for Managers 50 Strategic Rules (2nd Edition). Avon, MA. F+W Media, Inc.

Molière. The Misanthrope quoted in Judith N. Shklar “Let Us Not Be Hypocritical”, in Ordinary Vices (Cambridge: Harvard University Press, 1984), p. 52.

Monin, B., & Merrett, A. (2010) Moral hypocrisy, more inconsistency, and the struggle for moral integrity. American Pschological Association (3). Retrieved from http://www-psych.stanford.edu/~monin/papers/Monin%20&%20Merritt%20Hypocrisy%20chapter.pdf

Mujtaba, B.G. (2013). Negotiating with modern Chinese professionals. Journal of Technology Management in China, 8 (3), 190-202. doi: 10.1108/JTMC-07-2013-0031

Olekalns, M., Kulik, C., & Chew, L. (2014). Sweet little lies: Social context and the use of deception in negotiation. Journal of Business Ethics, 120, 13-26. doi: 10.1007/s10551-013-1645-y

Oxford Dictionary. (1999). Retrieved from http://www.oxforddictionaries.com/definition/english/hypocrisy

Oxford Dictionary. (2013). Retrieved from http://oxforddictionaries.com/definition/english/reciprocity

Polman, E., & Ruttan, R. (2012). Effects of anger, guilt, and envy on moral hypocrisy. Personality and Social Psychology Bulletin, 38 (1), 129-139. doi: 10.1177/0146167211422365

Pustay, M., Griffin, R. (2013). International Business Seventh Edition. Edinburgh, EN. Pearson Education Limited.

Rarick, C. (2009). Historical antecedents of Chinese business ethics. Journal of Management Research, 1 (1), 1-9.

Rosaldo, R. (2014). Of recruiters and soldiers: Separating cultural and ethical relativism. Markkula Center for Applied Ethics. Retrieved from http://www.scu.edu/ethics/publications/iie/v11n1/relativism.html

Salacuse, J. (2004). Negotiating: The top ten ways that culture can affect your negotiation.

Sebenius, J. K., & Qian, C. J. (2008). Cultural notes on Chinese negotiating behavior. Harvard Business School. Retrieved from www.hbs.edu/faculty/Pages/download.aspx?name=09-076.pdf

Stiglitz, J. (2015). The Chinese Century. VF News. Retrieved from http://www.vanityfair.com/news/2015/01/china-worlds-largest-economy

Stone, J., & Fernandez, N. C. (2008). To practice what we preach: The use of hypocrisy

in addition, cognitive dissonance to motivate behavior change. Social and Personality Psychology Compass, 2, 1024-1051.

Sun Tzu. (1971). The Art of War. Oxford, EN. Oxford University Press

Sun Tzu, The Art of War. (2009). Pax Librorum Publishing House.

Valdesolo, P., & DeSteno, D. (2007). Moral hypocrisy: Social groups and the

flexibility of virtue. Psychological Science, 18(8), 689–690.

Velasquez, M., Andre, C., Shanks, T., Meyer, M.J. (1987). Can Ethics be Taught? Markkula Center for Applied Ethics, Issues in Ethics 1 (1). Retrieved from http://www.scu.edu/ethics/practicing/decision/ethicalrelativism.html

Velasquez, M., Andre, C., Shanks, T., Meyer, M.J. (1992). Ethical Relativism. Markkula Center for Applied Ethics, Issues in Ethics 5, (2). Retrieved from http://www.scu.edu/ethics/practicing/decision/ethicalrelativism.html

Wee Chow Hou & Lan Luh Luh. (2004). Outline of strategies of the Chinese. Chinese History Forum. Retrieved from http://www.chinahistoryforum.com/topic/80-outline-of-36-strategies-of-the-chinese/

Wu, Bao-Pei, Gao, Shu-Ling. (2012). Moral hypocrisy an opportunistic adaptive strategy. Advances in Psychological Science, 20 (6), 926-934: doi: 10.3724/SP.J.1042.2012.00926

ABOUT THE AUTHORS

Steve Clarke (MBA, PhD, ABD) is Senior Consultant and Managing Director, Asia, for Global Management Group (www.globalmanagementgroup.com), a leading consulting firm that helps US companies and executives succeed in Asia. He has consulted for Fortune 500 companies and has extensive experience in the China market. In addition, he has more than 25 years of experience in International Business at Federated Department Stores (Macy’s, Bloomingdales), May Department Stores, Carter Hawley Hale Department Stores, Eddie Bauer, National Football League (NFL), Arnold Palmer Golf Design, Central Department Stores (Thailand), Robinson Department Stores (Philippines), and #1 Department Store (China). He has also been a successful entrepreneur founding China Silk Wines, in addition to consulting foreign companies entering the Asian market. He has taught international business classes including, global strategic management, cross-cultural negotiations, foreign market entry, marketing, global sourcing, product and brand development. He is a graduate of Northern Arizona University, Grand Canyon University, and Northcentral University. He is currently teaching at the University of California Santa Cruz, Sanford Brown College, Cal State Fullerton, and is guest business analyst on the Nation, Sunday Night Business weekly television in Bangkok Thailand.

Professor Peng Chan (PhD) is Full Professor of Strategic Management at Cal State Fullerton. He has published widely (200+ articles) in the fields of strategy, franchising, and international business and has over 25 years’ business and consulting experience in the US and the Asia Pacific region. Dr. Chan is founder and CEO of Global Management Group (www.globalmanagementgroup.com).

Appendix A: 36 Stratagems

Table 2 36 Stratagems of Ancient China

Note: * Thirty-six Strategies is a summary of some of the war strategies used by the ancient Chinese warriors, the name Thirty-six Strategies may have come from Yi Jing's (or I-Ching) (易经) Yin Yang Theory (阴阳学说) which uses the Tai Yin number of 66 (太阴六六之数) to mean many tricks . The main statement, which sums up the Thirty-six Strategies writes: Quote Six multiplied by six is 36. The word calculation (数) conceals another word, namely strategy (术). In the application of a strategy, careful calculation is required. Once one is able to calculate the pattern of how situations develop, he will find the required strategy. A strategy cannot be detached from an objective assessment of a situation. It cannot work by subjective imagination. (Wee Chow Hou & Lan Luh Luh, 2004). ** Adapted from Craven, R. (2013).

Appendix B: Sun Tzu as a Business Strategy (13)

Table 3 Sun Tzu Military Strategy Application to 13 Business Strategies

Note: Adapted from the translation of Sun Tzu’s The Art of War by Lionel Giles (1910), assembled in The Art of War (2009); and from (Bul-Godley, 2013).

Appendix C: Tai Chi Negotiations Stratagems (8)

Table 4 Tai Chi Negotiation Stratagems based on Tao De Ching (8)

Note: The Tao De Ching way is not static but dynamic. The greater the interaction between the two forces, yang and yin, the greater the size of tai chi (the Great Ultimate); it expands. Tao is expansive and if applied to negotiation, it is to be collaborative. Chinese negotiators want to have business sustainability and growth or longevity. Most Chinese aim for long-term business survival as well as partnerships in business. They are in it for the long haul, and not for short-term gains. Most of them would like very much for their businesses are long term, and in fact survive long enough to be passed from one generation to the next (adapted from Kim Cheng Low, Patrick, 2010, p. 97).