Ericsson There Were a Number of Things Case Study

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Ericsson

There were a number of things that Ericsson did that were effective in this situation. One was that Ericsson was keen to establish relationships with the Chinese delegation, for example bringing the delegation to Sweden and playing host.to the delegation. This helps to build trust with the Chinese delegation, something that is important in the negotiation.

Something else that Ericsson got right was understanding the nature of the relationship with the Chinese. The Chinese view business relationships as long-term endeavours, which is why they want to do business with "big mountains." As such, the Ericsson managers behaved well when they reminded themselves that the negotiations were long-term and for the good of the company. This approach is in line with how the Chinese viewed the relationship, so taking this approach avoided needless conflict or miscommunication.

One thing that might not have been as effective is treating the Chinese like a singular, monolithic entity. It is foolish to think that, for example, they have all read and swear by The Art of War. While in vogue in the West, this book is just one of many books in China, most of which do not have exposure to Western audiences.

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By not recognizing the diversity of Chinese culture, and by not understanding that they might have influences we don't know about, the Ericsson managers lost opportunities to forge a negotiating system capable of maximizing outcomes. Soderberg and Holden (2002) make a forceful argument that treating international negotiations as encounters with well-defined and homogenous entities is foolish, especially when negotiations are about dealing with individual people.

There were moments in the post-negotiation phase that demonstrated certain miscommunication and misunderstanding of Chinese culture. The incident with the Swedish managing director's housing comes to mind. The Chinese accepted the terms when the contract was written, only to backtrack later. They cited the high cost of the residence, but that was not the real problem. The problem, of course, is that if the Swedish MD had a much better residence than the local Chinese managers of equivalent status, causing them to lose face, as they would….....

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