A Study On Business Related Gift Giving Among Chinese And West European Businessmen,and Its Impact On The Negotiation Outcome

Although gift giving is done all over the world, the forms that it takes, the obligations that come along with it and the areas in which it is done vary extremely from one society to another. In China it is considered as a fundamental element to build up an maintain guanxi, and therefore it is very common in Chinese business life. In Western Europe, however, it is only done in social life. Consequently, the question arises to what extent international oriented businessmen from these two opposite gift societies adapt to each other’s gift giving customs when encountering each other in the global economic market and if so, which influence their intercultural gift exchange has on their relationship and consequently their (future) negotiation outcome. However, so far little to no research has addressed these issues. Therefore, I conducted a comparative research on West European and Chinese business related gift exchange through a survey and applied correlation and regression tests on the data to retrieve the impact of several factors of the gift exchange on the negotiation outcome. This in order to make Chinese and West European businessmen better understand the impact of their gift exchange during their intercultural business (negotiation) process.In the second chapter I tried to depict the history of gift giving, its major characteristics and business related gift giving features in both societies. Based on this foundation I build my own comparative research on business related gift giving between West European and Chinese businessmen and its impact on different elements of the cooperation between them, and more specifically on the negotiation outcome constructed between them. A survey was conducted within both target groups, resulting in a sample size of235useful surveys, thanks to the participation of106West European respondents, and129Chinese respondents.The approach of this comparative research is twofold:First, we give a general overview of the results of the survey by comparing the answers of both groups of respondents regarding the gift exchange among them. The major findings of the survey show that although West European business people engage themselves less in gift exchange, a majority does find it and important aspect in their business relationship with their Chinese business partners. Additional results were that money and tobacco shouldn’t be given as gifts, especially not to West European businessmen; and the value of a gift shouldn’t be too high or too low out of ethical considerations. A detailed description of all the results and practical implications are discussed in chapter three.Second, based on the results of the research we constructed a model to research the impact of gift giving on the negotiation outcome and used the data of the surveys to test the model in chapter four. The three inherent factors of gift giving that we selected are:value of the gift, kind of gift and frequency of gift exchange and we executed correlation and regression tests between those three factors and the impact on the negotiation outcome one by one.The results of the correlation tests showed that:first, the correlation between’the value of the gift’and’the impact on the negotiation outcome’was different for the West European and Chinese respondents. Within the Chinese sample there was a correlation for gifts with a value higher than100euro (820RMB); while within the West European sample the correlation was the highest for gifts with a value lower than100euro (820RMB).Second, the correlation between’the kind of gifts’and’the impact on the negotiation outcome’was similar within both groups of respondents:there is a correlation for intangible gifts, especially in the West European sample; and no correlation for tangible gifts.Third, there is a correlation between’the frequency of gift giving’and’the impact on the negotiation outcome’for both groups of respondents; but not between the ’frequency of receiving’and the’impact on the negotiation outcome’. Apart from these findings, we found out that another element that seems to have a big impact on the negotiation outcome is the ’personal opinion regarding the importance of gift exchange in a business relationship’ of the respondents since there was a big correlation between both of those variables, especially in the West European sample.The results of the multiple regression tests show that ’the frequency of gift giving’ has the strongest significant impact on the ’negotiation outcome’ in both samples. The other variables ’the value of the gift’ and ’the kind of gift’ show a different significance outcome within our sample groups. Within the West European sample, although correlated and therefore difficult to define their respective impact factor, they (the ’value of the gift’ and the ’kind of gift’) both have a significant impact on the negotiation outcome; in the Chinese sample however, although correlated as well, they are insignificant variables in relation to the negotiation outcome.If we combine the results from the correlation tests and multiple regression tests, we can conclude that there is no way for the West European businesspeople to influence the negotiation outcome by giving gifts to their Chinese business partners, since the only positive related factor to the negotiation outcome is the ’frequency of gift giving’ of the Chinese business partner himself. However, he can try to improve the relationship with his Chinese business partner by giving intangible gifts with a value higher than100euro. Chinese businesspeople, on the contrary, can try to improve the negotiation outcome with their West European business partner, although in a limited way as well by giving intangible gifts with a value lower than100euro.However, the most important factor influencing the negotiation outcome for both Chinese and West European business partners, is one that they can’t control since it regards the ’frequency of gift giving’ of the business partner himself. If your business partner gives you business gifts regularly, it is more likely that it will have a positive impact on the negotiation outcome you reach with him. Although there doesn’t seem to be a huge correlation between gift giving and the impact on the negotiation outcome, it is still worthwhile to keep exchanging gifts since64%of the West European respondents and68%of the Chinese respondents acknowledge that gifts improve the relationship between business partners.