Contracting from East to West: Bridging the Cultural Divide Harvard Case Solution & Analysis

While outsourcing and building contractual relationships beyond the borders, it is essential to have the knowledge of cultural differences in order to avoid any possible risk of misconceptions. Culture defines the respective rights and responsibilities of each party engage in the contractual relationships and shapes the language of the contract. To ensure the success of the contract, it needs to have a thorough knowledge of the culture differences. For instance, to successfully negotiate and carry out the contract between the U.S and Chinese businesses, each of the parties should identify the differences that exist in the core values of their culture and develop the strategies for reconciling these differences.

The reconciliation of these differences strengthens the business transactions and mitigate the risk of failures. This installment of Business Law & Ethics Corner provides five dimensions of the culture of the U.S and China to facilitate managers to enhance the understanding of existing cultural difference between these two countries. These five dimensions are: Individualism/Collectivism, Universalism/Particularism, Power distance, Context, and direction. This article facilitates managers regarding how to recognize and accommodate cross-cultural differences to tackle these cultural predispositions to achieve the mutual expectations.

They help to explore the legal requirements and contract requirements between these two countries. Managers can ensure the strategic success of cross-cultural business contracts by minimizing these cross-cultural differences between the U.S. and China, which would help to gain a win-win situation.

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