An acquisitions expert and his team from Nestlé were sent to Shanghai to explore working with a company that made Chinese delicacies. Initial meetings with the Shanghai company’s negotiators baffled him. The team from Nestlé were friendly and tried to provide all the details the Chinese wanted, but negotiations were not progressing. Knowing that something had to be done, the acquisitions expert contacted a Chinese business consultant who agreed to help the Nestlé team understand how they should adjust their approach.
He told them that negotiations wouldn't go anywhere until the Chinese executives developed “guanxi” with them – that is, a relationship that may benefit both parties. He advised the Americans to forget about the deal for a while, go out and have some fun. Taking this advice, they did so. When they came back to the negotiation table the following day, they were pleasantly surprised to find a more receptive and engaged Chinese delegation. Negotiations continued smoothly from that point forward, allowing Nestle to establish a partnership with the Chinese company and achieve their goals.