Social capital and the dynamics of business negotiations between the northern Europeans and the Chinese

The paper assesses the impact of social capital on the dynamics of Sino‐northern European business negotiations. It is argued that, while conflicting negotiation styles create interactional difficulties between the Chinese and the northern Europeans, the impact of the interactional difficulties on the processes and outcomes of negotiations is critically dependent on the pre‐existing level of social capital among the negotiators. Social capital has three major components, namely cognitive, relational, and structural. The cognitive dimension highlights the level of shared understanding among the actors; the relational dimension focuses on the affective bonding among the actors; while the structural dimension highlights the nature of interconnectedness among the actors. This is an exploratory study conducted through in‐depth interviews with 24 northern Europeans and 15 Chinese managers, who have been negotiating with each other for several years. We highlight the linkages between the different dimensions of social capital and negotiation processes and outcomes, and conclude with implications for research and practice.