I of course cannot prove it, but I am convinced that the failure rate for a business whose owner has gone to a Chinese wedding is at least five times higher than for those who have not.
Let me backtrack a bit and explain.
The Quality Inspection blog recently did a post, Corruption of inspectors: the role of social pressure, discussing the “risk of corruption of inspectors in factories” and two types of bribery. One is outright corruption where an envelope filled with cash changes hands. Inspectors know this is forbidden and engaging in it is risky. The other kind of corruption is where the factory treats the inspector so well he or she feels obligated to “repay these favors.”
According to the post, this subtle pressure is very common in China and can be very effective. It then delves into the psychology of why people around the world feel compelled to reciprocate and why this sort of social pressure is stronger in China than in most other places.
Now here’s where the weddings come in and what we have seen as international lawyers who devote massive amounts of time in working with factories all over Asia, and especially in China. Our clients often tell us that the potential evils/risks we see in their deals “could never happen because I am really good friends with so and so. . . . Such good friends, in fact, I attended his daughter’s wedding. I am not kidding when I say I do not know how many times our lawyers get told this, but I do know that whenever I am told this, I bristle. And I do know this happened earlier this week.
I responded by saying that “you having attended the wedding of your factory owner’s kid actually makes me more worried about something going wrong than if there were no friendship between you two. And if you two are such good friends, it should be relatively easy for the two of you to reach agreement and get that in writing. Also, it is even more important that you two reach clear agreement on your relationship now so as to avoid problems later that might impact your friendship. My client thought about it and, to my surprise, agreed with me.
This is not a peculiarly China phenomenon and I am not saying you should never “mix business with pleasure.” But you should not allow friendships and weddings and social gifts to impede your business judgment and you should not for a moment believe that going to a wedding means your business relationship will always be safe and secure.
Would love to hear your stories either reinforcing or refuting the above.