Case 2 Importance of Pre-negotiation Preparation Some Chinese companies ignore the importance of collecting necessary information and doing investigation on their trading partners' financial position seriously and thus induce great losses to their companies. The following two cases provide a real lesson for Chinese firms doing business overseas. A Chinese engineering company in Gabon dismissed quite a number of local workers after it had completed the framework of a construction, which gave rise to a strike lasting for 40 days. The company had to hold a tough negotiation with the local workers, who demanded a large sum of subsidies in line with the labor law of the country. Only by this time was the company aware of their ignorance of the local law and heavy losses thus happened. The company was informed that, according to Gabon's labor law, a casual laborer automatically turns into a permanent laborer if he keeps the job for a week without being fired. As a permanent laborer, he is entitled to family subsidies (enough for two wives and three kids), transportation fee and unemployment subsidies. An unskilled laborer working continually for a month will naturally become a skilled laborer and be promoted to a technical worker after three months. Their salaries will increase along with their upgrading. The Chinese managers’ understanding of casual and permanent labors, unskilled and skilled workers, and technical workers is apparently quite different from that of Gabonese. The result of the negotiation was obvious, the company had to pay a large sum of subsidies, which was as much as the salaries the company had already paid to the workers, and which was not included in the budget of the project. A lesson learnt from the case is that all the concepts and practices suitable for domestic business activities may not fit foreign situations. This crucial point is often neglected because most negotiators are used to the environment of their domestic operations and are not conscious of the constraints and changes of the business activities in foreign countries. Question: What you learn from this case?