Top International Negotiation Examples: Apples

Apology in China
The importance of sincerity in apologies mending fences
with angry counterparts
In April 2013, Apple CEO Timothy D. Cook made the unusual move of apologizing to Chinese
customers for his companys warranty policy and promised to make amends, the New York
Times reports.

Apologies in China
On March 15, 2013, International Consumers Day in China, the nations largest state-run television
network criticized Apple for giving iPhone customers in China a short warranty and for charging
consumers to replace faulty back covers on iPhones. Apple products are immensely popular in
China.
Other state media outlets joined in the Apple bashing, and the public outcry grew. Some speculated
that the complaints were a calculated campaign by the Chinese governments to boost Apples
Chinese competitors.
Apple initially failed to respond to the accusations against its warranty policies. Then, in an open
letter released in Chinese, Cook admitted that his companys lack of communication had led to the
perception that Apple is arrogant and doesnt care or value consumers feedback. The letter
continued, We sincerely apologize for any concern or misunderstanding this has brought to the
customers.
In recent experiments, Professor William W. Maddux of INSEAD and his colleagues studied
reactions to apologies in the United States and Japan.
The results suggest that in collectivist cultures such as Japan and China, an apology can be an
especially effective means of alleviating conflict, regardless of whether the apologizer is to blame
(see also, Conflict and Negotiation Case Study: The Importance of Sincerity).
In general, carefully delivered apologies can restore dignity and trust in a way that sheer financial
compensation cannot (see also, Difficult Negotiation Going Nowhere? Consider an Apology).
Related Article: Dispute Resolution in China Apple Apologizes for Warranty Policies What lead
to the worlds premier technology company, Apple, apologizing to its customers in the Peoples
Republic of China.

Conflict Negotiation Strategies: Apples Apology in China

Apples Apology for Warranty Policies in China Provides an Example of How to Overcome Cultural
Barriers in Communication
When dealing with a difficult counterpart, it helps to take a conciliatory approach to the bargaining table.
While apologies necessarily involve moments of vulnerability, they can also open doors to value creation
and strengthen the relationship you have with your bargaining counterpart. Lets look back at Apples
apology in China for its maligned warranty policies as it provides an excellent example of how to
overcome cultural barriers in communication. In April 2013, Apple CEO Timothy D. Cook made the
unusual move of apologizing to Chinese customers for his companys warranty policy and promised to
make amends, The New York Times reports.
On International Consumers Day in China the nations largest state-run television network criticized Apple
for giving iPhone customers in China a one-year warranty, less than the two years required under
Chinese law, and for charging consumers about $90 to replace faulty back covers on iPhones.
Other state media outlets joined in the Apple bashing, and the public outcry grew. Chinas Industry and
Commerce agency called for strengthened supervision of Apples activities in China. Chinese celebrities
seemed to engage in a coordinated effort to pan the American company.
How to Overcome Cultural Barriers in Communication: The Value of a Public Apology
The complaints against Apple coincided with pressure from the Obama administration on China to
address computer hacking attacks on American companies, the Times reports. Some speculated that the
complaints were a calculated campaign by the Chinese governments to boost Apples Chinese
competitors. Apple products are immensely popular in China; the company earned $20 billion in revenues
in China in the past year.
Apple initially failed to respond to the accusations against its warranty policies. Then, in an open letter
released in Chinese, Cook admitted that his companys lack of communication had led to the perception
that Apple is arrogant and doesnt care or value consumers feedback. The letter continued, We
sincerely apologize for any concern or misunderstanding this has brought to the customers.
Speaking to the Times, Santa Clara law professor Anna Han called the public apology a very Chinese
thing to do and predicted that Apples apology and promises to do better would take the wind out of the
[Chinese] governments sails.
In a 2009 negotiation research article, Professor Elizabeth A. Nowicki of Tulane University Law School
suggested that, contrary to the conventional wisdom that your opponents in a dispute will use your
apology against you, sincere, well-timed apology can actually be the key to keeping you out of court.
Nowicki found in a review of research on legal disputes that apologies can improve the odds of
settlement, reduce costs, save time, and decrease the fallout from damaged reputations and
relationships. We described Nowickis research in detail in the article Why Your Lawyer Could Be Wrong
About Apologies in the June 2010 issue of the Negotiation newsletter.
Carefully delivered apologies appear to restore dignity and trust in a way that sheer financial
compensation cannot. This may be especially true in Asian countries where apologies are a time-honored
tradition.
In recent experiments, Professor William W. Maddux of INSEAD and his colleagues studied reactions to
apologies in the United States and Japan. The results suggest that in a collectivist culture like Japans, an
apology can be an especially effective means of alleviating conflict regardless of whether the apologizer is
to blame.