Management of interpersonal conflicts has attracted researchers’ interest in the fields of psychology and management. Previous studies have documented drastic cultural differences in preferred conflict management styles, with Chinese people having a greater preference for conflict avoidance (e.g., Tjosvold & Sun, 2002) and Westerners having a greater preference for direct, confrontational strategies (Friedman, Chi, & Liu, 2006; Morris et al., 1998). The need to understand this cultural difference has become more pressing than ever given the rising economic power of China and the increasing prominence of Chinese companies as global business partners or competitors in international business.

In this chapter, we will provide a cultural explanation for Chinese people's tendency to avoid conflicts. This explanation pertains to the importance that Chinese culture accords to the values of maintaining harmonious interpersonal relationships. The concern with interpersonal harmony could lead Chinese people to erroneously overestimate the relationship costs of direct confrontation, believing that using a direct approach to conflict management would evoke strong negative reactions from and hurt the relationship with the other disputant. This belief would result in a preference for conflict avoidance, which ironically could increase tension in future interactions between the disputants.