Principles of Negotiation

Negotiations with Asian counterparts can be described as an uphill battle in a vacuum. Just when you think you have reached the top, 'up' changes and the hill becomes a valley!

Different cultures mean different values, assumptions and attitudes. 'Up' to one culture is 'down' to another, or 'yes' can mean 'no', or vice versa.

What to Expect

'Face' and face-saving is an extremely important aspect of negotiating in Asia. Actions, expressions, words and the surrounding environment are all part of the greater negotiating picture - not just the issue at hand. In Asian-style negotiations, you should prepare yourself for initial pleasantries and recognise that you are entering into the beginning of a long-term relationship, with the negotiation process indicating the start of this relationship. Initial negotiations with an Asian counterpart or company will generally not deal with specific issues at first. The process usually goes from general to the specific, and this includes the detailing of agreements in later stages of negotiation.

Be aware of the fact that while some Asian cultures try to keep away from conflict. Others, like the Koreans and the Chinese will use confrontation to try to control the negotiation process. So, be prepared to face aggressive and often vocal counterparts who try to keep you on the back foot and retain control. Counter this with being patient, and being certain, exact and consistent with facts, figures and explanations.

Some Asian cultures are very good at haggling and see this as a regular part of the negotiating process. With the exception of the Japanese perhaps, this could be said to be true of almost all of the Asian societies, to varying degrees and extremes. What should be noted, however, is that often the saying of "yes" and "no" may not mean "yes" or "no". As stated, 'face' is an important aspect of doing business in Asia, and saying "no" could cause the loss of 'face' as a result. While this cultural tendency will differ from culture to culture, (e.g. the Koreans say "no" far more than the Japanese or the Thais), it is never safe to assume that saying "yes" means "yes".

In negotiating, this is especially interesting - often concessions are asked for at the end of negotiations, just at the time when you thought the process was over and agreement reached. Be prepared to re-negotiate prices (and other conditions) even after initial agreements are made and even after contracts are signed.

Differences in Negotiations

Australians tend to see the negotiating process as a decision making forum, while in Asia negotiations are often only information gathering sessions with decisions to be made later, off-site.

We may view the goal as being a signed contract, while the other side may look upon the process as the establishing of a relationship. The key question to ask is "How important is this relationship, how far should I take it and what concessions should I make?".

TIPS on Negotiating

Prepare well - Prepare your sales approach well, focusing on product features rather than pricing. If you are an operator dealing direct and negotiating rates, do not lead with your lowest offer. Instead, start high and negotiate to a point you are comfortable with. Never go below your lowest pre-determined cut off level. Walk out of any negotiations amicably. Non-agreement at any point does not necessarily mean failure!

Homework - Check credit standing and credit terms of your proposed client. Assess business volume and commitment towards your product.
Business Cards - Don't forget to pack a good supply. If possible, have your card details translated to the language of your destination on the reverse side of the card.

Promotional Material - If possible, have your promotional material or at least a "flyer" of your product, printed in the language of your destination.

Appointment - Always arrive at your meeting slightly early or at least on time.

Greeting - Shake hands and present your business card with both hands, face up and right way round for the receiver. Do not fiddle with, bend or deface the client's business card. When it is presented to you, take time to look at it and never put it in your back pocket. This is seen as a mark of disrespect to the owner.

Meeting - Speak clearly and slowly. If your client is in doubt, say it again with a different expression. Listen well and do not make any off-hand remarks. Be patient. By maintaining and retaining emotional control, demonstrating patience and not too aggressively pushing your position, not only do you leave further negotiations open, but you also importantly retain 'face' and subsequently earn respect. Be accurate with information and advice.