Successfully Negotiating in Asia

By Kim Cheng Patrick Low

Successful negotiation requires a close understanding of their partner’s culture, their feelings, habits and values. When planning to do business with suppliers and other partners in Asia, a thorough preparation is essential to avoid misunderstandings, confrontations and disappointments, and to ensure the mutually desired success.

This book presents a complete communication and negotiation skills program with special focus on negotiation partners from the different regions of the Asian continent. Readers learn to negotiate the Chinese, the Indian or the Japanese way, and they learn to understand the ways Asians negotiate. Written by a cross-border author, both academician and practitioner, with plenty of experience from Eastern and Western cultures, this book is a valuable resource for anyone relying on business success with Asian partners.

• Language: English
• Publisher: Springer
• Release date: Jan 15, 2010
• ISBN: 9783642046766

Book preview

Patrick Kim Cheng LowSuccessfully Negotiating in Asia10.1007/978-3-642-04676-6_1© Springer-Verlag Berlin Heidelberg 2010

1. What Is Negotiation?

Prof. Patrick Kim Cheng Low¹, ²  

(1)

Faculty of Business, Economics & Policy Studies, Universiti Brunei Darussalam, Jalan Tungku Link, Gadong, BE1410, Brunei Darussalam

(2)

University of South Australia, Adelaide, Australia

Prof. Patrick Kim Cheng LowChartered Marketer

Email: [e-mail]

Abstract

Negotiation is an everyday occurrence. I am always negotiating and so are you. You have been negotiating ever since you were old enough to disagree with your parents about whether or not you should eat your cabbage. We all negotiate every day, with our workmates, partners, children, friends and acquaintances. Most of the time we might not even be aware that we are doing it because it is such an everyday event (Hodgson 1994, p. 1).

To be persuasive, we must be believable. To be believable, we must be credible. To be credible, we must be truthful.

Edward R. Murrow

Every human benefit and enjoyment, every virtue, every prudent act is founded on barter and compromise. Each party recognises the right of the other party to be in negotiation on an equal footing. He that wrestles with us strengthens our nerves and sharpens our skills. Our antagonist is our helper.

Edmund Burke

1.1 Introduction

Negotiation is an everyday occurrence. I am always negotiating and so are you.

You have been negotiating ever since you were old enough to disagree with your parents about whether or not you should eat your cabbage. We all negotiate every day, with our workmates, partners, children, friends and acquaintances. Most of the time we might not even be aware that we are doing it because it is such an everyday event (Hodgson 1994, p. 1).

Inside the company, we are also transacting business. You transact with bosses, staff, other departments, people at the same level and service departments. You may find that you are a maker as well as a seller of services within an organisation, and the users of your services may dicker with you about the quality, quantity, time, cost and continuity of those services. Production managers have to deal with production planners and schedule makers. Company purchasers report that much of the negotiating they do is with users within their companies who use various ploys to circumvent and thwart company procedures. And human resource managers have to negotiate with staff, recruitment/placement agencies and many others in addition to the union(s). Every time, we negotiate. Every time, we seek to influence people/the other party (OP).

And in life, there is no shortage of conflicts, arguments, disputes, or disagreements. They occur most of the time, and at all levels: between workers and managers, between developers and environmentalists, between husbands and wives, between neighbours, between groups within a nation and between nations themselves. Whatever is required to settle the dispute or disagreement, we need skills to negotiate/bargain to come to an agreement or a win–win outcome.

1.2 Definition of Negotiation

Yes, there are always many viewpoints, perspectives, ideas and angles. To this author, negotiation is when we, each time, seek to influence the OP or persuade the OP of our point of view.

Negotiating is a way to get what you want out of your life. It is not a skill to be brought out once in a while, but it is a skill to be learnt and always be part of you. It is your own communication style and skill to create or better the life you want. You persuade others and get things done.

And whatever endeavour you are working on – whether a personal, financial, or career goal or a community goal – you need to set yourself the ideal of helping as many people as possible to win. And in leading, when your people win, you win too. When employees see that their business leaders are doing everything possible for them to succeed and meeting their needs, they will be willing to put in extra effort. Children, seeing their parents having worked hard for the family, will work hard in their studies. When your family wins, you win too. And when your country wins, you win too. When the universe wins, you win too. When you help each other, you live in a better surrounding and environment.

1.2.1 Successful Negotiation

Successful negotiation is not a win–lose situation. It is not I win, you lose! or You win, I lose! The win–lose mentality is, in fact, one of the serious negotiation mistakes committed by most people. Avoid thinking of negotiation as a zero-sum game or a contest. This line of thinking can lead you to perilous waters.

An example is the well-known situation where employees virtually force management to give a huge pay rise. The employees may have won the negotiation, and the company owners lost. But when the company does not earn enough to finance the pay rises, what happens? The employees are laid off. Was the negotiated win at all costs really worth it?

You don’t work against someone. Negotiating, I believe, is working with people to come to an agreement. Both sides have a stake in ensuring a deal comes out right. Deals are put together. Deals are worked out together.

And it is critical to make the OP understand that if and when one succeeds, the OP succeeds, and vice versa. One African participant gave me this analogy during one of my many negotiation-training sessions. Negotiation is likened to two persons sitting in and rowing a canoe. Both must sit and neither must stand nor rock the canoe; otherwise both would suffer if the canoe capsized!

Many people believe that you have to be intimidating, aggressive, forceful and even rude to be successful negotiator, a very common misconception. You are not going to war! Avoid Mao Zedong’s notion of power coming from the barrel of the gun, carving the opponent into pieces. Instead, embrace it being the honey that attracts the ants. Avoid Mao Zedong’s style of catching the turtle in a jar. Instead, embrace Gandhi’s peaceful and non-violent, yet persuasive ways. Avoid trickery and deception, killing with a borrowed knife. Instead, build trust, work together and achieve results.

Negotiation is talking, not screaming. It is discussing things, and amicably settling things. The Indonesians simply call it bicara, or talking, gently telling the OP or nudging the OP towards one’s point of view. Negotiation is a respectable art of persuasion between two parties – whether the person on the other side is former US President George Bush, US President Barack Obama, or your used-car dealer.

In a successful negotiation, everyone wins. All parties walk away happy. A successful negotiation entails a win–win relationship for all involved. Your needs are satisfied; the needs of the OP are satisfied too. You win and the OP wins too!

1.3 Skilled Negotiators Seek To Build Common Ground

When we build relationships with OPs, we get to know the OP, and thus create common ground with the OP. If we seek to identify the differences, well, there are always differences and in fact 1,001 differences! And it becomes difficult, if not impossible, to negotiate with the OP. Remember the difference between the optimist and the pessimist? One saw the glass as half full and the other as half empty. Find common ground, and you will find an excellent starting point for negotiations to move forward.

Skilled negotiators seek to create common ground with their OP. They search for common interests/areas of agreement, accentuating the positives and moving forward in their negotiations. This is tantamount to a Malay proverb: Buang keroh ambil jernih (Get rid of the scum to make the soup clear), meaning look at the positive aspects rather than the negative aspects of the issue.

The case examples I have in mind are the popes’ historic trips. One example is the historic trip-cum-pilgrimage of the late Pope John Paul II to Greece from 4 May to 5 May 2001. Pope John Paul II talked of the time to heal the wounds that have divided Eastern and Western churches for nearly 1,000 years. The positive aspects were accentuated and common ground was built to foster greater church unity. Another example is a speech by Pope Benedict XVI in 2009 to Muslim leaders in Jordan when he urged Muslims and Christians to come together as worshippers of God. He stressed that religion should be a force for unity between Muslims and Christians. The pontiff also referred to God as merciful and compassionate, using the formula Muslims use when speaking of God (The Sunday Times 2009).

1.3.1 Knowing Yourself

Know yourself well. Examine your own ego, interests and emotions.

Will you fly off the handle or tend to insult the OP? If so, and if you feel you will not be able to control your actions, then perhaps, at times, you should let someone else negotiate for you. Is there someone else in your workplace who could handle the negotiation better?

What are your attitudes when you come to a negotiation? Are you enthused? Are you charged? To paraphrase Vince Lombardi, if you are not fired with energy and enthusiasm, you will be fired, overwhelmed or attacked by the OP’s enthusiasm!

Do remember, spread cheers, not jeers! And a good attitude can always be as contagious as laughter. People somehow like to relate and mix with positive people; positive people have more friends than negative people. So, direct your feet to the sunny side of the street.

Let us never negotiate out of fear. But let us never fear to negotiate (John F. Kennedy). Don’t be afraid of the negotiation process. Most people fear the very idea of negotiating. They fear the hurt feelings. They are afraid that they may appear impolite, pushy or unfair. These fears are natural, every negotiator experiences them. I understand these fears. And I’ve always felt that rather than fear the person you are trying to negotiate with, you should try to make the person your ally. Or in fact, the OP can be your partner. Show him or her respect and patience. Put your OP at ease. You don’t want a negotiation to turn into a battle.

As you see yourself as a good negotiator, you begin acting like one, and it is a self-fulfilling prophecy! Enjoy your growth and confidence.

1.3.2 Knowing Your Business Well

Make sure that no one on earth knows more than you do about the business. Become the best. Become the expert in your business. You are adding value to your business. And be sure that the earth becomes a better place because of the contribution that you are making.

Believe that what you do is important and equip yourself with whatever knowledge and skills are necessary. Learn and become better each time. And build your own negotiation library. Buy or borrow books on negotiation to read if you want to sharpen your negotiation skills.

1.3.3 Knowing Asia Well

If you are doing business in Asia, know the place – cities, countries, or region – where you want to do business well.

Make sure that you know the people, the social norms, and cultural practices well. Get to know the way in which introductions and greetings are made, the handshakes and various table manners – they are a passport to a world that is otherwise closed. An introduction is the first impression you make on someone, so it is important that you do it well. If your name is mispronounced when you are introduced to others, repeat your name when you acknowledge them.

Be an expert in manners; they will open many doors for you. Know the pleasantry words – such as please and thank you – so that you can easily remove the feeling of uneasiness when dealing with the OP and others in general. You’ll be surprised by the way people respond to you. Knowing the proper local Asian etiquette helps, it inspires trust and that can give you the edge you need to succeed when negotiating.

1.3.4 Knowing the OP’s Needs

Knowing your OP is similar to Sun Tzu’s famous tag line: Keep your friends close and your enemies [OP] closer. Always know your OP. Is he or she the best person on the OP’s side to negotiate with you?

If you do not know whether or not you are talking to the best for the negotiation at hand, begin with a friendly chat. Find out how long this person has been on the job and what that person’s previous experience is. You can then assess how much authority and flexibility the person has. People who are new have less authority and flexibility than people who have been with the company longer. If someone has been repeatedly passed over for promotion, you know that you are dealing with a person who may have frustrations and a lack of loyalty to the company.

Knowing the OP well entails knowing the OP’s needs. We find out more about the OP’s needs: What does the OP want? What does the OP really want? What are the needs of the OP?

Find out more about and probe into the OP’s needs. Several car sales reps have told me that they usually study their target audience or OP. They would check on their OP’s needs. If their customers (OP) want safety, they emphasise the car structure, air bag, and the alloy wheels. And if their OP stresses his or her need for status and prestige, the car sales reps emphasise the (metallic) colour and/or the brand name/make of the car. When the prospective buyer seeks the luxury of driving and the comfort of a passenger car for the entire family, the car sales reps would suggest a seven-seater multipurpose vehicle. It is indeed different strokes for different folks, but always catering to the OP’s needs and requirements. Overall, put your arguments in terms your OP can identify with and understand.

If you negotiate with a bean counter, bring your beans. When talking to a sports enthusiast, you need to speak in sports language.

On 6 May 2001 in Syria, the Pope greeted the Muslim leaders there with the Arabic expression As-salamu-alaikum (Peace be with you) and talked to them. Reports cited that he was warmly welcomed, and his visit to Syria’s Umayyad Great Mosque marked a milestone in Christian–Muslim relations. If you want to persuade or influence a person, speak in the person’s language, the language understood by the person.

Good presenters – like effective negotiators – are able to capture their audience’s attention, working to touch them and providing emotion as well as facts for full understanding. Singapore leaders, for example, are admired for their ability to establish good rapport, persuading Singaporeans passionately through the use of simple, clear language and analogies. I remember former Prime Minister of Singapore Lee Kuan Yew likening himself to a football captain when he spoke of the succession issue some time back. And Prime Minister Goh Chok Tong too spoke of leaders, being in the forefront, as right or left wingers and advancing forward. Analogies and metaphors help, they lend vivid visual impact to the audience. And they’ll remember you well too.

Next, be empathetic, and put yourself in the OP’s shoes. Participate in your OP’s feelings and ideas – this is the crux of all successful communication. Empathy is the bedrock of win–win negotiation. Being empathetic enables you to maintain your feelings as well as understanding the position, views, and feelings of the OP.

As facts alone will not persuade the OP (think of persuasion as facts wrapped in emotion"), pander to your OP’s emotional needs. And use the OP’s emotional needs to reach his logical, argumentative mind. If you find that your OP is a self-made man, he may need praise for his accomplishments. Complimenting him makes him feel he really is as good as he’s worked to be.

In summary, remember that overwinning, bulldozing your way through without considering the OP’s needs, is one of the most common negotiation mistakes. Like Russian tanks or the authoritarian (My way is the way) approach, ineffective negotiators bulldoze their way, wanting to get what they want without even considering their OP’s needs and requirements. And this leads us to …

1.4 Overwinning Is Bad!

Your OP makes blunders; you are winning but at the expense of the OP. Do you take advantage of the OP’s blunders? Suppose you have pinned your OP down and you both know it, what happens? Do you continue to hit your OP?

Remember there is always revenge, maybe not today, perhaps tomorrow or some day and anyone badly beaten is likely to come back and hit you. He or she may poison the well. Indeed, he or she may come swooping back as your deadliest rival! And in the long term, it could be a lose–lose deal for both. Be magnanimous, and give back a little to your OP in return for goodwill, a good relationship and security.

1.4.1 Even If We Win

It is better to make sure that the OP feels good at the close of the negotiation. This enables you to deal with him or her further and thus secure goodwill and build long-term relationships. Any negotiation that ends in bitterness or regret is a bad deal – if this happens, you have actually made a loss! The consequences will come back and haunt you!

If you are dealing with your supplier, don’t think of your first deal as a way of showing who is the boss. Don’t knock him down! Build your bridges. Aim for fairness as well as taking a long-term view of your relationships, otherwise you will be searching for a new supplier all over again. Treat your OP with respect and honour. A thank-you note, a celebration meal/high tea, a telephone call and/or a gracious remark to a mutual acquaintance are some of the ways and means of making the OP feel that if he or she had to lose, at least he or she lost to you, a decent person.

Sometimes, I heard some people bragged of how good a deal they got from their opponents. I believe that it’s not very smart to tell your OP that you have got a good deal. Never let your OP know what a good deal you got. If word gets back to your OP, she will feel you are talking about her and making her appear silly or inexperienced in front of other people, and so she will be unhappy and hostile. Gloating after the deal is also exceedingly bad manners. The best advice is to keep your boasting to yourself where it is not going to hurt you or anybody else!

1.4.2 Making Sure That the OP Does Not Lose Face

At any time when someone really embarrasses himself in a negotiation, the incident can be a deal killer despite the merits of the agreement. We should avoid situations that will make OPs look bad to their client(s), other members of the team, their family or the public.

In Asia and in China, face, or mianzi, is an important cultural concept. It is a fragile commodity. The Chinese are acutely sensitive to the regard in which they are held by others or the light in which they appear. It is very critical to be aware of the concept of mianzi, if only to head off situations in which you cause someone to lose it. If so, you can lose that person’s cooperation, or worse you may open yourself up to retaliation by him.

Not treating someone with proper respect is a serious sin among the Chinese. It almost always comes back to haunt you. If you cause someone to lose face, you will not only lose the respect of the person who you have wronged, you will also lose that of others who are aware of your transgression.

Indeed, as the Chinese proverb has it, A person needs a face; a tree needs bark. Overall in Asia, remember that an individual’s reputation is extremely important. A business-person’s reputation is their rice bag or bread and butter in the Western sense. The Asian culture places a very high value on a good reputation and those with a good reputation are treated with the utmost respect. To lose face in the Asian culture is like losing life itself and when taken to extremes, people have lost their lives because of their reputation. When in China, you should give face, that is enhance someone’s image or reputation. Complimenting your OP on his employees and publicly recognising your OP’s efforts are good ways of giving face. Thanking your OP’s secretary, or employee, who has worked hard on a particular project, even if that someone is of very low rank, is also an excellent example of this. Such actions carry a great deal of weight among the Chinese when they come from foreign guests.

1.4.3 Setting a Pleasant and Cooperative Atmosphere

Regard your negotiation as a working relationship and both of you have the same goals. Avoid confrontation at the outset. Get rid of the direct, harsh-sounding word of No from your vocabulary.

Show respect. Respect begets respect. Build understanding, trust and goodwill.

Collaborate.

The Japanese in business, for example, spend great amounts of time getting to know each other while establishing close personal relationships. Both parties go out together, have karaoke sessions, play golf and visit each other’s offices to chat; and when the time comes for actual negotiation, the important matters have already been discussed.

1.5 Checkpoint

Think About It

Review the following key points and when you have finished the quiz, check your answers.

1. Using your own words, write a definition for negotiation.

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2. What is face? How does one enhance a person’s face in China?

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3. Someone says, Always know your OP. We need to know the OP’s needs. Explain that idea in your own words.

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4. Why is overwinning is bad?

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5. Can you cite reason(s) why overwinning is particularly bad in Asia?

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6. How do you make sure that your OP does not lose face?

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7.