Don't anchor yourself: When preparing for a negotiation, remember to develop your 'ask' or opening offer first - before your goal and least acceptable agreement or walk-away.
6 Tips for Negotiating Business Deals with Asian Counterparts
By Farrah Prince
Only a short time ago, business across Asia was booming. It is common knowledge that companies worldwide are dependent on Asian factories, and that the current pandemic is having a far-reaching impact on global supply chains.
Re-negotiating business deals with Asian counterparts will mean remembering your foundation lesson in cross-cultural negotiating. Here are some tips to help you wade through the negotiation process and emerge more likely to succeed.
Be aware of the decision-making process and authority
The decision-making process and authority can vary by culture — and this is important to take note of as it affects how long negotiations can take and who you need to convince. In general, Asian cultures typically have top-down or consensus-driven decision-making styles. For instance, while it may take US or German business days or weeks to make a big business decision from executives, research from the University of Hong Kong has found that the Japanese take weeks or months due to consensus-driven decisions, but can pay off with fast and smooth transitions once the decision is made. Additionally, recognition of seniority or hierarchy is also another aspect to pay attention to, as in Vietnam, you must show the eldest person respect by giving them your business card first.
Address communication gaps
Aside from having language barriers, sometimes the true meaning can get lost because of cultural mores that impact cross-cultural negotiations. For instance, most Chinese and Japanese negotiators will never directly tell you “no”, but will expect you to understand it in other ways. This is also similar in India, where business negotiators have difficulty saying "no" as it can convey an offensive message, so they too, will say statements like "We'll see" or "Maybe" when they likely mean "No". For you to understand this, you must be able to distinguish high context and low context cultures. Blog on Linguistics defines the former as a culture where the context of the situation is emphasized, while the latter is a culture that emphasizes the verbal content of the message. In other words, high-context cultures are not straightforward, while low-context cultures are more straightforward. Realizing there can be gaps as simple as whether the word “No” was used or meant will remind you to seek clarification more often. Sharpen your skills with our tips for direct and indirect negotiators.
Allow them to Save Face
The West is highly individualistic compared to Asia. And while an article by Marcus on social media points out that we too are concerned about how others think of us, as “we might pick cars, accessories, clothes, and other material possessions based on what we believe these objects say about who we are,” the concept of ‘face’ is quite different in Asia. The Asian concept of ‘face’ is described as a combination of social standing, reputation, influence, dignity, and honor, and this is why East Asian cultures emphasize the importance of social harmony. For instance, you will not see a Vietnamese or Chinese businessperson pointing out that their boss made a mistake, as it makes the boss lose face because they were wrong, and the employee will lose face because they appear disrespectful. Understanding this delicate and respectful balance will help you maintain harmonious relationships when conducting negotiations.
Don’t assume their style of expression means the same as yours
When communicating with different cultures, how the other party views expression in emotion in the business setting varies to save face (see above). For instance, some cultures, such as the Chinese or Japanese, value a reserved style of expression and emotions, as well as seeing any public display as inappropriate. On the other hand, business culture in countries like India favors high communication, expressive styles, and value emotion as part of the process. They also appreciate humility and honesty even if things go wrong, as they are happy to guide you. Understanding this will help you avoid the trap of misinterpreting a reserved or expressive style during negotiations.
Aim for equally-mutual positive outcomes
Business negotiations in Asia are an opportunity to build relationships and find common ground. Uncovering mutual goals is vital for the parties to reach a win-win solution. Research from Singapore Management University suggests that Asian culture is fundamentally a low-trust culture, and will not do business with companies who they feel will not equally give and take. Thus, sharing the alignment of goals and aiming for mutually beneficial arrangements is vital to build trust, as companies are more likely to appreciate and build a long-term relationship with you if they see you are giving to the relationship in equal measure.
Take your time
Western cultures tend to view negotiations as sprints — the faster you get it done, the better. For Asian cultures, however, it’s better to take your time. It can take a lot of time for Asian hierarchy to make a decision, so Westerners need patience. For example, some Chinese and Indonesian businesses prefer to have ‘marathon-like negotiations,’ which means that most negotiations will occur over a long period of time. Not to mention, in the US, negotiations over the phone often happen, while some Asian cultures put a lot of emphasis on face-to-face interactions, regardless of how far away the two negotiators are from each other. In Singapore or Vietnam, for instance, meeting someone for the first time should occur in person, and be scheduled at least two weeks in advance. This is because they want to know who they're meeting, their role, accomplishments, etc. ahead of time. See our tips for building in time and showing patience.
by Farrah Prince
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