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Selling /Importing from China

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Negotiating a deal is one of the most stressful aspects of our business lives. There are a few clear requirements for successful negotiating across cultures.

Many people consider their negotiating style to be an integral part of them, like their dress sense, their sense of humour of their car, and they put huge emotional capital into their efforts. But there is no right or wrong way to negotiate; merely a way that gets results or one that doesn’t.

The first is to plan, plan and plan again.  Unless you go into any negotiation with a clear idea of what the minimum acceptable to you is, and what the alternative would be if you did not conclude this particular deal, you will not have a chance of success.  You have to know what your worst case scenario is, and how to deal with it.

What’s more, nobody does it the same way all the time.  Even in your home market, you will adapt your negotiating style to suit the circumstances.  You wouldn’t haggle over the price of a suit or dress in KaDeWa,  Harrods  or El Corte Inglés the way you do in a street market. It’s the same when you try the same thing in a different culture.  However, you also need to take into consideration the culture of the country and people you are negotiating with.


Patience Patience Patience

You also have to understand that in most cultures, you are not negotiating a one-off deal, you are building a business relationship which might last for years.  Or at least, that is what the other guy will be trying to do.  You have to negotiate for win-win, rather than win-lose, and you have to understand that these negotiations can take a considerable amount of time as your counterpart assesses you and your organization as potential long term partners for the future.  Patience is one of the first requirements.  Never fly into a country, expect to conclude a deal over a couple of hours’ horse-trading, and head for home without having taken time to set the basis for a friendly professional and personal relationship.

One of the infuriating habits – in European eyes at least – of other cultures is that many of them, especially the east Asian cultures of China, Japan and Korea, tend to discuss the easy parts of the deal first, and leave the tough problems until last.  We see that as inefficient.  We want to attack the thorny problems first, and if we cannot solve them, then at least we haven’t wasted too much time in a failed negotiation.  But in east Asia, the preliminary discussions and negotiations – perhaps about packaging rather than price or quality – are all part of the getting to know you process.  The way your counterpart deals with these issues tells you a great deal about them, and the Asian view is that the more successfully the little questions are covered, the more likely it is that the big issues will prove negotiable.  Without the getting to know you period, a big difference is likely to stay unresolved, because there is no particular motivation on either side to overcome the difficulties.

Negotiations in many cultures try to reach consensus. This is quite different from a compromise, where I want to pay $1, you want to charge $2, and so we agree on $1.50. At the outset of the negotiation, the gap between that $1 and $2 may well exist, but by discussion and negotiation, one side gets the other to see things more their way, and perhaps by giving way on other aspects of the deal, reaches agreement that the product will indeed cost $2 rather than $1. It is the totality of the deal your counterpart is looking at, and he wants a deal that will bring prosperity to both sides over a long period of time.

Face to Face does and don’ts

There are a few practical hints that are worth remembering when negotiating face to face.  Firstly, timing - be on time. There is almost no culture where it is polite to be late for a business meeting.  Be sure to consider business hours: an Arabic country host may accept a meeting on a Friday but it will not be convenient as the working week is from Sunday to Thursday.  Indonesians are the exception keeping Monday-Friday as the working week. Secondly, learn how formal greetings are carried on in the culture you are visiting.  Check the local dress code, and if it doubt, be slightly more formally dressed than necessary.  Women should cover their shoulders in the Middle East counties of Bahrain and Dubai but in Saudi they will need to cover their head.  Don’t give bear hugs in China, or arrive without business cards in Japan.

 Business cards in many Asian cultures have an etiquette and a meaning that seems to us entirely out of proportion.  Never give out Chinese business cards anywhere except China, and have a box of double-sided cards for every country.  In China have a card printed in gold or black ink. 

Treat your counterpart’s card with great respect, making note of the rank of everybody you meet, be sure to place the card carefully in your card case, pocket, or on the table next to you.  .  Never write on a card in the presence of the person who gave it to you, and never give somebody your card if you have already given them one on a previous occasion – this implies you have forgotten who they are, a hefty insult. 

Be sure to give business cards with both hands, native language side up and readable to your host.  Certainly don’t use your left hand only as this is seen as the ‘dirty’ hand. Note also that in many Asian cultures, the rank of the person as shown on their card may have little bearing on the job they actually do.  To be described as ‘Manager, Sales Department’ merely indicates that this person is of manager rank, and is currently with the Sales Department, but he or she does not necessarily manage the department. In Europe, the card would tend to say ‘Sales Manager’, a job description rather than a title. This is the person who runs sales, so has to be listened to. In an Asian company, there may be several people of manager rank in that department, or none. You have to find out who actually runs things through hard won experience. After a few sessions, you will begin to learn who is actually pulling the strings.

Be modest to win

Be proud of your company, and play down your own role within it.  Most cultures are more group-oriented than we are in Northern Europe, and they look for good team players.  They are negotiating with a company, not just an individual, although they also want to know that the individual is a compatible human being, with outside interests beyond the confines of the office – someone it will be a pleasure to do business with over the years.

Gifts- Giving and receiving

Giving gifts also needs to be considered.  In Asia, give gifts at the end of meetings but only if the appointment has gone well.  Gifts should not be valuable but reflect the type of business or geographical region from where your company originates.  Never give gifts of four items or in white wrapping as this means death in China, Japan and Korea.  However, remember the packaging is as important as the gift itself.  If you receive a gift don’t open it during the meeting unless invited.  Similarly, don’t expect your gift to be opened in front of you and never refuse a gift

Dining out

Dining is an important part of relationship building and there will also be cultural rules to follow so find out what is the correct etiquette in the country you are visiting.  Generally in Asian countries don’t refuse anything you are asked to eat – it will have been prepared in your honour.  Don’t pour yourself a drink in Japan, offer the bottle to your host and they will reciprocate.  In most countries allow your host to make the first toast then respond with a similar appropriate toast.  Never haggle over or insist on paying the bill. Oh – and when it comes to the negotiation, never forget that the little word ‘yes’ can be a minefield.  In many languages, it does not mean, “I agree”.  It merely means, “I heard you”.  It has the force of the English sound “uh-huh”, no more and no less.  Never assume that because you have heard the word “Yes”, that a deal is done.  It’s may be that they are happy to sign on the dotted line, but it’s just as likely that they are merely looking for a face-saving way to say “no”.

There have been many hundreds of books written about how to negotiate successfully, and most of the people who do it best are those who never took the time to read the books.  You don’t need perfect language skills or even perfect business skills – you simply need to know in your own mind exactly what you are trying to achieve, and you need to display an enthusiasm and a commitment to the company and the culture you are negotiating with.  And never judge the situation by your normal cultural expectations; that way madness lies.