Negotiations in Asia

Conducting successful negotiations even in one's home country is a challenging task. Bearing in mind the cultural diversity within Asia Pacific, it is extraordinarily difficult for a regional business executive (irrespective of country of origin) to be effective across an area stretching from Japan to Singapore and encompassing Australia, China, India and a host of other culturally diverse nations.

Most of the "management literature" on "Negotiations" is written in the West and while offering significant insights, applied in their entirety without reference to local cultural norms can reasonably be expected to produce suboptimal outcomes at best and disasters at worst.

Unfortunately, negotiations tend to have an adversarial dimension and in as much as this can generate stress for both parties, it often results in people "reverting to type" within their own cultural norms. Thus we can find a "straight talking", "direct", "contract oriented" western executive having entirely unproductive and indeed unpleasant encounters with "face loving", "relationship oriented", often more strategic (in a long run sense) and less direct, Asian executives. This, too often unrecognised culture clash, can cause havoc.

Even those individuals who are intellectually aware of the differences in view point that cultures can beget, often forget more or less all about such matters when the pressure comes on.

What to do?

Well one can begin by reminding oneself of some fundamentals.

(1) When in Rome, do as the Romans do…

Whether you are British or Singaporean, if you find yourself in Indonesia or Japan, you need to realize that people operate differently, business is done differently and negotiations are conducted differently, in "foreign" countries. As such, you should prepare yourself for this "foreignness" and not just at a superficial level.

(2) Specifically you might wish to look at the environment under a number of headings.

a. At a macro level, what is the basic underlying societal philosophy? As an example, East Asian Confucius influenced societies, to greater or lesser degrees tend to exhibit traits which are quite different from Western Aristotelian, Judeo Christian societies. These basic cultural norms clearly influence people’s “day-to-day” thinking and behaviour and are ignored at one's peril.

b. Seniority and gender as factors
Again views on the importance of such matters vary from society to society. One might want to factor such matters into one’s considerations when selecting members of a negotiation team.

c. "Face"
Again more or less of an issue across the region.

d. Silence and non-verbal cues
Typically more important in Asia than in the West.

e. Agreement
What does "Yes" mean? Actually, depending on the country, the answer is "Just about anything". This can be enormously difficult to digest. It can lead to doubts about the "honour" of the participants followed by anger, aggression and a breakdown in communication.

f. Relationship V Contract based
Again the relatively black and white, linear, sequential approach of Western trained executives needs serious tweaking to cope with environments where relationships and trust comes first and contracts are often viewed as little more than "expressions of general intentions".

g. Calm
The Western approach of readily displaying one’s emotions particularly anger sits badly in Asian cultures in general and especially so in more traditional environments.

Having said all that, when one is operating off one’s "home turf", one must also be cognisant of the possibility that a wily local negotiator will play on one’s fears of upsetting local sensibilities. At the end of the day, "business is business" in any language and the age old and cross culturally effective admonitions to:

  • Fully research the topic

  • Know what outcomes are essential, desirable etc

  • Know what you are prepared to give away

  • Actively think about what you bring to the table, the interests of the other party, possible third party involvement and so forth

  • Understand the necessity of playing "one's cards close to one's chest"

  • Recognize the absolute necessity of remaining outwardly calm at all times

  • Ensure that one is actually negotiating with the decision-maker rather than engaging in shadow boxing with subordinates

  • Be willing to engage in protracted discussions where necessary. No rush!

  • Ensure "buy in" from one's own managers prior to engaging in the negotiation thus ensuring that one is not "out flanked"

  • Be willing to walk away if necessary

......should not be overlooked.

In summary, being an effective cross-cultural negotiator requires one to:

(1) Take the time to understand the cultural setting in which one will be operating. (This in itself is an enormous task as when the heat comes on, people tend to revert to type)

while not

(2) Ignoring all the basics of negotiations that really apply to all environments.

All very well but practically what can an executive do to prepare him or herself for serious business discussions in a 'foreign' country.

Really it starts with a mindset and this is that one needs not just to recognize differences between one’s own cultural mindmap and that of another but also to actively decide to respect these differences. If tens of millions of nationals in whatever country daily go about their business, quite successfully, operating within their own cultural paradigm, you need to accept, respect and adjust to this environment as you are the foreigner. To fail to do so will certainly be counterproductive and depending on the history of your two countries, may even serve to conjure up unpleasant memories of colonisation or what not ….matters that are certainly better kept at a distance.

So you've mentally decided to adjust to the environment in which you'll be operating. Congratulations! Now what?

Now is the time to thoroughly familiarize yourself with the operating environment. This can and ideally should involve a multifaceted approach. Starting with the obvious, read widely. Drop into your company library, local bookstore/Amazon or whatever and pick three or four relevant titles such as

- …how to do business in XYZ…
- …history of XYZ…
- …dos and don'ts in XYZ…

Try to find titles that are relevant to the level at which you will be operating. Backpacker tomes, while no doubt interesting, may not be super useful for this purpose.

If you have the luxury of time, you should try to ensure that you have actually spent as much time in the country as possible prior to commencing any serious negotiations. Even family holidays can help here. If your company already has an "on the ground" presence, you should spend time with them and ideally not just with expatriate staff. Speaking to senior people within your

- company
- network
- embassy

that have significant insight into the local scene can be enormously helpful. Remember that in many parts of Asia, access to very senior people can be arranged relatively easily, if you take the time to ensure that you join the dots. Think 3 degrees of separation!

Start small: Once again try to grant yourself the luxury of time. You will almost certainly not be as effective in your first serious business meeting in a new country as in your twentieth. It’s a great idea to work up to things, do the groundwork both professional and social and then engage.

Learn to listen: Developing the basic discipline of "listening a lot and speaking a little" is a real help. Obviously this cannot be so obvious as to be noticeable. Lots of small talk initially but the aim should be to produce a level of warmth and relaxation in what ultimately remains a conversation. People in general love to talk and faced with a good listener, whom they respect, most people like to chat a bit. If you find yourself in this highly desirable situation, learn to gently steer the conversation, while maintaining, indeed increasing the momentum. Definitely do NOT interrupt. You will learn much more by leaving things flow and knowledge really is power.

Remind yourself that networks and referrals are absolutely vital in some countries in the region. Again pre work, positioning and other times some socializing can be hugely beneficial. This emphasis on “the personal" is actually often a form of "risk management". Who am I dealing with here? What level is he/she? Will an association reflect well on me? Really the thought process is similar but not identical to the western question "Is this a good use of my time?"

Gifts: Something of a vexed topic in Asia but one must be aware of cultural norms and within the constraints of your own organisational setting, ensure that you know what is appropriate and when. Really it’s all a matter of being able to operate fluently in the “foreign” country or more accurately it’s about converting this "foreignness" to "familiarity" as quickly as possible.

To sum up:

To conduct negotiations successfully in countries whose cultures are markedly different from your own is a hugely challenging task. It is also extremely likely to be a task with which you will be faced if you are in a senior regional role.

All too often jet lagged, underprepared, culturally insensitive executives find themselves lost and out of their depth in business negotiations across Asia. It pays to avoid this scenario.

Preparation begins with you… yourself. You must first of all accept that "your culture" is just one of many and that you will be the "outsider" in this instance. Actually, this can sometimes even be turned to your advantage but not without first of all really, deeply trying to appreciate, understand and respect local cultural and business norms.

The tools and knowledge you need are readily available on bookshelves, within your own regional management teams and embassies but you must learn to utilise them.

Everything new is necessarily a trifle tentative. One needs to build confidence over time so in the ideal world you will spend as much time as possible, soaking up like the local "scene" and engaging in low risk negotiations before doing anything really serious.

The great thing about this process is that the more effective one becomes in one "foreign" setting, the easier adapting to the next becomes. Ultimately this process becomes more than just a tool of international business…. it actually becomes a real route to personal growth.

Enjoy and good luck!

Declan O'Sullivan
Kerry Consulting

The author is the founder and principal of Kerry Consulting which is one of Singapore's leading financial recruiters. He has lived/worked in Europe, the US, Australia, Japan and Singapore and first arrived in the region in 1992.

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