Using Negotiation Skills During The Five Step Program To Ensuring Lucrative Deals In China
1. Negotiation goal
For many the aim of negotiation is a substantive outcome and material gain. In China the deal is all about the relationship and there is no better way to succeed in doing business than through a close partnership, so consider investing a lot of time in this pre-negotiation phase.
The aim of negotiation is not the signed contract and unexpected events are resolved through the partnership; the agreement is more a sign of the intent to do business together than a legally binding document. Trust is the foundation of the contract and the fact that you have signed a contract does not actually mean that the deal is sealed; it means that a relationship has been established.
2. Negotiation attitude and communication style
The Chinese negotiation approach is one of collaboration and problem solving whilst still focused on the bottom line.
The communication approach is expressed by using titles, following procedure and being very respectful and aware in conversation. Always start with a formal approach, using first names and an informal style is risky and can be considered offensive and interpreted as an insult.
When you negotiate, listen carefully to determine the true meaning. It is unusual to be told a direct no and you will more likely be told "it is difficult" which in fact does mean that you have no chance of success. Do not expect to receive direct clear responses, because you will try to resolve something that "is difficult" when in fact it can't be resolved.
3. Time perception
A lot of time is expended in building up a relationship which is a sign of respect and which is expected to be reciprocated. For Westerners time is sacred and the Chinese usually take advantage of this fact. Preparation is therefore important, create options and let the otherside know that they are is not the only one who can walk away from the deal. Bear in mind that "tomorrow" or "next week" often doesn't literally imply the following day or week; instead this could mean "in the future".
4. Negotiation style
What for most Westerners may appear to be innocent socialising is in fact their way of gathering information.
Chinese negotiators are well versed in the art of positioning & framing, the complexities of pricing and the use of time as a negotiation tactic. They have excellent negotiation skills and will often use negotiation tactics to embarrass or shame the other party in order to create stress and gain the upper hand. Take the blame if a problem develops whether you are accountable or not and do not react with disrespect.
Your whole team is advised to attend the appointments and it's vital to arrange for someone with a rank of authority within your business to make the introductions and to escort you during meetings. Without obvious official support, you will be delivering the wrong message about how genuinely you view the negotiations.
5. Team based negotiations
The Chinese almost never negotiate unaccompanied. It is not always clear who the leader is and who has total authority to decide issues. Although decisions are made by consensus, there is normally one leading authority who may not be very involved during negotiations. Gain the attention of their senior negotiator and direct your most persuasive and logical discussions towards him. The rest of the team normally plays the role of an advisory body.
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