Welcome back to our mini-series about the art of negotiating in the Chinese business culture.
In Part 1, we established that Chinese has different words for different stages and styles of negotiations: 商讨 (shāngtǎo) describes initial and/or more informal discussions; 谈判 (tánpàn) is used for formal/ final negotiations when each party is likely to be more aggressive and uncompromising.
In Part 3, we’re looking at how to successfully navigate 商讨 in order to be better positioned for 谈判.
LOOK BEYOND PRICE
Paul Ark starts off this part of our interview by pointing out how “getting the best price doesn’t necessarily take sole priority in China, which can be mystifying to foreigners.” It’s important to look beyond high price vs. low price positions, especially at the beginning.
Consider the other party’s motivations and interests. Paul gives the example of when he’s worked with government representatives: “You might want to pay attention to these people’s aspirations to rise in the CCP. What can you offer to help their social/political standing?”
“Ask yourself: why does that person want to sell?” expands Paul. “Maybe they have medical expenses to cover, so if you have connections with the hospital perhaps you can reduce their medical costs or set-up fast-track access to a renowned doctor as a part of the negotiations.”
This may be rather more personal and involved than we’re used to in the west, but it can be of huge benefit.
RESEARCH AHEAD OF TIME
“Any good negotiator will spend time working up front; doing research and investing in the relationship”, says Paul.
“I make it a point with all my brokers to make every meeting like an interview. The minute I walk through the door, the negotiation has begun. I need to know in advance exactly who is going to be at the meeting – and what are their respective relationships with the landlord – so I can know their possible motivations, and how to frame even informal discussions.” Paul adds that this is where intermediaries can be of great help in providing the background information.
Of course, this works both ways round: you should understand your company’s interests too, to know where there’s space for exploration on your side.
SPLITTING THE ORANGE SO IT’S WIN-WIN
Paul goes on to explain that you should approach negotiations as integrative rather than just distributive. He gives the metaphor of dividing an orange between two sisters. What if one of the sisters wants to make orange juice, while the other just wants the rind to make a cake? Cutting the orange in two (distributive) is fine, but if you split the orange by juice and rind, each sister gets 100% of what she wants. This is the integrative approach, figuring out how to make the most of the resource before talking money.
In sum, Paul emphasizes that at the very beginning, you should do your research in order to figure out how to optimize the value of the deal for everyone. Whether you offer sought-after convenience or connections, or something else – bring this up before price talks begin. “I always avoid talking numbers until as late as possible”, says Paul. This way, more of a win-win scenario can be set-up before the typically aggressive, “You vs. Us” 谈判 begins.
Just as was said by the famous Chinese general and military strategist of the 6th Century BC, 孫子 (Sūn Zǐ):
Shìgù shèngbīng xiān shèng ér hòu qiúzhàn, bàibīng xiān zhàn érhòu qiú shèng.
Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.
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