We negotiate every day in our interactions with others. Sometimes it’s easy and sometimes it’s hard, negotiating between culture boundaries is something that will not come immediately and will take a lot of practice and determination (that good old Korean 열심).
Different Rules
“Comparative International Law is really simple. In England, anything that is not legally forbidden is permitted. In Germany, anything that is not legally permitted is forbidden. In Russia, everything is forbidden, even that which is permitted. In France, everything is permitted, even that which is forbidden. And in Korea, anything that is either forbidden or permitted is subject to negotiation”
Problem Points
The following is based off of a study involving 22 countries and 55 nationalities.
A. Finding a Common Ground
Common ground is essential in order to resolve conflicts and differences. Most good things start off from common ground so it is wise to invest some time into knowing this.
B. Mutual Trust
Studies have shown that two parties must develop a relationship of trust in order to benefit. Especially across national borders it is important to first gain this trust and to give it before trying to negotiate. Without trust, both parties will perceive any move by the other as hostile.
C. Communication Barriers
Although language barriers generally always arise, the more important factor is understanding what the other party is actually saying. Americans can sometimes seem impolite and too much on-your-face while Koreans too polite and not direct enough. These issues can even arise between parties who speak the same language, like America and Britain.
D. Cultural Business Etiquette
When dining with the opposite party, the best advice is to follow the hosts and do what they do.
(chapter 6 deals with some of these)
E. Legal and Practical Distinctions
Legal systems around the world are very different. While one thing may be considered a legal document or promise in one country may not be in another.
Korean Concepts of Negotiating
In Korea, a contract is more like an unwritten understanding between the two parties. This partly explains why so much time is taken in the early stages to understand each other. This can frustrate Westerners who feel like a promise was broke when the Korean company changes the terms after it was written.
Negotiating Pointers
Build the Right Climate
Like previous chapters have already iterated, it is important to let one’s hair down and entertain and be entertained to gain trust.
Communication
Make sure to prepare everything beforehand that will be used and review afterwards to make sure that all your ideas were put across in a manner you wanted.
Allow for Sufficient Time
Many foreigners feel rushed when negotiating with new partners. This is expected since the Korean companies have less experience with foreign companies, so they are more cautious at coming to a conclusion. Make loose flight schedules that can change when doing opening negotiations to allow enough time for both parties to come to a reasonable understanding. Once the relationship and history is developed one may make more precise schedules and assume the long negotiations won’t last quite as long (depending on who you’re dealing with).
Be Innovative
Don’t just prepare one suggestion and present it, constantly be thinking of and suggesting potential alternatives. Sometimes the other parties motive isn’t what you think it is, so you need to find sources to figure out what they are and play towards them.
Use a Facilitator
Sometimes it is useful to use a third-party to facilitate negotiations. They can hold both parties to ground rules and be a mediator.
Find the Right Fit
When offering solutions and benefits to the other party, do what is in their best interests. Find out what they need and offer it. You’ll find things turn out much easier if you actually care about and tend to the needs rather than just offering a de-facto deal.
Maintain Relationships
Don’t burn your bridges, always maintain a good relationship even if negotiations don’t end up in good terms. You may need to come back a second time and your reputation is at stake.
Process Rather than Substance
To Koreans, the process of negotiations is just as important as the substance of it. There’s a Korean saying, 폼생폼사, which means to live and die by the form. It is sort of a joke among Koreans, but they do acknowledge the fact that it is important.
Tough Bargainers
Koreans are very tough when it comes to bargaining prices down. They see their job as buyers to negotiate a price where the seller is almost ready to not go through with the deal. Because of this, it might be important for a company to keep their profit margin confidential so that the other party doesn’t have a certain goal they want to get the price down to.
Playing by the Local and International Rules
Although it was stated before that verbal contracts are seen as more important, it is nonetheless important to make a written contract that is simple to read and understand and has important items like pricing and dates included. This can help prevent errors of confusion later on.
Keeping a Practical Balance
Apply all of these rules in proper balance. Adapt to local circumstances but don’t fall into the error of being too lenient and letting things slide and not taking care of details. When you learn new things, try it out and ask people you know well to get feedback.
Go to the next chapter, Getting Joint Ventures Right or select a chapter.
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