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China Negotiation Mistakes - ChinaSolved.com's Least Wanted List

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International negotiators doing business in China have been making the same mistakes for years. ChinaSolved.com has compiled a "least wanted list" of Western worst-practices for doing business in …

International negotiators doing business in China have been making the same mistakes for years. ChinaSolved.com has compiled a "least wanted list" of Western worst-practices for doing business in China. Make sure you - or people you rely on - aren't committing these highly-avoidable blunders.

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  • 1. 10 China Negotiating Mistakes to Avoid The ChinaSolved.com “Least Wanted List”
  • 2. About Andrew Hupert • 10+ years in China, – 3 in Taiwan & HK • Principal at Best Practices China ltd – Specialist in US-China Negotiation – Corporate training, consulting, and project management • Publisher of ChinaSolved.com • Author – Guanxi for the Busy American and The Fragile Bridge All Rights Reserved. Copyright @2014. Property of ChinaSolved
  • 3. Negotiate Successfully in China • Negotiating successfully in China means building relationships and staying in control of your goals. • Don’t make the same mistakes that others have made. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 4. 10 Avoidable China Errors 1 Flying blind. 2 Building on a weak foundation. 3 Declaring “Mission Accomplished”. 4 Losing control of the agenda. 5 Training your competition. 6 Coasting on past successes or good starts. 7 Searching for common ground. 8 Playing by US HR rules. 9 Delegating the strategy role. 10 Forgetting that it's only guanxi until you get caught. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 5. China Negotiating Mistake #1: Flying blind. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 6. Flying blind. You don’t have to have all the answers in China – but you do have to know the right questions, and have some way of gauging the answers other people are giving you. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 7. Flying blind. • Problem: You don’t know enough about the China business environment to make sound decisions on your own. • Remedy: Develop a business intelligence strategy that will keep you up to speed in the areas you care about. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 8. China Negotiating Mistake #2: Building on a weak foundation. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 9. Building on a weak foundation. • Your most important China negotiation takes place in your own HQ. • If your stakeholders at home aren’t 100% committed to the China business, you will spend too much time explaining and reassuring your own people. • Your Chinese negotiating counterparties will sense it and take advantage. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 10. Building on a weak foundation. • Problem: Lack of unified home front when negotiating with Chinese counterparties. • Remedy: Negotiate internally first, and develop a unified strategy for managing the China business. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 11. China Negotiating Mistake #3: Declaring “Mission Accomplished” All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 12. Declaring “Mission Accomplished” • Chinese negotiators focus on the relationship – not the contract. In the West we stop negotiating when the paperwork is signed. • In China negotiations start at “Hello” and end when your relationship is over. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 13. Declaring “Mission Accomplished” • Problem: Americans view negotiation as the prelude to business – to Chinese it is the business. In China relationships count more than transactions. • Remedy: Prepare and budget the time, money, and sanity for non-stop bargaining. You know that they will ask for more, so you should prepare your own wish-list. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 14. China Negotiating Mistake #4: Losing control of the agenda. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 15. Losing control of the agenda. • Guanxi is great to have and China holds the promise of tremendous opportunities – just as long as you never lose focus or control of your own agenda. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 16. Losing control of the agenda. • Problem: Westerners who are too sensitive about offending Chinese partners and associates end up squandering resources and allowing others to hijack their agenda. In China it is easy to lose focus. • Remedy: Good planning and appropriate time horizons will keep you focused on your plans. Listen and learn from Chinese associates, but don’t be too quick to throw out your business plan. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 17. China Negotiating Mistake #5: Training your own competition. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 18. Training your competition • Develop strong relationships with the right partners early. • No one gets more honest as the amount of cash on the table grows larger. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 19. Training your competition • Problem: Newcomers to China often trust the wrong people with their company and assets. • Remedy: To get the right partner, you must be the right partner. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 20. China Negotiating Mistake #6: Coasting on past successes or good starts. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 21. Coasting on past successes or good starts. • Don’t confuse hospitality or cordiality with win-win negotiation. • In the West we say, “what have you done for me lately.” In China they say, “what can you do for me tomorrow.” All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 22. Coasting on past successes or good starts. • Problem: Western negotiators often lower their guard when early-stage meetings seem relaxed and friendly. Chinese often save the worst for last. • Remedy: Coordinate with your entire team in advance. Make sure you have the authority to hit the brakes or change the scope of the deal. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 23. China Negotiating Mistake #7: Searching for common ground. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 24. Searching for common ground. • Plan on building bridges - not discovering common ground. • Value is found in differences – not superficial similarities. • Foster good cross-cultural communication skills with a focus on high-context, non-verbal cues. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 25. Searching for common ground. • Problem: Westerners think that they are being “politically correct” by minimizing the differences between cultures – but instead they are inviting false expectations and conflict. • Remedy: Understand what you want and who you are dealing with. Encourage more communication and make fewer assumptions. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 26. China Negotiating Mistake #8: Playing by US HR rules. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 27. Playing by US HR rules. • The West is a buyer’s market for managerial talent, but in China experienced managers are in short supply and high demand. • Forget about paying for performance, and start building an extended-family type environment to keep your managers happy. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 28. Playing by US HR rules. • Problem: US HR management approaches don’t work in China. Businesses in China live or die by their middle managers, and western approaches tend to drive away their best assets. • Remedy: Obtain, Train and Retain high quality teams. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 29. China Negotiating Mistake #9: Delegating the strategy role. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 30. Delegating the strategy role. • Knowledge is a superpower -- blind trust is kryptonite. • Ask for advice and input, but don’t surrender the initiative. Figure out how to integrate China business goals with your broader company strategy. • Have good methods for moving information up to your own decision-makers in HQ. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 31. Delegating the strategy role. • Problem: Don’t allow partners, suppliers, advisers or even key hires hijack your China strategy. • Remedy: Develop a business intelligence plan and a broad range of information sources. Your goal is to be able to process advice and recommendations from trusted associates. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 32. China Negotiating Mistake #10: It's only guanxi until you get caught All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 33. It's only guanxi until you get caught. • Local customs may never help you, but if you get them wrong they can hurt you A LOT. The big 3 business customs are: • Guanxi • Face. • Harmony All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 34. It's only guanxi until you get caught. • Problem: Western negotiators in China must know the difference between GUANXI and CORRUPTION. • Remedy: Customs are important, but they don’t replace laws or regulations. Know the law on both sides of the water and don’t break it. All Rights Reserved. @ copyright 2013. Property of Andrew Hupert
  • 35. Thank You www.ChinaSolved.com
  • 36. Guanxi for the Busy American • A professional’s guide to building relationships in China. • Written for the Western negotiator who needs to transact and execute. • Available on Kindle, iBook and all major eformats. Property of ChinaSolved. All Rights Reserved. Copyright 2013
  • 37. The Fragile Bridge • Conflict Management in Chinese Business . • Building relationships is easy – maintaining them is hard. Learn to do it right. • Available on Kindle, iBook and all major eformats. Property of ChinaSolved. All Rights Reserved. Copyright 2013
  • 38. Online Course: Negotiate Successfully in China • ChinaSolved presents a new online course for professionals who want to achieve greater success in Chinese negotiation. Available on Udemy.com All Rights Reserved. @ copyright 2013. Property of Andrew Hupert