Chinese Negotiation Tactics –    A Comparative ApproachKnow Your Chinese Negotiating Counterparty
Agenda1. Negotiating tactics – comparing   Chinese and US methods.2. Western tactics3. Chinese tactics4. Counter tactics5....
Part 1:Comparative Negotiation Tactics  Western and Chinese Approaches
Working Definitions• Strategy :: goals• Tactics :: methods / techniques• Negotiation :: conversation with a business goal
Western Tactics• Western tactics are designed to bring  about a transaction – immediate,  favorable terms.• Most negotiati...
Chinese Tactics• Chinese tactics are about creating and  manipulating relationships.• Chinese are more comfortable  negoti...
Part 2: Western TacticsGoal: Sign a contract or agree   to favorable deal terms
Sample Western Tactics• Atom Bomb –                                  •    Higher Authority  Armageddon                    ...
Western Tactics:               Confrontation / WL• Direct.• Forces an emotional response to motivate a  specific action.  ...
Credibility• Demonstrate credibility  – Lower risk  – Leverage credibility, reputation, or brand  – Reliance on external a...
Stress Negotiation                 From Strength• Negotiate from strength  – Hide weakness (bluffing)  – Access other’s st...
Part 3: Chinese TacticsAn orderly progression to   build a relationship
Chinese Negotiating Concepts• Face• Harmony• Guanxi• Relationship  – Balance of Power  – Balance of Power Shift           ...
Guanxi and the  Balance of Power Shift – The BOPS• Chinese often purposely appear weak or  dependent at the start of a rel...
Part 4: Counter Tactics   @2012 All Rights Reserved. Property of Best Practices China ltd
Overview:Westerner Transact / Chinese Build Trust               US                                             China • Dir...
Power Orientation• Chinese are better at negotiating from  weakness.  – Clumsy or evasive when they have advantage.• Ameri...
Counter Tactics1. Knowledge is power – develop your own   channels of information.2. Add counterparties and complexity to ...
Part 5: Best Practices• When doing business in China, you have to be  able to answer two basic questions:  – 1. What does ...
What do the Chinese want?• Capital• Know-how• Markets       @2012 All Rights Reserved. Property of Best Practices China ltd
How are you going to give      it to them?  The core decision for      negotiation    @2012 All Rights Reserved. Property ...
Structure Deals for Success• American negotiators say, “what have you  done for me lately?”• Chinese negotiators say, “wha...
Structure Smarter Deals• If the Chinese feel that it is cheaper or easier  to work without you than with you, that’s  what...
Constructive Conflict• Many small conflicts build a relationship.  – One big conflict creates an enemy.• Build relationshi...
Negotiate the contract               Negotiate the deal• Negotiating contracts vs. negotiating deals• Westerners see the s...
• Written by: Andrew Hupert  • Chinasolved@gmail.com• www.ChineseNegotiation.com   • Twitter: @chinasolved• Linkedin group...
Guanxi for the Busy American• A professional’s guide to  building relationships in  China.• Written for the Western  negot...
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Chinese Negotiation Tactics - A Comparative Study

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Chinese negotiating tactics are fundamentally different from Western ones. American negotiators use pressure tactics to force a decision. Chinese negotiators build and manipulate relationships to gain value.

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Chinese Negotiation Tactics - A Comparative Study

  1. 1. Chinese Negotiation Tactics – A Comparative ApproachKnow Your Chinese Negotiating Counterparty
  2. 2. Agenda1. Negotiating tactics – comparing Chinese and US methods.2. Western tactics3. Chinese tactics4. Counter tactics5. Best Practices
  3. 3. Part 1:Comparative Negotiation Tactics Western and Chinese Approaches
  4. 4. Working Definitions• Strategy :: goals• Tactics :: methods / techniques• Negotiation :: conversation with a business goal
  5. 5. Western Tactics• Western tactics are designed to bring about a transaction – immediate, favorable terms.• Most negotiation follows either a sales pattern or a legal pattern – both end with contracts.• Western tactics feature pressure, manipulation of value, and fear of loss.
  6. 6. Chinese Tactics• Chinese tactics are about creating and manipulating relationships.• Chinese are more comfortable negotiating from weakness to close gaps, then switch to more aggressive tactics.• Chinese tactics center on gaining position within a group, network or relationship.
  7. 7. Part 2: Western TacticsGoal: Sign a contract or agree to favorable deal terms
  8. 8. Sample Western Tactics• Atom Bomb – • Higher Authority Armageddon • Linking issues• Deadlines • Low-balling• Divide and conquer • Lunch• Full Disclosure • Trial balloon• Good cop / Bad cop @2012 All Rights Reserved. Property of Best Practices China ltd
  9. 9. Western Tactics: Confrontation / WL• Direct.• Forces an emotional response to motivate a specific action. – Rush into a decision – Pressure tactics – Fear of loss – Hope for gain @2012 All Rights Reserved. Property of Best Practices China ltd
  10. 10. Credibility• Demonstrate credibility – Lower risk – Leverage credibility, reputation, or brand – Reliance on external authority, agency or benchmark @2012 All Rights Reserved. Property of Best Practices China ltd
  11. 11. Stress Negotiation From Strength• Negotiate from strength – Hide weakness (bluffing) – Access other’s strength (higher authority) – Exploit others weakness (now or never) @2012 All Rights Reserved. Property of Best Practices China ltd
  12. 12. Part 3: Chinese TacticsAn orderly progression to build a relationship
  13. 13. Chinese Negotiating Concepts• Face• Harmony• Guanxi• Relationship – Balance of Power – Balance of Power Shift @2012 All Rights Reserved. Property of Best Practices China ltd
  14. 14. Guanxi and the Balance of Power Shift – The BOPS• Chinese often purposely appear weak or dependent at the start of a relationship – Become much more assertive and aware when it is to their advantage.• This is usually after acquiring technology or funds have been transferred @2012 All Rights Reserved. Property of Best Practices China ltd
  15. 15. Part 4: Counter Tactics @2012 All Rights Reserved. Property of Best Practices China ltd
  16. 16. Overview:Westerner Transact / Chinese Build Trust US China • Direct / Transactional • Indirect / Relationship • Emotional Response • Trust => Exclusivity • Raises pressure • BOPS Start by negotiating from weakness. • Transparency / Credibility • Misdirection / Reliance @2012 All Rights Reserved. Property of Best Practices China ltd
  17. 17. Power Orientation• Chinese are better at negotiating from weakness. – Clumsy or evasive when they have advantage.• Americans are better at negotiating from strength. – Capitulate , trust the wrong people, and over- compromise when weak. @2012 All Rights Reserved. Property of Best Practices China ltd
  18. 18. Counter Tactics1. Knowledge is power – develop your own channels of information.2. Add counterparties and complexity to gain power. Always have a Plan B (and C, D & E).3. Give them what they want until it becomes what they need.4. Structure deals for success – not failure5. Many small conflicts build a relationship. One big conflict creates an enemy. @2012 All Rights Reserved. Property of Best Practices China ltd
  19. 19. Part 5: Best Practices• When doing business in China, you have to be able to answer two basic questions: – 1. What does the Chinese side want? – 2. How are you going to give it to them? @2012 All Rights Reserved. Property of Best Practices China ltd
  20. 20. What do the Chinese want?• Capital• Know-how• Markets @2012 All Rights Reserved. Property of Best Practices China ltd
  21. 21. How are you going to give it to them? The core decision for negotiation @2012 All Rights Reserved. Property of Best Practices China ltd
  22. 22. Structure Deals for Success• American negotiators say, “what have you done for me lately?”• Chinese negotiators say, “what will you do for me tomorrow?”ALWAYS HAVE MORE VALUE TO OFFER! @2012 All Rights Reserved. Property of Best Practices China ltd
  23. 23. Structure Smarter Deals• If the Chinese feel that it is cheaper or easier to work without you than with you, that’s what they’ll do.• If they feel it is more profitable to work with you (for the long term), then they will.• Chinese want to see a RISING payout over time. @2012 All Rights Reserved. Property of Best Practices China ltd
  24. 24. Constructive Conflict• Many small conflicts build a relationship. – One big conflict creates an enemy.• Build relationships and guanxi by engaging on a personal, emotional level. – Once you have built a real relationship, it is easier to talk about long term deals.• If you have never settled a dispute with a Chinese partner, then you don’t have a real relationship yet. @2012 All Rights Reserved. Property of Best Practices China ltd
  25. 25. Negotiate the contract Negotiate the deal• Negotiating contracts vs. negotiating deals• Westerners see the signing of the contract as the end of the negotiation.• Chinese tend to see it as one of many milestones in the development of a relationship.• Westerners feel that negotiations have a beginning and end. Chinese negotiators see them as more fluid and organic. @2012 All Rights Reserved. Property of Best Practices China ltd
  26. 26. • Written by: Andrew Hupert • Chinasolved@gmail.com• www.ChineseNegotiation.com • Twitter: @chinasolved• Linkedin group: China Solved @2012 All Rights Reserved. Property of Best Practices China ltd
  27. 27. 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 e- formats. @2012 All Rights Reserved. Property of Best Practices China ltd

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