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Chinese Negotiating Styles

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Chinese negotiating styles are easy to work with if you know what to look for and how to react. All negotiators fall into 1 of 5 categories: Competitors, Compromisers, Accommodators, Collaborators and Avoiders. In China negotiators look and act different from their Western counterparts - but if you know what to expect you should be able to make profitable deals that protect your interests and technology.

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Chinese Negotiating Styles

  1. 1. 5 Chinese Negotiating StylesChinaSolvedSpring 2013Property of ChinaSolved. All RightsReserved. Copyright @2013
  2. 2. All negotiators, Chinese,Western or any other, fall into 1of 5 categories, or TYPES.Property of ChinaSolved. All RightsReserved. Copyright @2013
  3. 3. 5 Types of Negotiators (Universal)• Competitive• Compromising• Accommodating / Yielding• Avoiding• CollaboratingProperty of ChinaSolved. All RightsReserved. Copyright @2013
  4. 4. Reading List Recommendation• G. Richard Shell’sBargaining for AdvantageProperty of ChinaSolved. All RightsReserved. Copyright @2013
  5. 5. Two dimensions:• How important are YOUR goals to you?• How important are HIS goals to you?Property of ChinaSolved. All RightsReserved. Copyright @2013
  6. 6. Your Benefit / Goal• High• Mid• LowProperty of ChinaSolved. All RightsReserved. Copyright @2013
  7. 7. Your Benefit / Goal• Maximize value of this transaction• High• Mid• LowProperty of ChinaSolved. All RightsReserved. Copyright @2013
  8. 8. Your Benefit / Goal• Maximize value of this transactionUnique assetStrong bargaining positionConfident• High• Mid• LowProperty of ChinaSolved. All RightsReserved. Copyright @2013
  9. 9. Your Benefit / Goal• Professional sales• High• Mid• LowProperty of ChinaSolved. All RightsReserved. Copyright @2013
  10. 10. Your Benefit / Goal• Professional salesModerate value transactionRetail / commodity• High• Mid• LowProperty of ChinaSolved. All RightsReserved. Copyright @2013
  11. 11. Your Benefit / Goal• You NEED this sale• High• Mid• LowProperty of ChinaSolved. All RightsReserved. Copyright @2013
  12. 12. Your Benefit / GoalLow regard for your own goal?Imagine you have a warehouse full ofice cream in August and your freezerjust broke.If you don’t sell it – you have to cleanit up.• High• Mid• LowProperty of ChinaSolved. All RightsReserved. Copyright @2013
  13. 13. His Benefit / GoalLow Mid HighProperty of ChinaSolved. All RightsReserved. Copyright @2013
  14. 14. His Benefit / GoalYou feel that time orcircumstances are in your favor.You have non-economicconsiderations.Property of ChinaSolved. All RightsReserved. Copyright @2013Low Mid High
  15. 15. His Benefit / GoalNormal business.Professional sales.Property of ChinaSolved. All RightsReserved. Copyright @2013Low Mid High
  16. 16. His Benefit / GoalYou really need this client.Strategic relationshipFew buyersHigh value transactionProperty of ChinaSolved. All RightsReserved. Copyright @2013Low Mid High
  17. 17. Now let’s combine these twodimensions into a matrix of 5negotiating types or styles…Property of ChinaSolved. All RightsReserved. Copyright @2013
  18. 18. Negotiating StylesYour BenefitHis BenefitProperty of ChinaSolved. All RightsReserved. Copyright @2013
  19. 19. Negotiating StylesYour BenefitHis BenefitCompetitiveAccommodativeAvoidingCompromisingProperty of ChinaSolved. All RightsReserved. Copyright @2013
  20. 20. Competitive Type• Typical Win-Lose aggressive negotiator.• In the US, this is the arch-typical “used carsalesman” personality.• 99-1 in his favor.Property of ChinaSolved. All RightsReserved. Copyright @2013
  21. 21. Negotiating StylesYour BenefitHis BenefitCompetitiveAccommodativeAvoidingCollaborativeCompromisingProperty of ChinaSolved. All RightsReserved. Copyright @2013
  22. 22. Accommodative Type• He really needs to make this sale.• It is a buyers market, and he needs to unloadhis goods before they go bad.• 1 – 99 (not in your favor) is OK.Property of ChinaSolved. All RightsReserved. Copyright @2013
  23. 23. Negotiating StylesYour BenefitHis BenefitCompetitiveAccommodativeAvoidingCollaborativeCompromisingProperty of ChinaSolved. All RightsReserved. Copyright @2013
  24. 24. Collaborative Type• Win-Win• Let’s enlarge the pie and create value.• 2 + 2 = 5Property of ChinaSolved. All RightsReserved. Copyright @2013
  25. 25. Negotiating StylesYour BenefitHis BenefitCompetitiveAccommodativeAvoidingCollaborativeCompromisingProperty of ChinaSolved. All RightsReserved. Copyright @2013
  26. 26. Avoiding Type• Wins by not playing.• He doesn’t gain from transacting – but mayhave to work harder or take a risk.• Bureaucrat or reluctant buyer.Property of ChinaSolved. All RightsReserved. Copyright @2013
  27. 27. Negotiating StylesYour BenefitHis BenefitCompetitiveAccommodativeAvoidingCollaborativeCompromisingProperty of ChinaSolved. All RightsReserved. Copyright @2013
  28. 28. Compromising Type• Some call him “win win”, but others call him“lose lose”.• He transacts often, but doesn’t maximizevalue.• Both sides leave the table feeling they couldhave done better.Property of ChinaSolved. All RightsReserved. Copyright @2013
  29. 29. Part 2:The Chinese NegotiatingPersonalitiesProperty of ChinaSolved. All RightsReserved. Copyright @2013
  30. 30. Competitive Type: Chinese Edition• Competitors will often appear to be veryaccommodative – offering to bend overbackwards to help you.– May even be very flexible on certain issues –particularly schedules, timetables, sales targetsand other things that can’t be easily enforcedlater.Property of ChinaSolved. All RightsReserved. Copyright @2013
  31. 31. Competitive Type: Chinese Edition• Don’t fall into the trap of negotiating solelyon price with competitive counterparties.– Technology– Intellectual Property– Assets– Customers & Client lists– Deal termsProperty of ChinaSolved. All RightsReserved. Copyright @2013
  32. 32. Accommodators: Chinese Edition• Accommodators exist in China, but you haveto be doubly careful here.– Beware of counterparties who look helpful but arereally gathering information, methods and IP thatthey can use against you later.– But wolves in sheep’s clothing aren’t your onlyproblem here…Property of ChinaSolved. All RightsReserved. Copyright @2013
  33. 33. Accommodators: Chinese Edition• In China kindness can kill as passive colleaguesand counterparties smile and nod as youblunder into disaster.• Accommodators often put a very high valueon their own knowledge and contacts.– They expect to be paid for helping you – but youhave to know what to ask for and how to ask.Property of ChinaSolved. All RightsReserved. Copyright @2013
  34. 34. Compromisers: Chinese Edition• Compromise is an integral part of China’sconsensus-oriented culture and yourcounterparty may look like he’s reallysearching for a fair solution.– It’s possible – but he also may have anticipatedyour naïve willingness to sign a deal and willemploy the meet- in-the-middle” technique morecommonly seen at one of China’s many ‘fakemarkets’.Property of ChinaSolved. All RightsReserved. Copyright @2013
  35. 35. Compromisers: Chinese Edition• Here they set a price 400% above their realtarget, and will try to compromise you downto a mere 200% overcharge.– Don’t start negotiating as soon as they call out anumber.– Learn the market and control the parameters ofthe discussion at the start. (I.e.: Just because theysay 500 doesn’t mean you are required to shoutback a counter offer.)Property of ChinaSolved. All RightsReserved. Copyright @2013
  36. 36. Avoiders: Chinese Edition• Avoiders are common in China, and are mostlikely to show up in governmentbureaucracies, mid-level managers atcorporations and the heads of State OwnedEnterprises.Property of ChinaSolved. All RightsReserved. Copyright @2013
  37. 37. Avoiders: Chinese Edition• China’s Imperial legacy lives on in itsbureaucracy, and you may find it extremelydifficult to meet the real decision-maker face-to-face.• Beware: if you can’t get a satisfactory answerto basic questions before you sign a dealyou’re probably going to have a lot moretrouble afterwards.Property of ChinaSolved. All RightsReserved. Copyright @2013
  38. 38. Collaborators: Chinese Edition• Collaborative negotiators are your greatesthope and your worst fear in China.– On the one hand a true value-adding partner canopen doors and supply vital market information.– The problem is that lots of Chinese counterpartieslike to talk like the boss even if they don’t have thepower to back it up.Property of ChinaSolved. All RightsReserved. Copyright @2013
  39. 39. Collaborators: Chinese Edition• The result is a lot of big plans that don’t everamount to anything.– Newcomers to China have been known to buildthese optimistic notions into internal businessplans – and later face disappointed seniormanagers who want to know what happened tothe budding China JV.– Beware of partners who move too fast whennegotiating in China.Property of ChinaSolved. All RightsReserved. Copyright @2013
  40. 40. Relationships PrecedeTransactions• China is a relationship-oriented negotiatingenvironment.• Anyone who moves too quickly may not haveyour best interests at heart.• Beware of the Chinese talent for building trustearly and then manipulating your newrelationship to their advantage.Property of ChinaSolved. All RightsReserved. Copyright @2013
  41. 41. About Andrew Hupert - Author• 10+ years in China,– 3 in Taiwan & HK• Principal at Best Practices China ltd– Specialist in US-China Negotiation– Corporate training, consulting, andproject management• Publisher of ChinaSolved.com andChineseNegotiation.com• Author – Guanxi for the BusyAmerican and The Fragile BridgeFull list of publications andslideshows available onwww.AndrewHupert.comProperty of ChinaSolved. All RightsReserved. Copyright 2013
  42. 42. Guanxi for the Busy American• A professional’s guide tobuilding relationships inChina.• Written for the Westernnegotiator who needsto transact and execute.• Available on Kindle,iBook and all major e-formats.Property of ChinaSolved. All RightsReserved. Copyright 2013
  43. 43. The Fragile Bridge• Conflict Management inChinese Business .• Building relationships iseasy – maintainingthem is hard. Learn todo it right.• Available on Kindle,iBook and all major e-formats.Property of ChinaSolved. All RightsReserved. Copyright 2013
  44. 44. Thank YouAll Rights Reserved. Copyright @2013.Property of ChinaSolved
  45. 45. Contactwww.ChinaSolved.comwww.ChineseNegotiation.comLinkedin: ChinaSolvedYouTube Channel:www.youtube.com/Chinasolved
  46. 46. About Andrew Hupert• 10 years in mainland China,– 3 in Taiwan & HK• Author of “Fragile Bridge –Managing Conflict in Chinese Business”• Co-Founder of China TrainingInstitute– Teaches Western professionals tobe more successful in China.• Publisher of ChinaSolved.comand ChineseNegotiation.comwww.AndrewHupert.comAll Rights Reserved. Property ofChinasolved, LLC. @Copyright 2013
  47. 47. Thank you.All Rights Reserved. Property ofChinasolved, LLC. @Copyright 2013

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