|
Tom Coyner |
By Tom Coyner
For a Korean, negotiating is viewed more as part of a relationship,
rather than specific terms of an agreement that happen to be written
down on paper. A written contract among Koreans is not necessarily
regarded as binding or important as it is in the West. To the Korean
mind, commitments based on relationships, or on a personal level are
equally important.
It is commonly considered that ``a contract is as good as the
willingness of the parties to observe it.'' Perhaps Koreans are more
concerned, even in the early stages of negotiating, that future
enforcement of agreements can only be secured by personal commitments.
Foreign businessmen are often puzzled and frustrated that Korean
counterparts sometimes shy away from seemingly lucrative deals.
Sometimes it is because the Korean party lost face, or felt that he or
she was patronized too much, or possibly that the setting of the
negotiation was unsatisfactory. To a Westerner, this may be a denial of
the process of logic with which he or she is familiar.
``Who's in charge?'' is sometimes a baffling mystery to the Western
negotiator. A dozen negotiators may sit on the opposite side of the
conference table, but none may have decision-making authority. This can
be the cause of the Western negotiator's frustration and impatience.
This is especially the case with family-owned companies. Families still
control many companies in Korea. When negotiating with a
family-dominated company, the key family decision maker usually does
not attend the negotiations. Pinpointing the real decision maker may
seem to be impossible. In many cases, the real decision maker's absence
can seriously delay negotiations.
As negotiating situations can vary greatly, generalization is not easy.
The following, however, are some suggestions that may help foreign
business professionals to sharpen their sensitivity to the local
business environment, and to enhance their negotiating skills:
Build the Right Climate
Koreans prefer to do business with people they like. Profit alone is
not always their first priority. Sustained growth and good personal
relations are equally important.
Entertainment plays a major role among businesspeople in building a
climate conducive to a better understanding of each other. To
facilitate the negotiating process, entertain and be entertained.
Behave as an uninhibited human being at a drinking party with local
counterparts. Let one's hair down. They love to see a foreign opponent
unmasked by his nationality, company, and position. One will be quite
surprised to discover the different mood and rapport at a negotiating
session the next morning.
Communication
Communication is not easy even between parties who have a considerable
background of shared values and experience. Cross-cultural
communication is even more difficult. Negotiating under these kinds of
conditions requires from both parties special qualities such as
empathy, patience and a good ear, in addition to proficiency in the
language used.
Remember that local businesspeople prefer to express themselves in
their own language that is often vague and ambiguous. It may help for a
foreign negotiator to repeat, in her own terms, what has been presented
by her counterpart after each session. Exchanging minutes after
meetings is helpful to avoid misunderstanding. Don't assume that all
was understood by one's counterpart and therefore agreed.
If an interpreter is used, make the most of him or her. Brief them
beforehand and give any notes one has on the proposal one intends to
make. Also, allow sufficient time for them to clarify points where they
think the meaning is obscure.
Allow For Sufficient Time
Typically, a visiting foreign businessperson will attempt to settle all
his business dealings in a short period of time. He becomes impatient
when he cannot secure a firm reply from the counterpart on short
notice. This is, of course, an even greater problem when the foreign
representative has committed a milestone to his or her overseas
management. Consequently, experienced foreign businesspeople in Korea
tend to underestimate results compared to their colleagues elsewhere.
Negotiation can be time-consuming in any place. Time must be spent,
however, to assure that the decision is as close as possible to what
one desires. For most local businessmen, their exposure to foreign
business is rather limited and naturally they want to be more prudent
in their decisions with foreign partners. Do not demonstrate impatience
at a negotiating table since one's counterpart will interpret this as
weakness. Allow sufficient time to negotiate and remember to be patient
with their deliberate and often slow decision-making process.
By not allowing sufficient negotiation time, more often it is the
foreign negotiator than his Korean counterpart who often unnecessarily
concedes important points in order to catch the plane. Depending on
one's relationship with the other negotiation team, one may wish to be
precise or vague in offering one's flight departure date and time. If
one is negotiating with an established partner, it is good to share the
information so that the other side can negotiate in good faith at a
pace to come to an agreement in time. On the other hand, if one is
unsure or unfamiliar with the other firm, one may give a general,
expected departure date but work with an airline ticket that one is
certain one can extend the departure date of if necessary.
Finally getting to ``yes'' with the other side of the negotiating table
may not be the same as coming to an agreement with the other firm.
Often the final agreed terms may require additional time to gain final
approval when dealing with a large, bureaucratic firm such as one of
the chaebol (business conglomerate) companies.
Be Innovative
To strike a deal in a dynamic country where nothing seems stationary,
one must be quite imaginative. During the course of negotiations,
generate as many possibilities and present these alternatives as often
as necessary to induce an agreement.
Foreign firms often have Korean employees who may have personal, often
long-term, relations with employees of the other firm. The foreign
executive can learn a great deal about the ``lay of the land'' _ and
sometimes surprisingly more _ via these personal connections. If the
other firm has a sincere interest in coming to an agreement, one may be
surprised to find invaluable ``inside sales people'' in the other firm.
These individuals are normally junior managers and above who are
willing to assist the overall negotiation process by providing insight
as to the real priorities of their company, which personalities are
leaning towards and against a deal with one's firm, and even
information on competitive offers.
Use a Facilitator
It is desirable especially in the case of sensitive negotiations to
have someone to facilitate the proceeding either at the negotiating
table or outside the meeting. A facilitator may help to keep the
meeting on the right track, enforce any ground rules and stimulate
proceedings at the negotiating table. In this case, a third party
mediator or a consultant may play a role. An interpreter can also
perform on a limited basis. In the case where a mediator is not
participating in the meeting, he can work as a go-between, facilitating
the process of agreement. These facilitators may ask for a flat fee,
but often payment is a percentage of the value of the deal.
Maintain Relationships
Do not leave hard feelings with your counterpart even if the
negotiations fail. Though the negotiations break off, try to establish
a pleasant climate for one's potential partner. It will also facilitate
one's next move. There is often a second chance to come back to the
table if not for this deal but at the next opportunity. Also, it is
important to remember that the Korean marketplace is a tight-knit one
and one's reputation of any sort can precede one.
Always leave the counterpart with something about which to feel good.
Otherwise, the creation of an enemy may result. Try to negotiate as
though one will definitely have the occasion to deal with the same
partner again. Given the escalation of mergers and acquisitions in the
Korean marketplace _ not to mention that Koreans often these days
change firms _ it is important not to burn one's bridges.
Tom Coyner is president of Soft Landing Korea, a consulting group
focusing on sales and human resources issues. He is co-author of
Mastering Business in Korea: A Practical Guide.
|
