Major Differences in Negotiation Tactics, Techniques & Mindsets Between the East and West (1)
In this video, we are going to look at the differences in negotiation mindsets and techniques between Eastern and Western culture. A main reason why I started this channel is because there’s painstakingly little literature and research on Eastern negotiation methods, which is alarming in this multicultural world we live in. Studying various negotiation behaviors around the world can come a long way in allowing us to better understand the thought processes in different cultures, reducing potential misunderstandings and conflicts. Worst still, most of the information I have read online about eastern negotiation and cultural roots are inaccurate at best, and completely wrong at worse.
Another reason why I started this blog is because frankly speaking, from my point of view, I believe that western people are generally not as good in negotiations compare to Eastern people, which I think is because haggling habits are not prevalent in the west. The most alarming thing yet however, is that the world’s best business schools are basing their syllabus mostly on western negotiation case studies and theories, without enough emphasis on the study of various negotiation techniques and behaviors around the world. This is significant cause for concern since this actually disables westerners from understanding easterners thoroughly, which is an indirect hindrance to harmony amongst races.
Disconnect between eastern and western races
As Donald Trump says in his widely acclaimed book “The Art of the Deal”, one must know his opponent inside out in order to strike the best possible deal for himself. As a Hong Kong-er myself, I know both eastern and western cultures really well, which gives me a great edge in securing the best deals for myself and for my clients in situations whether I have had to be the middleman between the east and the west. With my international relocation business, where I help eastern and westerners relocate to various countries across the globe, it is actually a must for me to be an expert in both cultures. However, from my personal experience, even though people from the east, especially the Chinese, has been present in western countries for more than a century now, westerners know close to nothing about their Chinese counterparts. This has significantly weakened westerners’ ability to carve out a good deal in China or in other Asian countries, and worst still, hand their opponents the upper hand in negotiations nine times out of ten.
Wrong Perception number #1 – The win-win mentality
Let’s dive deep into a major misunderstanding of Eastern negotiators from a westerner’s point of view. I have noticed the prevalence of the win-win mentality in modern western negotiation literature. This is simply a recipe for disaster when you approach a negotiation with easterners. I know that the negotiation model of making an offer, then making concessions and finally making deal with the other party seems perfect and can’t go wrong, but the answer is it can go wrong when negotiating with Eastern people, say the Chinese.
If you study the negotiation process of all historical US-China trade talks, it seems like they always go nowhere for ages and even when a deal is made, it is China that always seems to benefit more. Westerners must realize that when coming to negotiations with the Chinese, Chinese people are mostly reluctant to make any outright concessions, since there is a deeply embedded Chinese culture of “giving face”. To explain more clearly what “giving face” really means in China, it means that Chinese people deeply care about looking good in front of their friends, families, workers and employees, and for Chinese businessmen to look good in front of their employees means to get the best deal for themselves, hence it is EXPECTED that negotiation counterparts hand them a good deal so that they could justify themselves in front of their employees. It is taken for granted that face is given to one another in Chinese culture and this has widespread implications.
Firstly, a typical Chinese businessman would rather not strike a deal even if it is a FAIR deal from a logical or reciprocal standpoint, if striking the deal will lead him/her to lose face. By the way, the subject of face is non-negotiable from the Chinese point of view – it is deeply tied to their personal identity and good luck if you think you can strike a deal with the Chinese if what you have done leads to losing of face from your Chinese counterpart. Whether you like this or not is another subject.
Secondly, the culture of face leads often to a win-lose situation in a negotiation where there is a Chinese and western negotiator, and the losing party is always the west, since westerners often feel forced to give concessions to the Chinese negotiator to help him/her save face, without getting anything back in return. If such a situation does occur, I would rather walk away from the negotiation table than waste time trying to carve out a deal that would put me at a disadvantage.
Thirdly, even if you manage to carve out a good deal for yourself, it would have taken a long, long time since you will need to spend much time letting your Chinese counterpart save face and making sure his/her ego is in-tact, not to mention the lots of back and forth between parties. This leads to many cases where the western negotiator finally loses patience and gives in to all demands from the Chinese.
I therefore have a golden rule in negotiation – I always walk away from the negotiation table when the Chinese counterpart is making ridiculous requests so that I can save him/her face. I would rather spend my time on other productive activities than try and reach a deal with such people.
Negotiating with the Chinese is notoriously difficult but the problem is that people don’t understand why. What I can tell people is that there is no such thing as a win-win mentality in China and negotiators should not be naïve in trying to secure major concessions with the Chinese. If the opening offer from the Chinese isn’t great or even borderline ridiculous, it is usually the right decision to cut short negotiations and leave the table quick, or else you will be embroiled in a fight that will never end. Sometimes leaving the table can actually bring better results if the Chinese really is interested in securing a deal with you.
I will give out more tips on how to negotiate with the Chinese in the future but for now, just remember that win-win is an opinion, not a fact.
To conclude, before approaching a negotiation with in fact, anybody, don’t assume your opponents share the same values as you do. The win-win mentality of most westerners may not be shared by easterners, which can explain why there can be lots of conflicts when negotiating with people from different cultures. The rule of thumb is to try and find out how your opponent views negotiations. If they view negotiations as win-lose, you better stand more firmly with your demands. Thank you, remember to like and subscribe, and see you in the next video!
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