Articles > Mastering Business in Asia
Mastering Business in Asia
by David West
Traders
The issue, as Peter Nixon points out in his book, is about doing business with Asian companies and he points out that
they are usually a whole lot better at negotiation than Westerners.
"Asia has had first-hand experience of trading goods and services throughout history. From the camel trains
of the Silk Road, to the junks and sampans that have plied the waters from the Bay of Tokyo through the
straights of Formosa and Malacca, down to Sri Lanka and into the Bay of Bengal, Asians are truly experienced
traders and, as such, skilled negotiators."
Nixon goes on:
"Every day, in ever-increasing numbers, people are disembarking at airports across Asia ... intent on making
their fortunes ... A large number of them quickly realize that they have no idea of how to negotiate in Asia,
especially with seasoned traders, and they have to scramble to learn from experience before they have to
pay too high a cost."
Understanding Asia
Too many accounts of Asia are seen and reported through a distorting lens. Too many writers take the standpoint that the
West is normal and that Asia is different (with the implication of at best of 'quaint' and at worst of 'wrong-headed.')
Peter Nixon fills the role of independent reporter extremely well. He is first of all a Canadian. Secondly, he is a Quebecois
- born in the Canadian province of Quebec - and while he is married to a Quebecoise, he is in fact an 'Anglo'. His first
language is English. Thirdly, his management years have been spent initially in Switzerland and then in Hong Kong,
where he now lives with his wife and family, the latter composed of an adopted Malaysian daughter (Ni Si), an adopted
Chinese son (Long Tim) and a son born to him and his wife (Jean-Pierre.)
Anyone who has fewer problems with culture, it would be difficult to imagine. (We won't hold the fact that he trained as
an accountant against him!) Peter Nixon is very good on the 'differences' that the Westerner will face in negotiating in
Asia. I will pick out some of the highlights.
Relationships mean more than contracts
"While Western negotiators might argue that something is in the contract and must therefore be adhered to,
people with plenty of experience in Asia know that contractual terms are always negotiable. The question
reverts to the people involved and knowing who to influence in order to get things done."
The group matters more than the individual
"... Asian negotiators will tend to check with everyone in the group before taking a decision ... Negotiations
tend to be more drawn-out than in the West, with less obvious outcomes, and if a consensus isn't achieved,
they may even stall."
Gender
"Gender bias may be in favour of males (as in Japan, Korea, India and Muslim countries) of in favour of
women (such as in Thailand, Indochina, and possibly the Philippines) ... "
Keep it in the family
"... this behaviour extends to not wanting to transfer wealth outside their network to foreigners and strangers
... in the belief that they will be able to extract future benefits from people inside their network and better control
the delivery of products and services from people with whom they have had long term relationships."
Age
"Since respect for elders in part of Confucian belief, senior family members feel they have the right to tell
their offspring what to do, and often do so. This extends into the business world, where it can be expected
that older family members will impact on negotiations."
Asian enjoy bargaining
"People who grow up in price-variable markets learn that it pays to bargain ... it is common for Westerners in
Asia to complain of paying exorbitant prices because they didn't bargain or bargained but didn't know the
market well enough ... Some cultures teach their children that it is not 'sophisticated' to bargain..."
Owner-managed companies
"Large companies in Asia ... tend to be more closely held and have less of a distinction between owner and
manager ... Asian business owners reward loyalty and compliance by setting up their executives with financial
independence. If they do the right thing, Asian negotiators win both the respect of the owner and some
financial benefit."
Black versus white versus gray
"In Western societies, negotiations tend to become quite heated (for example, "either we stop now or we go
ahead"), whereas in Asian negotiations the tendency would be to look for a solution that lies between the two
extremes (for example the "go slow" option.)"
Volume is significant
"... huge domestic populations ... Even a small percentage increase on a range of low-margin transactions
(which in a small market might not mean very much) can have significant impact on the overall result in a
high volume market ..."
Short term focus
"Relative to Western countries that have enjoyed a longer period of peace and economic stability, Asians
have been prompted to make money while the going is good because it can all be lost tomorrow."
I have dealt with only a small part of this excellent book. Most of it is devoted to practical, hands on advice on how to
handle negotiations in Asia. It offers actual examples, preparations guidelines, tactical analysis and warnings. If you are
going to negotiate in Asia - and it looks as if you will have to - read this book first.