Assignment topic: Comparing negotiation patterns for different modes of international

business in different regions of the world.

China:

Business negotiations are growing increasingly complicated and can take on a variety of forms. The
evolution of many negotiating models across time was examined in order to identify the most recent
successful ones. Case studies of high-level commercial discussions in China were examined to uncover
important megatrends and takeaways. According to the findings, there are many parallels between
Chinese and foreign business negotiations, but there are also significant Chinese differences. Prior to the
commencement of talks, both parties usually do thorough preparations and competition analysis. To
establish excellent guanxi and easy negotiations in China, certain negotiation practices and norms must
be followed. It is critical to follow the fundamental principles of equality and mutual benefit in order to
accomplish win-win agreements at the end of the day.

China's trade reforms began in 1978, and the country has worked to enhance export volumes by
introducing export-oriented, foreign-invested companies. Meanwhile, China has improved the
competitiveness of its manufacturing industry exports by reforming its national economic structure. As a
result, China's international trade volume has increased dramatically.
China's overall import and export value, for example, increased from US$20.60 billion in 1978 to
US$2,207.22 billion in 2009. China's international trade value has risen 106-fold in 31 years, with an
average annual growth rate of 16.3%. As a result, as China's economy opens up, the country's economic
reliance on international commerce has increased to 44.9 percent. The ever-increasing competitiveness
of China's exports has resulted in a significant shift in China's international trade balance. Despite
China's rapid economic expansion, which has aided in the increase of import quantities, the country's
international trade balance has been positive since 1994.

The Chinese view of negotiation

Tan pan is a Chinese term that combines the characters for "to talk" and "to judge." Negotiation, from a
Chinese perspective, serves largely as a means of establishing confidence between two parties so that
they can collaborate for mutual gain. Trust is developed via discussion in which one side judges or
evaluates the other's skills and assesses their relative standing. The negotiating process also allows
parties to come to an agreement on a specific problem, condition, or transaction in a way that makes
each party feel like they received a "good deal”. But rather than crafting a one-time agreement, the
notion of negotiation is based on establishing a framework for long-term cooperation and problem-
solving.

As a result, in China, negotiation is seen as a continuous, dynamic process that considers practical
considerations and environment. Many Chinese prefer this method over establishing contract-based
absolutes, which they believe is the fundamental goal of Western-style negotiations. Significant
disparities in negotiation technique and culture might lead to mutually negative views. Americans may
regard Chinese negotiators as inefficient, imprecise, and perhaps dishonest, whereas Chinese
negotiators see Americans as impersonal, impetuous, and excessively focused on short-term benefits.

Task-based, time-conscious Western partners must balance the need for rapid resolution on particular
issues and contract conditions with the slower-paced and seemingly abstract construction of
interpersonal connections while adjusting to Chinese-style negotiations. Understanding and adapting
the Chinese-style approach in order to develop a strategy plan that works on a local level is essential to
competing effectively inside a Chinese negotiating environment.

The goal of strategic negotiation preparation is to acquire insight into the negotiating partner's
circumstances, intent, and skills, as well as to suggest topics of conversation that should be prioritized.
This takes time and effort, but careful planning will aid a firm in determining the appropriate approach
to the table, improving the chances of a successful negotiation and long-term commercial relationship.
The following are the five most important success variables to consider:

Know the context of the deal

It's crucial to understand the circumstances and context in which business is conducted. Because the
corporate environment in China differs from what Western executives are used to or expect, investing
resources in comprehensive due diligence is frequently a good investment.

Foreign partners in China usually expect foreign parties to understand and work within the local context,
so having easy access to local data and insights is critical before sitting down at the negotiating table. By
understanding what questions to ask before and during the negotiation, local personnel, local
connections, and external consultants may give pre-negotiating assistance. In the context of the local
business environment, they may also analyze and assess the responses obtained. In the perspective of
the Chinese partner, a foreign partner who is informed about the local situation and conditions is more
credible and will develop confidence.

Western businesses sometimes misjudge the degree to which government and business are intertwined
in China, as an illustration of the significance of context. Due to a lack of understanding about Chinese
industrial strategy, government laws, and important government and corporate players at the national,
provincial, and local levels, the wrong strategic approach to talks might be taken. If, for example,
international business goals clash with local instructions, efforts to reach an agreement with the Chinese
partner may delay or stop without the foreign company realizing it. Companies can position themselves
to obtain the greatest potential outcome if they have appropriate understanding about the business
context.

Know your partner

Foreign firms must get to know potential Chinese partners on a human and organizational level,
confirming trustworthiness by looking at past performance and understanding the Chinese partners'
goals for engaging into a commercial relationship. Too often, rather than a systematic screening
procedure, partners are picked only on the basis of English-language competence or during a chance
meeting. Two criteria for effective negotiations and a long-term commercial collaboration are having a
reputable local partner and being closely aligned on shared aims.

Due to a lack of organizational transparency in China, it is important for firms to invest time upfront
learning about their competitors, particularly in areas like ownership structure, income sources, and
capital asset and operations finance. Before engaging in talks, companies should ensure that there is a
solid foundation for long-term success.
In one instance, partners reached an agreement to buy a product that needed export permissions. The
foreign partner engaged into a purchase agreement only to learn later that the Chinese firm lacked the
requisite export permits and was not permitted to get them. A more thorough examination of a
partner's skills can decrease the danger of signing a contract that subsequently needs to be fully
renegotiated and reformed.

Know yourself
Understanding one's spouse goes hand in hand with knowing oneself. Self-awareness helps one to know
how to effectively prepare for negotiating in China on a personal level. On a company level, internal pre-
negotiation posture is driven by clarity regarding high-level objectives, resource commitment, and
managerial support for business in China. This, in turn, aids the firm in preparing opening remarks to
Chinese partners about its past, dedication, track record, and value—the “big picture” tale that is
customary in the early stages of Chinese-style talks. Knowing how to place the foreign company's pitch
in the local Chinese business environment is critical to the efficacy of this strategy.

A Western executive new to negotiating in China was discussing a commercial endeavor with his
company's long-term China partners as an example of what not to do. When questioned about the
impact of a recent US court judgment on corporate ties with a domestic regulatory body, the foreign
executive dismissed it as immaterial to the business at hand. The new boss, on the other hand, lost
credibility by looking either unaware of “big picture” issues that affected his own business or hesitant to
share expertise with trusted partners. As a result, the Chinese side was less open and trusting, and
business volume was far lower than the Western corporation had anticipated.

Put relative strengths and weaknesses in context

To create a negotiating strategy, a company must first get to know itself and its Chinese counterpart.
Then it must analyze the relative strengths and weaknesses of each side within the commercial
environment. In terms of both pricing and non-monetary value, the firm must also evaluate its strengths
and limitations in comparison to prospective rivals.

For example, the Chinese partner is likely to rank possible partners against one another during talks and
is frequently fairly upfront about it. It is very unusual for a Chinese partner to claim that the foreign
company's direct competitor offers significantly better price. Prepare to emphasize product values and
business comparisons in areas like as brand awareness, quality, service, and general perception in China
to reduce the focus and debate on pricing.

Strive for operational readiness

Operational preparedness entails aligning internal organizational resources in order to negotiate in a
Chinese-style manner. The establishment of a highly disciplined, coherent negotiation team that follows
a unified communication plan is the most crucial step.

A cultural interpreter is different from a verbal interpreter in that he or she gives insight into nonverbal
developments, cultural variables, and outside influences that the foreign party may not be aware of.
Because of the “big picture” and highly contextual character of Chinese-style talks, Western negotiators
are typically at a disadvantage during operational preparedness planning if they lack this capacity.
Finally, organizations should not overlook the function of the team's mediator. Because of the Chinese
tendency to avoid direct confrontation and personal humiliation, having someone who can
communicate informally with the Chinese team is essential.

Negotiation in the Chinese manner is the process of establishing and maintaining connections in order
to benefit both parties. It's a never-ending process that doesn't finish until the connection is broken. This
method of negotiating is based on Chinese cultural, historical, and practical factors, and it is used in
modern China.

Export

I am going to talk about the mode of export and import for China as USA being the largest importer from
China with an amount of more than 572 billion dollar and China importing over 172 billion dollars’ worth
of products.

The Chinese Negotiator.

As previously said, the three cultural elements that are evident in Chinese culture lead the Chinese
negotiator. In their negotiations, the PRC situation, Confucian philosophy, and Sun Tzu stratagems all
play a role. These are fundamental principles that are significantly different from what western
negotiators are used with.

During discussions, the Chinese tend to ask a lot of questions and interrupt frequently. The Chinese will
frequently pay all of the deal's suspended items in a single transaction. They like to make compromises
only at the conclusion of the talks. Concessions for concessions are expected in China. The Chinese will
demand corresponding concessions over time, even if they do not come immediately. Different forms of
negotiations are used by the Chinese with different types of businesses. These negotiating strategies are
influenced by the sort of goods being sold and the product's supply chain. Chinese people want to make
their problems appear to be more significant than those of Westerners. Almost often, the agreement or
contract is signed in front of a government official.

Cooperation, aggressiveness, defensiveness, flattery, recognizing the opponent's issues, deceit, shaming,
and putting foreign firms against one other are all tactics used by the Chinese to control the American
side. Long discussions on the side of the Chinese are a frequent technique used by the Chinese to get
concessions. They almost never provide any signals when the talks are concluding. The Chinese have a
proclivity for using delaying tactics. Before the government official arrives, the Chinese will try to
persuade you to make concessions and sign the deal.

The American Negotiator

The western negotiator prefers collaboration but also believes in competitiveness. Their objective is to
maximize shareholder value by generating economic riches. Although conflict may briefly benefit the
Americans, it will harm the essential human connections that bind more tightly than any contract. These
connections are required for the continuation of long-term contracts as well as the formation of new
ones.

Symbolic visits by senior executives from western companies, as well as dinners and informal
interactions, can help to establish confidence. Having Chinese delegates visit a western company's home
country can go a long way toward establishing confidence. Because the intermediary is generally the
one who initiates the contact and establishes all of the connections, they must attend all of these
occasions.

India:

India's multi-ethnic population is made up of roughly 80% Hindus, 14% Muslims, and 6% members of
other ethnic groups. The oft-quoted caste system plays just a little influence in Hindu commerce.
Business culture may be extremely diverse, with major regional variances in style. While Southern Indian
businesses, particularly those in and around Bangalore and Hyderabad, are innovative in certain
respects, Southern Indians are generally more reserved and traditional than there. Business practices
may differ from those described in this section on occasion. When doing business in this country, keep in
mind that people want things to be done ‘their way.' The vast majority of Indians feel proud of their
country's development, accomplishments, and dynamism. Your partners like it when you recognize and
respect this.

Relationships and Respect

India's culture is characterized by a strong sense of belonging to a community. Individual preferences

may be overlooked in favor of a sense of belonging to a group, adhering to its standards, and preserving
peace among its members. Building long-term, trustworthy personal connections is thus crucial, but to a
lesser extent than in some other Asian nations. While the process of developing relationships continues,
some Indians may participate in business.

Many Indian businesses are still run by families. Mutual trust and respect are the foundations of
relationships, which can take a long time to build. In this country, business ties occur at both the
individual and corporate levels. Indians like to do business with people they know and trust. However, if
your employer replaces you with someone else during the course of a negotiation, your successor may
find it quite easy to pick up where you left off. Similarly, if you introduce someone from your firm into an
established business connection, that person may be rapidly regarded as a legitimate business partner if
he or she invests time and attention in developing those ties.

Communication

Despite the fact that Hindi is the official language of India, several of its states have their own indigenous
languages, some of which have more than one. Almost every businessperson is fluent in English. Indians,
particularly those in the southern and western areas of the nation, typically talk in calm, mild tones
unless they hold senior positions. They may even look bashful at times. Do not misinterpret this as a lack
of self-assurance. Their modesty and reserved demeanor only serve to emphasize their civility and
regard for others. Loud, boisterous conduct is sometimes mistaken for a lack of self-control. Dishonesty
is sometimes associated with loudness. Positive feelings, on the other hand, can be expressed openly.

In India, gestures and body language are often far more comprehensive than in most other Asian
nations. Except for handshakes, avoid physical touch with other people. The left hand is considered
filthy by Hindus and Muslims, therefore only use it if absolutely necessary.
Initial Contacts and Meetings

It is very important to identify and employ a local intermediary before beginning business talks in India,
especially if you represent a small firm. This individual will assist in bridging the cultural and
communication divide, as well as navigating India's complex bureaucracy and obtaining the requisite
signatures and stamps. Individuals or teams of negotiators can undertake negotiations in India. Teams
should be well-coordinated, with duties clearly defined for each individual. Schedule meetings at least
four weeks in advance, if feasible.

Even if it isn't precisely followed, agreeing on an agenda ahead of time is beneficial. Despite the fact that
meetings may start late, Indians usually expect foreign guests to be on time. If you're going to be late,
don't be more than 10 to 15 minutes late. Being on time is preferable since Indians are typically
impressed by punctuality. Many Southern Indians do not use their surnames as a surname.

Academic and professional titles are extremely significant to Indians, and they place a great value on
them. When addressing someone who carries one, always use them. Older folks should be the first to be
introduced and greeted. The initial meeting's major goal is to get to know each other. Business can be
discussed, but don't attempt to rush through your schedule. It's unreasonable to anticipate direct
decisions from first interactions. The images in your presentation materials should be appealing. Indians
are frequently awestruck with technological prowess. It is typically not necessary to have your English-
language handout materials translated into Hindi or another Indian language.

Negotiation

Attitudes and Styles - In India, distributive and contingency bargaining are the most common approaches
of negotiating. Despite the fact that the buyer is in a better position, both parties in a business purchase
are responsible for reaching an agreement. They are looking for long-term commitments from their
business partners and will concentrate on the long-term advantages. Despite the fact that their primary
negotiating style is competitive, Indians cherish long-term relationships and seek win-win outcomes.
They may appear to be following a win-lose strategy on occasion, in which case it is beneficial to assist
them in focusing on mutual advantage. Avoid becoming confrontational, though. If a disagreement
arises at any point throughout the discussion, you may be able to resolve it by demonstrating kindness,
respect, and a willingness to compromise. Show your devotion to the partnership by refraining from
utilizing logic or getting argumentative, since this will only exacerbate the situation. As long as you stay
friendly, this will most likely offer up fresh avenues for reaching an agreement.

Sharing of Information – Before proceeding to the negotiating stage of a negotiation, Indian negotiators
would gather information and debate numerous aspects. In order to develop confidence, people may be
willing to disclose a lot of information. This isn't to say that they'll tell you all you want to know
throughout the discussion. However, if one party appears to be withholding information from the other,
discussions can become very tough, leading to attempts to outwit each other.

Pace of Negotiation – Expect a long and drawn-out bargaining process. Delays are almost always
unavoidable when dealing with government bureaucracy. Prepare to make many visits if required to
meet your goals. Be patient, manage your emotions, and understand that delays will occur during the
discussion. Indians consider impatience and pushiness to be impolite. If your opponent’s appear to be
delaying the discussion, consider if their inaction signals that they are considering other options or that
they are unwilling to do business with you.

Bargaining – Indian entrepreneurs are skilled negotiators who should not be overlooked. Most of them
like negotiating and haggling, albeit not to the extent that other Asians do. A negotiation's negotiating
stage might be lengthy. Between first bids and final agreements, prices sometimes fluctuate by more
than 40%. Technical help, training, and other fees, on the other hand, may be major negotiating issues,
and Indians remain flexible throughout the negotiation process. Allow plenty of leeway for compromises
at various phases. If you made one, ask the other side to reciprocate. You can take advantage of the fact
that elements can be revisited by providing further concessions in exchange for the Indian side
reciprocating in areas that have previously been agreed upon. Techniques of deception are regularly
employed. This involves deception and giving misleading nonverbal cues, as well as acting disinterested
in the entire agreement or specific concessions and making false demands and concessions. Do not take
such methods personally and be aware that overt attempts to deceive or bluff your competitors may
backfire, causing business relationships to suffer.

Decision Making – The majority of businesses here are very hierarchical, and employees expect to
operate under well-defined lines of authority. Disagreeing with or criticizing superiors is frequently
frowned upon. In India, making decisions is a lengthy and careful process. Top executives are typically
the ones who make decisions in the group's or organization's best interests. Before deciding, they could
confer with others. It's possible that subordinates will be hesitant to take responsibility. Decision makers
seldom transfer their power, thus dealing with top executives is crucial. They expect to deal with others
on a level playing field. People aren't always receptive to new concepts.

Agreements and Contracts

Taking notes and sharing meeting summaries can help to ensure that everyone is on the same page.
Indians may express their approval by making passionate remarks that use their own terminology.
Interim agreements, even if they are made orally, are regarded binding, and are typically followed.
Nonetheless, only a final contract signed by all parties should be considered a legally enforceable
agreement. Written contracts should be simple and straightforward, with few specific terms and
conditions. Signing the contract is crucial not just from a legal standpoint, but also as a clear statement
of intent from your Indian partners. In India, legal rights are largely enforced, however the procedure
might be lengthy and inconvenient. During the negotiating process, or at the very least before signing a
contract, you should consult a local legal professional. It's better not to come out as excessively
legalistic. Bringing an attorney to a discussion might be interpreted as an indication that you don't trust
your competitors. Contracts signed may not always be fulfilled. This is dependent in large part on the
quality of the contract partners' ongoing connection. It is critical to keep in touch with your Indian
business partner and preserve his or her confidence.
India’s mode of Export with USA:

Tactics used by Indians while negotiating with the Americans.

• Emotional blackmail (outlined above under Attitudinal Bargaining).

• Use of silence to make you uncomfortable and to encourage you to break the silence by talking.

• Stalling by revising areas or turning questions back on you.

• Placing potentially unreasonable time pressures on you.

• Placing no value on negotiation schedules.

• Being untransparent with certain areas in an attempt to draw out your weaknesses before disclosing
real issues.

• Revisiting issues that you had assumed were closed.