Business Negotiation in China/Japan/Korea - Idiot's guide to beer and karaoke

一通百通
The more I learn, the more I realize I know nothing.

That's my continual thought when trying to do business in Japan, China, and Korea. Why should I know anything? I'm a newcomer. I've only been doing business in this part of the world since 1992...not nearly enough time. Fortunately, I cover my mistakes by telling my friends that my job involves drinking beer and singing karaoke around the world. How can anyone screw that up?

I think it helps to learn some of the local language. I can speak a little Chinese, Japanese, and Korean without insulting too many people. OK, that helps a little. But 5,000 years of historical culture builds an impenetrable, unconscious way of thinking and acting much different than mine. I try reading the Harvard Business Review, books on doing business in China/Japan/or Korea, and other books on the art of negotiation. The authors certainly are wealthier than me. They must be successful. But I still don't understand their rules for success. I end up formulating my own rules for negotiation.

Rules of Negotiation in Asia - from the TRUSTWORTHY GOOD GUY 大坏蛋
(trust me, a man named 大坏蛋 would never lie to you)

1. BE Patient. Patience is the most valuable virtue in business over here. Before starting a big project, people here must research, research, and research again. They can't lose face by making a mistake, no matter how small. You will get asked many questions repeatedly many times. Be Patient. Just cut and paste your previous 5 identical answers. A big business deal usually takes 6 months or a year to set up. 2 hour business meetings get stretched to 8 hours + an alcohol-filled dinner. Be Patient. Immediately after you sign a contract, the customer starts asking for more things at no additional charge. Be Patient.

2. Once you mention a price, the number can never be increased. The famous rule of negotiation is "he who states his position first will lose." The customer will wait until you mention a price. Then he will start piling on more features and services like he's at a grand Chinese lunch buffet. Despite this, the price can NEVER go up. Always plan for added demands and start high on your price. The customer will always allow you to come down later. Be Patient.

3. The customer must get a discount. Managers need to gain face by telling their boss, "I negotiated very hard and got him down 25%." This is the way they score winners and losers in the business game. Start 30 or 40% high and let your customer talk your price down...bit by bit. Give him a chance to gain face. Be Patient.

4. The amount of work or features will always be increased, especially after the contract is signed....but rule 2 still applies: price can never be increased. Plan for this in advance when calculating your bid price. Or you can do the opposite: spend months arguing with no effect.

5. Remember that friendship is friendship and business is business. The guy across the negotiating table from you is probably a very good person and can be a great friend. No matter if negotiations are successful or not, it's just business. Be patient, be nice. At the end of the day, enrich your life by adding good friends. Business comes and goes like the wind. Friends add to your life for a long time. The outstanding friendships I've gained with ordinary and extraordinary people alike: that's the real wealth from doing business over here.

Now you can understand why I'm not wealthy. My business rules are not so good. Fortunately I simply enjoy drinking beer and singing karaoke around the world. Even I can't screw that up.