Outsourcing to China - negotiation

When outsourcing to China, sometimes, there is a communication breakdown.

Sometimes you get to a point you almost give up. It seems like it is impossible to reason with the other side and they just won’t listen.

But there is too much at stake. The project must be delivered. The shipment must leave on time.
The validation report must be submitted before the deadline.
Sometimes, when you are outsourcing to China and you deal with people from other cultures, without knowing it, and without any bad intention you say and do the wrong things and the relationship takes a hit.
In most cases, at the beginning of a new cooperation, both sides are excited at the opportunity to improve the situation of their organization and themselves by making more money for their company.
However, sometimes, as time passes, one of the sides starts feeling that things are not the same as they expected. Sometimes they feel it is because the other party is not being reasonable or fair.
Slowly it changes their attitude and bitter feelings that were hidden surface in the form of being unwilling to compromise, negotiate and help. If no attempts are made to stop the snowball, mutual trust is getting damaged as well.
When this happens the first thing you need to do is stop.
Help all stakeholders calm down and find the root cause of the friction that started everything.
Once you know where the friction is, the first thing that needs to be done it to divert the conversation back in a positive direction and restore trust.
This can be done by discussing the less critical disagreement and reaching agreements over there.
Then, once a more open and relaxed atmosphere was achieved, you can slowly discuss topics that present higher stakes and where agreement will be more difficult to achieve.
Now I can hear people say: “…easier said than done…” which is very true.

There are a few reasons why this is true:

  • The reasons that created the disagreement and communication breakdown were not dealt with, and whatever started the whole communication breakdown may still have negative  influence as you are trying to do damage control.
  • All above is only possible when there are no communication barriers. It is very difficult to know how much a person who uses a language he is not completely fluent in really understands. It is also very difficult to know how do people from another culture interpret your body language and tone of voice. What do they tell them about your feelings and your intentions? It is just not possible to know the answer to this question.
  • The emotional baggage is still there. Each party is still carrying the disappointment and bitterness they feel the other side caused them to feel.
  • At the end of the day, everybody is in this because they want to get the best financial results for their business. Part of the inflexibility and unwillingness to compromise is because they feel that if they will insist they will be able to leave the conversation with a better agreement. Better for them.
In many cases, you will be able to reach better results if you get the right person to help you.
You will need someone that is able to do a few things:
First, they need to be able to speak to your supplier or other counterparts in a way that will make them feel more comfortable and more relaxed. They will need to speak to them in their own language and be able to understand what’s really on their mind.
Second, just by being looked at as a third party, as someone who starts fresh and not bring into the conversation tension, it will be easier for a third party to open a more healthy communication channel.
Third, if the person that helps you rebuild communication lines is familiar with the local business culture and etiquette, they will send positive signals with their body language and tone or voice that will enforce the credibility and trust you would like your supplier or another counterpart feels towards you.
After trust and positive atmosphere were restored, you will have to get back to the original negotiation and focus on getting the best results for you.
Many times the results of the negotiation depend a lot on your and your counterpart other options.
It is extremely recommended to prepare a plan B you feel comfortable with, in case things don’t work out. You don’t have to finalize all details, before the negotiation, but you have to feel confident enough that you can always choose to take it as a course of action.
Preparing such a plan B is time-consuming and requires a lot of effort.
But having such an option ready will help you send a message to your counterpart in China that you don’t have to work with them, and you do have other options.
That itself might increase the motivation of your counterpart to be more flexible and try harder to reach an agreement.
At the end of the day, your suppliers will ask themselves what are we getting for willing to reduce the financial benefits we get out of working with you. Part of the answer is the small amount of effort they have to invest in the relationship because it is easy to communicate with you and overall they enjoy working with you.
They could also decide they perceive you as an honest and reasonable person and for this reason working with you pose very little risk.
We’d love to talk to you about the challenges you have communicating with your China business partners.
Contact us by
Phone: +185-6668 3420
Email: amit@csoprojement.com
Skype: ABRaphael.
Or simply leave us a message using the form below.