Due Diligence in Negotiation

a. Importance

“Do your homework.” This advice espoused by Mr. Tay was also supported by both Mr. Ramlee and

Ms. Chen during the interviews. All three are firm in their belief that the negotiation process begins not

at the table, but much earlier. This means negotiators must prepare well in order to achieve the best

possible outcomes; after all, “devoting insufficient time to planning is one weakness that may cause

negotiators to fail.” [ CITATION Lew07 \l 1033 ] Yet, as Ms Chen emphasized, it is also important to

note that the amount of preparation required with every negotiation increases with the importance

placed on the negotiation.

b. What Types of Information are Needed?

Information negotiators need to prepare can be subdivided into three major parts, namely information

(1) concerning them and their own position(s), (2) the other party and (3) other information

surrounding the negotiation such as the market environment.

“The first step in developing a negotiation strategy is to determine one`s goal.” [ CITATION Lew07 \l

1033 ] Yet, failing to clarify a negotiator’s own goals is a surprisingly common mistake with serious

consequences. Both Ms. Chen and Mr. Ramlee emphasize the importance of understanding your own

objective and “what you are trying to get out in any negotiation”. Additionally, Mr. Tay pointed out

that it is also crucial to “know your strength and weaknesses”.

Nevertheless, the other party’s position including objectives, reservation price and even attitude

towards flexibility during negotiation must also be considered and well-researched on before reaching

the negotiation table [ CITATION Eva10 \l 1033 ]. This is in accord with Ms. Chen’s advice to find out

“what they want” after understanding what negotiators want for themselves.
1
Finally, negotiators must be well versed about the negotiation issues they expect to be discussed.

Unsurprisingly, all the three interviewees agree on that fact that the price, the market environment and

market trends are key issues you should deal with when preparing a deal.

c. Sources of Information

Where should negotiators source all these information? While definitely not the only tool, Ms. Chen

and Mr. Ramlee cited the internet as their first source of information most of the time. In any case, the

abundance of data online can help negotiators mine for information about the other party (e.g. company

profiles and past negotiation deals). Moreover, crucial data surrounding the issues to be discussed such

as market comparisons, historical price data, and market analyses or forecasts are merely a few

keyword searches away. However, the internet cannot be totally relied upon especially if the

information gathered cannot be verified by trustworthy sources.

Apart from the internet, Mr. Tay stressed the importance of gathering information at the negotiating

table itself. For example, there have been a few instances where he was able to roughly gauge the other

party’s reservation price just by paying close attention to his or her “facial expression [or] body

language”.

2
Relationships in Negotiation
a. Importance

A relationship is defined as a state of being connected (Dictionary, 2009). We sought to explore why

parties in a negotiation would ideally strive to build such a connection between themselves and found

that by having a positive relationship between negotiating parties, negotiation "becomes much easier",

according to Mr. Ramlee. He continues that negotiation "becomes more conducive for openness and

transparency". These were factors that Ms. Chen also brought up at the very start and were echoed by

Mr. Tay who believes that relationships build "trust between parties", thus making it "easier to work

through problems and focus on long-term benefits over short-term rewards".

Building relationships are "incredibly important" as attested by Ms. Chen because these connections

are the bridges between parties. Relationships facilitate discussion and the understanding of each

other's views and interests, as alluded to by our interviewees in their mentions of "openness". After all,

effective negotiation needs to begin from an understanding that the party at the table, like oneself, has

interests and concerns (Bilings-Yun, 2010) and what better way to allow this than through a

connection?

b. Long Term vs. Short Term

Next, we explore the idea of whether there could be any disparity in the way negotiations are handled

when parties perceive significant differences in a relationship’s expected duration. We found it affected

each negotiator differently. For example, Mr. Tay replied that “short-term relationships are generally

less valuable” and he would “tend to drive a harder bargain as compared to one where I have a long

term commitment towards”.

3
Mr. Ramlee, who does not believe “there is any short term or long term relationship”, challenges this

with the same view as Ms. Chen – “it’s a small world; you never know when you’ll come across him

again”. Seeing that the three differ in terms of amount of experience, with Mr. Tay being the much less

seasoned negotiator, we opine that as one becomes more well-versed in negotiations and in commerce,

one would ideally maintain cordial relationships as much as possible should a future encounter

transpire.

c. Approaches Used to Build Relationships

Lastly, we investigate how to build an effective relationship. Relationship-based negotiations take place

in 3 stages: (1) Understand as much about the other party as possible, (2) Anticipate appropriate

approaches, imagine likely reactions and prepare compelling responses and lastly, (3) Connect by

communicating as partners; listen to his views, show an understanding of his concerns, build mutual

empathy, and work together to resolve the issues (Bilings-Yun, 2010).

Unsurprisingly, all three interviewees emphasized the importance of due diligence – this involves the

first two steps as mentioned above. With regards to style and conduct during negotiations, Ms. Chen

stresses comfort while Mr. Ramlee, consistency. He also recommends that the negotiation style you

employ should make the other party comfortable and suit the other party’s personality. Hence, Mr.

Ramlee also believes that flexibility in terms of negotiating style is important. After an agreement is

reached, again all three interviewees advised following up so as to formalize the conclusion with a

recorded summary as well as to thank the other party and indicate a hope for possible future

partnerships, as Ms. Chen suggests. Clearly, building a relationship starts pre-negotiation, when the

understanding of the other party begins with research and ends not with the conclusion of the

negotiations but with the possibility for future collaborations.

4
Ethics in Negotiation

a. Importance

We believe that underlying almost every negotiation is a fundamental element of ethical conduct. What

are ethical or unethical tactics in the negotiation process – where do negotiators draw the line in an

ethically ambiguous situation? For example, some may view failure to disclose certain information as a

form of unethical misrepresentation, but others may find such omissions acceptable. In this section, we

will analyse common ethical dilemmas and the impact of a company’s code of ethics during

negotiations using the end-result ethics system (see Appendix A) (Lewicki, Barry, & Saunders, 2007).

b. Common Ethical Dilemmas

1. Under-the-table Rewards

Mr Ramlee has come across suppliers requesting premiums on top of the negotiated price and

demanding that these amounts not be included in a written contract. Such hidden acts are not

condoned and he (and the company) will walk away from negotiators who insist on them. However,

official gifts in celebration of a successful agreement are acceptable at the company. Although Mr

Ramlee did offer that the size of the gift has to be in perspective of the size of the deal, we feel a

grey area lies in determining what proportion can be considered as reasonable and ethical.

Negotiators should thus analyse carefully the consequences of accepting or giving ‘gifts’ – as a

rule, we believe that if the gift is so large as to affect the ultimate agreement, then it will not be

ethical to receive or give such a gift.

2. Avoiding Compensation for Services

Consider a company which engages an agent to search for and handle the contract with a suitable

supplier. After the agent gathered the relevant contacts, the company realises that negotiating

directly was not as difficult as previously thought, and could be more cost effective since the
5
 agent’s commission could be avoided. Should the company drop the agent? Ms Chen strongly

believes the agent should always be properly compensated and that the inherent level of mutual

trust between the two parties should not be sacrificed. Again, the consequence of ‘dumping’ the

agent should determine the negotiators actions. While a breach of contract is evidently (and

lawfully) wrong, the consequence may sometimes not be so obviously severe as to show

negotiators what they should do.

c. Overcoming Ethical Dilemmas

Negotiators should also consult their company’s code of ethics, which acts as a moral compass, to

determine what is ethically acceptable. According to Ms Chen, in order to maintain its reputation as a

dependable company, Citibank has a strict and constantly reviewed code. In fact, passing an ethical test

is one of the bank’s hiring requirements. Cerebos also updates its code as and when required;

employees must also sign an acknowledgment of the required behaviours and values in their course of

work. Yet fundamentally, are the ethical viewpoints raised through codes questionable? If the company

does not have a formalised code (as with Mr Tay’s small company), will relying on the negotiators’

personal codes of ethics be sufficient? Culture also plays a major role in moulding ethical viewpoints:

what a Chinese may think is acceptable behaviour, may not be welcomed at all by Germans.

Ultimately, before engaging in tactics which are ethically ambiguous, negotiators should first evaluate

how it will impact them as individuals as well as the company. The reputation effect (see Appendix B)

(Burr, 2001) could after all be very damaging for the company in the long run. For example, should a

company’s under-the-table activity be discovered, it is likely that the company would lose its reputation

as a trustworthy business partner.

6
Culture in Negotiation

a. Importance

Understanding and adapting to the instinctive negotiation styles of people from different cultural

backgrounds is essential in the negotiation process. After all, every culture values aspects like trust,

relationships, and communication at different levels. In this section, we will analyse the differences in

views of Eastern and Western cultures on three aspects of negotiation.

b. What is Important to Who?

1. Punctuality and Time

“Time is money” probably sums up the general opinion of Westerners towards keeping time. More

often than not, they expect to start and end meetings on time; meetings are focused and strictly

follows an agenda (LeBaron, 2003). On the other hand, Asians tend to be more flexible when it

comes to keeping time. Thus, punctuality is not as frowned upon in Asia unlike in the United

States, for example (Kwintessential Ltd).

2. Relationship-building

Relationship-building is top priority and a pre-requisite to conducting business deals more so in

Asia than in Western countries. For instance, it is common practice for Asians to receive and send

gifts of goodwill during the pre-negotiation process (Low, 2010). According to Mr Ramlee, the

time taken to develop "guanxi" with the Chinese is time well spent. However, as pointed out by Ms

Chen, although relationships are not usually focused upon because of the "inherent level of trust" in

developed countries, this does not mean relationships are not important at all in those parts of the

world. So while negotiators from places like USA and Western Europe try to reduce informal

communications to a minimum (unlike Asians), they still try to maintain good relationships in order

to smooth the negotiating process and achieve better results (Salacuse, 2005).
7
3. Importance of Contracts

Are signed contract terms set in stone or can negotiating parties choose to modify them at a later

time? Though we may feel that it is obvious that modifying negotiated terms already signed on is

unacceptable in business contracts and subject to legal proceedings such as in USA, certain cultures

do not hold a similar view. For example, after months of tough negotiating, Mr Ramlee’s Joint

Venture with a Chinese company was still "difficult to continue" because his Chinese counterparts

were always modifying the terms of agreement. However, this may not be representative of all

Asian contracts – Singapore has strict company laws which deters any breach of contract, and Mr

Ramlee also mentioned that although Japanese companies drive hard bargains, they will always

"deliver their agreements".

8
Bibliography

 Bilings-Yun, M. (2010). The four pillars of effective negotiation. . Leader to Leader (57), 11-

17.

 Burr, A. M. (2001). Ethics in negotiation: Does getting to yes require candor? Dispute

Resolution Journal , 56 (2), 8-16.

 Dictionary, C. E. (2009). Dictionary.com. Retrieved 2010, 28-September from Dictionary.com:

http://dictionary.reference.com/browse/relationship

 Evans, C., & Richardson, M. (2010). How to Negotiate Effectively. Manager: British Journal

of Administrative Management (69), 32-33.

 Kwintessential Ltd. (n.d.). Cross Cultural Negotiation. Retrieved 2010, 28-September from

Kwintessential : http://www.kwintessential.co.uk/cultural-services/articles/cross-cultural-

negotiation.html

 LeBaron, M. (2003 йил July). Culture-Based Negotiation Styles. Retrieved 2010, 28-September

from Beyond Intractability: http://www.beyondintractability.org/essay/culture_negotiation/

 Lewicki, R., Barry, B., & Saunders, D. (2007). Essentials of Negotiation (4th Edition). Mc-

Graw Hill International Edition.

 Low, K. C. (2010). Chapter 2 - Negotiation, the Relationship Way. In K. C. Low, Successfully

Negotiating in Asia.

 Salacuse, J. W. (2005 йил Mar/Apr). Negotiating: The top ten ways that culture can affect your

negotiation. Ivey Business Journal Online , 1.

9
1. Appendix A

There are various approaches (four, in particular) to ethical reasoning[ CITATION Lew07 \l 1033 ].

Table 1 summarizes the definitions of these four ethical systems. While we believe that no one

approach can be deemed as the right way, we chose to offer our views from the perspective of a

negotiator functioning on a pure end-result ethics system.

Table 1
ETHICAL SYSTEM DEFINITION
End-result Ethics Rightness of an action is determined by considering consequences
Rightness of an action is determined by considering obligations to
Duty Ethics
apply universal standards and principles
Rightness of an action is determined by the customs and norms of a
Social Contract Ethics
community
Personalistic Ethics Rightness of an action is determined by one’s conscience

10
Appendix B

Source: Ethics in negotiation: Does getting to yes require candor? [Anne M Burr, Dispute Resolution

Journal, ; Vol. 56, No. 2, pp. 8-16]

Excerpt from the Article:

The Reputation Effect

Unilateral conciliatory moves alone, however, will not guarantee a mutual trusting relationship and a

successful outcome. To sustain trust, parties must also be willing and able to deter those who abuse

trust. Research has shown that negotiators who are "conditionally cooperative"— cooperative but

willing to retaliate if their trust is abused— are the most successful in building trusting relationships.''

One of the most potent deterrents to trust abuse is the fear of developing a bad reputation. The

"reputation effect" is documented in business research as contributing significantly to the stability of

long-term commercial relationships. The reputation effect has impact on two levels: in repeat dealings

and in the general marketplace.'''

Parties will seek to maintain reliability and trustworthiness within the context of a particular

commercial relationship. Parties and negotiators that anticipate repeated dealings with one another have

strong incentives to establish and maintain trust as a means of cutting costs and maximizing profits.'"

Building a reputation for reliability and trustworthiness has benefits in the marketplace. Negotiators

prefer to deal with trustworthy people rather than strangers or those known to be untrustworthy.'"

People who abuse trust in bargaining situations reduce their chances of acquiring a good reputation and

risk developing a distrustful one. As a result, their transaction costs are likely to rise and their overall

profitability drop as others insist on dealing with them cautiously or not at all.'"

Appendix C

Interview with Ramlee Bin Buang, Cerebos Pacific Ltd

EXPLORING EXPERIENCES
11
 1. Would you please describe your negotiating experience and the kind of negotiations you have
been involved recently? Please give examples.

Okay I've been with Cerebos for more than 13 years. We are in the health supplements
business. There are a couple of things that are critical to us. Obviously one of them is the supply
of materials and there are a couple of ingredients or raw materials that are critical which are raw
birds' nest, 2nd, chicken. I'm responsible for IS. We've got IS equipment, hardware, software
and also consultancy arrangements and services that we've got to negotiate. In addition to that
obviously there are sometimes the need to negotiate for acquisition, especially in Aus and NZ
where we've acquired a couple of businesses in the last few years. One of the things that I've
realized early on when you're negotiating is that you need to know what's your objective, you
must clearly understand what you're trying to get out in any negotiation. 2. you need to also
understand what is your bottom line so that you would understand what's the spread between
the best position you can get and what's the worst position. Without understanding this it would
be very difficult for you to negotiate. 3. You also got to understand what's your strength in
terms of, or vis-a-vis the other party that you're negotiating with. Because if supply is limited
and so forth, you need to really try to achieve best possible of a worst situation where your
negotiating powers are very limited. Next thing is cultural differences are also critical because
in certain countries you realize that the people you're negotiating with may not be the people
who are making the decision so it slows down the process. You got to understand who the
decision maker is, secondly, even if you know who the decision maker is, you may not have the
ability to meet him early on in the negotiation so you got to persevere and to get into a position
where you can negotiate with him directly. And the different culture would also affect the
approach as well as the need to vary your negotiation tactics. If you deal with Japanese, for
instance, you'd realize that they are very consensus driven. They won't make a decision, they'll
go round in circles, you don't know whether it's yes or no, they may just nod their head and
you'll never know they've got a deal and they will always listen then they will say they'll come
back to you. In some cultures, you'll actually go in there, agree on the terms and conditions, and
then when you come back, you'll realize that when they'll confirm the minutes of meeting, the
terms and conditions are actually different from what you've discussed. So it's a long process.

Culture in Negotiation
1. What kind of cultures have you negotiated with?

I've negotiated with Indonesians, Malaysians, Japanese, Koreans throughout my career and also
Chinese. Each one has different approaches without being culturally biased, I think the most
difficult people to deal with, in my experience are, Koreans. 1. It's because, maybe due to the
communication gap, but you never know where they're coming from and whatever's agreed is
the real terms of agreement, because you'll always have misunderstandings and you'll always
have the continuity of arguing or negotiating specific terms even you thought you've agreed.
The Japanese are good because they do negotiate very hard but once they've got the agreement
signed, they basically don't go back and they deliver their agreement. Fantastic. They'll argue to
the cow comes home each point and so on but once they've got it signed they normally don't
renegotiate terms. Indonesians are totally different, they are more non-confrontational, they are
very soft-spoken and it's difficult to read their mind despite the obvious expectation of
corruption in Indonesia but overall if you persevere and negotiate, if you don't blow your top,
you can normally get things done in Indonesia. Chinese, in mainland China, my experience is
also that they're tough negotiators. Depending on whether they're from Shanghai or Guangzhou.
They both have different styles. I once had a negotiation for an acquisition when I was in Sara
12
 Lee of Kiwi International for a perfumery company. We were going into a joint venture and that
was before China opened out and it was hell of a difficult negotiation. The negotiation took us
months and by the time we actually signed the contract, the contract was actually, there were
around 10-12 contracts and it was so thick that at the end of the day it was difficult to continue
with the JV because each time they will look at the agreement to see if it's been agreed upon or
not.

2. Would it be different if you were negotiating with other countries because of so many contracts
eg. Japanese?

Normally they won't go through again except to confirm the terms of the contract. They seldom
dispute the key things, the Japanese, once they're agreed. The key thing is, when you go into
negotiating, you must know who in your team needs to come - you obviously cannot negotiate
alone - my experience is that you normally need a good lawyer, a commercially inclined one,
not someone who says oh this is illegal or cannot be done and so forth, you need someone who
is able to look at it from a commercial perspective. Not only that, you also need the lawyer to be
able to come up with an agreement that's fair. The experience I have with most lawyers is that
they always look at a win-lose situation and in a negotiation the best approach is try to get a
win-win situation. Sometimes it's not possible but you always should come up with the frame in
mind because if you don't have a win-win situation, no matter what you sign, problems will
arise. And the other party may feel very disappointed or aggrieved because you've forced them
into a corner.

3. What values do you think take priority

I think the values that do help in any negotiation is the ability to be able to negotiate in a
friendly manner. Like the Chinese, Guangxi is better, you start off with being friendly, you
know them, they always like to be in a position whereby you show a lot of respect. Even when
China wasn't opened up, if you said you were from an MNC, you've got all the resources and so
forth and they need the funds, you shouldn't go in and say hey, guys, I'm in command here and
so respect is critical in all cultures, not only just in developed countries but undeveloped
countries also. If you don't have respect for each other, again, it's starting on the wrong footing.
Some cultures don't really want legal people to come in the first instance, actually it's the
business people talking about it and this is sometimes prevalent in Indonesia or Thailand
whereby you get the commercial people going inside discussing and once you've got a
framework to deal with then you call the legal people. Because once you get the legal advisors
in upfront, they will think that it's very confrontational so these are the key things. So to
summarize values, it's basically being able to respect each other, being upfront as much as as
possible, open up, and establishing a relationship and really looking for a fair solution.

Planning, Due Diligence and Preparation for Negotiation

It depends on what we're negotiating for; in a purchasing agreement, let's say you want raw
materials and so forth. Obviously you've got a smaller team and you most probably got a
purchasing committee made up of various heads of departments like Finance, the purchasing
guys, the business leader of the thing and most probably depending on what industry you're in,
the technical guys - specifications etc. In Cerebos’ case, it's probably somebody from R&D who
13
 knows the product or the quality of the product. Then you go in and get those people to
understand from day 1, what is our objective, we must understand the market, the prices of the
products, whether it's poultry or birds nest, we must know where the trend is going so that we
don't go in blind without knowing whether the price is increasing or decreasing. Then we need
to decide how many suppliers would be sufficient. Because if it's critical raw materials like
birds nest, you've one supplier and if the supplier doesn't deliver then it's problem so you've to
identify who you want to negotiate with, go in and for let's say, chicken, we buy it locally, in
our own factory in Malaysia, we've got our purchasing team and so forth. They will buy it
locally. Then we also make sure we have 12 -1 8 months contract so that it tides over for a
period of time. In most places where we manufacture, the supply of raw materials, like chicken,
packaging and so forth is negotiated on a term basis. But for birds nest which is a commodity or
for coffee it becomes much more difficult because commodity prices will go up depending on
demand and supply and we sometimes realize we don't have a strong position. Our bargaining
power in respect of that is very limited so the best thing is to get the best prices so we don't
really push it so much because if these people disagree with your prices they'll walk out and you
don't have supply. So that goes back to my point whereby you need to know where your bottom
line is. You gotta run a business.

Now in terms of negotiating for let's say IT services, hardware and so forth, it's always good to
be able to tell your supplier if you've got alternatives because let's say the way I currently am
trying to evaluate between using Oracle and SAT, and the team that's really looking into it, is a
team of really specialized IT people plus our business, one or 2 business leaders who really look
at functionality. So when we negotiate this we would then try to get not only functionality but
all the suites we would require but also try to get the best price and we would then make sure
the supplier knows we are talking to both of them. Because there's on point hiding.

2. What is the most important information you usually gather before your negotiation? How do
you get this information? How do you make sure that it’s reliable?

Information for all the decision making - you've got historical data for raw materials like coffee,
chicken and all that. You've got market data as well. You go on the web, you can find out the
trends and so forth. Getting information is not a problem nowadays. Except for birds' nest
because these are controlled. People do say birds' nest, commodities are very tightly controlled.

3. Determining Reservation Price (RP) How do you assess the reservation price (RP) of your
counterpart? (Reservation price is the maximum a buyer is willing to pay and the minimum a
seller is willing to accept).

In theory, that is right but when you look at bottom line you look at the impact to your business,
if it's something like coffee beans whereby you buy from the open market, you really do not
have the choice. The thing is that you need to see the trend see if it's going up and you need to
understand what your requirement is and decide based on your budget what's the time to go in
and buy this commodity. Once you get it in then it's up to you, you already know what your cost
is, now it's how you want to manage your selling price. In packaging and so forth, think when
you talk about the bottom line, if you've got 3 or 4 suppliers, you'd know which is the cheapest
and you will then look at quality of product. Knowing which is the cheapest then you will
decide okay, go to the best quality and try to negotiate how far down to the cheapest. Always
going to the cheapest supplier is not always the right strategy, you gotta balance cost vs quality.

14
Ethics in Negotiation
1. Does your company have an ethical code with regards to negotiation – if any, how often is it
updated?

We do have a code of ethics for the organization, not only in purchasing but in any activities
that we do. Obviously we want to make sure that the company's position is protected; we do not
go against any legal requirements of the specific country that we buy from. There shouldn't be
any kickbacks, there shouldn't be any fraud, there shouldn't be bribery involved. We're a listed
company. And in negotiation, normally we want to make sure that all the documents are correct,
it's on paper, there's a paper trail so that if there's anything we can trace, there's proof. And as
far as possible, for any purchasing, or any contract, we'll try to get two or three, minimum 3
suppliers for consultation. And the code of ethics is normally updated as and when required.
And people are trained on it, new employees are trained on the code of ethics when they join.
They're supposed to sign an acknowledgement that this is the behaviors or values that they have
in negotiation or in the course of their work in Cerebos.

2. What are some of the common ethical dilemmas you normally face during negotiations? How
do you overcome them?

In some countries where it's expected that you give rewards to negotiators and so forth or there
are some countries whereby you actually get suppliers who come in and say they require more
than what's negotiated and not include it as part of the negotiated price. And we as an
organization try to avoid it. We do not condone such acts and there are some occasions whereby
if there is a request and we don't feel comfortable, we will walk away. But if it's normal dinner,
if it's normal giving of official presents to the negotiator, celebrating the success of the
agreement, that's not a problem. It should be within reason. If you've got a 10m contract and
you provide a gift that's 1000, 2000 dollars, that's not a large problem but even then you'd have
the approval process you'd have to go through. But if your contract's 10,000 and you give a
5,000 dollars entertainment, that's not on. So it's all in perspective. We try to be as open as
possible and there's nothing under the table or hidden.

3. Are there any particular cultures you have interacted with which tend to have flimsy ethical
codes? How do you think the situation can be improved? / What do you think should be done?

I think that in all cultures as far as I'm aware of, there's got to be some black sheep. That's to be
fair. Singapore, Malaysia, Thailand and so forth. But when you talk about where the business
ethics are different form Singapore I think places like Malaysia, Indonesia, China are much
more different.

I think as the countries get more developed and people realize that there are much better ways
to do business, I think it will improve, as younger generations get more international, they
understand ethics, they understand the need to be culturally-sensitive as well as responsible, I
think it will reduce / improve. I always have faith in the younger generation, or the next
generation.

4. “Transparency in the negotiation process is far more likely to bring about buy-in than hidden
agendas or tricky maneuvers.” http://www.negotiatormagazine.com/article217_2.html
How true do you think this statement is?

15
 Ya I think it does help to be transparent but it also depends on what sort of negotiation you're
talking about - if you're actually doing an acquisition and so forth, your agenda is always to get
the best value. And if you say being transparent is telling the vendor what you think the
business is going to be, then it's fine. And most cultures now expect openness. At least defend
your valuations and the price that you're willing to pay - why. I think it's critical for them to
understand why you cannot go up or you're asking for a lower price.

5. How do government regulations help to mould a company’s ethics code?

I think that some of the governments / environments are quite controlling / controlled and there
are regulations that don't allow certain things like taking of kickbacks, they don't allow bribery;
I think it will help the negotiation, it becomes easier.

4. So do you think globalization is changing the differences between the cultures?

I don't think the culture will change but I think the world will become more transparent. I think
there will be much more openness. But it will take a long time, I don't think there's a lot of trust
between the developed world and the Chinese or the Asians. Sometimes I think that as long as
everybody treats one another with respect it will go a long way but you will realize that in most
negotiations or most approaches with developed countries is that, they think in Asia, we're a
backward country. They tend to blame every problem in the world to the Asian economy or
China.

Relationships in Negotiation
Why? 
1. Firstly, do you believe in investing in relationships? If yes, then -  What is the reason / Why is it
important to build relationships in Negotiations? Is there a difference in reasons with regards to
internal or external parties? 

I think it's good to know the party you're going to negotiate with. Having a cordial relationship
is always much better than not knowing and once you've established a relationship and you
establish trust, it becomes much easier. It becomes more conducive for openness and
transparency. It's when you have doubt in your mind about the other party then it becomes very
difficult to progress. You'll be wondering whether the guy's gonna starve you up or do
something inappropriate and it's very difficult so you always need a friendlier environment. It's
not always possible but that's the best environment to be in.

I think when you negotiate with internal parties, it is much easier because at the end of the day,
both of you are really trying to do what's best for the company so at least you're in the same
bottom line, and the same objectives so you're going towards a common direction. The thing
about negotiating internally is to get buy-in rather than anything else because if you don't get
buy-in or the support in whatever you're trying to do you won't achieve, it'll be very difficult. It
makes it easier if you don't' really use your position in the organization and you actually have an
open conversation with the internal stuff. It becomes much easier, so that they can be open but
if you keep using your rank and position in trying to negotiate with the internal party then it
becomes very difficult because they will do it but based on your position rather than doing it
because they believe in it.

What?
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 2. What kind of relationships are you required to build at work with regards to negotiations? Do
you find a difference in the way you treat seemingly short term vs long term relationships?  

Within the organization, the relationship is knowing the strength and weaknesses of the people
that you choose in the negotiating team because you will then be able to live on each other's
strengths or actually try to compensate for any weaknesses. You've got some people who are
actually very aggressive and want to win at all costs and some people who think that the
negotiation is getting along slowly and want to do it much faster and as team leader you need to
balance all that out because speed is sometimes critical but making sure that everybody gets the
right deal is also important. You don't rush into something and then regret it. Then when you
look at it in terms of aggressiveness and so forth, it can create problems so you need to tone
down. Normally when people are aggressive they always have the good intention of trying to
get the best for the company so you cannot say that it's wrong but you need to tone it down cos
if you're too aggressive then the negotiation may not go as smoothly as it should be.

I don't think there's any short term or long term relationship. The good thing about life is that if
you have a relationship especially in business is that you keep in touch and you increase your
network. It will come in handy so no matter what you should try to cultivate a relationship for
the long term.

Who?
3. With whom do you build relationships with? (Internal or external parties) With whom will you
put in more effort to develop a relationship? Do you treat different groups of people differently
(different negotiation style in building relationships)? 

Obviously internally is all the employees and HODs, you need to be accessible to anyone in the
office, organization. Externally, I think your suppliers, your key suppliers, advertising agency, your
service providers, legal reps, auditors and so forth. Practically everybody you need to have in a
relationship with.

We're an organization that believes in customer relationship management. We do treat different

How?
4. Before: Should you be meeting the person for the first time, do you prepare anything with the
intent of building a relationship with the person?

We do background checks, we make sure we understand who the people are, what their
positions in the company are, try to understand whether they have the ability to make decision
or not then we can tailor-make the negotiation based on their requirements.

5. During: In what manner do you interact with the party whom you wish to build a relationship
with? E.g. Do you adapt or maintain a certain posture?

It's good that you have your own style then people will then realize this is your style as you go

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 building your network but the key thing is obviously trying to make the other party as
comfortable as possible. Then when the company is comfortable, whether you're yourself or not
then I think you've achieved part of the objective. Obviously you don't try to project something
that you're not because that's very hard to maintain in a relationship. You must be always true to
yourself but you can style and the mood of the negotiation needs to gel with the person's
personality. If the guy's serious and you keep cracking jokes it doesn't work. But if the guy's
very relaxed then you need to give relaxed, you cannot be tensed. So you need to be flexible.

6. After: Would you do anything after the meeting to continue the interaction for later meetings?

It's always good to follow up any negotiation meeting with minutes of meeting and
documentation so that people understand what's been communicated; there's a record of what's
been communicated. You always try to write a note to say thank you for the thing because
people do appreciate even a note to say thanks. And then to follow up, to agree, in fact even
during the negotiations, we need to agree on the next step, what needs to be done and follow up
on that next step. Because you don't just negotiate and just come out of the room without
getting the next step. Whether it's just to relook at the prices whether to tell the customer or
supplier this is what we can do, this is what we relooked at in order to move this business
forward so you need to follow up.

ADVICE TO INEXPERIENCED NEGOTIATORS

Have a plan in mind, have an objective in mind, be as transparent as possible and try to make sure you
understand who you're negotiating with. And the key thing is that to make sure it's a win-win situation.
Nobody should lose out of that negotiation. Everybody should come out and be a happy man or a
happy party because they've got what they want and you've got what you want.

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