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STEP 12: NEGOTIATING AND QUOTING IN EXPORTS
You are here: Step 12: Negotiating and quoting in exports > Doing business abroad > Far East  
The Far East

While Western society usually stresses self-control of personal destiny and individual initiative, Far Eastern societies traditionally emphasise family and group cohesion, loyalty, conformity and national pride. The conditioning process by which these traits are instilled begins almost at birth and includes a highly developed personal identification with national histories and cultural achievements.

Japan is the most industrialised nation in the Far East, while South Korea, Taiwan, Singapore and Hong Kong are acknowledged to be the newly industrialised countries (NICs) of the region. These four countries have been nicknamed the Four 'Tigers' because of their rapid modernisation and economic development in recent years, and both business and social life in these countries are characterised by a combination of traditional eastern values, and modern western practices and management philosophies.

While business and negotiating styles in the Far East differ from one country to another, the establishment of trust and harmonious human interaction is always a primary consideration. For most Far Eastern people, particularly the Japanese, knowing how to treat visitors, guests and business associates is a major concern. To do so disrespectfully may result in the loss of `face' both for themselves and the other party. Whether or not people actually take offence has little to do with it - the preservation of face for yourself and others is essential to the maintenance of harmony within the group, be it a family or corporation. If you cause a Far Eastern businessman to lose face, particularly in public, your prospects of business success may be seriously jeopardised.

Neil Chesanow, in his book The World-Class Executive, related the following story: An American was importing wooden toilet seats from Japan. His initial order was for 3 000 seats for $4 each. The wooden seats sold very well, so he sent a telex to the Japanese plant saying that he would like to increase the order to 8 000 seats per month, and would the Japanese quote him a new unit price ? The return telex said: "Fine. We will send you 8 000 toilet seats a month. But they will cost you $7.50 each." As this was almost twice the price he had paid for a much smaller order, the American assumed There was some mistake. Again telexes were exchanged. Still the answer was the same "No mistake. $7.50 per seat". Naturally, that ended their business relationship. Years later, the American told his story to a Japanese businessman, who was not at all surprised. "You failed to realise what was happening," he explained. `The Japanese company could not deliver 8 000 toilet seats a month. It was beyond their production capacity. But if your contact had simply told the truth, he would have lost face. So instead, he quoted an outrageous price, knowing there was no possibility you would accept."

Even the grammatical structure of languages of the region has evolved to help preserve face. In Japanese, for example, a sentence ends with a verb. This enables the speaker to gauge the reception of his listener to what he is saying before he commits himself to a particular line of thought. If, for example, by reading subtle facial expressions, he suspects that what he is communicating is not being well received, he may change the verb at the last minute to soften or completely change the meaning of the preceding words!

Nowhere is exchanging business cards so important as in the Far East. Consider the following extract for the Asian Wall Street Journal Weekly:
In Japan, the business card is The executive's trade mark. It is both a mini resume and friendly deity which draws people together. As a consequence, there is a certain gamesmanship or etiquette which has evolved. Take, as an example, the following instructions given to businessmen: first of all, have plenty of cards on hand when attending a large meeting of Japanese businessmen. A participant must have at least 40 cards for each meeting. Participants often exchange cards more than once since the single exchange may not make a lasting impression. For a businessman to make a call or receive a visitor without a card is like a samurai going off to battle without his sword. It is bad form to greet someone and then, flipping through a card holder, apologise for being out of cards. The card holder is also a mark of distinction. It should be of good quality, and appropriate. A secretary may keep her cards in a handbag, but it makes a bad impression when a young executive pulls a card out of a cheap plastic case used for commuting tickets.

Not only is there a way to present a card, there is also ty of receiving one. It akes a good impression to receive a card in both hands, especially when the other party is senior in age status. You may put a business card away immediately upon receiving it; however, it is an inexcusable faux pas to put a card away with a brief glance and then, while offering a chair, peek into your pocket to recall his name.

Most people in The Far East, even those who have been 'nationalised', bow to each other in greeting, though they do normally shake hands with Westerners. Handshakes, however, may call for some dexterity. A Far Eastern businessman may, for example, have to shake hands and exchange business cards at the same time in order to find out the other person's title so he can pay him the appropriate degree of respect.

After business cards and the appropriate greetings have been exchanged, business guests will be escorted to an informal sitting area, sometimes adjacent to a private office. Tea or coffee will be served, which you must accept out of courtesy to your host. The next 10 or 20 minutes will be taken up in friendly small talk. During a negotiation session, you will be asked technical questions about the company and relevant to the business you propose. The more you have to rely on the knowledge or authority of others, the more likely you are to lose face in the 'eyes' of your business partners. Just as they would feel embarrassed if they were asked questions they could not answer owing to a lack of knowledge, or failure to understand the question (which they would not admit), they will feel embarrassed by asking you questions at you cannot answer.

Japanese and Chinese are ideographic languages. Consequently, these two cultural groups are highly visually-orientated. Product information should, wherever possible, therefore, be in the form of examples, diagrams, drawings, etc. While businessmen in the Four 'Tigers' might be comfortable with the direct question-and-answer approach characteristic of the westerner, this may be far from the case in more traditional countries such as China and Japan. Chesanow provides an example of the type of problem you are likely to encounter - see the box below:

If you ask a Japanese a yes-no question, you will rarely get simply a `yes' or `no' for a reply. The Japanese are famous for not saying `no'. But what is less well known is that they are almost as reluctant to give a direct `yes'. What you will get instead is the Japanese rationale for a `yes' answer: the logic of it all, without the word `yes' actually being said e.g. a Japanese might say, "You asked me a question. But there are many aspects to the answer. Let us analyse each one of Them and discuss which one may ultimately be best" (Source N. Chesanow, The World-Class Executive)

Far Eastern people hide their emotions, particularly in their facial expressions, and foreign visitors should do likewise. In contrast to the Arabs and Latins who converse almost nose to nose, the Far Eastern people display a strong sense of personal space, reserve and control. Gesticulating with your hands, for example, would be considered improper.

To find out more about individual countries in the Far East, please try CountryHelp:

Far East
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Step12: Negotiating and quoting in exports
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Learning to export... The export process in 21 easy steps
Step 1: Considering exporting
Step 2:Current business viability
Step 3:Export readiness
Step 4:Broad mission statement and initial budget
Step 5:Confirming management's commitment to exports
Step 6: Undertaking an initial SWOT analysis of the firm
Step 7:Selecting and researching potential countries abroad
Step 8: Preparing and implementing your export plan
Step 9: Obtaining financing for your exports
Step 10: Managing your export risk
Step 11: Promoting the firm and its products abroad
Step 12: Negotiating and quoting in exports
Step 13: Revising your export costings and price
Step 14: Obtaining the export order
Step 15: Producing the goods
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Step 21: Export Management
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