In Southeast Asia hierarchies are of great importance. That is why seating arrangements for negotiations are not left to chance. Each participating party sits on one side of the conference table. High-ranking participants and decision makers sit with their backs to the wall, usually facing the door, where the guest and negotiating partner is often placed. Negotiating partners who are on the same level of hierarchy usually sit directly facing one another. The interpreters sit behind them or kneel or stand bending forward, a little behind those sitting down.
Incidentally, your Southeast Asian negotiating partners often push notes to each other which they write during the talks.
Negotiations in Southeast Asia are conducted with counterparts of equal rank. Thus, it may be that several smaller rounds of talks take place at the same time in which experts from both sides, of equal rank, negotiate individual points. The results are passed on internally up to the larger round of negotiations.
In some countries it is common practice to clearly state what your negotiating aims are, to quickly describe the main points and to swiftly get to the heart of the matter. Efficiency is the key point here.
Southeast Asians, however, start negotiations by emphasizing common features. They are inclined to approach difficult topics more slowly. Negotiations are likely to take a circular course: topics are raised, dropped and picked up again at a later stage. This is primarily exercised when it comes to important and difficult subjects which can quickly lead to disagreement and a disruption of the harmony. As soon as the dust has settled, the sensitive issues are brought up again.
One of their aims is to learn more about their counterparts during the course of discussions and to recognize new aspects which could possibly be expanded further. Of course Southeast Asian negotiating tactics are target-orientated, but they allow more time and scope for flexibility. If negotiations are difficult and threaten to stagnate they may consciously deviate from the relevant topics. They then go back over points of agreement and engage in small talk.
It often happens that the actual concerns, requests and demands are not expressed until shortly before the end of negotiations. Southeast Asians know that people from other cultures often have a tight time schedule and they like to use this knowledge to their own advantage. The counterpart feels the pressure and is more likely to agree to a compromise in favor of the Southeast Asian partner. Furthermore they also know that people from other cultures often do not feel safe until a written contract agreement has been achieved.
In Southeast Asians cultures, price negotiations can often be a lengthy and tedious procedure. In general, Southeast Asian business partners and customers expect a movement in prices. They assume that allowance has already been made for this flexibility, i.e., that concessions have already been calculated into the price. They also often assume that the supplier will provide after-sales service free of charge.
Reaching an agreement in negotiations in Southeast Asia is usually the result of group decisions. Experts are also part of the process in addition to the actual decision makers, who sometimes do not have the necessary specialises knowledge. As before in negotiations, they discuss possible recommendations in groups within their company. These recommendations are passed on through the levels of hierarchy. Eventually, the highest ranking person responsible makes the final decision which the employees involved accept without question.
It is also possible that the actual decision maker does not actively take part in negotiations. In that case the necessary information on decisions to be made is passed on through the levels of hierarchy.
When you are waiting for a decision in Southeast Asia, do not forget that small talk is absolutely essential. Small talk strengthens a relationship, builds up trust and in so doing promotes a decision in your favor.
There is a saying in Southeast Asia: “A written text fades quickly in the sunlight.” This means that a written agreement does not have the same significance here as in many other cultures.
Historically, there was never a civil code or code of commercial law in Southeast Asia. Verbal agreements have existed from time immemorial because Asian cultures have always been extremely people- and therefore relationship- orientated.
The smaller and less experienced in dealing with business partners from other cultures a company in Southeast Asia is, the more important verbal agreements become, but this also means there is more flexibility in keeping to these agreements!
Whether agreements are reached verbally or in written form, negotiations are not necessarily over, as far as Southeast Asians are concerned! Contracts are more likely to be seen as a temporary result which can change and be adapted to a different situation. This means that even after a contract has been signed, further additional negotiations can take place. This is perfectly normal and has nothing to do with a breach of contract.
Susann Sumadirana
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