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2009-10 Seminars


Negotiating in China - An Oil Persons Experience

Bill Brant
Former Regional Director of M&A
BP

Abstract:
In China negotiation is considered a national sport. The cultural protocols are different, personal relationships are important and ‘face’ must be managed carefully – foreigners are forgiven for some things, but not everything. Successful relationships start with an understanding of each party’s interests and always keeping a sense of perspective.
 

The business development process can be described as understanding the parties interests (diplomacy) followed by problem solving to bridge gaps (negotiating) and finally making concessions (haggling). It is important to gather good intelligence and obtain an understanding of the issues for both parties. Good commercial diligence, permits one to be more creative at the negotiating stage creating a solution that is more than the sum of the parts. Culture is an important element of any discussion and it is here that the phrase ‘know thyself’ is as important as ‘know the other side’. Many commercial discussions require diplomatic as well as negotiating skills.

In China, the negotiating process is dependent on what goes on ‘outside of the box’ and ‘inside of the box’. The government drives strategy, particularly in oil and gas. Commercial entities compete with each other for specific commercial opportunities that fit the government's strategy. Understanding the complex networks of government permissions and commercial competition is important in managing expectations around the outcome of any negotiation.

Negotiating in China is similar to negotiating everywhere. The speed of the negotiation is dependent upon the quality of the negotiators, the need for an outcome, an understanding both parties interests and finally the relevant gap between the positions. Negotiation success is dependent upon preparation, creativity, inventive ways of framing, power and leverage. Sometimes progress can be quick if for example, negotiators are under time pressure. Sometimes progress can be painfully slow if the negotiators are tough-minded and not prepared to make concessions. Ultimately, success is about building 'trust' between the two parties.

Bill will speak about his negotiating adventures in China. He will discuss planning frameworks, team roles and responsibilities, culture and the many surprises faced in real situations