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Dr. Farid Elashmawi, President

The Global Adventures of Mr. Chen
Even the best-educated and most well-traveled global executives often find it difficult to answer the types of questions listed above, so it is not surprising when Mr. Bernard Chen, a Singaporean marketing manager with a very successful work history, received a probationary note from his boss after returning from a frustrating four-week sales trip to Asia and the Middle East.

Chen works for a wholesale distribution outlet that supplies clients with high-quality garments manufactured on license from top American brands. Due to his excellent sales performance in Singapore last year, Chen was assigned to head the company's Asia/Middle East sales team, which is hoping to capture a substantial volume of sales during his business trip. Chen called numerous contacts in the countries he is to visit and has arranged several sales presentations in Kuala Lumpur, Jakarta, Seoul, Tokyo, and Cairo.

Kuala Lumpur, Malaysia

Armed with numerous samples of his company's new product line, including evening gowns, lingerie, cosmetics, and luggage, a confident Chen sits in his first class seat on his flight to Kuala Lumpur, Malaysia. On the morning of his arrival in Kuala Lumpur, he phones his first client, Abdul Magid, to confirm their appointment at 9:00 a.m. Magid's company has been one of Chen's big targets, and he hopes to quickly capture the sale so that he can focus on other clients for the rest of his two-day visit. Unfortunately, he is told that his meeting has been changed to an 11:00 a.m. lunch with the assistant manager, Noor Ismail. Although Chen had already planned a lunch appointment, he has no choice but to change his schedule and reshuffle his afternoon meetings.

Chen arrives at the meeting on time and quickly begins to discuss how much profit Noor's company can make from his new products. Noor seems more interested, however, in learning about the credibility of Chen's company and its past activities in Malaysia than in negotiating specific details. One hour into the meeting, Chen anxiously inquires if his price offer is acceptable. Noor replies that he has to meet with other clients and asks Chen if he would like to join his assistant for lunch. Chen wonders initially if Noor is just passing the buck, but at this point begins to recognize that he needs to show more patience and flexibility when dealing with Malaysian organizations. Their desire to maintain harmony will be reflected in their indirect refusal of an offer, and they will frequently entertain your offer with a polite smile. Chen, on the other hand, is used to a direct yes or no when dealing with his clients. So, the lunch goes well, but no purchasing contracts are finalized.

In order to gain this Malaysian company's business, Chen must maintain contact with his clients and continue to prod them for a definite response. To succeed with Malaysians you must present your company's capabilities and management expertise clearly, in addition to naming your other Malaysian clients. You must then maintain on-going communication with them in order to highlight your products' features and market potential.

Jakarta, Indonesia

Chen, now a day behind in his travel plans, begins to understand the importance of building relationships with his clients. He is less confident, however, when he boards his flight to Jakarta, and he worries about his prospects, even though he has worked very hard over the past six months to recruit an Indonesian marketing agent who can arrange several meetings with potentially lucrative companies.

Chen quickly discovers that marketing to Indonesian companies can be a rigorous and demanding process. Chen and his agent spend a full day with one prospective company, scheduling meetings with three of its important buyers. Each meeting consists of an hour of waiting and ten minutes of presentation. Although Chen tries to make a sale to each of the directors, he ends up simply giving away samples of his product line. Once again, he is surprised that the process of negotiating prices does not even get started. He had expected that his low prices would easily clinch the sale, but a deal is not even mentioned.

Chen is irritated. To cool him off, Chen's local agent explains that in Indonesia you have to make several visits to make sure that everyone involved in the sale approves of it, even before official submission of the proposal. His agent has simply been planting the seeds that Chen will have to water with more samples.

On his last night in Indonesia, Chen is invited by his agent to meet with him and two purchasing managers for dinner. Despite his growing confidence, and after three hours of discussion, the purchasing managers only smile politely and say “Insha Allah (If God wishes) you may receive our order.” When the purchasing managers and the agent depart, Chen finds himself with a US$200 bill for the dinner, but no purchase order.

What are the lessons of this experience? When dealing with Indonesians, you must identify key players in the game: a person to introduce you to the highest position in the company; another within the company to recommend and lobby for your product; and a third to influence the decision on your behalf. Unfortunately, Chen's agent did not have the multiple connections Chen required.

Seoul, South Korea

Boarding his flight to Seoul, Chen next turns his attention to Korea. He recalls his earlier experiences negotiating with Koreans. For several weeks prior to his overseas trip, Chen spent much of his time negotiating a deal to distribute his product through a large Korean company. He began by contacting the company's VP of Sales, whom he had met a few months earlier at a trade show, and who had referred Chen to a junior manager for price negotiations. At the end of the negotiations, which lasted until just a week prior to Chen's trip, the junior manager confirmed the sales agreement. Chen asked his company's legal staff to draw up a contract to carry with him, and while he was on his trip the marketing staff was to develop promotional materials for the Korean market.

Sure enough, when Chen meets the junior manager in Seoul, he is informed that the vice president has not actually agreed upon the terms of the contract, claiming that another company was offering a similar product line at a reduced price. The Korean manager is now asking for an additional discount of 30 percent. The done deal was not really a done deal.

How does the beleaguered Chen react? After a few more rounds of negotiation, which last two days, he finally pins down a contract, but only after Chen has learned this valuable lesson: in Korea, the boss makes the final decision. Like the junior manager, each Korean worker simply tries to satisfy his immediate superior by executing orders in an unquestioning manner. This lesson, while valuable, offers little consolation to Chen, who reflects that he would have fared better as a salesman in Korea if he had graduated from a military academy, not a business school.

Tokyo, Japan

As Chen boards his flight to Tokyo, he recalls his first attempt to meet with his Japanese clients. He tried to sell his product line to a large corporation that a colleague had previously visited. The colleague had given him the name of a manager in the acquisitions department, Hidao Suzuki, to whom Chen mailed a marketing packet detailing his company's services nearly one month earlier. Unfortunately, two weeks passed without any response, so Chen telephoned Suzuki before he left Singapore. Suzuki remembered the company and product, but said that he might be too busy to meet with Chen when he comes to Japan. Nevertheless, Suzuki asked Chen to call him when he arrives in Tokyo, to see what could be arranged.

When Chen reaches Suzuki's secretary from his hotel, Chen discovers that Suzuki is “too busy” to hold a meeting. Chen wonders about the cold response; it seems as if Suzuki isn't even making an attempt to meet with him. What is wrong? Only later does Chen learn that Suzuki is not really a close acquaintance of the colleague; the two had simply met at a garment show. Suzuki has declined to do business with him because the two men did not have a close mutual acquaintance.

Failing to secure any direct sales, Chen now falls back on his Japanese agent, with whom he's been working for several months. Fortunately, the agent's relationship with the contact is strong and a meeting with an important buyer is secured.

When making his first presentation to a group of high-ranking Japanese buyers, Chen finds himself engaged in a lengthy question-and-answer session. He is happy that the Japanese are asking so many questions, thinking that it is a sign he will secure a good order. Chen even notices that the top sales vice president has a smile on his face ten minutes into the talk. Chen believes that this indicates a genuine appreciation of his products, so he talks with even more enthusiasm for the rest of the hour, making numerous attempts to elicit feedback from the vice president.

Unfortunately, no offers are made after his presentation concludes, nor are any made over a sushi dinner with his clients, when Chen is bombarded by more questions about the quality of his products, his company's ability to meet production quotas, and projected delivery times.

Late that evening, as Chen sits in his taxi en route to Tokyo's Imperial Hotel, he wonders if the $400 bill for the sushi dinner will ever pay off for his company. He even muses aloud to his local agent on the subject of how the Japanese company has not made an offer: “You should have seen the expression on the vice president's face! A mile-wide smile!”

His agent now informs Chen politely of an important lesson: in Japan, a smile can indicate not only an appreciation of what one is saying or doing, but also a smiler's sense of embarrassment. Chen feels like a fool as he realizes that he had been vigorously pitching the very executive to whom he was least likely to make a sale. His agent further informs him that most meetings Japanese host for foreigners are not intended to negotiate a sale. They are set up only in order to provide an opportunity for the Japanese to ask further questions or to clarify issues. Only later will the Japanese hold meetings among themselves to decide if they want to proceed further.

Cairo, Egypt

Now on his last leg of the trip, Chen boards his flight to Cairo. Maybe something can be salvaged from this painful trip, he reflects. After all, an Arab distributor has faxed his office with a request for a price quote on 5,000 of the company's elegant wedding dresses. The Arab learned of the company through a connection in Singapore. A price quote for 5,000 garments! Chen exults at the prospect. The Arab must mean business if he is talking about an order of that magnitude.

In response, Chen has faxed the Arab client with a discounted price on the products. The Arab's return fax was titled, “Very Urgent,” so Chen has assumed that the sale might be completed very soon. He is even happier that the Arab has asked for 20 samples to show to his clients, which Chen has carried to Cairo with him on the plane.

When the two men meet at the airport, the Singaporean feels that he is in good hands. These feelings continue when his client takes the samples and says, “It will take me a couple of days to show the product to my clients. Then we can make final arrangements.” Excited by this development, Chen extends his two-day visit to a week and enjoys himself at the Pyramids Hotel.

After five days of waiting, the Arab finally contacts Chen. “Thank you for the samples; they are great,” the Arab says. “My clients are interested in purchasing 500 sets. Can you give them to us at a 20 percent discount from the price you quoted earlier?” As you can imagine, Chen almost suffers a heart attack! A mere 500 gowns with a 20 percent discount—after a price quote had already been given for 5,000!

What are the lessons? If Chen had been more aware of Arab strategies for price negotiation and delay, he would have been in a better position to secure his ultimate goal. Most Arabs will lead you to believe that they are interested in a large order. They will ask for samples to gain more time, and play their cards at the final moment. They will then pin you down to your lowest quoted price.

His trip nearly over, Chen has hopefully learned the following lessons about the people and the cultures with which he has been dealing:

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This material is presented to you by Global Success, a leading multicultural management, negotiation, training, and consulting organization. The company develops managers' skills in dealing successfully with global diversity in employees, clients, partners, and suppliers. It was founded by Dr. Farid Elashmawi, author of Multicultural Management 2000.