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The korean negotiating process
The Korean negotiating process seems to be very much of a
three-stage affair. Round One, obviously, centres on the
initial meeting and the gaining of mutual trust through
commitment. Typically, the Western partner will be
tested in some way, and this ought not to be too off-
putting. The tests, in fact, are best looked upon as
little more than a series of hurdles that have to be
overcome. The underlying purpose amounts to little more
than a test of potential commitment. Moreover, the
competition in selling to Korea is very tough indeed.
There are very many Western - as well as Japanese
companies - making their pitches; and the Korean
companies themselves are by no means unaware of their own
world-scale purchasing weight. At this point the Western
negotiator ought to be especially wary of anyone
proffering a business card bearing the legend, "Planning
Department". Such a card needs to be treated with some
diffidence, because a Korean company's planning
department invariably is home to its professional
negotiating team. And they are quite capable of
squeezing a little more from the negotiations than their
colleagues were able to. So, it is critical that the
Western negotiator leaves a little leeway in his dealing
to allow something for the planning department team to
nibble away at.
Round Two involves food. Having successfully concluded
Round One, both sides will adjourn for food. To Koreans,
food is very important. It is not something you merely
eat, it informs the entire business modus operandi.
Round Three now commences. After the meal you will be
taken to a karaoke bar - and Korean businessmen seem to
be very good at karaoke. The important thing for the
Westerner to do is to join in. Even more importantly, he
should drink well but keep sober, because on the
following day it would be advantageous to be in better
shape than the other negotiating party. Probably, this
process is another integral part of the testing regime!
In general, despite an understandable degree of
Americanised pronunciation, the standard of spoken
English within most companies is quite remarkable.
Korean legal concepts, too, are quite finely attuned,
presumably because the companies are so very accustomed
to purchasing things ...but, beware of the man from the
planning department when he returns, wanting to change a
deal on which you have only just shaken hands. Finally,
it is worth being aware of the fact that the Korean
Government typically needs to give its approval to every
licensing deal. Invariably this is little more than a
formality, but it does usually take about a month and it
is something that just has to be endured. There is a
withholding tax regime, as in most East Asian countries.
In effect, the Korean Government takes some money out of
whatever deal is being negotiated and this will be offset
against the UK company's home country tax liability so
that, as long as the company is trading profitably, the
whole exercise ought to be relatively painless.