Parantara vs Zhongjian Ren: Use the bridge to successfully negotiate in Indonesia

China and Indonesia both share some similar elements of culture, but dont assume they are the same

 

Indonesia has a long history of interaction with China and although the Ethnic Chinese have been trading in Indonesia for more than 1000 years, most of the present day Chinese Indonesian population started to arrive in Indonesia during the Dutch colonial period during  the 19th Century. Chinese Diaspora communities have brought with them cultures and traditions from China, and as a consequence the styles of behaviour common in China will be transferable to other countries and cultures within the broader Asian region. This assumption is not so straightforward in the Indonesian context due to the recent and historical conflict, criticism and victimisation of the ethnic Chinese-Indonesians by the ethic Indonesians.  Entrenched victimisation and discrimination has even been initiated and conducted by various Indonesian governments over the past 60 years since achieving Independence from Dutch colonial rule. Chinese identity in Indonesia has been eroded over time to the point where it was regulated by law that family names be “Indonesianised” and so it is now not possible to identify a person of Chinese heritage by their name. There has consequently been part assimilation in recent generations of ethnic Chinese Indonesian with the local ethnic Indonesian, and so it is not uncommon to find a person with a Chinese father and an ethnic Indonesian mother, or vice versa. 

The importance of Guanxi or ‘Social Capital’ has long been acknowledged in China, and similar issues of trust and social capital are equally important in other parts of Asia (see my article on Guanxi: http://wp.me/pS6DN-37). This principle is not solely related to managing your professional network, but additionally maintaining a strong and solid reputation within the network. As I wrote in a previous article (Zhongjian Ren: http://wp.me/pS6DN-3e) the importance of Zhongjian Ren or ‘The Intermediary’ in the Chinese business context, is a tried and tested method of transferring Guanxi and social capital from one person to another through introduction to members of a network. In practical sense using Zhongjian Ren is the principle of guaranteeing the quality of business partner, and putting one’s own Guanxi up as a guarantee of their good standing. The Zhongjian Ren in many cases will continue to play a part in the deal as a formal partner, until a sufficient level of Guanxi has been established. 

International business negotiations are a daily occurance in Indonesia today, don't be unprepared

 

Negotiators in Indonesian adopt a similar version of the Zhongjian Ren principle, however in Indonesia it is referred to as the Parantara or ‘The Bridge’. It is very important to utilise Parantara if a business negotiation is to be successful in Indonesia, and has been described as fundamental to conducting business the Indonesian way. The role of the Parantara changes during the many phases of the negotiation process. During the Pre-negotiation phase, the Parantara is used to sound out potential partners and make appropriate approaches and subsequent introductions on behalf one side. The Parantara is unseen during face to face negotiation, and in the early stage builds the bridge (metaphorically speaking of course) over which the negotiating parties can meet. An important distinction between the Chinese Zhongjian Ren, and Indonesian Parantara is that in the Indonesian business context the Parantara acts on behalf of both parties to assist in creating a successful and lasting outcome for both the negotiating parties. 

As the negotiation process progresses from pre-negotiation to face-to-face negotiation there are often issues that need to be resolved in order for the negotiation to continue. During the negotiation process in Indonesia it is imperative to maintain harmony, which often means that issues of conflict are not raised face to face in the formal negotiation. To raise issues that may cause conflict will affect the harmony of the relationship and would not be good for the long-term success of the negotiation or the future partnership. It is therefore necessary to utilise the Parantara to conduct informal negotiations to overcome the problem. The Parantara rarely forms part of the deal or partnership itself, and because of this separation from the negotiated deal the Parantara is able to maintain neutrality between the negotiating parties. Maintaining this neutrality is the key to the success of Parantara in forging successful business negotiations in Indonesia. 

So when you conduct business in Indonesia manage your professional networks by finding yourself a trusted Parantara who can help maintain the harmony in the relationship while you conduct your negotiations.

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Building the Relationship is the Key to Business Success in Indonesia

Building a relationship in Indonesia takes time and is built on solid foundations

Those experienced in conducting business in North Asia will tell you that relationship building is paramount to a successful business outcome. Relationship building in Asia is often in direct contrast to standard business practices expected in Anglo-Western cultures such as North America, Australia and the UK.  These business practices will affect the way negotiations are conducted, and so when you are negotiating in Asia it is important to consider the differences from your standard negotiation protocols. The Anglo-Western negotiation protocol is generally more direct and task focussed, ensuring that negotiation discussions are conducted primarily in a formal context, building relationship is not really required outside of the functionality of the deal.  In North Asia, such as China, Japan and South Korea this direct task orientated approach is at odds with the accepted relationship building process which helps to build trust or Guanxi (see my recent post on Guanxi: http://wp.me/pS6DN-37). Without trust, there is no relationship, and consequently no successful negotiation outcome. 

 In Indonesia, you would think that because it is part of “Asia” that it is safe to assume that relationship building would also be of great importance to the successful negotiation outcome.  However past research has found that Indonesia exhibits strong performance focus, suggesting that negotiations are more task orientated and potentially less focussed upon relationship building. Recent research investigating Indonesian negotiation behaviour has however, identified elements of both relationship building and also task orientation which would suggest that both assumptions were correct in an Indonesian context, and that relationship building during the negotiation process in Indonesia is unique in Asia. 

This research describes the negotiation process as starting with a task orientation and moving towards a relationship building orientation, but what does that mean?  Initial negotiation meetings are often conducted with technocrats and lower level managers who discuss the specific technical requirements of the International negotiating partner, so discuss the task at hand ie. Task Orientation. This task orientated negotiation component is similar to the negotiation protocols expected in Anglo-Western cultures, and is equally compatible with the performance orientated findings of past studies. However, this task orientated component of the negotiation does not seem to be vitally important from an Indonesian perspective, and appears to be conducted purely to appease “western” expectations. This may be due to many senior Indonesian managers being university educated in western countries such as US, UK and Australia, and so learning Anglo-Western negotiation norms and expectations. Indonesian negotiators use this initial task orientated discussion as a way to maintain harmony in the negotiations, by giving western negotiators what they want….ie. Functionality and task orientated discussion.  The Indonesian negotiators allow the negotiations to run to this familiar western format, before the negotiations return to familiar and more comfortable ground for the Indonesian negotiator. How is this done? 

Once the initial meetings have been conducted with the technocrats, the senior Indonesian executives and decision makers will then enter the negotiation, and this is when the negotiation atmospherics will ultimately change to reflect more relationship building. The negotiation team on the Indonesian side will then often change its composition and this is when the executives enter the negotiations, with the technocrats either reducing in number or no longer attending the meetings. In addition to the change in the negotiation team composition, there is also often a change in the meeting environment, as the face to face negotiations move to more informal environments such as restaurants and hotel lobbies. If the negotiation is moving towards a successful outcome then it is more likely that the meeting environment will change to further informal environments and possibly result in a meeting with the family. Once you meet the family you are a long way towards reaching your desired goal of achieving a successful business deal. 

So when you do business in Indonesia, remember that you must be concerned with building the relationship, regardless of how technical the meetings originally appear. Ultimately the stronger the inter-personal relationship the stronger your business deal will become.

“Gan Bei”: Business and ritualistic drinking in China

As I have discussed in my previous article on “The subtle art of the formal Chinese banquet”  (https://nathanhgray.wordpress.com/2010/04/14/the-subtle-art-of-the-chinese-banquet/), the importance of relationship building to the Chinese is paramount. Apparent social functions like banquets are held in very high regard by Chinese businessmen and government official due to the ability for one to get to ‘know’ their potential business partners. This knowledge is achieved through watching foreign businessman’s behaviour during the formal and informal drinking and eating rituals that are performed during every formal banquet. It is therefore important to be aware of these rituals, drinking strategies and how to ensure you leave the banquet in higher esteem than when you arrived.

Drinking in China

 There is a definite hierarchy to the formal toasting at a banquet.  Thus the host will toast the most important guest, then the next most important and on and on down the order of importance. This must be remembered, in order for one not to jump the gun and propose a toast before ones allocated turn. It is therefore important for one to observe the banquet environment to determine ones hierarchy at the banquet table. Toasting someone is highly ritualistic and generally requires the toaster to stand and make a toast. It is important at this stage to ensure there is an adequate supply of wine, beer or spirit in the glasses of the toaster and the toastee. The glasses should be filled to the same level, if they are uneven it can imply anything from a lack of respect through to an intent to cause drunkenness. One must then propose a suitable toast, probably to enduring friendships and successful business ventures, while looking at the person receiving the toast. It is at this point that the glasses are clinked to confirm the toast. Even this ritualistic clinking is embedded with importance.

Clinking of glasses should be done in a delicate and considered manner, not smashed together like beer steins in a Bavarian beer hall.  It is important to get the glass as low to the table as possible when clinking glasses. This is much the same principle of bowing in traditional Japanese culture. A lower glass infers respect upon the other person. This can create a competitive environment when in China, as each person strives to outdo the other with the lowest glass.  Ultimately both glasses may be touching the table.  It is at this point that the toast is completed with the refrain of ‘Gam Bei’ which is like cheers, and implies that the glasses will be emptied. Obviously this could pose a problem if the glass is significantly filled, or is filled with a strong spirit, especially if you have already completed a series of ‘Gam Bei’s’. The glass should ideally be grasped with both hands, one hand around the rim and the other at the base of the glass.  Drinking the contents of the glass in a measured fashion, not necessarily throwing them back quickly like shooters in the front bar of you favourite night club. Depending upon the competitiveness of the drinking, you may be required to show the inside of your glass to prove it is empty, or even turn it upside down over your head. Allow for regional variations to determine which is the norm in this regard…when in Rome do as the Romans, when in China do as the Chinese.
At this point its starting to seem like an end of season footy trip or even a stag party…..but it is in fact serious business, and it is vitally important to remain at the top of your game. Potentially business killing mistakes can be made easily under drinking duress, so be careful. To succeed in not playing the fool or blowing the game through inappropriate drunkenness it is important that you have a strategy to deal with a ‘Gam Bei’ attack should one occur. A ‘Gam Bei’ attack is where a series of hosts all toast you one after the other; this is especially dangerous if you are at a numerical disadvantage, and your team members don’t match up evenly with the other side to reciprocate the ‘Gam Bei’s’.  If there is no disadvantage then this is easily remedied by reciprocal ‘Gam Bei’s’ by other members of your contingent, that way evening the drinking balance.  If you are under siege and have a disadvantage then you need to be a seasoned drinker, keep calm and even consider regular trips to the toilet….for a ritual cleansing (I am not joking here).
 Obviously not everyone who ventures to China on Business is a drinker, or a seasoned drinker, however, not accepting a toast is very dangerous and will be looked upon as uncivilized or potentially disrespectful. This does not mean that you will necessarily kill any deal, but it does mean a successful deal is a lot more difficult to achieve. So the moral of the story is to be prepared, be strategic, and try not to drink mystery spirits.
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