Negotiating Goal: Contract or Relationship?
Negotiators from different cultures may tend to view the purpose of a negotiation differently. For deal makers from some cultures, the goal of a business negotiation, first and foremost, is a signed contract between the parties. Other cultures tend to consider that the goal of a negotiation is not a signed contract but rather the creation of a relationship between the two sides. Although the written contract expresses the relationship, the essence of the deal is the relationship itself.
According to one survey over 400 persons from twelve nationalities, 74 percent of the Spanish respondents claimed their goal in a negotiation was a contract, whereas only 33 percent of the Indian executives had a similar view. The difference in approach may explain why certain Asian negotiators, whose negotiating goal is often the creation of a relationship, tend to give more time and effort to negotiation preliminaries, while North Americans often want to rush through this first phase of deal making. The preliminaries of negotiation, in which the parties seek to get to know one another thoroughly, are a crucial foundation for a good business relationship. They may seem less important when the goal is merely a contract.
It is therefore important to determine how your counterparts view the purpose of your negotiation. If relationship negotiators sit on the other side of the table, merely convincing them of your ability to deliver on a low-cost contract may not be enough to land you the deal. You may also have to persuade them, from the very first meeting, that your two organizations have the potential to build a rewarding relationship over the long term. On the other hand, if the other side is basically a contract deal maker, trying to build a relationship may be a waste of time and energy.
Say "True" or "False" according to the passage. Then correct the false statements.
1. Cultures affect transactions people make and the way they negotiate.
True.
2. Negotiators from different cultures may tend to view the purpose of a negotiation similarly.
False.
Negotiators from different cultures may tend to view the purpose of a negotiation differently.
3. Indian executives are more likely to view their goal in a negotiation as a contract than Spanish executives are.
False.
Spanish executives are more likely to view their goal in a negotiation as a contract than Indian executives are.
4. Asian negotiators tend to give more time and effort to negotiation preliminaries.
True.
5. Trying to build a relationship with North American negotiators may be a waste of time and energy.
True.
CCPIT
Founded in 1952, China Council for the Promotion of International Trade (CCPIT) is a national foreign trade and investment promotion agency.
The major responsibilities of the CCPIT include: implement relevant major national development strategies, and promote foreign trade, bilateral investment and economic & technological cooperation; carry forward cooperation with overseas trade promotion counterparts; receive overseas high-end trade and economic delegations; organize Chinese trade and economy delegations to visit foreign countries; manage overseas trade exhibitions organized by Chinese agencies, participate in affairs of Bureau International des Expositions (BIE) and World Expo on behalf of the Chinese government; hold or organize Chinese companies to attend trade and economic exhibitions, forums, fairs and other international conferences; represent domestic industry and commerce in the field of foreign trade, and involve into the formulation of trade and economic policies and rules, foreign trade negotiation and making of international commercial rules; carry out legal consulting, commercial conciliation , trade and maritime arbitration; sign and issue certificates of origin for export products and other certificates and documents related to foreign trade, provide intellectual property services such as patent application, trade mark registration, litigation and rights safeguarding; organize industries and enterprises to cope with trade disputes; provide trade and economic information, training services etc.
The CCPIT will establish wide connections with relevant international organizations, trade & investment promotion agencies, commercial associations and business circle, to organize various forms of communication and cooperation. It is committed to enhancing services for companies and making positive contributions to development of bilateral and multilateral trade relationships, promotion of world economic prosperity and improvement of the well-being of all mankind.
Answer the following questions orally according to the passage.
1. When was CCPIT founded?
CCPIT was founded in 1952.
2. What kind of organization is CCPIT?
CCPIT is a national foreign trade and investment promotion agency.
3. What kind of certificates can CCPIT issue?
CCPIT can sign and issue certificates of origin for export products and other certificates and documents related to foreign trade.
4. Will CCPIT hold or organize Chinese companies to attend trade and economic exhibitions?
Yes.
5. What is CCPIT committed to?
It is committed to enhancing services for companies and making positive contributions to development of bilateral and multilateral trade relationships, promotion of world economic prosperity and improvement of the well-being of all mankind.
Tips: Expressions about Letter of Credit
opener 开证人
applicant 开证申请人
opening bank; issuing bank 开证行
advising bank; notifying bank 通知行
beneficiary 受益人
negotiating bank 议付行
paying bank; drawee bank 付款行
confirming bank 保兑行
reimbursing bank 偿付行
accepting bank 承兑行
drawee 付款人(或称受票人，指汇票)
drawer 出票人
L/C Number 信用证号码
date of issue 开证日期
L/C amount 信用证金额
expiry date and place 有效期和到期地点
documents presentation period 单据提交期限
revocable L/C 可撤销信用证
irrevocable L/C 不可撤销信用证
confirmed L/C 保兑信用证
unconfirmed L/C 不保兑信用证
in duplicate 一式两份
in triplicate 一式三份
Tips for payment
1. Letter of Credit is a formal payment method that offers a lot of protection to the parties. L/C is usually used for the larger quantity order shipped by sea. L/C requires total accuracy in conforming to terms, conditions, and documentation.
2. T/T is the simplest and easiest payment method to use. T/T payment in advance is usually used when the sample and small quantity shipments are transported by air or by sea. T/T payment in advance presents risk to the importer if the supplier is not an honest one.
3. Payment is sometimes made by collection through banks under the terms of Documents against Payment (D/P) or Document against Acceptance (D/A). In this case, the banks will only do the service of collecting and remitting and will not be liable for non-payment of the importer. The major advantage of payment in collection is the low cost, versus using a letter of credit. However, there is the risk that the importer will for some reason reject the documents (or they will not be in order). Therefore, payment on D/P or D/A involves a high level of trust between the exporter and the importer.
4. Foreign exchange rate is directly related to the real profit from a transaction. A sophisticated foreign trade businessman shall always keep a close eye on global economic and financial situation.
