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    Negotiating with Powerful Parties: 5 Strategies

    December 23rd, 2015  by  Asia-Pacific Global Research Group - Jasper Kim

    powerbalance
     
    The recent and original Star Wars trilogies involve an epic clash between good and evil. Within the context of the Star Wars story line, a small rebel alliance was pitted against a seemingly much larger galactic Empire (The First Order, in the recent plot line of The Force Awakens).
     
    Such epic clash may appear like the concoction of science fiction rather than a real world scenario. But this is not exactly true.
     
    Switch the Empire/First Order with a larger competitor/superpower. Then switch the Rebellion/Resistance with a smaller start-up/organization/non-superpower. Now things become all the more real with very real and practical implications.
     
    This then raises the question: What is the best negotiation strategy for dealing with a seemingly larger and more powerful counterparty?
     
    Below are five (5) strategies supported by practitioner perspectives, but also academic studies:
     
     
    1. IS YOUR COUNTERPARTY REALLY MORE POWERFUL?
     
    Your foe may seemingly appear larger and thus more powerful. But it’s important to note that larger is not more powerful in every contextual situation.
     
    The benefit of being a larger entity is often a general association with more resources–along with greater scale and scope (i.e., domestic or global footprint/presence). But in certain situations, being large can have its distinct disadvantages. Such disadvantages can at times outweigh the advantages of being a larger entity. For example, a behemoth company may be overly diversified, with its resources spread out overly thin, domestically and globally.
     
    Think: The Roman Empire. The reason for the Roman Empire’s implosion—seemingly at the very pinnacle of its power–was ironically due to its string of prior successes (of conquering people, land, and resources). The Roman Empire was simply too large to succeed. In the current era where technology and being nimble is a strategic advantage, being too large is arguably now a sine quo non to stress-testing, collateral damage, or outright collapse of a larger entity or foe.
     
    Much like the Roman Empire, the Empire (First Order) appears like a foe that can easily defeat the Rebellion (Resistance). But as we see in the Star Wars mythology, a smaller often ill-equipped band of unlikely heroes can prevail over a larger more organized and well-equipped foe.
     
     
    2. IS YOUR COUNTERPARTY WILLING TO USE ITS POWER?
     
    A key strategic question is will your counterparty understand and actually use its power? First, does your foe understand its actual power? You may believe this is to be a given. But it is worthwhile to stress-test this working assumption. For example, even just prior to the U.S.’s delayed entry into World War II, it was arguably uncertain from not just America’s perspective, but its other Allies as well as its enemies, just how powerful America’s entry would impact the outcome of the war. In hindsight, it was a game changer. At the time, it was not so certain.
     
    Second, is your negotiation counterparty actually willing to use its power against you? It’s important to note that the question to ask is definitively stated one, without the ambiguous “may” or “could” wording that clouds a clear strategic analysis. The answer should be a definitive and categorical yes or no, based on the best available imperfect information attainable (at the time, and of course, given the circumstances).
     
    For example, regarding the Korean peninsula, a key question would be: Is North Korea actually willing to use its nuclear weapons against its enemies (above and beyond mere saber rattling)?
     
    In the lighter context of the Star Wars trilogies, the key question would be: Is Darth Vader willing to use the Death Star to destroy planets (and stars)? The answer in A New Hope (Episode IV) was an emphatic yes, as demonstrated when the Death Star used its laser weapons capability to destroy Alderaan, the home planet of Princess Leia (who was then being held captive by the Empire to solicit information about the whereabouts and plans of the Rebel Alliance). Similarly, in The Force Awakens, the First Order Star Destroyer’s “Catapult” superweapon was in fact used to destroy many lives (above and beyond the mere appearance of having such power).
     
     
    3. TAKE PRE-EMPTIVE STRATEGIC STEPS
     
    Take strategic steps to maximize the likelihood of your success. As Sun Tzu claimed, “Every battle is won before it is ever fought.”
     
    If you’re the smaller party, fighting a battle in the traditional sense is a game that will often be geared against you than in support of you (i.e., pivoted towards a loss than a gain). Thus, strategically, you should seek to delay, divert, or dispense of the need for battle with your larger counterparty.
     
    Strategically, understand what is your GPS (Game rules, Payouts/Penalties, Strategy) vis-à-vis your opponent. Next, step into the shoes of your foe to calculate the other side’s GPS. In doing this, assign a person to play the role of your adversary foe. This will help clarify and extend the relative perspectives of both sides in terms of positions (what you/foe want) and interests (why you/foe want such positions). This in turn will help clarify your negotiation strategy analysis.
     
    Next map out a “decision tree” of possible best next steps, with assigned probabilities. For example, let’s say you are a small Silicon Valley start-up about to negotiate with Google (a tech titan). Further along in this simplified hypothetical, let’s say you then consider, calculate, and then ultimately conclude that the possible decision tree possible outcomes could be (1) majority buy-out (30% probability); (2) minority investment (35% probability); and (3) no agreement (35% probability). As before, this is calculated on the best available imperfect information at the time.
     
    In Star Wars: A New Hope and The Force Awakens, the smaller renegade group of rebel fighters determine that their GPS would be to counter-attack the Death Star (Star Destroyer).
     
     
    4. USE INFORMATION STRATEGICALLY FOR TACTICAL ADVANTAGE
     
    Negotiation is an “information game.” If you have a competitive advantage in information, the game pivots more towards a win for you (or your team/organization/country).
     
    But where do you get information about your negotiation counterpart? First, seek information from publicly available information (Google, public filings, the press, news articles, etc.). Second, seek information from your foe’s other counterparties, enemies, and even friends. Specifically, find out who they are, then reach out and make strategic contact with them. You can be honest and say that you are making contact merely to get information on how to best work with a particular entity with which the person who has been contacted has had prior dealings. Third, for all remaining data, seek information directly from your counterparty (through a separate but related negotiation communication strategy).
     
    In The Empire Strikes Back (Episode V), Han Solo (Harrison Ford) and Princess Leia (Carrie Fisher) could have solicited information about the Empire from Lando Calrissian (Billy Dee Williams). Lando, as mayor of Cloud City, had prior dealings with the Empire, who stayed strategically neutral until Han and Leia’s unexpected arrival to Cloud City sufficiently incentivized Lando to betray Han and Leia (however, Lando then later betrays the Empire by subsequently helping Leia, Luke, Chewbacca, C-3PO, and R2-D2 to escape along with Han Solo in frozen carbonate form).
     
     
    5. KNOW YOUR “WALKAWAY POINT”
     
    What is your “walkaway point”? This is your negotiation decision matrix anchor—based on your personal metrics (i.e., money, emotion, pride, nationalism, etc.). Knowing this information, you will know the general limits and boundaries of your “yesable” negotiation range. Without knowing this information, you will conversely not know the general limits and boundaries of your “yesable” negotiation range. This in turn will increase the likelihood of you not knowing what you ultimately don’t want (as well as what you do want in your dealings with your counterparty opponent). This is a very dangerous position to put yourself or your organization–especially when such risk can be mitigated through this suggested strategic approach.
     
    For example, in the 1990s, when Microsoft was being investigated by the Department of Justice for alleged antitrust behavior at the time, Microsoft’s management team should have considered whether it would allow Microsoft to be broken up into smaller independent entities onshore if legally compelled to do so, similar to the case of the Baby Bells previously. Or alternatively, would this be beyond its walkaway point, compelling Microsoft to consider other alternatives, such as moving some or all of its offices offshore to other countries? Knowing such valuable walkaway points is not just useful, it is absolutely critical.
     
    In Star Wars: A New Hope (Episode IV), Obi-Wan Kenobi (Alec Guinness) determined that his walkaway point for an impending and epic light saber duel with Darth Vader would be the ultimate sacrifice of his own physical body (although he would continue to exist in non-physical form through the Power of the Force).
     
    In summary, these are five (5) concise strategies (of many more that can be utilized), which are easy to implement and extremely value-added.
     
    These strategies have proven to be the difference maker when it comes to negotiating with larger and seemingly more powerful counterparties.
     
     
     
    Sources: Kim, Jasper (2015); Adler, R. S. & Silverstein, E. M. (2000).

     
     
     
    If interested in how Asia-Pacific Global Research Group’s consultancy and training expertise can help your organization, CONTACT US HERE.
     
     
     

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    Uber-Negotiations in South Korea: Where Did Uber’s Negotiations Go Wrong?

    May 18th, 2015  by  Asia-Pacific Global Research Group - Jasper Kim

    images-1
     
    Uber Technologies, famous for its cutting-edge taxi app service, has officially suspended services as of March 6, 2015 in Seoul, South Korea. Uber Technology’s service, which allows for shared rides, has been attracting controversy in several countries. From its purview, the Seoul local government has offered rewards of 1 million won to anyone who can show proof of Uber-affiliated ride services, a move which has forced the company to take a step back to maintain a foothold on the peninsula.
     
    While Uber has been spotlighted by the Seoul government for its drivers not being properly licenced to operate as taxi services, a new similar taxi hailing service–a free app by South Korea’s Daum called “Kakao Taxi”–seems to have fully leveraged and benefitted from the Uber-Seoul negotiation breakdown.
     
    Originally an online text messaging app, Daum’s Kakaotalk is Korea’s most popular messaging service, with a consumer base of estimated to be over 35 million people with 94% of market share in Korea in the messaging app. The company is hoping to extend its reach into tertiary services. While the Seoul government is contemplating launching its own separate similar app, so far city officials seem to have had little problem with the Kakaotalk version.
     
    So where did Uber go wrong and Daum do right from a negotiation perspective?
     
    This is a classic example of the concept of ‘Integrative negotiation’ in negotiation theory – which is basically when the interests of two parties brings them together for mutual gain, making the negotiation a collaborative effort rather than a competitive one. Roger Fisher and William Ury have spoken about this theory in their book “Getting to Yes: Negotiating Agreement Without Giving In,” (Penguin Books, 1983) where the authors explain that looking for an integrative solution to a problem works as a better negotiated solution than finding a distributive (competitive) solution. In this particular case, it obviously works to the advantage of both the Seoul Government and Kakao Taxi to allow Kakao’s app to continue. Kakaotalk Taxi seems to meet the security parameters set by the government, while providing customers with an easier way to hail cabs, which can only gain approval with and for the Seoul municipal government.
     
    Conversely, Uber’s relationship with the local government could have been more integrative (cooperative) in nature. However, the continuance of operations by Uber in Korea without direct communication with the Seoul municipal government led to increasing conflicting interests. This is despite the fact that Uber had maintained from the beginning that it only had consumers’ interests in mind from the start by offering a viable value-added alternative to traditional taxi ride services. Arguably, however, such sole focus on consumers may have led to a costly lack of focus on municipal regulatory regimes, particularly in South Korea, which historically has a governance culture of strong state influence. Perhaps in realization of this, Uber has recently released a statement that they will try to work more collaboratively within the regulations set by the government.
     
    How does Kakaotalk Taxi differ from Uber? Customers can forward their location to friends and family, ensuring their safety, a detail that seems to have gone down well with the Seoul government. In this fashion, Kakao’s Taxi app is matching shared negotiation interests not only with the government but directly with customers, which seems to be Kakao’s formula for success. Additionally, Kakao Taxi’s app has at least initially been successful because of its large consumer base and fan following based on its free text messenging service, a resource any competitor may find it hard to tap into or replicate in South Korea.
     
    One of the major downsides however, seems to be the problem most applications suffer from in Korea – the lack of any language options outside of Korean. With the addition of new languages, the application could make an excellent case for itself among the growing expatriate and tourist community.
     
    Whether with little competition or not for online taxi hailing services in South Korea, as long as the average Seoul citizen is gaining in the bargain, the addition of Kakao Taxi and perhaps one day Uber will represent a win-win-win negotiated outcome scenario.
     
     
    Juhi Mendiratta is a PhD candidate at the Graduate School of International Studies, Ewha Womans University (Seoul, Korea)

     
     
     
    If interested in how Asia-Pacific Global Research Group’s consultancy and training expertise can help your organization, CONTACT US HERE.
     
     
     

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    India and Japan Counterbalancing China: How Shared Interests and Fears Led to Negotiation Cooperation

    April 6th, 2015  by  Asia-Pacific Global Research Group - Jasper Kim

    Narendra Modi, Shinzo Abe, Taro Aso
     
    India and Japan recently pledged cooperative efforts to deepen national security interests, as a means to counterbalance China’s increasing influence in the Asian region.
     
    “A strong India-Japan partnership is not only in the national interest of the two countries but is also important for peace and security in the region,” India’s Defense Minister Parrikar stated, reiterating that he would like to see a strong partnership with Japan in defense equipment and technology.
     
    While Indian Prime Minister Narendra Modi is involved in one controversy after another within India, there is no doubt that abroad he has been winning hearts and minds wherever he goes outside of his country. Among the first of his official visits was a five day trip to Japan where he was personally welcomed by Abe. With both parties claiming that bilateral ties held great potential, any observer could tell that the foundation for a stronger relationship was being laid down from the outset.
     
    But what is it about this particular set of ties between India and Japan that makes it so special? Similar political and economic goals? Threats from other neighbors? A need to find understanding partners?
     
    When two economic giants come to the negotiating table, the mindset makes a huge difference. India and Japan represent the second and third largest military spenders in the region. With the only overt gestures being friendly, and either side acquiescing benefits to the others, the emphasis on collaboration was strong from the onset. Already sharing a history of having supported each other from before both world wars, the historical foundation between India and Japan had already been set. It only needed two like-minded leaders—such as Modi and Abe who have shared interests and fears–to incentivize the process towards negotiation cooperation.
     
    In negotiation theory, there is a concept called ‘likeness theory’ that forms the crux of any relationship where both negotiating parties can find elements outside of the negotiation that help them bond. This, in turn, based on related negotiation behavioral studies makes it easier to find a solution and collaborate, repivoting the negotiation process towards a positive-sum game, not a zero-sum game.
     
    Here in this case, both Abe and Modi appear to have similar goals (or likenesses) for their respective nations. Both are fiscally conservative, both are known for favouring an internal economic strengthening, have nationalist tendencies, support strengthening ties with neighbors and both are trying to raise their nations to a standpoint where the world recognizes both India and Japan as true global powers, not just economic powers. With this kind of shared likenesses between Japan and India, it becomes easier for the two Asian giants to negotiate towards cooperation rather than betrayal (non-cooperation) in a iterated prisoners dilemma-type scenario.
     
    Both Modi and Abe have come to power at times when their people are hungering for economic and political change. With Modi looking to drastically improve India’s infrastructure, Japan is looking for markets to invest in, making this a “win-win” relationship based on “shared and complementary interests” that have a greater chance of principled rather than positional bargaining between the two Asian giants.
     
    Another common factor for both countries is their mutual neighbor, China. There is no subtle undertone for India here, as there is while negotiating with China, no horatory promises to cooperate while simultaneously coping with intrusions into sovereign territory or aggressive overtures in the international arena (something Modi hinted at in his speech in Kyoto). Similarly for Japan, with relations with China taking a nose dive due to diplomatic riffs and economic disagreements, finding other equally strong partners within the Asian region is imperative.
     
    Such ever-changing negotiation climate is also simultaneously a clear signal to America that intra-Asian cooperation may not be solely U.S.-centric at all times. With both India and Japan being strong strategic partners for America in the Asian subcontinent, it seems that both India and Japan are taking steps not behind but in concert with the United States under U.S. President Barack Obama.
     
    From India’s purview, Modi’s is initiating an “Act East” policy – a throwback of sorts and perhaps an improvement on the nation’s earlier “Look East” Policy. We know Modi also took no time in meeting Chinese Premier Xi Jinping in a recent multilateral diplomatic meeting and is set to visit Xi in May later this year. On the other hand, Modi has also already spoken to president Park Geun-Hye of South Korea on the phone. Further, his regular references to the rapid economic growth South Korea has experienced since the 1950-53 Korean War (the nation’s “Miracle on the Han” economic experience) speaks volumes about Modi’s admiration and perhaps economic benchmark for the country relating to India, with a population of over 1.2 billion people.
     
    Based on the actions of both India and Japan, it is apparent that both Modi and Abe have the shared common interests and fears that may incentivize strategic cooperation vis-à-vis China. But how the forging of such closer India-Japan ties affects the U.S. and Europe is still to be determined.

     
     
     
    If interested in how Asia-Pacific Global Research Group’s consultancy and training expertise can help your organization, CONTACT US HERE.
     
     
     

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    SmartWatch Wars: How the Apple Watch May be an Opportunity for Asia’s Tech Giants

    March 14th, 2015  by  Asia-Pacific Global Research Group - Jasper Kim

    im-Watch-Smartwatch
     
    Apple unveiled its much anticipated line of Apple watches recently with a price range of $349 to $17,000. I believe they also revealed a weakness in the company. This is a weakness that Asian companies would be less prone to, such as Samsung (South Korea) and Xiaomi (China). In full disclosure I’ve owned several iPhones, an iPad, and an iPod. I loved these products because they were innovative, fun, easy-to-use, well-built and stylish. In my opinion, the combination of those aspects were done better than anyone else out there. Even though the iPhone is relatively expensive, I still felt that I got a lot of value out of the product. The iPhone eliminated the need for a separate camera, GPS unit, music player, desk calendar, etc.
     
    As word came out about the watch last year (2014), I felt that it had potential. I was leaning towards buying the least expensive version, realizing that there is probably little initial additional functionality over the iPhone other than the health functions. At this point, it seemed like more of a toy than a need to have, but I was willing to give it a try and open to further possibilities, as I suspect others may also have shared this same consumer sentiment.
     
    Hearing that the most expensive version of the Apple Watch would start at $10,000–and rise to $17,000–I thought the article I was reading had a typo. Now that this pricing is confirmed, it seems exorbinant on several levels.
    • This signaled that Apple is now willing to move away from products that provide true value. All of the value in a smart watch itself can be obtained at the base price of $349. Beyond that you are paying for jewelry. At a price level above $10,000 you have a vast array of world renowned watches to choose from.
    • What rational consumer would be willing to buy a $10,000+ Apple Watch over a Rolex? A Rolex is truly expensive, but one could argue that it’s not really that expensive at all because it will last for decades. The Apple Watch on the other hand will be the fastest depreciating watch of its price range as the technology advances will quickly make it obsolete.
    • If consumers buy the $10,000 watch, it’s akin to burning money for attention. The fact that someone would rather buy the $10,000 Apple Watch than use the extra money for a wise investment or charitable donation speaks volumes, in my view, of such consumer’s character.
    • Do I want to be associated with the “conspicuous consumption” individual who buys the $10,000+ Apple Watch?
     
    It almost seems to me that the $10,000+ Apple Watch is a cry for recognition amongst the Apple design team. After Steve Jobs died, there was a fear that Apple might not be able to innovate. Jony Ive thereafter became more prominent and powerful within the company. Rumor has it that Ive was the one who pushed for the $10,000+ watch. The $10,000+ watch is where the design shines and the technology takes a backseat. After all, the smart watch is the same across all models, so you’re just paying for the extra materials and design of the band at $10,000+. This, then, makes Apple not only a technology company but also a fashion company.
     
    Jony Ive is unquestionably a great designer, but this $10,000+ watch is an unnecessary distraction for the company. What made Apple work before was the teamwork: great vision, great technology, great execution, and great design. We can’t all be great at everything, that’s why we need a pool of diverse talents to make a company great. It appears to me that those at Apple with a talent for business sense and strategy were overridden by those at Apple that want to now be part fashion company. This, I believe, has the potential to create a rift within Apple’s employee and customer base.
     
    A better strategy for Apple would have been to go down the pyramid instead of up the pyramid. The top of the pyramid contains the wealthiest consumers and the bottom of the pyramid the poorest. When the iPhone C came out, some were expecting this would be Apple’s offering to the developing world, but it wasn’t. Most of the consumers in the world are in the bottom section of the pyramid. To go there is more difficult than to go up the pyramid, but the potential rewards are greater. This is a hole in Apple’s offerings that is recognized and being filled by other players in technology–including Samsung and Xiaomi–in the smart phone space, as well as even Google and Facebook.
     
    Corporations have the mandate to maximize shareholder value, and at first glance it could appear that extravagantly priced products may add value. However, if you deviate from what your stakeholders (in this case employees and customers) expect from you, those stakeholders may go elsewhere, thereby reducing shareholder value. The $10,000+ Apple Watch isn’t worth that risk. The weakness that the $10,000+ watch exposed is that there must have been a struggle within Apple as to whether or not to enter the luxury goods market. It’s not inconceivable, based on personal speculation, that Jony Ive may even have threatened to leave if not allowed to pursue his personal vision. This has the potential to fracture the company. Asian companies such as Samsung and Xiaomi are less subject to this issue because of Asia’s relatively consensus-based corporate culture. Asian companies are thus more likely to work cohesively as a corporate unit and follow the lead of senior management. This represents a rare yet tangible opportunity for many of Asia’s tech giants.
     
     
    Brian Sullivan is an Assistant Professor of Finance at Hallym University in South Korea where he teaches courses on finance and business. He has an MBA in Finance from The University of Chicago Booth School of Business and a BA in Economics from The University of California at Berkeley.
     
     

    If interested in how Asia-Pacific Global Research Group’s consultancy and training expertise can help your organization, CONTACT US HERE.
     
    The views expressed in this blog are not endorsed, directly or indirectly, by the Asia-Pacific Global Research Group
     
     

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    American Law 101: An Easy Primer on the U.S. Legal System (by Jasper Kim)

    January 20th, 2015  by  Asia-Pacific Global Research Group - Jasper Kim

    American Law 101 - COVER
     
    Publication Release Announcement: Asia-Pacific Global Research Group Team
     
    American Law 101: An Easy Primer on the U.S. Legal System is a thorough introduction to American legal principles, a highly accessible user’s guide into both the spirit and the black letter law underlying the U.S. legal system. Everyone who wants a better, working understanding of U.S. law and the way it is applied—foreign lawyers, law students or those thinking about law school, business professionals, journalists, and the simply curious—can use this straightforward, approachable guide to the American legal system.
     
    American Law 101 offers:
    • easy-to-read and succinct explanations and examples of most of the concepts covered in U.S. law schools
    • concepts and terms explained in plain English, with minimum use of American colloquialisms, cultural references, and slang
    • short executive summaries of each chapter that cover the most crucial, “big picture” applications of the concepts covered
    •simple and useful diagrams •complete copies of the U.S. Constitution and Bill of Rights, as well as a glossary of legal terms
     
    Chapters include thinking like an American lawyer, contracts, torts, constitutional law, criminal law and procedure, American perspectives on international business and public law, and alternative dispute resolution and civil litigation. American Law 101 offers a better understanding of the U.S. legal system–and the legal professionals working in it—to domestic and international readers.
     
    About the Author
     
    Jasper Kim is a visiting scholar at Stanford University, former visiting scholar at Harvard University, professor at the Graduate School of International Studies at Ewha Womans University in Seoul, South Korea, and adjunct faculty at the Straus Institute of Dispute Resolution, Pepperdine University School of Law. Previously, he worked for Barclays Capital, Credit Suisse, and Lehman Brothers.
     
    Jasper Kim is a member of the Washington, D.C. bar and received graduate economic training from the London School of Economics (LSE), graduate legal training from Rutgers University School of Law, and negotiation training at Harvard Law School’s Program on Negotiation. He is a contributor to various media, including the BBC, Bloomberg, Christian Science Monitor, CNBC, CNN, LA Times, NPR, NYT/IHT, Voice of America, and the Wall Street Journal (WSJ). He is the founder of Asia-Pacific Global Research Group, asiapacificglobal.com, and author of ABA Fundamentals: International Economic Systems, and 24 Hours with 24 Lawyers: Profiles in Traditional and Non-Traditional Careers.
     
    Website link (American Bar Association Press):
    http://shop.americanbar.org/eBus/Store/ProductDetails.aspx?productId=131991070
     
     
     
    If interested in how Asia-Pacific Global Research Group’s consultancy and training expertise can help your organization, CONTACT US HERE.
     

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