Contract Negotiation Tips for Japanese Corporations #2 Always Negotiate Long Term
It may seem unusual that Ascent is recommending Japanese Companies to focus long term, since this is a well known cornerstone of Japanese business practice. In Japan, business relationships often take years to build and Japanese companies are usually considered patient compared to foreign counterparts. Yet this can be both a strength and a weakness.
There is a danger that poor negotiation of a contract may create negative precedents affecting the company’s relationship with the other party and setting negative precedents for future contract negotiations.
If, on the other hand, the company is polite, fair and unwavering in insisting that each term be reasonable this will create a positive precedent for all future negotiations between the parties. Hopefully this will result in more balanced and favorable (as opposed to the most aggressive and one-sided lawyer’s drafts) drafts being forwarded in the future. At the very least the company’s behavior and attitude regarding the current contract under negotiation should send a clear message to the other party that:
- The company will not fall for common negotiating tactics
- The company will negotiate every term until considered fair
- The company will take as much time as deemed necessary to conclude negotiations in a mutually beneficial manner.
The company should always negotiate for the long term. This means thinking about the impact this particular contract negotiation is going to have on future business, future contract negotiations and the relationship between the parties. Being direct, open and fair is the best way to build the relationship and gain respect. Being timid and agreeing to unfair terms creates a very negative precedent.