Korean Job Discussion Forums

[Fredbob]

During a class I gave the students a task to plan a negotiation session with American executives for the purpose of proposing a cooperative relationship.

The question, in the first rounds of such a negotiation, if the K students were to make first contact and invite the Americans, who would pay the travel and lodging costs?

There proposal is intended to ultimately be a win-win situation so my suggestion was that the inviting company would pay, one of the students suggested that they should not pay because it would be too accomodating and put them in a weaker negotiating position later on.

I tried to research this on the net, but no luck so far.
Any insight or resources will be appreciated.

[CBP]

If this is to be a win-win situation with the purpose of building a cooperative business relationship, this implies that both parties would benefit and have something to gain. Which in turn seems like the travel costs would be footed by the party doing the traveling. That's what expense accounts are for. As far as resources go, I'd email someone in the business program at the university you attended. People love flaunting their knowledge and at the very least might send you some valuable links.

[BobNads69]

The answer to your question is �Yes�. The inviting company or the benefiting party always pays the bill. All expenses except the airfare and sometimes the airfare is included.
This holds true in most all negotiating situations. �Win- Win or Won-Lose� doesn�t have anything do with �Business Matters�. And NO, �as in Korea, do like the Korean�. The International Business World has already established rules and guidelines to follow. Koreans need to learn and follow them.

�Put them in a weaker negotiating position later on�? Your students need to understand that they already are in a weaker (needier) position by inviting the other party in the first place.
By not following the proper business etiquette makes them look inexperienced and not prepared to do business. (Not serious or sending the wrong message) The invited party can be offended and maybe unwilling to do business with them.

Business etiquette and protocol are not strong points here in Korea. Other areas you can cover with your class.
Concerns when dealing with Korea.
1 The level of business language of Koreans business people is poor, so leads to problems
2 Lack of knowledge in international business practices and protocols creates legal issues
3 Rude and often offensive use of English words in conversation and written correspondence.
4 Inconsistent follow up procedures and information flows.
Good Manners are Good Business!

Think of it this way: I invite to my house for dinner, some drinks and some advice on a problem of mine. It gets late and I suggest you stay in the guestroom. The next morning at breakfast, I hand you the �bill� for dinner, the room and breakfast. How would you feel?

I hope this helps.

[PRagic]

Depends on the size of the company, the nature of the trip, and whether or not business will be concluded. For smaller companies, very often, the visiting party will indeed pay their own way, including air and hotel, but the hosting company will foot the bill for some of the in-country expenses (e.g. entertainment and grub).

In the OP's post, this was for a 'cooperative relationship'. This could mean anything from an introduction with intent to pursue business to simply a 'warm fuzzy' get together. My wife just got back from one of those, and her company paid the cost of travel and board. One of her Chinese clients and one of her Japanese clients is constantly flying around the world signing contracts or just putting together meetings. They pay, and they pay because they are going to make a good chunk of change if and when deals materialize. They don't make the trip unless they are pretty sure business is going down.

The rules have changed with innovations in communication. Companies no longer have to be at the table every step of the way, but there is no getting around the fact that 'being there' (read Gertler) gets the job done. In the case of my wife's company (high tech), a hosting company might foot the bill for a trip once there is a successful business relationship and they want to take it to the next level. Chinese buyers have flown over on their own dime just to see her storage and office facilities. The French, Germans, and Americans, on the other hand, have been quite content to do business long distance, with samples and P/0s sufficing.

How do the big boys do it? A lot of time, they pay their own way. For BIG contracts, sure, they foot the bill...when the contract is ready to go AND they don't have an office in-country. This would be an interesting topic to research. If you have the KOCHAM and AMCHAM directories, go for it!

I heartily agree with the remainder of the points made thus far. Ettiquite can get you where you need to go, and can indeed push the envolope where legalities are concerned. Look at the deals gone sour here because of cultural differences and poor PR prior to John Handcocking the paper.

[Fredbob]

Seems like I have some answers both ways, the hypothetical situation is between big boy firms so I'll go with the airfare being negotiable but the stay here is taken care of.

Thanks for the lucid feedback, some of it supports what I thought, other is new info to chew one, anyone else feel free to post more.

[ChopChaeJoe]

If my company is going to be making a lot of money for another ompany and I may or may not want to work with a particulat inviting company, then the inviting company should pay the basic costs because, if they don't, another company may be more accomdating.


That's a pretty long sentence, almost surely a run-on.