Sourcing in Seoul
Waldtraut Braun, 30-year old senior procurement manager from one of Germany’s largest and best-know companies, was on her first visit to Seoul. Accompanied by Paul Schmidt, one of her male subordinates, she was there to negotiate a major purchase of industrial components. Since this South Korean manufacturer had been a supplier to her company for several years, Frau Braun expected the discussions to proceed without particular difficulty.
However, things did not work out that way. Throughout the meeting the Korean negotiators ignored her completely, addressing all questions and comments to Paul Schmidt. Furthermore, when Schmidt excused himself for a comfort break the Korean negotiators fell silent and acted as though Frau Braun was not there at all.
Frustrated by the way she was being treated, Frau Braun terminated the meeting before agreement could be reached and returned to her Singapore regional head office determined never again to negotiate with Koreans. Shortly thereafter this very successful purchasing manager arranged for a transfer to another division of her global company.
At our Global Management negotiating workshops I often ask participants what Frau Braun, Paul Schmidt and their company could have done differently to avoid the problems these German buyers encountered in Seoul.
Sourcing in Seoul
Solution and Discussion
One of the participants at a workshop in a German multinational automotive company’s Asia-Pacific headquarters had just returned from a sourcing mission in South Korea. During the Q&A session she came forward with the personal experience on which this case is based. The incident upset “Frau Braun” so much that she demanded a transfer to a different part of this global firm.
Braun’s meeting in Seoul got off to a bad start because the Korean negotiators obviously did not know who on the German side was in charge. As we learned in Case 5.3, Frau Braun should have been properly introduced by a high-ranking male in her company. Otherwise her Korean counterparts would naturally assume that Paul Schmidt was the boss and Frau Braun his assistant. Since she was not introduced Frau Braun should either have introduced herself as the decision-maker or instructed Paul Schmidt to make the introduction.
Interestingly, the German negotiating team could still have saved the situation. How? Instead of replying to the Koreans’ first question, Paul Schmidt should have remained silent, simply turning his head expectantly toward his female partner. This nonverbal action would have clearly signaled the Korean side that Frau Braun was the person in charge, thereby neatly solving the problem. Body language sends strong, clear signals across cultures.
Some seminar and workshop participants ask why the Koreans failed to follow Rule #2, “The seller adapts to the buyer.” The reason is simple. They just did not understand that Frau Braun was the person in charge. Taught by their culture that the customer is king, the Korean negotiators would immediately have directed their questions and attention to her.