Here are the top 5 common bargaining techniques in Indonesia.

Have you been applying the same bargaining strategy to everyone? And in every country? As we have established in a previous post, the way to do successful business in a country depends on how much you understand their culture, or ‘the way they do things’. Bargaining is no exception to this, you need to understand culture the most when bargaining! Here are five common Indonesian bargaining techniques that you should know, and appropriately respond to:

1. Haggling on an extensive range

Often, Indonesian businesspeople are perceptive negotiators who love haggling; they should not be underestimated. Expect to see a lot of bargaining during negotiations and when you do, play along or they may be offended if you refuse. Rather than negotiation per point, they are more likely to focus on the big picture. The range discussed during the bargain can be extensive. According to Katz, the author of “Principles of Negotiating International Business”, prices can move 40% or more from initial offers.

Although the primary bargaining style is competitive, the culture promotes a win-win approach to maintain harmony. So try to make compromises on different stages. Make use of the polychronic work style of Indonesians, which allows you to revisit an aspect for your advantage. For example, by offering further concessions under the condition that the other side reciprocates in an area that was previously agreed on.

2. Deceptive technique

A technique frequently used is deceptive tactics such as sending false non-verbal messages, pretending to be disinterested, or making false demands. These tactics should not be taken personally. Instead of trying to bluff at them in response, try to verify that information through individual research. The Indonesian counterpart also cautiously treats outside information.

Never use the good-cop bad-cop tactic as a response because this can significantly harm relationships. A point to note is, the Indonesian counterpart may claim to have limited authority and thus need to ask their manager for approval. Is this a tactic or a truth? It can be either. To avoid the occurrence of “loss of face” be cautious when making false concessions as a technique.

3. Pressure technique

Another technique that is usually used is the pressure technique by making “final offers” or nibbling. These “final offers” are rarely final and they come more than once. Do not apply time pressure or make expiring offers as tactics since this gives the impression that you are unwilling to build a long-term relationship, an important aspect of Indonesian business dealings. If those tactics are used for retaliation, you might be faced with a terminated negotiation.

4. Emotional technique

Considering that Indonesia is a relationship-oriented culture, emotional techniques such as attitudinal bargaining, attempting to cause guilt for the counterpart, and appealing to personal relationships are often used. While this technique is effective to use for negotiations, be careful to not make your counterpart lose face. Avoid being aggressive since this can damage relationships. The ultimate goal at the end is to create mutual understanding and reach an agreement based on voluntary consent.

5. Defensive technique

Defensive tactics including blocking, asking probing questions, changing a subject, and making promises are very often used. Hence, it is common and allowable for both sides to use such a technique. In contrast, directness is not and Indonesians may be shocked if you are overly direct. The indirectness is also true during conflicts or disputes as Indonesians often prefer to ignore or deny them. Overall, patience and friendliness are required for every situation.

BRIGHT Indonesia as Your Perfect Local Partner

These five bargaining techniques could help you in partnering with new companies. With very delightful techniques and knowledge of your bargainer, a perfect agreement would create a beneficial deal. Aside from knowing the right techniques, having a local partner is one of the solutions to gain information about the best deal and which techniques to use.

BRIGHT Indonesia will help your businesses to enter the Indonesian market through services, such as Business Partnership Engagement, Foreign Direct Investment Promotion, and Management and Strategy Consulting. This is to secure the agreement between your company and your future Indonesian business partners, support your company from the private sector with the development of corporate/business unit strategies or helping your company from public sector organizations with public policy, and link your company both from the private and public sectors in global foreign direct investment (FDI).

For more information, email info@brightindonesia.net.

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In the end, the ability to bargain well is one of the most vital attributes you can possess. From bringing in good people to nailing the first big deal, sound bargaining techniques will be essential. As you already know how to deal with Indonesian bargaining techniques, take care of this skill, and undoubtedly, you will get business deals in Indonesia more easily.

Be prepared, the next article in our communication series will discuss the tips in cross-cultural communication by BRIGHT Indonesia!