Negotiation teams are too often chosen from relevant functions within a company rather than on the basis of the negotiation skills of the members.

In this context, the term "team" refers to an operating group of personalities and experts whose functional goals are interwoven in a rational way and not a gaggle of functional representatives whose job it is to safeguard the interests of their individual departments. This type of disjointed team results in the deal having fissures in which cobras hide!

It would be better to choose good negotiators for the team and fill in the functional blanks by functional departments (legal, treasury, manufacturing, sales, etc) on an ad hoc basis. An ad hoc appointee should be told what his of her function is beyond dealing with the area of particular expertise.  

The key negotiators have to be chosen carefully. These people will form the core negotiating group and should have business and functional expertise as well as good understanding of the cross-business and functional issues that will be at issue in the negotiations. Because they will be looked to by the PRC team for signals and opinions, both inside and outside the negotiation room, they should be people who can control themselves and who will act for the goals of the team rather than to protect their personal or departmental egos and desires. A short list of personal qualities for key team members should include:

• Intelligence – issue spotting
• Flexible thinking covering the entire project
• Ability to deal with ambiguity
• Ability to remain in control of emotions
• Ability to walk away from unreasonable demands
• Understanding of what the company wants and why
• Experience in and understanding of the PRC and international business methods and in dealing with foreign parties on their home turf.

The team will find it helpful to have a designated detailed note taker. The entire team should watch for the body language emanating from the other side. Providing its own trusted translator is also a good idea.

Ethnic Chinese employees, even if they are bi-lingual, must have the same personal qualities as other candidates. They should not be placed on the team with the expectation that, simply because they are Chinese, they will be able to read the PRC counterparts at the negotiating table. A mistake often made is the assumption that an ethnic Chinese who was not raised in mainland China will understand or be able to explain the PRC team's thinking or pressures or system. It is unreasonable to expect them to do so because the socio-political and cultural background of the ethnic Chinese may have varied greatly from the mainland Chinese with whom they are working.

It is a good idea to assign the future project leader to the negotiating team for purposes of relationship building, familiarization and continuity. His or her role in the negotiations should, however, depend on experience and personal qualities.

Finally, previous China experience is definitely an advantage on the team especially if two or more members have it. However, real-world experience is also very valuable as it introduces North American, Latin American, African, European, Middle Eastern, South and South East Asian and Australasian experience and creativity and solutions.

Should you have decision makers on the team? Only if it works to your non-time related advantage, that is, not because it saves time but because the decision maker's negotiation skills are important to their success. The limited authority of the Chinese negotiators and the disadvantage in which it places your team must be recognized. It is usually wise to keep the top decision makers in reserve until it is time for each side to roll out their compromisers.

Ed Neunuebel is a USA attorney who has served as Head of China [Hong Kong] for a global law firm and Pacific Area General Counsel for America's largest chemical/plastics company.  Fluent in written and spoken Mandarin, he has been involved primarily in the chemical, crop protection, mining, oil & gas, shipping and steel industries during his 27 year career as an international lawyer and has concentrated on joint ventures, direct investment, corporate, commercial, M&A, and intellectual property matters. This article is taken from his contribution to "Introduction to Doing Business in China" published by Juris Publishing, Inc.