7 Negotiation Styles in Indonesia for Doing Business

Review by : Yuli SE., MM

Indonesia is a country with lots of diversity living together, from the marriage culture in Indonesia, the cuisine, and more. The diversity existing in Indonesia gives both good and bad side effects. If the bad side effect is starting to emerge, sure everyone will do anything to not let it happened. And one of the way to solve the bad side effect of diversity is negotiation.

Negotiation has become a part of Indonesian etiquette since long time ago. Sure many of you already experience this, but one thing that you should know that Indonesia has many ways of negotiation. Below are 10 negotiation styles in Indonesia that you should know that will help you to understand the problems emerging and how to solve it. Check them out!

Situation Based Negotiation

Based on this kind of negotiation, there are two types of negotiation. There are formal and informal negotiation.

1. Formal Negotiation

Formal negotiation is the one that has distinct feature, and that feature is the based-on-law agreement that required the signatures from people involved in it. The goal of this negotiation is to make sure that every parties involved in the agreement are obeying every point in it. You may want to read about Leadership Styles in Indonesia

Or else, they’ll get the penalty according to the law applied. Usually this kind of negotiation occurs between governments or enterprises, but you can also find such negotiation in your surroundings. For example, when you agreed to sign for your driving license, it means you agreed to obey every single driving rule that exists.

2. Informal Negotiation

This informal negotiation is the one you did almost everyday. Because this negotiation doesn’t need any signatures on agreement paper or something like that. Informal negotiation only needs some arguments before the parties involved reached the agreement they want.

For example, whenever you go to traditional market and you’re unhappy with the price. You’ll start to negotiate the price with the seller, right? Or when your class wanted to throw a party, sure there will be lots of negotiation to plan the party so it will accommodate everyone’s ideas. Read more about Indonesian Lifestyle.

Negotiator Based Negotiation

In this kind of negotiation, there are also two types of negotiation. There are negotiation with negotiator and without negotiator. Negotiator is the one who has the role to help parties involved in a negotiation to reach an agreement.

3. Negotiation With Negotiator

This kind of negotiation also the one that you should be familiar with. Usually this kind of negotiation happened to solve a difficult problems, or the one that couldn’t be solved by the parties involved. That’s why in this kind of negotiation, negotiator who is outside of the problem is needed to make the agreement more objective.

This kind of negotiation is the one happened at the court. When the plaintiff and the defendant are giving their arguments, the judge plays its role as the negotiator. You may want to read about Indonesian Behavior

4. Negotiation Without Negotiator

Negotiation without negotiator is the kind of negotiation that doesn’t need any third party involved to reach an agreement. It doesn’t need any negotiator because the agreement is easier to reach even it’s only between the parties involved in the agreement.

This is the most common negotiation styles in Indonesia, and it’s called “musyawarah” in Indonesian. It’s the kind of negotiation that require parties involved to gather in a place and practically discussed the problem and state each other’s arguments.

The agreement will be reached after everyone discussed the best arguments within all the arguments given and agreed to a result. The result may be within the arguments given, or maybe combined between the arguments given, or even not from any arguments given. You may want to read about How to Preserve Indonesia Culture

Profit-and-Loss Based Negotiation

This kind of negotiation has four types, there are win-win, win-lose, lose-win, and lose-lose negotiation. All of these negotiations requires the negotiator to solve the problems emerged.

5. Win-Win Negotiation

Win-win negotiation is the one that will give all parties involved an agreement that collaborate all their needs. This case is similar to bargaining at the market for the affordable price by the buyer, and sufficient profit for the seller as well. But in this type of negotiation, it needs the negotiator to be able to reach an agreement. Win-win negotiation is the one that you want to do if all parties involved have similar goal but have different approaches to reach it.

6. Win-Lose / Lose-Win Negotiation

Win-lose or lose-win negotiation is the kind of negotiation that gives the most advantages to one side, and gives the disadvantages to the other side. Usually this occurs when one side failed to defend its arguments and finally the agreement only takes one side and the other have to deal with the consequences.

This usually occurred when the parties involved have different goals and also different approaches to reach it. One of the example for this case is when the government decides to rise the price of basic needs, and the society couldn’t do anything about it. Read more about Things You Shouldn’t Do in Indonesia

7. Lose-Lose Negotiation

Lose-lose negotiation is the kind of negotiation that resulting the unsolved problem since parties involved refuse to solve it. There could be some reasons, but usually one of the main reason is they don’t want to experience any loss or disadvantage. This kind of negotiation is quite rare to found, since usually parties involved in the negotiation try its best to win the argument.

Above are the common ways of Indonesian people negotiate for agreement. Beside those negotiation types, you can find even more variations at how Indonesian people negotiate stuffs. One of the example is Marosok, the culture of Minang negotiate the cow’s price through covered palms. This negotiation was rarely seen by now, but you’ll find it in some big events held in West Sumatra.