| Negotiating in
by Sheida Hodge
Managing Director, Worldwide, Berlitz Cross-Cultural
Until recently, U.S. superiority in technology and finance
spared executives the necessity of making adjustments
when they did business internationally. What distinguished
a foreign business trip from a domestic trip was that
one packed a passport and an electricity converter.
It was assumed that there was only one way to do business:
the American way.
In fact, each country has its own unique style of business
negotiations. The more you understand about how their
approach to negotiations differs from yours, the more
successful you will be.
Some cultural differences such as language, food and
gestures are easy to observe and deal with. For example,
gestures that are considered positive and upbeat in
one culture may be seen as rude and obscene in another.
While infractions of these outward cultural rules are
tolerated, there are deep and often unconscious cultural
values that can snare an unsuspecting executive. Jon
Thomas, a skilled international negotiator for AT&T,
once told me, “The niceties, such as how to shake
hands, not crossing your legs, and so on, are far less
important than the deeper cultural beliefs such as face
saving and building trust. After all, people understand
that you don’t necessarily know their customs
just as they donut understand yours, so a great deal
of tolerance is present.”
The following guidelines will help you manage your international
business negotiations. Keep in mind that these are general
tendencies and that individual cultures sometimes vary.
Even within the same culture, business practices can
vary by region or according to the individual negotiators
personality or background.
Acknowledge that cultural differences exist
Individualism vs. group orientation.
A key trait that sets American culture apart from the
rest of the world is the emphasis on the individual.
We focus on individual achievements and incentives,
and responsibility for decisions lies with the individual.
Traditional cultures such as Asian, Latin American and
Middle Eastern are group oriented.
On of the most important consequences of this difference
is that traditional cultures rely on group structures
rather than the legal system to resolve difficulties.
I once asked a high-level Malaysian consular official
for the most valuable advice he could give Americans.
“Not to threaten a lawsuit as soon as they see
a difficulty,” he told me. John Condon observes
that in Japanese culture, “When a lawyer shows
up it’s like the appearance of a Buddhist priest
who is called on to administer last rites.”
The slow-decision making process of group-oriented cultures
is likely to severely test Americans` patience. In consensus-oriented
cultures, such as Japan and Indonesia, the lobbying
effort to get everyone’s buy-in is a lengthy process.
Even in authoritarian cultures such as China there is
lengthy consultation with others to ensure against bad
decisions, as well as to avoid being blamed if things
don’t work out.
Equality vs. Status. In the
U.S. we tend to minimize status differences and encourage
equality over hierarchy and social class. In status-oriented
cultures such Asia, Latin America, the Middle East,
and many European countries, people aren’t comfortable
unless they have a clear idea where you fit on the totem
pole. They want to know your position and authority
level before the first meeting. For your part, find
out about the hierarchy within the other team and treat
them accordingly. They are very sensitive to being treated
with the proper respect. Remember that as purchasers
you already have an automatic power position and that
sellers will treat you with deference.
Informal vs. formal. While
Americans like to get on an informal, first-name basis
as soon as possible, traditional cultures like to preserve
formality in business relationships. Call them by their
last names and titles, and avoid jokes and frivolous
behavior. Many cultures use social occasions to establish
informal relations. However, this informal behavior
doesn’t carry over to the negotiating table, where
a certain level of formality and dignity must be maintained.
Accept their social invitations and reciprocate in due
Dress formally. The best guide is to dress the same
way you dress at work. Avoid dressing as though you
are on vacation.
Direct vs. indirect. In this
culture we say, “Don’t beat around the bush.”
In Asian, Latino, and Middle Eastern cultures, a direct
approach might be viewed as rude or aggressive and may
cause people to lose face. Such cultures won’t
be direct in telling you “no” or giving
you bad news. On your side, be aware that a sharp “no”
may cause the other party to lose face, especially if
you tell him in front of others. You may want to deliver
a negative response through a go-between or privately.
On the other hand, German and other northern European
cultures tend to be more frank and up front than is
comfortable for Americans. Returning from a long day
of business meetings, I felt obligated to say a few
words to my Swedish counterpart sitting next to me on
the airplane. His reply was, “I am very tired
and I don’t wish to talk to you for the duration
of the trip.” Talk about losing face!
Select a wining team
Select negotiators with the other side in mind. People
participating on each side should be of comparable status
and expertise. Be careful about sending people of the
same ethnic background as the country of negotiations.
This tactic sometimes fails because the negotiator is
not perceived as an authority figure. Also, other cultures
tend to have a lower tolerance for mistakes when dealing
with someone of the same background.
It is more cost effective to send a negotiating team
if your company is faced with complex negotiations in
which many loose ends need to be tied up. Before your
team leaves, make sure you have your game plan worked
out and that there is agreement about who is to lead.
Open disagreements among your team members will undermine
your negotiating power. Make sure the facts and issues
to be discussed are clear to your team and, when you
get there, to the other side.
Prior to your trip, let the other side know about your
team hierarchy and how each person fits into the scheme
of things. Negotiators from traditional cultures need
in-depth information about your company and the background
and authority of individual team members. If you go
without providing this information in advance, they
will be hospitable, but precious time will be lost as
they try to assess you and find out what they need to
know. People in traditional cultures like to negotiate
with people of authority, and if you don’t establish
yours you won’t be taken seriously. This step
is crucial for women and younger executives who might
be perceived as having lower status and authority.
Manage the negotiating process
Your preliminary preparations will smooth the path but
they won’t guarantee success. The negotiating
process itself needs to be managed properly.
Adopt an appropriate negotiating style.
Whether both sides compete or cooperate depends more
on fundamental negotiating tactics than on nationality.
Stakes are high if you take the wrong approach. Many
international negotiators are like the knight who staggered
into the king’s court all disheveled and bloody.
The king asked with astonishment, “My good knight,
where have you been?” “I’ve been killing,
raping, and pillaging your enemies to the west,”
replied the knight.” “But I don’t
have any enemies to the west,” said the king in
surprise. “You do now!” said the knight.
Don’t push your position too hard.
Be patient but firm. Don’t corner them or cause
them to lose face. Skip over sensitive issues for future
discussion or use informal channels such as a go-between
or a private meeting away from the negotiating table--where
personal relationships can smooth the way. Avoid losing
your temper and showing anger, especially with Asians.
Latino, Middle Eastern, and Russian negotiators tend
to negotiate with passion and great displays of emotion;
nonetheless, you need to maintain decorum and dignity.
Persuade by appealing to the “human”
side of the equation. Use “emotional
common denominators” instead of logical arguments.
Such arguments can force the other side to dig in their
heals, or to spend their time looking for the weak links
in your argument. By itself, a superior argument often
leads to deadlock.
Overcome Language barriers.
There’s a myth that you can’t do international
business effectively unless you speak their language.
In fact people all over the world are doing business
together without fluency in each other’s language.
Americans have a distinct advantage over the rest of
the world because English is the global linguistic common
However, don’t assume that what you say is the
same as what they hear. Their courtesy and polite nodding
of the head is not a sure indication of comprehension.
Exchange plenty of written information, and follow up
every meeting with a memo outlining the results and
specifying what is to follow.
Many executives believe that learning a few words in
their counterpart’s language will be appreciated.
But some caution is in order. An American businessman
meeting with a high level Mexican official asked in
Spanish, “I hear that you’re an avid golfer.”
Because he used the wrong word, everyone in the meeting
heard him saying, “I hear that you are an avid
philanderer.” The fact that the official was a
philanderer as well as a golfer made the situation more
tense than humorous.
Be careful about using immigrants as translators. The
following translation into Japanese appeared on a box
containing an alarm clock: “Thank you to perfection
of alarming mechanism. You are never awake when you
are asleep.” It is worth the expense to hire professional
interpreters if you are negotiating with non-English
Bring home the contract.
In Middle Eastern cultures a whisker pulled from one’s
beard used to clinch a deal. Even today, a handshake
might be sufficient in some Asian countries, where legal
documents are not as important as human rapport and
trust. Businesses in many of these countries prefer
that contracts be left flexible enough to allow them
to wiggle out of certain terms if circumstances change.
A negotiator once complained to a Chinese counterpart
about their habit of breaking agreements. The Chinese
client replied “We don’t break agreements.
We just make a new set of promises” (WSJ). Americans
say, “a deal is a deal.” The final contract
is the blueprint for the future relationship, and its
terms are taken very literally.
The win-win solution is to develop a good rapport and
relationships, and also have airtight contracts. Contracts
made in good faith have a life of their own, while those
aimed at taking advantage of the other side are always
unstable, regardless of the culture.
When you understand and respect cultural differences,
you can move to focusing on similarities. Human beings
are far more similar than they are different, and your
aim of generating value for both sides will bridge most
differences. When I was in China, I once asked my counterpart
to teach me how to say “excuse me” in Chinese
in order not to offend anyone. “Because you are
a foreigner doing business in China,” he told
me, “you are automatically excused.”