By Maxence Lefebvre
Preamble: this article points out the influence of intercultural factors on the negotiation process in an international environment. This article is mostly based on the work of Brian J Hurn, teaching postgraduate students International Communication and Cultural Awareness at the Universities of Westminster and Surrey, UK.
Negotiating is simply the process you follow to get somebody else to do what you want him to do. A successful negotiation has to follow a certain process with seven main stages: pre-negotiation, entry, establishing relationships, review of strategies, bargaining, agreement and post-agreement.
This negotiation process will pretty much keep the same structure in both domestic and overseas environments, however many new factors will need to be taken into consideration when negotiating across borders, such as the difference of language, cultural sensitivities, legal systems, tax regimes, labor laws and business practices. Moreover government-led bureaucracy, restrictive regulations and direct government interferences could further complicate the negotiating environment, as well as the need to analyze political and economic instability, currency fluctuations and ideological differences before starting any overseas negotiation. At the end of the day, even if the stages of the negotiation process remain the same in theory, international business negotiations are crucially different from domestic negotiations and the negotiator that engages in this should be aware of those differences and appropriately trained to ensure a successful negotiation.
This article will give you some general recommendations, tips and facts that you may want to know before dealing with foreign businesses to expand your own company.
Communicate effectively with your international negotiator
With the globalization and the multiplication of business transactions across borders, English became the main international language used in negotiating across cultures. This is more precisely, what is described as “international English” or “off-shore English” that became the official business language: a form of “low-risk English” using words, phrases and grammatical structures which can be easily understood, avoiding idioms, slang, jargon and complex structures. When starting contact with a foreign negotiator who may not be a native speaker, make sure you adapt your speaking and writing style to your counterparty to avoid misunderstandings.
If your negotiator cannot speak English, the use of an interpreter becomes essential. Before starting any direct conversation with the counterparty, the interpreter should always be briefed and provided with any notes you may have on the proposals you intend to make. During the negotiation discussion, you should express your main points in several different ways so that the meaning is clear and helpful for the interpreter. Moreover you should always look at the negotiator while corresponding, not the interpreter, since it could be perceived as a lack of respect in some cultures.
Adapt your approach to your negotiator’s culture
The “getting to know you” phase could be crucial in determining the success of a negotiation. The “shared experience” are a form of cultural shorthand and are extremely helpful in preliminary and informal discussions, as “ice-breakers”, covering interests, sport, art etc. In some cultures, building relationship and mutual trust are initially more important than proceeding to detailed negotiations. If your company is dealing with organizations from India, Middle East or Africa, showing interest and respect towards your counterpart’s family could be vital for successful relationship, since the family unit is highly valued in those regions. Such questions about building a family could be judged as private and not appropriate to the situation in some other cultures (e.g. France, Germany). In any case, those “small talks” should avoid contentious subjects such as political, cultural or religious sensitivities, when not sure whether they are appropriate or not.
The use of humor could also be used as an “ice-breaker”. Humor was described as “the shortest distance between two people” by the comedian Victor Borge. However, in an international context, humor could be something of a double-edged sword, as it does not always translate well across cultures and could cause embarrassment, offence or confusion through misunderstanding. While humor is often used in British business presentations, Germans would judge it as a lack of seriousness.
Developing good listening skills is really important to succeed in international negotiations, because it enables you to pick up the various subtle cultural nuances. Silence is often used by the Japanese to mull over what has been said and think of the alternatives, but it could be mistaken by Westerners as showing a lack of understanding. Do not feel uncomfortable and jump in, or worse, make concessions, if you encounter this situation.
The concept of “face”, defined as the regard in which one is held by others, is of a vital importance in the Chinese, Thai and Japanese cultures. This could explain why Chinese business people use indirectness and prefer intermediaries for negotiations, in order to save and give “face” because of the importance they attach to the establishment and maintenance of long-term relationships. Keep in mind that Westerners separate business life from personal life, but this distinction is less significant for eastern cultures.
Adopt the right negotiation practices
The business etiquette differs greatly across cultures, especially the exchange of business cards. In the Japanese culture, the ‘meishi’ is treated with great respect because Japanese consider the business card as the manifestation of the person’s persona. They will give you their business cards directly after the initial formal introduction: make sure you analyze the cards before carefully placing them in the front pocket of your wallet or on your desk in front of you. Concerning your own card, the best would be to print one side in your own language and the other in the other culture’s language. When making business in Hong Kong you will meet many Westerners with business cards on which they even have their names translated into Chinese characters. Another aspect of business etiquette which differs across cultures is the level of familiarity in the approach. In Germany, The Netherlands and Italy, people address each other by their academic titles, calling Doctors people with doctorates, as opposed as the more familiar approach used by Americans and increasingly by the British. Greetings can also be more formal for some cultures, including Germany and Russia. When dealing with women from other cultures, always wait for them to initiate the handshake.
Socializing plays an important role in successfully negotiating across borders. Due regard to seniority is essential with strict attention to seating at formal dinners, order of speeches, and giving and receiving gifts. On this last aspect, you should know that exchanging gifts for business purposes is very important in some cultures, sometimes it could even be an offense not to offer gifts, but it may be viewed as bribes in Australia and other western cultures. Try to offer gifts that symbolize the status of your company and the importance of an impending deal, such as an item characteristic of your local area, or one that displays your company logo.
The negotiating environment should also be considered carefully to maximize your chance to make a successful business deal. Some cultures, such as Latin America, Japan and particularly France, business people tend to see negotiations as ‘social ceremonies’ as opposed to the British, Americans and Scandinavians who put less emphasize on the social aspects. When dealing with French negotiators, make sure you invite them to a restaurant during a lunch break, rather than offering them sandwiches in the Board Room.
Understand your counterpart’s negotiation process
In an international context, your negotiator will probably not use the same negotiation steps and methodology than the ones you are used to dealing with in the domestic market. Agreeing on an agenda is probably the best way to clarify the stages of the negotiations and determine what has been agreed on at a certain stage of the negotiation process. This agenda takes even more importance when dealing with a foreign organizations, and you should try to follow it as much as possible, since surprises and hidden items could affect long-term trust in some cultures.
The pace of negotiations will differ a lot from culture to culture. In India and the Middle East, the progress will be initially slow until the negotiator succeeds at establishing trust. In contrast, indirectness is disliked in the USA, with an emphasis made on “getting the point”. The French, tend to view negotiations more as an intellectual exercise in logic, defending or disproving hypothesis. Arabs look upon deadline as merely general guidelines and see the possibility of amending these in the light of circumstances. The German, British and Japanese like deadlines and the agenda to be specifically stated and agreed upon in the contract and would expect negotiators to honor these.
Another aspect that is influenced by culture is the attitude to time. The existence of different attitudes to time could cause concern. There are two types of culture concerning time: the monochronic and the polychronic cultures. Negotiators from North America, Germany, Scandinavia, and Japan, are part of monochronic cultures, so they will like strict time-keeping, punctuality and keeping schedules. On the other hand, negotiators from Latin America, Southern Europe, Africa and Arabic countries, are part of a polychronic cultures: they may arrive late, deal with several issues and activities at the same time, and engage in multiple conversations. This behavior could cause frustration, be perceived as irritating and unhelpful for people from monochronic cultures. If you find yourself uncomfortable dealing with people with such behavior, you will then need a high level of patience if you want to ensure the success of your business deal.
Do you think your efforts made during the whole negotiation will be rewarded? First you should be aware of your counterpart’s ability to make decision by himself. Indeed, decision making in negotiations is often influenced by cultural characteristics and so the amount of authority given to the negotiator will differ from culture to culture. In Latin America and Greece, decisions will be made by the negotiating team leader. In Anglo cultures, negotiators often have high power and can make decisions by themselves concerning their business deals. In contrast, Japanese negotiators do not have much decision power. They have to report back to higher authority. This explains why Japanese will adopt a step-by-step approach to decision making with emphasize on what is agreed. This aspect of the Japanese culture causes frustration for western companies that are used to face-to-face negotiations with those who are empowered to make final decisions.
In practice, many negotiations often conclude in some form of compromise, either through mutual agreement or by some form of external mediation. Here are some examples of things that will maximize your chances to successfully negotiate: study and review the cultural sensitivities and characteristics; use skilled and experienced translators if necessary; adapt your negotiating style and pace accordingly; spend time building trust by establishing personal relationships at an early stage; always show patience; and be prepared for negotiations to continue after an apparent agreement.
Maxence Lefebvre, Australian Institute of Export
Brian J Hurn (2007), The Influence of Culture on International Business Negotiations, Industrial and Commercial Training Vol. 39 No. 7.
Cohen, R. (1999), Negotiating across Cultures: International Communication in the Independent World, US Institute of Peace Press, Washington, DC.
Guy, V. and Mattock, J. (1991), The New International Manager – An Action Guide to Cross –cultural Business, Kogan Page, London.
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