Negotiating is a critical skill for global managers. To be effective at cross-border negotiation, find ways to work around cultural differences so that the outcome is acceptable to all parties. Use well-tried tactics and be well prepared.
Points to Remember
- Most cultures want to feel they are winning a debate.
- In many consensus and status cultures, a written contract will be less important than a handshake. In these cultures, overly legalistic contracts may be perceived as a lack of trust.
- In many parts of Asia, a contract is never final. It is always open to renewed negotiation as circumstances change.
Adapting Your Style
Cultural style influences the pace of negotiations, as well as the strategies, decision-making, and contractual arrangements used. Negotiations in autonomy cultures tend to be fast, but are tied up with legalities. Negotiations in consensus cultures are often slow, and require trust, which is built up over time. Contracts are likely to be broad, and subject to change as circumstances alter. People in status cultures also like to take time to form trusting relationships. They may become impatient with overly legalistic contracts.
Before a negotiation, ask yourself some questions:
- Why? – List the risks and opportunities for both sides in the negotiations.
- When? – Consider the factors, such as budget cycles or the market, that will influence timing.
- Where? – Think about the advantages and disadvantages of specific locations.
- Who? – Look at the status, age, and gender of those involved. Consider including a third party.
- How? – Judge the amount of time that should be spent on task versus relationship issues.
The Western tendency to be direct can be perceived as confrontational by those in cultures that put great value on relationships and prefer indirect communication. The respectful deference of an Asian can be seen as a weakness by a Westener.
Make sure that you understand the context of the negotiations that you will be taking part in. Gather fundamental information about the other party and its country of origin. Assess the decision-making style, hierarchy, and underlying interests of the organization. Gauge the economic development, and the monetary, fiscal, and trade policies of the country it is based in, as well as the telecommunication and transport networks. Understand the country’s political ideologies and foreign policies, and make a point of studying the legal tradition and business law. Make sure that you appreciate the values and beliefs, language, and customs of the country too.
Keep your language plain and simple and make sure that everyone understands the meaning of what you have said. Minimize surprises, because these will put the other party on the defensive. Focus on all parties’ mutual underlying interests. If you see the situation as a problem that you all want to solve, you will avoid getting into a deadlock. Never rush: patience beats impatience every time. Build trust, and always focus on a win-win result.