Understand Culture for Success in International Business Negotiations
written by: N Nayab•edited by: Jean Scheid•updated: 5/30/2011
Negotiation is discussion aimed at resolving points of differences and reaching an agreement. Negotiation styles are the positioning or methodology adopted by parties engaged in negotiation, and depend on many factors such as the beliefs and skills of the participant, the context, and culture.
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Culture is the collective manifestation of a set of behaviors, values, beliefs, and thinking patterns, dominant in a region or among a group of people. It determines how people behave and view others, and influences all their actions. An understanding of different business cultures and negotiating styles that shape from such cultural influences helps negotiators.
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Highly performance oriented cultures, such as those prevalent in North America and parts of Europe prefer a direct style of negotiation, or getting into the core issues upfront without beating around the bush. This is in stark contrast to other cultures, such as those in the Middle East and China that values relationships over performance. In such places, the negotiations start by exchanging pleasantries and discussing the weather or a myriad of other things before coming to the core issue.
Most Americans and many Europeans view business meetings as just that, and wish to rush to the process and get the contract and want an outcome such as a detailed contract that specifies terms and conditions in detail and covers all eventuality. Oriental cultures, however, believe in doing business with friends, and as such, try to strike up a relationship first. They prefer to strike the deal and draw up a contract with broad and general terms, and solve the nitty-gritty of the deal as and when it occurs using the relationship.
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People from performance oriented cultures usually remain open, which means they negotiate by making explicit their stand in unambiguous terms, placing the goals and bargaining points upfront. People imbibed in oriental culture keep their cards close to the chest, waiting for the other person to disclose their stance. The reasons for the same vary. One reason is the fear of offending the other party spoiling the chance of forming a relationship. Another reason is the presence of authoritarian and non-democratic regimes that have conditioned people not to speak their minds too loudly. A third reason could be historical. Sun Tzu's philosophy, for instance harps on knowing the enemy's objectives and strengths without revealing one’s own, in stark contrast to the Harvard Negotiation Project that advocates mutual share of information to enlarge the pie and promote efficiency.
Open cultures similarly emphasize direct and simple methods of communication that provides a clear and precise response whereas other cultures rely heavily on indirect and complex methods such as circumlocutions, figurative forms of speech, facial expressions, gestures and other body language to express opinions, especially unpleasant ones. For example, the indirect ways by which Japanese negotiators express disapproval often make foreign business executives believe that their proposals were still under consideration.
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Oriental cultures such as China and India remain sensitive toward rank and seniority, and this manifests in their negotiation style. People imbibed in such cultures do not give credence when negotiating with someone junior in ranks to them, and expect to strike the deal with equals. Such people may also value age and experience, and tend to accept the words of such people over “bashful youth." People in such cultures also remain group oriented, tending to prefer group opinions or make politically correct decisions by consensus with group members, rather than negotiate independently and/or assert individual preferences.
When negotiating with people who value rank and seniority, very often only the highest ranking person makes comments and everyone else remains moot unless given permission to speak up. The other party showing anger or impatience to the “top dog" is akin to humiliating them, and signals the end of negotiations. Most cultures that value rank and seniority also place high importance on connections, and dropping the right name or having someone make the right phone call beforehand help negotiations, and sometimes becomes a requirement to proceed.
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Culture strongly influences the personal style of negotiators, such as the way they talk, use titles, dress, and display emotions. For instance, Germans usually have a very formal style and avoid personal anecdotes, whereas Americans usually have an informal style, calling other negotiators on first name basis. Latin Americans and Spanish display high levels of emotionalism during negotiations, whereas the English, Germans, and Japanese rarely express their emotions. Such seemingly little actions nevertheless have a big say in outcome of the negotiation process. For instance, the Japanese consider calling people by their first names as an act of disrespect.
The personal style of the negotiator also influences the structure of negotiations. The French, and Indians, for instance prefer a top-down approach to negotiations, starting negotiations with an agreement on general principles, whereas the Americans and Japanese prefer a bottom-up approach, or try to seek agreement on specifics first.
People think, judge, behave, perceive, and reason differently primarily owing to cultural differences. Successful negotiations, especially in international businesses requires negotiators to understand different business cultures and negotiating styles that stem from such cultures, and adapt to the same.
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"Sino-American Business Negotiations: A Cross-cultural Perspective." http://www.ccpcc.com/jjxj/km1/020676.htm. Retrieved May 29, 2011.
Salacuse, Jeswald W. "The Top Ten Ways Culture Affects Negotiating Style." http://fletcher.tufts.edu/salacuse/topten.html. Retrieved May 29, 2011.
"Negotiating International Busines." http://www.globalnegotiationresources.com/cou/India.pdf. Retrieved May 29, 2011.