Cross-cultural negotiation

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The fine line between triumph and tragedy
Carina Solbach, Krauthammer Consultant Netherlands
Leading a negotiation in a different cultural setting is challenging and you should be aware of some attention points. Check out what we have prepared for you to develop the right negotiation approach when you go abroad.

 

Much has been written on negotiation. So why are we writing yet another article on this topic? Given our globalised world, knowing about general negotiation practices is no longer enough. Cultural habits, rituals and beliefs have added new flavours to the mix and can often become the proverbial hair in the soup: a tiny detail that ruins it all.

A Swedish entrepreneur, for example, can be stuck in red tape forever and run up against regulatory walls trying to set up business in Russia if she doesn’t understand and actively make use of the power of personal relationships to influence the situation.

So what do we need to consider when moving the negotiation abroad?

In addition to three basic principles* that apply in any cultural context, it is wise to ask yourself a series of questions before jumping into action. Reflecting on these points will make you more sensitive to finding the right negotiation strategy to reach your goal.

1. Knowledge or seniority?

The image of a "worthy negotiation partner" differs greatly. While some cultures place the most value on knowledge and subject matter expertise, independent of age, others are more impressed by seniority expressed in years of experience. Countries with a higher power distance (based on Hofstede’s cultural indicators, such as Hong Kong versus Australia or the Netherlands) may show more respect for grey hair and wrinkles. So if these features don’t belong to your repertoire yet, it may be more strategic to invite a colleague to join you.

2. Emotional or non-emotional communication?

Emotion versus reason and logic is a much known dilemma and an aspect that comes back in intercultural negotiation. Countries such as Israel or Italy base their arguments on emotion, trying to touch the hearts of their negotiation partner to stimulate personal identification: a tactic that is highly frowned upon in Japan. In other countries, rational thinking and logical arguments based on facts and figures are paramount. The devil is in the details. “I feel” versus “I think” can determine your verdict.

3. Decision by the group or decision by the individual?

Cultural preference for group versus individual decision-making greatly influences the way you present your arguments during a negotiation. When addressing issues in group decision-making cultures, such as in China, you have to make sure to highlight the benefits of certain offers to the company or the department as a whole. In the USA, on the other hand, it is more effective to point out individual advantages and progress. Additionally, this aspect affects the directness of communication. In many group-oriented cultures, such as in Korea, indirect questioning techniques are preferred - especially techniques used to deduce needs and preferences by offering different packaged solutions. In individual oriented cultures, this form of communication can come across as beating around the bush and might even provoke suspicion.

4. Business before personal versus personal before business?

The question is not only whether to eat and drink before discussing business, but also how impactful personal relationships are on business success. While some countries focus strictly on facts and figures, rules and regulations, others are simply interested in whether you know the right people. It is wise to regularly audit your “Guanxi”, as the Chinese call it, to see whether all threads of the spider web are still intact. Personal attention and tokens of appreciation (don’t get me wrong, this shouldn’t be interpreted as actual bribes or anything like that) are a strong glue.

5. Short-term or long-term oriented?

In more short-term oriented cultures, a win-lose mentality can drive the negotiation strategy, leading to a focus on quick wins and short-term rewards. Long-term oriented cultures on the other hand favour a win-win approach and are therefore more attracted to durable, relationship-building solutions that offer future gains. Knowing your negotiation partner’s approach can enable you to strategically position your offer.

6. Concrete details or abstract overarching concepts?

Are we talking about the general concept of a deal or about the nitty-gritty of the terms and conditions? Some countries, such as Germany for example, want to dive straight in to the details and discuss clauses and sub-clauses until every “i” is dotted and every “t” is crossed. Others, France for example, first want to define the abstract idea of the agreement before going into specifics. The question is therefore not necessarily if, but when the details will be tackled.

7. Clock time or event time?

The concept of time is a flexible one. In many Western cultures time is bound by seconds and minutes, whereas time can have a rather metaphorical meaning in Eastern cultures. Whether time is seen as clock time or event time, greatly impacts the length of the negotiation - the shorter the better versus allowing the time for rituals, in order to develop a deeper connection. Additionally, in certain cultures, for example in India or in China, time is seen as a negotiation tactic to create pressure and exhaust the negotiation partners. It might therefore be worth considering leaving your watch at home when you negotiate abroad.

There is only one thing left to say: Enjoy the soup!

*Three core ingredients, no matter the location of your negotiation:

1. Make the topic of cultural difference explicit by addressing it proactively. Show an interest and ask the
    host the typical do’s and don’ts. This gives the host the chance to express needs rather than forcing you
    to rely only on books.
2. Don’t take yourself too seriously and sprinkle the negotiation with a dose of humour. A twinkle in your eye
    can go a long way.
3. The power of silence. Shutting up, excuser le mot, and listening gives you the chance to observe and
    notice rituals, expressions, tactics and cultural specifics, allowing you choose your actions more
    consciously and carefully.

Sources:
Negotiation examples in business and negotiation in China: The Importance of Relationship Building, Pon Staff, March 14th

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