Cross-Cultural negotiations: avoiding the pitfalls

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When entering into negotiations, we should always take into account cultural factors such as the educational or religious background of the person sitting across the table, but many people both underestimate and overestimate the cross-cultural aspects.

People tend to only look at national culture when they go into international negotiations but there is also educational culture, race culture, gender culture, a religious culture. All of these also impact the way people behave and they are all ‘cross cultural’, which means that we’re underestimating the role of culture because we are only looking at the national one; but as negotiators, we need to try to understand all the others.

This is because these cultural factors will help us understand how the other person thinks and communicates, and therefore we’ll be able to negotiate and persuade that person better.

On the other hand, if the person across the table comes from a similar background, we can also fall into the trap of making incorrect assumptions. Why? Because with that second person, we might feel we are so alike, that we make so many assumptions that we should know and understand (each) other that we are going to run of the risk of over-estimating that proximity.

When negotiating with “someone who is so different from us, we are going to be so extra careful through the negotiations … that we would actually run less of that risk.”

We should regard every negotiation as a ‘cross-cultural exercise, ’ adding that communication – the process in which people deal with each other – is a very important dimension in which rituals have a major impact.

In Japan, you don’t say no directly, you have to find a more indirect way to let the other person know and understand that you don’t want to do something.

Training or coaching can help negotiators avoid some of the pitfalls and understand what normally goes on, especially someone who has bi-national experience – someone who has lived in the country that you’re going to visit, so they can do the translation as accurately as possible.

In terms of tactics, we need a strategy of exploration, preparation and adjustment. Start with the assumption maybe, of at the very ‘get-go’, of zero: I don’t know. And why does that help me? That helps to approach you from learning prospective. Start to try to learn as fast as you can.

That said, it can be wrong to assume the person across the table has to be either friend or foe. The individual in front of you might be neither, or might be both, depending on how you approach them. If I already approach them as foe, they will reciprocate, if I approach them as friend, they might reciprocate as well.

So you need to really understand that one person there. You have to figure out how much you need to adjust or adapt to the person across the negotiating table. In terms of negotiations, there are only two cultures: the competitive culture and a collaborative culture, friend or foe in a way.

We try to build a system that works for both of us. That might take time, but if you are talking about a long-term relationship, or a big value-creation exercise, or something that just matters a lot, then that’s the right way to do it. It might be a little harder, it might take a little bit more time, but you run much less risks and you are much more certain to be successful [45].

Phases of Negotiation

In order to reach agreement, all negotiations go through 6 phases. In each phase, you will apply different skills and use different aspects of language.

ü Preparation

ü Establishing rapport

ü Discussion: starting the negotiation

ü Proposals

ü Bargaining

ü Reaching settlement

1. Preparation How should you prepare? Start by considering:

— The issues involved

— Your interests

— Your objectives

— The other party’s interests

You should try to learn as much as possible about the other party.

— Who will you be negotiating with?

— What type of people are they?

— What will the other party want to achieve from the negotiation?

Find out as much as possible about:

— Their company

— Their department

— Their cultural background

— Their country

— Something about the personal characteristics of the individuals in their negotiating team

Think about what the other party will want to achieve from the negotiation. You should try to ‘put yourself in their shoes’.

2. Establishing rapport It is usual in most cultures to exchange ‘small talk’ with the other party before getting down to the negotiation In some cultures it is essential to spend quite a lot of time establishing rapport.

3. Discussion: starting the negotiation During this phase of the negotiation, you will need to do the following things:

— State the purpose of the meeting.

— Agree an agenda for the meeting.

— Explain your interests and what you hope to get from the meeting.

— Check that you understand correctly what the other party says to you. If you do not understand ask for clarification.

4. Proposals Now you should have some idea of the obstacles to a solution.

In the proposal phase of the negotiation, you should move on to finding ways to overcome the obstacles.

5. Bargaining In the Bargaining phase of a negotiation, each party starts to trade. When you bargain in English, two approaches that you might find useful are:

— Linking offers to conditions If you order more than two thousand units, then we will give you a twenty per cent discount

— Asking hypothetical questions What if I were to offer you more money to finish the project quickly; What would you say if I were to invest a million dollars in the project?

6. Reaching settlement Agreement should not be reached until:

· Both parties think that they have obtained as many concessions from the other party that they can reasonably expect to win.

· Both parties are satisfied with the terms and conditions on offer.

The negotiating parties set the climate for the whole negotiation; it is important to keep the conversation moving; questions are asked and answered; comments are made; each side shows an interest in what the other side has to say. The parties state their objectives clearly and agree on them with the other side. Then the negotiating parties offer a short summary of the company’s history and activities, and also exchange statements of each side’s interests [20].

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