CROSS-CULTURAL NEGOTIATIONS

A very common challenge that we face is how to avoid projecting our own values, fears and concerns onto others, such as our clients or negotiating counterparts. A lawyer for example might go to battle on behalf of a client for the maximum restitution that he perceives possible when the client really wants to settle amicably and move on. A doctor might prescribe an entire arsenal of pain medication when the patient might prefer to live with some moderate pain rather than to intoxicate himself with all those chemicals. A financial advi­sor with a high risk tolerance may talk his client into a high risk/high return investment when his client is far more risk averse. 

This becomes a problem when we negotiate across borders and attempt to impose our own values, beliefs and systems onto the other side. What then might be a more effective way to successfully negotiate with those from different cultures to our own?

 

In helping our corporate clients who regularly negotiate across cultures, we provide them with an operational framework with which to manage these significant cultural differences. In developing this framework, we distilled these differences into four categories: communication; value priorities; decision-making processes; and managing and management. 

Unless these four areas are acknowledged and addressed in cross cultural negotiations, relationships will be strained, progress diminished, trust eroded and sub-optimal outcomes, if any, will result.

Different Communication Styles

 

Different cultures communicate in different ways which can affect not only the negotiation itself, but also the continuing relationship, post negotiation. These differences create a greater risk of misunderstandings due to diverse communication behavior, patterns and greater ambiguity in terminology and phrases.

 

In establishing a strong working relationship with your cross-cultural counterparts, it is useful to devote some discussion to communication. Good questions to generate dialogue around communication differences might be: 

Addressing such issues up front will help towards learning a good deal about your counterpart's communication style and allow you to design a process that is aligned with their communication preferences.

Different Value Priorities

 

In our work with other nationalities and cultures what always strikes us is how different cultures attach value to different things. For example in the US world of business, profitability is of high value, whereas in many Arab cultures loyalty is of greater value. In Europe, leisure and living is of higher value than accumulation of wealth and in many Asian cultures, honor is paramount.

 

In negotiating across cultures it is important to understand these value priority differences, to be sensitive to these differences and  to maintain an open mind without assuming that they value things the same as we do.

Listen carefully and ask good questions to try to understand what is really important to them so that you can design responsive proposals. A proposal to someone from Asia which would perhaps violate his honor, or to a European that would require him to give up his holiday in the South of France, or to someone from an Arab country that would force him to fire his cousin would not be received very well.

Different Decision Making Approaches

 

Different cultures have different approaches to decision making, often vastly different from one another. Some like to make decisions by committee and consensus. Others make them unilaterally. There are those that do extensive research and information gathering before making decisions, and then there are those who make decisions quickly and intuitively, almost on a hunch. As negotiators don't assume that your cross-cultural partners make decisions in the same way as you do. Rather seek to understand how they typically make decisions so that you are not surprised later. 

Questions and requests that will help to uncover their decision-making processes are:

Once you understand their decision-making approach, you can tailor the negotiation process and the agreement that you reach, to conform to their decision making norms, thereby increasing the chances of success both in the negotiation and in the business relationship moving forward. 

Different Management Models

 

Different cultures adopt very different models of management. These differences become crucially important in negotiating joint ventures, mergers and acquisitions.

Some cultures make decisions by consensus, others by authority and command, some by committee and others by democracy.  In negotiating ongoing relationships with foreign entities, it is useful to generate some discussion around management issues and approaches.

 

As a point of departure for this discussion ask: 

These four components will provide a useful framework to manage cross-cultural differences in your negotiations. With this understanding you will be able to connect with your counterparts on a far deeper level, and they with you as you negotiate new and rewarding business relationships across borders.