Negotiating across Cultures

“In all negotiations of difficulty, a man may not look to sow and reap at once; but must prepare business, and so ripen it by degrees” – Francis Bacon (1561-1626) ‘Of Negotiating’

Negotiation is probably as old as mankind itself and was born out of Homo Sapiens’ early struggles for survival and dominance.

During the last century or so, negotiation has become a science, dominated by the Americans. But anyone who has mediated at, for instance, a Japanese-US joint venture knows that the moment intercultural factors enter the equation, the landscape can change utterly.

It has always been advisable to understand the cultural factors in international negotiations. The first principles and values of the different parties can diverge widely, colouring the entire process.  But in the current climate appreciating cultural bias is essential. Three key reasons are:

• In times of financial crisis, people are under psychological stress and there is a tendency to assert our cultural values more powerfully when under pressure.
• Global markets and sources of labour are shifting to the East and South, forcing Westerners into understanding different negotiation mind-sets.
• Relationship skills – including negotiation – are overtaking linear task-oriented skills (like production, logistics and IT) as the main driver of competitive edge.

In international negotiation, cultural preparation to understand different worlds is central to successful strategy and tactics.

Is your counterpart persuaded by logic or force of personality? Is price the key issue, or is there a broader more long-term view? Are they more likely to paint a rosy picture of the deal, and expect you to do so, or do they prefer to err on the side of caution, even pessimism? What is their reaction to concessions? How do they see you, and how do your assumptions colour your view of them? What is their notion of truth? Of ethics? And, most important of all, what builds trust in their eyes – the glue without which no negotiation is truly going to succeed?

It is dangerous to rely on our intuitions. We feel that our unwritten behavioural codes for persuasion and negotiation are universal and innate. In fact, they are largely acquired and culturally-bound.

But where to begin? There are over 200 national cultures world-wide, and many other ‘cultural layers’, such as region, generation, gender, class, education, profession – in fact all the norms that we have learned through being members of a particular group.

One theoretical model which may be useful for analysing broad cultural differences in approach is set out by Richard D. Lewis in his book When Cultures Collide. He divides cultures into three main categories as follows. Many cultures are a mix, but tend to dominate in one or two categories:

The relative positions of cultures can be roughly arranged in a triangle, as a guide to which negotiation approaches may work best (click on the image to see a larger version):

For successful cross-cultural negotiation it helps to have a logical mental process encompassing:

1. A clear analytical model for interpreting cultural behaviour and applying that model to manage cross-cultural interaction.
2. A sharpened understanding of your own personal cultural profile, and how that fits into the global context of the triangle, in areas such as attitudes to truth, risk, time, power, etc.
3. Adaptation of personal communication style to different cultures’ expectations in negotiation – e.g. in the use of logic, emotion, initiation versus reaction, simplicity versus complexity, optimism to create a positive climate or a frank investigation of problems at the outset.
4. An understanding of how trust is seen in different cultures, and using this as a means of building trust more effectively in negotiation.
5. Building time in your preparation to synthesise these elements into your overall strategy and tactics.

Over time, one can refine one’s approach to create check-lists for distinctive national negotiating characteristics. A list about the French – from an Anglo-Saxon perspective – might be:

• Be prepared for more formality than you are used to, seen in hierarchical seating and the use of surnames and formal introductions.
• Understand that logic and precision dominate and they will not accept arguments that are based on compromise rather than logic. At the recent G20 negotiations, President Sarkozy remarked “I prefer a clash to a flabby consensus.”
• Expect a longer, more roundabout and oratorical discourse than at your domestic negotiations.
• Remember that the most important demands may only appear at a late stage in the negotiations.
• Understand that they often need to receive direction from their superiors who are not present.
• Personal views often influence dealings on behalf of their organisation. Building a relationship may be crucial.
• They will not be flexible simply to get agreement.

Francis Bacon’s words on negotiating apply more than ever today. But in a global world, we ignore cultural preparation at our peril.

For more information about how we can help you, please email us at negotiating@rlcglobal.com

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