Negotiating in Different Cultures
By Terri Morrison and Wayne A. Conaway
© Copyright 2004, All Rights Reserved
Few of us negotiate global deals from the comfort of home. Part of the lure of international business is the extended travel to exotic locals and the exposure to varied customs and foods. But when you are far from the home-field support system, how do you keep that advantage?
Tip #1: Never underestimate your prospect
Judging the negotiating skills of a Japanese executive based upon his or her initial handshake. A "gentle" handshake does not belie the strength of the Japanese negotiating style. The Japanese thoroughly research their prospects and clients, and your Japanese negotiator probably knows everything about you, your product, price, and flight arrangements before you ever enter the room.
Similarly, just because you have worked with a German firm's representative in the US does not mean you have a sound knowledge of the skills of negotiators in Munich. When German corporations conduct business on foreign soil, they often send engineers or project managers to represent them. These executives are usually anxious to get to work and may be too impatient to be good negotiators. However, when you travel to Germany, expect to sit down with their A-list negotiators. On their home soil, German dealmakers are very tough. They play to win and yield nothing.
Tip #2: Don't expect decisions to be made based upon your priorities
Foreign executives often have different criterion. The typical US motivating factors price and quality are not universal considerations in decision-making. In many countries, personal relationships are more important. For example, when the Simmons company expanded into the Japanese market, they were astonished that customers sometimes chose to purchase inferior beds at higher prices. In Japan, the decision to buy was sometimes made on the basis of friendship or favors owed to the distributor.
Elsewhere, deciding factors could be anything from family honor to religion to nationalism. And in some cases, major deals (and prices) have been fixed long before you ever attempted to penetrate the market. You may never know what all the reasons for winning or losing a contract may be, but if you research the culture, and utilize a personal network of players in-country, you can definitely skip some of the more mundane mistakes.
Tip #3: Be prepared to be tested by your foreign counterparts
When French firms have acquired foreign companies, they sometimes mandate a "French only" policy at the global meetings. That's difficult enough if you are part of the team, but even more so if you are selling and negotiating in a language you don't understand.
When you are dependent upon translators and interpreters to convey subtle nuances as well as critical facts, be certain that you have utter confidence in the translator (and always have a backup linguist). Be clear, concise, and never expect a highly skilled interpreter to work more than a 3 or 4 hour span.
Expect to face challenges at the dinner table as well as at the conference table. In Japan and South Korea, visiting executives are usually invited to participate in after-hours drinking bouts. Even when the focus is on food rather than alcohol, the challenge may be daunting. JoAnne Stephens, the Director of International Sales for Sklar Medical Instruments, once faced a gustatory test in Taiwan. "A three-hour private luncheon with business partners included baby pigs' head and monkey brains. In order to save face I had to eat these delicacies, which I washed down with a tremendous amount of water. After frequent trips to the rest room, I finally closed the deal at the end of the meal."
Tip #4: Prepare yourself for unexpected negotiation techniques
Michael Landau, a textile manufacturer in the Philadelphia area, relates this tale of intimidation during a negotiation in the United Arab Emirates. "One of our salesmen was negotiating a contract with a government official to buy textiles for military uniforms. At one point, the official who was also a military officer in full uniform laughingly handcuffed my salesman. He told the salesman that he wouldn't be released until he agreed to the officer's conditions. The officer soon uncuffed my salesman and passed the entire incident off as a joke, but it left the salesman pretty nervous. It was a vivid reminder that he was negotiating far from home, in a place where he had very few civil rights."
Ultimately, travel is an adventure, and business travel is no exception. International business requires flexibility and an appreciation of diverse views. As Mahatma Ghandi said, "Civilization is the encouragement of differences."
Excerpted from OAG Frequent Flyer, June 1, 2001