Negotiating Errors

By Terri Morrison
© Copyright 2004, All Rights Reserved

Sometimes, the results are simple miscommunications…easily remedied with time and discussions. But when the errors are more serious, the costs can escalate.

For example, in the United States, sales managers are always held to stringent deadlines for closing deals and hitting (unrealistic) quotas. There is tremendous pressure to place prospects in warm, medium and hot queues…and the hot queue is usually slated to close within weeks. However, negotiating large contracts in Asia can take longer than a U.S. president’s term in office. Why?

a)	Japanese is a difficult language, and it takes a long time to translate a proposal.
b)	Japan is a consensus-based culture, and there is always an extensive network of people who must be involved in a decision. .
c)	The Japanese legal system is complex, and contracts take an extremely long time to develop...

While A and C are somewhat plausible (all languages are difficult to a non-speaker, and legal systems are all convoluted), the answer is B. The Japanese consult their network for input, and must feel that this business decision will be beneficial to the entire group. Otherwise, they will be perfectly comfortable walking away from the table at any point in the process.

Obviously, there are many reasons why negotiations can go awry—and all of us have committed errors from time to time. To measure more of your talents at parley in different cultures, pick the ONE example out of the following four that would NOT be a rude move!

1. Part of the strategy for your sales presentation to a German buyer is to compare your technically advanced product to its strongest competitor. You explain the higher quality of your product in a precise, line-by-line, fact-based comparative analysis. You even unveil a complete advertising campaign based on these findings. You are proud of the immense amount of detail that has gone into this presentation, and wait with glee for the impressed murmurs of your German prospects.



2. You are visiting a potential client in Latin America when your company’s lawyer calls. He is supposed to be inking a final contract with a huge new client of yours in Rio de Janeiro. Something has gone wrong, and your corporate counsel is angrily saying that this trip was a big waste of his time, and is blaming you for not closing the deal before he flew down from headquarters.
   
   You immediately phone to your erstwhile Brazilian client, apologize for the confusion, and say you will be on the next plane to Rio.



3. 3) During final negotiations in Beijing, you discover that the Chinese are not comfortable with your proposed maintenance plan. You were under the impression that this was not an issue, and are perturbed that, at the 11th hour, they want to re-negotiate a substantial part of the contract. Your concern increases in proportion to the approach of your travel arrangements home. By the last day, you confront the lead Chinese contact in the hall outside of the conference room, and question their tactics in a gracious, yet firm manner.



4. 4) During the negotiation of a lucrative opportunity in the Middle East, one of the Saudi Arabian executives solicitously invites you to join him for a cup of coffee. Unfortunately, you are already late for another appointment elsewhere, so you graciously decline.

Answer: #2 is correct. In Brazil, as in the majority of the world, it is important that the key players in a sale remain involved throughout the process. If your company utilizes different individuals for opening, supporting and closing sales, this will present a serious problem in countries where the relationship between the client and the salesperson is paramount. The larger the deal, the more important your relationship becomes as well, because in Brazil, many executives believe in the power of the individual to change policy for their friends. Personal contacts are how things get done, and if you are absent from the final portion of the close—the Brazilians may balk at signing the contract without you.

Why are 1, 3 and 4 wrong? .

#1) It is against the law to disparage a competitor’s product in Germany. As David Ricks pointed out in his book "Blunders in International Business", Goodyear Tire made this mistake when it ran an ad which demonstrated a Goodyear tire cord breaking a steel chain (which, by the way, was a German-made steel chain!). The government halted the promotional campaign because the ad seemed to imply that the chain was inferior to the tire.

Additionally, never anticipate a compliment from a German. Business is business, and generally, they neither give, nor expect to receive plaudits for work.

#3) You and the Chinese prospect both lost face because of your one-on-one confrontational style. If you want to deliver bad news to a Chinese contact (or receive it), you should have used an intermediary.

#4) When a Saudi invites you for coffee, a meal, or to visit his home, accept, accept, accept! A thousand times “Yes!” Your refusal may have significantly lessened the value of that contract. Also, never schedule appointments back-to-back in the Middle East; you can probably only make one or two serious appointments a day.

Every culture has its negotiating rituals, and trying to control or change the process is futile. In the United States we are extremely direct, fast-paced and individualistic. (We make decisions and take actions on our own…often without even consulting all the parties involved.) Also, U.S. executives generally accept quantifiable data as evidence, but simultaneously tolerate a relatively high amount of risk. They make a “leap of faith” based on numbers. Other cultures accept feelings and faith as evidence—they like to feel connected to, and trust the people they will work with. Those personal ties, reputations and belief systems will mean more during negotiations in most of Latin America, Asia and Africa than all the numbers you can crunch on Wall Street.

Excerpted from OAG Frequent Flyer, November 19, 2003