By Sharon Schweitzer
When looking to expand abroad or partner with a multinational firm, even the most successful business professionals get blindsided by unexpected cross-cultural differences. The reality is that certain business practices, including regulation, contract mediation, and decision making, vary widely according to the culture with which one negotiates. Before you dive into trying to make a deal, familiarize yourself with these three crucial aspects of intercultural negotiation for a more successful business endeavor.
- Identify Key Interests:
Misconceptions may lead you to believe that negotiations take place exclusively between business professionals from each company. However, international business is often a multiplayer game involving anti-monopoly agencies, political parties, and local governments. These parties comprise a diverse set of interests that one must take into consideration when setting up the terms of the contract. Should a deal be developed between the two companies with other constituents brought on board afterwards, or should you build accommodations of these other players into the negotiation? In other words, should you focus primarily on the business aspect of the negotiation, or weigh the interests of all parties equally? The answer to this question may require the acumen of local professionals who are familiar with the political and economic nuances of regional business deals. Reading over the host country’s Economist’s EIU Report or Country, industry, and risk analysis from The Economist Intelligence Unit (eiu.com) will provide invaluable insight into the country.
- Determine the Decision Maker:
Depending on the host country’s level of collectivism, decisions may be made by a single individual or by group consensus. When a boss-centered culture encounters a lengthy consensus process, it can cause frustration and misunderstanding between both parties. It is important to remember that consensus-based cultures often emphasize relationships, so taking the time to build mutual trust and confidence is well worth the effort. Be ready to present your proposal more than once and back up your points with concrete examples and data until everyone is on board. Remember that international negotiations are a marathon, not a sprint.
Although a long consensus process may be tedious and time-consuming, the long-term payoff of gaining everyone’s approval includes a lasting business relationship and a faster implementation of the decision. Facilitate the other party’s understanding with clear information, and foster positive relations with patience and open communication.
- Evaluate the Economic Context:
When negotiating with an international company, it is wise to research recent business deals made in their country that are comparable to what you are proposing. Offering examples and points of reference will help you bridge any cross-cultural communication gaps and will demonstrate your knowledgeability of the region’s economics. As Dr. James Sebenius from the Harvard Business School reminds us, “gaining this broader understanding as well as ordinary legal and regulatory advice by locally knowledgeable counsel are clearly critical. By thinking broadly about comparable deals, you may better understand your host’s expectations, hopes, and concerns.” This will prepare you to make cogent, culturally adapted arguments in favor of your strategy.
International business negotiations can come with unforeseen roadblocks that may impose delay or disagreement but taking the time to research your host’s country and prepare your points accordingly can help you avoid these challenges. Be ready to adapt your negotiation strategy to a new set of rules and strive to build cross-cultural bridges that last at least as long as the contract.