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 that one negotiates with. 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.
- Identifying 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 Doing Business report published by the World Bank Group will also give you insight into country-specific procedures and protocol for new business ventures.
- Determining 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’s 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 several times 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, cogent information, and foster positive relations with patience and open communication.
- Evaluating the Economic Context:
When negotiating with an international company, it’s wise to research recent business deals made in their country that are comparable to what you’re 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 many of 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.
Sharon Schweitzer, J.D., is a cross-cultural trainer, modern manners expert, and the founder of Protocol & Etiquette Worldwide. In addition to her accreditation in intercultural management from the HOFSTEDE centre, she serves as a Chinese Ceremonial Dining Etiquette Specialist in the documentary series Confucius was a Foodie, on Nat Geo People. She is the resident etiquette expert on two popular lifestyle shows: ABC Tampa Bay’s Morning Blend and CBS Austin’s We Are Austin. She is regularly quoted by BBC Capital, Investor’s Business Daily, Fortune, and the National Business Journals. Her Amazon #1 Best Selling book in International Business, Access to Asia: Your Multicultural Business Guide, now in its third printing, was named to Kirkus Reviews’ Best Books of 2015. She’s a winner of the British Airways International Trade Award at the 2016 Greater Austin Business Awards.