The following question was posed to our Negotiation Briefings newsletter editorial board and Program on Negotiation faculty member Jeswald Salacuse offers his insights. Question: Before taking my new job, I had 10 years of successful experience negotiating with suppliers all over the United States. The company I just joined sources materials and components from almost everywhere but the United States. What advice can you give me on negotiating with foreign suppliers?
One particular obstacle that almost always complicates international negotiations is the cultural differences between the two sides. Culture consists of the socially transmitted behavior patterns, attitudes, norms, and values of a given community, whether a nation, an ethnic group, or even an organization. Differences in culture complicate business negotiations and relationships in many ways.
First , they can create communication problems. In fact, your supplier, coming from a culture that avoids confrontation, may have been giving a flat no. While many Americans may view the hiring of relatives as dubious nepotism, Lebanese counterparts may consider the practice to be necessary to securing trustworthy, loyal, and long-term employees.
Third , cultural considerations influence the form and substance of the deal. Later, under pressure from its Thai franchisee, it permitted the sale of noodles, a dish traditionally served on auspicious occasions.
Sales increased as a result of the menu changes. With a little more thought, the U. The need for consensus among players on the other side will affect your negotiating strategy in other ways as well. First, since consensus cultures often focus on relationships rather than deals, the parties involved will often want to take substantial amounts of time to learn about you and forge a deeper relationship before talking about the deal.
In consensus cultures, relationship building is critical not only to reaching an agreement but also to making it work. Second, since consensus processes often go hand-in-hand with near-inexhaustible demands for information, you should be prepared to provide it—many different forms, in great detail, and repeatedly. Third, to the extent that you can pinpoint the source of delay—usually the doubts of specific people or units—you can and should design your approach to help your proponents on the other side convert the doubters, giving them the data they need and supplying them with arguments they can use internally to address specific concerns.
Since consensus processes often go hand-in-hand with near-inexhaustible demands for information, you should be prepared to provide it. Fourth, you may need to shift your focus away from the bargaining table and instead interact extensively and informally with the other side as it tries to reach a position internally.
With some bitterness, U. If you wait to do this until you are at the bargaining table, you will have to pry open their now-fixed position, reached before the players officially sit down to negotiate. In Japan, the negotiating table is not a place for changing minds. Persuasive appeals are not appropriate or effectual. Caught in the middle, you may feel as though your choices are limited: You can walk away and undermine your effectiveness and waste resources , or you can make major concessions and dilute the value of the deal.
In general, if you think your side cannot handle a lengthy negotiation, you may be better off avoiding the negotiation altogether.
As frustrating as the need for consensus may be to those from fast-moving cultures, there can be offsetting advantages. A slow and painstaking negotiation process may lead to a decision that has more staying power.
People may also be more attached to the deal after investing so much in it. In one case, a U. During this excruciatingly detailed process, the negotiations were halted several times due to what the Japanese team described as a break-down in its consensus process. Each time, however, the Japanese company resumed negotiations with a stronger consensus on the central role of the deal to its long-term global strategy.
Underlying View of the Process. People may view the negotiation process as cooperative win-win or competitive win-lose. Making assumptions about which view the other side will take can be misleading and even dangerous. Approach to Building Agreement. Their Chinese counterparts often focus first on what seems to many Americans to be a very general historical and national frame for discussion. Then, as many French negotiators do, they seek agreement on general principles, later working through the details.
This tendency also manifests itself in thought processes: Many Chinese tend to reason about the whole while Westerners often proceed by breaking the whole into parts and reasoning incrementally. Form of Agreement. What level of detail is required? In many parts of East Asia, negotiators are content with a fairly broad agreement that focuses on general principles rather than detailed rules.
By contrast, North American and European executives often insist on a detailed contract in which as many contingencies as possible are foreseen.
Implementation of Agreement. Is adherence to an agreement expected or contingent? In many other cultures, an agreement is merely a starting point in what is expected to be an evolving relationship; renegotiation may occur as warranted under the assumption that all contingencies cannot possibly be foreseen.
The precise terms are expected to unfold as the process does. Moreover, while a U. When a European firm unexpectedly made a tender offer for the entire U. After years of negotiations and mentally integrating the U. In short, you should not be blindsided by the need for consensus.
In contrast, the governments of many developing and former communist countries closely supervise imports and joint ventures, and frequently an agency of the government has a monopoly in dealing with foreign organizations. In addition, political considerations, such as the effect of the negotiation on the government treasury and the general economy of the country, may influence the negotiations more heavily than what businesses in developed countries would consider legitimate business reasons.
Toggle navigation. Environmental Context Salacuse identified six factors in the environmental context that make international negotiations more challenging than domestic negotiations: political and legal pluralism, international economics, foreign governments and bureaucracies, instability, ideology, and culture.
Political and Legal Pluralism Firms conducting business in different countries are working with different legal and political systems. International Economics The exchange value of international currencies naturally fluctuates, and this factor must be considered when negotiating in different countries.
Foreign Governments and Bureaucracies Countries differ in the extent to which the government regulates industries and organizations. With the knowledge of your core work values and the perception of others, you can gain insights about how you can adapt to dealing with people in different cultures and where your strengths and weaknesses match with theirs, Niblett said during his cross-cultural management lecture.
Someone from an Anglo-Saxon, individualist culture such as the U. Some traits generally seen in a Western culture such as the United States include valuing material rewards, individual achievement, need for change, informality, fast-paced decisions and the need for action, Niblett said.
People stand on their own two feet. In China, there is a tendency for interdependence, respect for social hierarchy, humility, obedience, and duty for the group objective, he said. Every relationship should be a two-way street. Comparing the two, some of the aspects least valued in Western cultures — analyzer, maintainer or moderator — are among the highest-valued aspects in an Eastern culture, Niblett said.
The cultural styles of Spony, as well as the insights gained from a personal SPM analysis, can add another layer of perception to various cultures and how members may react during negotiations. Fill out the form to get program details and access to valuable resources. Fill out the form below to get started and take the next step toward your educational goals. I understand calls and texts may be directed to the number I provide using automatic dialing technology.
I understand that this consent is not required to purchase goods or services. Power Distance In some countries, the levels of power are distinct and understood internally but may not be apparent to outsiders. Uncertainty Avoidance Uncertainty avoidance refers to the extent to which someone is comfortable with unstructured or uncertain situations.
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