Tips for successful international business negotiations

By Maxence Lefebvre

Preamble: this article points out the influence ofintercultural factors on the negotiation process in an internationalenvironment. This article is mostly based on the work of Brian J Hurn, teachingpostgraduate students InternationalCommunication and Cultural Awareness at the Universities of Westminster andSurrey, UK. 

Negotiating issimply the process you follow to get somebody else to do what you want him to do.A successful negotiation has to follow a certain process with seven mainstages: pre-negotiation, entry, establishing relationships, review ofstrategies, bargaining, agreement and post-agreement.
Thisnegotiation process will pretty much keep the same structure in both domesticand overseas environments, however many new factors will need to be taken intoconsideration when negotiating across borders, such as the difference oflanguage, cultural sensitivities, legal systems, tax regimes, labor laws andbusiness practices. Moreover government-led bureaucracy, restrictiveregulations and direct government interferences could further complicate thenegotiating environment, as well as the need to analyze political and economicinstability, currency fluctuations and ideological differences before startingany overseas negotiation. At the end of the day, even if the stages of thenegotiation process remain the same in theory, international businessnegotiations are crucially different from domestic negotiations and thenegotiator that engages in this should be aware of those differences andappropriately trained to ensure a successful negotiation.
This articlewill give you some general recommendations, tips and facts that you may want toknow before dealing with foreign businesses to expand your own company.

Communicate effectively with yourinternational negotiator
With theglobalization and the multiplication of business transactions across borders,English became the main international language used in negotiating acrosscultures. This is more precisely, what is described as “international English”or “off-shore English” that became the official business language: a form of“low-risk English” using words, phrases and grammatical structures which can beeasily understood, avoiding idioms, slang, jargon and complex structures. Whenstarting contact with a foreign negotiator who may not be a native speaker,make sure you adapt your speaking and writing style to your counterparty toavoid misunderstandings.
If yournegotiator cannot speak English, the use of an interpreter becomes essential.Before starting any direct conversation with the counterparty, the interpretershould always be briefed and provided with any notes you may have on theproposals you intend to make. During the negotiation discussion, you shouldexpress your main points in several different ways so that the meaning is clearand helpful for the interpreter. Moreover you should always look at thenegotiator while corresponding, not the interpreter, since it could beperceived as a lack of respect in some cultures.

Adapt your approach to your negotiator’s culture
The “gettingto know you” phase could be crucial in determining the success of a negotiation.The “shared experience” are a form of cultural shorthand and are extremelyhelpful in preliminary and informal discussions, as “ice-breakers”, coveringinterests, sport, art etc. In some cultures, building relationship and mutualtrust are initially more important than proceeding to detailed negotiations. Ifyour company is dealing with organizations from India, Middle East or Africa,showing interest and respect towards your counterpart’s family could be vitalfor successful relationship, since the family unit is highly valued in thoseregions. Such questions about  building afamily could be judged as private and not appropriate to the situation in someother cultures (e.g. France, Germany). In any case, those “small talks” shouldavoid contentious subjects such as political, cultural or religioussensitivities, when not sure whether they are appropriate or not.
The use ofhumor could also be used as an “ice-breaker”. Humor was described as “theshortest distance between two people” by the comedian Victor Borge. However, inan international context, humor could be something of a double-edged sword, asit does not always translate well across cultures and could causeembarrassment, offence or confusion through misunderstanding. While humor isoften used in British business presentations, Germans would judge it as a lackof seriousness.
Developinggood listening skills is really important to succeed in internationalnegotiations, because it enables you to pick up the various subtle cultural nuances.Silence is often used by the Japanese to mull over what has been said and thinkof the alternatives, but it could be mistaken by Westerners as showing a lackof understanding. Do not feel uncomfortable and jump in, or worse, makeconcessions, if you encounter this situation.
The concept of“face”, defined as the regard in which one is held by others, is of a vitalimportance in the Chinese, Thai and Japanese cultures. This could explain whyChinese business people use indirectness and prefer intermediaries fornegotiations, in order to save and give “face” because of the importance theyattach to the establishment and maintenance of long-term relationships. Keep inmind that Westerners separate business life from personal life, but thisdistinction is less significant for eastern cultures.

    Adopt the right negotiation practices
             The business etiquette differsgreatly across cultures, especially the exchange of business cards. In theJapanese culture, the ‘meishi’ is treated with great respect because Japaneseconsider the business card as the manifestation of the person’s persona. Theywill give you their business cards directly after the initial formalintroduction: make sure you analyze the cards before carefully placing them inthe front pocket of your wallet or on your desk in front of you. Concerningyour own card, the best would be to print one side in your own language and theother in the other culture’s language. When making business in Hong Kong youwill meet many Westerners with business cards on which they even have theirnames translated into Chinese characters. Another aspect of business etiquettewhich differs across cultures is the level of familiarity in the approach. In Germany,The Netherlands and Italy, people address each other by their academic titles,calling Doctors people with doctorates, as opposed as the more familiarapproach used by Americans and increasingly by the British. Greetings can alsobe more formal for some cultures, including Germany and Russia. When dealingwith women from other cultures, always wait for them to initiate the handshake.
             Socializing plays an important rolein successfully negotiating across borders. Due regard to seniority isessential with strict attention to seating at formal dinners, order ofspeeches, and giving and receiving gifts. On this last aspect, you should knowthat exchanging gifts for business purposes is very important in some cultures,sometimes it could even be an offense not to offer gifts, but it may be viewedas bribes in Australia and other western cultures. Try to offer gifts thatsymbolize the status of your company and the importance of an impending deal,such as an item characteristic of your local area, or one that displays yourcompany logo.
             The negotiating environment shouldalso be considered carefully to maximize your chance to make a successfulbusiness deal. Some cultures, such as Latin America, Japan and particularlyFrance, business people tend to see negotiations as ‘social ceremonies’ asopposed to the British, Americans and Scandinavians who put less emphasize onthe social aspects. When dealing with French negotiators, make sure you invitethem to a restaurant during a lunch break, rather than offering them sandwichesin the Board Room.

    Understand your counterpart’s negotiationprocess
                Inan international context, your negotiator will probably not use the samenegotiation steps and methodology than the ones you are used to dealing with inthe domestic market. Agreeing on an agenda is probably the best way to clarifythe stages of the negotiations and determine what has been agreed on at acertain stage of the negotiation process. This agenda takes even more importancewhen dealing with a foreign organizations, and you should try to follow it asmuch as possible, since surprises and hidden items could affect long-term trustin some cultures.
                Thepace of negotiations will differ a lot from culture to culture. In India and theMiddle East, the progress will be initially slow until the negotiator succeedsat establishing trust. In contrast, indirectness is disliked in the USA, withan emphasis made on “getting the point”. The French, tend to view negotiationsmore as an intellectual exercise in logic, defending or disproving hypothesis.Arabs look upon deadline as merely general guidelines and see the possibilityof amending these in the light of circumstances. The German, British andJapanese like deadlines and the agenda to be specifically stated and agreed uponin the contract and would expect negotiators to honor these.
                Anotheraspect that is influenced by culture is the attitude to time. The existence ofdifferent attitudes to time could cause concern. There are two types of cultureconcerning time: the monochronic and the polychronic cultures. Negotiators fromNorth America, Germany, Scandinavia, and Japan, are part of monochroniccultures, so they will like strict time-keeping, punctuality and keepingschedules. On the other hand, negotiators from Latin America, Southern Europe,Africa and Arabic countries, are part of a polychronic cultures: they mayarrive late, deal with several issues and activities at the same time, andengage in multiple conversations. This behavior could cause frustration, beperceived as irritating and unhelpful for people from monochronic cultures. Ifyou find yourself uncomfortable dealing with people with such behavior, youwill then need a high level of patience if you want to ensure the success ofyour business deal.
                Doyou think your efforts made during the whole negotiation will be rewarded? Firstyou should be aware of your counterpart’s ability to make decision by himself.Indeed, decision making in negotiations is often influenced by culturalcharacteristics and so the amount of authority given to the negotiator willdiffer from culture to culture. In Latin America and Greece, decisions will bemade by the negotiating team leader. In Anglo cultures, negotiators often havehigh power and can make decisions by themselves concerning their businessdeals. In contrast, Japanese negotiators do not have much decision power. Theyhave to report back to higher authority. This explains why Japanese will adopta step-by-step approach to decision making with emphasize on what is agreed.This aspect of the Japanese culture causes frustration for western companiesthat are used to face-to-face negotiations with those who are empowered to makefinal decisions.               

                Inpractice, many negotiations oftenconclude in some form of compromise, either through mutual agreement or by someform of external mediation. Here are some examples of things that will maximizeyour chances to successfully negotiate: study and review the cultural sensitivitiesand characteristics; use skilled and experienced translators if necessary; adaptyour negotiating style and pace accordingly; spend time building trust byestablishing personal relationships at an early stage; always show patience;and be prepared for negotiations to continue after an apparent agreement.

Maxence Lefebvre,Australian Institute of Export

Brian J Hurn (2007), The Influence of Culture on InternationalBusiness Negotiations, Industrial and Commercial Training Vol. 39 No. 7.
Cohen, R. (1999), Negotiating across Cultures: InternationalCommunication in the Independent World, US Institute of Peace Press,Washington, DC.
Guy, V. andMattock, J. (1991), The New InternationalManager – An Action Guide to Cross –cultural Business, Kogan Page, London.