Negotiating in a Multicultural Business Environment
As business becomes increasingly global and large numbers of international mergers and acquisitions continue to take place, you may soon find yourself having to negotiate with people from cultures very different from your own. Going abroad in search of new customers or business partners is the obvious example, but you may also have to receive potential clients or suppliers from overseas, and, if you work in a company that is multinational, you may even be involved in cross-cultural negotiations within your own company.
Remember that it is up to you to make the effort to adapt; not attempting to understand and take into account the other party's cultural background may be felt as an insult. On the other hand, most people will notice that you have made the effort and will give you a great deal of credit for trying.
The very best way to prepare yourself is to spend time living in the other culture, or to find a reliable local mentor or partner who thoroughly understands the culture. Clearly, these are not always options open to you, but careful planning and attention will pay dividends.
- Do not be in a hurry. Build in plenty of time to deal with the unexpected, to recover from travel, get used to the climate, and so on.
- Decide under whose law contracts will be applied (preferably your own). If you have to accept the other party's law, be certain you know all the implications.
- Be sure that technical, professional, safety, and environmental standards meet the other party's national standards, and are acceptable to your own company.
- Make sure you have established a good line of communication with your home base.
- Do not adopt the other culture's style. Be aware of it, but retain your own (cultural) style and play to your strengths.
Finding out as much as you can about the social conventions of a country or region you travel to on business is invaluable.
You will easily spot the obvious differences in style, but it is the more subtle distinctions that usually cause problems. For example, unintended rudeness or failure to observe little points of etiquette can quickly make a negotiation competitive. These subtleties usually occur in a small number of business and social situations, so learn as much as you can beforehand and observe carefully what others are doing around you while you are in the country.
Watch to see:
- who introduces whom;
- whether gestures such as bowing are appropriate;
- whether you are expected to shake hands, and if so, how;
- whether women shake hands;
- whether there are set greetings and responses.
As a general rule, hold back if you are unsure how to proceed. Let your hosts guide you and avoid any physical contact until you know it is acceptable. If you too enthusiastically adopt local customs, however, you may be regarded suspiciously. People may feel that you are mimicking them, rather than attempting to behave appropriately by matching your approach to theirs.
The non-verbal clues we give to our colleagues or friends when we communicate with them do not always translate the same way in other countries. While a smile can rarely go wrong, keep in mind that in some cultures:
- the "ok" sign (thumb and forefinger closed together to make a circle) is offensive;
- the "thumbs up" sign is also offensive.
- a nod of the head means "no" and a shake of the head means "yes."
- standing with your hands on your hips (as many people do in repose) means that you are angry.
- people are not offended by a lack of personal space. For example, in some cultures people stand right up close to your face while they talk to you. This can be disconcerting if you do not expect it.
- people greet each other with a kiss on both cheeks rather than a handshake.
- people value silence more than others do. In the West, we often feel the need to fill gaps in a conversation with chit-chat, whereas in Japan, for example, silence is important and designates "thinking time." Saying too much during a negotiation is a bad move. Say only what you really need to.
- people feel making eye contact is insulting. This is particularly the case among some Latin American and African countries.
- people take a great deal of time to get to the point. In some countries, there may be a long exposition to the negotiation that, if you are in a rush, may drive you mad. Be patient, however, and adjust to the slower pace.
- gum chewing or standing with your hands in your pockets during conversations offend people.
- people are much more inclined to touch each other while talking than some of us might be used to.
- people will not sit with their legs crossed (as many people do when they are at ease), as this may mean that the sole of their shoe is pointing at someone. This is considered extremely rude and should be avoided.
In some cultures gifts tend to be seen as a bribe, in others, as an embarrassment, and in still others, as proper etiquette. Therefore, find out:
- the attitude toward gifts—are they accepted or expected?
- the type of gift that is appropriate, especially a gift for a host or hostess if invited to someone's home;
- customs for receiving gifts yourself.
This is an area in which no one will notice if you get it right, but everyone will notice if you get it wrong. So do your homework to avoid being noticed!
Observe local customs about timing of meetings, particularly:
- the rules about appointments. Do you turn up on time (Europe); before time (China); or a little after time (Africa)?
- how time is viewed—rigidly or flexibly? Does a half-hour appointment mean exactly 30 minutes, or anything up to an hour?
- how your host indicates that your time is up. How and when can you or should you politely take your leave?
In many cultures, meals with others have culturally sensitive symbolism and rituals. Some may be based on religion, some on historical tradition. If you are invited to a meal, ask a reliable source what the etiquette is, particularly:
- what form the meal will take, whether it is formal or informal;
- customs such as washing, which hand to use when eating, formal ceremonies, if prayers precede meals, and so on;
- what people usually drink with their food, for example, whether alcohol is permissible or not;
- whether it is polite to eat/drink everything or polite to leave something on your plate;
- whether business is discussed over meals;
- any dress conventions.
Some cultures have embraced the role of women in business more than others and may have very strict conventions governing gender relationships. You need to know:
- how women's role is defined in the country you are visiting. Do not comment on the role of women in society, whatever your opinion may be.
- the roles women play in business.
- any "rules" covering relationships between men and women at work and socially.
What people in one culture find humorous, those in another might not. Even if you are attempting to break the ice, avoid making jokes until you are certain you understand the other party's jokes. Be aware that irony and sarcasm can be lost on people who do not share your first language, so it is best not to use them.
If you feel you have made a gaffe, it is best to just move on and pick up the thread of your earlier conversation or start a new one, rather than try to rescue the situation with another joke.
Although there is an increasingly a common core to the way different cultures do business internationally, certain important conventions and habits that distinguish one culture's way of doing business from another still exist. If you are opening new markets, you must understand these distinctions. Get help or advice if you need it; guesswork is not recommended.
In recent years, many new markets have opened up. Some of these countries have no recent history of dealing with foreigners and little experience of international trade. Doing business under such circumstances can be difficult, so be forearmed with the answers to the following questions about their cultural attitudes, and be prepared to be patient. Ask yourself:
- What is their level of understanding and acceptance of outsiders?
- Who controls business; how is it structured and how does it work?
- How are decisions made? Is the culture one in which compromise is sought or is it more competitive?
- How do their legal, technical, and financial systems differ from your own? Will any special conditions need to be met?
- Are support systems (transportation, banking arrangements, and so on) adequate to deliver the deal, and does the other party have reasonable control of them?
Negotiate in your own language if possible: fluency gives power, but be aware that if you do, the other side has already made one concession.
The consequences of missing subtle points when you have to work in another language can be serious. But negotiating in their language can also have advantages: you can slow things down by frequently asking for clarification.
In most cultures people will be pleased by your speaking their language—but may be less forgiving of "cultural errors" if you do. You might decide not to disclose your knowledge of their language if you do not speak it fluently.
Confirm all concessions and check for accidental misunderstandings. Finally, if you do work in your own language, make certain the other party has understood you properly by asking questions or summarizing regularly.
If you feel it is appropriate, hire an interpreter. Make sure that he or she:
- is professionally neutral and properly skilled;
- understands the negotiation process and the objectives of this particular negotiation;
- can translate not only words but their meanings through gestures, tone, and so on.
Rehearse with your interpreter to familiarize him or her with likely events. Do not accept the other party's interpreter if the negotiation is important. It may be wise to find an independent interpreter to ensure impartiality. Finally, schedule plenty of breaks, as long negotiations in a foreign setting are very tiring.
Taking extra time to learn about another culture may seem like a hassle, but any preparation you do will serve you well. Imagine your embarrassment if a negotiation should fail because of a gauche remark or gesture you make? Courtesy is essential in business: you would expect it of others, and they will expect it of you.
Jokes often do not work when translated into another language and may make things worse if a discussion is becoming heated. If you know your opposite party well, you may get away with it, but err on the side of caution, especially if you are meeting someone for the first time or if the negotiation is particularly tense.
BusinessCulture.com: www.businessculture.com
Business Know-How: www.businessknowhow.com/growth/body-language.htm
ExecutivePlanet.com: www.executiveplanet.com