Have you ever been involved in overseas negotiations and felt as though things got a little awkward?
You’re not alone.
It’s not uncommon for business negotiations to get a little sticky — or suddenly go south — when one side of the deal isn’t practicing cross-cultural etiquette.
In this article, we’ll explain the importance of understanding cultural nuances and how to ensure that you, or your team, are fully equipped to handle cross-cultural negotiations like pros.
What Is Cross-Cultural Negotiation?
Cross-cultural negotiations are the business interactions that take place between individuals of varying cultures.
While typically seen as occurring between nations, cross-cultural negotiations can also occur between various cultures within the same nation — for example, Native Americans and European Americans.
Why Is Cross-Cultural Communication in Business Negotiations Important?
Globalization and international business relations continue to expand as the world becomes more interdependent than ever.
As a result, cross-cultural negotiations are not unusual in both business and political transactions.
Understanding how to manage and effectively carry out cross-cultural negotiations is an increasingly important skill to possess.
Not only does this understanding give you a better understanding of how you are viewed from a cultural standpoint, but it also allows you to adjust your own negotiation approach based on your cultural awareness of the company or individual at the other end of the negotiation.
If your company is holding back on cross-cultural negotiations because of a lack of experience or fear that you’ll mess up, then you need the experience of the professionals at The Maker Group.
Our top of the line negotiation consultancy has decades of global commercial negotiation experience and can teach you how to be effective and successful in cross-cultural negotiations.
10 Factors That Affect the Process of Cross-Cultural Negotiation
#1: Etiquette and Protocol
Business etiquette is something that is quickly learned within our own cultures, but what happens when it’s time to negotiate with an individual or group of people from a foreign culture?
The situation could become quite uncomfortable, so it would be prudent to research business etiquette and protocol, such as:
- Introductions
- Level of formality
- Personal space
- Physical contact
- Gift giving
Learning etiquette norms in advance of negotiations will not only help to avoid awkward situations, but may also give you the upper hand by immediately earning the respect of everyone involved.
#2: Language Barriers
Anyone living in the U.S. has come across a situation where a language barrier was a factor. Anything from chatting with a newly immigrated neighbor or hiring migrant workers, language barriers can sometimes lead to awkward, or even hilarious, encounters.
But, in business, a language barrier can make or break the deal.
Of course, in a situation where neither party speaks the others’ language, interpretive services should be used.
But when one party is communicating in their second language, there may be circumstances in which important details get lost in translation.
Here are some situations to avoid:
- Not leaving enough time for translations to take place
- Failing to give interpreters a set of ground rules to follow
- Using difficult technical language or acronyms when speaking
- Using slang or idioms
- Speaking too quickly
The last thing anyone wants is for important details to go unnoticed, ultimately resulting in a deal that isn’t mutually beneficial.
#3: Body Language Differences
Body language can be easily misinterpreted, especially among different cultures, and several factors play a role in how people interact with each other.
For example, a person’s …
- Upbringing
- Gender
- Education
- Religion
- Age
- Work experience; and
- Culture
… all play a part in their body language signals.
Where eye contact may seem like a sign of confidence in some cultures, in others it can be seen as inappropriate. Physical contact and personal space may also vary greatly among different cultural groups.
Where body language is concerned, it’s always a good idea to do some research ahead of time, but to also pay attention to signs of discomfort in your business dealings and make adjustments accordingly.
#4: Relationship Building
Where relationships are concerned, there will be varying degrees of comfort among different cultures — but also in different industries.
In much of the world, the art of schmoozing is alive and well. It’s common to arrange meals out to discuss expectations of a negotiation before even setting foot in a boardroom to hash out details.
However, the end goal of these relationships may not always be the same. In North America, we tend to value a contract as the catalyst of our business relationships, whereas in South America, getting to know the individual personally is far more important.
Successfully navigating business relationship expectations in cross-cultural negotiations can make the difference between forging a long-standing agreement between parties or ultimately parting ways.
#5: Timing and Punctuality
Does it drive you nuts if people arrive late to a business meeting? Or maybe you’re accustomed to being less stringent when it comes to timing.
Either way, you’re not alone.
In some cultures, failing to arrive on time is seen as a serious breach of etiquette. Whereas in other cultures, such as some South American countries, time is seen as something more fluid.
Want to avoid timing conflicts in cross-cultural negotiations?
Learn to bend your own views on timing and punctuality based on varying cultural nuances, and you’ll save yourself embarrassment and avoid a negative outcome.
#6: Foreign Laws and Bureaucracy
Where foreign law is concerned, it’s always advisable to seek the appropriate counsel to determine what laws must be applied to your contracts.
In many countries, legislation trumps what’s written in a contract. So, if a conflict arises you could be out of luck — and potentially a lot of money — if contracts aren’t relevant to the jurisdictions in which they take place.
Always protect your interests by ensuring compliance in foreign contracts.
#7: Decision-Making Hierarchy
Know who’s boss.
Depending on the culture, the parties entering the negotiation may or may not have the final decision-making authority.
In North America, it’s common for a decision-maker to attend negotiations, but other cultures may take a different approach by sending in a middle-person to gather information.
It may also be unclear who the authority is, as it could be spread horizontally across multiple people in the room, as opposed to a single point of contact.
Or, you may be faced with a backroom democracy where a single point of contact attends the meeting then shares the information with all other decision-makers.
Find out what to expect and who holds the authority early on, and you might be able to save yourself from attending multiple meetings by asking upfront to speak to the person or people in charge.
#8: Gender Relations
Gender issues present one of the most unfortunate value clashes in cross-cultural negotiations.
In Western cultures, having a woman at the negotiating table is a common occurrence that would be expected in any industry.
However, when business dealings take your company to countries where women would not be respected or heard in the same way, using male negotiators could be the only way to ensure a deal is considered.
#9: Setting Expectations
Even before entering into negotiations, it may help to clarify expectations from both parties.
You may have a clear-cut goal of securing a contract as early as possible, but this may not match the goal of the other side of the negotiating table.
As previously mentioned, some cultures prefer to spend time cultivating a relationship before entering into contractual details and legalities. Or, the goal may not be a contract at all, rather a networking opportunity for possible future dealings.
Taking the time to clarify the end goal of any negotiation can save a lot of hassle and misunderstanding.
#10: Negotiation Styles
Like a game of poker, many North Americans approach negotiations holding their cards close to their chest and watching their opponent closely for any tells.
But in cross-cultural negotiations, you have to expect the unexpected.
Some cultures may approach topics simultaneously, rather than sequentially. Others may lay their cards on the table, ready to discuss items in any order.
Negotiators in varying cultures may also be trained to use pressure tactics, whereas in some cultures this approach would backfire.
Adjusting your negotiating style may not come so easily, but The Maker Group can help.
We’ve trained thousands of negotiators in the art of cross-cultural negotiations, from initiating contact and relationship building, to setting expectations and negotiating final terms.
Don’t let the fear of cross-cultural negotiations stand in the way of your company’s globalization goals. Let our team of negotiation consultants show you how to successfully negotiate with any culture.
4 Ways to Overcome Problems in Cross-Cultural Negotiations
#1: Get to Know the Culture
A quick and easy way to earn respect at the negotiation table is to learn the basics of the other party’s culture.
Not only do you build trust and gain credibility, but you can also give yourself the upper hand during the negotiation.
You’ll be well equipped to implement cross-cultural negotiation strategies that will lead to more efficient business dealings and ultimately more successful negotiations.
#2: Throw Away the Stereotypes
Making assumptions about cultural negotiation norms can be devastating to any deal.
A lack of trust between counterparts within the negotiation can create barriers to reaching a mutually beneficial agreement.
Rather than generalizing, or assuming that the other party will try to take advantage of you, making an effort to understand their position and goals will go a long way in building a long-lasting and trusting relationship.
#3: Bridge the Culture Gap
Negotiations are never one-sided, and bridging the culture gap doesn’t need to be either. Make an effort to encourage or persuade your counterpart to adapt some negotiation elements from your own culture.
And remember, you’re speaking to individuals, not an entire culture. Get to know the people on the other end of the negotiation because it will be their individual business goals and values that matter the most.
#4: Get Expert Advice
When all else fails, a third-party expert interpreter who understands your industry can go a long way in bridging cultural gaps and working toward a successful negotiation.
The Maker Group: Training Negotiators How to Successfully Manage Cross-Cultural Negotiations Every Time
We’re here to help your team maximize their potential in cross-cultural negotiations. Using our proven behavioral framework, you’ll be able to turn awkward situations into lasting business partnerships and big wins for your company.
Choose from a variety of customized on-site negotiation training workshops, and give your team a leg up in any negotiation — anywhere in the world.
Contact The Maker Group today for your free consultation.
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