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Negotiating Across Cultures

Presenter:

Richard R. Gesteland

Global Management LLC

Partnering Across Cultures

The Two Iron Rules of International Negotiation:

• The seller adapts to the buyer.

• Before starting negotiations, understand the business culture.

And what is a Business Culture?

“A set of expectations and assumptions about how people should do business.”

Negotiating Across Cultures -Five Key Variables:

• Deal-Focus vs Relationship-Focus

• Direct vs Indirect Communication

• Informal vs Formal Business Behavior

• Monochronic vs Polychronic Time

• Reserved vs Expressive Communication

Comparing Deal-Focused and Relationship-Focused Negotiating Behavior

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Deal-Focused Business Cultures:

• The Anglo Cultures: North America, UK, Australia and New Zealand.

• The Germanic Cultures: Germany, Netherlands, Nordic Countries

Moderately Deal-Focused Cultures:

• France, Belgium, Southern Europe

• Russia, Eastern Europe, Central Europe

• Hong Kong and Singapore

Relationship-Focused Cultures:

• Asia except Hong Kong and Singapore

• Middle-East, most of Africa

• Latin America

• (= most of the world!)

D-F Behavior: R-F Behavior:

• Direct contact often works.

• Face-to-face meetings less frequent.

• Usually use direct language.

• Indirect contact is expected.

• More frequent.

• Often use indirect language.

Communication and Context:

• Relationship-oriented people often use High-Context (indirect) language.

• Deal-oriented people mostly use Low-Context (direct) language.

Some reasons R-F negotiators

avoid saying „no‟

• To avoid disappointing you.

• To avoid losing face.

• To avoid causing loss of face.

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D-F Behavior: R-F Behavior:

• Maintaining harmony is not a big issue.

• People depend on the legal system.

• Written agreements are considered final.

• Maintaining harmony is VERY important.

• People depend on relationships.

• Contracts are considered to be renegotiable.

Comparing Egalitarian and Hierarchical Negotiating Behavior

Egalitarian: More Hierarchical:

• Nordic countries

• North America

• Australia, New Zealand

• Britain

• Most of Continental Europe

• Asia, Africa, Latin

America, Middle East

Egalitarian: Hierarchical:

• Informal behavior.

• Status differences are small.

• Protocol rituals are

simpler.

• Formal behavior.

• Status differences are large.

• Protocol rituals are

more elaborate.

Comparing Monochronic and

Polychronic Negotiating BehaviorMonochronic Business Cultures:

• Germans and German-Swiss (very monochronic)

• Northern Europeans, North Americans

• Czech Republic, Hungary, Japan

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Polychronic Business Cultures:

• Southern and Eastern Europe, East Asia

• Latin America

• South and Southeast Asia, Middle East, most of Africa (very polychronic)

Monochronic: Polychronic:

• Punctuality is expected.

• Meetings usually follow an agenda.

• It is rude to interrupt meetings.

• People tend to be less punctual.

• Meetings may not follow an agenda.

• Meetings are often interrupted.

Comparing Reserved and Expressive Negotiating Behavior

Emotionally Reserved Cultures:

• Northern Europe, Britain

• East and Southeast Asia (very reserved)

Moderately/Variably Expressive:

• North America, Australia, New Zealand

• Eastern and Central Europe

• South Asia

Very Expressive Cultures:

• Southern Europe

• Middle East, Mediterranean region

• Latin America

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Reserved and Expressive Nonverbal Communication – Four Key Variables:

• Interpersonal distance

• Eye contact

• Touch behavior

• Gestures

Interpersonal Distance:

• Close: Middle East, Latin America, Southern Europe.

• Variable: North America, East and Central Europe, South Asia, Australia/NZ

• Distant: Northern Europe, East Asia

Eye Contact:

• Intense: Middle East, Southern Europe, Latin America

• Moderate: Northern Europe, North America, East-Central Europe.

• Indirect: East and Southeast Asia

Touch Behavior:

• High Contact: Middle East, France, Southern Europe, Latin America.

• Moderate: Eastern and Central Europe, North America.

• Low Contact: Northern Europe.

• Very Low Contact: East and Southeast Asia.

Ambiguous Gestures:

• Use of left hand

• Showing sole of shoe

• ‘Thumbs up’ sign

• ‘Peace’ sign

• ‘A-OK’ sign

• Pointing/beckoning with index finger.

To Achieve Lasting

Partnerships Across Cultures:

• Learn your partner’s business culture.

• Build strong personal relationships.

• Work to develop a Third Culture with your partners.

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Thank you…and best of luck in

your International Negotiations!

Richard R. Gesteland

Global Management USA