Negotiation Skills In International Business
Negotiation Skills are one of the most important aspects of successful international business relations, with quite high stakes! You might be the most confident negotiator back home, but when entering a different culture you have to start from scratch, and often you have to work on forgetting everything you know. Your well-established patterns and routines when negotiating – which reliably drive your success in your home country – might work against you in a different cultural setting.
So let’s take a closer look, and see what factors should be taken into consideration when talking about negotiations skills in international business! Spoiler alert: there are many. Business ethics, trust, attitude towards relationships, communication styles, time management, decision making and risk-taking all have a say in how business people from a certain culture or in a specific country tend to negotiate, and the list is far from complete!
What Is Being Valued?
The ethical norms of doing business deeply affect the way negotiations are conducted in a certain country, and the possible outcomes of negotiation can depend on how well the partners know each other’s values and norms. Is it considered unprofessional or even unethical to bring gifts to your business partner, or it is rather a sign of wanting to build a closer relationship and this makes it much welcome?
In some countries, getting closer to your partner on a personal level can be a must for a successful business deal, while in others you might seem intrusive if you approach them in a personal manner. Also, what is the accepted or/and expected way to view time? Being a few minutes late is perfectly acceptable in some cultures, but in others, it is a major sign of disrespect. How formal should your vocabulary be? Again, in countries where personal relationships are valued above all, talking informally, even bonding by joking is a good way towards sealing a fruitful business deal, while in other cultures keeping your distance and being formal is the norm.
It might seem overwhelming, but being aware of all these factors is one step towards preparing for successful negotiations across cultures. And the good news is that you can gather this information and develop your negotiation skills further, you just have to be on it, and always do your research first!
How To Express Trust?
If you think about the cultural iceberg, you will find that trust and everything relating to it are factors that go way deeper than the surface. In order to understand a culture’s views on trust, you have so many things to consider: relationships, what are they looking to gain from them, and what are the core values that organize business relationships. There are many aspects to trust that you might want to consider during your business negotiations across cultures: how you choose to build it, how you express it and how you expect your partner to express it, etc.
A rather interesting and not so much talked about aspect to consider here is whether your partner is culturally more familiar with a win-win or a win-lose setting. We do say that a win-win is always best to strive for, but there are cultural differences that have a say in this question as well. If a culture is thinking more in confrontational terms rather than viewing negotiation as a collaborative process, then win-lose might be a natural way of thinking and should be part of your negotiation skills repertoire.
This doesn’t mean that collaboration is not possible, it just means that knowing where your partner stands can and will help you communicate in their language, address their expectations, fears even, and get you closer to build trust, and from there sealing a mutually successful deal.
How To Communicate Without Words?
Yet another aspect that becomes important right from the start: the non-verbal communication during negotiations across cultures. I emphasized “right from the start” because this is something that contributes to that famous first impression.
The way you step into a room, you shake hands, you touch/don’t touch your partner’s shoulder, how far you sit from them, how long you maintain eye contact when speaking, etc are all so different across different countries! In this case, it may be more a “what not to do” than a “what to do” question. Learning about the non-verbal communication norms of a certain culture can help you greatly in what you should avoid, and some really basic “to dos”. But only making a certain physical gesture because you read it was used in a country might not be the best idea, as you don’t want to seem “fake”.
Staying authentic is a fundamental requirement during a negotiation as well as in any other life situation. But the more you understand the norms of a country, the closer you get to it, the more empathy you will develop, and certain actions, gestures even will come naturally after a while, you won’t have to make them just because it was “on the list”.
Now let’s look at some negotiation skills for specific countries:
Negotiation Skills For China
The rules of conducting business in China are complex and not always obvious if you are used to a different way. But there is nothing you can’t learn and understand when preparing for your upcoming negotiation.
Focus On The People
Since China is a deeply relationship-oriented country, where the people and their relationships are of higher priority than the task itself, you must think of a good relationship as a starting point, and act accordingly during your negotiation process. This influences many aspects of your communication while you are negotiating in China. First, in the meaning that whatever you are trying to achieve, people come first. You establish a good relationship first, a strong bond and trust, and only then do you turn to the cold facts.
And focusing on the people comes with a second meaning as well: you pay attention to the group dynamics. It’s a good idea to identify who the decision-maker is, and also who are the persons in the group who usually have a say in the decision, and can influence the outcome.
Read Between The Lines
The Chinese like to wrap it nicely. Precisely because the relationship comes first, a lot of thought goes into how you express yourself as not to cause any awkwardness. One thing is to learn to express yourself in such a way, and another is to understand their communication. Pay attention, and know that you will not hear a certain cold “no”, but you will get a beautifully dressed and diplomatically put “no”, if that is the case.
If you are used to straightforward, yes-or-no communication, forget that, and look for the subtle signs and expressions when developing your negotiation skills for China.
Be Modest And Patient
There are countries where talking about how great your company is and how much you’ve achieved, how big a vision you have, and generally having an ultra-confident appearance are the essentials of good negotiation, but not in China. Here being humble can go a long way. This doesn’t mean shying away of course, but it does mean that when you are negotiating, you might look better if you tend to say less and keep it low. Modesty is valued here, and so is patience.
Don’t expect everything to fit into a couple of hours. Understand, that given the fact that we are talking about a relationship-oriented country, negotiations take time, often lots of it. Many meetings take place, giving each other the space to get to know one another and for trust to form. Think of your time as an investment, be willing to connect personally, and don’t give the impression that you are in a rush.
Negotiation Skills For The Netherlands
Adjusting your negotiating skills to fit the country you are preparing to expand to is a key component in your business success, and while some things take time to learn, there are others that you can easily implement.
The direct approach is the key to negotiating with the Dutch: they are known for their straightforwardness. This can be really easy if you were socialized in a similar culture, and more of a challenge if you are used to very formal, and indirect communication during negotiation.
In the Netherlands, you will need to communicate what you want: no beating around the bush. Say exactly what you think. They will do the same and it will be expected of you as well.
As an egalitarian view is a basis for the Dutch way of life and work, you have to avoid anything that might give the impression of superiority. In Dutch companies, everyone is involved in the decision-making process, literally everyone, so this is the place where you have to forget about strict hierarchies.
Address the entire group, don’t make them feel that you are only talking “to the boss”, and also pay attention that your actions show that you consider yourself an equal to them.
Don’t Get Too Emotional
Leave emotions out of it. In the Netherlands, if it is about work, then it is about work, and that’s all. More so if you are negotiating in the Netherlands. There is something you want to achieve, there is something they want to achieve as well, and this is all that matters. For some, this might seem cold, or even rude, but it is not at all about that. It is about the priorities, which in the Netherlands are the task and the results.
You also have to be prepared to openly share opinions and don’t be afraid or intimidated when you see many, sometimes contradicting opinions unfold. Say what’s on your mind, and don’t be afraid if your opinion is different from the others. The basis for successful negotiation in the Netherlands is sharing your opinion and thoughts openly, so everyone knows where all of you are standing.
Negotiation Skills For Germany
Planning, discipline, punctuality, numbers and facts. Being so direct, that it can often be perceived as blunt. These are some of the things that first come to mind when talking about the German way of working and doing business.
Information, Facts, Data
Plan everything, and with particular attention to facts and data. In Germany, you don’t win your partner over with niceties and small talk, or bonding on a personal level. The biggest asset in negotiations is the information you are ready to deliver, backed up by cold facts and numbers. Make sure you present clear terms, with no room for misunderstanding. Also, be prepared for questions and be ready to give answers. Avoid anything vague at all costs.
Be willing to take on an entirely formal attitude when negotiating in Germany, and also show respect to a protocol. If you come from a society where the protocol is often put aside, and people tend to handle things on a personal level, informally, you have to shift your perspective. This level of formality also influences the decision-making process, which is often much slower than in other European countries, because of the thorough processes of analyzing and scrutiny, and also the hierarchical dynamics within a company.
Avoiding vagueness goes both ways: you delivering as much information as you can, and also asking questions if something is left unclear. Don’t be afraid to ask, if you feel that something is still missing. It won’t be considered impolite, as they will do exactly the same. Having clear terms is what you are both striving for, so questions play a major role in the negotiation process, from both sides.
Negotiation Skills For Japan
Hierarchy, respect, and karaoke, if we want to sum it up. The Japanese negotiation culture is very complex, but at the same time easy to understand if you start paying attention.
Hierarchy and respect are valued above all else in Japan. There are strict hierarchies in companies just as generally in society, and the higher someone is in the hierarchy or seniority, the more important to show the appropriate form of respect. This means that before you take on your negotiation, you should learn about the structure of the company you are preparing to approach, identify the senior members, and understand the exact structure of the company.
On the other hand, show the same regarding your company: at initial meetings it is expected that a senior member is present, who represents the entire company, and gets acquainted with the potential partners. They are not expected to be present during all the further meetings, but at first, it is of great importance that they are there.
Convince The Group
Yes, hierarchy is one of the defining values in Japanese companies, but so is the group spirit. You should be aware of the Japanese decision-making process, which is very complex and really lengthy.
Since the Japanese strive for consensus, they will spend as much time with the decision making as is needed for consensus to be reached. They will discuss over and over again, and it helps if you are aware of this, because this way you know that if you have to wait for an answer, it doesn’t necessarily have to mean it’s a no, it can easily be that they are still talking about it.
And precisely this is the reason why you shouldn’t focus only on one person when negotiating. You should rather focus on the entire group, and not pick one person you want to convince. You want to convince all of them since they will not agree on anything unless the entire group is fully in.
The Japanese will invite you, more often than not to karaoke evenings. This is something really important for them, as outside of work interactions strengthen the group spirit and the personal bonds, which are essential in their work- and business culture. These karaoke nights often involve heavy consumption of alcohol, which doesn’t come off as awkward the day after. This is their way of letting off steam, and also of forming stronger personal relationships.
They will invite you, and if you decline, that will be seen as a sign that you are not that serious about doing business with them. So if there is an invitation, show no hesitation, and just dive right in!
Negotiation Skills For Saudi Arabia
Knowing how to build up a network, and who to approach with what if you want to be effective, are some of the most useful skills for negotiating in Saudi Arabia.
Build Deep Relationships
In Saudi Arabia all business and negotiations are based on trust. This is rooted in the deep relationship values that define the country’s attitude towards life, work, and business. Saudi Arabia is a relationship-oriented country, and this means that trust is built on a personal level, by creating a bond first.
Approach your partners on a personal level, let them know that you are genuinely interested in them as persons, and you are not looking at them merely as business partners.
The Saudi Arabian way of negotiation may seem strange if you are used to the straightforward way of negotiating. Here, it is common that they jump from topic to topic, and then going back again. You shouldn’t expect a linear way of negotiating, and it helps if you are aware of this kind of communication, so you don’t end up surprised.
Be willing to go with the flow, and always keep in mind, that they don’t see the task and the result as the first and most important, because the people are always first. So show no sign of impatience or annoyance, when negotiations start to take an unexpected turn, and things are going back and forth.
Always show respect, both towards people and their norms and values. Precisely because personal relationships and networks are so important in Saudi Arabia, expressing respect towards the people is key. Learn their rules of conduct and norms, and also educate yourself on what their taboos are when it comes to discussing on a personal note. Let them know that you came prepared, and you are willing to play by their rules.
Stay Aware, Invest In Learning
These are just a few examples showing the variety of factors that have a say in how negotiations across cultures will play out, but certainly important ones. It is always good to stay aware and invest in learning, which has no end really, especially if it comes to cross-cultural questions.
Let us think again of the cultural iceberg, and remember that even if at first something seems to be a question of the surface, if you start to think about it, you will also go deeper and deeper under the ocean only to find even more explanations and questions as well.
- There are many factors to consider in negotiations across cultures.
- In countries where personal relationships are valued, talking informally is the way towards sealing a business deal, while in other cultures keeping your distance and being formal is the norm.
- There are many aspect to trust that you might want to consider during your international business negotiations.
- Consider whether your partner is culturally more familiar with a win-win or a win-lose setting. This will help you communicate well and get closer to a deal.
- Learning about the non-verbal communication norms can help you greatly in what you should avoid, and some really basic „to dos”.
- However, staying authentic is a fundamental requirement during a negotiation. The more you understand the norms of a country, the closer you get to it.