International Trade Negotiation Tips
Culture, Time Management, Respect & Trust Drive Global Deals
Dec 22, 2008
Negotiating successfully in international trade requires a delicate balance of finely tuned people skills and technical expertise.
The starting point for a winning strategy in global trade is a sensitive understanding of foreign cultures.
Rule #1: Culture Drives Negotiations
Prudent negotiators first research a foreign culture to find out whether negotiations require a formal or informal approach.
On his website, Professor Geert Hofstede explains that an American or Canadian negotiator strives to achieve a target of mutual understanding. When the opposing sides from these Western cultures reach an agreement, the negotiating parties shake hands to show that negotiations are over and that the working together phase has begun.
In contrast, negotiators from Middle Eastern cultures shake hands to signal that serious negotiations are about to proceed. After a handshake at the end of a hard day of bargaining, an American or Canadian representative might be under the false impression that a multi-million dollar deal has been struck. One negotiating side will be shocked when they learn that the Middle Eastern business persons are expecting more detailed presentations and compromises in the next round of negotiation.
Rule #2: Manage Time Wisely
Rule number two is that negotiators must use their time wisely. This is much trickier than simply showing up on time. Prudent time usage means being sensitive to how the opposing side wants to spend their hours, minutes and seconds.
American, British and German cultures demand that the other side be punctual. A German executive frowns both on opposing negotiators that show up either too early or too late, as this shows a lack of planning – a deadly sin for any party to German negotiations.
Mexicans and Brazilians are generally more relaxed in their approach to time. It’s not unusual for people from these more emotional cultures to spend the first hour of their working days discussing family or social matters before getting down to business. While being late isn’t as serious in these cultures, failure to spend enough time chatting about personal matters before starting business proceedings is.
Rule #3: Respect Negotiation Opponents
Rule number three is universal: to be respected in international trade negotiations, one has to first respect his or her opponents.
Regardless of culture, negotiators must avoid confrontations and never show any belligerence. This applies whether checking in with an junior administrative assistant at an international trade show or greeting a senior executive from a foreign country.
To achieve skills in showing genuine respect for one’s opponent, negotiators often practice self-control assignments at home, school or at the office. Personal development courses are available that enable participants to grade themselves on how well they think they show respect. Others are then surveyed on how each participant comes across. Role-playing exercises are video-taped, providing more valuable feedback on self-perception versus how other people actually perceive the negotiator.
Some cultures, like the Japanese, have historically shown more respect to older male figures. Sending a bold younger leader like Sarah Palin to negotiate with an old school Japanese board of directors can present some cultural issues of respect, depending partly on how smoothly verbal and non-verbal communications flow. One approach would be to team a younger female executive with a cohort of local Japanese representatives with many years of negotiating experience.
Rule #4: Listen Before Making a Point
Rule number four is to be a good listener. The most successful negotiator isn’t necessarily the person who talks the loudest or the longest. By listening well, the negotiator shows that he or she is seeking to understand and will accept a reasonable compromise.
The flipside to being a good listener is that one never reveals essential information in the first meeting. That’s because the initial meeting is about learning what each side wants and the best way to proceed. The most effective negotiators also know that good timing is key to clearly communicating one’s position.
Rule #5: Lead Discussions Humbly
Rule number five is to be humble but assertive. That way, the negotiator shows the other side a willingness to enter into meaningful discussions that often lead negotiations to win-win solutions.
Rule #6: Trust Opponents but Do Homework
The foundation for all relationships is trust. Negotiators must be as accommodating as possible, particularly in face-to-face meetings. After all, the only way that negotiations can move forward is if all parties trust each other.
Still, all major findings presented at negotiations must be thoroughly vetted and fact-checked with authoritative sources.
If the other side has valid points, the negotiator is respectfully verifying another perspective. This should reassure everyone that the negotiators want an optimal solution based on essential facts.
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