The Cultural Context of Business Negotiations

Considering the potential problems in cross-cultural business negotiations, particularly when you mix managers from relationship-oriented cultures with those form information oriented ones, it is a wonder that any international business gets done at all obviously, and the economic imperatives of global trade make much of if happen despite the potential pitfalls. But an appreciation of cultural differences can lead to even better international commercial transaction-it is not just business deals but highly profitable relationships that are the real goal of international business negotiation. For the efficient and effective international business negotiations few steps are important .Which includes:

  1. Selection of the appropriate negotiation team.
  2. Management of preliminaries, including training, preparation, and manipulation of negotiation settings.
  3. Management of the process of negotiations, that is, what happens at the negotiation and table; and
  4. Appropriate follow-up procedures and practices.

Selection of Negotiation Teams:

One reason for global business successes is the large numbers of skillful international negotiators. These are the managers who live in foreign countries and speak foreign languages. In many cases, they are immigrants to the foreign countries or have been immersed in foreign cultures in other capacities.

Traits such as maturity, emotional stability, breadth of knowledge, optimism, flexibility, empathy, and stamina are all important, not only for marketing executives involved in international negotiations but also for the technical experts who often accompany and support them. In studies conducted at Ford Motor Company and AT&T, three additional traits were found to be important predictors of negotiator success with international clients and partners; willingness to use team assistance, listening skill, and influence at headquarters.

Willingness to use tam assistance is particularly important for American negotiators. Because of cultural heritages of independence and individualism, Americans often make the mistake of going it alone against greater numbers of foreigners. One American sitting across the negotiation table from three or four Chinese negotiators is unfortunately an all too common sight. The number of brains in the room does make a difference. Moreover, business negotiations are social processes, and the social reality is that a larger number of nodding heads can exercise greater influence than even the best arguments. It is also much easier to gather detailed information when teams are negotiating rather than individuals. For example, the Japanese are quite good ate bringing along junior executives for the dual purposes of careful note taking and training via observation. Compensation schemes that overly emphasize individual performance can also get in the way of them negotiating a negotiation team requires a split commission, which many Americans naturally avoid. Finally, negotiators may have to request the accompaniment of senior executives to better match up with client’s and partner’s negotiation teams, Particularly in relationship oriented cultures, rank speaks quite loudly in both persuasion and the demonstration of interest in the business relationship.

The single most important activity of negotiations is listening. The negotiator’s primary job is collecting information with the goal of enhancing creativity. This may men assigning one team member the sole responsibility of taking careful notes and not worrying about speaking during the meetings. This may also mean that knowing the language of clients and partners will be crucial for the most complete understanding of their needs and preferences. The importance of listening skills in internal business
negotiations cannot be overstated.

Bringing along a senior executive is also important because influence at headquarters is crucial to success. Many experienced international negotiators argue that half the negotiation is with headquarters. The representatives’ lament goes something like this, “The better I understand my customer, the tougher time I have with headquarters’”, Of course, this misery associated with boundary-spanning roles is precisely why international negotiators and sales executives make so much money.


This part in concerned with the preparation for the negotiations process, which includes tuning of negotiators and groundwork of physical arrangement. Many companies in the United States provide employees with negotiations training. For example, through is training programs, Chester Karrass has taught more people to negotiate than any other purveyor of the service – see his ads in almost all in-flight magazines of domestic American air carriers. To the Indian context, management schools are updating their curriculum based on the contemporary business requirements. However, very few companies provide training for negotiations with managers from other countries. Even more surprising is the lack of cultural content in the training of the government’s diplomats. Instead, in most schools of diplomacy the curricula covers language skills, social and diplomatic skills and knowledge specific to the diplomatic profession, are including diplomatic history and international relations, law, economics, politics, international organizations, and foreign policies. Cultural differences in negotiation and communication styles are seldom considered.

Things are different at Ford Motor Company. Ford does more business with Japanese companies than any other firm. Ford owns 33 percent of Mazda, it built a successful minivan with Nissan, and it buys and sells component parts and completed cars from and to Japanese companies. Ford has made a large investment in training its managers with Japanese responsibilities. Over 2,000 of its executives have attended a three-day program on Japanese history and culture and the company’s Japanese business strategies. Further, more than 1,000 Ford Managers who work face-to-face with Japanese have attended a three-day program entitled”Managing Negotiation: Japan” (MNJ). The MNJ program includes negotiation simulations with videotape feedback, lectures with cultural differences demonstrated via videotapes of Japanese/American interactions, and rehearsals of upcoming negotiations. The company has also conducted similar programs on Korea and the People’s Republic of China. In addition to MNJ the broader Japan training efforts at Ford must be credited for their successes in Japan. Certainly, MNJ alumni can be seen exercising influence across and up the ranks regarding Japanese relationships.

Any experienced business negotiator will tell you that there is never enough time to get ready. Given the time constraints of international negotiations. Preparations must be accomplished efficiently – the homework must to be done before the bargaining begins. The following checklist is recommended to ensure proper preparation and planning for internationals negotiations:

  1. Assessment of the situation and the people
  2. Facts to confirm during the negotiation
  3. Agenda
  4. Best alternative to negotiated agreement (BATNA)
  5. Concession strategies
  6. Team assignments

Preparation and planning skill is at the top of almost everyone’s list of negotiator traits, yet is seems many Americans are still planning strategies during over-ocean flights when they should be trying to rest. Quick wits are important in business negotiations, and arduous travel schedules and jet lag dull even the sharpest minds. Obviously, information about the other side’s goals and preferences should be sought ahead of time. Also important are clears directions from headquarters and detailed information about market conditions. No mater how thorough the preliminary research, negotiators should always make a list of key facts to reconfirm at the negotiation table. Information gathered about foreign customers and markets almost always includes errors, and things can change during those long airline flights, next, anticipate that managers from other cultures may put less emphasis on a detailed agenda, but it still makes sense to have one to propose and help organize the meetings.