Conducting business negotiations within domestic markets isn’t exactly an easy process. While some see it as a game between two sides trying to ‘beat’ each other, it’s often a process of striking a compromise that benefits both parties. But if you’re in the process of an international business negotiation, it can become even more challenging.
The language barrier may be an obvious issue for international negotiations, but ignoring cultural differences can make or break the deal.
There’s potential for things to go wrong if two parties don’t get off on the right foot. Understanding the cultural nuances of a potential business partner can range from differences in body language and the softening of particular words, to how you meet-and-greet a client and how you deliver feedback.
READ MORE: How to Give Feedback in Different Parts of the World
When entering into international negotiations, it’s essential that you take the time to prepare beforehand to understand cultural differences in order to manage expectations of a potential client or business partner to land a deal.
Communication
Methods of communication vary among cultures and delicate negotiations rely on precise cultural understanding. One of the cornerstones of mastering the art of negotiations is adapting your personal style of communicating to fit the cultural expectations of the local market.
For example, Germans have a more formal style of communicating than in the UK. The norm in the German market is to address people by their title and surname, like Herr Schmidt or Frau Weber, until you’re considered friends and invited to address them on a first-name basis.
Calling someone by their first name in the UK and the US is a standard practice in and out of professional work environments, but to do this in Japan during your first meeting is a sign of disrespect.
If you’re involved in negotiations in China, understanding concepts such as ‘saving face’ will be a vital addition to your communicative repertoire to ensure you engage with Chinese partners in a culturally sensitive way.
Never underestimate the importance of saving face in Chinese culture. Causing public embarrassment has been the root of many conflicts in China.
Insulting someone or openly criticizing their ideas is considered a major faux pas in this market. Furthermore, you should always respect someone’s status and their level of seniority.
READ MORE: The Art of Negotiating and Dealing with Chinese Business Partners
One useful tactic many senior executives use when navigating conversations with international partners is whether to adopt a direct or indirect approach to communication.
While Americans value directness and expect a definitive and clear response to proposals, other cultures, such the Japanese, prefer to conduct negotiations with more indirect, figurative forms of speech.
For example, a response to your questions or proposals may come in the form of vague comments or physical gestures of approval or dismissal, and you’re likely not to receive a commitment or rejection of your business proposal in your first meeting.
While these indirect styles of communication can initially be confusing or even frustrating for some individuals, understanding your host’s cultural forms of verbal and physical communication will be key to building international relationships in order to strengthen a business partnership.
Even simple physical cues such as rolling up sleeves and loosening of a tie can be considered unprofessional and unflattering in some European countries such as France.
In Japan, China, India and Korea, where you sit in a meeting is considered hierarchical – often defining the status of individuals. Misread these signals and both parties could be set up for embarrassment.
Interpreters
Interpreters are used to bridge the linguistic divide when both parties don’t speak the same language. Business interpreters that assist in cross-cultural communication will often participate in video conferences and interviews, as well as face-to-face business meetings.
Furthermore, it’s common for both parties to use the same interpreters for each meeting during the negotiation process. Which comes as no surprise as business negotiations are often about developing relationships and building trust.
As a result, an interpreter’s role requires a huge amount of focus in order to listen carefully and accurately convey the spoken words and physical cues between their client and their clients’ business partners.
For example, in Japan where direct forms of communication to express a negative response is considered rude, it’s common to use the word ‘maybe’ instead of the word ‘no’. Whereas, in the US and the UK, the word ‘maybe’ indicates the possibility a request could be considered in the future. It’s these subtle nuances that interpreters are looking out for, as well as translating both languages.
It’s essential that interpreters are not only familiar with the cultures of both parties, but also have superior business fluency in order to synthesize and communicate the most complex linguistic cues and business jargon as accurately and swiftly as possible.
Implementing a thorough briefing process and hiring the right interpreter with specialist knowledge of your industry will be vital to the success of your multilingual meetings. The more time and effort you invest during the briefing process, in terms of providing the relevant reference materials in advance, the better prepared your interpreter will be.
Understanding industry terminologies and regulations, company procedures and background information on previous negotiations will be essential elements to the briefing framework, as well as how you, as the client, wish to conduct the meeting and overall objectives of the negotiations.
Forms of agreement
Defining the purpose of a negotiation and how to form an agreement differs across cultures. For some, it could be getting a contract signed to formally agree to a partnership. For others cultures, nurturing a relationship through extensive preliminary meetings is considered the appropriate way of reaching a mutual understanding before signing a formal agreement.
This can certainly be said of Asian cultures, such as the Chinese, who value taking the time to get to know potential business partners before confirming a partnership and finalising the details of a proposal.
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It can be frustrating for some Western business owners who are used cutting straight to the first phase of a tendering process or brokering the terms of a contract in their first few meetings. But this doesn’t necessarily equate to a barrier in negotiations.
Preliminary negotiations not only allow you to establish and build long-term relationships, it can also help both parties learn how each business operates and identify additional needs. Information gathered during these stages is critical if you wish to preempt unforeseen challenges in the future due to cultural needs or develop a more efficient, bespoke onboarding process for your client.
In some markets, for a contract to be valid, both parties have to go through formalities that might seem almost ritualistic to those familiar with the relatively informal UK process.
When it comes to confirming the finer details of a business agreement such as delivery dates, pricing structures and quality assurance procedures, it would be wise to err on the side of caution as some cultures tend to prioritize some aspects over others.
If you’re negotiating with French business owners, the general process for forming agreements is by developing a framework of general principles upon which a final contract is built.
That’s pretty logical when you consider the French tend to clarify their own thoughts during business meetings through extensive discussions before making solid decisions or taking direct actions. Be prepared for vigorous, logical debate when negotiating in this market.
Harvard’s Program of Negotiation indicates that cultural differences have the ability to influence the form and substance of an agreement that both parties make.
Business owners in the UK and US tend to lay all their cards on the table and draft lengthy and detailed contracts to mitigate the impact of any unexpected circumstances. Whereas Chinese negotiators prefer to build contractual agreements on general principles and rest on the foundations of the relationship to solve any issues that may arise in the future.
The trade-off is to be open-minded when you encounter unfamiliar value systems during business negotiations.
Working with business partners from different cultures often requires the adaptation of your products, services or internal management processes in order to secure and maintain rewarding, long-term international business relationships.