Business

Negotiation

Negotiation is the face-to-face process of resolving conflict to a mutually satisfying end. Globalization has resulted in increased business travel to many countries to buy, sell, form mergers or acquisitions, build relationships and more. Most of these business relationships involve some form of negotiation, but the negotiation process differs from culture to culture because of language, cultural conditioning, negotiation styles, approaches to problem-solving, and building trust. Differences in work-related values, communication styles, and even business etiquette can also have an impact on the negotiation process.

The roles individuals play in decision-making vary widely from culture to culture. In the US, decisions are frequently delegated to a subordinate. In many Southern European and Latin American countries, there is a strong value place on an individual decision-maker. When decisions are made by groups, majority rule is common in the US, but in Japan consensus is the preferred mode.

Although much has been written about the intercultural negotiation process, there are four major areas where cultural groups may differ.

• First, cultural groups may differ in their view of what the negotiation process is. Cultural groups that prefer harmony over honesty might view negotiation as one group gaining power at the expense of another.
• Second, cultural groups may differ in task or relationship priorities. Task-oriented groups will prefer to come to a quick agreement whereas relationship-oriented groups may not even be able to negotiate until they know who their counterparts are as people.
• This can lead to our third issue, and that is different ideas in what constitutes trust. Does trust come from a signed agreement or a relationship?
• And lastly, is the preferred form of agreement a formal written contract approved by the legal department, or an informal agreement based on historical and social contexts?

At this point in the book, you probably understand that cultural differences are likely to be a factor in the negotiation process. Yet, interestingly enough, new research suggests that negotiators, may give too much weight to cultural factors when preparing for the negotiations.

Researchers surveyed US Americans who had conducted business in Japan and their Japanese counterparts. So, what happened? The study participants typically adjusted their negotiating style too far toward the other's culture. Each side expected that the other would negotiate as they would in their home cultures, not expecting the counterpart would attempt to adjust their strategy to the foreign counterpart leading to confusion and unintended clashes. The researchers concluded that the negotiators focused too narrowly on the most obvious information rather than the task at hand. By focusing only on the cultural differences, the negotiators treated their counterparts as cultural ambassadors rather than business partners.

Obviously, more research needs to be done to solidify this finding, but it's important to note that there is no one-size-fits-all approach to doing business across national boundaries. It's important to be present and attentive to all aspects of the negotiation process. Though important, culture is only one aspect of a successful business negotiation.