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Negotiating With Other Cultures

Author(s):

F.M. "Mike" Babineaux, C.P.M., A.P.P.
F.M. "Mike" Babineaux, C.P.M., A.P.P., Senior Business Specialist, Procurement Strategic Sourcing and Supply Center of Excellence, Federal Express Corporation, Memphis, TN 38118, 901/224-4988, http://www.fedex.com

84th Annual International Conference Proceedings - 1999 

Abstract. Every person who negotiates with other cultures must be aware of the serious and costly mistakes and misunderstandings in business practices that are caused by cultural differences. The overall objective of this presentation is to enhance negotiators' effectiveness by reducing the likelihood of mistakes and misunderstandings when they negotiate with people from other cultures and/or countries.

Nations, on the surface, are changing every day in many ways, but the fundamentals of culture change at a glacial pace. People continue to believe and act the same way they have for generations. So, you'll see many generalizations about cultural norms in this presentation. Every country has a national character, meaning that members of a nation have a shared system of values and common behavior. It's these commonalties that make cultural generalizations possible. Generalizations can aid understanding; however, generalizations are simplifications. All nationalities are made up of diverse groups and individuals that conform to cultural norms in varying degrees. The negotiator can make big mistakes assuming that all individuals fit the norm. In order to make generalizations useful, we must understand that a generalization does not explain the individual. An international negotiator must constantly distinguish the normal expectation from what is actually at hand.

Negotiators who have the greatest success in doing business around the world are those who have learned to have credible appreciation and understanding of those with whom they do business. To help in this, the negotiator will find in this presentation an exploration of the following:

  • The American way.
  • The variations of cultures.
  • The cultural stereotypes.

Exploring the American way of doing business. Much is being said these days about corporate culture: we have one at FedEx, Apple Computer has one, as does IBM and others. But whatever the culture of the individual organization, it is only a variation upon and operates within the culture that's common to all American businesses. There is an American way of negotiating that is quite distinct from the way negotiation is done in every other country. It is made up of all the habitual ways Americans behave at work and do their job. Common attitudes and assumptions about work, the workplace and markets shape it. And it is supported by common ways of thinking about life and other values more or less directly related to work. Certain behaviors are expected and rewarded in America. Others are considered antisocial, unprofessional or counter-productive. The bundle of expectations we have about the way things are or should be make up a frame of reference or lens through which we view the negotiation. When we look through our own cultural lens in America, we generally know how to interpret and evaluate what we see. But when we look at other cultural situations through our American frame of reference, we may come to the wrong conclusions.

Exploring the variations of cultures. Just as there is great variation between the languages, there is also great variation in nonverbal aspects of culture. Some of these variations are the sense of time, space, communication and work.

Sense of time. How we value time affects our negotiating conduct. We all negotiate according to hundreds of cultural rules we have about time. Americans come across as slaves to the clock. We treat time as a valuable, tangible and limited resource. Like money, we save it, waste it, take it, make it, spend it, run out of it and budget it. We certainly account for it and charge for it. Because time is so valuable to us, we try to use it productively and compartmentalize it into efficient intervals of activity on daily calendars. In many ways we rank time: earlier is better than later, first better than last, faster better than slower. We even use time as a form of communication. Consider a typical negotiating session in America. To arrive early would suggest that the visitor is anxious, overly eager, or has time to spare. To arrive late may give the impression that they're more important than the other parties. In other cultures, language doesn't allow precision regarding time. In Mexico the dictionary meaning of manana is "tomorrow," but manana really means only "soon." In Arabic, bukara means "tomorrow" or "some time in the future."

Sense of space. The way cultures use space "speaks" as expressively as the way they use time, and the language of space varies around the world. International negotiators are disoriented when spatial cues and relationships are different. The American treatment of space is remarkably similar to our treatment of time. Space is regarded as a resource to be carefully compartmentalized and used. Space, like time, indicates status. More important people have more space. Americans who are moved to smaller offices or who are crowded together worry about their status in an organization. While window offices are high-status in the United States, the Japanese expression "sitting near the window" refers to employees who are being retired. Office configurations are different abroad, and we cannot rely on our customary spatial clues to organizational structure. The French are likely to place a supervisor at the center, where subordinates can be kept under control. Space will be laid out in a network of related activities or areas of influence. In Japan, everything is open. Supervisors sit at one end of a room, possibly at the head of a giant table, from where they can see and hear everything that is going on in the room. Other spatial clues vary too. What we perceive as a small or crowded office, the South American or Arab may consider spacious. What we see as a bare room will be cozy to the Japanese

Personal space also varies from culture to culture. In America, when our space is invaded, we become perplexed and back off to regain it. Conversely, when we feel people are too far away for us to comfortably communicate, we move closer. Americans are most comfortable when standing a little over an arm's length apart. On the other hand, Arabs or South Americans are comfortable much closer, so close that an American may become extremely uncomfortable. The American, who backs away, may confuse the foreigner, who will sense the backing away as rejection. When a native Italian sales rep stands very close to you during the conversation about his products, holds on to your forearm, and then gives you a hearty hug at the close of the deal - he's doing what comes natural to him.

Communication: Americans tend to speak directly and openly. We try to say what we mean, and are uncomfortable with silence. We want the truth, and we want it now. We are suspicious when we think someone is being evasive. The person who seeks a concession will ask for it. The adept American will sum up a negotiation, pinpointing agreements or progress made toward an objective that was defined when the negotiation began. The American who proceeds in the direct American style in a negotiation will not be particularly effective in some countries. He or she will be on a different wavelength than the foreigner because our style of communicating is very different from that of others. Consequently, misinterpretations result even when translation is perfect. In many cultures, directness comes across as abrupt, demanding or intrusive. An open person may be seen as weak and untrustworthy, incapable of appropriate restraint. Giving details and specifics may insult one's intelligence. To some, written contracts imply that a person's word is not good.

Work. American parents from Miami to Seattle read "The Little Engine that Could" to their two-year-olds. We get the message from infancy that if you just try harder, you can do anything, even the impossible. Underlying much of American enterprise is the conviction that individuals and organizations can substantially influence the future, that we are masters of our destiny, that we can make things better and that we get what we deserve, i.e., hard work will be rewarded. Self-determination is a concept almost outside the comprehension of many cultures. In Moslem countries, the will of Allah influences every detail of life and many feel it is irreverent to plan for the future. Although many Moslem negotiators do think in terms of strategy and plans, even they will regard their efforts in the context of what God wills. Striving in the American sense is uncommon in Southeast Asia, where Buddhists believe that suffering is caused by desire for possessions and selfish enjoyment. Work gives Americans identity; we often define others and ourselves by what we do. Other people's cultural identity often stems from religion, family and village. Other people find us "workaholics." Few other cultures have such a devotion to work as the Americans. In most other cultures, work is generally something that must be done out of necessity; it is not an all-consuming drive and certainly not appreciated for its own sake.

Exploring the cultural stereotypes. A person's cultural or national origin plays a part in forming his or her psychological stance toward negotiating. However, there is such a rich diversity of attitudes, values, beliefs, traditions, and role behavior in various cultures that it seems very dangerous to try to generalize or stereotype. So, while we may make some stereotypical statements about a certain culture's negotiating style, we need to remember that a certain individual may not fit the stereotype. But here are some generalizations that I've found to be true.

Latin American: Latin America generally refers to Spanish-speaking Caribbean, Central and South America and Mexico. Business practices differ in its many different cultures. Even so, there are several common negotiating traits that they share.

  1. Preparation - Basic/poor (Likes to "wing-it")
  2. Decision Making - Individualist rather than part of a team
  3. Protocols and Rules - None
  4. Arguments- Based on rhetoric/improvisation (Not lies-but will make it up)
  5. Relationships - Amicable, informal and important
  6. Risk Taking - High to medium
  7. Flexibility - High and creative
  8. Time Value - Low (manana)
  9. Style - Emotional and passionate
  10. Agreements - Moderately important, but not more than relationship.

Japanese: The Pacific Rim countries have in common ancient histories characterized by sophisticated cultural achievements, dynastic rule, and social stratification. These histories lead me to believe that this culture will share these common negotiating characteristics.

  1. Preparation - High and intense pre-negotiations
  2. Decision Making - Based on consensus and requires multiple reviews
  3. Protocol and Rules - Emphasized
  4. Arguments - Based on detailed studies
  5. Relationships - Build on trustworthiness and face-saving is critical
  6. Risk taking - Low
  7. Flexibility - Very little
  8. Time Value - Relative low
  9. Style - Formal
  10. Agreements - Documented via acts/minutes

Western European - French: While Americans may be more comfortable in Western Europe than in many other places, remember that negotiating there can sometimes be quite difficult and that negotiating styles differ from country to country and can be very individualistic. As an example, look at France.

  1. Preparation - Moderate
  2. Decision Making - Individualist rather than part of a team
  3. Protocol and Rules - Highly valued
  4. Arguments - Based on logic and reason
  5. Relationships - Business first and conservative
  6. Risk Taking - Medium to low
  7. Flexibility - Controlled
  8. Time Value - High (Much like an American)
  9. Style - Nationalistic
  10. Agreements - Reached orally with written contracts to follow

Middle East - Arabic: The Middle East is a very diverse area, covering countries like Saudi Arabia, Israel, Egypt, the United Arab Emirates, Syria, Iran, Iraq, Jordan, Lebanon, and Oman. The Arabs are relatively small in number, mainly centered in Saudi Arabia, Jordan, Iraq, and the Gulf States. Negotiating, or bargaining, is part of the every day life of Middle Easterners, particularly the Arab population. Here are some negotiating characteristics of the Arab culture.

  1. Preparation - Absurd initial positions
  2. Decision Making - Individualist rather than part of a team
  3. Protocol and Rules - Emphasized
  4. Arguments - Based on power/politics/ideals
  5. Relationships - High praise for hospitality
  6. Risk Taking - Very high
  7. Flexibility - Moderate to low
  8. Time Value - Low
  9. Style - Interrupted environment
  10. Agreements - Word based

Eastern European - Russia: Lots of changes since the fall of the USSR. Though definitions vary in the changing European political and economic landscape, Eastern Europe is considered to be the countries that formerly constituted the Soviet Union. Russia is the largest and therefore the most logical choice for a characterization of the negotiating procedures of the region.

  1. Preparation - High for a small number of scenarios
  2. Decision Making - Collective orientation/consensus
  3. Protocol and Rules - Important
  4. Arguments - Persistent
  5. Relationships - Formal
  6. Risk Taking - Minimum
  7. Flexibility - Very bureaucratic
  8. Time Value - Low
  9. Style - Critical attitude against the other party
  10. Agreements - Compliance with the spirit, if not the letter

Certain fundamentals of negotiating apply whether you're negotiating in Memphis, Tennessee or Memphis, Egypt. It's important to understand these. They're the foundation on which you can build your negotiating strengths regardless of the culture of the others.

  • * Understand the concept of negotiation as others see it
  • Keep a win/win attitude
  • Understand the stages of negotiation
  • Plan your negotiation

REFERENCES

Lennie Copeland and Lewis Griggs, GOING INTER-NATIONAL How to Make Friends and Deal Effectively in the Global Marketplace. New York: Random House, Inc. 1985

Frank L. Acuff, How To NEGOTIATE ANYTHING with ANYONE ANYWHERE around the world. New York: American Management Association. 1993

Dean Allen Foster, BARGAINING ACROSS BORDERS How to negotiate business successfully anywhere in the world. New York: McGraw-Hill, Inc. 1992

The Parker Pen Company, DO'S and TABOOS around the world. New York: John Wiley and Sons, Inc. 1993

Robert M. Monczka, Ph.D. and Larry C. Giunipero, Ph.D., Purchasing Internationally: Concepts and Principles. Tempe, AZ: NAPM. 1990

FedEx, International Business Practices. U.S. Department of Commerce: Washington, DC. 1993

Victor H. Pooler, C.P.M. Global Purchasing: Reaching for the World. New York: Van Nostrand Reinhold. 1992


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