In cross-cultural negotiations, above and beyond the issues of personal negotiation styles and techniques, one must consider the impact of cultural difference. This impact will often be tied to communication issues, increasing the possibilities of misunderstanding. Things that are said, left unsaid, or unclearly said can all create an extra layer of difficulty on top of the substantive issues to be discussed.

In cross-cultural negotiations, we also often bring a certain amount of baggage to the table based on our personal and group history, with all of the stereotypes and assumptions that may go along with that history. What makes it particularly challenging is that cultural difference is a two-way street, potentially making both sides of the table feel awkward. In a potentially adversarial negotiation, that awkwardness could easily become distrust and fear.

One of the challenges in dealing with cultural difference is the nature of culture itself. While the concept of culture applies to a body of people, and their history, we negotiate with individuals, not a “culture”. In a sense, we are all the product of a variety of micro-cultures; based on our family, gender, race, religion, age, education, geographic history, peer groups, occupation, etc. Generalizing based on one’s culture is not only challenging but dangerous.

To maximize the chances of success in the cross-cultural setting, one should consider a number of factors, including:

1. Etiquette/Protocol Issues

Simple issues we take for granted can make a difference in cross-cultural settings. How do you greet someone; with what level of formality? First name jocularity may work wonderfully in Los Angeles, but fall flat in Beijing where formality is more the norm (at least in the absence of longstanding relations). How should you dress to meet a senior government official in the heat of a Trinidadian summer? Are there gender issues to consider that may impact on how to behave?

Are gifts appropriate? Required? Have we considered the impact of some of the issues set out below, such as personal space norms? Are certain topics acceptable, and if so when can they be raised comfortably?

There may even be protocols that we will never be aware of.  For example, in Saudi Arabia, showing the sole of your shoe to your host would be considered a breach of etiquette, but they would rarely point it out to you. In Belgium, failing to properly introduce everyone might ruffle feathers.

Lack of understanding of etiquette can lead to tension, discomfort, and mistrust. In Saudi Arabia, it would be quite normal for a visitor to be greeted by their male host with a very soft handshake and a kiss, then taken by the hand and walked hand in hand around a party being introduced to everyone. Such an activity would make many North American males a tad uncomfortable, but understanding the nature of the cultural norms can make the experience far less daunting.

Try to inform yourself and understand the protocol and etiquette norms in advance, but keep your senses open for any signs that you have stepped into inappropriate territory.

2. Body Language Issues

While in Western (North American and European) cultures, eye contact is often seen as a good thing (a sign of confidence, honesty, etc.), even in those cultures, it can be misinterpreted. In other cultures, such as some aboriginal cultures and Japanese culture, eye contact can be seen as rude or inappropriate or uncomfortable.

One must be careful in reading too much or too little into body language signals, as they can be so easy to misinterpret and so dependant on personal history. As individuals, we are the product of many micro-cultures, all of which play a role in our interactions with others. A Japanese businessperson, for example, is the product of his family upbringing, his education, his gender, his religion, his work experience, his geographic history, his age, etc.

Working among the Inuit for example, we have been told by Southerners that Inuit are uncomfortable with eye contact. The truth is much more complex. Our Inuit participants in workshops have told us that eye contact may be uncomfortable in some settings (in discussions with elders, in discussions with a power imbalance, and in discussions that are uncomfortable by their nature), but that eye contact is not inherently bad at all. Indeed much communication in Inuit culture takes place with the eyes (‘Yes’ and ‘No’ are often communicated by a mere facial expression – what you might see as raised eyebrows and a grimace respectively). The comfort level with eye contact also depends very much on the background of the Inuk in question. Are they a 60 year old who was raised on the land or a 14 year old raised on MTV?

Other issues of body language commonly worth considering are the aspects of “personal space” and physical contact. Typically, to be comfortable, members of Western cultures desire a couple of feet of personal space. In some Asian cultures, more space may be desired. In Middle Eastern culture and some others, there may be much more physical contact as a norm, particularly between males. Contact between different genders however may be more limited in the Middle East than in Western norms. All of these norms however, are subject to significant variation dependent on the individuals in question and their exact relationship with one another. What works for good friends for example, may not work with strangers.

With all aspects of body language, try to keep your radar open for signs that discomfort is being created.

3. Language Issues

In certain circumstances, language differences will require interpretative services on one or all sides. It is worth exploring the degree of language issues early on to prepare accordingly, before substantive discussions begin. Will there be a similar standard for verbal and written communications?

Recognize that, when translation is required, you will need to at least double the time required to accomplish a goal.

In using translation, you will want to ensure that you are getting accurate and timely translation, so set clear ground-rules for your interpreters. Are they to summarize or to repeat word for word? Nothing is more disturbing than to hear a three minute speech translated with one short sentence.

Technical language is much harder to understand and translate and acronyms can be easily misunderstood. An acronym (PMO) may simply sound like an unknown word. Avoid acronyms where possible. Speaking slowly and enunciating can help.

In negotiations with people from another language group, rather than caucus in private, some people may simply start talking in their own language. One should be careful of such actions as you never know what language proficiency is on the other side of the table. In one case, a group had a conversation in Flemish that was largely insulting to the other side. Unbeknownst to them, a Flemish speaker on the North American side understood every word, and was not amused.

4. Relationship Issues

In Western culture, there may be varying degrees of comfort with personal relationships in a negotiation. Some people are inherently relationship builders by nature and want to get to know the other party before getting down to business. Others are more rational and “cut to the chase” by nature, and may see personal relationships as external to or even dangerous in a business deal.

Other cultures can approach relationships in different ways. South Americans, for example, are more likely to want to get to know you as a person before getting down to business. The same would be true of many Asian cultures.

Americans often see contracts as the answer to all questions in a business relationship, whereas Europeans, particularly from the south, may be more likely to see a contract merely as the starting point of the larger relationship.

In the Caribbean, personal ‘respect’ is a crucial value. The way you deal with people will be remembered for a long time, and reputation can be very important to doing business effectively.

Ask yourself what role relationships should have in this negotiation. Is there a place for building relationships, and how can that be done effectively without disadvantaging oneself?

5. Timing Issues

Different cultures deal with time in very different ways. In Western cultures, punctuality is generally seen as a positive, though in the extreme it can actually be seen as nitpicky behaviour. In Japan and China, a failure to appear on time may be a serious breach of etiquette. In the Caribbean, the Arctic, South America or the Middle East, however, time is often seen as more fluid. Many a conflict at a hotel desk in the Bahamas has arisen because, “I am getting to it” in Nassau does not mean the same as it does in New York City.

In Toronto, cutting to the chase may be quite acceptable, whereas in Tokyo, more time may need to be set aside for negotiations, to lay the groundwork for the relationships. Time might also be used as a weapon. In a Chinese negotiation, for example, the substantive discussions were delayed and delayed until two hours before the known departure time of a Canadian negotiator, putting added pressure on that negotiator to make concessions before leaving.

Whereas many North Americans see a “one issue at a time” approach as a rational one, a Saudi negotiating team may jump all over the map on the issues. Is it a strategy or a cultural trait? We often infer negative intention from actions that have a negative impact on us, but we need to be careful about such knee jerk reactions. By clarifying the process in advance, we are less likely to be surprised in a negative way.

It is worth exploring timing issues explicitly with all parties so everyone understands what is meant by a timetable. When the other side says “We’ll get it to you soon”, what does that really mean?

Be prepared for surprises nonetheless.

6. Trust and Information Issues

North American culture generally values a rational, analytical, straight-forward approach to information, but at the same time, many North Americans typically keep their cards close to their chests and are reluctant to disclose. The adage of “I’ll show you mine, if you show me yours first” would not be uncommon. The approach to information often varies with the parties’ personalities and their relationship at the time, as well as other factors. The greater the level of trust, the more likely that fuller disclosure will occur.

Other cultures may approach information and trust in different ways. Some cultures are more risk averse than others, though typically, our training suggests that most cultures world-wide have a broad component of risk-averse individuals and a small subset of risk-takers. What kinds of personalities are you dealing with? Which are you?

7. Legal Issues

Where foreign law is an issue, advice from counsel adept in the appropriate jurisdiction is a must. The parties will need to determine what law is to apply to any contract, both procedurally and substantively. Be aware that legislation in one or more countries may trump what is written in the contract if there is a conflict. As a result, it is imperative to have someone who knows the legal framework in the relevant jurisdictions. If contracts are drafted in more than one language, what will happen in the event of a conflict?

What level of commitment is necessary to finalize an agreement? A written contract is the norm in most cultures, but the power of the handshake and verbal agreement varies from place to place and person to person. Ensure you are on the same page about the level of commitment and have the appropriate protections in place to ensure compliance.

8. Authority Issues

Depending on the culture (and other issues), true authority for decision-making may rest in various hands. In North America, it would be normal for a representative to attend with authority to make decisions, but there may be practical or strategic reasons for them to attend with limited or no authority to commit their principal. The boss may be out of country, or unwilling to make a final decision, for example.

In Japan, decisions may be made by consensus or by a senior representative of the company. Again, this may well depend on the people and companies involved. In Saudi Arabia, simply trying to determine who has the real authority may be a challenge.

There can be confusion and distrust when authority is spread in a horizontal manner on one side of the table but hierarchically on the other. How can you deal with decision-making to make both sides comfortable? Does a backroom democratic style, with a single point of contact to the client, make more sense than having all decision-makers participate equally with the client?

It is worth clarifying who has authority early on, modeling by your own example.

9. Political/Procedural Issues

When dealing with a foreign culture, you need to educate yourself and be aware of the political and practical realities of getting what you want in the applicable environment. Are there channels that must be followed? If so, what are they, and what is the best route through them that is compatible with the ethical issues in both cultures. Gift giving (and receiving), for example, may be the norm in China, but may run afoul of Government of Canada or company regulations on conflict of interest. This is a political issue. On the practical and procedural side, if giving a gift, what would be appropriate, and how should it be done?

10. Gender Issues

One of the most common and deeply felt value clashes that can occur between cultures is triggered by gender issues. In Saudi Arabia, for example, most Western companies will use male personnel in negotiations, out of concern that female negotiators will not be heard and respected in the same way by the Saudi Negotiators. Companies do this despite (at least in some cases) having their own internal codes of conduct which rule against gender discrimination. Important values and traditions on either side of the negotiation come head to head with stressful results on both sides.

Many aspects of gender relations crop up under some of the other categories set out above, such as etiquette and relationship building. It is worth spending time to consider the impact of gender dynamics on either side of the table, before plowing ahead into unknown territory.

11. Expectation Issues

It may help to clarify the expectations of the parties early on. What one side sees as the logical goal of a negotiation (getting a contract) may not be the goal of the other side (getting to know you/making contacts for future business). It never hurts to have a shared understanding of the goals. Clarify the shared purpose of the negotiation early on.

Conclusions

While there can be no over-arching ‘how to’ list for approaching cross-cultural negotiations (no single negotiation or negotiator is alike), a few simple guidelines will generally be helpful.

1. Seek to understand the culture in question, and encourage the other side do the same. Merely trying to learn and comply with cultural norms may generate significant respect and trust. Seek advice from those familiar with the culture and be careful about assumptions. Try to find a comfort level on both sides. Merely seeking to come to common cultural footing at the outset may create the relationship on which to build the deal. Recognize, however, that you cannot learn another culture overnight and remember the old adage about “a little knowledge”.

2. Know the specific negotiators in question. It is ultimately the person, and not the ‘culture’ to whom you are speaking. It is their individual beliefs and values that matter.

3. Plan your approach to minimize any negative impacts of cultural difference and to maximize the chances of success. Simply understanding that the cause of a problem is mere cultural difference can help. Recognizing that there is no active adversarial intent to hurt either side can go a long way towards preventing the negative reactions and escalation that often happen in such settings.

Written by Paul Godin, 2006