Culture profoundly influences how people think, communicate and behave, especially in the form of international businesses, whether in the form of trade, investment or business relations. The type of transactions you make and the way you negotiate also affect the type of people you interact with, as well as the quality of your relationships with other people.
The great diversity of cultures around the world makes it difficult for negotiators, no matter how competent and experienced they may be, to fully understand all cultures they can encounter. Cultural differences, such as family businesses, religions and ethnic groups, can create barriers that hinder or completely block the negotiation process.
So how should politicians prepare to deal with these cultures when they do business in Singapore or elsewhere this week?
The ten most important elements of the negotiation behaviour provide a framework for identifying cultural differences that may arise during the negotiation process. In our recent book Making and Managing Intercultural Negotiations, we have found that ten specific elements keep cropping up that complicate intercultural negotiations.
Negotiators from different cultures tend to see the purpose of negotiations differently. In dealmaker cultures, the primary goal of business negotiations is for the parties to sign a contract. Whereas written contact expresses the relationship, in other cultures the essence of the agreement is the relationship itself. Other cultures tend to think that negotiations are not about signing a treaty.
This different approach might explain why certain Asian negotiators, often aiming to establish relationships, tend to devote more time and effort to prepare for negotiations, while North Americans often want to rush the first phase of the agreement. Spanish respondents said they wanted a contract without a relationship, while only 33% of Indian executives had a similar view. The fact that both sides want to get to know each other thoroughly is a crucial basis for a good business relationship.
However, this seems less important when the objective is merely the Treaty and the relationship between the parties is less important than the actual Treaty itself.
It is therefore important to determine how your interlocutors see the purpose of the negotiations. Perhaps you will also have to convince them at the first meeting that the two organisations have a rewarding relationship to build over the long term. For the negotiators of the relationship sitting at the other table, this may not be enough if they are convinced that they need to reach a cost-effective deal. However, if you are basically the contractor, trying to build a relationship can be a waste of time and energy.
Despite differences in culture and personality, businessmen seem to approach business as if negotiations were a battle in which one side inevitably wins. Here, too, surveys show a clear cultural difference: win-win negotiators view the conclusion of an agreement as a cooperative process of problem and solution, while the win-win negotiator views it as confrontational. In negotiations, it is important to know who is sitting opposite you. In this process, you can gain the trust of the other side, as well as the respect and respect of your partner.
The personal style of a negotiator is strongly influenced by culture, and this is particularly true of the title and the clothes worn by the negotiators. For example, it has been observed that Germans have a more formal style than Americans.
The informal negotiator can take off his jacket and roll up his sleeves when negotiations begin in earnest and quickly seeks a personal and friendly relationship with the other team. He tries to start discussions by the first name, insists on naming his interlocutors, avoids personal anecdotes, avoids questions that concern him, tries to avoid personal anecdotes and fails.
There is a culture that all people share, a kind of glue that holds them together as a community. Every culture has its own values, traditions, customs, beliefs and norms, and there are people who share them.
For an American, it is an act of friendship and therefore a good thing to call someone by their first name. For a Japanese, using your first name in your first meeting is an act of disrespect and therefore bad for the Japanese. Negotiators in foreign cultures must follow appropriate formalities, but in general, it is always safer to adopt a formal stance when the situation requires it and to move away from an informal stance than to adopt the informal style too quickly.
Communication methods vary according to culture, and some can be used by the latter, while others rely heavily on indirect and complex methods.
If your culture values directness, you can expect to receive a clear and unambiguous answer to any suggestion or question. What you don’t get at the first meeting is a clear commitment or a clear rejection. In cultures based on indirect communication, your response to a suggestion can be achieved by interpreting the other person’s words and actions, as well as their body language and facial expressions.
If your culture values directness, your answer to a proposal or question should be clear and unambiguous, even if it is not clear to you.
During the Camp David negotiations, which led to a peace treaty between Egypt and Israel, relations between the two sides were exacerbated by the preferred indirect form of direct negotiation. Indirect statements by Japanese negotiators, for example, often led to the assumption that their proposals would be examined, even though they were rejected by their side. The Egyptians interpreted the Israeli “directness” as aggression and thus as an insult. Egyptian insincerity, the Israelis looked at him impatiently and suspected that he was sincere when he did not say what he meant.
Commentators sometimes claim that some cultures value time more than others; some say that Germans are always on time, Latinos are usually late, Japanese negotiate slowly, and Americans make quick deals. But these observations may not be an accurate description of the situation; discussions about national negotiating styles always deal with the attitudes of a particular culture at the moment. On the contrary, negotiators can evaluate the time they have spent pursuing their goals differently.
Time is money: the Americans want to reach an agreement quickly and so they try to minimize the formalities and get to the point quickly. For the Americans, the deal is a signed treaty, so forget to make it quickly; for the Germans, it is a treaty to be signed.
Japanese and other Asians, whose goal is to build a relationship rather than simply sign a contract, are investing time in the negotiation process so that both parties can get to know each other and decide whether they want to enter into a long-term relationship. An aggressive attempt to shorten the negotiation time can be seen as an attempt to hide something.
In a case that attracted considerable media attention in the mid-1990s, a multi-billion rupee ($1.5 billion) nuclear project in India was challenged and terminated after an accelerated process that bypassed the normal process of developing such projects in the past. In his defence, he told the Press he was extremely concerned about time because “time is money.” The Indian public automatically assumed that the government had failed to protect the public interest because the negotiations were moving so quickly.
The difference between the Indian and American attitudes at the moment is obvious in the twelve nationalities surveyed. India has a higher percentage of people who consider themselves less time-sensitive – more sensitive, in fact than Americans who are considered less “time-sensitive,” according to a Pew Research Center survey.
Individual personalities play a role, of course, but reports of negotiation behaviour in other cultures almost always show a particular group’s propensity to act emotionally. Japanese and many other Asians hide their feelings, while Latinos are more open about their emotions while hiding feelings from other people, such as their parents.
Different cultures have different rules about the appropriateness and form of representation of emotions and decisions – decision-makers should try to learn from them. These rules also bring different types of people to the negotiating table, such as passive Latin and sharp-headed Japanese. Passive Latin, for example, is more open to his feelings, but more cautious about using his emotions in negotiations.
For the authors of the study, the cultural group that ranked highest in terms of emotionality was Latino and Hispanic, which was clearly statistically significant. Germans and English were rated as the least emotional, while the Japanese held the position, along with Asians, but to a lesser extent.