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Archive for December, 2009
What sets the successful cross cultural negotiator apart from the rest is their ability to think in terms of ‘differences’ between cultures and people rather than thinking in terms of ‘right and wrong’.
As humans we tend to think that those who are different to us and our ways are wrong. You see, we all view the world through the filters of our own experience and preferences and this means that our picture of ourselves and others is by definition almost always prejudiced one way or another.
If you can think of others as only being different rather than wrong, then it is much easier to emphatically and openly engage them in interest based negotiations.
When considering business negotiations across cultures there is a tendency to only think about the national or ethic cultures involved. You could easily make the mistake of stereotyping people according to their national culture whilst ignoring the other elements of culture that will contribute to the success of your negotiation.
In addition to national or ethnic culture, you should also consider:
The secondary or group culture, for example the organisational culture (corporate culture & norms) and/or religious culture (Christian, Muslim, Hindu etc.).
The professional culture (accountants, lawyers, research scientists etc.).
Considering these additional cultural elements may well serve to assist you in uncovering potential common ground that would not exist if you only thought about culture in terms of national or ethnic dimensions.
The problem with preparing for cross cultural negotiation is that there is so much material that exists on cultural differences and similarities that it would take a significant amount of time for you to explore it in intricate detail.
To make it easier for you to derive some utility value from all the information that exists on cross cultural business negotiations, I would like you to consider only 2 key elements:
1. The maturity & sophistication of the financial infrastructure in place within that territory.
When we have a mature & sophisticated financial infrastructure in place it means that we have relatively easy access to capital and tools like credit vetting & credit insurance. This removes some of the risks associated in entering into business transactions.
2. The maturity & sophistication of the legal system in place within a territory.
When we have a mature & sophisticated legal infrastructure in place within a territory it means that we have reference to case law & precedents to provide guidance in terms of structuring agreements. It also means that when things go wrong it is easy for us to have recourse to the courts where we can rely on a relatively objective ruling to resolve disputes.
If you are negotiating in an environment where there is both a mature and sophisticated legal and financial system in place, you can expect to focus more on the content of the negotiation rather than the context surrounding the negotiation. Examples of these territories are Western & Northern Europe and North America.
In content driven negotiations the focus will be on the contractual terms and supporting details. Involve finance & legal early on in these negotiations. The relationship can be explored after the contract has been successfully agreed & implemented.
However, if you are negotiating in an environment where the legal and financial systems are relatively immature then it becomes important for you to focus on the context within which you negotiate rather than focusing only on the content. Examples of these types of territories are Africa, parts of the Middle East and Asia and parts of Latin America.
This means that when you are involved in negotiations in a context driven territory you should spend more time on developing relationships and establishing trust. Once you have established trust the agreement will follow!
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