by Sheida Hodge
Managing Director, Worldwide, Berlitz Cross-Cultural
Until recently, U.S. superiority in technology and finance spared executives the necessity of making adjustments when they did business internationally. What distinguished a foreign business trip from a domestic trip was that one packed a passport and an electricity converter. It was assumed that there was only one way to do business: the American way.

In fact, each country has its own unique style of business negotiations. The more you understand about how their approach to negotiations differs from yours, the more successful you will be.

Some cultural differences such as language, food and gestures are easy to observe and deal with. For example, gestures that are considered positive and upbeat in one culture may be seen as rude and obscene in another. While infractions of these outward cultural rules are tolerated, there are deep and often unconscious cultural values that can snare an unsuspecting executive. Jon Thomas, a skilled international negotiator for AT&T, once told me, “The niceties, such as how to shake hands, not crossing your legs, and so on, are far less important than the deeper cultural beliefs such as face saving and building trust. After all, people understand that you don’t necessarily know their customs just as they donut understand yours, so a great deal of tolerance is present.”

The following guidelines will help you manage your international business negotiations. Keep in mind that these are general tendencies and that individual cultures sometimes vary. Even within the same culture, business practices can vary by region or according to the individual negotiators personality or background.

Acknowledge that cultural differences exist

Individualism vs. group orientation. A key trait that sets American culture apart from the rest of the world is the emphasis on the individual. We focus on individual achievements and incentives, and responsibility for decisions lies with the individual. Traditional cultures such as Asian, Latin American and Middle Eastern are group oriented.

On of the most important consequences of this difference is that traditional cultures rely on group structures rather than the legal system to resolve difficulties. I once asked a high-level Malaysian consular official for the most valuable advice he could give Americans. “Not to threaten a lawsuit as soon as they see a difficulty,” he told me. John Condon observes that in Japanese culture, “When a lawyer shows up it’s like the appearance of a Buddhist priest who is called on to administer last rites.”

The slow-decision making process of group-oriented cultures is likely to severely test Americans` patience. In consensus-oriented cultures, such as Japan and Indonesia, the lobbying effort to get everyone’s buy-in is a lengthy process. Even in authoritarian cultures such as China there is lengthy consultation with others to ensure against bad decisions, as well as to avoid being blamed if things don’t work out.

Equality vs. Status. In the U.S. we tend to minimize status differences and encourage equality over hierarchy and social class. In status-oriented cultures such Asia, Latin America, the Middle East, and many European countries, people aren’t comfortable unless they have a clear idea where you fit on the totem pole. They want to know your position and authority level before the first meeting. For your part, find out about the hierarchy within the other team and treat them accordingly. They are very sensitive to being treated with the proper respect. Remember that as purchasers you already have an automatic power position and that sellers will treat you with deference.

Informal vs. formal. While Americans like to get on an informal, first-name basis as soon as possible, traditional cultures like to preserve formality in business relationships. Call them by their last names and titles, and avoid jokes and frivolous behavior. Many cultures use social occasions to establish informal relations. However, this informal behavior doesn’t carry over to the negotiating table, where a certain level of formality and dignity must be maintained. Accept their social invitations and reciprocate in due time.

Dress formally. The best guide is to dress the same way you dress at work. Avoid dressing as though you are on vacation.

Direct vs. indirect. In this culture we say, “Don’t beat around the bush.” In Asian, Latino, and Middle Eastern cultures, a direct approach might be viewed as rude or aggressive and may cause people to lose face. Such cultures won’t be direct in telling you “no” or giving you bad news. On your side, be aware that a sharp “no” may cause the other party to lose face, especially if you tell him in front of others. You may want to deliver a negative response through a go-between or privately.

On the other hand, German and other northern European cultures tend to be more frank and up front than is comfortable for Americans. Returning from a long day of business meetings, I felt obligated to say a few words to my Swedish counterpart sitting next to me on the airplane. His reply was, “I am very tired and I don’t wish to talk to you for the duration of the trip.” Talk about losing face!

Select a wining team

Select negotiators with the other side in mind. People participating on each side should be of comparable status and expertise. Be careful about sending people of the same ethnic background as the country of negotiations. This tactic sometimes fails because the negotiator is not perceived as an authority figure. Also, other cultures tend to have a lower tolerance for mistakes when dealing with someone of the same background.

It is more cost effective to send a negotiating team if your company is faced with complex negotiations in which many loose ends need to be tied up. Before your team leaves, make sure you have your game plan worked out and that there is agreement about who is to lead. Open disagreements among your team members will undermine your negotiating power. Make sure the facts and issues to be discussed are clear to your team and, when you get there, to the other side.

Prior to your trip, let the other side know about your team hierarchy and how each person fits into the scheme of things. Negotiators from traditional cultures need in-depth information about your company and the background and authority of individual team members. If you go without providing this information in advance, they will be hospitable, but precious time will be lost as they try to assess you and find out what they need to know. People in traditional cultures like to negotiate with people of authority, and if you don’t establish yours you won’t be taken seriously. This step is crucial for women and younger executives who might be perceived as having lower status and authority.

Manage the negotiating process

Your preliminary preparations will smooth the path but they won’t guarantee success. The negotiating process itself needs to be managed properly.

Adopt an appropriate negotiating style. Whether both sides compete or cooperate depends more on fundamental negotiating tactics than on nationality. Stakes are high if you take the wrong approach. Many international negotiators are like the knight who staggered into the king’s court all disheveled and bloody. The king asked with astonishment, “My good knight, where have you been?” “I’ve been killing, raping, and pillaging your enemies to the west,” replied the knight.” “But I don’t have any enemies to the west,” said the king in surprise. “You do now!” said the knight.

Don’t push your position too hard. Be patient but firm. Don’t corner them or cause them to lose face. Skip over sensitive issues for future discussion or use informal channels such as a go-between or a private meeting away from the negotiating table--where personal relationships can smooth the way. Avoid losing your temper and showing anger, especially with Asians. Latino, Middle Eastern, and Russian negotiators tend to negotiate with passion and great displays of emotion; nonetheless, you need to maintain decorum and dignity.

Persuade by appealing to the “human” side of the equation. Use “emotional common denominators” instead of logical arguments. Such arguments can force the other side to dig in their heals, or to spend their time looking for the weak links in your argument. By itself, a superior argument often leads to deadlock.

Overcome Language barriers. There’s a myth that you can’t do international business effectively unless you speak their language. In fact people all over the world are doing business together without fluency in each other’s language. Americans have a distinct advantage over the rest of the world because English is the global linguistic common denominator.

However, don’t assume that what you say is the same as what they hear. Their courtesy and polite nodding of the head is not a sure indication of comprehension. Exchange plenty of written information, and follow up every meeting with a memo outlining the results and specifying what is to follow.

Many executives believe that learning a few words in their counterpart’s language will be appreciated. But some caution is in order. An American businessman meeting with a high level Mexican official asked in Spanish, “I hear that you’re an avid golfer.” Because he used the wrong word, everyone in the meeting heard him saying, “I hear that you are an avid philanderer.” The fact that the official was a philanderer as well as a golfer made the situation more tense than humorous.

Be careful about using immigrants as translators. The following translation into Japanese appeared on a box containing an alarm clock: “Thank you to perfection of alarming mechanism. You are never awake when you are asleep.” It is worth the expense to hire professional interpreters if you are negotiating with non-English speaking counterparts.

Bring home the contract. In Middle Eastern cultures a whisker pulled from one’s beard used to clinch a deal. Even today, a handshake might be sufficient in some Asian countries, where legal documents are not as important as human rapport and trust. Businesses in many of these countries prefer that contracts be left flexible enough to allow them to wiggle out of certain terms if circumstances change. A negotiator once complained to a Chinese counterpart about their habit of breaking agreements. The Chinese client replied “We don’t break agreements. We just make a new set of promises” (WSJ). Americans say, “a deal is a deal.” The final contract is the blueprint for the future relationship, and its terms are taken very literally.

The win-win solution is to develop a good rapport and relationships, and also have airtight contracts. Contracts made in good faith have a life of their own, while those aimed at taking advantage of the other side are always unstable, regardless of the culture.

When you understand and respect cultural differences, you can move to focusing on similarities. Human beings are far more similar than they are different, and your aim of generating value for both sides will bridge most differences. When I was in China, I once asked my counterpart to teach me how to say “excuse me” in Chinese in order not to offend anyone. “Because you are a foreigner doing business in China,” he told me, “you are automatically excused.”