Any negotiation presents challenges, but there are unique challenges in international business negotiations. It is important that you learn about these challenges before they occur, and then take preventive measures. Specifically, there are four key challenges that are most likely to affect you as an international negotiator. Some of these challenges are unique to international business negotiations (such as dealing with international virtual and remote teams), while others can occur domestically but are magnified internationally (such as dealing with a bribe).
Let’s review the impact of these problems and examine the action steps you must take to overcome them.
Challenge 1: Overcoming Culture Shock
Culture shock occurs when we do not have the familiar signposts of how to conduct ourselves. These signposts involve both our professional and personal lives, and often guide us in activities that we normally take for granted. In international business negotiations, these might include how to shake hands; what forms of address to use; to whom your comments should be addressed; how direct to be with TOS (The Other Side); determining if the meaning is really no when TOS says yes; and what should be discussed over dinner.
Action Steps for Dealing with Culture Shock
- Find a cultural mentor. Ask for advice from others who have negotiating experience in the areas of the world where you will be doing business. Talk with both people who have had successful and unsuccessful negotiating experiences there.
- Be flexible and patient with yourself and with those in the host culture. Events, services, issues, mechanical devices—in short, practically all aspects of your life—are not going to flow as smoothly and predictably as they do back home.
- Withhold judgment about the new culture and its people. Try not to go overboard with either positive or negative reactions.
- Recognize that the initial negative feelings you may have are normal and appropriate for these phases of adjustment. Annoyances, irritations, and letdowns are to be expected.
- Keep a sense of humor about yourself and your situation. This doesn’t mean joke telling, but rather keeping a sense of proportion and a positive attitude about whatever culturally irritating situation you find yourself in.
- Reduce stress by being as self-sufficient as possible with regard to business services. ‘‘Routine business services’’ is an oxymoron in some countries. In a developing country, for example, there are often no computers, copiers, faxes, or other business fundamentals. There may also be a confidentiality issue in many host-country business settings, so don’t depend on TOS to type your bargaining position or other similar material. Take along a personal computer (with appropriate electrical adapters) or arrange for service at a hotel or other professional services provider where possible.
- Process and learn from your experiences. Learn from your cultural experiences, both good and bad ones. When you make mistakes, try to smile and learn from them. Ask yourself, ‘‘What is working well, and not well and why?”
Challenge 2: Negotiating with Your Boss and Headquarters Staff Back Home
Negotiating with your international counterpart can be challenging, but experienced
negotiators can tell you that negotiating with your own boss, legal staff, and others back in the home office can be brutal In many cases, you may get a lot more ‘‘help’’ with the negotiation than you want. Your legal counsel is likely to want more detail than will be acceptable to your foreign counterpart. Expect the legal staff to challenge, correct, and attempt to overrule portions of or even the entire agreement you are negotiating
Action Steps for Preparing Your Boss and Headquarters Staff for the International Negotiation
- Stress the protracted nature of international negotiations in most parts of the world. Lower expectations as to the chances of a speedy agreement. Stretch out their time horizons.
- Clarify authority issues. The negotiation process will be undermined if TOS feels concessions that you wouldn’t agree to can be gained from the home office.
- Educate the boss and others on the key cultural factors that influence the negotiation. Contrast and compare specific instances overseas with how they would have been handled domestically (e.g., the degree of emphasis put on the relationship aspects of the negotiation).
- Cue the boss and legal staff to differences in contract length, specificity, and other matters early on in the negotiation. Try to determine the absolute necessities of protecting your side versus the nice-to-have items.
- Keep your own attorneys away from the negotiating table in most other countries. Their presence would be perceived as overly rigid and would show a lack of good faith.
- Don’t ask your legal staff dozens of questions as to whether you can put various legal items in the agreement. The lawyers will tell you no. It’s their job to tell you no. It’s your job to combine the necessary legal protections with the practicalities of achieving an agreement that is good for both parties.
- Don’t surprise the technocrats with a big problem. If you see that there is a potential legal, financial, or other problem, give ample notice to the appropriate person. By getting them involved early in the process, you have a chance to make your case before a final decision is made, and also to avoid potential problems with TOS.
- Give your boss or other headquarters staff a lesson in International Negotiating 101. If the boss or others make a trip with you, ensure that they are educated in detail regarding the status of the negotiations and the expectations associated with the culture of TOS.
Challenge 3: Resolving Bribery and Questionable Payment Issues
What constitutes a bribe or payoff in the United States may be considered business as usual in many foreign countries. If you are an American and are put in a situation of accepting a gift that might be construed by the American legal system as a bribe, don’t take a chance. Get your corporate legal staff’s opinion on any ambiguous gift to avoid serious problems later.
Action Steps for Resolving Bribery and Questionable Payment Issues
- Above all, check with your legal staff about any vague areas of home- or host-country laws. Here’s a time when you want the legal staff’s involvement. It may be necessary to get legal counsel in the host country as well.
- Keep your boss informed. This is no time to be the Lone Ranger. Be sure he or she is aware of any concerns you have.
- If you must make a payment, find out how to do it. Rather than make a direct money payment, it may be feasible for you to invest in community projects, such as building a school for the children of customs officials.
- If a monetary payment must be made, don’t make the payment yourself. Use a go-between such as a consultant or someone’s relative in the host country.
Challenge 4: Dealing with International Virtual and Remote Teams
Negotiations within your own organization can sometimes be the toughest. In today’s global business environment, your international negotiations may be taking place with people within your own organization who are spread around the world. It is hard enough for people to work well together in the same building, but there are additional challenges when they’re in different global locations.
Challenges of International Teams
There are four main challenges in dealing with international virtual and remote teams:
1. The team is located away from you.
2. The people with whom you are dealing are in different time zones.
3. The teams are from different cultures.
4. Communication is seldom face to face; most communication is by telephone or e-mail.
Action Steps for Dealing with International Virtual and Remote Teams
- Familiarize yourself with their cultural differences. Pay particular attention to differences relating to how employees and bosses communicate and relate to each other.
- Keep lines of communication open. All parties should be kept informed as to the teams’ successes, failures, and concerns.
- Don’t over-rely on e-mail. Use e-mail for the orientation and fact-finding stage of the negotiation (e.g., for providing information or an agenda), and to summarize the discussion or agreement, but not for hard bargaining. Negotiating with your team about project metrics, deadlines, dealing with setbacks, and so on should preferably be done in person, or—when that isn’t feasible—by telephone. The same can be said for blunt statements, challenges, or criticism—don’t do it by e-mail.
- Use clear language that is unlikely to be misconstrued by your international team members. Slang has no place here. Even attempts at humor can go terribly wrong in an e-mail to someone from another culture.
- Resolve time-zone differences. No one likes getting a telephone call at 3 o’clock in the morning.
- Periodically assess how well the teams are working. This assessment should be completed by those in both the manager’s location and those in the host country.*
*See American Management Association’s seminar, Leading Virtual and Remote Teams, 2001.
© 2008 Frank L. Acuff
Adapted from Negotiate Anything with Anyone Anywhere Around the World, by Frank L. Acuff, published by AMACOM, a division of American Management Association, 2008.