Cultural factors in negotiation

In the Mad Men episode, ‘The Chrysanthemum and the Sword’, Bert Cooper asks, ‘Have we received a gift yet?’. The day before, the executives at the fictional advertising agency pitched their services to the Japanese car company, Honda. Bert, with prior knowledge of Japanese culture, knew that if they stood a chance of winning the business, they would have received a gift. As it turns out, the men had actually offended Honda, and were expected to retract their offer.

Although entirely fictional, this storyline was a great example of why knowledge of cultural differences are essential in business. This is particularly so in the negotiation process. After all, negotiations are difficult at the best of times, never mind when the parties involved come from different cultural backgrounds.

Cross-cultural negotiations can falter for a whole variety of reasons; an obvious example is language. English may well be the foremost lingua franca of the 21st Century, but not everyone can speak and understand the language to the same ability. As such, native English speakers should be careful using colloquialisms and idioms around non-native speakers.

Differences in the understanding of body language can play a part too. In East Asian cultures, it can be rude to make eye contact for too long. Similarly, where Italians tend to gesticulate with their entire body as they speak, Britons are quite rigid. These may only be slight nuances in behaviour, but they can make a large impact in understanding and ease-of-negotiation.

There are other reasons too, such as cultural differences in emotions, punctuality, and body language. All in all, the key for anyone involved in cross-cultural negotiations is to learn and understand these differences well-ahead of any meetings with the other party, and this applies for both sides.

To this end, there are common themes of negotiation strategy which will serve any business well despite where they are in the world and with whomever they are negotiating, including:

  • Research the opposing side – learn everything you can about the other team, including their motivations and goals
  • Use clear language – avoid ambiguity and chances for misinterpretation
  • Learn about the cultures of the opposing side – this doesn’t just mean the culture of the nation they come from, but also their business culture
  • Identify what’s important to them, and yield if you can – allowing the other side to “win” on the points that are important to them, but less important to you, is a great negotiation tactic, especially when confronted with cultures that place an emphasis on “winning” negotiations.
  • Find a way to compromise – like yielding, compromise is a fundamental negotiation strategy. In cultures that place an emphasis on a “win-win” solution in negotiations, compromise is the best way to keep the other party happy and achieve the desired outcome.

Regardless of whether you are negotiating across cultures or not, the above strategies for negotiation will serve you well. However, if you’re looking to learn more about negotiation strategy in general, then please check out our negotiation skills training course.