Negotiating Across Cultures

8/18/2015

Negotiating is a complex and often difficult part of doing business. Many companies deploy only their most skilled executives to conduct negotiations. And while negotiating with companies within one’s own industry and country is challenging, doing so across cultures is even more difficult. That is why it is essential for negotiators to learn about the interaction style, thinking style and sense of self of their negotiation partners, and to ascertain the negotiation protocol used in their partners’ countries.

Let’s look at an example of an international negotiation whose partners had very different cultural norms, and how these impeded successful talks, at least at the beginning:

Peter Grayford, the chief negotiator for the NorSea Company, was based out of Norway. A physically imposing man, he also had a loud voice. His usual technique at the negotiating table was to be insistent and to use expansive gestures to convey his point. In line with the typical Norwegian business norms, he was not hierarchical and was quite informal and direct with his colleagues and superiors.

NorSea’s CEO did not think about the possible cultural impact of Peter’s style when she sent him to Seoul to negotiate an oil rig contract with the South Korean company East Oil. However, at the first negotiation session, the cultural gaps between the Norwegian and Korean counterparts were readily apparent. Peter’s informal dress and use of first names was very disconcerting to the South Korean negotiating team. The Koreans were also perplexed at the manner in which Peter seemed to switch from topic to topic before they had an opportunity to finish asking questions regarding a point he had just brought up.

And finally, the East Oil team was slightly disturbed that NorSea only sent one negotiator, while they had sent the top three executives to the meetings to negotiate the contract.

Had NorSea taken into account the different cultural orientations and negotiation styles of their Korean counterparts, they would have been able to prevent these gaps from interfering with the talks. However, it was not until negotiations stalled that Peter and his company invested in the Cultural Navigator, whose country guides include not only the cultural norms of each country’s business sphere, but also give detailed background on their business practices – including negotiation.

When NorSea eventually submitted a proposal to renew talks with East Oil, they were sure to do so in a way that respected the South Korean hierarchy, formality and indirect preferences, as well as to read up on the negotiation protocol in the country. Needless to say, the second round of talks was a success.