Do your homework before cross-cultural negotiations

February 25, 2008

Attorney Sharon Delshad (sharon@delshadlaw.com) specializes in legal issues impacting the jewelry industry.

By Sharon R. Delshad, Esq.

Negotiating is a significant element of running many aspects of your store. If you frequently deal with international companies or immigrant clients, it is important to take culture into consideration. Doing so helps you build business relationships with others, and also helps you understand their negotiation styles.

When a new client walks into your store, your ultimate goal is to build a relationship that will keep that customer returning. Yet in the United States, we do not always apply the same rules when negotiating contracts or disputes with our suppliers. Negotiators tend to be pragmatic, focusing on closing the deal quickly rather than engaging with the people involved. In Asian and Latin American countries, however, negotiators might meet with you several times before even discussing a transaction. Aggressive negotiating tactics might insult the other party and bring the deal to an end.

Most people understand culture as the shared history, arts, politics and language of a society. Expressing knowledge of another's culture demonstrates interest and helps build trust. I had a colleague who learned to say "Hello, how are you?" in several languages. Whenever he met people at conferences and said these few words to them, they would instantaneously let their guard down, smile and engage in conversation.

Culture also encompasses the assumptions and values that a group of people share, aspects that differ from group to group. These assumptions and values set the standard for what is appropriate and expected when dealing with others. Assumptions in negotiating might include how direct or emotional the negotiators are. For example, in the United States, negotiators tend to be direct and unemotional, while negotiators from southern Europe and Russia might be direct and emotionally expressive. You can research cultures by questioning someone who deals with a certain group regularly, or by researching in books or online.

Standard considerations include:

1. The goals of the negotiation: contract or relationship?
2. The parties' personal styles: formal or informal?
3. Communication: direct or indirect?
4. Emotionalism: emotional or unemotional?
5. Time sensitivity: high or low?
6. Team organization: one leader or group consensus?
7. Risk level: risk-taking or risk-averse?
8. Contract terms: general or specific?
9. Building an agreement: focus on the main issue or the smaller details?

You do not need to abandon your own style to take another culture's style into consideration.

The goal is to understand the other side and balance the two business styles. Nor must you rely on any cultural generalities you might find. Keeping an open mind and understanding the individuals involved will still be necessary. Understanding the cultural assumptions on both sides will help you become a more effective negotiator.

Editor's note: This story first appeared in the February 2008 issue of National Jeweler.

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