The Secret to Cross-Cultural Negotiations

In a globalized world, businesses increasingly look to international markets for growth. But cutting deals across borders is difficult. Teams of individuals from various cultures must negotiate in the face of differing expectations about not only the outcome but also the process. The parties may lack both a common language and shared working norms, complicating an already complex endeavor.

In bridging these gaps, negotiators are often left to fend for themselves, relying on anecdotal or conventional wisdom that has little bearing on the negotiation at hand. Or they may turn to academic or other theories that seem to explain cultural differences but generalize about cultures as a whole, ignoring individual variances. All this may encourage dealmakers to overascribe negotiation difficulties to cultural differences.

So how can negotiators successfully navigate the complexities of culture? Based on their research and work with the clients according to the  author secret to good outcomes in cross-cultural contexts involves respecting four basic rules: 

Rule 1.  Negotiate with the Person, Not the Culture.  In a very specific context like a negotiation, knowledge of local culture is of limited value because your counterpart may not represent its norms. In a negotiation, you are trying to understand the individual in front of you. And in this context, a focus on cultural differences may encourage unconscious stereotyping—that is, narrowly classifying and attributing expected behaviors to others.  Another reason to focus on the individual rather than the culture in a negotiation is the infeasibility of becoming an expert in the customs and norms of all the geographies in which one might do business.  In such situations, it is nearly impossible to memorize and leverage all the cultural dimensions relevant for each interaction. What’s more, trying to be all things to all people only encourages your counterparts to question your integrity. You will constantly be outside your comfort zone, which makes you more vulnerable to ignorance, doubt, insecurity, and exploitation.

One key to a successful cross-cultural negotiation is, to some extent, taking culture out of the equation. Business negotiators often have much in common with their counterparts—maybe even more than with their parents, partners, or children. After all, our international counterparts may be closer to us in age, education level, professional interests, the corporate world they operate in, or functional expertise. For these reasons it is important to focus specifically on their counterparts, learning their own particular intentions, rituals, and preferences.

Rule 2.  Identify Your Counterpart’s Intentions.  All negotiations should begin with the question, “Does my counterpart want to work with me or against me?” The role culture will play in the negotiation is largely determined by the answer to this question.  If the counterpart is a win-win or, better still, a value negotiator—that is, someone who is ready to pursue his or her goals without the use of power—cultural differences become operational challenges to be solved together. But if the counterpart is a win-lose or, worse, a power negotiator—ready to use whatever power is in his or her arsenal to secure negotiation success—the person will harbor adversarial intentions and is likely to use cultural differences as a tool for exploitation. 

The best way to gauge intentions is to make your own explicit, because this typically encourages reciprocal behavior. It can also reduce your counterpart’s fears and resistance to the negotiation and open a path for a more-collaborative process and superior outcome.

Casting people’s words and actions in a positive light may look naive, but it is a best practice in cross-cultural negotiations—even if you are facing a win-lose counterpart. If the gesture was indeed the expression of a good intention, you’ve shown that you understood and have validated the behavior. If the counterpart had a win-lose intention, you’ve shown that the person’s power move did not faze you, thus reducing the odds that the domineering behavior will continue. Even if it persists, you’ll have given an early warning that you will not be intimidated.

Rule 3.  Don’t Adapt Rituals, Co-Create New Ones.  Cross-cultural negotiations are further complicated by rituals—the established and sometimes symbolic actions, behaviors, or even ceremonies through which people convey messages and meaning within a social or cultural group.   Many negotiators attempt to show respect by adapting to their counterpart’s rituals. That is a dangerous negotiation approach—even more so if you face a win-lose counterpart intent on taking advantage of you. When you adapt to your counterpart’s rituals, you cede the power to determine what is or is not appropriate in your negotiation. Similarly, forcing counterparts to adapt to your rituals is a win-lose move; the cognitive challenge of negotiating outside their comfort zone will likely compromise their performance.  Instead of adapting, cross-cultural negotiators should create a new set of desired rituals together. They should engage in open conversations to define what a good relationship means, decide how much time they are willing to invest in building it, and lay out the process for working together.  This can be challenging. Negotiators should make their own rituals explicit up front, share the intentions behind them, and discuss how adopting each other’s rituals may introduce difficulties. 

In any cross-cultural negotiation, it is important for teams to have ongoing conversations about their shared rituals and behavior. Skipping or phasing out these conversations usually results in negotiators from each side defaulting to their preferred ways of operating and increases the odds of misunderstanding and miscommunication.

If adapting to another culture’s ritual appeals to you, then go ahead and enjoy the experience, but beware of the implications and the cognitive toll it may take on your negotiation performance. Otherwise, negotiate new rituals for communication and relationship building that will satisfy, not compromise, most team members’ preferences and avoid forcing anyone to adapt or be at a disadvantage. 

Rule 4.  Leverage Differences in Preferences, Not in Power.  Win-lose negotiators try to leverage power, often using cultural differences as a way to improve their position or conceal predatory behavior. But in win-win negotiations, each side leverages preferences: inclinations toward options, objects, experiences, or outcomes.  To close successful deals, make money, minimize risks, feel appreciated, and be seen as a good negotiator. The differences are not so much what negotiators want but how much each of those things matters relative to one another.   It’s important to recognize that while intentions and cultural rituals make negotiations harder as they diverge, the reverse happens with preferences. The more preferences differ among negotiators, the easier it is for them to make deals that create value for both sides.  By leveraging differences in preferences—which are often more abundant in cross-cultural negotiations—dealmakers may find more ways to increase value for both sides.

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