Doing Business Across Cultures and Borders
Doing business across cultures and borders begin by good negotiation, and individuals with good management skills and negotiating abilities. Managers cannot negotiate productively in an international marketplace if they do not possess important negotiating abilities and skills. Managers cannot negotiate successfully if they neglect these countries’ cultures, beliefs, and rituals. The differences in cultures, beliefs, and rituals create difficulties in the process of effective negotiation. Therefore, managers need to learn the differences in cultures and traditions from those countries, one-by-one in order to efficiently and effectively conduct a successful negotiation and be able to manage across cultures and borders.
It is also important to understand that because of our traditions and cultural differences, individuals do not think, judge, behave, perceive, and reason alike. Therefore, depending on negotiators’ style, they should learn to adapt to the cultures of those countries that are different from them, in which they intend to do business with. Shrewd negotiators are encouraged to empathically accept and adapt to these traditions and cultures for the sake of profits.
Before engaging in global markets, there are things that managers need to learn. They need to focus on the following:
(1) How to prepare for negotiations
(2) How to build relationships with their counterparts
(3) How much business related information can be shared
(4) How to persuade the other side to agree on issues that matter to them
(5) What to concede on
(6) How to structure the final agreement
Cross-cultural negotiations require careful preparation in order to stay ahead and take advantage of the other party. To avoid problems, managers need to be aware of the issues like cultural differences, language, beliefs, behaviors, family environment, differences in time, work habits, and religion. Different regions have different negotiating styles. So, when managers familiarize themselves with these important negotiating tactics, they may understand the negotiating styles of their counterparts. It is always advisable that companies do a research of the country that they are going into negotiation, in order to learn how their negotiating styles differ from their own. Research will help in revealing their value system, behaviors, and attitude towards foreign companies. To stay ahead is the beginning of an excellent engagement strategy.
In building relationships, managers should look for strategic partners; who they can trust, respect, and be comfortable working with. The strategic partners will be the ones that are familiar with cultures, behaviors, and languages. Most developing countries enforce their agreement based on their relationship and contacts. Such countries rarely adhere to the legal system because as soon as a new leader comes in, those legal contracts will be null and void. So, it pays to build a strong relationship.
In order to share information, a focus group of businessmen and women is recommended in order to discuss the issues that matter to each party. In this capacity, playing role reversal prior to attending the session is recommended. Usually, questions are asked by both parties to address their concerns, the issues that matter to them, and answers are provided by both parties in response to those issues and concerns. In capitalist countries, such as the United States of America, companies use direct approach in negotiations, while in other countries, an indirect approach is used. Some countries will use the debate approach in a negotiation; others adopt the detail oriented, suspicious of what is in there for them or their counterparts, laid back, or protocol approach. Companies should learn how to adapt to each environment in order to be successful.
Persuading the other party to change its original position is a good strategy in negotiation. It is recommended that each party concentrate on what matters to them, and to persuade the other party to accept the offer, and also make a few concessions when appropriate. Most importantly, it will serve managers well if they negotiate ahead of time before coming to the bargaining table. Few participating countries resolve their differences ahead of time based on their cultures, behaviors, and the way they do business. Managers need to do a regional research in order to identify those countries, and when such countries are identified; engaging in a backdoor negotiation is recommended since that is the way businesses are done by those countries. It is essential to avoid the tactics of misleading the other party as that may pose, or lead to potential problems in the future.
It also recommended that parties decide well ahead of time what they are willing to concede to the other party. This strategy will vary according to the culture of the other party. Giving limited information is a good strategy for not giving up on the strength of negotiation, and seeking information of the other party helps to understand what kind of information to give out.
Contracts vary according to the culture of a participating country. While the United States value contracts as binding documents, some view it as insults, some as lack of trust, other may renege on it due to political pressure or instability, and some will rather do business on trust and common understanding. Whoever the country is, understanding its culture and behavior is a key to a successful negotiation and a way to making profit.