Adapted from “Hidden Roadblocks in Cross-border Talks,” by James K. Sebenius (professor, Harvard Business School), first published in the Negotiation newsletter, September 2009.
Imagine you are leading a team that will soon be negotiating for the first time in several foreign countries. You’ve researched likely cultural factors, such as differences in etiquette or risk taking, while also being cautious about overemphasizing national culture relative to individual and economic factors. Are you ready?
Like many negotiators, you may have overlooked a key factor that varies across cultures: different traditions in governance and decision making. The following three issues have blindsided numerous teams:
1. Look beyond your negotiating counterpart. While you’re trying to get a “yes” from the person across the table, keep in mind that he is part of a decision-making process that may differ greatly from your own experience. Through negotiating moves at and away from the table, your goal is not just to influence your counterpart, but to influence this process to generate your preferred decision.
For example, in many Japanese negotiations, what happens in the conference room is essentially a formality, ratifying understandings that have been worked out in side meetings and sessions in restaurants and teahouses, and over karaoke. Arguments, persuasive appeals, and even brainstorming at the “formal table” are unlikely to work.
2. Don’t forget the informal process. When Chicago-based Stone Container tried to negotiate a major forestry deal in Honduras in the early 1990s, it focused mainly on the country’s president and forestry ministry, since they had the formal power to make the deal. But in the fragile Honduran democracy, suspicions among excluded stakeholders—local competitors, environmentalists, legislators, unions, etc.—led to a backlash that blew up the deal.
3. Adapt your approach. Once you have opened your eyes to various formal and informal decision processes, adapt your negotiating approach. For example, if you know the other side must come to consensus, expect a much longer negotiation and plan to deal extensively away from the table. If a “Big Boss” makes all the decisions, ensure that your moves aim to influence the right person. And if a management board or some other interested party holds a critical key, try to win it over along with the other major players.
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