Negotiating Effectively Between Cultures - part 2 of 2

If you have not yet read part 1 of this 2-part article, please do so as it will contextualise what you are about to read and give you a much better understanding of this complex and fascinating subject.

In part 1 we explored a number of concepts and models that underpin the subject of negotiating effectively across cultures. In particular the ‘Cultural Iceberg’ model, the work of Horatio Falcao from INSEAD, and a wide range of cultural dimensions, a few examples of which were explored in some detail.

In part 2 I endeavour to explain the remaining cultural dimensions.

I will illustrate each with examples from the literature, from knowledgeable practitioners, and from my own experiences of working across cultures for more than 25 years.

I will also draw upon some of the insights and experiences of the hugely culturally diverse range of participants with whom I have had the pleasure to work during my workshops on international commercial negotiations during the last 20+ years.

As a reminder, in part 1 we explored two cultural dimensions:

1. Perceived Control Over the Environment vs. Fatalism

2. Explicit vs. Implicit Communication

The remaining 20 cultural dimensions are shown in the model below, and each will be explored here.

We commence with ‘power distance between members of society’.

This dimension gives an opportunity to reference again one of the most influential researchers into culture - Geert Hofstede, co-founder of the Institute for Research on Intercultural Cooperation. Hofstede identified ‘power distance’ as one of the key dimensions of cultural variability, amongst others (see later for more references to Hofstede).

Symbols of power and status are visible across all cultures. In the commercial world they are most obvious in things such as job titles, company cars and office size.

Less tangibly, power and status can be communicated by how difficult it is to contact or interact with a senior ranking individual, how others react and respond in their presence, or how a high status person deals with people of lower status.

However, Hofstede’s description of this cultural dimension is not about the power and status symbols per se, but rather about the extent to which members of a society accept the fact that power in institutions and organisations is distributed unequally.

In hierarchical cultures, where there are clear, tiered structures and a ‘chain of command’, then an unequal distribution of power is accepted and expected by most citizens. Examples of hierarchical cultures include many parts of Latin America and Asia.

dimensions

A surface sign of a high power distance culture would be where staff are expected to comply with the directives of senior managers without question.

Another sign would be the absence of any form of corrective feedback being directed from staff to, or about, those in authority.

“I don’t want any ‘yes-men’ around me. I want everyone to tell me the truth, even if it does cost them their jobs.”
- Samuel Goldwyn

 

In large power distance societies inequalities are expected, less powerful people are dependent, parents teach children obedience, children look after elderly parents, teachers are seen as experts, there are wide salary differences between those at the top and bottom of organisations and the powerful have privileges.

By contrast, in cultures with low power distance between society members, for example many Northern European countries, society operates within a more egalitarian culture. Here people are treated more as equals, and employees expect to be consulted and to participate in decisions.

Power distance does not only relate to national cultures, it is also situation and organisation-specific.

Having worked in the international oil transportation business myself it is starkly obvious how critical a clear and unchallenged chain of command is on board an oil tanker. Organising a focus group of crew members to brainstorm different ways in which to put out a rapidly spreading on-board fire would not be an appropriate leadership style!

When negotiating in high power distance cultures it’s futile to try to fight against the hierarchy. Not only will you annoy or irritate those who have, or feel they have the power; you will also make more junior members of the other party’s negotiation team uncomfortable, as they are unlikely to be able to make decisions without deferring to their ‘higher authority’.

The best advice, even if it’s hard to swallow, is to respect the hierarchical structures existing within the culture, organisation and specific team with whom you are negotiating. It’s difficult enough doing business across cultures without you making it even more challenging for yourself by trying to swim against such a strong cultural undercurrent.

 

Importance of religion

Have you ever considered the phrase ‘sharia law’ (شريعة)?

Put simply, religion is the 'law' in countries of Islamic faith– the two are inseparable.

Whole books have been written on this subject and so to cover it in a few paragraphs does not do it justice.

However, as a negotiator it’s important to appreciate at least some of the aspects of religion that are pertinent to business situations such as meetings, and in more general social settings in which, whether you think so or not, you are still negotiating, and certainly creating an impression – positive or negative.

In part 1 of this article we explored Edward T.Hall’s ‘Cultural Iceberg’ model. If anything illustrates the deep and powerful influence of values and beliefs then religion is probably one of the most powerful forces.

Religion shows itself in such benign aspects as food preparation techniques, to forms of entertainment such as music and dancing. It also shows itself more potently in terms of a range of cultural do’s and don’ts, such as the often-cited example of not showing the soles of your feet in Arabic and some Asian cultures.

You don’t need to subscribe to a religion, or even agree with it, to understand some basic rules.

In the Arab world, a shoe is perceived as dirty. This is why Arabs always take their shoes off before entering a house or mosque, and in many Asian cultures visitors are expected to remove shoes before entering a home. When the statue of Saddam Hussain was toppled in Baghdad in 2003 Iraqis beat it repeatedly with their shoes to show their abhorrent disrespect.

Clearly, in a business situation you are not expected to remove your shoes in the office, and so culture is also situation and context specific – one of the things that makes it both fascinating and confusing at the same time.
handshake

On the subject of attire, Christian symbols are considered offensive in some countries, just as the wearing of the Niqab or Burka can cause upset, confusion or frustration in some Western cultures. In the West, people generally feel that it is difficult, or even impossible, to communicate or negotiate with people whom they cannot see ‘face-to-face’.

Religion is also significant in terms of greeting rituals, for example does a man, regardless of his cultural origin, shake hands with a female Indonesian negotiator?

The answer is… only if she extends her hand first.

Another area where religion impacts upon business and negotiations concerns prayer times. Westerners negotiating with Saudis need to understand that some of their counterparts will have very strict adherence to prayer times – something that needs to be taken into account when putting together meeting schedules and agendas. Westerners also need to be aware of very basic things such as Muslims have their weekend on Friday and Saturday, so only 80% of respective working weeks overlap.

At the same time, I personally have experienced a high degree of flexibility and understanding from Muslims around the issue of prayer times and number of prayer occasions, when people from a number of different cultures come together for a business meeting, a negotiation or a negotiation skills training workshop.

 

Perceptions of time

Question to Zhou Enlai – Chinese Communist Leader in 1976:

“What was the significance of the 1789 French Revolution?”

Answer: “It’s too early to tell.”

Zhou Enlai was misquoted. However, how people from different cultures perceive time is one of the most important differentiators of culture.

Fundamental differences in perceptions of time are critical in international negotiations; here are four sub-dimensions of time:

Long-term versus short-term orientation

In general, Asian nations tend to take a longer-term perspective and they consequently plan on a longer timescale than the West. This shows itself in business and in negotiations in terms of the speed with which things need to or should happen.

How time is perceived to pass

How do you perceive the passage of time? Is it sequential or synchronous, a series of distinct events or a continuum?

Sequential people like events to happen in order. They tend to think in a linear fashion, from start to finish. They love schedules, they like to stick to them, and they get agitated when things slip or other people miss deadlines.

Synchronous people have a more diffuse view of time, they multi-task, working on several projects at once and they have a more relaxed attitude towards planning; they see commitments as ‘flexible’.

How quickly relationships can and should form

Some cultures have a strong “Let’s get down to business” culture. Others are far more relationship-oriented in which greater value is placed on establishing a strong relationship before business can be discussed. This is particularly important for business negotiators to understand, as in the latter case, long-term commitments, loyalty and taking time to build trust are critical.

It is not uncommon for negotiators from the US to expect to do a deal in China within a single visit, when the Chinese are taking a time frame of a year or more before contemplating signing a contract.

Expectations of reward

Some cultures have an expectation that long-term rewards will come in return for hard work and in the coming months and years. Others have a short-term, ‘quick buck’, mentality. We most starkly see this played out in world stock markets.

What’s your time perspective?

 

Precise vs. loose definition of punctuality

Many years ago I had the opportunity to work in Greece as a junior trainer, working alongside a far more experienced female trainer from Berlin.

The two-day leadership programme was scheduled to start at 09:00. At 08:50 my colleague was becoming visibly agitated by the fact that not a single participant had arrived.

At 08:58 she instructed me to go to reception to find out what was happening, and where everyone was. I returned, five minutes later to the (still participant-free) training room to tell her that yes, everyone should be turning up.

By now she was totally losing her cool, pacing up and down, raising her voice and becoming angry. You can imagine the scene, and how uncomfortable this was making me feel, as the more junior trainer.

At 09:24 Spiros sauntered into the room, smiling and sipping his ice cool Frappe coffee.

Within seconds his smile was wiped off his face as he was confronted with an extremely assertive German lady who’s first words to him were…

woman“And where on Earth have you been? Where are all the others?”

Spiros was stunned because… he thought he was early!

Suffice to say, the programme did not go well. It took several hours for the lead trainer to re-build some semblance of rapport with the group, and she was never invited back to train in that country again!

To all involved, this incident was a powerful lesson in how cultural expectations can collide, and how serious consequences can arise.

If my colleague had taken the time to consider the culture within which she was working, before she did her planning, or stepped on the plane, then this horrible incident could easily have been avoided. She could have published an earlier start time, had a more fluid agenda, expect them to be ‘late, relax and go with the flow.

When planning your negotiations build in buffer time, expect and plan for delays and never, never, never, show any signs of a need for urgency. In any negotiation, the person under the most time pressure has less power. Feeling pressured to agree a deal means you are more likely to concede more, concede quickly and leave money on the table.

 

Focus on the past, present or future

A further dimension of time, which deserves attention, is the degree to which different cultures place importance on the past, the present or the future. Some cultures see immense interconnectedness, whilst others perceive the past, present and future as very distinct time frames.

For example, France and China, which are firmly grounded in tradition and history, place great importance on the past, referring to it and referencing it often, and using it to guide the future. Others, such as North Americans and South Koreans, are more future-oriented.

Of course people are different and so we need to be careful not to assume that just because a person is French they will be harking on about the past and tradition. They may be extremely future-oriented such as the French participant that I had on one of my negotiation programmes recently who said… “Hey, the past is past, history is history, it’s over - get over it!”

In a negotiation context one party may keep going over old ground, perhaps complaining again about how the other side had let them down. Even though the situation may have since been resolved, they may keep bringing it up in order to achieve some leverage.

If you encounter such tactics then it is a simple matter to point out that this is ‘old ground’, you have resolved the matter since, and that constantly bringing it back on the table is not helpful to your current negotiation and thinking about the future.

 

‘Masculine’ vs. ‘Feminine’ societies

This is another dimension that has been focused on by several early researchers; and which has unfortunately caused more confusion than clarity.

Masculinity and femininity in terms of culture has little to do with gender.

A helpful way of thinking about this is to consider masculine societies as being ‘tough’, and more feminine societies as being ‘tender’, regardless of whether you are negotiating with a man or woman.

In masculine societies winning and decisiveness are valued, whereas in feminine societies process and consensus are more admired. This is the case regardless of the gender of the person(s) you are dealing with. Masculine cultures focus on values such as money, success, and competition. These cultures consist of a need for power, assertiveness, dominance, wealth and material success.

In more ‘feminine’ societies relationships, modesty, caring and sharing are important, conflicts are resolved through negotiation and consensus, and there are more women in positions of power.

That said, in some ‘masculine’ societies gender roles are clearly distinct – men are expected to be assertive, competitive, tough and focused on material success, whereas women are supposed to be more modest, tender and concerned with quality of life.

So, it’s a ‘fuzzy’ area.

Lifting ourselves out of the gender debate, and focusing more at the broader society level, the US, Mexico, Japan, Nigeria, India, Italy and German-speaking countries could be described as more masculine, whilst Scandinavian countries, the Netherlands, Chile, Indonesia, Malaysia and many other Asian countries are generally viewed as more feminine.

What’s your experience? If you have travelled to some, or all of these countries, do you sense the difference in values, approach, behaviours and expectations?

I have certainly noticed it, for example I have observed a stark difference in negotiation style and approach in Malaysia, compared with North America.

So, each type of society will respond differently, according to where it stands on the masculinity/femininity continuum. Therefore, as a professional and attuned negotiator you need to understand the different cultures, and tailor your message and style in either a masculine or feminine way, depending upon whom you are meeting.

Businesses that are built within a masculine type of culture feel that financial success and winning in the corporate world determine a successful and profitable business. This type of culture believes that success equals money. Companies win or beat the competition by making the most money.

So, when negotiating with a masculine-oriented organisation you are likely to be more successful if you focus on achievement, success, hard numbers and financial gain.

If, instead, you are negotiating with people from a more feminine oriented culture you would be wise to de-emphasis the aspects mentioned above, and instead focus on qualities such as collaboration, relationships, modesty, interpersonal relations, caring, liking and egalitarianism.

 

Prevalence of corruption

Pick up any newspaper today and stories of political and business corruption abound.

In 2015 the following were just a few of the allegations reported in the British press:

The chief executive and other senior management at Brazil's Petrobras resigned on 4th February 2015 amid a festering corruption scandal.

A UN study group reports Africa loses at least $50 billion a year to illicit practices like tax fraud, corruption and organised crime.

Mexico’s leader, Enrique Peña Nieto, his wife and finance minister have been accused of buying houses on terms below market rates from building firms to which Mr Peña has awarded government contracts.

Police forces in England and Wales have been ordered to review 2,000 cases of alleged corruption within their ranks.

A Chinese sport anti-corruption drive has uncovered corruption and match-fixing scandals, jailing or punishing at least nine officials, four judges, 13 footballers or coaches and 17 club workers.

New York Assembly Speaker Sheldon Silver, one of the state's most powerful politicians, was charged with pocketing $4 million from bribery and kickback schemes.

moneyAt least 30 New York politicians have faced legal or ethics charges since 2000.

Spanish authorities arrest 51 top public officials, bureaucrats and business leaders in anti-corruption sweep, on charges including money laundering, embezzlement and influence peddling.

Indonesia's parliament has appointed a national police chief accused of taking bribes in a corruption case in January 2015.

French industrial group Alstom SA pleaded guilty to paying more than $75m in bribes to government officials around the world and were fined $772m.

And in January 2016 the Malaysian prime minister, Najik Razak is facing questions about how he mysteriously has amassed $681 million in his personal bank account. At the time of writing there is no better explanation other than it was a 'personal gift' from the Saudi Government. Hmmm... I wonder what for?

Perhaps it was his birthday?

And this is the tip of the iceberg.

In relatively recent memory we also had the Berni Madoff Ponzi Scheme, the jailing of Tyco International’s CEO and CFO for stealing $600 million from the company, Lance Armstrong admitting to several doping charges, the Parmalat accounting scandal, Barclays admitting to rigging the Libor rate and the Personnel Manager of Volkswagen accused of procuring prostitutes under the guise that it was ‘in the company’s interests’.

So… what do you do as a professional negotiator?

The answer is in the question. Corrupt officials and business people are not ‘professional’.

Either refuse to negotiate with people who offer you bribes or who ask you for what is sometimes euphemistically called a ‘consideration’. Or report the matter to your own higher management, external authorities and industry bodies, or even report it to senior executives within the other party’s organisation.

Unfortunately, whatever you do is unlikely to help you personally as corruption often transcends the hierarchy.

If your industry is endemically corrupt then probably the best thing for you is to get out as soon as you can, and choose to work in a more respectable one where your skills as a negotiator are valued far more than your ability to either take or make dirty cash bribes.

 

Importance of what you achieve vs. who you are

People from more ‘achievement oriented societies’ primarily pay attention to your results and successes, and they base their opinion of your worth on such aspects, no matter who you are.

Those from what the academics call ‘ascription-oriented societies’ are more interested in who you are. This includes things such as your status, power, position in society, job title, educational background and even who your parents are/were.

When negotiating in situations where ascription is highly valued you may be able to leverage your own privileged background or position – if you have one!

If that's not possible, then it’s best to show respect to people who are in authority, use titles, and whilst not fawning or being overly sycophantic, to at least not be seen to dismiss things such as position or education (even though privately that may be what you think).

Personally, I feel nauseous when I see people toadying or being submissive to figures of authority, but that’s as much a reflection of my own values than anything else.

Conversely, in negotiation situations where achievement is more valued, you should focus on commending the tangible results of others, and lean the discussions strongly towards outcomes, mutual gains, results and success.

winning

 

Relationship intimacy in business and society

How ‘close’ should you get in a negotiation? Not in the sense of physical closeness (we explored that in part 1 of this 2-part article), but rather in terms of emotional and relationship closeness.

Do you buy more from people whom you like? Are you drawn to people who you think like you? Do you trust people who are, or at least appear, to be open to you? Have you ever found yourself negotiating with a person who you dislike, don’t feel any connection with, or for some other reason you don’t want to spend any more time in their presence than you have to?

Of course.

A recent article in the Guardian newspaper cited evidence that people are six times more likely to buy something from someone they like than from any other person. It’s not surprising and makes sense, even without a study to prove it.

From a cultural perspective some societies need, want and expect a relatively high, or low, level of relationship intimacy. It applies in business too.

Generally, in more northern European countries, such as Finland and Sweden, people prefer to have a more formal, even distant business relationship in terms of how they interact.

It is generally the opposite in hotter, southern European countries such as Portugal, Spain, Turkey and Greece. People from the Middle East and South America are also extremely focused on the importance of relationships.

In negotiations it’s important to realise that it is not that relationships are not important to some cultures, but rather it is the order in which things occur i.e. what comes first, the business or the relationship?

In relationship-oriented societies the relationship needs to be developed first - before any business can be negotiated or agreed.

In less relationship-oriented societies it tends to be the other way around. Motivation and behaviours revolve around getting the business done first, and when that’s settled then it’s time to consolidate it by building a stronger relationship; a common approach in North America.

We touched on this earlier when discussing the cultural dimension about the importance of time.

 

Treatment of women in society

In part 1 of this 2-part article I used ‘treatment of women in society’ as an example of an important cultural dimension in 2016 that was not so prominent in the work of cultural researchers 20-30 years ago.

There are some extremely shocking aspects within this area, which do not need to be documented here as you only need to listen to the news or read the newspapers - but my advice is not to as some of it is horrific.

At a less gruesome level, in some cultures women have been jailed for dancing in the street, for being in the street without a male family member as chaperone, or for simply driving a car.

Whilst these examples do not relate to business negotiations, they do show, very starkly, how attitudes, expectations, practices and behaviours towards women can vary dramatically; and this will spill over into business.

In contrast, it‘s reported that in Sweden more women than men make purchasing decisions, and in Berlin, the government has decreed that by 2016, at least 30% of board members in the top 100 public companies should be women. Interestingly, the head of the German government is a woman - Angela Merkel.

In part-1 of this article I gave an example of a negotiating team from the Netherlands visiting a male-dominated country. The visiting team, led by a woman, found that her counterparts continued to primarily address the men in the room, even though she was the most senior person.

Several years ago in India I personally experienced what to me was a bizarre situation when meeting a husband and wife at a business function. In trying to engage them both in conversation I found that whenever I enquired about something from the wife, it was the husband who answered. Even when I asked how she was the husband replied… “Yes, my wife is fine.”

You may intend to show respect to a woman from a different culture, perhaps by extending your hand to shake hands. Unfortunately, in some cultures your ‘respectful’ well-intentioned gesture is likely to be treated as showing disrespect and a lack of understanding of what is and what is not acceptable.

If you have negotiated internationally then you will be aware of how gender can impact on business, even if only in subtle ways. The significant number of women in senior positions in some countries vs. others is just one difference you may have observed.

When working in Saudi Arabia, I knew in advance that the organisation I was working with was dominated by men, but it still didn’t stop it feeling weird not to see a woman all day… other than in the administration offices.

There’s no point fighting it. You may not agree with it but you aren’t going to change it in your lifetime!

 

Degree of expression or suppression of emotion

As I sat in the departure hall of the UK’s Manchester Airport, I watched in wonder and amusement, as an Italian businessman spoke willdy, expressively and loudly into his mobile phone.

Even more entertaining were the expansive arm gestures he was making, whilst pacing up and down, unpredictably ‘bouncing’ around the concourse like a fly trying to get out of a bottle.

Of course the person on the other end of the phone could not see any of this, so to me I regarded it as a very vivid example of how ingrained culture is at a human level.

At the other end of the scale I remember trying to negotiate with an Austrian gentleman who, if his lips were not moving occasionally, a doctor might have pronounced him dead!

When preparing to negotiate in a culture different to your own consider whether, on the whole, individuals are expected to be reserved, diplomatic, relatively un-animated and calm. Or, is it normal to display emotions openly, to gesticulate in a lively manner and express how you really feel?

We discussed in part 1 the dangers of stereotyping, contrasted with the more useful generalisations that can be made about cultures – cultural norms if you like.

Richard Lewis is just one of a number of researchers who have analysed how cultures vary according to the degree of expression of communications and emotion in how they speak and act.

His research shows, for example that the more expressive cultures include the countries of South America, Sub-Saharan Africa, Italy, Portugal and Spain.

In contrast, more restrained and reserved behaviours are usually seen, and expected, in the UK, Sweden, Finland, Norway, Germany, Switzerland and Canada.

You can see that this cultural dimension has a very clear South-North dimension. It’s a good example of where you are probably on relatively safe guard with a 'generalisation' as a starting point.

However, people are people and so when meeting to negotiate with people for the first time you should quickly tune into the person or persons in front of you and adapt your style to suit. Simple, but incredibly important advice.

 

Rule following vs. rule breaking

In some cities around the world traffic light signals are regarded more as ‘suggestions’ rather than absolute rules!

I have certainly experienced this myself in Cairo where there appeared to be no logic to the traffic flow and drivers seemed to be communicating with each other using incessant horn honking.

Thankfully I was in a taxi and not driving myself.

Try to jump a red light in Singapore however and you will be swiftly apprehended.

However, cultural norms and behaviour can change over time. 24 years ago when I first started visiting Singapore on business it was frowned upon for a pedestrian to cross the road at a pedestrian crossing when the ‘red man’ was illuminated. In 2016 I observe people doing this all the time and even jaywalking across main roads.

In the business world the 'rule following vs. rule breaking' dimension relates to things such as whether promises are kept or broken, whether contracts are adhered to (even in the face of changed circumstances) and how strictly prescribed protocols, processes and controls are adhered to.

chainFor example, verbal contracts are legally binding in many cultures, whereas in others it is very important to ‘get things in writing’.

If you are doing business from a culture where verbal agreements are common, then the best advice is to at least get something tied down; even if this is only confirmation from the other party of an email from you that outlines your mutual agreement and understanding.

If you are from a more ‘fluid and flexible’ type of culture or organisation then you will probably be frustrated by all of the hurdles that you have to jump through, the reams of paperwork, box-ticking and multiple signatories required.

Equally, if you are used to a more structured environment where the ‘i’s need to be dotted and t’s crossed’, then you may feel very uncomfortable and nervous about proceeding without having something in writing or a guarantee.

The ‘rule following vs. rule breaking’ dimension links to ‘individualism’ vs. collectivism’, to ‘appetite for uncertainty and risk’, and to ‘same rules for all vs. different rules for others’ (see later).

 

Body posture, movements, gestures and touching

In part 1 of this article we referred to differences in expectations and behaviour in relation to use of personal space.

When we get into more intimate the more edgy areas of touching, and even kissing, we are on very dangerous ground.

Above, I recounted my own experience of the Italian at the UK airport where local onlookers thought he was performing some sort of theatrical act. I am sure he was unaware of the culturual stereotype of Italians that he was inadvertently confirming!

We can plainly see, and sometimes uncomfortably feel cultural differences when it comes to physical contact.

Burton & Dimbleby (2006) observed people in a coffee house. During one hour, Puerto Ricans touched each other 180 times, French 110, Americans twice, and the English people didn’t touch at all.

Middle East, Latin America and southern Europe prefer a lot more physical contact during normal conversations.

Contrast this with how the Japanese normally greet each other in business – a bow, without physical contact.

CulturesIntro

North Americans also seem to struggle with physical contact other than shaking hands.

In the Middle East it is normal to see two men walking down the street holding hands or linking arms. In Brighton, England, where I live, to see such a thing you would be almost certain to assume that they were gay lovers. If I were to assume that in Bahrain, which is the last time I observed this, I would be making a gross mistake, and probably spend a night in jail!

I work a lot in Europe in business and negotiation situations, and encounter much confusion about the subject of ‘business kissing’.

To kiss or not to kiss; one cheek, two, or three; which cheek first; who initiates the kissing; does a hug accompany the kissing…?

When cultures collide, even within one continent, it can often end up in a sort of farcical, awkward ritual where neither party knows exactly what to do and you end up butting your counterparty on the nose... or perhaps a second night in jail!

What I HAVE learned from countless situations is that when I am in another country I take the lead from the other party, and if it does go wrong, then to just laugh and make a joke about it. In my experience, using humour in such situations always works, as the other person is probably as embarrassed as you are about it.

When cultures collide noses don't need to! You can both smile about it, laugh and move on to what the bigger purpose is, which is about building or cementing a strong business relationship.

Paradoxically, mutually getting it ‘wrong’ can actually help get the meeting off to a good start as you are both already agreed on something, which you have also laughed about!

Of course it also depends on who you are meeting, how well you know the other party and how close your relationship is, as it would be less likely for kissing to be the ritual greeting for a first business meeting between people who had not met before.

In negotiations it also depends on the circumstances of the encounter. If you are meeting to resolve a conflict then you may choose not even to extend your hand, other than to dismissively usher them to sit down.

One more aspect of touching that needs to be considered is how it can confer status. In most Western cultures people with higher status, or who want to communicate their dominance, will use and initiate physical contact.

It can be amusing to observe the ‘game’ when two parties meet and greet, each of which wishes to signal to the other that they consider themselves to be the dominant player in the situation! Think about where and when you have experienced this yourself.

 

How decisions are made in business and society

In your culture, and specifically in your organisation… how are decisions made?

Is it autocratic, top-down and unquestionable; is it consensus based, inclusive and egalitarian, or somewhere in-between?

When you have grown up in a particular decision-making context it can be difficult to comprehend why some other cultures approach decision making very differently.

The fact is - they do, and it is especially important in business negotiations to take into consideration how different parties may need to or want to decide in their own way(s).

North Americans tend to approach decision-making by looking at the positive consequences of a decision, whereas many people in Asia make decisions based on more of a prevention of risk. This can often show itself in delay, avoidance, compromise or mediation.

Generalising further, North Americans tend to want to make decisions faster, and, the people at the negotiation table often have the mandate and decision-making authority to decide. By contrast, it is normal in Asia for those at the negotiation table to not be the ultimate decision-makers, and hence their need to ‘go back and check with head office’ can frustrate the other party.

There are clear links between decision-making and the ‘appetite for uncertainty and risk’, and ‘respect for hierarchy, position and age’ cultural dimensions (see later).

A further clouding of decision-making can occur if elements of corruption (discussed earlier) are involved.

Good negotiation practice would be to discuss with the other party up front how you will jointly arrive at a decision; who will be involved, who ultimately decides and what the anticipated time frame and steps are likely to be for you to reach a mutually acceptable decision.

 

Degree of formality of dress, communications and behaviour

What do you wear in the office or when negotiating with another party? Do you modify what you wear when negotiating with business people from another culture, and particularly, when you are visiting their country?

When meeting my main Arabian contact in Riyadh I was in a suit and tie (uncharacteristic for me), and he was wearing his traditional white cotton Thobe.

When he visited me in London I hardly recognised him, as he turned up at my office in traditional London business attire. He felt comfortable and fitted in perfectly and we had a good meeting. Imagine, however, if I had decided to visit him in Riyadh and I stepped off the plane in full Arabian regalia!

So, whilst there are guidelines and considerations, you also need to apply a little intelligent thought to what is most appropriate for the business situation you are facing.

Germans take great pride in dressing well. It is understated, formal and conservative. Ostentatious, flamboyant or casual business dress is frowned upon, for both men and women.

Contrary to popular myth, Australian men do not wear shorts in the office, however, the East coast of North America genuinely does have a very casual dress code, particularly in Silicon Valley. The typical office man’s wardrobe usually consists of jeans, khaki pants, hoodies, and button-down shirts. However, senior women tend to go for designer clothes and shoes, which adds another cultural complexity to the mix. And then, you need to consider if you are visiting on a ‘Casual/Dress-Down Friday!’

However, this is not the place to go into details of what to and what not to wear for each country.

The main thing is to do some research on what the likely dress code is going to be, or do what I do, which is if I am unsure about the dress code for a particular organisation I am visiting I will simply ask my key contact what is most appropriate. The request is always appreciated and it shows respect.

If in doubt, dress up, as you can always take your jacket and tie off, or loosen your shirt.

team

 

Same rules for all vs. different ones for others

With regards to applying rules and procedures do you believe that everyone should be treated the same, or that there should be different rules for different people?

Fons Trompenaars has described this difference using the terms ‘Universalism’ and ‘Particularism’.

In more Universalist societies people try to deal fairly with people based on one set of rules, and the rules come before considerations of relationship.

In Particularist societies relationships come before rules, and so the response may vary depending on circumstances and who is involved.

You will note that there are links between this dimension and some others, such as ‘prevalence of corruption’ and ‘rule breaking vs. rule following’.

If you are a purchasing negotiator do you apply the same ‘rules’ to all of your suppliers, or do you show favouritism or leniency towards some?

As a supplier, do you sometimes hold customers strictly to written contracts, whereas for some others you make allowances, short-cut processes, or give them preferential terms or access to information

Whilst relationships are incredibly important in negotiations, it is important to appreciate what sort of society you are negotiating in, and therefore what is and what is not likely to work.

If you discover, however, that some parties are obtaining more favourable terms than you, when all other variables are equal, then you may consider challenging this.

If you know you are getting better terms than others then it’s probably best to keep your mouth shut!

 

Appetite for uncertainty and risk

Geert Hofstede calls this dimension ‘uncertainty avoidance’.

It refers to the extent to which members of a culture feel comfortable with, or threatened by ambiguous or unknown situations.

Societies with high uncertainty avoidance show higher levels of stress and anxiety. Investments are conservative and what is different is seen as dangerous.

As the future can never be known, and such societies desire stability, they tend to put in more structured rules and social norms, and are less comfortable taking risks.

In low uncertainty avoidance societies people are more comfortable with uncertainty and ambiguity. They tend to be more entrepreneurial, more likely to take risks, and less dependent on structure and rules

Here again, you can see connections with some of the other dimensions that we have explored so far.

Countries which score high on uncertainty avoidance include Germany, Japan, Turkey, Korea, Mexico, Belgium and Russia.

Germans are not keen on uncertainty; they want to reduce risks to the minimum and proceed with changes step by step – hence why they plan things carefully. German society relies on rules, laws and regulations.

Those that score lower, the ones who are happier to take more risks, include Hong Kong, the US, UK, India, China and Singapore.

The global crisis of a few years ago had been blamed largely on huge and irresponsible risk taking within US banks; a country that has a high appetite for risk.

In negotiating with high risk appetite it logically flows that new, innovative, challenging or change-oriented proposals are more likely to be well received.

In high uncertainty cultures you are probably going to have to tone things down a bit, show you have considered all factors, show how risks can be removed, contained or mitigated, and you may need to move slower in both gaining acceptance and during the process of implementation.

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Respect for hierarchy, position and age

There are links here to other cultural dimensions, especially ‘power distance between people’ and ‘importance of what you achieve vs. who you are’.

However, whilst the first two are to do with power distance and how a person is valued by society, this dimension is more to do with position within the organisational structure, maturity and age.

When I was 36 I was considering moving from the UK to Germany, to apply for an internally advertised position; it would have been a promotion, and a job that I felt confident I could do.

I pulled out of the recruitment process however, for several reasons. Some of these related to other cultural dimensions discussed in this article. In particular, in the German parent company I felt relation intimacy was low, education and job titles seemed to be extremely important, people addressed colleagues very formally and there was little appetite for behaviours and ideas that were considered outside of organisational norms.

I found myself in an extremely hierarchical environment, where seniority and position were tremendously important. There were three eating areas in the building; a sprawling self-service cafeteria on the ground floor for the vast majority of staff, a nice restaurant on another floor for managers, and a dining room on the top floor for heads and directors, who were served by waiters and waitresses with silverwear and porcelain, whilst wearing white gloves.

However, what really sealed my decision not to make the move was because of something a senior manager said to me… “Jon, I think you will struggle here. You see… you don’t have enough grey hair.”

That told me that I would struggle to command respect because I was not old enough. As I know many young extremely competent people, and some far older people who frankly are a danger to their companies and themselves, I decided that if that was one of the values of this organisation then I was not prepared to fight the system. A system that I thought was anarchical, old-fashioned and inappropriate for the current and future business world.

In negotiations there are expectations from each side that representatives from the other party will be ‘senior enough’ to competently negotiate, and to have the ability to make decisions.

Therefore, it is important to match negotiators and negotiating teams with each other at roughly the same levels of experience, maturity, seniority and position.

If you are at the younger end of the spectrum then there are of course things you can do, short of putting talcum powder in your hair. Not least of which is to dismiss any reservations from the other party by quickly demonstrating your capability, competence, deep knowledge of your subject area and your total professionalism.
Societies that value age include Korea, India, China, Japan, Philippines, Vietnam, Greece, and Hispanic/Latino societies. Elders are looked up to and seen as a source of wisdom.

Societies that value hierarchy include many of the above (age tends to go with seniority), plus Russia, Romania, Slovakia, Switzerland (French), and the Arab countries, amongst others.

By contrast, societies that pay little attention to age and hierarchy include Norway, Denmark, Sweden, Finland, Netherlands, Israel and New Zealand.

It’s interesting to note that there are clusters of neighbouring countries that share similar characteristics. This does not only apply to this cultural dimension alone.

 

Individualism vs. collectivism

This is the last of our cultural dimensions, and one that has been extensively researched by the culture gurus.

In collectivist societies people from birth are integrated into strong and cohesive groups. The group protects them in return for unquestioning loyalty.

Speaking your mind is not encouraged in collectivist societies, neither is direct criticism of others.

Japan has a highly collective culture, illustrated by the expression… “The nail that sticks up gets knocked down.”

Other collectivist countries include China, Korea, Africa and Latin America.

In individualistic cultures the ties between individuals are loose and everyone is expected to look after him or herself. Individual freedom and achievement are valued, people are expected to speak up and there is press freedom.

Typical individualist cultures include the U.S., Canada, U.K, Netherlands, Scandinavia, Switzerland, and many other European countries, Australia and New Zealand.

If you are from an individualistic culture and you are negotiating with a person from a collectivist culture you need to understand that the person sitting in front of you may not be able to make the decision alone. They will wish to avoid confrontation and to save face. This means, amongst other things, that they may become uncomfortable if tensions rise, and they may try to communicate to you a ‘no’ without actually saying “no”.

You should avoid asking too many direct questions, and if you press for a decision and get silence, “I’ll think about it”, a tangential response that directs the conversation elsewhere, an excuse about having to leave for some reason, or “we will write you a letter”, then you know, or should know that it’s a “NO”!

If, on the other hand you are negotiating with someone from an individualistic culture then you should have no fear of being direct, open and challenging. The person sitting in front of you is more than likely to be able to make the decision.

Equally, you should not be offended by a more direct, challenging, questioning and “let’s get this deal done” type of approach.

 

Whats next?

You have now read both parts of this article, yet there is so much more to learn.

Please explore the rest of this site, including the videos, sample negotiation cases and the other two articles about influence, and contact us if you want to learn more.

Best regards,

Jon and the team