Nothing but negotiation

 
 
Negotiation

Cultural Difference

 

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Jonathan Foyle

Hello and welcome to Nothing but Negotiation, today I'm joined by Wai Lau, Asia/ Pacific consultant for The Gap Partnership, to discuss cultural difference.

Now Wai, it's a shrinking business world and negotiators are facing many more people from different countries, so what role does cultural difference play?

Wai Lau

I urge people when they ask me that to not think about negotiation with a person as negotiation with a culture, you can't negotiate with a country. At the end of the day you are sitting across from a person and that person comes from a very different background, they've got their family, they've got their education, socio-economic circles and lots of other things, and culture is just one piece of that.

JF

Now I appreciate that not all ,let's say, French or Japanese people behave the same way in negotiations but surely there's a grain of truth in the stereotypes.

WL

Yeah, I'll give you an example: I go into a negotiation in a Chinese setting and let's pretend I'm a western negotiator. The first thing I say is: "Hi Jonathan, How are you doing?" As a Chinese negotiator, you might say to me: "Wai, have you eaten?" And you're sitting there thinking, what does me having eaten have anything to do with this? Well, it's back to that concept of time and fluidity. Western cultures and western negotiators come in with this idea of everything is a bit sequential; look, I'm going to say hi to you, we're going to sit down and someone is going to bring us a cup of coffee and we're going to get into the terms and conditions, and at the end of the day at 5pm we're going to wrap, we'll sign the deal and I'm going to go home and catch my flight.

Whereas a Chinese negotiator might think, before any of that happens, we've got to eat, I've got to get to know you a little bit and we can figure out the rest as we go.

JF

Now all of this is very subtle but could presumably spring some major misunderstandings or get things off on the wrong footing, what kind of preparation would you recommend?

WL

… A couple of things to think about, the first is: What is the type of negotiation you're going into? Is this more of a transactional one-off deal where you're never going to see the supplier again? Or is this something where you are going into a new market and you're trying to develop a key supplier or a key customer and you're trying to broaden the market?

Now, if it's transactional, do you really have to consider that cultural piece? It's not as important really in that situation, whereas if you're trying to build something long term, well, then it becomes a bit more important.  There's the idea of the balance of power that you should also keep in mind and figure out before you walk in and sit down at that negotiation table. Who's got more power? If you've got all the power, well then you're dictating the deal and the chips are stacked against me, so in that situation I might choose to be more cognisant of the cultural implications and play on that strategically and use that in my favour. However, if I've got all the power… I don't care if you're blue, black, green, red or white, I can do whatever I want, as long as I've got the power and that plays into the dependency too, who needs who more? The person who needs the other one more, well obviously they're going to have to do more preparation and be aware of that cultural piece.

JF

Wai, thank you for explaining cultural difference.

WL

Thank you, Jonathan.