Business Diplomacy: Cross-Cultural Negotiations

Would you present, as a business gift, a bottle of vintage wine to a Muslim business partner? Even before taking your seat on the negotiating table or speaking a single word, you’d have committed a large unforced error. In business, where impressions count for a lot, you can’t afford to be culturally insensitive.

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Recently, an article in the Harvard Business Review dug deep to identify the base components making up future-ready skill sets for the business world. It reiterated the importance of good communications ability but also introduced three new qualities necessary to succeed in the fast-paced, modern era.

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Beyond change management on a personal and organisational level, beyond learning how to learn, the Harvard Business Review found that cultural sensitivity was the most important aspect in preparing skill sets to come. With the world becoming smaller and increasingly interconnected, the ability to work across cultures has never been more emphasised. 

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Logically speaking, cultural sensitivity is also indispensable in cross-cultural negotiation, and turning a blind eye to its importance is to willingly forgo advantages in securing business opportunities. Conversely, when you take the time to research and understand the cultural background of the other party, negotiations will be smoother and less awkward, and it’ll be easier to get them on the same page.

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Don’t Get Lost in Translation

The work of taking cultural differences into consideration is far-reaching and extensive – even the language of the culture in question can present new variables to contend with. For instance, when I do business in Japan, I’m reliant on my local Japanese colleagues as I don’t speak the language.

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If your local counterparts understand and share your goals, they will aim to deliver a message that aligns with what you’re trying to express. If you don’t have any local liaisons to work with, or if you’re going there for the first time, it’s worth spending some time to sit down with your interpreter and work with them to convey your messages in a culturally appropriate manner.

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To ensure that your intentions and messages cross the language barrier intact, it’s necessary to develop a strong relationship with your local interpreter or translator. Suppose “no” doesn’t actually mean a hard “no” in the target language, and comes across as more of a “maybe we’ll look into it”. In these situations, having your interpreter use a literal translation may be contrary to the position you’re trying to express – that’s why it’s important to properly communicate your intentions to your interpreter, and through them.

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People are the sum of their upbringing, cultural and societal influences. In a business negotiation context, understanding these influences can help you anticipate their behaviour and expectations to a certain extent. 

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If you’re doing business in the United States, which has a very individualistic society, you can expect the other party to have more leverage and delegated power when negotiating with you. Conversely, in more consensus-based societies like China and Japan, the other party may lack authority or power to complete the deal without oversight, and they may need to secure buy-in from the company owners or founders. I have often found that one needs to convince two people to finalise a deal in the US, but around 20 people at minimum to achieve the same outcome in Japan.

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In some cultures, where you sit at the negotiating table can even signal your position in the company hierarchy to the other party. In Japan, whoever sits at the head of the table is understood to be the big boss of the company, but this person is not expected to contribute substantially to the conversation taking place. The big boss’s role in the negotiation is mainly symbolic – they are there to display their business’s commitment to the deal and to reflect the importance of the customer. Each big boss is flanked by his or her deputy, who is the company’s chief negotiator and responsible for driving the agenda.

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Depending on the cultural context, it’s important to understand your role in the negotiation and how you should behave. When I travelled to Japan for business, the local office had me positioned at the head of the table. I was very keen to make the deal happen and initially jumped into the conversation, taking an active role. It was only after that I learnt the hard way what my role was – to stay silent and support the local team with my presence as the company’s regional representative, emphasising our commitment to doing business overseas.