Chapter 1

What International Negotiation Is Not

It seems negotiation has expanded from just a term we use in business. Now it’s something that is integral in our daily lives.

Ask people, What’s negotiation? Chances are you will hear words such as conflict, tension, winning and losing, concessions, price, and contract. Interestingly, this question will rarely evoke responses like dialogue, commitment, exchange, and culture. Negotiation has become a trivialized word that people use without knowing what it really means. That is why many people shy away from it, because they think that it implies conflict. When undertaken with confidence and understanding, negotiation is a creative interpersonal process in which two parties collaborate to reach superior results.

After all, why is negotiation important? There are only two ways of getting what we need in life: fighting or negotiating. Simply put, negotiating is a way for people to get what they need from someone else without physical aggression.

To be a successful international negotiator, you must feel psychologically comfortable in situations that involve uncertainty, unexpected behavior, measured risks, and decisions based on incomplete information. You need to think about resolving problems and creating opportunities with people who don’t think and behave like you. That is why investing time in preparing your negotiations is so important.

This chapter will give you an overview of some common beliefs about negotiation and the counterarguments about them.

It Is Not All About Price

Ask people to do a negotiation role-play and they will focus on price—as if price were the only factor business negotiations were based on. This is a very narrow view of the field, and it prevents negotiators from seeing other solutions that form part of an agreement. More often than not, people get stuck in negotiations because the seller will not lower his or her price and the buyer will not accept the proposed price. However, there are many other aspects to be negotiated, such as delivery conditions, quantities, product customization, and such.

Here is one plausible explanation. Most business books, courses, and training sessions present negotiation techniques only based on price. One example is the main vocabulary they use: best alternative to a negotiated agreement (BATNA), reservation price, and zone of possible agreement (ZOPA).

BATNA states that negotiators will aim to get the best price for them: highest for the seller and lowest for the buyer. Both parties want to gain more than what they really need. BATNA is the standard against which a proposed agreement should be evaluated. It is the only standard that can protect a negotiator from accepting terms that are too unfavorable and from rejecting terms that are in his or her best interest to accept.

The reservation price is the lowest price the seller can propose and the highest that the buyer can accept without losing money (and the negotiation, of course). Finally, the ZOPA is a price range that would be negotiable between the two parties and lead them to a deal. Without ZOPA, there is no possible discussion, because it means the negotiators can’t establish a common ground on price. It is also known as the bargaining zone. ZOPA refers to the region between parties’ reservation prices. Its purpose is to determine if an agreement is feasible and whether or not it is worthwhile to negotiate.

This quantitative approach to negotiation hides the relevant qualitative side of it. Before anything else, negotiation is a human interaction. Companies do not negotiate: people negotiate on behalf of companies. Western negotiators are task-oriented and used to focusing on numbers instead of building relationships. But, as the world’s economic power has shifted from North to South and from West to East, the theories about negotiation strategies and basics are to be adjusted.

You don’t negotiate with the Chinese, Indians, Brazilians, and with any other more relationship oriented collective country the way you negotiate with North Americans, and Western and Northern Europeans. These groups are more people- than contract-oriented. If all you can talk with them is about price, then you might miss making your deal. They have an iterative way of working, and they might be more flexible on price if you focus on more long-term aspects, such as commitment, privileges, and customized conditions.

To summarize, price does not generate loyalty, as the customer will always be attracted to anyone offering the lowest price. Other values lead people to compromise and create a longer term relationship. The negotiation process ends up being more subtle and time-consuming, but the outcomes are more sustainable—and less costly—in the long run.

Despite What You’ve Heard, Negotiation Is Not a New Trend

It has become fashionable to talk about negotiation these days. Business schools are creating courses on business negotiations. Professional trainers are developing negotiation sessions and coaching. The market has been flooded with books promising readers will win in all negotiations thanks to the techniques they would provide.

But neither negotiation nor international negotiation is new. The very first negotiators in the world—the Phoenicians in 1200 BCE—were naturally international. (Phoenicia was what we know today as Lebanon.) The Phoenicians were navigators, buying goods from one country and selling them to another. They knew where to find resources and what other parts of the world wanted them. Although their business world was limited to the Mediterranean coast, they traded goods internationally by providing their clients with products they would be unable to purchase in their own countries. As a pragmatic civilization, the Phoenicians stopped bartering and created the first currency in the world.

It Is Not Only a Matter of Win-Win or Win-Lose Strategies

Another common belief is that negotiation strategies are limited to win-win and win-lose outcomes. Either everybody wins, or someone must lose for the other party to win. Today’s business ethics requires every negotiator to announce a desire for a win-win agreement. Win-win is considered good and noble, while win-lose is bad and should be avoided. No negotiator has the liberty of choosing a win-lose negotiation style: It is not politically correct.

So we negotiate in a world where everybody announces win-win intentions—without really understanding what that means. Indeed, what does winning a negotiation mean? How universal can this concept be? Is it about selling at the most expensive price, or buying at the lowest price? Or is it about collaborating with other people and getting what we need to do a better job? How vital can each negotiation be to all parties?

The answer might vary from culture to culture, which is why negotiating styles differ between countries. While the contract is the end of the negotiation process in some countries, signing an agreement is just the beginning of collaboration in others. In some countries, signing a contract is the goal, while in others the main goal is to create a network.

Some negotiators are skeptical about taking cultural differences into account. They say that business is business, and getting more by giving less is what counts. You may agree. But you should also remember that negotiators are people, and that people’s minds are shaped by education, personality, and culture. Keep both in mind—business is business, but people are people. Doing this will help you understand that negotia­ting styles differ from country to country because people do not relate to ­others the same way. Thus, the old common beliefs about negotiation techniques and strategies might not apply to the new economic powerhouses. There are emerging negotiating styles for emerging countries.

Negotiation is not a championship sport, where there is only one winner on a podium surrounded by two others who came close. It is about doing business. The goal is not being better than someone else, but getting what you need from someone else. If you start a negotiation with a competitive mentality—to beat the other side, ask yourself what you are going to do with those people once the negotiation is over. Unlike a sports contest, you don’t say goodbye and go celebrate the triumph with your friends after the game is over. You get stuck working with them for a while—in an unpleasant relationship. And sure enough, next time you need to negotiate with them, they won’t make your life easy. Negotiation is not a game.

But being nice is not the answer, either. You just need to understand that the people you are negotiating with are not your opponents. They are your counterparts, and you are negotiating with them because you need them. So it makes sense to be their partner, not their enemy. This way, instead of rejecting what they say, or openly disagreeing with them, take the process as it comes and reframe it in a more favorable way for you. This gives you the chance to talk about the issues from another perspective, which can be more productive for both parties. Reframing means taking what your counterpart says and directing it against the issue—not him.

It Is Not Only a Male-Dominated World

Most negotiators—international or local—are men. They were the first to get into this position in companies because they have been historically more independent to travel, compared with women who were needed at home to look after the family. Although this remains a male-dominated field, more women are getting involved. Having said that, it also is clear that more women are purchasers than sellers, probably because it is a more stationary position. Here’s a good question: How many women have written books about international negotiation?

While the mentalities are evolving on women as negotiators, they are few in international settings. Often it does not seem natural to men to negotiate with businesswomen. It’s also worth noting that women will never be able to negotiate in some countries, where business is exclusively a male activity.

While women might not appear as negotiators in several countries, often they are the ones pulling the strings from behind the scenes. Indeed, their role is to manage the budget and to make sure that the family’s business goes well. They might not negotiate with strangers, but they will tell the men of the family how much they can spend and whom they can trust.

Consider the following situation. You are negotiating with a gentleman in India. You are both working in his office, and all of a sudden he invites you to go to a movie together. What do you do? I bet initially you are so surprised that you can hardly say anything! You have been invited for lunches, dinners, karaoke, and other more usual activities, but going to the movie? What for? We have work to do! You will feel even more surprised—and perhaps embarrassed—if you are a female negotiator.

Forget about your Western a priori and just accept the warm invitation. The man will certainly bring someone from his family to the movie, to get to know you in a more social setting. You will watch the film, have dinner, and—depending on how it goes—be deemed as trustworthy and secure the deal. There is one thing you can be sure about in such situations: no movie, no deal. By declining the invitation, you show you don’t trust them. Then why would they trust you?

International Negotiation Is Still Negotiation

Successful international negotiators need to go beyond mastering strategies and tactics. They also must have a particular mindset: diligently preparing and planning, being creative, being flexible, and being curious about other people and cultures.

You may think the main difference between negotiation and international negotiation is the language. However, most international negotiations are conducted in English and, more often than not, negotiators don’t work in their native languages. Some would even say that English has turned into something called Globish, which means Global English. It is a limited, usually conventional, vocabulary, supposed to be used and understood by all negotiators, independently of their mother tongues.

Even more important is the fact that language, in its broader definition, includes nonverbal communication. Negotiators need to hear what is not said. This aspect of intercultural interactions is much harder to understand than the array of English accents we may hear! To understand what has not been said, negotiators need to decode their counterpart’s culture to avoid misleading interpretations.

Here is an important tip for negotiators from straight-talking countries. They should know that in several other countries, any type of open disagreement should be avoided. Instead, their counterparts will use ­indirect communication to express disagreement. International negotiators often get disappointed because they think that the negotiation went really well, but after a while, they realize that there is no follow-up from the other side. What sounded like an agreement to them was actually a negative response from the counterpart.

Stereotypes and Generalizations As Starting Points

The word intercultural often reminds us of stereotypes. Everybody has an idea about other cultures, and this often can be limited to a single characteristic. No negotiator is neutral vis-à-vis the counterpart’s culture. Stereotypes are frequently deemed as being something bad. Well, they are not. Stereotypes are different from assumptions. They are part of a common, universal—however limited—knowledge of a culture. While rooted in history and tradition, stereotypes are a partial and superficial representation of it. The downside of stereotypes is when negotiators believe these give them enough information, so they don’t spend the time and effort to dig deeper into the culture to get a broader view. In summary, stereotypes are just a starting point to get to know a culture, not a true representation of it.

Generalizations are created by assigning particular cultural orientations to a society or people. Be careful that these don’t degenerate into stereotypes. Generalizations are initial hypotheses to be examined and modified through active engagement, while stereotypes are closed systems of belief. In other words, generalizations are a statement or an idea with a general and not specific applications. Stereotypes are a belief about people considered to typify or conform to one pattern, lacking any individuality.

Figure 1.1. depicts the cultural iceberg. It represents the main aspects of a culture. Invisible to others are the deep-rooted values, priorities, and assumptions—which actually are the underlying reasons for the visible customs, mores, and courtesies. By focusing only on what you see, you probably will judge people on their behavior without understanding it. To have a less stereotyped view of your counterparts, search for information about what you cannot see. The Cultural Analysis Grid (in your toolkit at the end of this book) will help you do that. Although it is impossible to know 100 percent about a culture (even your own), you should go beyond appearances to avoid being stuck in stereotypes.

Figure 1.1 The cultural iceberg

The Seven Myths of International Negotiation: Total Cultural Homogeneity or Total Heterogeneity?

Sometimes people don’t make the effort to understand cultural differences and their impact on business. Instead, they take comfortable shortcuts like the following:

•Myth 1: We’re really all the same.

•Myth 2: I just need to be myself to really connect.

•Myth 3: I have to adopt the practices of the other culture in order to succeed.

•Myth 4: It’s really all about personality.

•Myth 5: Business is business.

•Myth 6: Everybody wants win-win negotiations.

•Myth 7: It’s about business, not about making friends.

The negotiator who believes those myths will be in trouble.

We can’t be the same, because we don’t have the same backgrounds. All people are shaped by national, cultural, and corporate environments, which makes it impossible to be the same. Being honest is the best thing you can do to be respected. However, being spontaneous is a big pitfall in international negotiations. The issue is that you tend to behave the same way you do back home, which may not be appropriate in the culture in which you’re working.

In addition, avoid imitating others’ behaviors. This might be seen as artificial—or even worse, as mockery. No one expects a stranger to behave as a local would. What people expect is some knowledge about and respect for the host culture. In any case, if you don’t know how to behave in a given country, ask your counterparts what to do. Most often they will be pleased to explain their culture and help you by sharing some of their rituals. During any negotiation, asking for your counterparts’ advice shows that you value them. You also will have more accurate information and take fewer risks than trying to figure out everything by yourself.

Cultures provide a source of identity for their members. In international business, we most often talk about country-based cultures. But cultures also develop around professions, organizations, religions, and so on.

How Can You Learn About Your Counterpart?

Let’s move from cultures in general to the uniqueness of individuals and their personalities. The first bit of advice that negotiation trainers give you is to know about your counterpart’s personality to better understand him and plan your counterattack. Now the question here would be, “How?” How do you get to know their personality? You can’t expect them to take a personality test. In addition, you will be working with several people from the same country, and each one will have his or her own personality. How do you handle it? This advice does not sound realistic. But if you know the culture, you can have a better understanding of what guides their behavior in general.

The authors of the cultural intelligence model examined the relationship between the big five personality factors and the four-factor model of cultural intelligence (Ang et al. 2006). Their results demonstrated that a relationship existed that could predict behavior in international settings in terms of consciousness, agreeableness and emotional stability, extra­version, and openness to experience.

People who think that it is all about business, and that cultural differences do not matter, will be in big trouble. Although it is true that businesspeople do the same things all around the world, they do them differently. That happens because of cultural differences. And despite the politically correct discourse leading everyone to announce a win-win negotiation, that’s not the aim of every negotiator.

Finally, in most cultures, making friends and doing business aren’t considered separate activities. It is impossible to dissociate social and professional settings. If you are not part of the group, you are not in business with them. It might not always be about friendship as you define it. It has to do with getting to know the person they will work with, not just as a representative of the company. It has to do with empathy and trust. Being empathetic is focusing on the feelings of the other person, instead of their actions. People like to give things to people who listen to them, who value them, and who consult with them. That is why you need to know about people first.