Understanding the local negotiation style is key to getting the business outcome you want
If you’ve ever tried to buy a carpet in a Turkish bazaar, you’ll know the ritual. The seller mentions a ridiculous price. You (if you are bold enough) make a ludicrously low offer. The seller expresses outrage. You haggle for a while. If your nerve is strong, you walk away. If the seller still has some leeway in their selling price, they’ll chase after you, with a better ‘final price’. You leave with a new carpet.
This is one of the most extreme forms of negotiation. But understanding the local culture and bargaining style will help you get the best price for your carpet. The same applies to any cross-cultural business transaction. Of course, every individual is different, but cultures around the world certainly display an element of consistency in their negotiating style.
Americans tend to prefer a zero-sum result approach and information is used as power. Each side has a limit and it is hoped that common ground will be found where these bargaining zones overlap. The transaction is the focus; speed, cost and efficiency are useful bargaining chips. An action plan is desirable; Americans do not like vagueness.
Canadians usually aim for a win-win outcome, in which information sharing and problem solving lead to gains for both parties. Expect negotiating style to be polite, direct and efficient and for hard fact to be seen as more important than the relationship.
The Chinese are renowned for their tendency to be tough, canny negotiators. Large groups are always used for negotiations, never individuals, with one spokesperson per group. Chinese negotiations are characterised by a soft sell and a hard buy; initial offers will be extreme and generous concessions need to be made. Watch out for certain tactics. These may include controlling the meeting venue and schedule; withholding information; threatening to do business with a competitor; displays of mock anger (very disconcerting in a country where saving ‘face’ is so important) and pure attrition. Your counterparts may invoke the ‘guanxi’ argument, too, calling in favours from their business network which, for the purpose of the deal, includes you. Be thoroughly prepared, patient, reserved and always dignified.
Norway is almost the complete opposite. Negotiating meetings are collaborative, direct and efficient. Do not play games. Avoid hype or threats and on no account go in with a high-low gambit – starting with a ridiculous price and expecting to reduce it. The Norwegians (and other Scandinavians) will aim for consensus in the group. Your goal should be a win-win outcome.
United Arab Emirates
In the Arab world, negotiations are driven by two things: price and personal relationships. Although selling benefits are critical, they are not the primary factor. Expect a negotiating meeting to be fluid, with constant interruptions. Although much of the emphasis of the discussion will be on your relationship and happy future together, it will still all come down to price. Know your bottom line and don’t waiver. Know when to walk away – your counterpart will often call you back. A seller will start off very high with a much, much lower actual price in mind. Keep a few cards up your sleeve for last-minute concessions. Arabs expect a win-lose outcome to negotiations and you must show that you are prepared to give a little.
Hype-fuelled arguments and high-pressure techniques will not impress Australians and are most likely to provoke some caustic comments. Derisory remarks about others or competitors can be viewed also with suspicion or as not being ‘fair play’; this is a nation that favours the underdog. What is said will be taken literally, and Australians expect you to take what they say literally as well. Storming off in a mock fit of indignation will make you look foolish. Australians do not have the same tradition of bartering as, for example, their Asian neighbours, and expect an offer to include only a small margin for compromise and focus on a win-win outcome.
Zambians, along with several other southern and east African cultures, aim for a win-win outcome so if your potential partner demonstrates flexibility and willingness to commit, try to do the same yourself. Expect a degree of haggling, which is part of everyday life. Instead of giving you a price, your counterpart may put you on the spot by asking what you want to pay, which can un-nerve the inexperienced negotiator. A starting price on any deal may be unrealistically high but the goal of any deal is to get this to a level that is acceptable to both parties.
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