Negotiation Reader 2013

Table of Contents

When Cultures Collide: Managing Successfully Across Cultures 2

Jeswald Salcuse. Negotiating with the Government 99

Short Course in International Negotiating 102

When Cultures Collide: Managing Successfully Across Cultures

Chapter 1: Different Languages, Different Worlds

For a German and a Finn, the truth is the truth. In Japan and Britain it is all right if it doesn’t rock the boat. In China there is no absolute truth. In Italy it is negotiable.

Comparisons of national cultures often begin by highlighting differences in social behaviour. Japanese do not like shaking hands, bow when greeting each other and do not blow their nose in public. Brazilians form unruly bus queues, prefer brown shoes to black and arrive two hours late at cocktail parties. Greeks stare you in the eye, nod their head when they mean ‘no’, and occasionally smash plates against walls in restaurants. French people wipe theirplate clean with a piece of bread, throw pastry into their coffee and offer handshakes to strangers in bistros. Brits tip their soup plate away from them, eat peas with their fork upside down and play golf in the rain.

Appearance and reality

These various manners and mannerisms cause us great amusement. We smile at foreign eccentricity, congratulating ourselves on our normality. And yet we are aware that these idiosyncrasies are largely superficial. If we stay in France a while we are sooner or later happy to dunk our croissant and make a mess; we discover the unhurried delight of turning up outrageously late in Brazil; we throw vodka glasses over our shoulder with abandon in St Petersburg. Such adaptation of our behaviour leaves no scar on our psyche. We join strangers in their little ways partly to conform and partly for fun. Our appearance is not our reality. We can become French or Greek for an evening, a party or a dinner, we can sit on tatami with Japanese and eat legs of lamb with one hand among Arabs. But what goes on in our head remains a private, well-protected constant. We may put on a show for others, but all the while we follow our own silent programme.

Concepts and notions

Part of the superficial public behaviour we have cited above is cultural in origin, and yet we can adopt these manners without prejudice to our own core beliefs. Actions are not difficult to emulate, even different varieties of speech can be imitated to some extent. Thought is a different matter. We cannot see it, we cannot hear it, it may be revealed to us with reluctance, simulation or cunning. Cross-cultural problems arise not so much on account of our unfamiliarity with a bow, a Gallic shrug or chopsticks. Our society has trained us to adopt certain concepts and values. We know that many of these concepts areshared by other cultures. We can teach a Spaniard nothing about honour, the Japanese are masters of courtesy, Swedes, English and Germans are all convinced of their own honesty. It is remarkable, given the size of the world, its long history and immeasurable variety, how many common concepts are rooted so firmly in a similar manner in wildly different societies. Honour, duty, love, justice, gratitude and revenge are basic tenets of the German, Chinese, Arab and Polynesian alike. A Tasmanian knows his or her duty as clearly as a Greenlander does. What we often overlook is the fact that everyone has different notions of these concepts which appeal to so many cultures. Chinese duty is not American

duty. Romantic love is seen differently in France and Finland. The English notion of revenge bears little similarity to the Sicilian.

Extreme differences

We readily accept that cultural diversity is vast and formidable. If we take an extreme example, the barriers against communication or mutual comprehension between an Eskimo and an African Bushman might prove insurmountable. Given theirdifferent backgrounds, what could they talk about? They would be completely unaware of the structure or politics of each other’s society; it is hardly likely that they could imagine the opposite extremity of climate; their religion, taboos, values, aspirations, disappointments and life style would be in stark contrast. Subjects of conversation (if they had some mode of communication) would be minimal, approaching zero. Weather, sex and food, you say? Those are certainly basic issues. Yet if they met in a temperate climate (say England in spring) the Eskimo would find it hot, the Bushman cold. Their notions of sexual attractiveness would differ so strikingly that it is hardly likely that they would want to indulge in wife swapping. A tasty snack? Here, try this bit of blubber – ugh! Give me snake flambé any time.

The wildly differing notions of time, space, life after death, nature and reality held by isolated societies will have little impact on international business (although they may contribute usefully to our morals or philosophy). The Navahos with their nuclear concept of speech, the Zulus with their 39 greens, the Eskimos with their 42 types of snow, the Aborigines with their dreamtime, the Lapps with their eight seasons, all provide us with cultural gems, striking insights, unique thought and speech processes which intrigue and fascinate those of us who have time to study them. We are thrilled by these phenomena, take joy in their appreciation. We see, learn and sometimes understand. Deceived we are not. They are differences which we perceive, acknowledge and accept. We know, more or less, where we stand with these people.They live in another world and we know we live in ours.

Closer to home

In our world, there are others who are more like us. They have modern civilisations, political parties, factories, cars and stocks and shares. We meetthem regularly and their clothes resemble ours. We appear to have similar concepts and values. They seem to talk ‘our language’. Yet for some reason, French and Germans don’t always get on. In Belgium half of society dislikes the other. Chinese and Japanese are wary of each other, to say the least; neighbourly Swedes and Norwegians snipe at each other, and the mutual exasperation that British and American cousins experience is only too well documented.

Truth

The concepts are shining and clear: our notions of them are different. Both Germans and British people conducting a business meeting wish for a successful outcome. The German notion is that truth, absolute honest truth, even if somewhat unpalatable, will achieve this. The British, by contrast, give priority

to not rocking the boat. But die Wahrheit ist die Wahrheit say the Germans. Not so, the Chinese would add – these is no absolute truth. Two conflicting views may both be correct. Most Orientals and many Italians would agree with the Chinese.

In Germany, Sweden and Finland, where people are generally concerned about what the neighbours think, the drive towards conformity imposes checks and constraints on a person’s ability to refashion veracity. Brits and Americans, with that wonderfully idiomatic, nuance-rich tool of expression (the English language) at their disposal, are economical with the truth. The French, Italiansand other Latins are not famous for their candour, which might interfere with the smooth social intercourse they are so fond of. In Japan, where no one must face exposure, be confronted or lose face, truth is a dangerous concept. In Asia, Africa and South America, strict adherence to the truth would destroy the harmony of relationship between individuals, companies and entire segments of society. Only in Australia is a spade called a spade continent wide, and even there truth often occasions dismay and leads to fist-fights.

Contracts and ethics

As the globalisation of business brings executives more frequently together, there is a growing realisation that if we examine concepts and values, we can take almost nothing for granted. The word ‘contract’ translates easily from language to language, but notionally it has many interpretations. To a Swiss, German, Scandinavian, American or British person it is something that has been signed in order to be adhered to. Signatures give it a sense of finality. But a Japanese regards a contract as a starting document to be rewritten and modified as circumstances require. A South American sees it as an ideal which is unlikelyto be achieved, but which is signed to avoid argument.

Members of most cultures see themselves as ethical, but ethics can be turned upside down. The American calls the Japanese unethical if the latter breaks the contract. The Japanese says it is unethical for the American to apply the terms of the contract if things have changed. Italians have very flexible views on what is ethical and what is not, which sometimes causes Northern Europeans to question their honesty. When Italians bend rules or ‘get round’ some laws or regulations, they consider they are less ideal bound than, say, the Swiss, and actually closer to reality. They do not consider themselves corrupt, or immoral,nor do they admit to illegality. There are many grey areas where ‘short cuts’ are, in Italian eyes, the only intelligent course of action. In a country where excessive bureaucracy can hold up ‘business’ for months, currying favour with anofficial is a matter of common sense.

Common sense

The very term ‘common sense’ has to be watched carefully, for it is not as common as it seems. The English dictionary defines it as judgement gained from experience rather than study; the American lexicon gives it as judgement which is sound but unsophisticated. Academics are uncomfortable with common sense, which tends to preempt their research by coming to the same conclusion months earlier. But we must not think that this roughand- ready wisdom will unite our mix of nationalities. Common sense, although basic and unsophisticated, cannot be neutral. It is derived from experience, but experience is culture bound. It

is common sense in Germany or Sweden to form an orderly bus queue. In Naples or Rio it is common sense to get on the bus before anyone else. It would seem common sense for the Japanese to have discarded the Chinese writing system whichdoes not suit their language and which takes ten years for Japanese children to learn. But they have not done so. Japan is a rather regimented society, yet the police let a man urinate against a public wall if he really has to and will drive him home in his car if he is too drunk to drive himself. When asked why they are so lenient in such matters, they reply it is common sense.

Gossip

Gossip has negative connotations in the Nordic countries and hardly a good name in the Anglo-Saxon world. Yet gossip proves far more important to us than we would at first admit. It is a vital source of information in business circles inmany countries. In cultures like Spain, Italy, Brazil and Japan, gossip quickly updates and bypasses facts and statistics, provides political background to commercial decisions, and facilitates invaluable debate between people who do not meet officially. The Italian chiacchiera or Spanish paseo may be largely limitedto women and youngsters, but the cafés of Madrid and Lisbon overflow with businessmen, Japanese executives make momentous decisions every evening from 6–10pm in the bars of the Ginza, and the whole of Central and South America ‘networks’ merrily until one or two in the morning.

The corridors of power in Brussels, where European business and political legislation are inevitably intertwined, reverberate with gossip. European countries which do not have access to this hot-house exchange of information will be severely disadvantaged.

Another positive aspect of gossip is that it appears to be good for us – that isto say, in line with our natural evolution. Professor Robin Dunbar of UniversityCollege London points out that humans live in much larger groups than other primates and that language may have evolved as a form of social glue holding us together. While some animals obviously communicate well in small groups, it is hardly likely that they can gossip about third parties. This ability enables us to form social or working groups of approximately 150 members. This number holdstrue for ancient ‘clans’, military fighting units (a company) and even modern firms. Once a commercial enterprise swells well beyond that it has to be organised into divisions or it becomes less manageable. Intense interest in whatother people are doing, finding out from our ‘group’ the latest news about thirdparties, enables us to network on a large scale and calculate our positions and reactions accordingly. So the Latins, Greeks and Arabs have got it right after all!

Silence

Silence can be interpreted in different ways. A silent reaction to a business proposal would seem negative to American, German, French, Southern European and Arab executives. In countries as dissimilar as the USA, Peru and Kuwait, conversation is a two-way process, where one partner takes up when the other oneleaves off. The intervening silence is two or three seconds in Britain or Germany, less than that in Greece or Kuwait and hardly noticeable in France, Italy and America. However, the ‘listening cultures’ of East Asia find nothing

wrong with silence as a response. ‘Those who know do not speak; those who speak do not know’, says an old Chinese proverb. Japanese and one European nation (Finland) do not quarrel with this assertion. In both these countries silence isnot equated with failure to communicate, but is an integral part of social interaction. What is not said is regarded as important and lulls in conversationare considered restful, friendly and appropriate. Silence means that you listen and learn; talking a lot merely expresses your cleverness, perhaps egoism and arrogance. Silence protects your individualism and privacy; it also shows respect for the individualism of others. In Finland and Japan it is considered impolite or inappropriate to force one’s opinions on others – it is more appropriate to nod in agreement, smile quietly, avoid opinionated argument or discord.

Powerful mental blocks

As international trade and scientific and political exchange intensify, there isa growing effort on the part of academics, multinational organisations and even nations and governments to improve communication and dialogue. It is becoming increasingly apparent that in pursuit of this goal it is desirable not only to learn foreign languages on a much wider scale, but to show a sympathetic understanding of other peoples’ customs, societies and culture. Many binational and international bodies have been created to further this aim, and the personnel and training departments of many large companies have invested substantial sums of money in cross-cultural and internationalisation programmes and briefings for those staff members who will represent them abroad.

The question I would like to raise is whether or not cross-cultural training anda willingness to adapt will achieve anything at the end of the day, in view of the interlocking nature of our own language and thought. I am not necessarily suggesting that cross-cultural training might eventually be seen to be in vain –I believe the contrary to be true – but I would like to play devil’s advocate for a while and consider how powerful mental blocks may hinder our ability to change our attitudes or adopt new approaches.

In infancy we are conditioned by various factors and influences – not least by the behaviour and guidance of our parents, teachers and society. But they and weare subjected at every turn to that dominating and pervasive ‘conditioner’ – ourcommon language.

Many linguists adhere to the Benjamin Whorf theory or hypothesis, which states that the language we speak largely determines our way of thinking, as distinct from merely expressing it. In other words, Germans or Japanese behave in a certain manner because the way they think is governed by the language they thinkin. A Spaniard and a Briton see the world in different ways because one is thinking in Spanish and the other in English. People in the British Isles act and live in a certain way because their thoughts are channelled along Anglo-Saxon grooves which are different from neo-Latin, Japanese or Chinese grooves.

The Briton, the German and the Eskimo may share a common experience, but it appears to each as a kaleidoscopic flux of impressions which has to be organisedby the mind. The mind does this largely by means of language. Thus the three individuals end up seeing three different things. What is ‘fair play’ to the

Briton may be something else to the German, who needs to translate the concept into different words, and it may mean nothing at all in a society where there are no organised games.

English and Zulu

If you think ‘fair play’ is rather abstract, let us go to another instance wherea very basic concept is seen in a completely different way by two people of diverse origins. My example involves an Englishman and a Zulu. While the cultural chasm is clear, it is the linguistic factor which dominates this instance.

As you may know, Zulu tongues have 39 words for ‘green’, while English has only one. (If we wish to modify the shade we have to bring in another word, e.g. bottle green, leaf green). I was interested in how the Zulus could build up 39 one-word concepts for green, and discussed this at length with a former Zulu Chief who had taken a doctorate in philology at Oxford. He began by explaining why Zulus needed 39 words for green. In the days before automotive transport andnational highways, the Zulu people would often make long treks across their savannah grasslands. There were no signposts or maps and lengthy journeys had tobe described by those who had travelled the route before. The language adapted itself to the requirements of its speakers. English copes with concepts such as contract deadlines and stock futures (Zulu doesn’t), but our tongue is seen as poverty stricken and inadequately descriptive by Africans and Amerindians whose languages abound in finely wrought, beautifully logical descriptions of nature, causation, repetition, duration and result. ‘But give me some examples of different green-words,’ I persisted. My friend picked up a leaf. ‘What colour isthis?’ he asked.

‘Green,’ I replied. The sun was shining. He waited until a cloud intervened. ‘What colour is the leaf now?’ he asked.

‘Green,’ I answered, already sensing my inadequacy. ‘It isn’t the same green, isit?’ ‘No, it isn't.’ ‘We have a different word in Zulu.’ He dipped the leaf in water and held it out again. ‘Has the colour changed?’ ‘Yes.’ ‘In Zulu we have aword for “green shining wet”.’ The sun came out again and I needed another word (leaf-green-wetbut- with-sunshine-on-it!)

My friend retreated 20 metres and showed me the leaf. ‘Has the colour changed again?’ ‘Yes,’ I screamed.

‘We have another word,’ he said with a smile. He went on to indicate how different Zulu greens would deal with tree leaves, bush leaves, leaves vibratingin the wind, river greens, pool greens, tree trunk greens, crocodile greens... he got to 39 without even raising a sweat.

Language strait-jacket

It was evident that my Zulu friend and I saw the world through different eyes. And yet it was not a question of eyes. However ‘international’, multicultural orall-embracing I wished to be, there was no way I could perceive or feel about

nature the way he did, because I didn’t have the language to do it with. It was not just a matter of familiarising myself with the cultural habits, preferences and taboos of his tribe or even adopting his religion and philosophies. I could only experience reality as fully as he did by learning his language and escaping(in terms of descriptive ability) from the strait-jacket of my own.

Just as seeing with two eyes gives us stereoscopic vision, and a sense of depth,thinking in two different languages gives us added dimensions of reality. Finn–Swedes are a case in point. A striking thought is that while French (a language very similar to English) would give a Briton maybe an extra 10 percent of the observable universe, a ‘primitive’ language wildly different from our own, with its other logic and set of assumptions, might show us things we have never dreamed of!

It is not difficult for us to comprehend (once we are awake to the language strait-jacket phenomenon) that the Japanese, for example, with their reverse word order will organise their thoughts and priorities in a different manner from that of Europeans. But if we think more closely about the European scene, we discover that English, French and Spanish speakers use language and think in quite different ways, and may seem at times to be on a common wavelength when infact they didn’t really know what the other has said or what they actually meantwhen they said it.

Translation inadequate

The Greeks, who were the first people to enquire in depth into logic and reason,assumed that language was a universal, untampered-with element of reason. They believed it was a phenomenon shared by all mankind and, in the case of educated people, would provide a standard yardstick for comparison of ideas, experience and reality. They also assumed that ideas could be translated freely into any language. This is only true up to a point. Swedish translates readily into English and vice versa, but with Finnish and English the task is far more complicated.

Even those of us who have learned languages at school have noticed the difficulty our teachers have in translating such words as panache, esprit de corps, Gem¸tlichkeit and Zeitgeist into English. Interpreters at the United Nations are faced daily with similar problems, even with languages which are closely related. In one recorded case, the English speaker said ‘I assume’, the French interpreter translated as ‘I deduce’, and this was rendered by the Russian as ‘I consider’ –by which time the idea of assumption had been lost!

Different worlds

If this can happen working with three close relatives of the Indo-European group, we see that two languages as different as English and Navaho literally operate in two different worlds. I think it is important for business-people to consider carefully the implication of the words ‘in two different worlds’. All observers are not led by the same physical evidence to the same picture of the universe, unless their linguistic backgrounds are similar, or can in some way becalibrated. English, French, German, Russian and other Indo-European languages

can be roughly calibrated (although not always satisfactorily), but where does this leave us with Chinese, Indonesian, Finnish or Japanese? If the structure ofa person’s language influences the manner in which they understand reality and behave with respect to it, then we could have four individuals who will see the universe through Sino-Tibetan, Polynesian, Altaic and Japanese eyes respectivelyand then comport themselves accordingly.

Internalised thought

There is a good deal of scientific support for the hypothesis that higher levelsof thinking depend on language. Language can be regarded as internalised thought. Most of us conduct an interior monologue, often accompanied by visual imagery. The more educated and literate the individual, the more complex and sophisticated this monologue becomes. It was not until the Middle Ages that people learned to read without reading aloud. Today, talking to or reasoning with oneself is accepted as quite common and there is no doubt that most of thisgoes on ‘in words’, whether expressed aloud or not.

We can assume that German, Italian and Malaysian businesspeople do the same thing in their own language. When each speaks, we merely glimpse the tip of a huge iceberg of verbal activity which never breaks the surface of audibility. Ifyou make this reasonable assumption, then you can presume that whatever is said to you will be a brief projection of that inner world of the other person’s thoughts. What is said may be grammatically accurate or erroneous in the extreme, but it will be coloured by the foreigner’s view of reality, this itselfinfluenced by the rigidity of his or her own language structure.

This line of reasoning tends to become somewhat involved – and clearly thought may also influence one’s choice of expression – but to clarify the point, one can take a few practical examples.

The German language is a tightly disciplined, no-nonsense entity with long, compound words often expressing complex concepts. We might therefore expect the internal monologue of a German person to be serious rather than casual, concentrating on weighty issues, and resulting in verbalisation which will be anything but flippant.

Mobile American

Contrast this with the interior monologue of an American counterpart. The natureof American English is interwoven with the character and history of the youthfulUnited States. American speech or thought is mobile and opportunistic; it shiftsquickly for advantage or compromise and excels in casual and humorous shafts. The German will take Americans seriously when they do not intend to be taken as such. A further complication is the deep slide that American English has taken into clichés and ‘tough’ talk. Such expressions as ‘gotta deal’, ‘gotta be jokin’, ‘no way’, ‘full of shit’, ‘over the top’, ‘you can’t do this to me’ and ‘give away the store’ fail to indicate properly what the American is really thinking, but are verbal escape routes to simplified analyses or solutions not necessarily in their favour.

Britons are guilty of other clichés indicative of near-stultifying vagueness of thought, well designed to convey very little or nothing at all to their foreign interlocutors. Such expressions, occasionally derived from sport, include ‘fair play’, ‘sticky wicket’, ‘a good innings’, ‘good show’, ‘bad news’, ‘not on’ and ‘a bit thick’.

Clinical French

The French thought monologue is quite different. They have dissected their universe better than most of us and they try to think about it clearly. They know where they are going and what it is that they want. Their clinical vocabulary is conducive to quick thinking, its lack of vagueness leads to a cutting directness, and their ruthless pursuit of logic will often irritate Anglo-Saxons or Japanese, who tend to ‘feel their way’ towards a solution.

The Spanish speaker’s monologue is earthy, emotional and generous. The wealth ofSpanish vocabulary and the wide range of endearments and diminutives (shared with Italian and Portuguese and often untranslatable into English or Finnish) enable the Spaniard to communicate in a warm, human manner indicative of an expansive character and lack of cunning. Exporters should not, however, read this as a sign that the Spanish speaker can necessarily be taken advantage of.

Foggy Japanese

The Japanese have the most difficult task of all in making the transition from their internal monologue to actual verbal utterance. In their thoughts they agonise over striking a balance between gaining advantage and correctness of behaviour. Their thought (we can also regard this as internalised speech) has tobe polite in the extreme in view of the fact that they are to address others. But the speech mechanisms involved in such politeness often lead to incredible vagueness of expression, so that whatever message they seek to convey may well get lost in a fog of impeccable behaviour. On top of that, their formidable battery of honorific expressions – so useful in communication between Japanese –are rendered useless in the face of impossibility of translation, so that their conversation with their foreign counterpart emerges as terribly platitudinous, even if grammatically correct.

Humour across frontiers

It has been said that humour crosses national boundaries with difficulty, especially when heading east. If we analyse this assertion for a moment, severalimplications emerge. First, it is self-evident that the victim of a humorous attack is hardly likely to see the funny side of it. French anecdotes depicting the Belgians as a collection of slow-witted yokels fail to gain appreciation in Brussels. Dutch people resent similar treatment at the hands of the Belgians.

Secondly, failure to appreciate the funny side of a ‘foreign’ anecdote does not necessarily depend on one’s being the victim. Serious-minded, factual Germans donot split their sides on hearing American jokes about Texas, which usually depend on gross exaggeration. The story about the Mexican driving just as fast as he could for 24 hours to get out of Texas, but finding he had not managed it,

thrills the American imagination but sounds far fetched to the German, who wouldusually reply, ‘He should have used a German car.’ This response would be considered very funny in Germany and fairly good in England and Scandinavia.

Apart from the Koreans (who seem to like everybody’s jokes), few Orientals are amused by American or (most) European jokes. The Confucian and Buddhist preoccupation with truth, sincerity, kindliness and politeness automatically eliminates humour techniques such as sarcasm, satire, exaggeration and parody, and finds little merit in crazy homour or jokes about religion, sex and underprivileged minorities. Sick or black humour is definitely out.

So what is left, you might ask? Eastern humour, such as we understand it, is couched in subtlety, gentle, indirect reproach or reprimand, occasionally victimising listeners in a sly but non-aggressive manner which yet leaves them room for response and stops short of depriving them of their dignity. Even the rougher, occasionally bawdy Koreans take great care to protect the listener’s ‘wholeness’ or standing. Chinese are noted for their aphorisms and proverbs, andthey and Indians find great sources of humour in parables, which we in the west find only moderately funny, although they do combine wisdom, moralising and a sense of perspective. We can understand the point of most Confucian aphorisms and Indian or Malaysian tales, while we rarely understand Japanese jokes. But then, neither do the Chinese.

Is there such a thing as a ‘national style’ of humour? Before answering this question directly, one must accept the fact that there is such a thing as international humour – that is to say, some types of humour and some jokes gain international acceptance. In particular, this is true of slapstick, age-old in its use and laughed at by Europeans, Americans, Africans and Orientals alike. Itis very much in evidence, for instance, on Japanese television. There seems to be a general love of witnessing violence, which may compensate, in the international arena, for not always being allowed to practise it. There are also‘international’ jokes repeated across many borders, such as the one about who must jump first out of the aeroplane, elephant jokes, restaurant jokes and hilarious stories about golfers.

Even in the area of international jokes, however, the national ‘rinse’ begins toshow. Take, for example, the old joke about the journalists who organised a competition to write an article about elephants. The titles were as follows:

English Hunting elephants in British East Africa French The love life of elephants in French Equatorial Africa German The origin and development of the Indian elephant in the years

1200–1950 (600 pages) American How to breed bigger and better elephants Russian How we sent an elephant to the moon Swede Elephants and the welfare stateDane Elephant-meat smorrebred Spaniard Techniques of elephant fighting Indian The elephant as a means of transportation before the railway

era Finn What the elephants think about Finland

This joke, which probably originated at a conference of journalists, pokes fun at various national faiblesses – French lust, German seriousness, American bragging, British colonialism, etc. The punchline is the laugh about Finns’ preoccupation with what others think about them. In Helsinki, however, they developed an alternative punchline where a Norwegian was added, the title being:‘Norway and Norway’s mountains’.

Finns, Swedes and Danes find this alternative absolutely side-splitting. The Norwegians (who consider themselves a humorous people) do not find this ending funny at all. In fact, they do not understand it. Do you?

Humour in business

As world trade becomes increasingly globalised, businesspeople meet their foreign partners more frequently and consequently feel that they know them better. It is only natural that when one develops a closer relationship with a stranger there is a tendency to avoid overseriousness and to begin to converse in a more relaxed manner. Swapping anecdotes is a good way of melting the ice inmany situations and gaining the confidence of one’s listener. A funny incident involving some personal discomfort or embarrassment is a good start; a sly attack on a ‘common enemy’ may soon follow.

Humour during business meetings is not infrequent in most European countries, although it is less common among Latins than with Northern peoples, where it is a valuable tool for breaking the ice. Perhaps among the Spaniards, Portuguese and Italians, there is little ice to break. Their own racy, gossipy, confiding, conversation style constitutes in itself, however, a valid humorous element.

It is in the Anglo-Saxon countries that humour is used systematically. Relaxed in Canada and New Zealand, it can be barbed and provocative in Australia. In theUSA particularly, sarcasm, kidding and feigned indignation are regarded as factors which move the meeting along and get more done in less time. Time is, after all, money. It is perhaps in the UK that humour is most intertwined in business talks. The British hate heavy or drawn-out meetings and will resort to various forms of humour and distracting tactics to keep it all nice and lively.

However, two nationalities in particular avoid jokes and other forms of humour during the actual business sessions. Germans find it out of place during negotiations. Business is serious and should be treated as such, without irrelevant stories or distractions. If you do not concentrate on the issue, you are not showing respect to your interlocutor. Kidding is, in their eyes, not honest and creates confusion in business discussion. They want to know about price, quality and delivery dates, with some precision, please.

After the meetings are over, Germans are quite willing to relax and joke with their partners in bars, restaurants and at home. Humour and anecdotes are more than welcome in these circumstances. Relaxation, like business discussion and many other activities in Germany, is fairly strictly compartmentalised.

Japanese also fail to see any benefit in introducing humour into business meetings. They will laugh if they are aware that you have told a joke (it is unlikely they will have understood it) but that is out of sheer politeness. Theyare normally nervous about understanding your straight talk in the first place, so that any clever nuances or tongue-in-cheek utterances will leave them floundering. They take anything you say quite literally. Americans using expressions like ‘You are killing me’ or ‘Say that once again and I’ll walk awayfrom this deal’ cause great consternation among their Japanese partners. One US executive who said a certain clause would blow the deal out of the water was asked, ‘What water?’ An Englishman was asked by the waiter at the end of a business dinner if the ten men present required ice-cream for dessert. As the table was laden with beer, the Englishman replied humorously that everyone was having beer for dessert. Two minutes later the waiter appeared with ten beers.

While the introduction of humour in international business talks may bring considerable gain in terms of breaking the ice, speeding up the issues, escapingfrom deadlock, putting your partners at ease and winning their confidence in youas a human being, the downside risks are often just as great. What is funny for the French may be anathema to an Arab; your very best story may be utterly incomprehensible to a Chinese; your most innocent anecdote may seriously offend a Turk. Cultural and religious differences may make it impossible for some people to laugh at the same thing. Who can say with certainty that anything is funny? If all values are relative and culture based, then these include humour, tolerance, even truth itself. And remember that laughter, more often than not, symbolises embarrassment, nervousness or possibly scorn.

Making allowances

International businesspeople cannot escape the bottom line – a good American expression – of the considerations made above. The picture of the universe shifts from tongue to tongue, and the way of doing business shifts accordingly. There is no one metaphysical pool of human thought – or of behaviour. Different languages provide different ‘segments of experience’ and there is little we can do about it, except to learn more languages. We cannot learn all of them, but atleast the awareness of the problem and any allowances we can make for a foreign friend’s Weltanschauung will help us to establish whatever degree of communicationour different mentalities permit.

Chapter 2: Cultural Conditioning

We think our minds are free,but,like captured American pilots inVietnam and North Korea, we have been thoroughly brainwashed. Collective programming in our culture, begun in the cradle and reinforced in kindergarten, school and workplace, convinces us that we are normal, others eccentric.

What is culture?

Hofstede defined culture as ‘the collective programming of the mind which distinguishes the members of one category of people from another’. The key expression in this definition is collective programming. Although not as sinister as ‘brainwashing’ – with connotations of political coercion – it nevertheless describes a process to which each one of us has been subjected immediately after birth (some people would say even before birth, but that is a little deep for me!) Certainly when parents, returning from hospital, carry a baby over the threshold, the first decision has to be made – where to sleep. A Japanese child is invariably put in the same room as the parents, near the mother, for the first couple of years. British and American children are often put in a separate room – right away or after a few weeks or months. The inferences for the child’s dependence/interdependence and problem-solving abilities are obvious. To follow up one theory, Japanese children – used to doing everything jointly with their parents 24 hours a day for the first year, then acting thereafter in strict unison with 50 clones in kindergarten – developan addiction to group activity and ‘group think’ which leads to (and is reinforced by) close cooperation and joint pursuits in school, university, clubsand ultimately their company.

Parents and teachers obviously give children the best advice they can. It fits them out for successful interaction in their own culture and society, where goodand bad, right and wrong, normal and abnormal are clearly defined. Unfortunately(at least in one sense) American and European children are being given a completely different set of instructions, although equally valid in their own environment.

As we grow up, these taught-and-learned ‘national’ concepts become our core beliefs, which we find almost impossible to discard. We regard others’ beliefs and habits (Russian, Chinese, Hungarian...) as strange or eccentric, mainly because they are unlike our own. There is no doubt about it, Japanese are not like Americans!

On the other hand, we have a sneaking feeling (and we frequently hear it expressed) that ‘deep down all people are alike’. There is also truth in this, for there are such things as universal human characteristics. They are not too numerous, for our national collective programming ‘distorts’ some of our basic instincts (Scots thrift v American free spending). Figure 1 shows how national collective programming is ‘grafted onto’ inherited traits. In the top section weadd individual characteristics. Some people, by dint of personal originality, extra powers of perception, stubbornness or even genius, stand apart from their colleagues and deviate sharply from the national track. Such people often become

famous for their ‘idiosyncrasies’ and a few have actually changed the course of their nation’s destiny (King Henry VIII, Kemal Atatürk, Emperor Meiji of Japan).

Figure 1: Human mental programming — Japan

In general, however, our national or regional culture imposes itself on our behaviour rather than the other way round, and we become a solid German, a good Swede, a real American or a true Brit, as the case may be. Interacting with our compatriots, we generally find that the closer we stick to the rules of our society, the more popular we become.

\ Culture shock

Our precious values and unshakeable core beliefs take a battering when we venture abroad. ‘Support the underdog!’ cry Guy Fawkes-loving English.

The Australians – famous historical underdogs themselves – echo this to the full. Germans and Japanese, although temporary underdogs themselves after the Second World War, tend to support the more powerful of two adversaries, seeing the underdog as necessarily the less efficient. The Japanese government, throughMITI (Ministry of Trade and Industry), issues directives to the larger banks to lend money to those industries which are currently thriving and have the potential for further growth, while discouraging loans to enterprises which havebecome old-fashioned or have little hope for future success. This attitude is inmarked contrast to that so long prevalent in Britain, where ancient factories were kept alive and industrial underdogs such as textiles and coal-mining were supported long after they were economically viable.

Figure 2 shows the different paths which our core beliefs take according to the culture we try to impose them on. Others are not aware of our values simply by looking at us. They may draw certain conclusions from the manner in which we dress, but these days most businesspeople dress in a similar way. It is only when we say or do something that they can gain deeper insight into what makes ustick. This utterance or action may be described as a cultural display or event, since, by its execution, we reveal our cultural attitudes. In Figure 2, the cultural display might be that an Italian (probably Roman) turns up half an hourlate for a scheduled meeting. In her own cultural environment this will make no waves, for most of the others will be late too. Her behaviour is approved and eventually it becomes a cultural tradition. Were she to turn up 30 minutes late in an alien culture (say Germany) she would deliver a culture shock of no mean proportions. Germans do not like to be kept waiting for three minutes, let alonethirty. Immediate resistance and protest leads to Italian defence ( traffic jam,daughter was ill) and eventually a defence of the Italian way of life (‘Why are you Germans so time dominated – you are like clocks!’) Such confrontation leads to deadlock and probable withdrawal from a project.

Figure 2: Paths for core beliefs

In a friendly culture (shall we say the French), the criticism will be couched in cynicism, but will be less final or damning. (‘Mon vieux, tu m’as volé une demie heure,tu sais!’) The Italian, sensitive to Latin objections, next time comes only 20 minutes late. The Frenchman, no great believer in punctuality himself, eventually settles for 15 minutes. The Italian concurs. This is Latin understanding.

Who is normal, anyway?

Most English people think they are normal and that all others (whom they call ‘foreigners’) are abnormal – that is to say, they might be all right, but they really cannot act and think like the English, because, after all, they are foreign. You only have to look at them, you’ll know what that means...

Chauvinism

Americans think America is the biggest and the best, the newest and the richest,and all others are a bit slow, old fashioned, rather poor and somewhat on the small side. They can’t call the British foreigners, so they call them ‘limeys’.

Spaniards think they are the bravest because they kill bulls, the French think they are intellectually superior to everybody else, the Japanese are quite sure they are superior to others, including the French. The Germans admit that they are not as big as the Americans, as agile as the Japanese, as historical as the French, as smooth as the British, but what really counts in life? Efficiency, punctuality, Gr¸ndlichkeit, method, consistency and organisation. Who can match Germans on these counts?

There are few countries in Europe or the world where people do not believe, at the bottom of their heart, that they are the best, or the most intelligent, or at least normal. Perhaps in Europe the Italians and the Finns are the most innocent in this regard, often being willing to criticise themselves before others, yet both still consider themselves normal.

I am reminded of the old story of the 80-year old couple sitting by the firesidelooking back on their lives. The wife says to the husband: ‘John, everybody is strange except you and me. And even you are strange sometimes.’

Normal and abnormal

If each culture considers itself normal, then the corollary is that it considerseverybody else abnormal. By this token Finns consider Italians overemotional because they wave their arms while talking. The individualistic Spaniards consider the Swiss stuffy and excessively law-abiding. Lively Italians find Norwegians gloomy. French-influenced Vietnamese find Japanese impassive. Argentinians are considered conceited by all other South Americans. Germans think Australians are undisciplined. Japanese see straight-talking Americans as rude.

We can achieve a good understanding of our foreign counterparts only if we realise that our ‘cultural spectacles’ are colouring our view of them. In fact, both calm and excitable Italians use many gestures during conversation. Finns see them as overdemonstrative, Spaniards see them as normal. Conversely, Finns would not agree with Italians about Norwegians being excessively gloomy. Germansview the law-abiding Swiss as correct. The stereotypes described above derive largely from the ‘abnormality’ of the viewer, e.g. the ultra-politeness of the Japanese, the social shyness of the Finn, the Spanish tendency towards lawlessness.

What is the route to better understanding? To begin with, we need to examine thespecial features of our own culture. Finnish taciturnity scores good points in Britain and Japan, but will forever be considered very odd indeed in Portugal, Greece, the Middle East and Latin America. The Japanese will have to learn one day that when they say ‘yes’ the rest of world does not know that they mean ‘no’.

Our second task, once we realise that we too are a trifle strange, is to understand the subjective nature of our ethnic values. While Scots see stubbornness largely as a positive trait, flexible Italians may see mainly intransigence, the diplomatic English possibly lack of artfulness or dexterity. We also make assumptions on the basis of our subjective view and, even worse, assumptions of other people’s assumptions. The Italian who assumes that French people feel intellectually superior also judges that French assume Italians are suitable mainly for manual labour when emigrating to France. The Finn who judgesSwedes are snobs also assumes that Swedes assume Finns are rough and rustic. There may be a grain of truth in many of these judgements and assumptions of assumptions, but the danger involved in making them is only too obvious!

Legal and illegal

Our perception of reality (what a word!) may be assisted if we can wear someone else’s shoes for a moment – if we can see how they view some matter in a way very different from our own. Figure 3 illustrates differing viewpoints of Finns and Spaniards on legality and illegality.

Both nationalities agree that trafficking in drugs is bad and that laws against drunken driving are socially beneficial and justified. When it comes to restrictive immigration laws, the Finns’ subjective view is that the fragile, delicately balanced national economy must be protected, while semiconsciously their instinct is to protect the purity of their race. Spaniards, born in a country where no one dares trace their ancestry further back than 1500, have a reflex distaste for prohibitive immigration policies which hinder the free movement of Spaniards seeking better wages abroad. Such policies or laws they see as negative, or simply bad. A Finn consistently making expensive telephone calls for which she need not pay will ultimately fall victim to her own inherentsense of independence, not least because she is building up a debt to her friendin Finnish Telecom. The Spaniard, on the other hand, would phone Easter Island nightly (if he could get away with it) with great relish and unashamed glee.

It is by considering such matters that we realise that all that is legal is not necessarily good and everything illegal not necessarily bad. Finns, Swedes, Swiss and Germans do not make this discovery very easily. Americans, Belgians, Danes, Hungarians, Slovenes, Croats, Chinese, Koreans and Australians can acceptit without losing too much sleep. Latins, Arabs, Polynesians, Africans and Russians see it clearly from the beginning. A Sicilian friend of mine has not paid for a telephone call since 1948. His father owns a vineyard.

Recently I tested mature Finnish executives on cross-cultural seminars with the following exercise:

NATIONAL CHARACTERISTICS

heavy humorous excitable honest risk taking snobbish

serious diplomatic talkative slow opportunistic weak willed

humourless laid back sly emotional reliable true

money minded collective wise take things literally open shy

good manners unreliable direct joking sociable hard working

conservative individualistic loud no manners caring extrovert

efficient punctual flexible reserved quick polite

time dominated vague boring polished strong willed

old fashioned

Study the characteristics above and select eight for each of the following nationalities: German, British, Italian, Finnish, Swedish, American

Attributing 8 of the 48 available characteristics to 6 different nationalities, Finns invariably select the following qualities to describe themselves: honest, slow, reliable, true, shy, direct, reserved, punctual Six of these characteristics are clearly positive; even ‘shy’ and ‘slow’ do do not have negative connotations in Finnish ears.

Germans could be considered punctual, Swedes honest, Britons true and reliable, Americans direct, but the seminarists had a natural tendency to paint a positivepicture of the Finnish character. Swedes, Germans and Britons, when tested in a similar manner, do the same, selecting euphemistic adjectives to describe their own culture.

In another exercise, Finnish seminarists were asked to perform role plays in which Finnish, Russian, American and Polynesian characters were involved. The executives played the Finnish and Russian roles well, but invariably exaggeratedthe traits of Americans and Polynesians, magnifying and distorting the brashnessand blustering nature of the former and the innocence, clamour and chatter of the latter. This illustrated the Finnish tendency to resort to stereotype categorising when actual familiarity is lacking. (Russian characteristics, on the other hand, are well observed by Finns).

Stereotyping is dangerous, but it is also a fair guide at the national level. A particular Dane may resemble a certain Portuguese, but a Danish choir or football team is easily distinguishable from its Portuguese equivalent. Generalising on national traits breaks down with individuals but stands firm with large numbers.

Cultural spectacles continue to blur the vision of any nationals when they look at their foreign interlocutors. Figure 4 illustrates the barriers to communication which Japanese reticence erects when faced with Latin exuberance,

and Figure 5 shows the relative ease with which two Latin peoples can communicate with each other by virtue of wearing similar spectacles.

Figure 4: Barriers to communication

Figure 5: Interaction among Latins

It is worth pointing out that French and Italian people do not like each other particularly, but they are both good communicators and there are no substantial barriers in the way of rapid and mutually intelligible discourse.

If a Japanese or anyone else takes off their national spectacles, the world is initially blurred and out of focus. Many other pairs of spectacles will have to be tried on before 20/20 vision is achieved. This is the process of developing intercultural sensitivity.

Chapter 3: Categorising Cultures

The several hundred national and regional cultures of the world can be roughly classified into three groups:task-oriented,highly organised planners (linear-active); people-oriented, loquacious interrelators (multiactive); introvert, respect-oriented listeners (reactive). Italians see Germans as stiff and time-dominated; Germans see Italians gesticulating in chaos; the Japanese observes and quietly learns from both.

Linear-active and multi-active cultures

Sven Svensson is a Swedish businessman, living in Lisbon. A few weeks ago he wasinvited by a Portuguese acquaintance, Antonio, to play tennis at 10am. Sven turned up at the tennis court on time, already in tennis gear and ready to play.

Antonio arrived half an hour late, in the company of a friend, Carlos, from whomhe was buying some land. They had been discussing the purchase that morning and had prolonged the discussion, so Antonio had brought Carlos along in order to finalise the details during the journey. They continued the business while Antonio changed into his tennis clothes, with Sven listening to all they said. At 10.45 they went on court and Antonio continued the discussion with Carlos, while hitting practice balls with Sven.

At this point another acquaintance of Antonio’s, Pedro, arrived in order to confirm a sailing date with Antonio for the weekend. Antonio asked Sven to excuse him for a moment and walked off court to talk to Pedro. After chatting toPedro for five minutes, Antonio resumed his conversation with the waiting Carlosand eventually turned back to the waiting Sven to begin playing tennis at 11. When Sven remarked that the court had only been booked from 10 to 11am, Antonio reassured him that he had phoned in advance to rebook it until 12 noon. No problem.

It will come as no surprise to you to hear that Sven was very unhappy about the course of events. Why? He and Antonio live in two different worlds or, to put itmore exactly, use two different time systems. Sven, as a good Swede, belongs to a culture which uses linear-active time – that is to say, he does one thing at atime in the sequence he has written down in his diary. His diary that day said 8am get up, 9am breakfast, 9.15 change into tennis clothes, 9.30 drive to tenniscourt, 10–11am play tennis, 11–11.30 beer and shower, 12.15 lunch, 2pm go to theoffice, and so on.

Antonio, who had seemed to synchronise with him for tennis from 10 to 11, had disorganised Sven’s day. Portuguese like Antonio follow a multiactive time system, that is, they do many things at once, often in an unplanned order.

Multi-active cultures are very flexible. If Pedro interrupted Carlos’s conversation which was already in the process of interrupting Sven’s tennis, this was quite normal and acceptable in Portugal. It is not acceptable in Sweden, neither is it in Germany or Britain.

Linear-active people, like Swedes, Swiss, Dutch and Germans, do one thing at a time, concentrate hard on that thing and do it within a scheduled timescale. These people think that in this way they are more efficient and get more done.

Multi-active people think they get more done their way. Let us look again at Sven and Antonio. If Sven had not been disorganised by Antonio, he would undoubtedly have played tennis, eaten at the right time and done some business. But Antonio had had breakfast, bought some land, played tennis and fixed up his sailing, all by lunchtime. He had even managed to rearrange the tennis booking. Sven could never live like this, but Antonio does, all the time.

Multi-active people are not very interested in schedules or punctuality. They pretend to observe them, especially if a linear-active partner insists. They consider reality to be more important than manmade appointments. Reality for Antonio that morning was that his talk with Carlos about land was unfinished. Multi-active people do not like to leave conversations unfinished. For them completing a human transaction is the best way they can invest their time. So hetook Carlos to the tennis and finished buying the land while hitting balls. Pedro further delayed the tennis, but Antonio would not abandon the match with Sven. That was another human transaction he wished to complete. So they played till 12 or 12.30 if necessary. But what about Sven’s lunch at 12.15? Not important, says Antonio. It’s only 12.15 because that’s what Sven wrote in his diary.

A friend of mine, a BBC producer, often used to visit Europe to visit BBC agents. He never failed to get through his appointments in Denmark and Germany, but always had trouble in Greece. The Greek agent was a popular man in Athens and had to see so many people each day that he invariably ran over time. So my friend usually missed his appointment or waited three or four hours for the agent to turn up. Finally, after several trips, the producer adapted to the multi-active culture. He simply went to the Greek’s secretary in late morning and asked for the agent’s schedule for the day. As the Greek conducted most of his meetings in hotel rooms or bars, the BBC producer would wait in the hotel lobby and catch him rushing from one appointment to the next. The multi-active Greek, happy to see him, would not hesitate to spend half an hour with him and thus make himself late for his next appointment.

When people from a linear-active culture work together with people from a multi-active culture, irritation results on both sides. Unless one party adapts to theother – and they rarely do – constant crises will occur. Why don’t the Mexicans arrive on time? ask the Germans. Why don’t they work to deadlines? Why don’t they follow a plan? The Mexicans on the other hand ask: Why keep to the plan when circumstances have changed? Why keep to a deadline if we rush production and lose quality? Why try to sell this amount to that customer if we know they aren’t ready to buy yet?

Recently I visited a wonderful aviary in South Africa where exotic birds of all kinds were kept in a series of 100 large cages, to which the visiting public haddirect access. There was plenty of room for the birds to fly around and it was quite exciting for us to be in the cage with them. One proceeded, at one’s leisure, from cage to cage, making sure one closed doors carefully.

Two small groups of tourists – one consisting of four Germans and the other of three French people – were visiting the aviary at the same time as us. The Germans had made their calculations, obviously having decided to devote 100 minutes to the visit; consequently they spent one minute in each cage. One German read the captions, one took photographs, one videoed and one opened and closed doors. I followed happily in their wake.

The three French people began their tour a few minutes later than the Germans, but soon caught them up as they galloped through the cages containing smaller birds. As the French were also filming, they rather spoilt cage 10 for the Germans, as they made a lot of noise and generally got in the way. The Germans were relieved when the French rushed on ahead towards more exciting cages.

The steady German progress continued through cages 11–15. Cage 16 contained the owls (most interesting). There we found our French friends again, who had occupied the cage for five minutes. They filmed the owls from every angle while the Germans waited their turn. When the French eventually rushed out, the Germans were five minutes behind schedule.

Later on, the French stayed so long with the eagles in cage 62 that the Germans had to bypass them and come back to do the eagles later. They were furious at this forced departure from their linear progression, and eventually finished their visit half an hour ‘late’. By then the French had departed, having seen all they were interested in.

A study of attitudes to time in a Swiss–Italian venture showed that each side learned something from the other. After initial quarrelling, both parties cooperated for a few months. The Italians finally admitted that adherence at least in theory to schedules, production deadlines and budgets enabled them to clarify their goals and check on performances and efficiency. The Swiss, on the other hand, found that the more flexible Italian attitude allowed them to modifythe timetable in reaction to unexpected developments in the market, to spot deficiencies in the planning which had not been evident earlier, and to make vital last-minute improvements in ‘extra time’.

Germans, like Swiss, are very high on the linear-active scale, since they attachgreat importance to analysing a project, compartmentalising it, tackling each problem one at a time in a linear fashion, concentrating on each segment and thereby achieving a near perfect result. They are uneasy with people who do not work in this manner, such as Arabs and those from many Mediterranean cultures.

Americans are also very linear-active, but there are some differences in attitude. As Americans live very much in the present and the future, they sometimes push Germans into action before the latter want to act. Germans are very conscious of their history and their past and will often wish to explain a lot of background to American partners to put present actions in context. This often irritates Americans who want ‘to get on with it’.

Figure 6 gives a suggested ranking on the linear/multi-active scale, showing notunsurprising regional variations. German and other European influences in Chile have caused Chileans to be less multi-active than, for instance, Brazilians or

Argentinians. The differences in behaviour between northern and southern Italians are well documented. Australians, with a large number of southern European immigrants, are becoming less linearactive and more extrovert than mostnorthern peoples.

Figure 6:

Figure 7 lists the most common traits of linear-active, multi-active and reactive cultures.

Figure 7:

Reactive cultures (listeners)

Japan belongs to the group of reactive or listening cultures, the members of which rarely initiate action or discussion, preferring first to listen to and establish the other’s position, then react to it and formulate their own.

Reactive cultures are to be found in Japan, China, Taiwan, Singapore, Korea, Turkey and Finland. Several other East Asian countries, although occasionally multi-active and excitable, have certain reactive characteristics. In Europe, only Finns are strongly reactive, but Britons, Turks and Swedes fall easily into‘listening mode’ on occasion.

Reactive cultures listen before they leap. They are the world’s best listeners in as much as they concentrate on what the speaker is saying, do not let their minds wander (difficult for Latins) and rarely, if ever, interrupt a speaker

while the discourse/speech/presentation is going on. When it is finished, they do not reply immediately. A decent period of silence after the speaker has stopped shows respect for the weight of the remarks, which must be considered unhurriedly and with due deference.

Even when representatives of a reactive culture begins their reply, they are unlikely to voice any strong opinion immediately. A more probable tactic is to ask further questions on what has been said in order to clarify the speaker’s intent and aspirations. Japanese, particularly, go over each point many times indetail to make sure there are no misunderstandings. Finns, although blunt and direct in the end, shy away from confrontation as long as they can, trying to formulate an approach which suits the other party. Chinese take their time to assemble a variety of strategies which would avoid discord with the initial proposal.

Reactive cultures are introvert, distrust a surfeit of words, and consequently are adept at non-verbal communication. This is achieved by subtle body language,worlds apart from the excitable gestures of Latins and Africans. Linear-active people find reactive tactics hard to fathom, since they do not slot into the linear system (question/reply, cause/effect).

Multiactive people, used to extrovert behaviour, find them inscrutable – giving little or no feedback. The Finns are the best example of this, reacting even less than the Japanese, who at least pretend to be pleased.

In reactive cultures the preferred mode of communication is monologue ó pause ó reflection ó monologue. If possible, one lets the other side deliver their monologue first. In linear-active or multi-active cultures, the communication mode is a dialogue. One interrupts the other’s ‘monologue’ by frequent comments,even questions, which signify polite interest in what is being said. As soon as the opponent stops speaking, one takes up one’s turn immediately, since the westerner has an extremely weak tolerance of silence.

People belonging to reactive cultures not only tolerate silences well, but regard them as a very meaningful, almost refined, part of discourse. The opinions of the other party are not to be taken lightly, or dismissed with a snappy or flippant retort. Clever, well-formulated arguments require – deserve –lengthy silent consideration. The American, having delivered a sales pitch in Helsinki, leans forward and says, ‘Well, Pekka, what do you think?’ If you ask Finns what they think, they begin to think. Finns, like Orientals, think in silence. Another American, asked the same question, might well jump to his feet and exclaim, ‘I’ll tell you what I think!’, allowing no pause to punctuate the proceedings or interfere with western ‘momentum’. Oriental momentum takes much longer to achieve. One can compare reactions to handling the gears of a car, where multi-active people go immediately into first gear, enabling them to put their foot down to accelerate (the discussion) and to pass quickly through second and third gears as the argument intensifies. Reactive cultures prefer to avoid crashing through the gear box. Too many revs might cause damage to the engine (discussion). The big wheel turns more slowly at first and the foot is put down gently. But when momentum is finally achieved it is likely to be maintained and, moreover, tends to be in the right direction.

The reactive ‘reply-monologue’ will accordingly be context centred and will presume a considerable amount of knowledge on the part of the listener (who, after all, probably spoke first). Because the listener is presumed to be knowledgeable, Japanese, Chinese or Finns will often be satisfied with expressing their thoughts in half-utterances, indicating that the listener can fill in the rest. It is a kind of compliment one pays one’s interlocutor. At such times multi-active, dialogue-oriented people are more receptive than linear-oriented people, who thrive on clearly-expressed linear argument.

Reactive cultures not only rely on utterances and semi-statements to further theconversation, but they indulge in other oriental habits which confuse the westerner. They are, for instance, ‘roundabout’, using impersonal verbs (‘one isleaving’) or the passive voice (‘one of the machines seems to have been tamperedwith’), either to deflect blame or with the general aim of politeness.

As reactive cultures tend to use names less frequently than westerners, the impersonal, vague nature of the discussion is further accentuated. Lack of eye contact, so typical of the east, does not help the situation. The Japanese, evading the Spaniard’s earnest stare, makes the latter feel that they are being boring or saying something distasteful. Oriental inscrutability (often appearingon a Finn’s face as a sullen expression) adds to the feeling that the discussionis leading nowhere. A Finn or a Japanese, embarrassed by another’s stare, seeks eye contact only at the beginning of the discussion or when they wish their opponent to take up their ‘turn’ in the conversation.

Japanese ‘opposing’ delegations are often quite happy to sit in a line on one side of the table and contemplate a neutral spot on the wall facing them as theyconverse sporadically or muse in joint silence. The occasional sidelong glance will be used to seek confirmation of a point made. Then it’s back to studying the wall again.

Small talk does not come easily to reactive cultures. While Japanese and Chinesetrot out well-tried formalisms to indicate courtesy, they tend to regard questions such as ‘Well, how goes it?’ as direct questions and may take the opportunity to voice a complaint. On other occasions their overlong pauses or slow reactions cause westerners to think they are slow witted or have nothing tosay. Turks, in discussion with Germans in Berlin, complained that they never gotchance to present their views fully, while the Germans, for their part, thought the Turks had nothing to say. A highranking delegation from the Bank of Finland told me recently that, for the same reason, they found it hard to get a word in at international meetings. ‘How can we make an impact?’ they asked. Japanese suffer more than any other people in this type of gathering.

The westerner should always bear in mind that the actual content of the responsedelivered by a person from a reactive culture represents only a small part of the significance surrounding the event. Context-centred utterances inevitably attach more importance not to what is said, but how it is said, who said it and what is behind what is said. Also, what is not said may be the main thrust of the reply.

Self-disparagement is another favourite tactic of reactive cultures. It eliminates the possibility of offending through self-esteem; it may draw the

opponent into praising the oriental’s conduct or decisions. The westerner must beware of presuming that self-disparagement is connected with a weak position.

Finally, reactive cultures excel in subtle, non-verbal communication which compensates for the absence of frequent interjections. Finns, Japanese and Chinese alike are noted for their sighs, almost inaudible groans and agreeable grunts. A sudden intake of breath in Finland indicates agreement, not shock, as it would in the case of a Latin. The ‘oh’, ‘ha’ or ‘e’ of the Japanese is a far surer indication of concurrence than the fixed smile they often assume.

To summarise, the programme for reactive cultures is sequential in the followingmanner:

listen carefully establish understanding of the other’s intent allow a period of silence in order to evaluate query further react in a constructive manner maintain a certain amount of inscrutability imitate the other’s strengths or products improve on them refine perfect if possible

Reactive people have large reserves of energy. They are economical in movement and effort and do not waste time reinventing the wheel. Although they always give the impression of having power in reserve, they are seldom aggressive and rarely aspire to leadership (in the case of Japan, this is somewhat surprising in view of her economic might). France, Britain and the USA, on the other hand, have not hesitated to seize world leadership in periods of economic or military dominance.

Data-oriented, dialogue-oriented and listening cultures

Interaction between different peoples involves not only methods of communication, but also the process of gathering information. This brings us to the question of dialogue-oriented and data-oriented cultures. A dataoriented culture is one where one does research to produce lots of information which is then acted on. Swedes, Germans, Americans, Swiss and Northern Europeans in general love to gather solid information and move steadily forward from this database. The communications and information revolution is a dream come true fordata-oriented cultures. It provides them quickly and efficiently with what dialogue-oriented cultures already know.

Figure 8: Reactive cultures (listeners)

Which are the dialogue-oriented cultures? Examples are the Italians and other Latins, Arabs and Indians. These people see events and business possibilities ‘in context’ because they already possess an enormous amount of information through their own personal information network. Arabs or Portuguese will be wellinformed about the facts surrounding a deal since they will already have queried, discussed and gossiped in their circle of friends, business acquaintances and extensive family connections. The Japanese (basically a listener) may be even better informed, since the very nature of Japan’s web society involves them in an incredibly intricate information network operationalduring schooldays, college, university, Judo and Karate clubs, student societies, developed intelligence systems and family and political connections.

People from dialogue-oriented cultures like the French or Spanish tend to get impatient when Americans or Swiss feed them with facts and figures which are accurate but, in their opinion, only a part of the big human picture. A Frenchman would consider that an American sales forecast in France is of little meaning if he (the Frenchman) does not have time to develop the correct relationship with the customer on whom the success of the business depends.

It is quite normal in dialogue-oriented cultures for managers to take customers and colleagues with them when they leave a job. They have developed their relationships.

There is a strong correlation between dialogue-oriented and multiactive people. Antonio does ten things at once and is therefore in continuous contact with humans. He obtains from these people an enormous amount of information – far more than Americans or Germans will gather by spending a large part of their dayin a private office, door closed, looking at the screen of their personal computer.

Multi-active people are knee deep in information. They know so much that the very brevity of an agenda makes it useless to them. At meetings they tend to ignore agendas or speak out of turn. How can you forecast a conversation?

Discussion of one item could make another meaningless. How can you deal with feedback in advance? How can an agenda solve deadlock? Dialogue-oriented people wish to use their personal relations to solve the problem from the human angle. Once this is mentally achieved, then appointments, schedules, agendas, even meetings become superfluous.

If these remarks seem to indicate that dialogue-oriented people, relying on onlyword of mouth, suffer from serious disadvantages and drawbacks, it should be emphasised that it is very difficult to pass over from one system to the other. It is hard to imagine a Neapolitan company organising its business along American lines with five-year rolling forecasts, quarterly reporting, six-monthly audits and twice-yearly performance appraisals. It is equally hard to imagine Germans introducing a new product in a strange country without first doing a market survey.

It is noticeable that most of the successful economies, with the striking exception of Japan, are in data-oriented cultures using processed information. Japan, although dialogue-oriented, also uses a large amount of printed information. Moreover, productivity also depends on other significant factors, particularly climate, so that information systems, while important, are not the whole story of efficiency and its logic.

One might summarise by saying that a compromise between data- oriented and dialogue-oriented systems would probably lead to good results, but that there are no clear examples of this having happened consistently in modern international business communities.

Figure 9 gives a suggested ranking for dialogue-oriented and data- oriented cultures. Figures 10–12 illustrate the relatively few sources of information that data-oriented cultures draw on. The more developed the society, the more wetend to turn to print and database to obtain our facts. The information revolution has accentuated this trend and Germany, along with the USA, Britain and Scandinavia, is well to the fore. Yet printed information and databases are almost necessarily out of date (as anyone who has purchased mailing lists has found out to their cost). Last night’s whispers in a Madrid bar or café are hot off the press – Pedro was in Oslo last week and talked Olav off his feet till two in the morning. Few data- oriented people will dig for information and then spread it in this way, although Germans do not fare badly once they get out of their cloistered offices. Northerners’ lack of gregariousness again proves a hindrance. By upbringing they are taught not to pry – inquisitiveness gains no points in their society – gossip is even worse. What their database cannot tell them they try to find out through official channels – embassies, chambers of commerce, circulated information sheets, perhaps hints provided by friendly companies with experience in the country in question. In business, especially when negotiating, information is power. Sweden, Norway, Australia, New Zealand and several other data-oriented cultures will have to expand and intensify theirintelligence-gathering networks in the future if they are to compete with information-hot France, Japan, Italy, Korea, Taiwan and Singapore. It may well be that the EU itself will develop into a hot-house exchange of business information to compete with the Japanese network.

Figure 9: Dialogue-oriented, data - oriented cultures Dialogue

Figure 10: Information sources - data-oriented cultures

Figure 11: Information sources - dialogue-oriented cultures

Figure 12: Information sources - listening culture (Japan)

Listening cultures

Listening cultures, reactive in nature, combine deference to database and print information (Japan, Finland, Singapore and Taiwan are high tech) with a natural tendency to listen well and enter into sympathetic dialogue. Japanese and Chinese will entertain the prospect of very lengthy discourse in order to attainultimate harmony. In this respect, they are as people oriented as the Latins. The Finns, inevitably more brief, nevertheless base their dialogue on careful consideration of the wishes of the other party. They rarely employ ‘steamrollering’ tactics frequently observable in American, German and French debate. Monologues are unknown in Finland, unless practised by the other party.

Listening cultures believe they have the right attitude to information gathering. They do not precipitate improvident action, they allow ideas to mature, they are ultimately accommodating in their decisions. The success of Japan and the four Asian tigers – South Korea, Taiwan, Hong Kong and Singapore –as well as Finland’s prosperity despite few economic strengths, all bear witnessto the resilience of the listening cultures.

Chapter 4: The Use Of Time

The world views held by different cultures vary widely, as do a multiplicity of concepts which constitute and represent a kaleidoscopic outlook on the nature ofreality. Some of these concepts – fatalism, work ethic, reincarnation, sisu, Confucianism, Weltschmerz, dusha, etc. – are readily identifiable within specific groups, societies or nations. Other concepts – central and vital to human experience – are essentially universal, but subject to strikingly different notions of their nature and essence. Such concepts are those of space and time.

Time, particularly, is seen in a different light by eastern and western culturesand even within these groupings assumes quite dissimilar aspects from country tocountry. In the western hemisphere, the USA and Mexico employ time in such a diametrically opposing manner that it causes intense friction between the two peoples. In western Europe the Swiss attitude to time bears little relation to that of neighbouring Italy. Thais do not evaluate the passing of time in the same way that the Japanese do. In Britain the future stretches out in front of you. In Madagascar it flows into the back of your head from behind.

Linear time

Let us begin with the American concept of time, for theirs is the most expensive, as anyone who has had to do with American doctors, dentists or lawyers will tell you.

For an American, time is truly money. In a profit-oriented society, time is a precious, even scarce, commodity. It flows fast, like a mountain river in spring, and if you want to benefit from its passing, you have to move fast with it. Americans are people of action; they cannot bear to be idle. Past time is over, but the present you can seize, parcel and package and make it work for youin the immediate future.

Time looks like this:

Figure 13:

This is what you have to do with it:

Figure 14:

In America you have to make money, otherwise you are nobody. If you have 40 years of earning capacity and you want to make $4 million, that means $100,000 per annum. If you can achieve this in 250 working days that comes to $400 a day or $50 an hour.

Figure 15 suggests that you can make $400 a day if you work 8 hours, performing one task per hour in a planned, time-efficient sequence. In this orientation Americans can say that their time costs $50 an hour. The concept of time costingmoney is one thing. Another idea is that of wasting time. If, as in Figure 16, appointments D and E fail to show up, Americans might say that they have wasted 2 hours – or lost $100. Thus:

Figure 15:

did not show did not show

Figure 16:

This seems logical enough, until one begins to apply the idea to other cultures.Has the Portuguese fisherman, who failed to hook a fish for two hours, wasted his time? Has the Sicilian priest, failing to make a convert on Thursday, lost ground? Have the German composer, the French poet, the Spanish painter, devoid of ideas last week, skipped opportunities which can be qualified in monetary terms?

The Americans are not the only ones who sanctify timekeeping, for it is a religion in Switzerland and Germany, too. These countries, along with Britain, the Anglo-Saxon world in general, the Netherlands, Austria and Scandinavia, havea linear vision of time and action which the above figures have illustrated. They suspect, like the Americans, that time passing without decisions being madeor actions being performed is streaking away unutilized in a linear present and future.

Anglo-Saxon, Germanic and Scandinavian peoples are essentially linear- active, time-dominated and monochronic. They prefer to do one thing at a time, concentrate on it and do it within a scheduled timescale. They think that in this way they get more things done – and efficiently. Furthermore, being imbued with the Protestant work ethic, they equate working time with success. (The harder you work – more hours, that is – the more successful you will be, the more money you will make). This idea might sound reasonable in American ears, would carry less weight in class conscious Britain, and would be viewed as entirely unrealistic in southern European countries where authority, privilege and birthright negate the theory at every turn. In a society such as existed in the Soviet Union one could postulate that those who achieved substantial remuneration by working little (or not at all) were the most successful of all.

Multi-actives

Southern Europeans are multi-active, rather than linear-active. The more things they can do or handle at the same time, the happier and the more fulfilled they feel. They organize their time (and lives) in an entirely different way from Americans, Germans and Swiss. Multi-active peoples are not very interested in schedules or punctuality. They pretend to observe them, especially if a linear-active partner insists, but they consider reality to be more important than appointments. In their ordering of things, priority is given to the relative thrill or significance of each meeting. Spaniards, Italians, Arabs ignore the passing of time if it means that conversations would be left unfinished. For them, completing a human transaction is the best way they can invest their time.Germans and Swiss love clock-regulated time, for it appears to them as a remarkably efficient, impartial and very precise way of organising life – especially in business. For an Italian, on the other hand, time considerations will usually be subjected to human feelings. ‘Why are you so angry because I came at 9.30?’, he asks his German colleague. ‘Because it says 9am in my diary’,says the German. ‘Then why don’t you write 9.30 and then we’ll both be happy?’ is a logical Italian response. The business we have to do and our close relations are so important that it is irrelevant at what time we meet. The meeting is what counts. Germans and Swiss cannot swallow this, as it offends their sense of order, of tidiness, of pre-arrangement.

A Spaniard would take the side of the Italian. There is a reason for the Spaniard’s lax adherence to punctuality. The German believes in a simple truth –scientific truth. The Spaniard, in contrast, is always conscious of the double truth – that of immediate reality as well as that of the poetic whole.

The German thinks they see eye to eye, as in Figure 17:

Figure 17:

In fact the Spaniard, with the consciousness of double truth, sees it as in Figure 18:

Figure 18:

As far as meetings are concerned, it is better not to turn up strictly on time for Spanish appointments. In Spain, punctuality messes up schedules, as in Figure 19.

Figure 19:

Few northern Europeans or North Americans can reconcile themselves to the multi-active use of time. Germans and Swiss, unless they reach an understanding of theunderlying psychology, will be driven to distraction. Germans see compartmentalisation of programmes, schedules, procedures and production as the surest route to efficiency. The Swiss, even more time and regulation dominated, have made precision a national symbol. This applies to their watch industry, their optical instruments, their pharmaceutical products, their banking. Planes,buses and trains leave on the dot. Accordingly, everything can be exactly calculated and predicted.

In countries inhabited by linear-active people, time is clock and calendar related, segmented in an abstract manner for our convenience, measurement and disposal. In multi-active cultures like the Arab and Latin spheres, time is event or personality related, a subjective commodity which can be manipulated, moulded, stretched or dispensed with, irrespective of what the clock says. ‘I have to rush.’ says the American, ‘my time is up’. The Spaniard or Arab, scornful of this submissive attitude to schedules, would only use this expression if death were imminent.

Cyclic time

Both the linear-active Northerner and the multi-active Latin think that they manage time in the best way possible. In some Eastern cultures, however, the adaptation of humans to time is seen as a viable alternative. In these cultures time is viewed neither as linear nor event–personality related, but as cyclic. Each day the sun rises and sets, the seasons follow one another, the heavenly bodies revolve around us, people grow old and die, but their children reconstitute the process. We know this cycle has gone on for one hundred thousand years and more. Cyclical time is not a scarce commodity. There would seem to be an unlimited supply of it just around the next bend. As they say in the East, when God made time, he made plenty of it.

As many Asians are keenly aware of the cyclical nature of time, business decisions are arrived at in a different way from in the West. Westerners often expect an Asian to make a quick decision or treat a current deal on its present merits, irrespective of what has happened in the past. Asians cannot do this. The past formulates the contextual background to the present decision, about which in any case, as Asians, they must think long term – their hands are tied in many ways. Americans see time passing without decisions being made or actionsperformed as ‘wasted’. Asians do not see time as racing away unutilised in a linear future, but coming round again in a circle, where the same opportunities,risks, dangers will re-present themselves when people are so many days, weeks ormonths wiser. How often do we (in the West) say ‘If I had known then what I knownow, I would never have done what I did’?

Figure 20 compares the speed of Western action chains with Asian reflection. TheAmerican goes home satisfied with all tasks completed. The German and the Swiss probably do the same; the French or Italian might leave some ‘mopping up’ for the following day. John Paul Fieg, describing the Thai attitude to time, saw it as a pool which they could gradually walk around. This metaphor applies to most Asians, who, instead of tackling problems immediately in sequential fashion, circle round them for a few days (weeks etc.) before committing themselves. After a suitable period of reflection, A,D and F may indeed seem worthy of pursuing. B,C and E may be quietly dropped. Contemplation of the whole scene hasindicated, however, that task G (not envisaged at all earlier on) might be the most significant of all.

Figure 20:

In a Buddhist culture – Thailand is a good example, although Buddhist influence pervades large areas of Asia – not only time but life itself goes round in a circle. Whatever we plan in our diary, however we organise our particular world,generation follows generation, governments and rulers will succeed each other, crops will be harvested, monsoons, earthquakes and other catastrophes will recur, taxes will be paid, the sun and moon will rise and set, stocks and shareswill rise and fall. Even the Americans will not change such events, certainly not by rushing things.

Chinese

Chinese, like most Asians, ‘walk round the pool’ in order to make wellconsidereddecisions, but they also have a keen sense of the value of time. This can be noticed especially in their attitude towards taking up other people’s time, for which they frequently apologize. It is customary, at the end of a meeting in China, to thank the participants for contributing their valuable time. Punctuality on arrival is also considered important – more so than in many Asiancountries. Indeed, when meetings are scheduled between two people, it is not unusual for a Chinese to arrive 15–30 minutes early ‘in order to finish the business before the time appointed for its discussion’, so not stealing any of the other person’s time! It is also considered polite in China to announce, 10 or 15 minutes after a meeting has begun, that one will soon have to be going. Again, the worthy aim involved is to economise on their use of your time. The Chinese will not go, of course, until the transaction has been completed, but the point has been made.

This is indeed a double standard. The Chinese penchant for humility demands thatthe interlocutor’s time be seen as precious, but on the other hand Chinese expect a liberal amount of time to be allocated to repeated consideration of thedetails of a transaction and to the careful nurturing of personal relationships

surrounding the deal. They frequently complain that Americans, in China to do business, often have to catch their plane back to the US ‘in the middle of the discussion’. The American sees the facts as having been adequately discussed; the Chinese feels that he has not yet attained that degree of closeness – that satisfying sense of common trust and intent – that is for him the bedrock of thedeal and of other transactions in the future.

Japanese

The Japanese have a keen sense of the unfolding of time – this is well describedby Joy Hendry in her book Wrapping Culture. People familiar with Japan are well aware of the contrast between the breakneck pace maintained by the Japanese factory worker on the one hand, and the unhurried contemplation to be observed in Japanese gardens or the agonisingly slow tempo of a Noh play on the other. What Hendry emphasises, however, is the meticulous, resolute manner in which theJapanese segment time. This segmentation does not follow the American or German pattern, where tasks are assigned in a logical sequence aiming at maximum efficiency and speed in implementation. The Japanese are more concerned, not with how long something takes to happen, but with how time is divided up in the interests of properness, courtesy and tradition.

There are various phases and layers, for instance, in most Japanese social gatherings, e.g. retirement parties, weddings, parent–teacher association meetings. On such occasions in Sicily or Andalucia, people would arrive at different times, the event would gradually attain momentum and most satisfactionwould be derived from spontaneous, often exuberant behaviour or speech-making which would follow no strict pattern or ritual. There would be no distinct phases for passing from one activity to the next, whether eating, drinking, toasting, playing music, dancing or gossiping.

In Japan, by contrast, there would be quite marked beginnings and endings. At Japanese weddings, for example, guests are often required to proceed from room to room, as the ceremony and celebrations unfold, usually according to a strict schedule. The total time involved is not so important; it is the significance ofpassing from one phase of activity to another which puts a particular Japanese stamp on the event.

In a conformist and carefully regulated society, Japanese like to know at all times where they stand and where they are at: this applies both to social and business situations. The mandatory, two-minute exchange of business cards between executives meeting each other for the first time is one of the clearest examples of a time activity segment being used to mark the beginning of a relationship. Hendry points out that this ‘marking’ applies to a wide variety ofevents in Japanese society, in many cases where ‘phases’ would have little significance in the West. An example she gives is the start and finish of all types of classes in Japan, where activity cannot take place without being preceded by a formal request on the part of the students for the teacher to begin and a ritualistic expression of appreciation at the end.

Other events which require not only clearly defined beginnings and endings, but also unambiguous phase-switching signals, are the tea ceremony, New Year routines, annual cleaning of the house, cherry blossom viewing, spring

‘offensives’ (strikes), wrapping up of agricultural cycles, midsummer festivities, gift-giving routines, get-togethers of school and university colleagues, company picnics, sake-drinking sessions, approaching Shinto shrines or Buddhist temples, even the peripheral rituals surrounding judo, karate and kendo sessions. None of the above activities can be entered into by a Japanese in the casual, direct manner which a westerner might adopt. The American or northern European has a natural tendency to make a quick approach to the heart of things. The Japanese, in direct contrast, must experience an ‘unfolding’ or ‘unwrapping’ of the significant phases of the event. It has to do with Asian indirectness, but in Japan it also involves love of compartmentalisation of procedure, of tradition, of the beauty of ritual. Hendry suggests that this ‘unwrapping’ is a consequence of the Japanese having wrapped things up in the first place – social wrapping, the wrapping of the body, of space, of people. The fact that the Japanese imposed both the Chinese and Gregorian calendars on their earlier system means that the Japanese year itself is a veritable series of layers of openings and closings.

To summarize, when dealing with Japanese, one can assume that they will be generous in their allocation of time to you or your particular transaction. In return, you are advised to try to do the ‘right thing at the right time’. In Japan, form and symbols are more important than content.

Back to the future

In the linear-active, industrialised western cultures time is seen as a road along which we proceed. Life is sometimes referred to as a ‘journey’ – one also talks about the ‘end of the road’. We imagine ourselves as having travelled along that part of the road which is behind us (the past) and we see the untrodden path of the future stretching out in front of us.

Linear-oriented people do not regard the future as entirely unknowable, for theyhave already nudged it along certain channels by meticulous planning. American executives, with their quarterly forecast, will tell you how much money they aregoing to make in the next three months. The Swiss stationmaster will assure you,without any hesitation, that the train from Zurich to Luzern will leave at 9.03 tomorrow morning and arrive at exactly 10.05. He is probably right, too. Watches, calendars and computers are devices which not only encourage punctuality, but get us into the habit of working towards targets and deadlines.In a sense, we are ‘making the future happen’. We cannot know everything (it would be disastrous for horse racing and detective stories), but we eliminate future unknowns to the best of our ability. Our personal programming tells us that over the next year we are going to get up at certain times, work so many hours, take holidays for designated periods, play tennis on Saturday mornings and pay our taxes on the 28th of each month.

Observers of cyclic time are less disciplined in their planning of the future, since they believe that it cannot be managed and that humans make life easier for themselves by ‘harmonizing’ with the laws and cyclic events of nature. Yet in such cultures a general form of planning is still possible, for the seasons and other features of nature (except earthquakes, hurricanes, etc.) are fairly regular and well understood. Cyclic time is not seen as a straight road leading from our feet to the horizon, but as a curved one which in one year’s time will

lead us through ‘scenery’ and conditions very similar to what we experience at the present moment.

Cultures observing both linear and cyclic concepts of time see the past as something we have put behind us and the future as something which lies before us. In Madagascar, the opposite is the case (see Figure 21). The Malagasy imagine the future as flowing into the back of their head, or passing them from behind, then becoming the past as it stretches out in front of them. The past isin front of their eyes because it is visible, known and influential. They can look at it, enjoy it, learn from it, even ‘play’ with it.

Figure 21: Malagasy concept of time

The Malagasy people spend an inordinate amount of time consulting their ancestors, exhuming their bones, partying with them.

By contrast the Malagasy consider the future unknowable. It is behind their headwhere they do not have eyes. Their plans for this unknown area will be far from meticulous, for what can they be based on? Buses in Madagascar leave, not according to a predetermined timetable, but when the bus is full. The situation triggers the event. The Malagasy sees this as common sense: the ‘best’ time for the bus departure is when it fills, for not only does this make economic sense, but it was also the time that most passengers chose to leave. Consequently in Madagascar stocks are not replenished until shelves are empty, filling stations order petrol only when they run dry, and hordes of would-be passengers at the airport find that, in spite of OK tickets, in reality everybody is waitlisted. The actual assignation of seats takes place between the opening of the check-in desk and the ( eventual) departure of the plane.

Validity of time concepts

The Malagasy, the Thai, the Japanese, the Spaniard and many others will continueto use time in ways which will conflict with linear-oriented cultures in social and business spheres. The conflict is sharpest in the fields of economics, commerce and industry.

The objective view of time and its sequential effects is, however, favourable tohistoricity and to everything connected with industrialised organisation. Just as we conceive of our objectified time as extending in the future in the same way that it extends in the past, we mirror our records of the past in our estimates, budgets and schedules. We build up a commercial structure based on time pro rata values: time wages, rent, credit, interest, depreciation charges andinsurance premiums. In general we are confident (in North America and northern Europe) that we have approached the optimum management of time. Many cultures (including powerful economies of the future, such as China, Japan and South-EastAsia) will only allow the linear-oriented concept of time to dictate their behaviour to a limited extent. Industrial organisation demands a certain degree of synchronisation of schedules and targets, but the underlying philosophies concerning the best and most efficient use of time – and the manner in which it should be spent – may remain radically different.

Chapter 5: Status, Leadership and Organisation

Cultural roots of organisation

The behaviour of the members of any cultural group is dependent, almost entirely, on the history of the people in that society. It is often said that wefail to learn the lessons of history – and indeed we have seen mistakes repeatedover hundreds of years by successive generations – but in the very long run (andwe may be talking in millennia) a people will adhere collectively to the set of norms, reactions and activities which their experience and development have shown to be most beneficial for them. Their history may have consisted of good and bad years (or centuries), migrations, invasions, conquests, religious disputes or crusades, tempest, floods, droughts, sub-zero temperatures, disease and pestilence. They may have experienced brutality, oppression or near-genocide. Yet, if they survive, their culture, to some extent, has proved successful.

Besides being a creation of historical influence and climatic environment, the mentality of a culture – the inner workings and genius of the mindset – are alsodictated by the nature and characteristics of the language of the group. The restricted liberties of thought that any particular tongue allows will have a pervasive influence on considerations of vision, charisma, emotion, poetic feeling, discipline and hierarchy.

Societal training

Historical experience, geographic and geo-linguistic position, physiology and appearance, instinct for survival – all combine to produce a core of beliefs andvalues which will sustain and satisfy the aspirations and needs of a given society. Based on these influences and beliefs, societal cultural conditioning of the members of the group is established and consolidated (for as many generations as the revered values continue to assure survival and success). Infants and youth are trained by their parents, teachers, peers and elders. The characteristics of the group gradually emerge and diverge from those of other groups. Basic needs of food, shelter and escaping from predators are dealt with first. Social, economic and military challenges will ensue. Traumatic historicaldevelopments may divert the traditional thrust of the programming. Japan’s samurai traditions, discredited in 1945–6, gave way to growing enthusiasm for success in industry and commerce.

At all events, in victory or defeat, in prosperity or recession, a society needsto be organised, adapted or reorganised according to external pressures and its own objectives. Cultural groups organise themselves in strikingly different waysand think about such matters as authority, power, cooperation, aims, results andsatisfaction in a variety of manners.

Individual and collective leadership

The term ‘organisation’ automatically implies leadership – people in authority who write the rules for the system. There are many historical examples of

leadership having been vested in the person of one man or woman – Alexander the Great, Tamerlane, Louis XIV, Napoleon, Queen Elizabeth I, Joan of Arc are clear examples. Others, equally renowned and powerful but less despotic (Washington, Bismarck, Churchill) ruled and acted with the acquiescence of their fellow statesmen. Parliamentary rule, introduced by the British in the early part of the seventeenth century, initiated a new type of collective leadership at government level, although this had existed at regional, local and tribal levelsfor many centuries. Minoan collective rule – one of the earliest examples we know about – inspired a similar type of leadership both in the Greek city-statesand later in Rome. In another hemisphere, Mayan and North American Indians held similar traditions.

Figure 22: Factors leading to the organisation of society

In the business world, a series of individuals have also demonstrated outstanding abilities and success in leadership – Ford, Rockefeller, Agnelli, Berlusconi, Barnevik, Gyllenhammer, Iacocca, Geneen, Matsushita and Morita are some of them. It is now common for leadership and authority also to be vested inboards of directors or management committees.

The way in which a cultural group goes about structuring its commercial and industrial enterprises or other types of organisations usually reflects to a considerable degree the manner in which it itself is organised. The basic questions to be answered are how authority is organised; and what authority is based on. Western and eastern answers to these questions vary enormously, but inthe West alone there are striking differences in attitude. There is, for

instance, precious little similarity in the organisational patterns of French and Swedish companies, while Germans and Australians have almost diametrically opposing views as to the basis of authority.

Organisations are usually created by leaders, whether the leadership is despotic, individual or collective. Leadership functions in two modes – one of networking and one of task orientation. In network mode the concerns, in order of appearance, are the status of the leader(s), the chain of command, the management style, the motivation of the employees and the language of managementused to achieve this. In task-orientation mode, the leadership must tackle issues, formulate strategies, create some form of work ethic, decide on efficiency, task distribution and use of time.

Managers in linear-active cultures will demonstrate and look for technical competence, place facts before sentiment, logic before emotion; they will be deal oriented, focusing their own attention and that of their staff on immediateachievement and results. They are orderly, stick to agendas and inspire with their careful planning.

Multi-active managers are much more extrovert, rely on their eloquence and ability to persuade, use human force as an inspirational factor. They often complete human transactions emotionally, assigning the time this may take – developing the contact to the limit.

Leaders in reactive cultures are equally people oriented, but dominate with knowledge, patience and quiet control. They display modesty and courtesy, despite their accepted seniority. They excel in creating a harmonious atmospherefor teamwork. Subtle body language obviates the need for an abundance of words. They know their company well (having spent years going round the various departments): this gives them balance – the ability to react to a web of pressures. They are paternalistic.

Figure 23: Leadership styles

Because of the diverse values and core beliefs of different societies, concepts of leadership and organisation are inevitably culture bound. Authority might be based on achievement, wealth, education, charisma or birthright. Corporations may be structured in a vertical, horizontal or matrix fashion and may be mouldedaccording to religious, philosophical or governmental considerations and requirements. No two cultures view the essence of authority, hierarchy or optimum structure in an identical light. International exposure and experience will suggest a series of norms, rationalisations and patterns; these will invariably be eroded, even in the short run, by unswerving local beliefs about human values and interaction.

Different concepts of status, leadership and organisation

GERMANY

Germans believe in a world governed by Ordnung, where everything and everyone has a place in a grand design calculated to produce maximum efficiency. It is difficult for the impulsive Spaniard, the improvising Portuguese or the soulful Russian to conceive of German Ordnung in all its tidiness and symmetry. It is essentially a German concept which goes further in its theoretical perfection

than even the pragmatic and orderly intent of Americans, British, Dutch and Scandinavians.

Germans, just as they believe in simple, scientific truth, believe that true Ordnung is achievable, provided that sufficient rules, regulations and procedures are firmly in place. In the business world, established, well-tried procedures have emerged from the long experience of Germany’s older companies and conglomerates, guided by the maturity of tested senior executives. In Germany, more than anywhere else, there is no substitute for experience. Seniorspass on their knowledge to people immediately below them. There is a clear chainof command in each department and information and instructions are passed down from the top. Status of managers is based partly on achievement, but this is seen as interwoven with the length of service and ascribed wisdom of the individual, as well as formal qualifications and depth of education.

Germans believe in a world governed by Ordnung, where everything and everyone has a place in a grand design calculated to produce maximum efficiency. It is difficult for the impulsive Spaniard, the improvising Portuguese or the soulful Russian to conceive of German Ordnung in all its tidiness and symmetry. It is essentially a German concept which goes further in its theoretical perfection than even the pragmatic and orderly intent of Americans, British, Dutch and Scandinavians.

Germans, just as they believe in simple, scientific truth, believe that true Ordnung is achievable, provided that sufficient rules, regulations and procedures are firmly in place. In the business world, established, well-tried procedures have emerged from the long experience of Germany’s older companies and conglomerates, guided by the maturity of tested senior executives. In Germany, more than anywhere else, there is no substitute for experience. Seniorspass on their knowledge to people immediately below them. There is a clear chainof command in each department and information and instructions are passed down from the top. Status of managers is based partly on achievement, but this is seen as interwoven with the length of service and ascribed wisdom of the individual, as well as formal qualifications and depth of education.

Hierarchy and consensus

German management is, however, not exclusively autocratic. While the vertical structure in each department is clear, considerable value is placed on consensus. German striving for perfection of systems carries with it the implication that the manager who vigorously applies and monitors these processesis showing faith in a framework which has proved successful for all. Few junior employees would question the rules. As there is adequate protection in German law for dissenting staff, most Germans feel comfortable in a rather tight framework which would irritate Americans and British. Germans welcome close instruction: they know where they stand and what they are expected to do. They enjoy being told twice, or three or four times.

German managers, issuing orders, can motivate by showing solidarity with their staff in following procedures. They work long hours, obey the rules themselves and, although they generally expect immediate obedience, they insist on fair play.

In task-orientation mode, German basic values dominate strategies, The use of time resembles the American: meetings begin on the dot, appointments are strictly observed, late arrivals must be signalled by telephone calls in advance, time is linear and should not be wasted. The work ethic is taken for granted and although staff working hours are not overlong and holidays are frequent, the German obsession with completing action chains means that projectsare usually completed within the assigned period. Each department is responsiblefor its own tasks and there is far less horizontal communication between equals across the divisions of a German company than there is in US and British firms. Secrecy is respected in Germany both in business and private. Few German companies publish their figures for public consumption or even for the benefit of their own employees.

Working with Germans

Latins and some Anglo-Saxons frequently experience some difficulty in working ordealing with Germans on account of the relatively rigid framework of procedures within which many German companies operate.

Cooperating successfully with Germans means respecting their primary values. First, status must be established according to their standards. Efficiency and results will win the day in due course, but a foreign national must have adequate formal qualifications to make an initial impression. The German managerwith a university degree is promoted on an average every four years and those possessing doctorates have a career path to top management. Punctuality and orderliness are basic. Get there first, avoid sloppiness or untidiness in appearance, behaviour and thought. Procedures should always be written down, forGermans read them, and so should you. While familiarising yourself thoroughly with the rules and processes of the organisation, any instructions you yourself issue should be firm and unambiguous. If you want something written in black ink, not blue, then you should make this clear. Germans want content, detail andclarity – they hate misunderstandings.

It is advisable to strive for consensus at all times, although no one is going to chop and change. Consensus is obtained by clarification and justification, not by persuasion or truly open discussion. Consensus taking creates solidarity,which makes everyone feel comfortable. Each participant in the discussion makes a contribution, but does not query a superior too energetically and certainly does not question their judgement.

Hierarchical constraints necessitate your knowing the exact pecking order in thechain of command; you should also know your rung. Superiors generally address subordinates in a low voice, contrary to what many non-Germans believe. German directness enables you to point out when something is being done in an incorrectmanner or when mistakes are being made. If the criticism is clearly constructiveor designed to help, it will usually be accepted readily. If you are too subtle in your criticism, it may not register at all.

Subordinates in difficulties should be supervised, helped, advised, instructed, monitored. If no help is asked for, or probably not required, then tasks should not be interrupted. Quiet single-mindedness is admired in Germany, so don’t try

to do six things at once. Don’t leave anything unfinished. If you are working hard, show it; a casual approach will be misunderstood.

Finally, communication is vertical, not horizontal. Don’t go across the company to chat with people at your level in other departments. Most of your business ideas should be communicated to either your immediate superior or immediate subordinate. You do not have the ear of the chairman, however benignly he may smile at you – unless you are vice chairman.

FRANCE

French management style is more autocratic than German, although this is not always evident at first glance. German companies are highly structured with clearly visible hierarchies, but these are normally readily accepted and welcomed by the staff. In France the boss often seems to have a more roving role, using ‘ tu’ to subordinates and often patting them on the back. Such behaviour is, however, quite deceptive, as is the frequent donning of overalls by Japanese company presidents when they visit the factory floor.

Oratorical style

The French chief executive’s status is attributed on grounds of family, age, education and professional qualifications, with the emphasis on oratorical ability and mastery of the French language. Preferably he was ‘finished’ at the Ecole normale supérieure – an élitist establishment way ahead in prestige of any French university. French managers can well be described as élitist themselves –all-round cadres who are familiar with all or most of the aspects of their business or company, able to deal with production, organisational procedures, meetings, marketing, personnel matters and accounting systems as the occasion requires. They have less specialisation than US or British managers, but generally have wider horizons and an impressive grasp of the many issues facing their company.

The French leader

French history has spawned great leaders who have often enjoyed ( frequently with little justification) the confidence of the nation. Napoleon and Pétain areremembered for their heroics rather than for their disasters; Louis XIV, Joan ofArc, Charles de Gaulle, André Malraux were charismatic figures who excited the French penchant for panache and smashed the mediocrity and mundanity that surrounded them. Ultimate success in French culture is less important than the collective soaring of the national pulse – the thrill of the chase or crusade. French failures are always glorious ones (check with Napoleon Bonaparte).

While mistakes by German executives are not easily forgiven and American managers are summarily fired if they lose money, there is a high tolerance in French companies of blunders on the part of management. As management is highly personalised, it falls on the manager to make many decisions on a daily basis and it is expected that a good proportion of them will be incorrect. The humanistic leanings of French and other Latinbased cultures encourage the view that human error must be anticipated and allowed for. Cadres assume

responsibility for their decisions, which they made individually, but it is unlikely that they will be expected to resign if these backfire. If they are of the right age and experience and possess impeccable professional qualifications,replacing them would not only be futile, but would point a dagger at the heart of the system. For the French, attainment of immediate objectives is secondary to the ascribed reputation of the organisation and its sociopolitical goals. Thehighly organic nature of a French enterprise implies interdependence, mutual tolerance and teamwork among its members as well as demonstrated faith in the ( carefully) appointed leader. French managers, who ‘relish the art of commanding’, are encouraged to excel in their work by the very intensity of expectation on the part of their subordinates.

Role in society

Such expectation produces a paternalistic attitude among French managers not unlike that demonstrated by Japanese, Malaysian and other Asian executives. In the case of the French, emotion is a factor and managers or department heads will concern themselves with the personal and private problems of their staff. In addition to their commercial role in the company, French managers see themselves as valued leaders in society. Indeed, cadres see themselves as contributing to the well-being of the state itself. Among the largest economies of the world, only Japan exercises more governmental control over business than the French. French protectionism dates back to the seventeenth century, when increased trade and exports were seen as a natural consequence of French military successes. Modern French companies such as Rhône Poulenc, Aérospatiale,Dassault, Elf Aquitaine, Framatome, Renault and Peugeot are seen as symbols of French grandeur and are ‘looked after’ by the state. A similar situation exists in Japan and to some extent Sweden.

The prestige and exalted position enjoyed by the French manager is not without its drawbacks both for the enterprise and for the national economy. By concentrating authority around the chief executive, opinions of experienced middle managers and technical staff (often close to customers and markets) do not always carry the weight that they would in Anglo- Saxon or Scandinavian companies. It is true that French managers debate issues at length with their staff, often examining all aspects in great detail. The decision, however, is usually made alone and not always on the basis of the evidence. If the chief executive’s views are known in advance, it is not easy to reverse them. Furthermore, senior managers are less interested in the bottom line than in the perpetuation of their power and influence in the company and in society. Again, their contacts and relationships at highest levels may transcend the implications of any particular transaction. A Swedish executive I interviewed who had worked for a French company was appalled by the secrecy of motivation maintained by French senior executives. Information was not allowed to filter down below certain levels. In Sweden authority is delegated downwards as much aspossible. In high context France, managers expect that their staff will know what to do – the logic will be evident.

BRITAIN

The feudal as well as imperial origins of status and leadership in England are still evident in some aspects of British management. A century has passed since

Britain occupied a preeminent position in industry and commerce, but there stilllingers in the national consciousness the proud recollection of once having ruled 15 million square miles of territory on five continents. The best young men were sent abroad on overseas postings to gain experience and to be groomed for leadership. It was the English, Scots and Irish who provided the main thrustof society in the USA – the power which was to assume the mantle of economic hegemony.

The class system persists in the UK and status is still derived, in some degree,from pedigree, title and family name. There is little doubt that the system is on its way to becoming a meritocracy – the emergence of a very large middle class and the efforts of the left and centrist politicians will eventually alignBritish egalitarianism with that of the US and Northern Europe – but it is worthnoting that many characteristics of British management hark back to earlier days.

British managers could be described as diplomatic, tactful, laid back, casual, reasonable, helpful, willing to compromise and seeking to be fair. They also consider themselves to be inventive and, on occasion, lateral thinkers. They seethemselves as conducting business with grace, style, humour, wit, eloquence and self-possession. They have the English fondness for debate and regard meetings as occasions to seek agreement rather than to issue instructions.

Toughness and insularity

There is a veneer to British management style which hardly exists in such countries as Canada, Australia, Germany, Finland and the USA. Under the casual refinement and sophistication of approach exists a hard streak of pragmatism andmercenary intent. When the occasion warrants it, British managers can be as resilient and ruthless as their tough American cousins, but less explicitly and with disarming poise. Subordinates appreciate their willingness to debate and tendency to compromise, but also anticipate a certain amount of deviousness and dissimulation. Codes of behaviour within a British company equip staff to absorband cope with a rather obscure management style. Other problems arise when British senior executives deal with European, American and Eastern businesspeople. In spite of their penchant for friendliness, hospitality and desire to be fair, British managers’ adherence to tradition endows them with an insular obstinacy resulting in a failure to comprehend differing values in others.

Linguistic arrogance

At international meetings British delegates frequently distinguish themselves bytheir poise, charm and eloquence, but often leave the scene having learned little or nothing from their more successful trading partners. As such conferences are usually held in English, they easily win the war of words; this unfortunately increases their linguistic arrogance. One huge German insurance firm bought a sizeable British firm lock, stock and barrel. The top and middle executives of the German company were nearly all fluent in English, but advised the managers of the British company to acquire a modicum of German to use in social situations. This was issued in the form of a directive. Two years later none of the senior staff of the British firm had taken a single German lesson.

I recently gave a series of cross-cultural seminars to executives of an English car group which had been taken over by a German auto industry giant. The Germansattending the seminars, although occasionally struggling with terminology, listened eagerly to the remarks about British psychology and cultural habits. The British participants, with one or two notable exceptions, paid only casual attention to the description of German characteristics, took hardly any notes, were unduly flippant about Germany’s role in Europe and thought the population and GDP of the two countries were roughly equal! Only one of the British spoke German and that at a very modest level.

Calm approach to tasks

As far as task orientation is concerned, British managers perform better. They are not sticklers for punctuality, but time wasting is not endemic in British companies and staff take pride in completing tasks thoroughly, although in theirown time frame. British managers like to leave at five or six, as do their subordinates, but work is often taken home. As for strategies, managers generally achieve a balance between short- and long-term planning. Interim failures are not unduly frowned on and there are few pressures to make a quick buck. Teamwork is encouraged and often achieved, although it is understood that individual competition may be fierce. It is not unusual for managers to have ‘direct lines’ to staff members, especially those whom they favour or consider intelligent and progressive. Chains of command are observed less than in German and French companies. The organisation subscribes in general to the Protestant work ethic, but this must be observed against a background of smooth, unhurried functions and traditional self-confidence. The contrast with the immediacy and driving force of American management is quite striking when one considers the commonality of language and heritage as well as the Anglo-Celtic roots of US business.

AMERICA

The Puritan work ethic and the right to dissent dominated the mentality of the early American settlers. It was an Anglo-Saxon-Celtic, Northern European culture, but the very nature and hugeness of the terrain, along with the advent of independence, soon led to the ‘frontier spirit’ which has characterized the US mindset since the end of the eighteenth century.

The vast lands of America were an entrepreneur’s dream. Unlimited expanses of wilderness signified unlimited wealth which could be exploited, if one moved quickly enough, without taking it away from others. Only Siberia has offered a similar challenge in modern times.

The nature of the challenge soon produced American values: speed was of the essence; you acted individually and in your own interest; the wilderness forced you to be self-reliant, tough, risk taking; you did not easily cede what you hadclaimed and owned; you needed to be aggressive against foreign neighbours; anyone with talent and initiative could get ahead; if you suffered a setback, itwas not ultimate failure, there was always more land or opportunity; bonds broken with the past meant that future orientation was all important; you were optimistic about change, for the past had brought little reward; throwing off the yoke of the King of England led to a distrust of supreme authority.

American managers symbolise the vitality and audacity of the land of free enterprise. In most cases they retain the frontier spirit: they are assertive, aggressive, goal and action oriented, confident, vigorous, optimistic, ready forchange, achievers used to hard work, instant mobility and making decisions. Theyare capable of teamwork and corporate spirit, but they value individual freedom above the welfare of the company and their first interest is furthering their own career.

Dollar status

In view of their rebellious beginnings, Americans are reluctant to accord socialstatus to anyone for reasons other than visible achievement. In a land with no traditions of (indeed aversion to) aristocracy, money was seen as the yardstick of progress and very few Americans distance themselves from the pursuit of wealth. Intellectuality and refinement as qualities of leadership are prized less in the USA than in Europe. Leadership means getting things done, improving the standard of living, finding short cuts to prosperity, making money for oneself, one’s firm and its shareholders.

With status accorded almost exclusively on grounds of achievement and vitality, age and seniority assume less importance. American managers are often young, female or both. Chief executives are given responsibility and authority and thenexpected to act. They seldom fail to do so. How long they retain power depends on the results they achieve.

Motivation of American managers and their staff does not have the labyrinthine connotations that it does in European and Oriental companies, for it is usually monetary. Bonuses, performance payments, profit- sharing schemes and stock options are common. New staff, however, are often motivated by the very challenge of getting ahead. Problem-solving, the thrill of competition and the chance to demonstrate resolute action satisfy the aspirations of many young Americans. Unlike Europeans and Orientals, however, they need constant feedback,encouragement and praise from the senior executive.

Strict procedures

In terms of organisation, the rampant individualism in American society is strictly controlled in business life through strict procedures and paperwork. American executives are allowed to make individual decisions, especially when travelling abroad, but usually within the framework of corporate restrictions. Young Americans’ need for continual appraisal means that they are constantly supervised. In German companies staff are regularly monitored, but German seniors do not hover. In the USA senior executives pop in and out of offices, sharing information and inspiration with their subordinates (‘Say, Jack, I’ve just had a terrific idea’). Memos, directives, suggestions in writing are ubiquitous. Shareholder pressure makes quarterly reporting and rolling forecastsimperative. The focus is on the bottom line.

Americans can be quickly hired and just as rapidly fired (often without compensation). Being sacked carries no stigma, (‘It just didn’t work out, we have to let you go’). For the talented, other jobs and companies beckon. There

is precious little sentimentality in American business. The deal comes before personal feeling. If the figures are right you can deal with the Devil. If thereis no profit, a transaction with a friend is hardly worthwhile. Business is based on punctuality, solid figures, proven techniques, pragmatic reasoning and technical competence. Time is money and Americans show impatience during meetings if Europeans get bogged down in details or when Orientals demur in showing their hand.

Europeans, by contrast, are often miffed by American informality and what they consider to be an oversimplistic approach towards exclusively material goals. Eastern cultures are wary of the litigious nature of American business. Two-thirds of the lawyers on earth are American – a formidable deterrent for membersof those societies who settle disputes out of court and believe in long-term harmony with their business partners.

SWEDEN

The Swedish concept of leadership and management differs considerably from otherEuropean models and is dealt with in some detail in Chapter 20. Like Swedish society itself, enterprises are essentially ‘democratic’, although a large percentage of Swedish capital is in private hands. Managers of thousands of middle-sized and even large firms have attained managerial success through subtle self-effacement, but the big multinationals have also thrown up some famous executives who might well claim to be among the most far-seeing business leaders in the world: Carstedt, Gyllenhammar, Wennergren, Barnevik, Carlzon, Wallenberg, Svedberg.

Modern Swedish egalitarianism has age-old cultural roots. Although some historical Swedish monarchs such as Gustav av Vasa and Charles the Great were dominating, compelling figures, the Swedish royals, like those of Denmark and Norway, have espoused democratic principles for many centuries, no doubt mindfulof the old Viking lagom tradition when warriors passed round the drinking horn (or huge bowl) in a circle where each man had to decide what amount to drink. Not too little to arouse scorn; not too much to deprive others of the liquid.

LATINS

The business cultures of Italy, Spain and Portugal are described in later chapters. In Latin Europe, as well as in South America, the management pattern generally follows that of France, where authority is centred around the chief executive. In middle-sized companies, the CEO is very often the owner of the enterprise and even in very large firms a family name or connections may dominate the structure. More than in France, sons, nephews, cousins and close family friends will figure prominently in key positions. Ubiquitous nepotism means that business partners are often confronted with younger people who seem to have considerable influence on decision making. Delegations may often consistof the company owner, flanked by his brother, son, cousin or even grandson. Women are generally, although not always, excluded from negotiating sessions.

Status is based on age, reputation and often wealth. The management style is autocratic, particularly in Portugal, Spain and South America, where family

money is often on the line. There is a growing meritocracy in Brazil, Chile and in the big northern Italian industrial firms, but Latin employees in general indicate willing and trusting subservience to their ‘establishments’.

Task orientation is dictated from above, strategies and success depend largely on social and ministerial connections and mutually beneficial cooperation between dominant families. Knowing the right people oils the wheels of commerce in Latin countries, just as it does in Arab and oriental cultures. It helps anywhere, but assumes greater importance in those societies which prioritise thenurturing of human relationships over pragmatic, rapid implementation of transactions based on mere notions of opportunity, technical feasibility and profit.

THE EAST

Cultural values dominate the structure, organisation and behaviour of eastern enterprises more than is the case in the West, in as much as deeplyrooted religious and philosophical beliefs impose near-irresistible codes of conduct. In the Chinese sphere of influence (People’s Republic of China, Hong Kong, Taiwan, Singapore) as well as in Japan and Korea, Confucian principles hold sway. Thailand is Buddhist, Indonesia and Malaysia strongly Moslem. Although national differences account for variations in the concepts of status, leadership and organisation, there is a clearly discernible ‘eastern model’ which is compatible with general Asian values.

This model, whether applied to corporations or departments of civil service or government, strongly resembles family structure. Confucianism, which took final shape in China in the twelfth century, designated family as the prototype of allsocial organisation. We are members of a group, not individuals. Stability of society is based on unequal relationships between people, as in a family. The hierarchies are father–son, older brother–younger brother, male–female, ruler–subject, senior friend–junior friend. Loyalty to the ruler, filial piety to one’s father, right living, would lead to a harmonious social order based on strict ethical rules and headed up in a unified state, governed by men of education and superior ethical wisdom. Virtuous behaviour, protection of the weak, moderation, calmness and thrift were also prescribed.

Confucianism entered Japan with the first great wave of Chinese influence between the sixth and ninth centuries AD. For some time it was overshadowed by Buddhism, but the emergence of the centralized Tokugawa system in the seventeenth century made it more relevant than it had been before. Both Japan and Korea had become thoroughly Confucian by the early nineteenth century in spite of their feudal political systems. In the twentieth century Japanese have wholeheartedly accepted modern science, universalistic principles of ethics, as well as democratic ideals, but they are still permeated, as are the Koreans, with Confucian ethical values. While focusing on progress and growth, strong Confucian traits still lurk beneath the surface, such as the belief in the moralbasis of government, the emphasis on interpersonal relationships and loyalties, the faith in education and hard work. Few Japanese and Koreans consider themselves Confucianists today, but in a sense almost all of them are.

Confucianism in business

What do these cultural influences mean in terms of status and leadership? The Chinese ideal was rule by men of superior education and morality rather than by those merely of superior birth. Japanese and Korean business leaders today flaunt qualifications, university and professorial connections more than family name or wealth. Many of the traditional Japanese companies are classic models ofConfucian theory, where paternalistic attitudes to employees and their dependants, top-down obligations, bottomup loyalty, obedience and blind faith are observed to a greater degree than in China itself. Prosperity makes it easier to put Confucianism into practice: in this regard Japan has enjoyed certain advantages over other countries. The sacred nature of the group and the benevolence attributed to its leaders, however, permeate Asian concepts of organisation from Rangoon to Tokyo.

Buddhist and Islamic variations

In Buddhist Thailand and Islamic Malaysia and Indonesia, slight variations in the concept of leadership do little to challenge the idea of benign authority. Thais see a strict hierarchy with the King at its apex, but there is social mobility in Thailand, where several monarchs had humble origins. The patronage system requires complete obedience, but flexibility is assured by the Thai principle that leaders must be sensitive to the problems of their subordinates and that blame must always be passed upwards. Bosses treat their inferiors in aninformal manner and give them time off when domestic pressures weigh heavily. Subordinates like the hierarchy.

Buddhism decrees that the man at the top earned his place by meritorious performance in a previous life. In Malaysia and Indonesia status is inherited, not earned, but leaders are expected to be paternal, religious, sincere and above all gentle. The Malay seeks a definite role in the hierarchy and neither Malaysians nor Indonesians strive for self-betterment. Promotion must be initiated from above; better conformity and obedience than struggling for change. Age and seniority will bring progress.

Life in a group

Although Confucianism, Buddhism and Islam differ greatly in many respects, theiradherents see eye to eye in terms of the family nature of the group, the non-competitive according of status, the smooth dispersal of power, the automatic chain of command and the collective nature of decision making. There are variations on this theme, such as the preponderance of influence among certain families in Korea, governmental intervention in China, the tight rein on the media in Singapore and fierce competition and individualism among the entrepreneurs of Hong Kong. Typical Asians, however, acknowledge that they live in a high context culture within a vital circle of associations from which withdrawal would be unthinkable. Their behaviour, both social and professional, is contextualised at all times, whether in the fulfilment of obligations and duties to the group (families, community, company, school friends) or taking refuge in its support and solidarity. They do not see this as a trade-off of autonomy for security, but rather as a fundamental, correct way of living and interacting in a highly developed social context.

In a hierarchical, family-type company, networking is relatively effortless. Motivation is the enhancement of the reputation and prestige of the group, whichwill result in greater protection and support for its members. Managers guide subordinates to achieve these goals and work longer hours as a shining example. As far as task orientation is concerned, immediate objectives are not as clearlyexpressed as they would be in, for example, an American company. Long-term considerations take priority and the slow development of personal relationships,both internally and with customers, often blur real aims and intent. Asian staffseem to understand perfectly the long-term objectives without having to have them spelled out explicitly. In Japan, particularly, staff seem to benefit from a form of corporate telepathy – a consequence of the homogeneous nature of the people.

What is work?

The work ethic is taken for granted in Japan, Korea and the Chinese areas, but this is not the case throughout Asia. Malaysians and Indonesians see ‘work’ as only one of many activities which contribute to the progress and welfare of the group. Time spent (during working hours) at lunch, on the beach or playing sportmay be beneficial in deepening relationships between colleagues or clients. Timemay be needed to draw on the advice of a valued mentor or to see to some pressing family matter which was distracting an employee from properly performing their duties. Gossip in the office is a form of networking and interaction. Work and play are mixed both in and out of the office in Thailand, where either activity must produce fun ( sanuke) or it is not worth pursuing. Thais, like Russians, tend to work in fits and starts, depending partly on the proximity of authority and partly on their mood. Koreans – all hustle and bustlewhen compared to the methodic Japanese – like to be seen to be busy all day longand of all Asians most resemble the Americans in their competitive vigour.

Asian management, when organising activity, attaches tremendous importance to form, symbolism and gesture. The showing of respect, in speech and actions, is mandatory. There must be no loss of face either for oneself or one’s opponent and as far as business partners are concerned, red carpet treatment, including lavish entertaining and gift giving, is imperative. Ultimate victory in businessdeals is the objective, but one must have the patience to achieve this in the right time frame and in the correct manner. This attitude is more deeply rooted among the Chinese and Japanese than in Korea, where wheeling and dealing is frequently indulged in.

Is the Asian, ‘family model’ efficient? The economic success of Japan and the rates of growth in China, Korea, Malaysia and Taiwan, among others, would indicate that it is. Whatever the reality may be, it would not be easy for westerners to convert to Asiatic systems. Individualism, democratic ideals, material goals, compulsive consumerism, penchant for speed, environmental concerns and a growing obsession with the quality of life (a strange concept in Asia) are powerful, irreversible factors to be reckoned with in North America and Northern Europe. The globalisation process and the increasing determination of the multinational and transnational giants to standardise procedures will result in some convergence of aims, concepts and organisational structure, but divergence in values and world view will sustain organisational diversity well into the twenty-first century.

Chapter 6: Horizons and Team Building

Life within horizons

Our genes, our parental and educational training, our societal rules, our very language, enable us to see so far. Any human being can see as far as their horizon, and that is the limit. We can broaden our horizon to some degree by living in other countries, learning foreign languages, reading books on philosophy, psychology, other cultures and a variety of other subjects. Unless we make such efforts, our horizon remains a British horizon, an American horizon, a Japanese horizon or one of many other world views. In other words, each culture enjoys a certain segment of experience, which is no more than a fraction of the total possible available experience. Benjamin Whorf believed that such segments of experience were limited by the vocabulary and concepts inherent in one’s language. By learning more languages, especially those with excitingly different concepts, one could widen one’s vision and gain deeper insight into the nature of reality. Many graduates in Romance studies feel enriched by being able to see the world through Spanish eyes or using French rationality. Scholars of Chinese or Japanese often develop two personalities when immersing themselves in one of these two languages.

Multicultural people strive towards ‘totality of experience’ (impossible to achieve in a lifetime) not only by learning foreign tongues, but by cultivating empathy with the views of others, standing in their shoes in their geographical,historical and philosophical location, seeing themselves from that location. Butfor the moment we live within our limited horizons. Figures 24 and 25 show how Americans and French people look at the world from different standpoints, see some things in a similar light (science, profit, consumerism) while other concepts are visible only to one nationality. A third area, containing a varietyof beliefs and philosophies, lies outside the ken of either Americans or French.

Figure 24:

Figure 25:

Figure 26 shows how two nationalities speaking different languages miss out on several linguistically based concepts. Figure 27 indicates how two cultures united by the same language (England and the USA) are developing different horizons in the twentieth century, where concepts such as subtlety and understatement are invisible to many Americans and ‘tough talk’, clichés or a certain variety of hype meaningless to most English. In the case of Brits and Yanks, however, the overlapping areas of common experience still dominate the thinking. This is far from being the case with the Americans and Japanese or even neighbours like the Poles and Germans.

Figure 26:

Figure 27:

Managing the horizons – teambuilding

As business is increasingly internationalised and globalised, the problem of coordinating individuals or groups who hold quite different world views is constantly highlighted. Teambuilding has long been a subject of study on management courses, even when members were generally from one country or culture; now international teams are with us for good. No multinational company can afford to ignore their special character or neglect their training and nurture.

Many joint ventures get off to a flying start, as the injection of new capital and the synergy emanating from the merging of two layers of experience produce aeuphoric honeymoon between the partners. When business is smooth, national ‘idiosyncrasies’ rarely assume significant importance. Should, however, money orcustomers be lost, local cultures will quickly retire to their entrenched beliefs and criticise the methods and values of others.

The education factor

We live in an era of improved education and training, but education systems varyconsiderably from country to country, both as to content and objectives. The French all-round senior manager, carefully groomed in wideranging skills in the hautes écoles, views the vocationally trained manager from a German Volkswirtschaftshochschule as a highly competent technician. Practical Japanese engineers wonder why their French counterparts evince no inclination to change tyres or fix malfunctioning TV sets. The German Diplom-Kaufmann may wonder why hisBritish opposite number seems to have no official qualifications in commerce. Action-oriented American managers, many of whom climbed from the bottom rung of the corporate ladder to the very top through sheer ability, energy and aggressive ambition, may set no store by diplomas of any kind.

Even if all the members of a team have had a ‘good’ university education, there is no guarantee that this will facilitate international understanding. While universities have revolutionised their teaching of science, mathematics, engineering and medicine over the past two or three decades, there has been little new introduced in the study of social sciences. Only those graduates in foreign languages, literature, philosophy or history are in some ways equipped to interact in a more meaningful way with foreign nationals, and few of these graduates end up in international business.

Language and culture

How can we set about achieving a relatively harmonious and integrated international team? To begin with, one should face the fact that to understand what makes foreign colleagues tick, there is no substitute for learning their language, reading books produced by the culture and familiarising oneself with the country’s basic history. This means a sizeable investment not so much in financial terms as in time. To achieve modest fluency in a European language, 250–500 hours of direct teaching will be required, preferably over a three-monthperiod. This should include an intensive course of two to three weeks of full-time (minimum 40 hours) tuition. Japanese, Chinese, Arabic and Russian (to name four other major languages) will require almost double the time. By contrast, study of the country’s basic history and main cultural traits could be comfortably dealt with in two or three weeks and done simultaneously with the language training.

Companies which discount the importance of such training do so at their peril. Amalfunctioning joint venture with a foreign partner can result in catastrophic financial loss. One large, traditional British company (turnover several hundredmillion pounds) branched out in three European countries five years ago without giving sufficient attention to cultural diversity. The initial investment was around £10 million. Probably language and cultural training as outlined above

for 20 key executives would have cost in the region of £200,000. In 1994 in one European branch alone the British company incurred losses of £100 million. Yet the subsidiary in question was showing a profit at the time of its acquisition!

What had happened? The British parent – vastly successful in the UK – had moved quickly to mushroom the size and scope of the branch operation, applying strategies and policies which had many years of proven success in the UK. Most of the new products and the general monolithic approach found little favour in the local culture. The problems were spotlighted by the local managers who offered polite, guarded criticism and advice. The British, although reasonable, bulldozed on in the firm belief that their name, impressive home record and lengthy experience would carry the day. The locals, in retaliation for the snub,clammed up. The much-heralded synergy was lost.

Executives operating in an international framework must be given a training which will at least exempt them from the charge of complete ignorance of the culture of their colleagues. This implies language training, but also cognisanceof some very basic facts about the country concerned, such as politics, history and geography, as well as elementary business behaviour.

Horizons, common ground, divergence

Members of an international team, once they are familiar with the national profile, should be advised as to the cultural traits of their partners. What do the French, German, Japanese see on their horizon? What is essentially (and perhaps irrevocably) different? What overlaps? There are areas of agreement between any two nationalities. Latins are generally considered difficult partners for the British yet Britons can find common ground with French, Spaniards and Italians, although that ground differs in each case.

UK / France UK / Spain UK / Italy sense of superiority love theatre, plots flexible messianic support underdog reasonable long term vague, ‘muddle through’ exports to survive conservative humorous diplomatic, tactful interest in arts and science

distrust the French love of art

ex-imperial dignified sociable, good at smalltalk

linguistic arrogance individualists uses first names   poor linguists compromisers   out of European mainstream  

It is valuable to focus on common ground; divergences of approach merit no less attention. One’s first step towards adaptation must at the very least be to avoid irritants. An Italian, however, well-disposed towards a Brit, finds littlesubtlety of humour in being reminded that the best-known Italian product is spaghetti. The English may weary of incessant French ramblings at meetings, but they risk hostility if they attempt to quash it as irrelevant. Spaniards, touchy

about personal style, do not take kindly to British references to their unpunctuality or overt body language. Japanese and most Orientals should be treated with as much respect and deference as Anglo-Saxons can muster: a good performance will in any case only slightly mitigate their opinion of us as somewhat unsophisticated types. Disruption of harmony and protocol by Anglo-Saxon informality and wisecracking does not mean that British and Americans are the only miscreants. Latins and Germans alike take liberties in judging Brits asslow-moving, old- fashioned amateurs with no linguistic skills, while Americans are often categorised as dollar-mad salespeople lacking dress sense, tact, finesse and any values other than material.

Building on strengths

Common sense, good breeding and a modicum of unhurried thought are all useful resources for avoiding behaviour which might prove irritable to our partners. Ifwe accept that certain things are not going to disappear (American drive, Germanseriousness, French sense of superiority, Japanese opacity, Spanish tardiness, Italian deviousness, Norwegian obstinacy, Swiss secrecy, Russian sentiment, Arabpassion) we may come to the realisation that these very traits can make a positive contribution to our team effort. For example, American enthusiasm harnessed by thorough German planning and supervision could be very effective. Spaniards are slow starters, but can be good finishers, often displaying staminaand verve in the hours leading up to midnight. Italians are generally good dealmakers, finding ways of ‘making the business’ when others may be too entrenched or even deadlocked. They are valuable, too, in handling other Latins.Managers in experienced multinationals like IBM, Unilever and ABB are skilled atusing ‘horses for courses’. Unilever recently needed a man to supervise their marketing operations in South America. A Brazilian or an Argentinian might have been resented in some of the smaller countries and certainly in each other’s. They chose an Indian, who was given language and cross-cultural training. A keenly perceptive executive, not only did his nationality place him above inter-regional rivalry, but his Indian characteristics of people orientation, subtle negotiating skills and warmth made him someone Latin-Americans would easily relate to.

eambuilding exercises

There is a wide variety of teambuilding exercises; multinational corporations have tried all of them. At business schools, budding MBAs work together on hundreds of case studies. Promising managers and key staff from different countries are assembled to go camping together, climb mountains, raft down rivers and cross deserts. A basic principle of most teambuilding exercises is that all members shall face some kind of difficulty together, help each other out according to individual ability and with the resources that are at hand. Theenvironmental constraints of a tent, raft, yacht or classroom necessitate working closely together and avoiding needless friction. When the teams are international, interesting things occur. Individuals strive to put their personal skills at the service of the team – sometimes practical, sometimes inspirational, sometimes intuitive. Leaders emerge: different people take chargeof provisioning, planning, direction taking, financing, logistics, social

affairs, even cooking. A language of communication evolves, as do problem-solving routines. Even on a language course this spirit of cooperation emerges. Latins recognise long literary or scientific words in English easily, but have difficulty with pronunciation; Dutch and Scandinavians pronounce beautifully, but are short on Latin-based vocabulary. Swedes help Finns with unfamiliar prepositions. Germans struggle with English word order. Everyone learns from everyone else.

Back to cultural cooperation: working with someone at close quarters for a protracted period of time enables you not only to observe foreign patterns of behaviour but to perceive some of the reasoning behind them. You also have the opportunity to explain your own actions and concepts ( perhaps eccentric for others) as you go along. The talkative Italian, possibly irritating at first, may prove to be the social adhesive holding the group together. The disconcertingly withdrawn, opaque Japanese, sitting quietly in the corner, may later remind the group of things they have forgotten. The hustling American getseveryone to the restaurant on time, the superior Frenchman gets you the right wine, the fussy German has a minibus and umbrellas waiting for you in the rain.

Chapter 7: Bridging the Communication Gap

Whatever the culture, there’s a tongue in our head. Some use it, some hold it, some bite it. For the French it is a rapier, thrusting in attack; the English, using it defensively, mumble a vague, confusing reply; for Italians and Spaniards it is an instrument of eloquence; Finns and East Asians throw you with constructive silence. Silence is a form of speech, so don’t interrupt it!

Use of language

One of the factors leading to poor communication is often overlooked: the nationals of each country use their language and speech in a different way. Language is a tool of communication, delivering a message – but it is much more than that, it has strengths and weaknesses which project national character and even philosophy.

How do the French use their language? Like a rapier. French is a quick, exact, logical language and the French fence with it, cutting, thrusting and parrying, using it for advantage, expecting counter thrusts, retorts, repartee and indeed the odd touché against them. French is a good tool for arguing and proving one’s point. It is fair play for the French to manipulate their language, often at great speed, to bewilder and eventually corner their opponent, leaving the latter breathless and without reply.

The English use their language differently – to its best advantage, certainly, but they are not quick to attack with it. They will lean heavily on understatement and reservation; they will concede points to their opponent earlyon to take the steam out of the argument, but their tone implies that even so, right is on their side. They know how to be vague in order to maintain politeness or avoid confrontation, and they are adept at waffling when they wishto procrastinate or cloud an issue. (It is impossible to waffle in French, as each word has a precise meaning.) The English will use a quiet tone to score points, always attempting to remain low key. Scots or the Northern English may emphasise their accent in order to come across as genuine, sincere or warm-hearted, while the Southern English may use certain accents to indicate an influential background, a particular school, or good breeding.

Spaniards and Italians regard their languages as instruments of eloquence and they will go up and down the scale at will, pulling out every stop if need be, to achieve greater expressiveness. To convey their ideas fully they will ransackan extensive vocabulary, use their hands, arms and facial expressions and make maximum use of pitch and tone. They are not necessarily being dramatic or overemotional. They want you to know how they feel. They will appeal, directly and strongly, to your good sense, warm heart or generosity if they want something from you, and often you have to decide there and then whether to say yes or no.

Germans, like the French, rely to a large extent on logic, but tend to amass more evidence and labour their points more than either the British or the French. The French, having delivered their thrust, are quite prepared to be parried and then have their defence pierced by a superior counter thrust.

Germans are not; they come in with heavier armour and have usually thought through the counter arguments. Often the best way to deal with a German is to find common ground and emphasise solidarity and reliability in cooperation. The splendid German language is heavy, cumbersome, logical, disciplined and has suchmomentum that it is invincible in any head-on collision with another language. But that momentum can be deflected by a sensitive negotiator and all parties canbenefit.

Scandinavians are something else. In the long dark nights they have thought about matters well in advance and they list all the ‘pros and cons’ before giving you their conclusion, which they will justify. They will not abandon their decision easily for they believe they have proved their case, but on the other hand they do not ask for too much. Swedes wield their language in a democratic manner with only a modicum of personal deference and with great egalitarian informality. They cut out the niceties and get down to brass tacks. Finns are friendlier and more reticent, but with the same modern equal-footing approach. The Finnish language is much more eloquent and flowery than Swedish, Danish or Norwegian, but the bottom line is still drily factual, succinct and well thought out. You can use any kind of humour with a Finn, linguistic or otherwise. A Dane will go along with you for a while, especially if the joke is at the expense of the Swedes. Swedes will accept your humour if it doesn’t affect their profit margin. Never tell jokes about Norway to Norwegians. They don’t understand them.

American speech is quick, mobile and opportunistic, reflecting the speed and agility of the young USA. The wisecrack is basic to their discourse. American humour excels in quips, barbed retorts and repartee – short, sharp, smart-alec shafts, typical of the dog-eat-dog society of early America, where the old handshad all the clichés and the answers, and newly arrived immigrants had to learn to defend themselves quickly. Exaggeration and hyperbole are at the bottom of most American expressions, contrasting sharply with the understated nature of the British. In the early days of pioneering, when immigrants speaking many varieties of halting English were thrown together in simple, often primitive surroundings, plainness and unsophistication of language were at a premium. The wellworn cliché was more understandable than originality or elegance of expression. The American language has never recovered from the exigencies of this period. The ordinary man’s speech tends to be ‘tough talk’, rather reminiscent of cowboy parlance or Chicago gangland speech of the 1920s. The nation’s obsession with show business and the pervasive influence of Hollywood have accentuated and, to some extent, perpetuated this trend. To make a start isto get the show on the road, to take a risk in a business venture is to fly by the seat of your pants, lawyers are shysters, accountants are bean counters, and, if you have no choice, it’s the only game in town.

The Japanese use language in a completely different way from the rest of us. What is actually said has no meaning or significance whatsoever. Japanese use their language as a tool of communication, but the words and sentences themselves give no indication of what they are saying. What they want and how they feel are indicated by the way they address their conversation partner. Smiles, pauses, sighs, grunts, nods and eye movements convey everything. The Japanese leave their fellow Japanese knowing perfectly well what has been agreed, no matter what was said. Foreigners leave the Japanese with a completely

different idea. Usually they think that everything has gone swimmingly, as the Japanese would never offend them by saying anything negative or unpleasant.

In English, French and a good number of languages, people often aspire to elegantly polite discourse in order to show respect to their interlocutor. This process is carried on to a much greater degree in Japanese, where standards of politeness are much higher than in the USA or Europe. On all ceremonial occasions, and these may include formal business meetings, a whole sequence of expressions is used which bears little or no relation to the actual sentiments of the individuals present. The language is instead aimed at conveying the long-term relationships which are envisaged and the depth of expectation that each participant has.

When these Japanese thoughts are translated, other nationalities tend to look atthe content rather than the mood. Consequently, all they hear is platitudes or, even more suspicious, flattery. There is no doubt that most Japanese businessmenin England and the US are often successful at conveying the idea that they are very agreeable people to deal with. Later, toughness in negotiating appears and seems to contradict the early pleasantries. When at each meeting hosted by the Japanese they go through the ritual of thanking the visitors for giving up theirvaluable time and for suffering the prevailing weather conditions, Anglo-Saxons in particular feel uncomfortable about the sincerity of their hosts. The Japanese, however, are simply being courteous and caring.

The phenomenon of the different effects caused by national tongues has been noticed throughout the centuries. Charles V of Spain said he thought German could be spoken to soldiers, English to horses, Italian to women and Spanish to God. Vincenzo Spinelli remarked that while Italian is sung, Spanish is declaimed, French is danced and only Portuguese is really spoken.

The whole question of people using different speech styles and wielding their language in the national manner inevitably leads to misunderstanding not only ofexpression, but intent. Japanese or English may distrust Italians because they wave their hands about, or Spaniards because they sound emotional or prone to exaggeration. The French may appear offensive because of their directness or frequent use of cynicism. No one may really know what Japanese or Finns were thinking or what they actually said, if they said anything at all. Germans may take the English too literally and completely miss nuances of humour, understatement or irony. Northern peoples may simply consider that Latins speak too fast to be relied on. Languages are indeed spoken at different speeds. Hawaiian and some Polynesian languages barely cover 100 syllables per minute, while English has been measured at 200, German at 250, Japanese at 310 and French at 350 syllables per minute.

The communication gap

We have, therefore, a variety of cultures using speech not only according to thestrictures imposed by grammar vocabulary and syntax, but in a manner designed toachieve the maximum impact. These different speech styles, whether used in translation or not, do nothing to improve communication in the international forum.

The communication gap assumes three forms: linguistic, practical and cultural. It is with the first of these that we are concerned in this chapter. Practical problems are usually the easiest to solve, as expatriate executives soon learn how to conduct themselves in this country or that. They tip generously in Frenchrestaurants, but not at all in China. They use first names in Finland, take flowers to Swedish homes, draw up their rolling forecast for the Americans, and talk business on the golf course in the UK and Japan. (More information on manners and mannerisms is given in Chapter 9).

Of more lasting difficulty for expatriate executives are behavioural differencesof cultural or linguistic origin. To be successful, on a long-term basis – to gain the edge over competitors – they must achieve proficiency in both these areas.

Not many people are clever linguists and all over the world thousands of misunderstandings are caused every day through simple mistakes. Here are some examples:

Germany

Next week I shall become a new car ( get) Thank you for your kidneys ( kindness) What is your death line? ( deadline)

Japan

I have split up my boyfriend My father is a doctor, my mother is a typewriter I work hardly 10 hours a day ( hard)

Portugal

What will you do when you retire? I will breed with my horses. Butchers have been fined for selling monkey meat ( donkey)

Sweden

Are you hopeful of any change? No, I am hopeless.

Finland

We are sitting in the glass room ( classroom) He took two trucks every night ( drugs = pills) He took a fast watch ( quick look) How old is your son? Half past seven.

Communication patterns during meetings

We attempt to surmount the linguistic hurdle by learning the language of our partner well or by using an interpreter. The former method is preferable as we

get more fully involved in the negotiation and are able to express ourselves better in terms of intent, mood and emotion. When the issues are non-controversial and the agenda is smooth, few obstacles arise. When misunderstanding arises, our language abandons its neutrality and swings back into culture-bound mode.

Italians, who believe in full explicitness, will become more explicit, waxing even more eloquent than before (see Figure 28). Finns, by contrast, will strive to rephrase their statement of intent in even fewer words, as in their culture this is the route to succinctness and clarity (see Figure 29).

Figure 28: Italy

Figure 29: Finland

Germans tend to push resolutely forward in a constant, believing- in oneself style (Figure 30). The French use a variety of tactics, including imaginative appeal, but invariably adhering to strict principles of logic throughout their discourse (Figure 31).

Figure 30: Germany

Figure 31: France

English people, like Germans, go steadily forward, but often introduce humour orunderstatement as negotiating tactics to soften their style (Figure 32). South Americans and Swedes go in for long discussions although in an entirely different manner (Figure 33 and 34).

Figure 32: UK

Figure 33: South America

Figure 34: Sweden

Spaniards use lengthy discourse to get to know their interlocutor well and to develop friendship and loyalty as a basis on which they can build their transaction (Figure 35).

Figure 35: Spain

Americans regard negotiation as a give-and-take scenario where both sides shouldput all their cards on the table at the beginning and waste no time beating around the bush. Their style is confrontational and often aggressive (Figure 36).

Figure 36: USA

Listening habits

Communication is a two-way process, involving not only the communicative skill of the presenter but, just as important, the listening habits of the customer. Different cultures do not use speech the same way, neither do they listen the same way. There are good listeners (Germans, Swedes) and there are bad ones (French, Spaniards). Others, such as the Americans, listen carefully or indifferently, depending on the nature of address. Figures 37–45 give some indication of the main concerns of several nationalities when they are obliged to listen.

Figure 37: France

Figure 38: Japan

Figure 39: Spain

Figure 40: Arabs

Figure 41: UK

Figure 42: USA

Figure 43: Germany

Figure 44: Finland

Figure 45: Sweden

At a recent conference on cross-cultural diversity, a fellow consultant presented a paper in which he gave an account of a problem experienced by Rolls-Royce in their aircraft engine division. A new engine had been introduced and sold with considerable success to their customers around the world. After a certain period the engines started seizing up in a selection of countries, although they worked perfectly well in others. The engine was technically sound,the operating and service manuals were explicit, and highly qualified engineers had taken great pains to make full presentations in all countries which had bought the engine. In view of the problem, these top engineers were sent out again to go through the manuals with the servicing technicians to ensure that things were being done properly. The British company, conscientious in the extreme, engaged the above-mentioned consultant to interview the engineers. It turned out to be basically a language problem. The well-spoken, highly educated and very experienced engineers explained the manuals in the same professional manner that they employed with British technicians. This met with full understanding in the USA and some other countries where English listening comprehension was high. In other countries, such as Germany, the technicians asked questions when necessary to make sure they had understood correctly. In the instances where the engines were giving problems the technicians belonged tocultures where the level of English, although high, was insufficient to absorb instructions delivered in an idiomatic style. Also their cultures inhibited themfrom revealing their lack of understanding – to ask for repetition of the presentation would have seemed impolite.

Figure 46 summarises the principal expectations of audiences belonging to different cultures.

Figure 46: Audience expectations during presentations

Advertising

The same characteristics which influence the receptivity of an audience naturally have an effect on the way they plan their own advertising and promotion. Information-hungry Germans will issue lengthy brochures for foreign consumption, just as if they were providing information for

Germans. Newspaper or magazine advertisements will be print oriented as opposed to the more pictorial approach of people such as the Spaniards. The German will also tend towards serious, factual persuasion, rather than using catchphrases orslogans common in American advertising. Once when I was at London Heathrow airport in the company of a friend of mine, we contemplated a huge billboard advertisement:

First Bite at the Big AppleFly UNITED AIRLINES

My German friend was somewhat puzzled. Big Apple? I explained that that was a fairly common ‘nickname’ for New York. ‘Oh yes,’ he said, ‘first visit to New York – I see. But why United?’ The ad carried little conviction with me, a Brit – no logic in it. For a German it was utter nonsense.

An advertisement for Lufthansa which appeared frequently in a variety of international news magazines with a mainly Anglo-Saxon readership repeats

‘serious’ concepts such as responsibility (four times), quality (five times), compromise (three times), perfection (three times). Also noticeable is the mention of accurate information – DM 1.1 billion (not 1 billion) – 11,000 technicians (not 10,000). By contrast, an Air France ad shows light French touchand panache. It shows a tray laid with cheese and wine and the words ‘Flavour ofFrance’. Let’s fly Air France and have a bit of fromage en route. What a splendididea. American characteristics take over in this ad for Delta:

DELTA SERVICE Each year we fly more people than the largest airlines of Great Britain, Germany and France...COMBINED. Come Experience Travel That’s Anything But Ordinary.

The biggest, therefore, the best. Size justifies the airline to its American mind. A Lucky Goldstar ad, in a different vein, refers to the impressive size ofthe company in question, but indicates that Korean success has its origins in the age-old traditions of the country’s art and taste.

Finnish companies such as Nokia and Valio make frequent use of blue and white intheir ads – the colour of the national flag – conveying to the Nordic reader, atleast, a sense of Finnish cleanliness and reliability. Swedes tend to use blue and yellow with the same aim.

Firms planning print or television advertising in foreign countries clearly haveneed for guidance from local advertising agencies to indicate native preferences, pitfalls and taboos. There are some advertising agencies which claim to cater for requirements in any country, but they are few and far between.

The language of management

Different languages are used in different ways and with a variety of effects. Hyperbolic American and understated British English clearly inform and inspire staff with separate allure and driving force. Managers of all nationalities knowhow to speak to best effect to their compatriots, yet they are in fact only vaguely aware of their dependence on the in-built linguistic characteristics which make their job easier.

German

Germans belong to a data-oriented, low context culture and like receiving detailed information and instruction to guide them in the performance of tasks at which they wish to excel. In business situations German is not used in a humorous way, neither do its rigid case-endings and strict word order allow the speaker to think aloud very easily. With few homonyms (in contrast, for example,to Chinese) and a transparent word-building system, the language is especially conducive to the issuing of clear orders. The almost invariable use of the Sie form in business fits in well with the expectation of obedience and reinforces the hierarchical nature of the communication.

As far as motivating subordinates is concerned, German would seem to be less flexible than, for instance, bubbly American English. The constrictive effect ofcase-endings makes it difficult for German speakers to chop and change in the middle of a sentence. They embark on a course, plotted partly by gender, partly by morphology, in a straitjacket of Teutonic word order. The verb coming at the end obliges the hearer to listen carefully in order to extract the full meaning.The length and complexity of German sentences reflect the German tendency to distrust simple utterances.

Information-hungry Germans are among the best listeners in the world; their language fits the bill.

Figure 47: German

American English

In the USA the manager, if not always a hero, is viewed in a positive and sympathetic light, as one of the figures responsible for the nation’s speedy development and commercial services. It is a young, vigorous, ebullient nation and its language reflects the national energy and enthusiasm. Americans exaggerate in order to simplify – low-key Britons feel they go ‘over the top’, but the dynamic cliché wears well in the US.

The frequent tendency to hyperbolise, exaggerating chances of success, overstating aims or targets etc., allows American managers to ‘pump up’ their subordinates – to drive them on to longer hours and speedier results. American salespeople do not resist this approach, for they are used to the ‘hard sell’ themselves. Tough talk, quips, wisecracks, barbed repartee – all available in good supply in American English – help them on their way.

Figure 48: American English

The ubiquitous use of ‘get’ facilitates clear, direct orders. You get up early, you get going, you get there first, you get the client and you get the order, got it? The many neologisms in American English, used liberally by managers, permit them to appear up to date, aphoristic, humorous and democratic.

British English

In Britain the language has quite different qualities and, as a management tool,is much more subtle. British staff members who would be put off by American exaggeration and tough talk fall for a more understated, laidback version of English which reflects their own characteristics. Managers manipulate subordinates with friendly smalltalk, humour, reserved statements of objectives and a very casual approach to getting down to work. You don’t arrive on the dot and work round the clock. The variety of types of humour available in the UK enables managers to be humorous, to praise, change direction, chide, insinuate and criticise at will. They may even level criticism at themselves. Irony is a powerful weapon either way.

Figure 49: British English

Both British and American English are excellent media for brainstorming, due to the richness of vocabulary, double meanings, nuances and word-coining facilities. American managers and staff often used coinedyesterday business terminologies which neither fully understands, but which unite them in wonder atthe spanking newness of the expression. British, in contrast, shy away from neologisms, often preferring woolly, old-fashioned phrases which frequently leadto sluggish thinking. ‘Muddling through’ is the result – the British are famous for it.

Foreigners follow with difficulty, for in fact they are listening to messages ina code. American or German criticism is blunt and direct; British critique is incidental and oblique. Managers, when praising, may seem to condemn. When persuading, they will strive to appear laid back. When closing a project, they will do so in a casual manner. When being tough they will feign great consideration, even kindness.

Japanese

There is a certain similarity in the language of management in Britain and Japan, although the basic and ever-present indirectness of the Japanese style makes the British, by comparison, seem clinical thinkers! Nevertheless, they have something in common – an aversion to ‘rocking the boat’. British managers’ understated criticisms, their humorous shafts in attack, their apparent reasonableness of expression at all times, are gambits to preserve harmony in their team. In Japan the drive towards harmony is so strong that it takes priority over clarity, even over truth.

Japanese managers do not issue orders: they only hint at what has to be done. The language is custom designed for this. The structure, which normally stacks

up a line of subordinate clauses before the main one, invariably lists the justifications for the directive before it reaches the listener.

‘Complete September’s final report by 5.30 pm’ comes out in Japanese as: ‘It’s 10th October today, isn’t it? Our controller hasn’t asked to see September’s report yet. I wonder if he’ll pop round tomorrow. You never know with him...’ The actual order is never given – there is no need, the staff are already scrambling to their books.

Figure 50: Japanese

Japanese has built-in mechanisms creating a strong impact on the listener. The general mandatory politeness creates a climate where staff appear to be quietly consulted in the most courteous manner. This very courtesy encourages their support and compliance. In fact they have no choice, as the hierarchy of communication is already settled by the status of the manager based on the quality and date of his university degree. The use of honorifics, moreover, reinforces the hierarchical situation. The different set of expressions (again mandatory) used in formulating the subordinates’ responses to the manager’s remarks closes the circle of suggestion, absorption, compliance.

Other features of the Japanese language which serve managers in instructing and motivating staff are the passive voice, used for extra politeness; the impersonal verb, which avoids casting direct blame; and the use of silence on certain issues, which indicates clearly to the subordinate what the manager’s opinion is. Reported speech is not popular in Japan, for Japanese people subscribe to the myth that all one-to-one conversations are delivered in confidence and should not be repeated to others, and indeed the language does not possess a reported speech mechanism.

French

French managers inhabit quite a different world. They are clinically direct in their approach and see no advantage in ambiguity or ambivalence. The French language is a crisp, incisive tongue, a kind of verbal dance or gymnastics of the mouth, which presses home its points with an undisguised, logical urgency. It is rational, precise, ruthless in its clarity.

Figure 51: French

The French education system, from childhood, places a premium on articulateness and eloquence of expression. Unlike Japanese, Finnish or British children, French children are rarely discouraged from being talkative. In the French culture loquacity is equated with intelligence and silence does not have a particularly golden sheen. Lycée, university and …cole normale supérieure education reinforces the emphasis on good speaking, purity of grammar and mastery of the French idiom. The French language, unquestionably, is the chief weapon wielded by managers in directing, motivating and dominating their staff. Less articulateFrench people will show no resentment. Masterful use of language and logic implies, in their understanding, masterful management.

Other languages

In the Gulf States a good manager is a good Moslem. The language used will make frequent references to Allah and align itself with the precepts and style of theKoran. A didactic management style is the result. The inherent rhetorical qualities of the Arabic language (see Figure 52) lend themselves to reinforcing the speaker’s sincerity. A raised voice is a sign not of anger, but of genuine feeling and exhortation.

Figure 52: Arabic

Nigel Holden sees Russian, where social distance is encoded in highly subtle ways, as resembling Japanese as a flexible management language in network mode. Soviet managers were involved little in such areas as leadership or motivation of employees. The management style utilised threats and coercion to produce results demanded by socialist ‘planning’. How Russian will develop as a languageof management in the future will depend on modes of address using names and titles and the development of formal and informal mechanisms which do not remindsubordinates of coercion and control.

Figure 53: Russian

Swedish as a language of management leans heavily on the Du form and dry, courteous expressions which clearly stratify managers at the same level as theircolleagues or, at the very worst, as primi inter pares. I recently heard a TV journalist in his mid-twenties address the prime minister as Du.

Figure 54: Swedish

To take a very different example, Spanish is directed towards staff at a much more vertical angle. Spanish managers are usually happy to use the tu form to

subordinates, but the declaimed nature of their delivery, with typical Spanish fire and emphasis, makes their pronouncements and opinions virtually irreversible. Spanish, with its wealth of dimunitive endings, its rich vocabulary and multiple choice options on most nouns, is extremely suitable for expressing emotion, endearments, nuances and intimacies. Spanish managers’ discourse leans on emotive content. They woo, persuade, cajole. They want you toknow how they feel. The language exudes warmth, excitement, sensuousness, ardour, ecstasy and sympathy.

Figure 55: Spanish

Chapter 8: Meetings of the Minds

Meetings can be interesting, boring, long, short, or unnecessary. Decisions, which are best made on the golfcourse, over dinner, in the sauna, or in the corridor, rarely materialise at meetings called to make them. Protracted meetings are successful only if transport, seating, room temperature, lunch, coffee breaks, dinner, theatre outings, nightcaps and cable television facilities are properly organised.

Beginnings

There are more meetings than there used to be. Jet travel enables businesspeopleto go to a meeting in another continent and often leave for home the same day. It may well be that video-conferencing will reduce business travel in the future, but this facility, too, is a type of meeting.

For the moment, however, consider how people conduct meetings, face-to-face, in different countries. Meetings are not begun in the same way as we move from culture to culture. Some are opened punctually, briskly and in a ‘business-like’fashion. Others start with chit-chat and some meetings have difficulty getting going at all. Figure 56 gives some examples of unalike starts in a selection of countries.

Figure 56: Opening a meeting

Germans, Scandinavians and Americans like to get on with it. They see no point in delay. Americans are well-known for their business breakfasts (a barbaric custom in Spanish eyes). In England, France, Italy and Spain it would be considered rude to broach the issues immediately. It is seen as much more civilised to ease into the subject after exchanging pleasantries which can last from 10 minutes to half an hour. The English, particularly, are almost shame-faced at indicating when one should start (Well, Charlie, I suppose we ought to have a look at this bunch of paperwork...). In Japan, where platitudes are mandatory, there is almost a fixed period which has to elapse before the senior person present says: ‘ Jitsu wa ne...’ (The fact of the matter is...) at which point everybody puts their head down and starts. Japanese meetings are conductedin phases:

platitudinous preamble

outline of subjects to be discussed (language used formal) airing of views (less formal in tone) replies of each party to other’s views (more formal and

nonconfrontational) summary by both sides (formal)

Negotiation

Many meetings between people of different cultures are held to conduct negotiations, and the approach of each side is affected by cultural factors. Germans will ask you all the difficult questions from the start. You must convince them of your efficiency, quality of goods and promptness of service. These are features Germans consider among their own strong cards and they expectthe same from you, at the lowest possible price. They will give you little business at first, but much more later when they have tested you. French tend togive business much faster, but may also withdraw it more quickly. Spaniards often seem not to appreciate the preparations you have made to facilitate a deal. They don’t study all the details, but they study you. They will only do business with you if they like you and think you are ‘honourable’.

The Japanese are similar in this respect. They must like you and trust you, otherwise no deal. Like the Germans, they will ask many questions about price, delivery and quality, but the Japanese will ask them all ten times. You have to be patient. Japanese are not interested in profits immediately, only in the market share and reputation of the company.

Finns and Swedes expect modernity, efficiency and new ideas. They like to think of themselves as being up to date and sophisticated. They will expect your company to have the latest office computers and streamlined factories. The American business approach is to get down quickly to a discussion of investment,budgets and profits. They hurry you along and make you sign the five-year plan.

Businesspeople from small nations with a long tradition of trading, such as the Netherlands and Portugal, are usually friendly and adaptable, but prove to be excellent negotiators. Brazilians never believe your first price to be the real one, and expect you to bend it later, so you must take this into your calculations.

In short, one gets down to business in different ways, according to the customs of the host country. Concepts of time, space and protocol all play their part. It is only when the meeting gets underway, however, that deeper chasms of cultural difference begin to yawn.

Established principles

Business schools, management gurus, trade consultants and industrial psychologists have focused, for most of the twentieth century, on the goal of reducing the process of negotiation to a fine art, if not a science. Papers havebeen written, seminars have been held, manuals have been devised and published. The Americans in particular, by dint of their obvious successes in the development of business techniques, not to mention their decades-long supremacy

in world trade, have held a dominant position in the expounding and dissemination of the principles of negotiation.

One could be forgiven for assuming that relatively unchanging, universally accepted principles of negotiation would by now have been established – that an international consensus would have been reached on how negotiators should conduct themselves in meetings, how the phases of negotiation should proceed andhow hierarchies of goals and objectives should be dealt with. One might assume that negotiators with their common concepts (learned from manuals) of ploys, bargaining strategies, use of data, fallback positions, closing techniques, restriction gambits, mix of factual, intuitive and psychological approaches, areinterchangeable players in a (serious) game where internationally recognised rules of tactics, points won and gained, positions achieved would lead to a civilised agreement on the division of the spoils. This ‘game plan’ and its successful prosecution are not unusual or infrequent in domestic negotiation between nationals of one culture. But the moment international and interculturalfactors enter into the equation, things change completely. Nationals of different cultures negotiate in completely different ways. In view of the commoninformation obtainable by all participants and, to some extent, a fair amount ofcommon commercial training and theory, why should this be so?

The problems

These derive from two sources: the professionalism of the negotiating team; and cross-cultural bias.

As far as professionalism is concerned, what is often forgotten is that negotiating teams rarely consist of professional or trained negotiators. While this does not apply so much to government negotiation, it is often readily observable at company level. A small company, when establishing contact with a foreign partner, very often is represented by its managing director and an assistant. A medium-sized firm will probably involve its export director, finance director and necessary technical support. Even large companies rely on the performance of the MD supported by, perhaps, highly specialised technical staff and finance people who have no experience whatsoever in negotiating. Engineers, accountants or managers used to directing their own nationals are usually completely lacking in foreign experience. When confronted with a different mindset, they are not equipped to capture the logic, intent and ethical stance of the other side. Often, when discussing the basic situation executives may be wasting time talking past each other. This leads us to cross-cultural bias.

Cross-cultural bias

When we find ourselves seated opposite well-dressed individuals politely listening to our remarks, their pens poised over notepads similar to the one before us, their briefcases and calculators bearing the familiar brand names, wetend to assume that they see what we see, hear what we say and understand what our intent and motives are. In all likelihood they start with the same innocent assumptions, for they, too, have not yet penetrated our cosmopolitan veneer. Butthe two sets of minds are working in different ways, in different languages regulated by differing norms and certainly envisaging different goals.

Humanity has a common development up to a certain point and in this respect the negotiators opposite us know what we feel, desire and suspect. Like us, they love their young, feel anger at injustice, fear powers which seek to destroy them, want to be liked and are grateful for favours and kindness. The average Chinese, German, Japanese or American will rarely deviate from this inherited pattern. That can be the extent of our trust, both in a social and business environment. After that we enter a different area ó that of learned national culture. Now deviations of attitude and view are certain and we must be on our guard during the meeting to avoid irritants or outright offence, establish mutually understood facts and know when to ‘agree to disagree’, simply because the other culture cannot accept or even see our point of view.

National character and negotiation

Even before the meeting begins, the divergences of outlook are exerting decisiveinfluence on the negotiation to come. If we take three cultural groups as an example – American, Japanese and Latin-American – the hierarchy of negotiating objectives are likely to be as in Figure 57.

Americans are deal-oriented, as they see it as a present opportunity which must be seized. American prosperity was built on opportunities quickly taken and the immediate profit is seen as the paramount reality. Today, shareholders’ expectation of dividends creates rolling forecasts which put pressure on US executives to deal now in order to fulfil their quarterly figures. For the Japanese, the current project or proposal is a trivial item in comparison with the momentous decision they have to make about whether or not to enter into a lasting business relationship with the foreigners. Can they harmonise the objectives and action style of the other company with the well-established operational principles of their own kaisha? Is this the right direction for theircompany to be heading in? Can they see the way forward to a steadily increasing market share? The Latin Americans, particularly if they are from a country such as Mexico or Argentina (where memories of US exploitation or interference are a background to discussion), are anxious to establish notions of equality of standing and respect for their team’s national characteristics before getting down to the business of making money. Like the Japanese, they seek a long-term relationship, although they will inject into this a greater personal input than their group-thinking eastern counterparts.

This ‘master programming’ supplied by our culture not only prioritises our concerns in different ways, but makes it difficult for us to ‘see’ the priorities or intention pattern of others.

Stereotyping is one of the ‘flaws’ in our master programme, often leading us to false assumptions. Here are three examples:

French refusal to compromise indicates obstinacy. (Reality: French peoplesee no reason to compromise if their logic stands undefeated.)

Japanese negotiators can’t make decisions. (Reality: the decision was already made before the meeting, by consensus. The Japanese see meetings as an occasion for presenting decisions, not changing them.)

The Mexican senior negotiators are too ‘personal’ in conducting negotiations.

(Reality: their ‘personal’ position reflects their position of authority within the power structure back home.)

The social setting

French, Spaniards, most Latin-Americans and Japanese regard a negotiation as a social ceremony to which are attached important considerations of venue, participants, hospitality and protocol, timescale, courtesy of discussion and the ultimate significance of the session. Americans, Australians, Britons and Scandinavians have a much more pragmatic view and are less impacted by the social aspects of business meetings. The Germans and Swiss are somewhere in between.

US executives, although outwardly smiling and friendly, generally tend to get the session over with as quickly as possible, with entertaining and protocol kept at a minimum. Mutual profit is the object of the exercise and Americans send technically competent people to drive the deal through. They persuade with facts and figures and expect some give and take, horsetrading when necessary. They will be argumentative to the point of rudeness in deadlock and regard confrontation and in-fighting as conducive to progress. No social egos are on the line – if they win, they win; if they lose, what the hell, too bad.

Senior Mexican negotiators cannot lose to Americans, least of all to technicians. Their social position is on the line and they did not enter into this negotiation to swap marbles with engineers and accountants. Their Spanish heritage causes them to view the meeting as a social occasion where everybody isto show great respect for the dignity of the others, discuss grand outlines as opposed to petty details, speak at length in an unhurried, eloquent manner, and show sincerity of intent while maintaining a modicum of discretion to retain some privacy of view.

Japanese view the session as an occasion to ratify ceremonially decisions which have previously been reached by consensus. They are uncomfortable both with Mexican rhetoric and American argumentativeness, although they are closer to theLatins in their acceptance of protocol, lavish entertainment and preservation ofdignity. As befits a social occasion, the Japanese will be led by a senior

executive who sets standards of courtesy and deference. He may have no technicalcompetence, but represents the weighty consensus which backs his authority.

The French view the setting of the negotiation both as a social occasion and a forum for their own cleverness. Their sense of history primes them for the traditional French role of international mediator. Their leader will be their best speaker, usually highly-educated and self-assured. It will require a skilful American, Briton or Japanese to best him or her in debate. The leader will be unimpressed by American aggressive ploys and Cartesian logic will reduce‘muddling-through’ Englishmen and bellytalking Japanese to temporary incoherence. This is not a session for give and take, but for presenting well-formulated solutions. Lavish French hospitality will compensate for sitting through lengthy speeches.

Scandinavians, while relatively at home with Americans and Anglo- Saxons and familiar enough with German bluntness and protocol, have little feel for the social nuances displayed by Latins and Japanese. In their straight-forward egalitarian cultures a business meeting is for business to be conducted without regard to social status. Who the other negotiators are, their class, their connections, who they are related to – all these things are irrelevant to Finns and Swedes. Although more polite than Americans, Scandinavians have difficulty in settling down to a role in meetings where social competence dominates technical know-how.

Values & self-image

We see, therefore, how diverse cultures view the negotiating process in a different light, with dissimilar expectations about its conduct and outcome. Once the talks begin, the values, phobias and rituals of the particular culturalgroups soon make themselves evident. For the Americans, time is money and they wish to compress as much action and decision making as possible into the hours available. They rely on statistical data and personal drive to achieve this. TheDutch, Finns and Swiss, although somewhat less headlong, will be similarly concerned with the time/efficiency equation. The Germans will place emphasis on thoroughness, punctuality and meeting deadlines, making sure they always complete their action chains. For this they require full information and contextand, unlike Latins, will leave nothing ‘in the air’.

The French give pride of place to logic and rational argument. The aesthetics ofthe discussion are important to them and this will be reflected in their dress sense, choice of venue, imaginative debating style and preoccupation with properform. The Japanese have their own aesthetic norms, also requiring proper form, which in their case is bound up with a complex set of obligations (vertical, horizontal and circular!). In discussion they value creation of harmony and quiet ‘groupthink’ above all else. The British also give priority to quiet reasonable, diplomatic discussion. Their preoccupation with ‘fair play’ often comes to the fore and they like to see this as a yardstick for decision making. Latins place emphasis on personal relationships, ‘honourable’ confidences and the development of trust between the parties. This is a slow process and they require an unhurried tempo to enable them to get to know their counterparts. This is well understood by the Japanese, but conflicts with the American desire for quick progress.

Self-image is part and parcel of value perception and negotiators see themselvesin a light which may never reach their foreign counterpart, although their playing of the role may irritate. English people often assume a condescending, abitrarial role which is a carry-over from the days when they settled disputes among the subjects of Her Majesty’s Empire. They may still see themselves as judges of situations which can be controlled with calm firmness and funny stories. The French have an equally strong sense of history and consider themselves the principal propagators of western European culture. This encourages them to take a central role in most discussions and they tend to ‘hold the floor’ longer than their counterparts would wish.

Latin Americans see themselves as exploited by the US and they display heightened defensive sensitivity which may often delay progress. They consider themselves culturally superior to North Americans and resent the latters’ position of power and dominance.

The Japanese, on the other hand, are comfortable with American power – as victors in the Second World War they earned the number one spot. Inequality is basic in both Japanese and Chinese philosophies and the former are quite satisfied with the number two spot for the time being. The Japanese see themselves as far-sighted negotiators and courteous conversationalists. They have no aspirations to dominate discussion any more than they have towards moralworld or even Asian leadership. They are privately convinced, however, of their uniqueness of which one facet is intellectual superiority. Unlike the French, they base this belief not on intellectual verbal prowess, but on the power of strong intuition.

Decision making

Negotiations lead to decisions. How these are made, how long they take to be made and how final they are once made are all factors which will depend on the cultural group involved.

Americans love making decisions as these usually lead to action and they are primarily action oriented. The French love talking about decisions which may or may not be made in the future. If their reasoned arguments do not produce what in their eyes is a logical solution, then they will delay decisions for days or weeks if necessary.

Japanese hate making decisions and prefer to let decisions be made for them by gradually building up a weighty consensus. In their case, a decision may take months. This exasperates Americans and many northern Europeans, but the Japaneseinsist that big decisions take time. They see American negotiators as technicians making a series of small decisions to expedite one (perhaps relatively unimportant) deal. Once the Japanese have made their decisions, however, they expect their American partner to move like lightning towards implementation. This leads to further exasperation.

What westerners fail to understand is that Japanese, during the long, painstaking process of building a consensus, are simultaneously making preparations for the implementation of the business. The famous ringi-sho system

of Japanese decision making is one of the most democratic procedures of an otherwise autocratic structure. In many western countries action is usually initiated at the top. In Japan younger or lower-ranking people often propose ideas which are developed by middle management and ultimately shown to the president. There is a long, slow process during which many meetings are held to digest the new idea and at length a draft will be made to be passed round for all to see. Each person is invited to attach his or her seal of approval so thatunanimity of agreement is already assumed before the president confirms it. He will not do this lightly since he, not middle management, will have to resign ifthere is a catastrophe. To ask a Japanese negotiator during a meeting to take ‘another direction’ is quite unacceptable. No hunches or sudden change-abouts here. Drastic swings of intent would force the Japanese team to go right back tothe drawing board.

Mediterranean and Latin-American teams look to their leader to make decisions and do not question his personal authority. His decision making, however, will not be as impromptu or arbitrary as it seems. Latins, like Japanese, tend to bring a cemented-in position to the negotiating table, which is that of the power structure back home. This contrasts strongly with the Anglo-Saxon and Scandinavian willingness to modify stances continuously during the talk if new openings are perceived.

French negotiators seldom reach a decision on the first day. Many a British negotiator has asked (in vain) French colleagues at 4 pm, ‘Well, can we summarise what we have agreed so far?’ French dislike such interim summaries, since every item on the agenda may be affected by later discussion. Only at the end can everything fit into the Grand Design.

Short term decisions are seen as of little consequence.

Ethics

Once a decision has been made, the question then arises as to how final or binding it is. Anglo-Saxons and Germans see a decision, once it has been enteredinto the minutes of a meeting, as an oral contract which will shortly be formalised in a written, legal document. Ethically, one sticks to one’s decisions. Agenda items which have been agreed on are not to be resurrected or rediscussed once a tick has been put against them.

Neither Japanese nor southern Europeans see anything wrong, ethically, in going back on items previously agreed. Chop and change ( anathema to Anglo-Saxons) holds no terrors for many cultures. The Japanese consider it would be unethical to insist on a decision which had been rendered invalid or irrelevant by rapidlychanging circumstances. How ethical is a share swop agreement if the market crashes the next day? New tax laws, currency devaluations, drastic political changes can make previous accords meaningless.

The French show lack of respect for adherence to agenda points or early mini-decisions. This is due not so much to their concern about changing circumstancesas to the possibility (even likelihood) that, as the discussions progress, Latinimagination will spawn clever new ideas, uncover new avenues of approach,

improve and embellish accords which later may seem naÏve or rudimentary. For them a negotiation is often a brainstorming exercise. Brainwaves must be accommodated! Italians, Spanish, Portuguese and South Americans all share this attitude.

Contracts

Different ethical approaches or standards reveal themselves in the way diverse cultures view written contracts. Americans, British, Germans, Swiss and Finns are among those who regard a written agreement as something which, if not holy, is certainly final. For the Japanese, on the other hand, the contract which theywere uncomfortable in signing anyway is, in their eyes, a statement of intent. They will adhere to it as best they can, but will not feel bound by it if marketconditions suddenly change, anything in it contradicts common sense, or they feel ‘cheated’ or legally trapped by it. If the small print turns out to be rather nasty, they will ignore or contravene it without qualms of conscience. Many problems arise between Japanese and US firms on account of this attitude. The Americans love detailed written agreements covering themselves against all contingencies with legal redress. They have 300,000 lawyers to back them up. TheJapanese, who have only 10,000 registered lawyers, regard contingencies to be force majeure and consider that contracts should be sensibly reworked and mofidied at another meeting or negotiation.

The French tend to be precise in the drawing up of contracts, but other Latins require more flexibility in adhering to them. An Italian or Argentinian sees thecontract as an ideal scheme in the best of worlds, which sets out the prices, delivery dates, standards of quality and expected gain, or a fine project which has been discussed. But we do not live in the best of worlds and the outcome we can realistically expect will fall somewhat short of the actual terms agreed. Delivery of payment may be late, there may be heated exchanges of letters or faxes, but things will not be so bad that further deals with the partner are completely out of the question. A customer who pays six months late is better than one who does not pay at all. A foreign market, however volatile, may still be a better alternative to a stagnating or dead-end domestic one.

Propriety

If Anglo-Saxons and Scandinavians have a problem with the ethics of volatility, they have an even greater one with those of propriety. Which culture or authority can deliver the verdict on acceptable standards of behaviour or appropriate conduct of business? If it is recognised that Italian flexibility poses problems for law-abiding Swiss or time-dominated Germans, what are the sanctioned limits of such flexibility?

Italian flexibility in business often leads Anglo-Saxons to think they are ‘dishonest’. They frequently bend rules, break or ‘get round’ some laws and put a very flexible interpretation on certain agreements, controls and regulations. There are many grey areas where short cuts are, in Italian eyes, a matter of common sense. In a country where excessive bureaucracy can hold ‘business’ up for months, smoothing the palm of an official or even being related to a minister is not a sin. It is done in most countries, but in Italy they talk about it.

When does lavish entertaining or regular gift giving constitute elegant bribery or agreeable corruption? French, Portuguese or Arab hosts will interlard the negotiation sessions with feasting far superior to that offered by the Scandinavian canteen or British pub lunch. Expense-account- culture Japanese would consider themselves inhospitable if they had not taken their visiting negotiators on the restaurant night-club circuit and showered them with the usual expensive gifts.

Few Anglo-Saxons or Scandinavians would openly condone making a covert payment to an opposing negotiator, but in practice this is not an uncommon occurrence when competition is fierce. I once heard an American define an honest Brazilian negotiator as one who, when bought, would stay bought. More recently the leader of the negotiating team of a large Swedish concern tacitly admitted having greased the palm of a certain South American gentleman without securing the contract. When the Swede quietly referred to the payment made, the beneficiary explained: ‘Ah, but that was to get you a place in the last round!’

Judgements on such procedures are inevitably cultural. Recipients of under-the-table payments may see them as no more unethical than using one’s influence witha minister (who happens to be one’s uncle), accepting a trip around the world (via Tahiti or Hawaii) to attend a ‘conference’, or wielding brute force (financial or political) to extract a favourable deal from a weaker opponent. All such manúuvres can be viewed (depending on one’s mindset) as normal strategies in the hard world of business. One just has to build these factors into the deal or relationship.

Compromise

It is not uncommon for negotiations to enter a difficult stage where the teams get bogged down or even find themselves in deadlock. When such situations occur between nationals of one culture (for a variety of reasons), there is usually a well-tried mechanism which constitutes an escape route whereby momentum can be regained without loss of face for either side. Deadlocks can be broken by, for instance, changing negotiators or venue, adjourning the session, or ‘repackaging’ the deal. Arab teams will take a recess for prayer and come back with a more conciliatory stance; Japanese delegations will bring in senior executives ‘to see what the problem is’; Swedish opponents will go out drinking together; Finns will retire to the sauna.

These mechanisms are not always available in international negotiations. The nature of the deadlock, moreover, may be misconstrued by both parties as, for instance, when French insist on adhering to their logic which the Japanese have misunderstood or completely failed to follow. The mechanism used by Anglo-Saxonsis usually that of compromise. The British, with their supposedly innate sense of fair play, see themselves as the champions of compromise. The Scandinavians are very British in this respect, while the American willingness to compromise is seen in their give-and-take tactics, deriving from the bartering traditions in US history.

Other cultures, however, do not see compromise in the same favourable light and remain unconvinced of its shining merit. In French eyes ‘give and take’ is Anglo-speak for ‘wheel and deal’, which they see as an inelegant, crude tactic for chiselling away at the legitimate edifice of reason they have so painstakingly constructed. ‘Yes, let’s all be reasonable,’ they say, ‘but what is irrational in what we have already said?’

For the Japanese, compromise during a negotiation is a departure from a company-backed consensus, and woe betide the Japanese negotiators who concede points without authority. Adjournment is the least they must ask for. Many a senior Tokyo-based executive has been got out of bed in the middle of the night by trans-Pacific telephone calls asking for directives. Delays are, of course, inevitable.

Among the Latins, attitudes towards compromise vary. The Italians, although theyrespect logic almost as much as the French, know that our world is indeed irrational and pride themselves on their flexibility. They are closely followed by the Portuguese who, in their long history of trading with the English, have acquired close familiarity with Anglo-Saxon habits. The Spaniards’ obsession with dignity makes it hard for them to climb down without good reason. South Americans see compromise as a threat to their pundonor (dignity) and several nations, including Argentina, Mexico and Panama, display obstinacy in conceding anything to ‘ insensitive, arrogant Americans’.

Compromise may be defined as finding a middle course and, to this end, both the Japanese and Chinese make good use of ‘go-betweens’. This is less acceptable to westerners who prefer more direct contact (even confrontation) to seek clarity. Confrontation is anathema to orientals and most Latins and disliked by Brits andSwedes. Only Germans (‘the truth is the truth’), Finns and Americans might rank directness, bluntness and honesty above subtle diplomacy in business discussions. Arabs also like to use ‘ go betweens’. The repeated offer of King Hussein of Jordan to mediate in the dispute between Saddam Hussein and George Bush unfortunately fell on deaf ears, even though, as a thoroughly westernised Arab (with British and American wives to boot) he was the ideal middleman for that particular cross-cultural situation.

The problem remains that intelligent, meaningful compromise is only possible when one is able to see how the other side prioritises their goals and views therelated concepts of dignity, conciliation and reasonableness. These are culturally affected concepts, therefore emotion bound and prickly. However, an understanding of them, and a suitable step or reaction to accommodate them, formthe unfailing means of unblocking the impasse. Such moves are less difficult to make than one might believe. They do, however, require knowledge and understanding of the traditions, cultural characteristics and way of thinking ofthe other side. What is suitable or inappropriate in their eyes? What is logicaland illogical?

Logic

French debating logic is Cartesian in its essence, which means that all presuppositions and traditional opinions must be cast aside from the outset, as they are possibly untrustworthy. Discussion must be based on one or two indubitable truths on which one can build through mechanical and deductive processes to clarify further truths and knowledge. Descartes decreed that all problems should be divided into as many parts as possible and the review should be so complete that nothing could be omitted or forgotten. Given these instructions and doctrine, it is hardly surprising that French negotiators appear complacently confident and long-winded. They have a hypothesis to build and are not in a hurry.

Opponents may indeed doubt some of the French ‘indubitable truths’ and ask who is qualified to establish the initial premises. Descartes has an answer to this:rational intellect is not rare, it can be found in anyone who has been given help in clear thinking (French education) and is free from prejudice. What is more, conclusions reached through Cartesian logic ‘compel assent by their own natural clarity’. There, in essence, is the basis for French self-assurance and unwillingness to compromise.

Fellow French people would certainly meet thrust with counter-thrust, attempt todefeat the other side’s logic. Many cultures feel little inclined to do this. The Japanese – easy meat to corner with logic – have no stomach for arguing or public demonstrations of cleverness. During the perorations of the other side, their internal telepathy system has been hard at work – their reactions and conclusions are ventral and visceral, emotional and intuitive. They, like some other Orientals, acquire convictions without always knowing why – as occasionally do the ‘muddling-through’ British.

Anglo-Saxons, particularly Americans, show a preference for Hegelian precepts. According to Hegel, people who first present diametrically opposed points of view ultimately agree to accept a new and broader view that does justice to the substance of each. The thesis and antithesis come together to form a synthesis (compromise). Everything must have an opposite – were it not so, nothing could come into existence. The essence of this cause-and-effect doctrine is activity and movement, on which Americans thrive. An American negotiator is always happy to be the catalyst, ever willing to make the first move to initiate action.

Chinese logic is different again – their background is Confucian philosophy. They consider the French search for truth less important than the search for virtue. To do what is right is better than to do what is logical. They also may show disdain for western insistence that something is black or white, that opposite courses of action must be right or wrong. Chinese consider both coursesmay be right if they are both virtuous. Confucianism decrees moderation in all things (including opinion and argument); therefore, behaviour towards others must be virtuous. Politeness must be observed and others must be protected from loss of face. Taoist teaching encourages Chinese to show generosity of spirit intheir utterances. The strong are supposed to protect the weak, so the Chinese negotiator will expect you not to take advantage of your superior knowledge or financial strength! Another dimension of Chinese thinking is feng shui (wind- and water superstition) which means that the seating arrangements, the position of the furniture, alignment of doors and even the placing of mirrors will have significance for Chinese negotiators. Each individual is also supposed to

possess the qualities of the animal of the year he or she was born. For example,the horse means stamina, the snake wisdom, the rat bravery and cleverness – so negotiators, beware!

Language

Negotiators, unless they are using interpreters, need a common language. As English is now the language of diplomacy as well as international trade, they think they have one. English can, however, be a communication link or a semi-invisible barrier. When Americans use in discussion words like ‘democratic’, ‘fair’, ‘reasonable’, ‘obvious’, ‘evidence’, ‘common sense’, ‘equitable’, ‘makesbusiness sense’, they often fail to realise that Japanese understand quite different things under these headings and that most Latins will instinctively distrust each word listed above. ‘Democracy’ has a different meaning in every country; American ‘evidence’ is statistical, in many cultures it is emotional; in Russia the phrase ‘makes business sense’ has virtually no meaning. Language is a poor communication tool unless each word or phrase is seen in its original cultural context. This is naturally true also of other languages. Words such as Weltschmerz (German), sisu (Finnish), saudades (Portuguese) mean little to other cultures even when translated, while no westerner could possibly appreciate the spider’s web of duties and obligations implied by the Japanese words giri and on.

The non-verbal dimension

While verbal discussion might occupy 80–90 percent of the time devoted to a negotiation, psychologists tell us that the ‘message’ conveyed by our actual words may be 20 percent or even less. Our understanding, tolerance, sense of comfort and our very mood is more likely to be strongly influenced by other factors (Fisher calls it ‘cross-cultural noise’).

The venue itself may have positive or negative implications. Are we ‘home’ or ‘away’? Are we seated comfortably? (French negotiators are said to arrange lowerseats for their opponents!) American businesspeople are used to sitting in a confrontational style, facing their interlocutors across the table and maintaining challenging eye contact, while Japanese by contrast like to sit sideby side and stare at a common point (often a blank wall or the floor), punctuating their remarks with occasional sideways glances.

Hierarchy of seating is also important, but of more significance in the early stages of discussion are the negotiators’ physical and social attitudes. Each culture has its own concept of the ‘ space bubble’ – the personal space the individual requires to be able to think, talk and gesture in comfort.

Related to the ‘distance of comfort’ is the question of touching. The Spaniard’sgrip on your upper arm shows confidence in you, an African may continue to hold your hand when talking to you, but touching of any kind is anathema to Japanese,who regard it as unhygienic; it is little loved by Finns, Swedes, Germans, British and many Orientals.

American informality

Americans are ambivalent in this respect, normally occupying a space bubble equal in size to that demanded by most Anglo-Saxons, but only too frequently indulging in pumping hands, slapping backs and playful punches, which score no points whatsoever with Japanese, Germans and French. Americans in particular, intheir eagerness to downplay status and social hierarchy, have created consistentprotocolar havoc in business meetings around the world. The last thing the Japanese wants, on first meeting, is to be manhandled (even in a friendly manner); German senior executives have no wish whatsoever to be addressed by their first names; French negotiators abhor people who take their jackets off and loosen their ties during the first encounter. Other American habits such as chewing gum, slouching in their chairs, showing the soles of their shoes as theycross their legs, constitute ‘cultural noise’ of the first order. Japanese and Finns, on the other hand, can give rise to unease in their counterparts with ‘absence of noise’ (in their eyes, constructive silence).

Dress, formal and informal, correct and innappropriate, can also give negotiators false impressions of the seriousness or casualness of the other side. Gestures (of the Latin variety), can denote overemotion or unreliability to northerners. Impassive faces and absence of body language can cause Latins tosuspect cunning or slyness in Japanese, and the lack of feedback from the politely listening Finn can disorientate them.

Silence

Listening habits can clearly play an important part in the negotiating process. Finns and Japanese consider they make an important contribution to the discussion with their culture-oriented silence! ‘Those who know do not speak; those who speak do not know’ is a second-century Chinese proverb which the Finns, like the Japanese, do not quarrel with. In Finland, as in Japan, silence is not equated with failure to communicate, but is an integral part of social interaction. In both countries what is not said is regarded as important and lulls in conversation are considered restful, friendly and appropriate. Silence means that you listen and learn; talking a lot merely expresses your cleverness,perhaps egoism and arrogance. Silence protects your individualism and privacy; it also shows respect for the individualism of others. In Finland and Japan it is considered impolite or inappropriate to force one’s opinions on others – it is more appropriate to nod in agreement, smile quietly, avoid opinionated argument or discord.

The American habit of ‘thinking aloud’, the French stage performance, the Italian baring of the soul in intimate chatter, the rhetoric of the Arabs – all these are communicative gambits designed to gain the confidence of the listener,to share ideas which can then be discussed and modified. The Finn and the Japanese listen with a kind of horror, for in their countries a statement is a sort of commitment to stand by, not to change, twist or contradict in the very next breath.

Body language

Facial expressions and loudness of voice or manner are also cultural factors which may disturb interlocutors. Members of a Spanish delegation may argue fiercely with each other while opponents are present, causing Japanese to think ‘they are fighting’. Orientals are bemused when the same ‘quarrelling Spaniards’pat each other like lifelong friends a few moments later. Smiles, while signifying good progress when on the faces of British, Scandinavians or Germans,might mean embarrassment or anger when adopted by Japanese and often appear insincere in the features of the constantly beaming American. Finns and Japaneseoften look doleful when perfectly happy, whereas gloom on an Arab face indicatestrue despondency. The frequent bowing of the Japanese is seen as ingratiating byAmericans, while the hearty nose-blowing of westerners in public is abhorred by Japanese, who invariably leave the room to do this.

Man is the only animal that speaks, laughs and weeps. Other species we can observe obviously have their own means of communication, but, except for the dolphins, we stop short of saying that they possess speech. Animals growl, bark,grunt and squeal, imparting messages not only to each other, but also to more articulate humans. Inevitably these sounds are accompanied by the appropriate body language – a threatening crouch, hair standing on end, a showing of teeth, imminent flight, submissive posture or cowering, etc. Body language, with its accompanying odours, is probably the principal mode of communication among animals.

Speech as auxiliary to body language

Anthropologists tell us that before humans possessed speech – and possibly in the early days of its acquisition and development – they probably depended as much on body language as do the beasts today. They assume that speech developed to make body language more explicit and that as the former became more sophisticated, gestures became less necessary. The ability to deliver an icy ‘I’ll break your neck’ made club-waving superfluous and ‘Would you mind passing me a little more of that delicious cold lamb?’ has almost eliminated snatching, at the table or round the camp fire.

The theory that speech – first used minimally as an auxiliary to the basic messages of body language – developed into the main form of communication, gradually reducing body language to the auxiliary role, is a neat one. Surprisingly, it is not that simple. In spite of the incredible sophistication, subtlety and flexibility of speech, it seems that some humans still rely basically on body language to convey (especially where intense feelings are concerned) what they really mean. Such people are the Italians, South Americans and most Latins, as well as many Africans and people from the Middle East. Others, such as Japanese, Chinese, Finns and Scandinavians, have virtually eliminated overt body language from their communication.

The space bubble

People from reactive and linear-active cultures are generally uncomfortable whenconfronted by the theatrical, excitable gestures and behaviour of the multi-actives. The feeling of discomfort generally begins at the outset when the ‘space bubble’ is invaded. Orientals, Nordics, Anglo-Saxon and Germanic people mostly regard space within 1.2 metres of the self as inviolable territory for

strangers, with a smaller bubble of 0.5 metres in radius for close friends and relatives. Mexicans (and many of their cousins) happily close within half a metre of strangers for business discussions.

When a Mexican positions himself 0.5 metres away from an Englishman, he is readyto talk business. The Englishman sees him in English personal space and backs off to 1.2 metres. In doing so, he relegates the Mexican to the South American ‘public zone’ (1.2metres) and the latter thinks the Englishman finds his physical presence distasteful or does not want to talk business. For a Mexican to talk business over a yawning chasm of 1.2metres is like an English person shouting out confidential figures to someone at the other end of the room.

Different types of body language

Multi-actives – French, Mediterranean people, Arabs, Africans, South and CentralAmericans – possess a whole variety of gestures and facial expressions, largely unused and often misconstrued or disliked by reactive, linearactive and data-oriented cultures.

Finns and Japanese do not seem to have any body language – an assumption which administers cultural shock to first-time visitors in Finland and Japan. I say donot seem, because in fact Finns and Japanese do use body language which is well understood by fellow nationals in each country. Finns and Japanese have to be good ‘body watchers’, as the verbal messages in their countries are kept at a minimum. In the Finnish and Japanese cultures, upbringing and training discourage gesticulations, exaggerated facial expressions and uninhibited manifestations of glee, sorrow, love, hate, hope, disappointment or triumph. In both societies the control and disciplined management of such emotions leads to the creation of a much more restrained type of body language which is so subtle that it goes unnoticed by the foreign eye. Finns and Japanese are able to detectnonverbal messages in each other’s culture, as their own nationals behave in a similar manner. As Finns and Japanese are accustomed to looking for minimal signs, the blatantly demonstrative body language of Italians, Arabs and South Americans produces strong culture shock for them. It is as if someone used to listening to the subtle melodies of Chopin or Mozart were suddenly thrown into amodern disco. The danger is, of course, that over- reaction sets in – a judgmental reaction which causes Japanese to consider Americans and Germans as charging bulls and Finns to see French as too ‘clever’, Italians as over-emotional and even Danes as a bit slick.

The body language of multi-active people often incorporates the following features.

Eyes

Eyes are among the more expressive parts of the body. In multi-active cultures, where power distance between people is greater, speakers will maintain close eyecontact all the time they deliver their message. This is particularly noticeablein Spain, Greece and Arab countries. Such close eye contact (Finns and Japanese would call it ‘staring’) implies dominance and reinforces one’s position and message. In Japan this is considered improper and rude. Japanese avoid eye

contact 90 percent of the time, looking at a speaker’s neck while listening and at their own feet or knees when they speak themselves.

In great power-distance societies, it is easy for us to detect what the ‘peckingorder’ is by observing people’s eye behaviour. Lower ranking people tend to lookat superiors, who ignore them unless they are in direct conversation with them. When anyone cracks a joke or says something controversial, all the subordinates’eyes will switch immediately to the chief personage to assess his reaction. Thisis less evident in northern countries where head-and-eye switching would be muchmore restrained, sometimes avoided.

Mediterranean people use their eyes in many different ways for effect. These include glaring (to show anger), glistening eyes (to show sincerity), winking (very common in Spain and France to imply conspiracy) and the eyelash flutter (used by women to reinforce persuasion). Eyebrows are also raised and lowered much more frequently than in northern societies, again to show surprise, disapproval, aggression, fearlessness etc.

Weeping is another form of body language little used by monochronic cultures forcommunication and almost unknown in Finland, Korea and Japan. Weeping is seen frequently in Latin and Arabian societies, even occasionally used in moments of drama in the UK (Winston Churchill was a memorable public weeper). Biologists tell us that weeping is good for us, not only to relieve tension, but tears apparently release excess chemicals from the body and even contain benign bacteria which protect the eye from infections. The Latins know more than we do!

Nose and ears

French and Hispanic people indulge in the nose twitch, snort or sniff, to express alertness, disapproval or disdain respectively. Portuguese tug their earlobes to indicate tasty food, though this gesture has sexual connotations in Italy. In Spain the same action means someone is not paying for their drinks andin Malta it signifies an informer. It is best to recognise these signs, but not embark on the risky venture of attempting to imitate them.

Mouth

It is said that the mouth is one of the busiest parts of the human body, except in Finland where it is hardly used (except for eating and drinking). This is, ofcourse, not strictly true, but most societies convey a variety of expressive moods by the way they cast their lips. De Gaulle, Fernandel, Saddam Hussein, Marilyn Monroe and James Stewart made the mouth work overtime to reinforce theirmessage or appeal. The tight-lipped Finn shrinks away from such communicative indulgences as the mouth shrug (French), the pout (Italian), the broad, trust-inviting smile of the American, or even the fixed polite smile of the Oriental. Kissing one’s fingertips to indicate praise (Latin) or blowing at one’s finger-tip (Saudi Arabian) to request silence are gestures alien to the Nordic and Asian cultures.

Shoulders

Non-demonstrative people living in another culture for a prolonged period can progress to an understanding of demonstrative gestures. Multi-active peoples have very mobile shoulders, normally kept still in northern societies. The Gallic shoulder shrug is well known from our observations of Maurice Chevalier, Jean Gabin and Yves Montand. Latins keep their shoulders back and down when tranquil and observant, push them up and forward when alarmed, anxious or hostile.

Arms

Arms are used little by Nordics during conversation. In Italy, Spain and South America they are an indispensable element in one’s communicative weaponry. Frequent gesticulating with the arms is one of the features which northerners find hardest to tolerate or imitate. It is inherently associated in the northernmind with insincerity, overdramatisation, therefore unreliability. As far as touching is concerned, however, the arm is the most neutral of body zones and even Englishmen will take guests by the elbow to guide them through doorways or indulge in the occasional arm pat to deserving subordinates or approaching friends.

Hands

The hands are among the most expressive parts of the body. Kant called them ‘thevisible parts of the brain’. Italians watching Finnish hands may be forgiven forthinking that Finns have sluggish brains. It is undeniable that northern peoplesuse their hands less expressively than Latins or Arabs, who recognize them as a brilliant piece of biological engineering. There are so many signals given by the use of the hands that we cannot consider them all here. Among the most common are ‘thumbs up’, used in many cultures but so ubiquitous in Brazil they drive you mad with it, hands clasped behind back to emphasize a superior standing (see Prince Philip and various other Royals and company presidents). The akimbo posture (hands on hips) denotes rejection or defiance, especially in Mediterranean cultures.

Legs

As we move even further down the body, less evident but equally significant factors come into play. Northerners participate in leg-language like everybody else. As no speech is required, it inflicts no strain on them. In general the ‘legs together’ position signifies basically defensiveness, against a backgroundof formality, politeness or subordination. Most people have their legs together when applying for a job. It indicates correctness of attitude. This position is quite common for Anglo-Saxons at first meetings, but changes to ‘legs crossed’ as discussions become more informal. Formal negotiators such as Germans or Japanese can go through several meetings maintaining the ‘leg together’ position. There are at least half a dozen different ways of crossing your legs, the most formal being crossing ankles only, the average being crossing the knees, and the most relaxed and informal being the ankle-on-knee cross so commonin North America.

When it comes to walking, the English and Nordics walk in a fairly neutral manner, avoiding the Latin bounce, the American swagger and the German march. Itis more of a brisk plod, especially brisk in winter when the Spanish dawdle would lead to possible frostbite.

Feet

It is said that the feet are the most honest part of the body: although we are self-conscious about our speech or eye and hand movements, we actually forget what our feet are doing most of the time. The honest Nordics, therefore, send out as many signals with their feet as the Latins do. Foot messages include tapping on the floor (boredom), flapping up and down (want to escape), heel lifting (desperate to escape), multi-kicking from a knees-crossed position (desire to kick the other speaker). Nordic reticence sometimes reduces the kicking action to wiggling of the toes up and down inside shoes, but the desire is the same. Foot stamping in anger is common in Italy and other Latin countries, but virtually unused north of Paris.

Body language in business

Some forms of sales training involve a close study of body language, especially in those societies where it is demonstrative. Italian salespeople, for instance,are told to pay great attention to the way their ‘customers’ sit during a meeting. If they are leaning forward on the edge of their chair they are interested in the discussion or proposal. If they sit right back, they are bored, or confident to wait for things to turn their way. Buttoned jackets, and arms or legs tightly crossed, betray defensiveness and withdrawal. A salespersonshould not try to close his sale in such a situation. Neither should a proposal be made to someone who is tapping with feet or fingers – they should be asked tospeak. Italian salespeople are taught to sit as close as they can to their customers when attempting to close the deal. Latin people tend to buy more from a person sitting close to them than from a distance.

Solutions

Cross-cultural factors will continue to influence international negotiation and there is no general panacea of strategies which ensure quick understanding. The only possible solutions lie in a close analysis of the likely problems. These will vary in the case of each negotiation, therefore the combination of strategies required to facilitate the discussions will be specific on each occasion. Before the first meeting is entered into, the following questions should be answered:

1. What is the intended purpose of the meeting? (Preliminary, factfinding, actual negotiation, social?)

2. Which is the best venue? 3. Who will attend? (Level, number, technicians?) 4. How long will it last? (Hours, days, weeks?) 5. Are the physical arrangements suitable? (Room size, seating, temperature,

equipment, transport, accommodation for visitors?)

6. What entertainment arrangements are appropriate? (Meals, excursions, theatre?)

7. How much protocol does the other side expect? (Formality, dress, agendas?)

8. Which debating style are they likely to adopt? (Deductive, inductive, free-wheeling, aggressive, courteous?)

9. Who on their side is the decision maker? (One person, several, or only consensus?)

10. How much flexibility can be expected during negotiation? (Give and take, moderation, fixed positions?)

11. How sensitive is the other side? (National, personal?) 12. How much posturing and body language can be expected? (Facial

expressions, impassivity, gestures, emotion?) 13. What are the likely priorities of the other side? (Profit, long-term

relationship, victory, harmony?) 14. How wide is the cultural gap between the two sides? (Logic, religion,

political, emotional?) 15. How acceptable are their ethics to us? (Observance of contracts,

timescale?) 16. Will there be a language problem? (Common language, interpreters?) 17. What mechanisms exist for breaking deadlock or smoothing over

difficulties? 18. To what extent may such factors as humour, sarcasm, wit, wisecracking and

impatience be allowed to spice the proceedings?

Good answers to the questions in the above ‘checklist’ will help to clear the decks for a meeting which will have a reasonable chance of a smooth passage. It is to be hoped that the other side has made an attempt to clarify the same issues. French people often hold a preliminary meeting to do just this – to establish the framework and background for discussion. This is very sensible, although some regard the French as being nitpicking in this respect.

Chapter 9: Manners (and Mannerisms)

“Manners maketh man”. Cross-culturally speaking, they can unmaketh him as well.In a really free world we should be able to wipe our plates with bread like the French, hawk and spit like the Mongolians, belch like the Fijians, drink ourselves legless like the Finns, voice unpopular opinions like the Germans, turn up late like the Spaniards, snub people like the English and eat with our left hand in Saudi Arabia. In theory, there isno such thing as international etiquette,but certain mannerisms are acceptable only at home!

In our own culture we are provided with a code for behaviour. There is right andwrong, proper and improper, respectable and disreputable. The code, taught by parents and teachers and confirmed by peers and contemporaries, covers not only basic values and beliefs, but correctness of comportment and attitudes in varying circumstances. The rules may or may not be enshrined in law, but in one’s own society they may not be broken without censure or with impunity. Unless we are eccentric, we conform. At home we know how to behave at table, at cocktail parties, in restaurants, at meetings and at a variety of social occasions. We are also fully cognisant of the particular taboos which our own culture imposes.

Comfortable code

The well-brought-up citizen not only feels comfortable with the code, but in themain actually welcomes it. It is a familiar regulatory mechanism which stops people making fools of themselves or being considered outsiders. All societies have outsiders, of course, but most of us prefer to be insiders. Generally speaking, it is less hassle. A problem arises, however, when we go abroad. As a representative of our country, we would like to show what good manners we have. Unfortunately, what are good manners in one country can be eccentricity or downright bad manners in another, as anyone who blows their nose in a beautiful white handkerchief in front of a Japanese will soon find out. International travellers face a dilemma. Should they maintain their impeccable behaviour from back home and risk inevitable faux pas, or should they imitate the people they visit and risk ridicule?

Unfortunately, there is no such thing as international etiquette. When someone begins to formulate an international code for correct behaviour, they instinctively look to their own norms as being the logical, acceptable, inoffensive ones. So we are back where we started.

Sincerity helps

Sincerity takes us a long way. Europeans, Asians and Americans meet regularly onbusiness and at conferences and manage to avoid giving offence, by and large, bybeing their honest selves. The Americans are genial and sincere, the French gallant and sincere, the British reasonable and sincere, Germans and Russians unsmiling but sincere, Finns clumsy but sincere, the Japanese smiling and sincere (although unfortunately Europeans and Americans think their smiles are insincere). The odd dinner or business meeting we carry off well in the euphoriagenerated by the host’s generosity and the guest’s appreciative attentiveness. At such initial gatherings faux pas are ignored, even considered charming. The

question of correct comportment in a foreign environment only becomes pressing when the exposure is lengthened. A protracted host–guest relationship or, even more, an ongoing business relationship, places greater strain on the tolerance and patience thresholds of both parties as time goes by. The American habit of sprawling in chairs at business conferences may seem friendly and disarming to the British, but would place Germans in a constant state of unease either in their own offices or the Americans’. Mexican unpunctuality, forgiven once, becomes unacceptable if endemic. Latin loquacity, engaging at first for Finns and Swedes, soon drives them up the wall. There is a limit to the number of cupsof green tea a European can accept in a day.

Learning the ropes

Once the honeymoon of first acquaintance is over, international travellers/businesspeople seek a behaviour pattern which will serve them adequately wherever they find themselves. Some things come easily – handshaking or bowing, ladies first or ladies last, chocolates or flowers for the hostess. Other features give a little more trouble – the use of chopsticks, the texture of local smalltalk, the concept of time in a particular country. The deeper we delve, the harder it gets. What are the important social norms? What are the core beliefs? The real sensitivities? Above all, what is strictly taboo?

They don’t always tell you. Everyone knows that it is inadvisable to send the firm’s best-known drinker to represent you in Saudi Arabia and that Arabs do noteat pork, but is one aware that it is bad manners to point one’s foot at an Arabin conversation or ask about the health of any of his womenfolk? Did you know that sending yellow flowers to a woman signifies, in some European countries, that she has been unfaithful to her husband?

Let us take a look at the areas where major gaffes may cause offence and minor ones some embarrassment – dining table etiquette, cocktail parties, restaurant behaviour, meetings, social norms and finally taboos.

Table manners

An old Malagasy proverb says: ‘Men are like the lip of a cooking-pot, which forms just one circle.’ By this one might understand that the basic human need for food serves as a uniting factor, at least temporarily. This is more than likely, though what people do around that cooking pot can differ to a startling degree. To begin with, eating is actually more important to some of us than to others. We often hear it said that Americans eat to live and that the French live to eat. This may be an oversimplification, but it is a fact that many Americans have a Coke and burger in the office, the English a sandwich or pub lunch, and Scandinavians are in and out of the company canteen in 30 minutes flat. In contrast, the French attach social importance to the midday meal, whichmay last from one to two hours. Spaniards, Portuguese and Greeks rarely rush it either.

Eating hours

People also eat at very different times. Nordics, who begin work early, have very little breakfast, but are starving by noon. Finns have lunch at 11.30, while 12.30–1 is a European norm. Spaniards rarely get the meal on the table before 2 and used to carry on until 4 or 5pm, although their membership of the European Union is causing the younger executives at least to get back to the office by 3 and cut out the siesta. An even greater variety of eating times is apparent for the evening meal. Finns are starving again around four and they, along with the Japanese ‘salarymen’ and the British working classes, precede therest of us to the table around 5.30 pm. Canada and New Zealand, too, take an early ‘supper’. The Australians hang on a bit longer, the Americans and most northern and central Europeans sit down around 7.30, while the Spaniards and Portuguese, still digesting lunch, do not want to see food again till 9 or 10pm,often leaving it much later than that. A dinner invitation in Spain or Portugal for 8 or 8.30 means that the main course is likely to be served between 10 and 11. Chinese and other Asians start the evening meal at 8–9pm, although Indonesians have an aversion to dining early.

When invited to dinner at someone’s home, most nationalities turn up at the appointed time – it is quite a different matter for cocktail parties. Unpunctuality, is, however, no disgrace in Spain, when an invitation for 9pm means 9.30 in any case.

Protocol

Seating arrangements, when round a table, are often casual and left to the last minute in many countries, although Asians invariably seat the most important guest facing the door. In Europe, the French and Germans are more careful about placing people, bearing in mind their various interests and status. It is the Swedes, however, who behave most formally at table. Swedish hospitality notwithstanding, dinner in Stockholm can be quite an ordeal. The chief guest escorts the hostess to the table and sits on her left, unlike most countries, which prefer the right. Schnapps are served at the beginning and the guest of honour must initiate the toasting. The first toast will be to the hostess and a short speech is required. One raises one’s glass, proclaims the toastee’s name, looks into his or her eyes, utters the magic word ‘ skâl’, knocks back a fair amount of the firewater, holds one’s glass up again for another two-second eye contact, then places the glass firmly on the table. As the dinner proceeds each person round the table must skâl and be skâled in this way. If anyone is forgottenby anyone else, it might not be forgiven easily. The biggest scandal, of course,is if you skâl the hostess if more than eight people are present at the table. A Swedish couple from the small town of Gävle told me that some years earlier an important French visitor had done this to his hostess and that the people of Gävle had talked about little else since. Swedes are great after-dinner speakersand at large dinners (50 guests or more) lengthy toasts and speeches can take upto two hours. Guests are expected to speak in English, French or German if they can’t manage Swedish. You can be either humorous or pompous – both styles seem to go down well.

Bon appétit

In most countries the signal to start eating is given by the host or hostess. InFrance it is ‘ bon appétit’, in Germany ‘ guten Appetit’, in Italy ‘ buon appetito’ and so on. Anglo-Saxons have no equivalent for this formula and often mutter ‘right’or say nothing. This is very disconcerting for French people who invariably comeout with ‘good appetite’. One Frenchman, on being told one says nothing, waved his spoon hesitatingly over his soup for a moment, then grunted ‘ Eh bien, alors – bonne nuit’ before tucking in. The Japanese formula is ‘ itadakimasu’ ( I am receiving), although they will probably have preceded this by saying something nice about the appearance of the food. Japanese attach as much importance to theaesthetic arrangement or layout of the food as its actual taste, so in Japan youshould not attack a dish without complimenting your hostess on her artistry.

How many courses

Anglo-Saxons are used to eating three courses – starters, main dish and dessert.In other societies, the number of dishes may be far more numerous. The French, for instance, serve many side dishes such as lettuce, haricot verts, endives, asparagus and artichoke separately, whereas the British tend to put as much as they can on one plate. In Asia one can lose count of the number of dishes, although in China they will be placed on the table five or six at a time. The Japanese, when seeking to impress, can serve a very large number of dishes one after the other, each containing a small, easily digestible amount. Once hosted by a Japanese college principal, I counted 19 consecutive courses, all paper-thin slices of fish or meat (17 fish to 2 meat) and arranged concentrically overlapping to cover the whole plate. My mother, who was 92 at the time, was worried that the very multiplicity of cuts would be too much for her ageing stomach, but the principal, who was 90 himself, assured her she would be able todigest the lot without any problem. This proved to be true, until they served upthe twentieth dish (strawberries) which promptly sent off both nonagenarians to the rest room to be sick.

Customs

According to the customs of the country, meals may be taken sitting or at table,on the floor or on the ground. In Japan it is common to sit on tatami matting, inArabian countries on carpets, linoleum or polished surfaces, in Tonga, Fiji and most of Polynesia on grass or firm soil. When not at table, Europeans and Americans have to decide how to arrange their legs, not being able in general tosquat for long in the eastern manner. In Japanese and Arabian households shoes are generally removed and left in the hall. Chopsticks are used in several Asiancountries, particularly Japan and China, and Caucasians are advised to acquire enough aptitude with them at least to get morsels into the mouth. Clumsiness is normally overlooked, although goodness knows what they really think of us. We get our own back when some of them use knives and forks. In Arab countries one usually eats with the hand – the right one – as the left is reserved for ‘dirty’tasks, whatever those may be. It is not easy to eat a huge leg of lamb oozing gravy with one hand. You need to roll up the right sleeve before you start – thegravy will run down your forearm in any case. Most homes have an adjoining washroom to which you repair periodically to wash the gravy off. The choicest cuts are handed to you by the host – it is bad manners to take a piece yourself

or to decline the piece he offers you, too big though it may be. Rice will be squeezed into balls by the host (by hand) and given to you directly. You may squeeze further balls of rice yourself but do not touch the lamb on the serving plate. Don’t touch any food with your left hand unless you have informed the host at the beginning of the meal that you are left-handed, in which case remember that your right hand is the dirty one. In Malagasy families the leg of lamb is exclusively the father’s portion.

Starters

Starters vary in different countries. Japanese sashimi (raw fish) is arguably among the most delicious (and expensive), raw or smoked fish also being popular in Scandinavian countries. French hors d’oeuvre often consist of crudités. Italians favour antipasta (often parma ham). Americans shrimp cocktails and (recently) potato skins, Greeks tsatsiki and taramasalata and Turks yoghurt. Spaniards like to have a tapas session before dinner. Americans whet their appetite with pre-dinnerguacamole and cheese dips. In virtually all countries, however, soups are a greatstand-by and often a particular soup is closely associated with the national cuisine. In Spain, it is gazpacho, in France soupe á l’oignon and bouillabaisse, in Austro-Hungary goulasch, in Russia bortsch, in China shark’s fin or bird’s nest, in Nordic countries pea, in Italy minestrone, in Germany oxtail and in the UnitedStates clam chowder. All of these soups, whether hot or cold, are normally ordered as starters. In Japan misoshiro soup is eaten at or near the end of the meal, as is the sopa alentejana in the Portuguese province of Alentejo. In the latter case, the peasants used to fill up on soup, as main courses were often inadequate in this once poverty-stricken region.

Soups are normally eaten with metal soup spoons; in China they are ceramic and aspecial shape. In Japan and Korea one lifts the soup bowl to the mouth and drinks the contents accompanied by legitimate slurping. In these countries rice is also slurped up from close quarters with chopsticks. It is a noisy process, but perfectly good manners. Most Europeans tip their soup dish towards themselves when spooning out the last dregs – in England it is considered good manners to tilt the soup plate away from oneself in the closing stages.

Main courses

Main courses around the world are too numerous and varied to describe here. Strange though many foods may seem, most dishes are edible and even tasty when one has familiarised oneself with them. Sashimi, which puts a lot of Anglo-Saxonsoff at first tasting, is one of the world’s great dishes, priceless for its subtlety and delicate flavour. One can hardly say the same of Korean kimshi, someVietnamese fish and eel dishes and various offerings in the small villages alongthe Yangtse. Fijian kava tastes (and looks) like mud to the uninitiated and I would not recommend the Pyongyang sake with a snake in the bottle even to people who owe me money. Finnish kalakukko and mämmi take a little negotiating, but are good in the end, although calamares en su tinta (squid in its own ink) has few supporters outside the Hispanic world.

International travellers should eat as much as they can, to avoid offending their hosts. Americans and particularly English are well placed to get their revenge if they want to by offering their own cooking to visitors on Anglo-Saxon

shores. In general, although one offers one’s best and tries to follow the good manners of the host country. It is as well to know that an Australian country breakfast may consist of a huge beefsteak with two fried eggs on top and that inMadagascar you should not hand an egg directly to another person, but place it on the floor first. In Tonga and Hawaii you bury meat for a while before you eatit, in Japan you can eat whalemeat and live lobsters (they watch you eat them) and in Finland I have enjoyed succulent steaks of bear, beaver, elk and reindeer. Portuguese mix pork and clams and cook cod in 53 different ways. Malagasy slaughter zebu cattle on sacrificial occasions and put a little blood on guests’ heads to integrate them into the festivities.

Unusual table manners are not limited to Third World or out-of- the way countries. The English take the use of a knife and fork for granted, but Americans do not keep a knife in their hand while eating. First they cut the meat with their knife in the right hand and fork in the left. Then they put the knife down by the side of the plate, transfer the fork from left hand to right, slightly dip the left shoulder and start eating in what to the British looks like a lopsided manner. The British habit of eating vegetables (even peas) with the fork upside down is scorned by the Americans and Europeans. The French – great eaters – use bread as an extra utensil, pushing anything else around with it and eventually employing a chunk to wipe the plate clean and save the dish washers extra effort. It might not look very civilized around Cadogan Square, but what are the French to think of a society which eats its cheese after dessert?

Japanese, westernised in many things, do not usually eat dessert. Neither are they very fond of cheese or lamb, so remember that when you invite them home. InJapan the main things to remember are to say how nice everything looks, keep eating a little of each dish at a time without finishing any off, and lifting upyour glass when someone offers to fill it. You in turn should fill up their glass, and any others you can reach. When you have drunk enough sake, turn your sake cup upside down. In China you should never take the last morsel from a serving plate and never at any time during the meal say you are hungry.

In the Finnish countryside they serve new potatoes with their skins on at the table and you are supposed to peel them before eating. Finns can do this with a knife and fork without touching the hot potatoes, which burn the fingers of the uninitiated. In England we are told not to put our elbows on the dining table and to sit with our hands in our lap when we have finished. Mexicans are told toput both hands on the table during and after the meal; it is taboo to hide them under the table. In Fiji and some other countries it is polite (even mandatory) to belch or burp after completing your meal, to show appreciation. Don’t do it in the wrong country. (Swedish hostesses would faint.) In China you know when the meal is ended, for the host stands up and thanks you for coming.

In the United States many Britons have been shocked when on their first helping of the main course, the host asks them, ‘Did you get enough?’ The use of the past definite (instead of the present perfect, ‘Have you had enough?’) implies to the Brit that there is no more to be had. In fact the American is offering more, so you may legitimately reply, ‘I sure didn’t!’

Cocktail parties

There are no fixed rules for cocktail parties, which in themselves are often interesting exercises in cross-cultural behaviour. No one is quite sure what is the best time to arrive, the best time to leave and how long the party should last. Then there is the question of what one drinks, how much one eats and what one talks about. Having a few friends at home for drinks in one’s own country isa relatively simple affair. Larger parties with a multinational guest list require considerably more thought.

My wife and I spent five years on the Tokyo cocktail circuit – a very lively one– where attendances averaged well over 50 and involved a minimum of a dozen different nationalities, often more. They were usually held in the homes of business executives; embassies entertained on a somewhat larger scale on National Days and other occasions.

We counted among our circle of friends in Tokyo acquaintances from 20-odd countries as well as a liberal sprinkling of Japanese. Under such circumstances there is no such thing as a cocktail party of short duration. How does one schedule an event where the Japanese will turn up 10 minutes early, the Germans and the Swiss on time, the American and British a bit late, the French after them and the Brazilians an hour after the party was due to end? One could put something like 6.30–8.30 on the invitation card, but nobody took any notice of it. Few parties ended before 11 or 12 unless one ran out of liquor.

Another basic problem was how many people to invite. Even among the British and American communities, with which we were chiefly involved, it was likely that there would be half a dozen cocktail parties held every night. Consequently one counted on an acceptance rate of one in three and invited 150. If you were unlucky enough to hit a day when for some reason there were few parties, you might get landed with 100 guests or more – this happened to us on more than one occasion. The problem was further complicated by the fact that Japanese tend notto answer the RSVP – but they usually turn up. Furthermore most Japanese executives do not bring their wives, although some do! One just had to play the averages.

Small talk

Some nationalities thrive in the cocktail party atmosphere and others do not. Russians, for instance, like drinking sitting down, especially as they devote a considerable amount of time to it. Chinese, too – used to mammoth dinners seatedat banquet tables – are less at ease shuffling round from group to group of noisy strangers. Americans, with their mobile nature and easy social manners, excel in such a kaleidoscopic ambience. Australians and Canadians, used to formulating strategies for meeting new arrivals, have no difficulty in integrating themselves with circle after circle and conversation always comes easily to them. The British and the French – past masters at smalltalk – are also practised cocktailers. Yet the very issue of smalltalk poses a substantial problem for some other nationalities. Germans simply do not believe in it, Finnsand Japanese are frightened to death by it, Swedes usually dry up after about 10minutes. Russians and Germans – more than willing to have long, soul-searching conversations with close friends – see no point in trotting out trivialities andplatitudes for two hours to a complete stranger. Swedes – fluent in English and happy to talk about their job and technical matters – find little to say in

addition and often admit they become boring after the first half-hour. Finns, unused to chatter, actually buy booklets on smalltalk (one recently published inHelsinki was a great success).

The Japanese – masters of polite trivia among themselves – are never quite sure what to talk about with foreigners. At Japanese business meetings, there is the obligatory 15-minute session of platitudes and harmonising, after which one can get down to business. At cocktail parties they run up against a void.

Not so the South Americans. Although relatively deficient in foreign language skills, they maintain an incessant patter which often saves the day for Japaneseor Scandinavian partners. Mexicans, Peruvians, Argentinians never run out of steam. I once attended an all Latin-American cocktail party in Caracas which began at 7 and finished at 1am. There were 300 people present, very little to eat, nobody stopped talking except to draw breath for six hours flat; I do not remember a single word that was said.

Personal space

At cocktail parties it is sometimes difficult to maintain the integrity of one’s‘space bubble’, especially when there are a few Latins around. A common sight inTokyo was a Brazilian or Colombian businessman towering over a diminutive Japanese, gripping his upper arm to show confidence, while the Japanese would back-pedal, striving to keep his glass and himself on an even keel. The Latin inhis eagerness pushes ever forward into personal space; in 20 minutes they traverse the length of the room, the Japanese ending up with his back against a wall. The South American notices nothing of the other’s discomfort; the latter politely asks the whereabouts of the toilet and flees, drink in hand.

What to drink

For a big party it is necessary to stock a large variety of drinks, although drinking habits are now far more standard than they used to be. This is largely due to the ascendancy of whisky and gin and tonic as international beverages. The French, for instance, who formerly drank Scotch only after dinner, now regard it as an apéritif and import huge quantities of it. English frequently drink it with soda, Americans often on the rocks, Scots neat and Japanese with water (‘ mizuwari’). Gin and tonic sells well on hot evenings and is a favourite with ladies of most nationalities, as is Campari soda or Campari and orange. Germans like white wine, Spaniards and Portuguese red, Russians vodka, Scandinavians anything with a label on it.

When Americans ask for a martini they mean 99 percent dry gin with just a drop of vermouth in it, often with an olive or cocktail onion for good looks. With the olive it is called a Martini, with an onion a Gibson. When Americans ask forwhisky, they mean Bourbon; if they want whisky they say Scotch. When you’ve worked this out, they ask for whisky sour, so you don’t know what to put in it. When you think you’re well stocked they will request things like Manhattans, Screwdrivers and White Ladies and see if you know the difference between Tom andJohn Collins. The British get their revenge at American parties by ringing the changes on Pimms No. 1 Cup, Pimms No. 2 Cup and Pimms No. 3 Cup.

Embassies

Embassy cocktail parties can be long and boring affairs where most of the diplomats talk to each other for hours and leave businesspeople and other lessermortals to fend for themselves. On these occasions it is advisable to arrive andleave early, as the food usually runs out after the first hour. Japanese embassies provide the best food, the Germans and Americans at least serve enough. Paradoxically the embassies most oriented towards businesspeople were the Soviet, Chinese and Eastern bloc countries, as their attachés were actually the people who developed commercial outlets for command economies.

Leaving

There is no foolproof way of calling an end to cocktail festivities. American businesspeople can get so involved in discussing deals over drinks that they sometimes forget they are at a party, never mind the time. Latins can talk for ever. British, Germans, Dutch, Swiss and Japanese are relatively disciplined cocktail party leavers, but the same cannot be said for Danes, Scots, Slavs and Irish. In Asia it is the duty of a host to end a party, in Europe and the USA itusually depends on the guest. An old English gentleman I knew used to go to the front door at midnight, open it and stand quietly by it. After 10 minutes or so everybody used to get the idea and leave. A Swedish party-giver told me recentlythat there was only one way to make Finns and Russians leave. Simply announce there was plenty of food left, but nothing more to drink.

Restaurants

Restaurant entertaining plays an important part in the life of the internationalbusinessperson. It is not unusual for travelling executives to find themselves being hosted four or five times a week when on a foreign trip. They will be required to reciprocate when their partners or associates return the visit. The choice between entertaining at home or at a restaurant depends on varying circumstances. American, British, Canadian, Australian and New Zealand hostessesare quick to open their homes to foreign visitors. Spaniards, Portuguese and other Latins are less inclined to do so, until firm personal relationships have been established. Dining out is still rather good value for money in Madrid, Lisbon, Athens and Istanbul, whereas astronomical prices in Oslo, Stockholm and Helsinki make Nordics think twice about indulging in this once popular and time honoured practice.

A deductible expense

Restaurants tend to be packed in the evenings in cities renowned for their gastronomic excellence – Brussels, Paris, Lyon, San Francisco, New York, New Orleans, Vienna, Florence, Bologna and some other big Italian cities are good examples – while nowhere is dining out more popular than in Japan, where restaurant bills are fully deductible items for tax purposes and where companiesor fiscal authorities rarely question the validity of entertaining expenses which do not exceed 4 percent of the firm’s turnover. With companies like Mitsubishi, Mitsui and Hitachi footing the bill, that entails substantial activity in eating and drinking! Japanese and other Orientals, furthermore,

consider that the relative smallness of their homes in comparison to, say, thoseof their American or European counterparts, prohibits them from being able to entertain at home in the style the occasion calls for.

Ethnic cuisines

When being entertained by a foreign colleague in a restaurant, one need not be so fully attuned to the table manners of the country, since often the establishment will be chosen on account of its ethnic cuisine, which could be from anywhere. Although Parisians tend to invite you to French restaurants, Germans, Dutch or Swiss executives like to offer you a choice of cooking, while the London executive would have some difficulty in finding an ‘English’ restaurant once Simpson’s and Wheeler’s have been used. Americans, too, prefer European or Asiatic cuisine; Japanese executives usually offer you the western or Japanese alternatives.

It is as well to remember that some national cuisines are best represented outside their country of origin. This is certainly true of Russian food, for which Russian restaurants in Paris, Helsinki and Stockholm set standards nearly impossible to reach at establishments within the former Soviet Union. The best Hungarian meals I have ever eaten have been in Vienna, while nothing I ate during my month-long odyssey down the Yangtse even vaguely approached the excellence of Chinese dishes available in London or Hong Kong. London and England in general have unbelievably good Indian restaurants, while the 80-odd Japanese eating places in the British capital serve an expensive but delicious fare which can be bettered only with difficulty in Japan itself. With 50,000 Japanese permanent residents in London, it is not so surprising that such standards have been reached.

Most astonishing of all, Tokyo arguably possesses the best French restaurants inthe world! The bounding strength of the yen, plus the traditional Japanese admiration for various aspects of western excellence, has motivated several richJapanese entrepreneurs (in some cases well-known companies) to set up top Frenchrestaurants in Tokyo such as Maxim’s and Tour d’Argent, housed in sumptuous premises and staffed by the very best chefs and maîtres d’hôtel that Japanese money can buy. These establishments – frequented nightly by expense-account senior executives – have achieved levels of cuisine, service and ambience which could be said to equal or surpass those of competitors anywhere. The variety of disheson offer cover most of the regional specialities of France. The quality of Kobe beef and Japanese seafood ensure that no ingredients are lacking. Wine is flown in from France – wine lists can include 200–300 of the best vintages from Burgundy and Bordeaux – and it is not unusual for ‘good’ bottles to cost $3000–$5000 a time. One shudders when envisaging what the total bill might be when half a dozen Japanese executives who know their wines (and they really do) have a good evening out.

Major league and minor league

Somewhat removed from this fast-lane living are middle managers anxious to impress their foreign customers on a night out on the limited budget that their enterprise permits. It is often a good idea to ask the guests which ethnic type of meal they prefer. There are, surprisingly, a very small number of cuisines

which can be said to be truly famous internationally. These are French, Italian,Chinese and Indian. Such restaurants can be found in good numbers in almost every city in the world. Most businesspeople automatically opt for one of these styles. There is a growing ‘second division league’ of ethnic cuisines which aregradually establishing their reputation on an international basis. These includeGreek, Mexican, Russian, Spanish, Korean, Indonesian, Thai and now Japanese restaurants, which are bobbing up more frequently in large cities, although theydo not rival the ‘big four’ in general distribution. Other types of cooking suchas Portuguese, German, Hungarian, Scandinavian, Vietnamese and Lebanese can be very tasty, especially when a native gourmand can guide you as to what to select. One rarely talks about Anglo-Saxon cuisine (American, British, Australian, New Zealand, Canadian), unless one is addicted to pig-meat for breakfast. Dutch, Finnish, Baltic, African, South American and Central and Eastern European restaurants are rarely found in other countries, although Argentinian steakhouses are beginning to gain international acceptance.

Varying ambiences

Given such a variety of eating houses, dining out offers a multiplicity of experiences. In general one adapts to the ambience. Restaurants in Spain, South America, China, Hong Kong and Indonesia are usually convivial and noisy. In England, the USA and Japan the atmosphere is more conducive to quiet socialisingor business discussion, while in Sweden and Finland guests are asked to leave ifthey are too boisterous or unduly inebriated. Moderate intoxication is readily permitted in restaurants in Germany, Austria, Denmark and Greece, while in Japanit is considered good form for the boss to drink more than his subordinates, then perhaps leave early.

In Russia and Bavaria it is not uncommon for strangers to join you at table, particularly where the restaurant is rather large or has certain beer hall characteristics. In Munich people occasionally bring their dogs and ask if they may sit them under the table.

Lunch or dinner in France assumes much more importance than in some other countries and the choice of dishes, and especially wine, will be attended with considerable fuss and ceremony. Wine has in the last 20 years become much more popular with Anglo-Saxons and Scandinavians and it is as well that you possess areasonable knowledge of wines from at least France, Spain and Italy if you are aregular host. It is a far cry from the days when Swedes, Norwegians and Finns were not allowed to drink in restaurants unless they ordered another dish with each glass. In the Katarina restaurant in Stockholm, they used to have the specialrätten (the special dish) which one ordered with each additional cognac. It was cheap (to ease the strain on the diner’s pocket) and was in fact pea soup. One ordered this time and time again with the accompanying brandy, the waiter ceremoniously placing the soup plate in front of the customer. One sniffed momentarily at the soup, waved one’s spoon once over it, then let the waiter remove it. You didn’t actually eat nine soups, but they would be on the bill.

Japanese modesty

When taking Japanese out to a restaurant one should exercise care that they are not allowed to choose freely from the menu. The reason for this is that the

senior Japanese in the group will choose the cheapest thing listed and his colleagues will have to follow suit. In Japan it is good manners, when given thechoice of dish, to show that you are not being extravagant with your host’s money. This is certainly very meritorious behaviour on the part of the Japanese,but it may not be what you want. Very probably, for business reasons, you wish them to have a costly meal and wind up in your debt. The correct course of action is not to let them choose, but to recommend strongly the most expensive dish on the menu. The ch‚teaubriand is what I am having, Mr Suzuki, it’s the best dish in this restaurant and I insist you accompany me. He (and his subordinates)will be delighted to concur. It is not a cheap way of doing business, but it will almost certainly get you orders. Suzuki would have no hesitation in treating you with equal generosity in Japan.

Paying the bill

When it comes to paying the bill, it is usual to pay on one’s home ground, as the foreign guests will already be in the hole after paying for their air tickets. Junior managers often agree to ‘go Dutch’ if they meet frequently. On no circumstances should one propose this arrangement with Asians. In most Asian countries, especially in Japan and China, the question of who pays the bill is quite clear before the evening commences. It is permissible for you to invite them out in their own country, though normally only after they have entertained you at least once. Guests are given the seat facing the door and from this position you should never try to pay. When you have seen the amount on the bill in many Japanese restaurants, it is unlikely you will be eager to pay in any case.

Tipping

Tipping can be such a minefield of error and embarrassment that it is better to ask foreign nationals on their ground what is the accepted custom. Suffice it tosay that tips are awaited more anxiously by some waiters than others. The safestsituation is when service is included in the bill, although it is not unusual for Latin waiters to expect an additional sum in recognition of smart attention.There is no danger of having to pay for extra quick service in Eastern Europe. Elsewhere, alacrity of service varies enormously according to the establishment,but is noticeably efficient in Portugal, Turkey, Australia, the USA and Switzerland. In most Asian countries the standard of service is excellent, whether you tip or not. In Japan and China tipping is not expected. In France waiters are capable of throwing the tip on the floor if they consider it insufficient.

Home in safety

Once the bill is paid, the waiter rewarded and the appropriate belching (if required) executed, then one is free to leave. In Asia the host generally will include your transport home as part of the evening’s obligations. This is not socommon in the West, but care should be taken to ensure safe delivery of the guest in such cities as Naples, St Petersburg, Rio, Los Angeles and New York, not to mention spots such as Bogot· and Antananarivo, where not even locals venture out on the street after dark.

Manners in society

In addition to the accepted practices for wining and dining, most cultures have an intricate set of rules governing general social behaviour. These directives are referred to as ‘good manners’ and are designed to help avoid the embarrassing pitfalls which lie in wait for the uninitiated.

Fortunately, manners are not what they used to be. In England they reached theirpeak of stringency in the days of Queen Victoria, when gentlemen wore hats just so they could take them off when meeting ladies on the street and inexperienced diners almost starved to death at table for fear of exhibiting inadequate etiquette. Alice Thomas Ellis recently reviewed a terrifying Victorian volume, Manners and Tone of Good Society, or Solecisms to be Avoided (circa 1899), which devoted 22 pages to the etiquette of leaving cards and went on to detail suitable instructions for morning calls, introductions, titles, periods of mourning and five o’clock teas.

At the turn of the century, similar behaviour was being advocated in Paris, Budapest, Vienna, St Petersburg and other fashionable metropolises. Good manners, invented by the upper classes theoretically in the interests of smooth social intercourse, in fact developed into a repressive code which put people intheir place. Happily, Americans resent being sorted out in this way and shortly afterwards invented bad manners, which saved us all a lot of trouble. In this they were capably supported by the Canadians, with their disarmingly casual social graces, and particularly by the Australians, who, as we all know, don’t give a XXXX about etiquette and generally behave as they please.

If some of England’s colonies scrapped the tenets of correct behaviour held by the mother country, others imitated them well into the twentieth century. This was particularly true of India, where formality of posture and flowery speech habits even today retain Victorian overtones. Also New Zealanders and many SouthAfricans appear very polite to present-day English people, who, since the SecondWorld War, have largely adopted easy-going American social attitudes.

The Anglo-Saxons, along with the Scandinavians, are probably the most informal societies in the late twentieth century. The Japanese lead the world in standards of politeness, while Asians in general display consistent courtesy to foreigners and to each other. In Europe social ease fluctuates from Spanish warmth and Italian flexibility to Swiss pedantry and German righteousness; the French are probably the most formal of the Europeans.

The problem with observing the manners of others is not so much the degree of formality or informality to adopt (this can be quickly regulated) but to know what the manners are in certain regions. In Japan, for instance, the correct thing to do for a bereaved neighbour is to send them money in a sealed envelope.This custom makes some westerners uncomfortable, but nevertheless has considerable merit. If the family is rich they send the money back, if they are poor they keep it for funeral expenses. What more practical way to help them in their misfortune? To complicate the situation, bereaved Japanese often send you and your wife gifts in appreciation of your gesture.

Gift giving

Gift giving, particularly in Japan and China, is in itself a difficult area to negotiate. In brief, westerners cannot avoid indulging in this practice in the long run without running the risk of Orientals considering them churlish or stingy. Gift giving will almost invariably be initiated by the Asian; when reciprocating, be careful not to outgift a Japanese or a Chinese. It is a game you are not going to win anyway; extravagance on your part will only result in escalating expense on theirs. More important is the thought behind the gift. Something ethnic and tasteful from your own country is the safest (prints, ceramics, lace, illustrated books and so on). In general one should not open gifts in front of Asians and Arabs when an exchange of presents is taking place.The danger of someone losing face is too great.

When in Rome do as the Romans do

In Rome, imitating people’s behaviour entails little hardship, as foreign visitors are more often than not quite willing to indulge in the wining, dining and other aspects of la dolce vita available in the Italian capital. In some countries and environments, however, one has to use one’s judgement as to how far one is expected to ‘go native’. Taking one’s shoes off in Japanese homes comes easily, but what degree of politeness should one exhibit? For instance, Japanese apologise regularly for personal defects, minor transgressions, even for wrongs they have not done and can be embarrassingly self-deprecating in front of westerners. How much should Americans or Europeans run themselves down or accept Japanese apologies? Paradoxically, Japanese wives, in flower arrangingor origami classes, speak disparagingly about their husbands, as this is regardedas a sign of modesty and good manners. Should the British wife follow suit? In Japan, Korea and some other countries men walk in front of women and precede them up and down stairs. British, French and Nordic males find this hard to do, though Australians manage it.

Male visitors to Australia are soon disconcerted by being called ‘ bastards’. AnEnglishman is a ‘Pommie bastard’, a Frenchman a ‘Froggy bastard’ and so on. One realises eventually that this form of address is a sign of affection among Australian males and that if an Englishman is not soon called a Pommie bastard, then the Aussies don’t like him. Americans (Yanks) are called septic tanks.

In Russia it is polite to make a short speech with every toast, but it is betternot to smash your vodka glass to the floor unless it is evident that your host expects you to. It’s the same with plates in Greece – check it out. In Thailand a pale face is a sign of beauty in a woman (don’t ask if she is unwell); in Asiaone generally wraps up presents in red paper; white, on the other hand, is an unlucky colour associated with death. In Russia people don’t answer other people’s telephones – they just let them ring. And so it goes on – one just lives and learns how other people behave.

Strange or far out

Some traditions are so unusual that it is not advisable to imitate them. Cattle stealing is a proof of manhood in some African areas and it may be the only

route to secure a worthwhile wife. In other, drought-stricken regions it is customary to take soap with you on long journeys, in case opportunities arise for running water. Polynesians bite the head of a newly deceased relative to make sure he has really passed away; it is better to stand respectfully at one side, if you are present.

Chinese decide on how to construct buildings and arrange furniture according to their feng shui beliefs, which may mean little to you. Few customs, however, are stranger or more impressive than the Malagasy famadihana, which means ‘the turning of the bones’. In Madagascar when a relative has been dead and buried for a decent period of time, he or she is exhumed on some suitable anniversary or auspicious occasion, the bones are wrapped in a shroud and lovingly paraded at a family ceremony where a hundred or more people may be present. The bones are examined, fondled, shown to others and even talked to. In Madagascar the dead are considered more important and more influential than the living and the occasion often sees their reinstallation in a costly family tomb which offers considerably more comforts and amenities than the average Malagasy home. A fascinating sideline to this ceremony (to which foreigners are occasionally invited) is the question of taxation. The government taxes the famadihana severely, so that not infrequently three or four other families will surreptitiously whisk their own ancestral bones in and out of the tomb, rewarding the ‘host’ family by sharing the tax levy. This must be the world’s quaintest tax fiddle!

Taboos

Taboos exist in every country and we do well to observe them as they are often deep rooted in the history and beliefs of the region. Madagascar again leads thefield with a bewildering list of forbidden practices:

A woman may not wash her brother’s clothes. Pregnant women may not eat brains or sit in doorways. Eggs may not be passed directly to others. Children may not say their father’s name or refer to any part of his

body. Closer to Europe, Russians also have an impressive list: Coats should not be worn indoors. It is bad form to stand with your hands in your pockets. You should not sit with your legs apart. No whistling in the street. No lunches on park lawns. No public displays of affection. It is poor form to ask people where the toilet is, and never from the

opposite sex.

On the other hand, it is perfectly acceptable to wander round hotel corridors atall hours of the evening or night wearing only pajamas.

In Malaysia it is taboo to point with one’s index finger, although one may pointwith one’s thumb. In Indonesia the head is regarded as a sacred, inviolable partof the body and should not be touched by another. You must suppress the desire to pat young children on the head. It is also taboo in Indonesia to have your

head in a higher position than that of a senior person. This point of deference is easily engineered while sitting (a low chair or a crouch) but harder to achieve when meeting someone on the street. It is common to see Indonesians bobbing up and down on bent knees as they pass senior citizens or people of authority.

In Korea well-brought-up young people do not smoke or drink in front of elders. In Taiwan it is unthinkable to write messages in red ink. In England, Scandinavia, Japan and China it is bad form to blow your own trumpet, although others seem to see nothing wrong with it.

In Arab countries it is taboo to drink alcohol, eat pork or to ask about the health of a man’s womenfolk. You will make an Arab uncomfortable by pointing your feet at him in conversation and you will insult him if you display the soleof your shoe or hold up your hand in front of his face. Do not openly admire hispossessions, as he may feel obliged to give them to you. A harmless remark like ‘I like that camel’ may put you in an embarrassing situation in the Gulf.

Jeswald Salcuse. Negotiating with the Government

Coping with Corrupt Interests

The subject of government corruption is complex, and a full treatment is beyond the scope of this book. Its potential to affect a negotiation is in uenced by aflvariety of intricate factors, including the legal or business traditions of the country or industry concerned, the strength of the bureaucracy with which you are dealing, the nature of the persons sitting across the table from you, and your company’s own internal policies, culture, and controls, to mention just a few. In nearly all countries, the payment of a bribe to a government of cial tofisecure a favorable contract or action in a negotiation is a crime by law; however, the readiness of a particular legal system to enforce those laws variesfrom country to country, from state to state, and even from town to town. Even if you are negotiating in a country with weak enforcement of anti-bribery laws, you do well to remember that the U.S. Foreign Corrupt Practices Act imposes severe penalties on U.S. companies and persons who pay bribes to foreign of cials. Moreover, indulging in bribery has a corrosive effect on your own ficompany and employees, damages your reputation with business associates and thepublic, and can lead to other types of nancial losses.fi

So, how should you protect yourself against the demands of acorrupt of cial in your negotiations with government? Althoughfino foolproof protection exists, the following suggestions may helpyou cope with corruption in your government negotiations.

1. Work to understand the nature of the laws and institutions affecting corruptpayments in the country or area in which you are negotiating and discuss them with your team as part of your preparation.

2. If your company has prepared a code of business ethics or similar document, provide it to the other side as part of the introductory material you ordinarilyfurnish before or at the beginning of negotiations. When introducing your company to a governmental unit, you might review that state- ment in some detail.

3. Develop a strong relationship with a reputable and honest local individual or organization in the area. Often that per- son or organization has learned howto resist corruption and can advise you on whom to contact in order to counter the demands of a corrupt local of cial for bribes.fi

4. If you are approached for a bribe, explain that while you have great respectfor your counterpart, you risk prosecution under the Foreign Corrupt Practices Act if you make corrupt payments. When a West African minister during a break ina negotiating session poetically told an American executive that the minister was ‘‘the rst tree in the forest and needed water,’’ the American replied in fifriendly but blunt terms: ‘‘If I pay you, I’ll go to jail. And since you are my friend, I know you don’t want that to happen.’’

5. Try to de ect a demand for a bribe by making a donation or providing a flservice that bene ts the country or the local community. Your company might fibuild a playground for a school or a dispensary for a village, allowing the of cials with whom you have been negotiating to take full credit for persuadingfi

you to make this gift. Your company might also sponsor free cultural events suchas an art exhibit, a play, or a rock concert. If you choose to go this route, you must be absolutely sure that the payments you make do indeed go to nance fithese charitable and social activities, not to line the pockets of local of cials.fi

6. If corruption is pervasive within an organization with which you are negotiating, you may have no other option than to walk away from the deal. If corruption is not pervasive, you might attempt to involve in the negotiation process persons or departments that are not corrupt with the hope that their presence will serve to control the behavior of negotiators seeking a bribe. In negotiating a long-term sales contract with a manufacturer’s representative who is signaling the need for a payoff, you might stress your concerns over technology or quality control and ask that appropriate members of the company’s engineering division participate in the discussions. Another approach is to build a channel of communication at another, you might hope, higher level, then use that channel to persuade the company of the bene ts of dealing with you.fi

7. Recognize that in many cultures gifts are an essential part of building relationships between persons and groups. Not all such gifts are necessarily corrupt or equivalent to bribes.

To reject abruptly and moralistically any suggested request for a gift may be interpreted as a rejection of the relationship that the other side considers necessary for doing business with you. Try to set a policy as to the kind of gifts you are prepared to give that are consistent with the law and with your own company’s business ethics.

8. Finally, remember that efforts to satisfy the personal interests of your counterparts across the negotiating table are not always illegal or unethical. Their desire for your respect, for favorable standing in the eyes of their superiors, and for positive recognition from colleagues in their organizations are personal interests that you should recognize and in appropriate ways help tosatisfy as a means to pursue your company’s interests in the negotiation. For example, it never hurts to acknowledge the strong preparation of the other side or to thank them for their gracious hospitality.

And if the lead negotiator on the other side is having dif culty understanding fithe nancial technicalities of the deal you are proposing, you may want to fiexplain them in a private conversation rather than to lecture him in detail in front of his colleagues.

Four Rules for Renegotiation

Many persons view a contract renegotiation in negative terms. For them, it is anaberration, a disreputable practice that evokes images of broken promises, disappointed expectations, and bargains made but not kept. From the viewpoint ofanyone facing demands for an unwanted renegotiation, such a reaction is normal and understandable. But from the vantage of society, renegotiation plays a constructive role in human relations at all levels. If Karl Llewellyn is correctthat the work of agreements in society is a struggle of life against form, the

function of renegotiation in the social order is to mediate that struggle, to allow life and form to adjust to one another over the long term at least cost.As you contemplate the challenge of renegotiation in your dealing with governments, bear in mind the following rules:Rule 1: The risk of renegotiation is present in any transactionbut it is a particular risk in transactions with governments, primarily because of the political pressures and imperatives affecting government actions.Rule 2: As a result, incorporate into your negotiation strategies tactics and mechanisms to deal with this risk.Rule 3: Distinguish among the three types of renegotiation—post-deal, intra-deal, and extra deal—and apply the relevant principles outline above for each.

Rule 4: Develop strategies that reduce the likelihood of renegotiation, as well as strategies that enable renegotiation, if and when it occurs, to proceed productively at least cost.

Short Course in International Negotiating

Curry, Jeffrey, Edmund (Author) World Trade Press1999

Introduction

the growing demand for global specialists

Many companies, large and small, have made the error of approaching foreignmarkets in much the same way that they would their domestic markets. The beliefthat what worked at home will work elsewhere usually stems from lack ofexperience rather than from arrogance. The most successful internationalcompanies and traders have come to rely on ‘global specialists’ to handle theiroverseas operations. These specialists may be in-house personnel or, if it’s thecompany’s first overseas venture, the specialist might be brought in from theoutside on a consultancy basis.

Expertise is demanded in international trade and investment for two powerfulreasons:

1. Foreign markets are expensive to enter2. Second chances are few and far between ‘ some say nonexistent

Upper management must rely on these experts not only to plan the strategyfor entering the target market but also to execute the tactics in the most efficientmanner possible. The specialist, in turn, can be of greatest service by keepingmanagement constantly informed of the opportunities and risks in the expandedmarketplace. He (or she) should never make the mistake of letting the ‘finalresult’ speak for his proficiency. Attaining that result can be a long, arduousaffair, and management is unlikely to provide ongoing support to a venture thatdenies them timely information. The specialist will use his global acumen toinform and train management in the skills necessary to bring about long-termsuccess. As the specialist moves on to the next project, other staff members mustbuild on the foundation laid out in early negotiations.

The services these specialists provide have never been in greater demand.International trade is a huge contributor to the economy of nations. And it is byno means confined to the major economies. Foreign trade represents not onlybillions in realized profits but also millions of individual deals and contracts. Eachdeal or contract, in its turn, contains countless details. These details, which cometo represent the difference between long-term profit and loss, weren’t arrived atcasually. Each one was discussed and agreed upon in a conference room or officeor during a telephone call or email exchange. Regardless of the medium, theywere all negotiated.

Why negotiate?The word negotiate derives from the Latin infinitive negotiari meaning ‘totrade or do business.? This verb itself was derived from another, negare, meaning‘to deny? and a noun, otium, meaning ‘leisure.’ Thus, the ancient Roman

businessperson would ‘deny leisure’ until the deal had been settled. Negotiationis at the heart of every transaction and, for the most part, it comes down to theinteraction between two sides with a common goal (profits) but divergentmethods. These methods (the details of the contract) must be negotiated to thesatisfaction of both parties. As we will see, it can be a very trying process that’srife with confrontation and concession. Whether it’s trade or investment, one sidewill always arrive at the negotiation table in a position of greater power. Thatpower (e. g., the potential for profit) may derive from the extent of the ‘demand’or from the ability to ‘supply.’ The purpose of negotiation is to redistribute thatpotential. There’s no such thing as ‘take it or leave it’ in international business.Everything is negotiable. It all depends on the expertise of the negotiators.the zero-sum game

International business negotiations are the archetype of the zero-sum game.One side’s gains are directly offset by the other side’s losses. Your counterpart isattempting to achieve the maximum concessions while leaving you just enoughto keep you interested in the deal. Some business gurus may attempt to interpretthis as a win-win situation, but experienced global specialists are a hardened lot.Behind all of the smiles, handshakes, and banquets lurks the reality that both sidesare trying to ‘best’ each other. It’s an accepted, if unspoken, fact.In recognition of this zero-sum tendency, many of the so-called emergingmarkets actually legislate a maximum portion of the deal that the foreign partnerwill receive prior to the start of negotiations. Other economies simply give thelocal partner veto power on the project, even if they’ve only made a minimalinvestment in it. Still others dictate that local partners will always maintain aminimum 51 percent position in the venture, even if the foreign partner injectsnew capital. While these rules limit negotiations, they don’t close them. Thoseexperienced in international commerce see these as parameters within which theycan negotiate a wide variety of concessions. As it turns out, many of these‘legislated’ contract terms are flexible in direct proportion to the scope of theproject. It’s important to realize that while the size of the playing field may varyfrom venture to venture, the overriding concept remains the same: Success isn’twinning everything, it’s winning enough.

Understanding the realities of the zero-sum game and the concept of ‘enough’will be discussed in detail in the later sections on strategy. Readers may use thisbook to assist in their own role of negotiator or as a means to select the proper

personnel and strategies for international business. The basic format of this textwill move through the who?, what?, where?, when? and how? of internationalnegotiations. It’s assumed that the reader already understands the importance ofwhy? in today’s marketplace.Jeffrey Edmund Curry

San Francisco 1998

CHAPTER 1The Role of the Chief NegotiatorSmall Stage, Big Partthough large teams of global specialists may be assembled for some negotiations,thereal interaction takes place between the two chief negotiators. This chapter willdescribe the role and characteristics of a chief negotiator and examine how thatperson’s activities control the world of international business. Because in manycases the heads of companies must consider themselves for this role, a selfevaluationchecklist is provided at the end of the chapter. This checklist is alsouseful for readers who may be considering careers as consultant negotiators.Who Qualifies as a Negotiator?Not everyone is cut out to be a negotiator, and the demands for internationalwork are more stringent than for domestic work. Negotiators must possess a widevariety of technical, social, communication, and ethical skills. The job demandsnot only mental acuity but also a high degree of sympathy with the party on theother side of the negotiating table.One of the mistakes many companies make is to assign a member of theirupper management as a negotiator without actually considering his or hernegotiating skills. In many cases, being the boss almost precludes someone frombeing a good negotiator. Such a person may be used to getting their way withoutquestion and unable to engage in the give and take that’s at the heart of truenegotiations. Unless their management style is strongly based in consensus, they’llbe unwilling to allow for the needs of their counterparts.The negotiator must always inhabit the middle ground. He (or she) must enterthe negotiation process with the understanding that both teams must leave thetable with a sense that they’ve received ‘enough.’ The negotiator’s job is tomaximize the long-term benefits of the venture while securing short-term needs.

The Chief NegotiatorThe chief negotiator (CN) is responsible for unifying the strategy, tactics andoverall style to be used by a particular company. He must exercise a high degreeof self-control and keep the team on track under trying circumstances. Once thestrategy and tactics have been determined, team discipline demands that alldecisions regarding changes must have the CN as the focal point. While strategicconsensus is important, delegation of responsibility is of little value. The stakesin international business are very high, and the CN must be willing to accept totalresponsibility for the outcome. This will be true even when subordinates havemade key decisions.

The CN’s greatest skill is the ability to deal with pressure from a variety ofdirections. Headquarters, clients, team members, family, negotiatingcounterparts, and government officials will all demand attention. The CN mustbe a decision maker who can keep everyone satisfied without being distractedfrom the pre-established priorities. Handling these responsibilities within aforeign environment, and possibly in a foreign language, isn’t a job for the faint

of heart.Special problems often arise between a CN who has been brought in on aconsultancy basis and personnel who’ve been made members of the negotiatingteam primarily for their technical skills. These conflicts must be worked out farin advance of negotiations. This will be discussed in more detail later but thereader is cautioned at this stage that one of the CN’s duties is to present a unifiedand coherent negotiating agenda at all times.How Much Technical Knowledge is Required?Government regulations and corporate specifications make technicalrequirements a key part of negotiations. Besides the actual specifications of theproduct at hand, the logistical movement of the product across national bordersmay, in and of itself, require great technical insight. This is often the case inhigh-tech and telecommunication projects. While it’s certainly necessary for CNsto be thoroughly briefed on the technical aspects of the negotiation, it’s by nomeans a requirement that they be experts. Should the subject of the negotiationsbe highly technical in nature, team members will supply the proper technicalbackup when required. The CN must devote his attention to the larger picture.Candidates for CN should be technically astute with regard to both thecompany’s products and modern day information technology. Most internationalbusinesspeople now travel with laptop computers (notebook, sub-notebook orpalm-top) in order to compactly carry along the vast amount of data necessaryfor quick decision making. These ‘electronic team members’ can greatly reducethe number of personnel required to make presentations and/ or assist in technicaldecisions. These machines also bring the added ability to make the CN, or team,more productive during travel or downtime. The CN must not be a casual orneophyte user of this technology as his competence may be judged at meetings byhis ability to handle the newest hardware and software. In some ways, the laptophas become as useful, and potentially embarrassing (when they don’t work), asthe slide projector of yore. Laptops can also become a security risk.

Character TraitsshrewdnessThe CN, whether staff or consultant, carries the entire responsibility and trustof the company when acting on its behalf. The successful CN must be capable ofallowing the other side to see only what serves the strategy best, and this requiresan ethical mixture of honesty and cunning. Forthrightness is a trait to avoid whenselecting a CN. People who ‘wear their hearts on their sleeves’ or insist ontransparency in all dealings will make sorry negotiators in the global marketplace.While there’s no room for duplicity, the CN must know which cards to lay onthe table and when. For this reason, shrewdness heads the list for desirablecharacteristics.patiencePatience is an indispensable attribute. Negotiations can be quite taxing eachoffer brings a counteroffer and every maneuver a countermaneuver, while delays

eat up time and energy. Corrupt officials, petty management, and incompetentstaff members all must be handled with care. As will be seen in the sections onbias, some countries make patience a cultural requirement for working in theireconomic sector. Regardless of the locale, a CN who ‘flies off of the handle’ willbe of little use in international negotiations.adaptabilityBecause negotiations are concerned with each side getting the other to changepositions, the CN must be highly adaptable. Having an inflexible strategy andlimited tactics will almost instantly bring negotiations to an unproductive close.Beyond the preplanned contingencies, the CN must be able to respond quicklyand decisively to unforeseen developments. Negotiations seldom go completelyaccording to plan, nor will they always change in preconceived patterns. Beingable to ‘think on your feet’ will go a long way toward success at the conferencetable.enduranceWhile negotiating is primarily a mental activity, it can be physicallydemanding. The CN must be available for all sessions and eight-hour days willbe rare. Add in travel fatigue, climatic changes, jet lag, foreign food, late-nightsocializing, and work stress and you have the makings of burnout. Many culturesuse the tactic of physically and mentally wearing down their counterparts in orderto achieve concessions. The CN (and the entire team) must be on guard againstfatigue, and there is no better place to start than during the selection process.Physical fitness, endurance, and a reasonably abstemious nature are highlydesirable, and bankable, attributes in a CN.gregariousnessNegotiating is by nature a social process. Many countries have little in the wayof commercial contract law, and the success of the deal in such circumstances isbased on trust and friendship. Even when the deal is bound by contract, the‘relationship’ will play a huge role in finalizing it. A competent CN is gregariousby disposition and excels in social settings. Just as many deals are made acrossthe dinner table as are made across the conference table. The ability to hold agood, off-business-topic conversation with a counterpart, even in translation, willonly advance the CN’s position. Remember, concessions must be extracted fromadversaries but they’re given by friends.concentrationInternational business can make substantial demands on its practitioners. Timezone changes, language problems, and legal wranglings can all be majordistractions from the goals set forth in the strategy. The potential for ‘losingtrack’ is enormous. Many an executive has returned from an overseas negotiatingtrip with either a diminished sense of accomplishment or a firm belief that nothingwent according to plan. For this reason, the ability to concentrate on those issuesat the heart of the negotiation is an asset the CN cannot afford to be without.Counterparts will often attempt to put as many points as possible ‘on the table’

in an effort to cloud the main issue. The CN must be able to maintain the team’s(and his own) focus at all times.the ability to articulatePeople who can’t communicate their ideas or understand those put forth bycounterparts are of little use around the negotiating table. Good CNs must bepracticed listeners as well as articulate speakers. Everything about them’fromtheir demeanor, to their clothes, to their body language, to how they handlesubordinates’will be scrutinized. A CN must also have a keen sense of what ismotivating his counterparts in order to communicate the proper image. Make nomistake, the negotiating arena is a stage, albeit small, and CNs play the largestroles.sense of humorNegotiating can be a very stressful affair, and there will be moments when ithardly seems worth the effort. A CN must be equipped with a highly developedsense of humor in order to weather persistent storms. Some of the negotiatingdelays, logistical problems, and social settings may seem like exercises inabsurdity, and many of the discomforts of travel can be downright demeaning.Viewing such problems with a humorous eye and avoiding the syndrome of takingyourself too seriously can make all the difference in keeping negotiations on track.Organizational QualitiesWhen working overseas, the CN embodies the company in image and practice.Consequently, the CN must be highly organized in order to effectively handle thevast number of problems that will inevitably arise. The CN must be able to select,motivate, and control a team operating under high-stress conditions. He also mustbe able to arrange and rearrange schedules, as well as oversee staff in difficultcircumstances. Every and any logistical detail can make the difference betweensuccess and failure.Because administrative support teams will be unavailable to all but the largestcorporations, the negotiating team (or perhaps the CN alone) will be left to itsown resources. Problems must be foreseen far in advance, and team membersassigned to each task. There’s little room for error. Every negotiating sessionshould be preceded by a strategy session and followed by a recap. The professionalCN leaves no detail unexamined.The Importance of Team SolidarityWhenever possible, the CN should have full control over the selection ofnegotiating team members. This is key, because the team must think as a unit atall times and have total respect for, confidence in, and loyalty to the CN. Therecan be no ‘turf wars’ or disputes over the CN’s authority or assignments. Thismay seem extreme to believers in less hierarchical management structures.However, high stakes, stresses, and the adversarial nature of internationalnegotiations can’t tolerate anything less than a unified effort if success is tobeattained.CAUTION: Dissention within a team will be exploited by counterparts to the fullest

extent.While team members will have varying levels of authority and responsibility,all direction must come from the CN. Any actions that depart from thepreordained strategic, tactical, or contingency plans must be discussed with andcondoned by the CN. As we will see later, Divide and Conquer is a very commonnegotiating technique, and the only defense against it is seamless unity. Lastly,because of the need for centralized decision making, it’s wise to appoint a secondin command (in case illness or calamity should befall the CN).Self-EvaluationIn smaller companies, it’s often the case that a member of upper managementis called upon to act as the CN. This can be for overseas negotiations or in thedomestic market should a foreign company come calling. Although it may benecessary for top management to sign-off on the contract or attend meetings forappearances sake, it’s by no means necessary that they actually negotiate the deal.In some cases, it may be contrary to the company’s best interest to have uppermanagement involved, at least until the details have been finalized. The followingchecklist can be used by managers, owners, or anyone else wishing to consider acareer in international negotiations.

self-selection questionnaireYes No

1. Do I have the necessary time and attention to devote tothese crucial negotiations? 2. Am I the most experienced member of the organization interms of international business? 3. Do I understand the culture and commercial nuances of my counterparts?4. Are my language skills suitable for the negotiation?5. Have I ever worked with a translator before?6. Have I negotiated major contracts before? 7. Am I physically well enough to engage in extended and stressful negotiations? 8. Do I have the organizational skills to lead a team that’s not entirely of my own choosing? 9. Do I have the technical expertise to run the negotiation? 10. Am I capable of working sixteen hours a day?11. Am I at ease in unusual social situations? 12. Am I capable of living in physically demanding circumstances? 13. Do I find other cultures easy to accept? 14. Am I considered a patient person by my peers and subordinates? 15. Am I considered an extrovert? 16. Am I capable of accepting full responsibility for the outcome of these negotiations? 17. Are my organizational skills optimal for leading the negotiation team?

18. Have I traveled overseas for extended periods on business before? 19. Will my absence from home cause me only slight emotional distress? 20. Will my absence from home cause my family only slight emotional distress?

If you found yourself answering ‘no’ to any of these twenty questions, youmay wish to re-evaluate your potential role as chief negotiator.What to Look For in a Potential CN ConsultantSometimes the right person to fill the role of CN will not be found within yourcompany, or it could be that the best person for the job can’t be spared from theirdomestic duties. In both instances, an outside company or consultant must befound. Keep in mind that, in some cases, the CN is the only representative of yourcompany at the negotiations, while at other times, the CN’s role is to advise yourteam on strategy and tactics. Either way, making a correct choice and a ‘goodfit’ will ultimately determine the success of your strategy. Here are some majorpoints to consider.- MATCH ETHICS Make it clear to candidates that you want the negotiationsconducted in a specific manner. Check references thoroughly on this point. It’seven advisable to resort to role-playing in order to assess the consultant’s abilityto act in accordance with your company’s ethical standards.- MATCH CULTURES Negotiating in Japan is not like negotiating in Brazil. Make surethat the consultant has relatable experience in the target market. Language skillsare helpful but not absolutely necessary. If the consultant claims fluency in specificlanguages, put these to the test prior to making the decision to hire. The samegoes for dialects. Remember, Cantonese is of limited use in Beijing.- MATCH TECHNICAL PROWESS Most consultants specialize in specific industries orservices. While some will insist that they can negotiate ‘anything, anywhere,anytime,’ you’ll be best served by someone who has some expertise in yourproduct or service. This is especially true in high-tech, telecom, and financialservices.- MATCH COMMITMENT Because of the intensity of international negotiations, youcan’t afford to have a detached, dispassionate CN consultant or not. Thesuccessful candidate must perform as if their own company’s future is at stake.If the candidate gives you the impression that this is just another overseasassignment, end the interview. He or she must be deeply and noticeably committedto your success. The counterparts across the table should not be able to detectthat your consultant CN is anything other than an employee of your company.In many cases, consultants are given company logo business cards with a stafftitle, such as ‘Vice President of Overseas Planning,’ in order to blur theconsultant/ employee distinction.NOTE: It’s advisable to check your home country’s laws on independent contractors

prior to issuing the cards or titles.- MATCH LOYALTY Many consultants complain of being given the responsibility formaking the negotiations work and then having their authority undermined atevery turn. Conversely, headquarters management often complains of consultantswho are determined to follow their own agendas. Neither case is acceptable.Consultant CNs are paid to define strategy and execute prearranged tactics. Theymust be given 100 percent control of the negotiations and of any staff who mayaccompany them. In return, the consultant CN must tow the company line towhatever degree management stipulates. All of this must be made clearcontractually far in advance of the negotiations. If the company can’t find aconsultant CN they can fully trust, it’s best to forgo the hire. If the companyrecognizes other useful qualities in the candidate, it may wish to use him or heras an assistant to a staff CN.- MATCH MOTIVATIONS The majority of consultants will charge for both expensesand fees. Expenses should allow the CN to project an image that befits thecompany. (Don’t underestimate the value of appearances.) Fees should becommensurate with the prospective CN’s experience and the size of the project.Fees should also include payments for attaining specific portions of the strategy.Financial motivation feeds commitment. Consultants who will not agree toperformance-based pay are best avoided.

CHAPTER 2Choosing Your TeamBig Guns, Little GunsHow Big Should the Team Be?There are several reasons to keep your negotiation team (NT) as small aspossible. The first few deal with the expense and difficulties that arise when yourNT must operate overseas. Flights, ground transport, meals, hotels,communication, conference centers, taxes, and cargo can make a trip for even asmall team extremely expensive. Arranging for passports, visas, inoculations, andpotential medical care for a large group can easily become unmanageable.Problems and additional expenses may also arise when attempting to deal withvarious family and business schedules. Finally, for NTs operating overseas,keeping track of large groups in a foreign country is nightmarish at best ask anytour guide.The rest of the reasons for keeping the NT compact apply to both domesticand overseas assignments. Primarily, communication is a source of strengthwithin any organization and never more so than within the NT. Premeetings,recaps and midmeeting breaks demand that communication be both precise andconcise, as major decisions are made in a matter of seconds. The CN must be ableto seek the input of the team quickly, and large groups are cumbersome.Secondly, as mentioned earlier, presenting a unified front is key. The CN mustbe able to redirect tactics as counterparts bring new issues to the table. Agreementon tactics becomes more difficult in direct proportion to group size, even whenthere’s agreement on strategy. Keeping the NT small enables the CN to maketimely adjustments to the negotiating plan and to disseminate that informationquickly. Additionally, small teams are more easily able to withstand the ‘wedges’that counterparts may attempt to drive between members of large teams.Thirdly, the members of the NT have other job duties unrelated to thenegotiations. The fewer you pull away from their regular assignments the better.There’s no sense disrupting the company’s core business. As exciting as theinternational arena is, keep in mind that someone must oversee the old businesswhile others look for new opportunities.Don’t Use the Assignment as a RewardA very common mistake that executives or CNs make is assigning membershipto the NT as a reward for other successes unrelated to the task at hand. This isespecially true when the team is headed for exotic locales. Many employees seethe trip as a minivacation and a way for them to broaden their personal horizons.Even when the NT will be receiving foreign counterparts at the company offices,being a member of the NT is perceived as adding to internal prestige. Someemployees even see it as their right by seniority to be a part of the negotiations.Unfortunately, what (and who) succeeds in the domestic market doesn’t alwaysplay well internationally. Wise CNs must keep in mind that the blustering VicePresident of sales and marketing isn’t going to impress the reserved Japanese; norwill the brilliant, but reticent, chief engineer be able to withstand the verbal

onslaught of the impatient Americans.There can be a great deal of ‘fallout’ when a staff member fails to be selectedfor the NT. The best way to avoid it is to make it clear that only talents veryspecific to the success of the NT are being considered. Technical, cultural,linguistic, social, and travel skills should be compiled in checklist form (notdissimilar to that for the CN) and circulated among potential team members.Inclusion on the NT should be based on this profile alone, and CNs will find theyhave much better grounds for defending their personnel choices when approachedby determined, but unsuitable, staff members. This is especially true when otherexecutives and managers assume they’re going to be part of the NT. As a way ofpreserving morale among those left off of the NT roster, some CNs make thedeferrees part of the prenegotiation strategy planning process.A Balance of Skills and StrengthsIt’s unlikely that any single team member will embody all of the talentsnecessary to achieve the company’s strategy. The CN must choose a cross-sectionof technical skills and personal attributes that will create a compact and efficientteam. One team member’s weakness must be offset by another’s strength.Technical prowess must be accompanied by the ability to communicate and applythat prowess. Putting a team together is similar to assembling a jigsaw puzzle:there’s no success unless all of the pieces fit.A common practice among experienced travelers when packing for trips is tonever put anything in the suitcase that has ‘only one use’; the same applies tochoosing NT members. A specialist candidate is eschewed in favor of thegeneralist unless the technical expertise is absolutely crucial to the effort. If theCN must include these ‘one trick ponies,’ every attempt should be made to makethem a part of the wider strategy and tactics discussions. If that’s unsuccessful,these specialist members should be cautioned to advise in private duringnegotiations and to avoid direct involvement.Painting the ‘Big Picture’Although many technical types will disagree, it’s much easier to imparttechnical knowledge to a good communicator than it is to do the reverse. Membersof the NT must be chosen for their ability to effectively execute the company’sstrategy and to quickly respond to the tactics of counterparts. This isaccomplished only through good communications skills. Scientific and financialtechnical skills will take a back seat, especially during initial negotiations, as the‘big picture’ is discussed. Details will be left until much later in the process. Manybusiness cultures prefer to have the details tended to after the contract is signed.Bringing massive technical data to the negotiating table may only slow down thedeal-making process.NOTE: Much ‘expertise’ can be carried in file or laptop form, in case it should be neededduring discussions.Tasks Both Large and SmallMajor decisions are made every day during negotiations, but not all of thework is momentous. Some companies and consultant CNs make the mistake of

including only ‘big guns’ on the team. This causes problems, as no one relishesdoing the necessary but tedious (and decidedly unglamorous) work that keepsnegotiations running smoothly getting copies, typing policy changes, takingnotes, arranging dinners, and so on.Including a few junior managers or administrators in the ranks of the NT forthe sole purpose of controlling logistics is a wise move. This is particularly helpfulif these members have experience working or traveling in the target market.Should the finances or domestic needs of the company preclude this option, theseadministrative duties should be assigned to specific members of the team, and itshould be made clear that these duties are as important as any of the more‘spotlight’ tasks. As is true in other areas of business, what happens behind thescenes determines success on the stage.Home Team versus VisitorsThe respective sizes of the NT is usually determined by the group that’s visiting.This is particularly true if the visiting team is in the position of ‘buying’ fromthe home team or receiving group. The visiting group should forward a list of itsmembers, stipulating the job title and responsibility of each. The receiving groupshould assemble their NT to correspond to the visiting team.It’s true that the receiving team has the psychological advantage of operatingfrom their home turf, but they should resist the urge to overwhelm their visitorswith an imposingly large NT. Since these resources can be called upon at anytime, it’s best to see if they’re needed before arraying them. The ability tosuccessfully exploit the discomfort of counterparts is very much related to one’sculture and requirements for a ‘success.’ Some visitors may be in awe of yourfacilities and staff while others may consider it a vulgar display. Either way, smallis generally better when making initial contact.‘Observer’ TrainingCompanies that regularly pursue international trade and investment like to usenegotiation as an ongoing training tool by purposely including less experiencedmembers on the team. They’re given ‘observer’ roles and often do some of thelogistical work mentioned above. This allows them to gain experience that canbe put to use in future international negotiations. It’s best to make it clear to thesejunior team members exactly why they’re being included in the NT, so that they’rekeen to gain as much experience as possible, get ‘bloodied’ by their ownmistakes, and learn from those of other team members. It’s also an ideal way forthe company to see how their future CNs handle new and difficult situations.Many executives will attest to the fact that the ‘rising stars’ from the home officeoften become confused and ill-at-ease when put into the crucible of internationalnegotiations and travel. Conversely, the mediocre domestic manager may flourish

in the new international environment.Those Who Can’t ‘Cut It’A common question in business when determining whether someone will be asuccess is, ‘Can they cut the muster’? (Sorry, folks, it isn’t mustard.) During theMiddle Ages, the muster in question was the final pattern cut from cloth byjourneymen to be used by the master tailor. Cut improperly, the pattern will neverwork, and valuable cloth will be ruined. International negotiations have a similarone-chance-is-all-you-get sense of finality. The NT acts as the journeymen andthe CN is the master tailor preparing to stitch together a successful negotiation.Below are some types of people to avoid because they won’t be able ‘to cut it.’whinersEmployees who constantly complain, even under good conditions, are goingto find travel and the stress of negotiations intolerable. These types love to bringup problems but never offer solutions. Every company has them, but successfulnegotiating teams don’t.conniversUnity is paramount for negotiations and people who like to work their ownagenda or jockey for position will only undermine the team’s effort. These typesare generally keen strategists and they may be useful in planning. However, underno circumstances should they ever take an active role in negotiations.

hothouse flowersMore competent than whiners, these ‘high maintenance’ types can only excelunder ideal circumstances. They never complain but are easily set back by theslightest deviation from the norm. Unfortunately, negotiations and overseas travelare rarely conducive to ideal anything. Sometimes, the NT must operate whenmaterials and equipment are lost, or work in environments in which electricity issomething reserved for special occasions. Technically astute or not, these ‘flowers’won’t travel well. If they must be used, do so only when negotiations are on hometurf. An overseas team needs those that can adapt to any environment.

bigotsNegotiations are a zero-sum game based on finding common ground amid veryreal and distinct differences. Adding racial, cultural, sexual, or class bigotrywillonly obscure an already complex state of affairs. Bigots (of any ilk) tend tocommunicate their prejudices more than they realize, and it’s not the kind ofcommunication that leads to a successful deal.the frailRegardless of where the team originates, the world outside of the domesticmarket is filled with sights, sounds, smells, and tastes that pummel the visitor.

Part of the success of the NT will be in its ability to assimilate as quickly aspossibleinto the environment of their target market. The hygienic and culinary habits ofcounterparts and their culture may not meet the standards of the NT’s domesticscene. Members who can’t quickly and adequately adjust to new environmentswill only be a burden to the whole team, thus disrupting strategies andassignments. Like the CN, the team must be robust.Overseas? Domestic? One Core TeamOptimally, once a team is assembled, it should be used for both overseas anddomestic negotiations related to international business. (Specialists may be addedfor individual negotiations.) This is especially true for smaller companies withlimited resources. But large companies should not make the mistake of havingtwo separate teams one for overseas and one for domestic discussions’simplybecause they can afford the expense. Teams that have operated overseas willunderstand the stresses and strains being exerted on foreign teams when theycome for business visits. This information, used sympathetically or otherwise, canbe a key part of the overall strategy and daily tactics. Lastly, using the team forall negotiations will add to its ability to operate as a unit as team members becomeexpert at all aspects of negotiating. They must be able to visit as well as hostanegotiation and understand the responsibilities of being on either side of the table.

CHAPTER 3Controlling NegotiationsWho’s Calling the Shots?negotiating involves the recognition and assessment of a counterpart’s bargainingposition. Overestimating can be as disastrous as underestimating. Yourcounterparts will only reveal that which they believe is necessary and beneficialto their own plans. Trade strategies, and a good deal of tactics, will be dictatedby which side is buying and which selling. This also applies to investment, sincean investor is technically buying into a company (or market) that’s ‘selling apiece of its equity. The adage ‘the customer is always right seems to put thebuyer in the position of strength, as does the golden rule of business (The personwith the gold makes the rules!). Unfortunately, reality nullifies both axioms.Buying and Selling PowerThe power of the needyThe relative needs of the buyer and the seller are really what determineswho holds the upper hand. Added to this mix are the restrictions that governmentsestablish to protect their domestic markets from economic colonization. Asmany large companies have found out when investing in the emerging markets,even when offering to invest billions, they re still expected to transfer technology,train local management, and pay outrageous real estate costs. Here, the seller isdriving a hard bargain above and beyond the actual investment strategy controlling the supply (e. g., cheap labor, natural resources, consumers), andtaking advantage of the buyer’s need to expand into the new market. Hagglinghas taken on market-sized proportions. This is in stark contrast to the policiesof19th-century business, wherein commerce followed the flag and nations suchas Japan and China opened their markets under threat of military force. It shouldbe noted, however, that even today certain commodities, such as petroleum, aresubject to forceful negotiation.On a smaller scale, this type of power play takes place in every negotiation.The asking price is only a starting point; discussions and concessions are won orlost based on either side’s belief in what is fair. In order for negotiators tofunction, whether it be on a small or grand scale, they must be aware of their ownstrengths and those of their counterparts.Perceived Economic PowerFirst and foremost, negotiators must understand where the company theyrepresent stands in terms of international commercial perception. Therepresentative of a Chilean industrial chemical facility will be viewed as part of

an agriculture-based market when visiting Japan. Meanwhile, a Japanese grainsrepresentative trying to negotiate a deal in Chile will be perceived as being partof a great technological power. The relative power (and perceived need) that eachof these negotiators brings to the table will be colored by the level of economicdevelopment in their home market without regard to the product their companyoffers.It’s a natural part of assessing a counterpart to work from generalities tospecifics. Even after very specific company research is complete, a counterpartwill still tie the perception of need to stereotypes about economics. While thismay be a clear case of bias, there are some substantive issues connected to therelative development of a company’s national economy.emerging economiesNegotiators from emerging economies come to commercial discussions withhandicaps that are readily turned into strengths. Their economies are consideredto need virtually everything from cash to food to clothes to roads totelephones. They used to be taken as inexperienced and uneducated negotiatorswith little to offer except a polite ‘thank you to their benefactors. A centuryago, such countries would have been unceremoniously colonized. Nowadays, theybargain from the standpoint that, while they can use all the development they canget, they also have a lot to offer. Undeveloped resources, hardworkingpopulations, and untapped consumerism all make these emerging economiesattractive markets for buyers and sellers.But often, there’s an unforeseen price. Large companies may find that the rawproducts they seek are not for sale unless they allow local companies to ‘addvalue’ to the materials first. Investors find that there is a two-tiered pay scale forlabor one price for domestic manufacturers, another higher one for foreigncompanies. Sellers of consumer products find that distribution is expensive andnot open to foreign operators. Contracts that appear simple are difficult toenforce. All of this is foreseeable with proper research and planning. Negotiatorsmust come to the emerging markets with a vast array of bargaining chips and beprepared to relinquish far more control than they would in other markets.industrialized economiesIndustrialized economies have the unenviable position of needing to investinternationally while still vying for foreign investment to advance their owndomestic market. Emerging markets view them suspiciously as exploiters thatwish to use lesser economies to feed their own growth. Technological economiesview industrialized powers as economic ‘wannabees’ that imitate (or steal)technology but refuse to invest in expensive financial and information services orhardware. Many of these industrialized economies are not too far removed fromcolonial status, and they still harbor fears of becoming retrograde. Theirnegotiators see emerging markets as opportunities, but they concede as little aspossible ‘at the table’ in order to protect limited assets. The technologicaleconomies, on the other hand, are treated as future rivals and legislated out ofcontrolling roles. Negotiating with a company from an industrialized economyrequires a recognition of their belief that they’ve fought their way out of one

economic status and feel they’re being held back from entering another.technological economiesCompanies from technological economies are always perceived as beingarrogant, even by members of their own fraternity. At times, it’s a well-deservedassessment. Much of this perception comes from the exuberance of believing that‘anything is possible.’ Negotiators from these cutting-edge societies can be veryfrustrated with the pace of activity in less developed nations, and their attempts atpatience often seem patronizing. Because they’re affluent, any attempt to reducetheir own expenses is viewed as cheapness rather than astute frugality. It’s veryimportant that these ‘first worlders’ treat their less developed counterparts asequals. This will limit resentment and increase the chances for success. Negotiatingacross the table from a ‘technological superpower’ often creates a desire to ‘drivea hard bargain’ for fear of seeming too obsequious. This may lead to failure, sinceit may appear that risk and profit aren’t being distributed proportionally.Breaking Into a MarketSelling a product or investing in a new country will be met with some suspicionby locals even when the target nation has a high demand and everything to gainby the deal. Varying levels of xenophobia will confront the newcomer before,during and after the market is breached. Entrants must not give the appearanceof planning to ‘exploit’ their new found market; creating such fear is hardly amotivator for meaningful discussion. This fear of exploitation is inverselyproportional to the level of economic development, while the ability to quashpotential exploiters is directly related to the affluence of the target market.NOTE: It’s always best to enter a market quietly and then to build on successes over aperiod of time.Creating an atmosphere of ‘equality’ is all-important to early negotiations.This is true even when the deal is severely lopsided. The concept of ‘enough’must be on the table from the beginning of discussions. The outsiders must feelthey’re gaining enough to make entering the market worthwhile, just as the hostsmust feel they’re retaining enough to make the deal palatable. Here are some tipsfor setting up early discussions.- MAKE INITIAL CONTACT AN INTERGOVERNMENTAL PROCESS Business works withina framework devised by local and national governments. Often, perfectly gooddeals are scuttled by officials and politicians who feel they’ve been kept out ofthe process. Cries of violating ‘national sovereignty’ or ‘the good of the people?have been the death knell for thousands of potentially lucrative contracts andinvestments. Even large companies with seemingly unlimited resources can fallprey to the political process. Trade officials (national or local) from a negotiator’shome market and those from the target market can advise upon or actually make

the initial contacts. This lends a certain amount of credibility to the deal andkeepsthose in charge of eventual licensing (import or export) apprised of developments.Don’t underestimate how much damage a government can do to a deal norminimize their ability to assist during legal wranglings.NOTE: Hell hath no fury like a bureaucrat shunned.? INVESTIGATE A MARKET THOROUGHLY THROUGH RECONNAISSANCE Putting people?on the ground? to research a market is mandatory if success is to be assured.Preferably, these researchers will be eventual members of the NT and they’ll beable to bring their firsthand knowledge to bear on the discussions. Their job willbe to make contact with a variety of potential partners/ targets and make currentassessments of the marketplace. Political and market conditions are changing fartoo quickly these days to rely on last year’s assessment or another company’sexperience. Research is expensive but not as expensive as failure.? PLAN AHEAD AND FORECAST CONTINGENCIES If the success of your deal demandsthat you enter a market and set up production or a distribution chain by the endof the next fiscal quarter, be prepared to fail. Establishing international deals,even between technological powers, can take years before the dust settles. At aminimum, a year will be needed from the time the decision is made to enter a newmarket until actual operations commence. Even the simple trading of goods canbe held up by nontariff barriers such as extensive preimport testing. Whilenegotiations are proceeding the market is evolving and conditions are changing,so be prepared to make alterations to the original plan.? MAKE YOUR MOVE WHEN THE MARKET CONDITIONS ARE MOST FAVORABLE A numberof political, economic and social conditions dictate whether your plans for marketexpansion will succeed. Negotiations will hinge on proper timing. Your teammust be prepared to move when events take a sudden turn. The move byinternational mining companies to negotiate new contracts in Zaire turned on thesudden military advances of (what proved to be victorious) rebel troops.Negotiating mineral rights with a new, cash-strapped and battle-wearygovernment is significantly easier when done quickly. Waiting only changes thebalance of power at the table. When the balance tips in your favor, movedecisively.Breaking Out of a MarketMany emerging market companies face significant problems when attemptingto expand beyond domestic marketing. Their negotiators are faced with tinybudgets, restricted research, and self-doubt as to whether they can be players onthe global stage. Many of these companies labor under government-imposedtravel restrictions and limits on the ability to spend hard currency in foreignmarkets. They have very limited experience in dealing with foreigners and harborfears of appearing hopelessly behind the times. Much of this is easily remediedby the following.? FORM TRADE GROUPS AND POOL RESOURCES Deals can be negotiated on anindustrywide basis rather than by one company at a time. This is especially truein countries that are still experiencing central planning. Foreign companies arejust as happy (and anticipate) buying products from a co-op as they are from a

single manufacturer. Financial resources can be pooled along with the bestnegotiators in order to bargain from a position of strength. Money becomes lessof an issue, as a significant sum can be collected in small increments from a largegroup.? PETITION THE GOVERNMENT AS AN ECONOMIC OR POLITICAL BLOC Sometimes, thefirst part of international negotiations begins in the domestic market withgovernmental departments. Governments are very susceptible to group demands;even the most stringent socialists have come to see the value of internationalmarkets. A trade group or citizen’s organization arguing for more jobs andincreased income will be much better received than a sole company demandingto increase its market share.? BRING THE RESEARCH TO YOU Political or economic travel restrictions may limitthe ability to do market research but don’t eliminate it. It’s not unusual for foreigncompanies to visit potential partners upon invitation. A company or trade groupcan hold expositions or individual meetings where foreign firms are asked toattend and offer proposals. Some countries even require that a foreign firm be?invited? before their personnel are permitted to cross the borders’this is doneregardless of who is buying or selling. During these visits, a great deal ofinformation can be communicated that will play a significant role in future deals.Experienced foreign firms recognize this, and they’re prepared to exchange a greatdeal of cultural and economic data.The Host/ Guest Relationshipfamiliar territoryMuch has been made of the sports analogy of ?home court advantage? as itapplies to business. The theory is that the team that’s operating on its home turfwill hold a psychological advantage over visitors, who must deal with unknownterritory. This analogy holds true for the most part during negotiations, althoughit may be difficult to ascertain just what home turf is.For while it’s true that visitors to a country may be disadvantaged by the rigorsof travel and the unfamiliarity of the cultural surroundings, they may in fact bemore at home at the negotiating table than their hosts. Savvy teams with years ofexperience can be dropped into any country, culture, or business and exciseconcessions for which their hosts were wholly unprepared. Regardless of thelocale, these teams are always ?at home.? This is a powerful reason to keep ateam together for as long as possible.Another area in which experience overwhelms residency is technical detail.Visitors can put their hosts on the defensive early in negotiations simply by beingmore knowledgeable about the subject matter. This will be particularly true inhigh-tech, manufacturing, or transportation. Visitors will use their ability toobtain real-time information that may be completely unavailable to hostbusinesses but essential to negotiations. This is why timely research plays sucha

big role in international business. Never has the phrase ?knowledge is power?been more applicable.supply and demandBuying and selling also affects the host/ guest relationship. A host who is in abuying position wields enormous power at the table, even if technically uninformed.Major international telecom and construction companies repeatedly findthemselves on the receiving end of a ?hard bargain? when dealing with emergingmarket governments. Some of these countries are moving directly from the 19th tothe 21st century in their infrastructure and do so by playing one seller off of another.By relying on the visiting seller’s need to maintain (or establish) market share, thehost/ buyer will usually adopt a ?we only want to see your best? stance.Visiting buyers can maintain a similar attitude as long as the deal isn’t basedon a scarce resource. Visitors with an eye to long-term investment will also offervery good terms in the hope that future negotiations will be seen in a favorablelight when the stakes are higher. This can be very important in countries wherethe central government has a hand in every business deal. Military and politicalleaders may refuse to sign off on a major deal (which could mean thousands ofjobs and tax revenues) simply because they feel that the results of earliernegotiations were too ?exploitive.? Once again, the wrath of the bureaucrat hasbeen roused, and caveat vendor replaces caveat emptor.controlling the playing fieldOne of the advantages that hosts have, regardless of the buy/ sell relationship,is the ability to make the arrangements for visiting teams. This can involve locale,facilities, hotels, food, and transport. Making your ?guests? comfortable can bejust as disarming as making them uncomfortable. As will be seen later (Chapter5), some hosts use this particular form of control as a major part of their strategyand tactics. Returning to the sports analogy, in any competition, it’s alwaysadvantageous to keep the other side off balance.Using Financing as a Leverthird-party purse stringsThe control of financing is also a key part of negotiations. Oddly, the team thatis in the ?buying? position isn’t always putting up the money?at least up front.Many emerging market business deals are financed by foundations, developmentbanks, venture capitalists, and even sellers. Many basic infrastructure andeducation-related projects are funded by such organizations as the InternationalMonetary Fund (IMF) or the Asian Development Bank (ADB) in order to bringthese developing markets into the mainstream. Here the visitor/ seller finds littleresistance from the host/ buyer, who is either receiving the goods and service gratisor at extremely low interest rates. The host is almost extraneous to the negotiations,and the visitor need only meet the usually undemanding terms of the fundingorganization. Although it’s a simple process, it’s wide open to corruption, as has

been the case in many of the tumultuous nations of central Africa.adventurous capitalThe involvement of venture capitalists (VC) is another way for negotiators tomaintain control of the deal. These financiers will, in many cases, come from the homecountry of the visiting side. The use of VC is very popular with American and Britishcompanies when working overseas. Japanese and German companies can actuallysolicit VC-type funding from their own government organizations for global projects.Regardless of whether it’s private or public VC financing, the visitors can be much moredemanding, since the VC equity stake will (for the most part) be tied to them.seller buys allMany projects are done on a build-operate-transfer (BOT) basis, whereby theseller actually pays for the entire project (usually infrastructure) with hopes ofrecouping costs and profit over an extended period. Many transportation,telecommunications, and energy projects are conducted in this manner indeveloping countries, where financial resources are scarce. After several years ofcost recovery and profit taking, the project is turned over to the buyer at a nominalcost. Plainly, the seller is in a very strong negotiating position in a BOT project,although the wrathful bureaucrat must still be attended to if success is to be had.What’s on the Table?Everything is open to negotiation when skilled practitioners are involved.Thousands of details are open to discussion and it’s essential to learn todifferentiate between the important and the trivial. Many important and profitbustingterms are slipped through on ?laundry lists? of concession demands whileopponents argue fervently for meaningless demands in an attempt to distract.Listen and read carefully before and during discussions, as concentration is a keyelement in every successful negotiator’s style.do non-negotiables exist?Demands should always be viewed simply as strong requests and the term nonnegotiableshould be construed as ?We’re not prepared to negotiate this point atthis time.? Majority ownership, land usage, and profit repatriation rates are theusual targets of the designation non-negotiable. There’s no reason to accept thislimitation if the topics in question are of great importance to your deal. Often,the term non-negotiable is applied simply because there’s no belief that favorableterms could be granted. At other times, political or cultural sensitivity may notmake public discussion possible. Willingness to succeed brings success.

Negotiators must decide what the important issues are and whether theopposition’s supposed non-negotiable topics are among them. They must alsodecide if a suitable counteroffer can be proposed to keep the topic on the table.Another consideration is the practice of ?back channel? or nonpublicnegotiations. Making a concession non-negotiable often backfires on thepractitioners, as they’re eventually forced to be more generous on other topics,lest they appear unreasonable.

Chart of NegotiablesBelow is a list of major negotiation issues that should be considered forinternational trade and investment contracts.

TRADECorrespondent banksLetters of creditProduct lines Currency ratesFreight forwardersGround transportArbitration rightsTaxationInspection policiesTariff ratesPRODUCT LINEQuality control issues Technological transferSuppliersDomestic contentPatents, copyrights and trademarksLicensingREAL ESTATEAcquisition ConstructionContractorsLeasing and ownershipGovernment liaisonFINANCINGEquity relationshipsDebt acquisitionCurrencyExchange rates Taxation ratesRepatriation of profitsPayment schedulesWorking capitalBanking choiceStock transfersLoan guaranteesReinvestment plans

Exit strategiesAccounting practicesAuditing proceduresStock valuationMARKETINGLocal versus foreignAdvertisingProduct developmentDistribution channelsOPERATIONSEquipment procurementUtility contractsService contractsHours of operationMANAGERIAL DUTIESAccounting proceduresAccounting cycleReporting procedureOrganizational chartPolicy developmentCONTRACT ENFORCEMENTLanguage of enforcementJurisdictional rightsVeto processGovernment approval processAntitrust regulationsArticles of incorporationDispute settlement processconsiderations ArbitrationLABOR SELECTIONRecruitingUnion relationshipsTrainingSupervisory contactWage ratesBenefit packagesGovernment compliance

CHAPTER 4Initiating NegotiationsGetting the Lay of the Landsellers and buyers have the same motive?profit?but opposing means of achieving it.The same can be said of companies looking for capital and those looking to invest.Each side needs the other, although the degree of need varies from project toproject. Traditionally, buyers and investors set the rules and wait to be courtedby commercial suitors. Sometimes, however, the seller calls the shots, as is oftenthe case in the petroleum industry. At other times, an emerging marketgovernment seeking technology will play one foreign investor off of another, ashas often happened in auto industry licensing.Usually, the party with the greatest sense of need will make the initial contact,which will set the tone for all pursuant negotiations. Appearing too needy canmake the deal unattractive even before it’s on the table. Conversely, approachinga deal in a take-it-or-leave-it posture may only attract the most desperate partners,or none at all. Some basic contact points and guidelines can be followed to ensurethat when contact is made, it’s seen in the most favorable light.Project Summary: Setting the StageIt’s essential that the negotiations get off to an auspicious start. Both theinitiator and receiver of the inquiry must be excited about the prospects of thedeal regardless of who is actually selling or buying. Many potentially lucrativedeals have been stillborn because of too strong, too weak, too furtive, or too naivean initial contact.Truth is always the best approach, but a company must be careful about howmuch it reveals at the early stages. Revealing too much information will have adeleterious effect on future negotiations, while revealing too little may attract noone to the table. Preparing a project summary (often called a ‘sell sheet,? althoughit’s not confined to companies that are in a sell mode) will allow a company toeffectively and consistently initiate, or respond to, potential proposals.Whether used for trade or investment purposes, the summary is a key part ofthe negotiation strategy as it will act as the script for either the solicitation of or asa response to an inquiry. It will set the tone of negotiations and pre-position allcounterparts for long-term discussions. It should be prepared with the input of theactual negotiators, as they’ll be the ones who may have to defend its content atalater date. All data should be couched in terms that clearly suggest that the ?results?

are forecasted and that details of the project are subject to change. Since the purposeof the summary is to serve as entree to actual negotiations, the project should bedescribed in the most positive terms the truth will allow. Similar to an executivesummary of a business plan, the project summary should include the following:HISTORY A brief background on the company should be compiled along with amanagement profile (even if it’s a one person operation). If a successful trackrecord is available, it should be mentioned, but don’t include the names of pastclients unless previously discussed with them. Mission statements may also beincluded in this section (but not for simple trade projects).? PROJECT DESCRIPTION Without being overly technical, state the goal of the projectand a proposed methodology. Keep the terms general and avoid jargon unlessyou are sure the reader will understand.? DEAL DESCRIPTION Make it clear what type( s) of relationship will be acceptable.Whether it’s trade, a joint-venture, or strategic alliance, there’s little to begainedby ?beating around the bush.? Ownership percentages (or ranges) should bestated, and any legal restrictions clarified, if applicable.? FINANCIAL DATA If a partnership or corporate relationship is being sought, thereshould be a brief three- to five-year projected income statement for the project.(Balance sheets and cash flow statements should be on-hand if requested.) Fortrade, assemble projections on receiving (i. e., container loads or units per year)or estimate the quantities available for sale, especially if minimums are required.NOTE: Be aware that the project summary is a form of advertising and that claimsmadewithin it are expected to be deliverable. Basic as the claims may be, complexnegotiations will depend on them.Initiating NegotiationsAfter the target company or market has been selected, the first move must bemade. Whether trading or investing, buying or selling, the party that initiatesnegotiations has the advantage, as they can research potential candidates well inadvance of contact. Strengths and weaknesses of a counterpart have already beenexposed, for the most part, and can be allowed for or exploited. Planning (if doneproperly) is also on the side of the initiator, with every contingency reviewed.Assuming that the research and planning phases are complete, negotiations aretypically initiated by either a letter of introduction or a request for a proposal.letter of introduction (loi)This is a traditional way to approach both trading and investment partners.Such a letter is especially effective if it comes from a third party that has directinfluence on the desired receptor. The letter will include a cordial welcome and

a brief background of the subject company, followed by a broad description ofthe potential topic and a request for direct contact. The direct contact should beinitiated by telephone, then followed by face-to-face negotiations.If the letter is to be sent by a referring third party, it will be in the form of arecommendation (see sample below) that should also include a basic description ofthe project or trade deal. It’s best that the company seeking the referral actuallyoffer to compose the letter. It can then be submitted for the referring company’sapproval and signature on proper letterhead. This saves the referring company timeand assures that the letter will cover what is necessary for a successful contact.

sample letter of introductionDear________,On behalf of the Government of ________, allow me to introduce one ofour most successful business people, Mr. ________ of the__________Company. For many years his company has been a major contributor tothe economy of our _______ and Mr. __________ has personally been anactive benefactor of the community.He has asked us to write to you as a means of introducing his companyto your locality in the hopes that a successful commercial and culturalbond may be formed between our two peoples. His company is of thehighest caliber and his personal integrity is exemplary. We offer thisrecommendation without reserve and foresee a long relationship betweenyour two organizations.Thank you in advance for all of the consideration you may offer and pleasecontact this office if we can provide additional information or insights.With highest regards,

A company that’s introducing itself should take care not to appear too pushyor boastful about previous deals. State the goals of the project clearly andconcisely while maintaining a friendly tone. The LOI is no place for outrageousstatements or humorous turns of phrase that may be misunderstood or simplyfall flat.Because of the slowness and unreliability of the globe’s postal systems, LOIsare sometimes sent by fax. If that’s the case, a backup copy should be mailed asa matter of courtesy. Bear in mind that some totalitarian countries monitor allfax activity and often charge the receiver on a per page basis’thus possiblymaking your plans known to interfering parties or burdening your potentialpartner with fees and inquiries from government officials. Return faxes may beeven more expensive and subject to inspection. A little research will helpdetermine whether a facsimile transmission is, in fact, appropriate.WARNING: More than likely, the LOI will require translation. Make sure that thetranslation is reviewed by a native speaker other than the translator. Many countries

are very sensitive about the proper use of their language and will dismiss a solicitingcompany out of hand for not taking care with translations. Even when mistakes areforgiven, they’ll detract from a professional presentation. Also, make sure thatthenames, genders, and job titles of contacts are correct. More than a few proposals havebeen ignored when the letter of introduction misspelled the target company’s name.request for proposal (rfp)This method (sometimes called request for quote) of initiating contact is rathercommon in the developed markets of the West where contracts betweencompanies are seen as impersonal. The RFP is a basic description of a project,product requirement, or service system that’s sent to a target company with adirect (some might say blunt) request for a response. It can be used when buyingor selling, but it’s more commonly used as a description of goods or services tobe purchased. Most companies have a set format designed to cover any productor service. Translated versions should be thoroughly checked.The use of an RFP should be limited to those companies that operate ineconomies that are bound by substantial commercial contract law and tradeagreements. Because many international contracts are negotiated and operated atlong distance, the RFP can be a very cost-effective way of introducing businesspartners.CAUTION: As will be discussed later in the sections on cultural considerations,bluntness may be interpreted as a form of rudeness in some societies, while in othersit will be viewed as timely and efficient. Cultural awareness will go a long waytowardavoiding potential faux pas.How to Respond to Any InquiryDeveloping the proper response to an inquiry is as essential to futurenegotiations as the inquiry itself. While initiators have research and planning ontheir side, a respondent has time. There’s no advantage to firing off a hastyresponse nor will waiting too long serve the best interest of either party. Thefollowing basic procedures are recommended.prepare options

All companies, regardless of size, should prepare to operate in the internationalarena. Since an inquiry could come from virtually anywhere in the world, it wouldbe impossible to prepare a response in advance. However, this doesn’t precludethe gathering of technical data and the compilation of options, perhaps in theform of a ready-made company information packet. Being able to assemble aresponse in a timely fashion will both speed negotiations and set a professionaltone. Having considered all the possibilities in advance also allows a respondentcompany to proceed with confidence. Like the LOI or RFP, the response becomesthe basis for the early rounds of negotiations and perhaps eventual contract terms.

Accurate data and a well-thought-out proposal will keep negotiations on track.Remember, fortune favors the prepared mind.take advantage of government resources

Sometimes small companies or traders feel outmatched by large companiesthat demand responses to RFPs. This same sense of dread will be magnified atthe negotiating table. It may be wise to gain the assistance of a governmental tradeagency prior to formulating a response. They can offer advice on trade orinvestment terms and lay out the legal limitations. Such agencies may also be ableto supply critical trade data otherwise unavailable to the small or first-timeoperator and even provide assistance at the negotiating table. Being able torespond to an inquiry with some government backup will only add to thenegotiating strength of the respondent.

NOTE: The reader should be advised that for some financial services projects,armaments, and technology transfers, government agencies may insist on being partof the process. Getting them on your side, especially during the early stages, willcontribute greatly to successful negotiations.request more informationOften, an LOI will not contain enough information to formulate a cogentresponse. Confusion may also occur when an RFP doesn’t suitably addresstechnical problems, potential tariff restrictions, or ownership issues. Should thisbe the case, a company should quickly request clarification or additional databefore sending a formal response to the request.This will not be considered at all presumptuous as long as the request doesn’tdemand too much detail or the revelation of proprietary information. Often timesthe sender of the LOI or RFP will welcome such a request as an opportunity tofurther impress potential partners. Keep in mind, however, that a poorly wordedrequest for more information may serve as a guideline for judging technical orcommercial acumen. The request should be couched in terms that show expertiseand a general understanding of the proposed deal. ?Fishing? for informationabout ?givens? will most likely bring the deal to a screeching halt or, at the veryleast, label the respondent as naive.set up a quick teleconference

Much negotiating takes place over the telephone and the same is certainly trueof preliminaries. Certain inquiries may necessitate a quick response, andteleconferencing is a good way for negotiators to get a quick fix on the style andprofessionalism of their counterparts. Also, by setting up a teleconference, therespondent is demonstrating a high level of interest while moving the project alongin a timely fashion.

This sense of urgency will be appreciated by some and generate fear in others.Appearing to be ‘too hungry? for a project may detract from a professional

image, so negotiators are advised to rein in their eagerness. Some basic researchmust precede even a telephone response. Regardless of which side is setting upand paying for the teleconference, both sides will be planning to glean as muchinformation as possible prior to the start of face-to-face negotiations.request a preliminary meeting

If time and budget permit, a meeting to review the original inquiry may be inorder. This meeting can involve the principals of the respective companies or theirdesignated agents. In some cases, diplomatic commercial attachés will representa company at such a meeting. (Their language and cultural skills will beparticularly useful.) However, it should be noted that diplomatic personnel willonly get directly involved in large projects, technology transfers, or those projectsthat have potential political sensitivity.

These meetings should be brief, deal directly with topics covered in the inquiry,and be viewed as basic fact-finding sessions. No commitments should be offered oraccepted, but much goodwill should be displayed for possible future negotiations.A preliminary meeting, like the teleconference, is a way for each side to take theother’s measure prior to intense (and sometimes expensive) negotiations.

send an RFP

When the inquiring company has sent an LOI and is in a selling mode, theproper response may be an RFP. The RFP should be sent only after some basicinvestigation of the inquiring company. The research should include the historyof the company, an ownership/ management profile, and an overview of their totalbusiness activities (both related and unrelated to the inquiry). Don’t rely on theinformation found in the LOI. Research should not be confined to majorcorporate dealings but should encompass any type of international negotiation.

Although the RFP isn’t binding, it’s always wise to know whom you’re dealingwith in today’s marketplace. This is especially true when the bargaining betweenbusinesses has political or legal ramifications that may result in economicproblems. Many companies have been shocked to discover that the Chinesepurveyor they were dealing with was actually the People’s Liberation Army orthat their Russian suppliers were mafiya.decline gracefully . . . for now

Sometimes an inquiry simply isn’t attractive enough to warrant actualnegotiation. When this is the case, the response should be to decline the offergracefully. Reasons should be stated in the broadest and most diplomatic termspossible. Under no circumstances should a company respond rudely or (evenworse) fail to make any response at all. Besides being unprofessional, such

undiplomatic behavior limits the possibility for future projects and negotiations.It’s not unusual for companies and traders to maintain contact for years beforea single deal reaches fruition. Many attempts may occur before ‘the right fit?happens, and a well-worded rejection leaves the door open for the future.

Another reason to decline in a timely and courteous manner is that eachcompany or trader comes to represent the business culture of their domesticmarket. Every country has a reputation that’s based on past experience with itscommercial representatives. Acquiring a reputation for rudeness orunresponsiveness can work against an entire national business community, notjust the respondent. This is especially true in developing economies, where thereare few players and word-of-mouth is the main source of information. In thissituation, arrogance or poor performance in the preliminaries can get a company(sometimes a country) effectively ?blackballed? from all future negotiations.

The Value of Multiple ContactsEven the most informal, short-lived round of negotiations can be expensivewhen put on an international scale. Whenever possible, arrange to meet withmultiple, often competing, contacts during overseas stays. Besides maximizing thetravel budget, competing bids may be taken and played off of each other. Multiplebusiness contacts can, at the very least, result in a competitive price structure.Be aware that governments requiring ?business invitations? frown uponmultiple contacts unless prearranged through channels. Pursuing them may evenserve as a cause to revoke one’s visa. Some host companies may even find thepractice offensive (especially if they’re financing part of the visitor’s travelcosts).

Others, like U. S. companies, assume visitors will be seeking out a competitor?they will be doing likewise.

Obtaining an InvitationIt is not necessary to passively await an invitation from a potential client evenin those countries that require such documents prior to application for businessvisas. Target companies may be contacted and the prospects for a businessrelationship explained. This can be followed up with a request to forward a formalinvitation. Be aware that delays may occur, as the target company may need toseek government approval in order to forward the invitation.

These invitations are used by governments as a means of monitoring domesticcompanies and protecting the local market from foreign exploitation. Don’t takethe process lightly or attempt to circumvent it. Your travel costs will not bereimbursed when you’re sent packing by immigration officials. And posing as atourist in order to gain entry for commercial purposes can also have serious legalconsequences. In some countries, contracts signed by visitors with only tourist

visas may be invalidated, especially if it serves the purposes of your counterpart.

WARNING: Many immigration agents in the developing world consider the carrying ofbusiness materials or laptop computers as evidence of commercial intent. Laptopswith fax modems may be seized, and their owners required to obtain fax machineregistration for them in totalitarian countries. Don’t be surprised if the content of thelaptop’s hard-drive is deleted (or, at the very least, copied) as part of your ?punishment?for visa violations.how much will it cost?

International negotiations involving travel can be expensive for both hosts andvisitors, with a disproportionate amount being levied on the latter. For mostvisiting teams, even the opening round of talks will involve at least a week’s time.Hotels, flights, meals, ground transport, materials, shipping, meeting roomrentals, gifts, laundry, entertainment, and insurance can easily top US$ 3,000 perperson per week. In expensive locations like Tokyo, that amount can double. Andthese costs don’t include payroll and lost productivity.

Hosts also face the cost of providing meeting areas, ground transport,materials, entertainment, gifts, payroll, and lost productivity. Even the mostlackadaisical host can spend a large sum in a very brief period with no guaranteethat the investment will pay off. Both sides must firmly believe that they havemore to gain by pursuing negotiations than can be had by sitting on the sidelines.Because communication technology has vastly improved in the last decade, agreat deal of the preliminary negotiations can be accomplished by telephone, fax,email, or digital teleconferencing. Actual face-to-face meetings may be postponeduntil contracts are signed. Whenever budgetary concerns demand and whereverlogistics permit, technology should be considered as a substitute for travel.

Negotiating by Telephone and Faxby Olaf Greifenhagen

Geographical circumstances and time requirements do not always allow face-to-facemeetings with potential business partners. It can also be a question of money when thesize of the upcoming deal does not warrant expensive business trips in order to bringabout a successful conclusion. A simple request for a quote by fax or a telephone callcan be the start, and sometimes the ongoing mode, of very lucrative international deals.This case history demonstrates the information flow necessary and the role of serviceduring teleconference negotiations.case history:

I was called by a representative of a South American construction company askingus to ship heavy street paving machinery. The client explained that he was veryconcerned about shipping schedules because the construction project was already lateand penalty fees were soon to be charged. I explained that his stated desire to movethe machinery ?as is? and ?immediately? simply could not work. The equipment couldnot be loaded on ?flat rack containers? due to height restrictions, and the costforloading the equipment ?on site? was also prohibitive.

I made a number of telephone calls and found out that we would be able to dismantlethe machinery into smaller pieces. Though we now had more pieces to move, the newweights and dimensions allowed us now to move the freight on an ordinary ?low boy?chassis. It would not be necessary to hire special rigging equipment. In anothercall weagreed on the new chassis and that the loading of the cargo at the pier would beexecutedby a stevedoring company. I was able to provide my customer with an estimate forthistransport by a quote by fax. The freight charges were to be on a ?collect? basiswiththe shipping line. My part of this transport would be now limited to bringing the cargoto the pier and loading it on board. After receipt of a wire transfer for those charges,we executed the move. But there were more problems.

My customer had requested to use a South-American shipping line, but it was

discovered that this line could not provide us with the equipment necessary to load thecargo. This shipping line was using noncontainerized, ?break bulk? vessels. Becausethe shipping line did not allow us to load the cargo on deck, the freight charges weregoing to skyrocket?unacceptable.

More phone negotiations ensued, and I found a container line that provided us witha guarantee that the cargo would be professionally lashed and secured, therebyeliminating the liability for damages due to nonseaworthy loading. This, and thehiringof a marine surveyor to approve the seaworthiness of the load, further lowered the costfor standard marine insurance. The customer remained happy, and our risks weregreatly limited. The entire move was arranged within seven days, and throughout theentire negotiating process I never met face-to-face with my customer or any other peopledirectly related to the deal. The cargo arrived in South America without damage andwell within my customer’s time parameters. Successful, quick, and telephonicnegotiations.

Mr. Greifenhagen is a sales manager for an international freight forwarder.

The Value of PatiencePatience comes in many forms and it is a required quality for any and all peopleworking in international business negotiations. As mentioned at the beginning ofthis text, the word negotiation derives from the Latin for ?deny leisure? but thisis not to imply that there are not times when little is happening. In fact, muchofthe initial stages of negotiations involves waiting. This is called downtime anditcan be very trying. Negotiations will always move at the pace of the slowestparticipant and, though prodding may be in order, patience must rule the day.Oddly enough, speed can often demand patience. The technological economiesof the West, especially the United States, like to move at a very quick pace whichthey believe is ‘the only way to go.? Business cultures that move at a moremeasured pace will have to exhibit patience when attempting to meet theproduction and delivery demands of their counterparts.Requests for various types of information can also tax patience regardless ofthe time demands. Some negotiators like to ?peel the onion? and only divulgeinformation as needed. Others demand transparency in negotiations and wanteverything laid on the table at once for review. Some business cultures, generallyEast Asian, like to only discuss good news in public and reserve the ?downside?for back channel discussions. Sometimes this preservation of harmony forces thebad news to be revealed only after the deal has been finalized.International travel and communications demand patience even whennegotiations are going smoothly. Similarly, outside influences such as foreign anddomestic politics, governmental agencies, and citizen groups can all have a bearingon negotiations. In all cases, the ready application of patience will go a long waytoward countering their effect.ReconnaissanceEvery good battle plan requires reconnaissance. ?Recon? allows a strategistto uncover the strengths and weaknesses of an opponent prior to engaging them.The same is true of international negotiations. While it is preferable to do therecon ?on the ground? a great deal of information can be gleaned from secondarysources such as texts or the Internet. Regardless of the source, make sure it isasup to date as possible since global commerce has a rapidly changing terrain. Muchof the information acquired during the reconnaissance will have a direct bearingon future negotiations. It will also aid in the development of strategy and tactics.Listed below are types of information that proper reconnaissance should coverfor both traders and investors.? POLITICAL SECURITY Determine the stability of the local government, its attitudetoward foreign companies, and the expropriation of assets. Focus on thegovernment’s participation in commerce and the oversight agencies that willdirectly affect the project.

? ECONOMIC Determine the state of economic development within the areatargeted. Quantify GDP growth rates, status of governmental finances, current

level of foreign investment, and inflation rates; target sector growth rate potential,and company rank in the proper industrial sector.? EDUCATIONAL Determine the educational requirements of the participants in thetargeted sector. Assess the training needs of the targeted company for possiblebudgeting. Assess the managerial capabilities of the target market and company.? INFRASTRUCTURE Determine the status of the national and local system ofelectrical power supply, roads, water, sewage, waterways, seaports, railways andairports. Place special emphasis on those areas that will have an immediate effecton the project (e. g., electricity).? TECHNOLOGY Establish the level of access to and current use of technologicaldevelopments related to the project in both the near- and long-term. Investigategovernment involvement in or restriction of technological access or development.Determine government policy regarding technology transfers and training.? FINANCE Determine the ability of the local economy to provide or absorbfinancing for the project, the convertibility of local currency, access to stablebanking facilities, and the target company’s financial status. Note the number offoreign-operated banks and their ability to act as ?correspondent banks? forletters of credit. Also determine any restrictions on currency flows into or outofthe target market.? ACCOUNTING Information should be gathered regarding accounting standards,asset valuation, intangible assets, fiscal periods, loss rollovers, and tax filingperiods.? TRANSPORTATION Focus on the status of the target market’s internal and externalair transport. Ground transportation, including auto, truck, and rail stock, shouldbe quantified if in direct connection to the project. Governmental projectionsregarding transport should also be acquired if readily available.? TELECOMMUNICATIONS Telecom development is a key indicator of futureeconomic development for many of the newer markets. Phones per capita, accessto fax machines, optic cable installation, Internet usage, cellular phone contracts,and international satellite access should all be quantified for virtually anyinvestment project. These factors will determine future growth and currentprofitability in the global market.? DISTRIBUTION Traders and investors must have entree to adequate distributionlines. Recon should ascertain restrictions on foreign rights to distribute and theguidelines for setting up a distribution chain inside of the target market.? INVESTMENT AND TRADE RESTRICTIONS Obtain printed copies of the targetcountry’s investment and foreign trade regulations. Most nations issue an Englishversion of their regulations although companies may have to pay extra. Do not

accept anyone’s word or opinion on the topic. Current information in this areais vital so it is wise to take note of pending regulations or the tendency of locallegislators to pass retroactive laws.

WARNING: Many emerging markets have regulations that are flexible in directproportion to the size of the deal although it is not openly stated in the law.

TAX STRUCTURE Some nations place severe tax restrictions on certain forms offoreign trade or investment. Areas to concentrate on are repatriation of profits,import/ export tariffs, local content requirements, export processing zones,membership in the World Trade Organization, corporate income tax, expatriatetaxes, and trading bloc membership.? LEGAL ENVIRONMENT Determine the level of protection afforded foreignoperators. Similar to investment documents, obtain as much of the informationas possible in writing. Focus should be placed upon arbitration requirements,central government and local jurisdictions, copyright/ trademark protection,licensing requirements, joint venture/ partnership restrictions, property ownershipcapability, liability laws and limits, WTO oversight, shipping standards, customsregulations, business visas, and internal travel restrictions.? PERSONNEL POLICIES Few countries permit the wholesale importation ofexpatriate staff. Focus on foreign-to-local staff ratio quotas, minimum wagerequirements, local/ expatriate wage differentials, management trainingstipulations, work visas, benefits allotments for locals, hiring and firing standards,housing prices and restrictions for expats, liability insurance, as well asemployment contracts.? REAL ESTATE AND LEASE PRICES Determine the pricing structure for propertyownership (if available) by foreigners. Many of the developing nations have atwo-tiered leasing structure that places a heavy burden on foreign companies.Some localities even require foreigners to pay rent a year in advance. Leases andproperty prices are always open to negotiation and ?going rates? should bedetermined far in advance of formal talks.? CORRUPTION Bribery of governmental and business officials is a very real ifunstated part of international commerce, and all nations suffer from it to varyingdegrees. As a rule, the poorer the market, the greater the potential for corruption.Determine the extent of the problem in the targeted industry as well as the attitudeof the local population and officialdom. Formal negotiations may open with arequest for ?facilitation money? or ?consulting fees,? and it is best to have aprepared response. Research may also determine that an industry or economy isfar too corrupt to warrant further inquiry.? ATTITUDES TOWARD FOREIGNERS Get a fix on the host country’s view towardforeigners in general (xenophobia is alive and kicking worldwide) as well theattitudes concerning your particular nation. National biases may be racial,

geographic, cultural, political, moral, or religious in nature. Determining thesestereotypes in advance will allow for proper strategy and tactic development aswell as team selection.? CULTURAL HISTORY Learn everything possible about the culture surrounding thetargeted business activity whether it be a simple trade or a multibillion dollarinvestment. Do not underestimate the role of culture on business negotiations?this holds true for both sides of the table.

Scheduling the First MeetingsThe first impression each side makes will most likely have a major effect onthe style, progress, and eventual outcome of the negotiations. Scheduling the firstround of meetings is an important task for both sides and should be handled ina manner that preserves the professionalism of all the attendees. Bear in mind thatsome business cultures consider maintaining the ?discomfort? of counterparts asa basic negotiating tactic. Both visiting and hosting perspectives will beconsidered, and the reader may act in accordance with their particular position.the scheduleWhether buying or selling, visitors should never schedule meetings until theyhave been able to gather their required research. If this means postponing a tripfor several weeks, so be it. Unlike the hosting company, additional vitalinformation may be unavailable to visitors during discussions. If budgetingpermits, try to arrive in the host country a day or two in advance of meetings inorder to get the lay of the land. Unless it is a very short trip with few time zonedifferences, do not schedule meetings for the same day as arrival. Schedulingmeetings to begin on Monday after a Saturday arrival is an optimal pattern. Somehosts may attempt to monopolize this downtime with social events, so visitorsmay wish to keep their arrival (and departure) schedule vague as a countermove.Intrusions on free time may be unavoidable in countries that require invitationsfor business visas (countries such as China still like to keep close tabs on businessvisitors under the guise of constant hospitality). Remember, even if you are a solonegotiator, time away from the table is as important as the time you spend at thetable. Schedule both and stick to the schedule.

Visitors that are in a selling mode will be at somewhat of a disadvantage asthey will be pressed to adhere to the schedules of the hosts. This is an even greaterreason for precontact preparation as the buyer/ hosts may wish to meet ASAP.Postponing for a few weeks to prepare may cause the loss of a sale. Sellers musthave their bags packed and their materials in order at all times in today’s market.passports/ visas/ invitations

Many countries will not admit foreigners whose passports are within six

months of expiration. Getting renewals or new passports overnight is anexpensive and unnecessary venture. Some countries (especially those withtotalitarian central governments) have severe restrictions on overseas travel andmay require lengthy background checks prior to passport issuance. All teammembers should have current passport status as part of their qualifications. Teammembers that hold multiple citizenship, and thus passports, can be particularlyuseful for negotiating teams.

It is vital to secure visas for admission to host countries prior to departure. Donot rely on the ability to obtain visas at the port of entry as this will often leadto delays and sometimes shakedowns by immigration personnel who may be wellaware that important business is at stake. Some countries require special visas forbusiness personnel (generally more expensive) and issue severe penalties, evenexpulsion and ?blackballing? if business visitors are found to be holding touristvisas. It is advisable not to jeopardize your business over a US$ 60 visa.

Much of the developing world contains governments that like to keep a tightrein on foreign business ventures. Such countries require that foreign companieshave a formal, written invitation (email may not suffice) to enter the country onbusiness. Be aware that such an invitation is not carte blanche to conduct whateverbusiness is available. In fact, its secondary function is to restrict visiting companiesto solely dealing with those that invited them. Domestic companies in disfavorwith the central government will have difficulty inviting foreign firms. Visitorsmay even find that they will be restricted to doing business with state-owned orfavored companies.

NOTE: While your own government may have a somewhat laissez faire attitude towardbusiness, your counterpart may be subject to direct scrutiny or even oversight bygovernment agencies in every aspect of their operation.accommodations/ meeting rooms

The choice of accommodations will have a direct impact on how a companyis perceived. If the host chooses (and pays for) low- or mid-range hotels for theirvisitors, it will send a message about their standards. When visitors choose thelodging, it should be done in a manner that reflects their economic status withoutflaunting wealth. The second proviso is especially important when working indeveloping economies. Showing up the hosting company, whether buying or

selling, is not an auspicious way to open negotiations. Also, very rarely are luxuryaccommodations necessary. As mentioned earlier in the text, it is not wise toinclude members in your negotiating team who cannot function in anything lessthan ?class A? surroundings. Keep it simple, keep it apropos.

Meeting rooms are an important part of the negotiating process and can beused as part of the overall strategy. Host companies are generally determined tomeet on their own turf, but some find their own facilities lacking. Meeting at thevisitor’s hotel is often amenable to both groups although it does shift theresponsibility for the facilities from the host organization. Visitors find thisneutral ground to be beneficial as it allows them to control the pace and lengthof the meetings. More on meeting rooms will be discussed in the later sections.equipment and amenities

The comfort of the meeting facilities is something that both visitors and hostsmust be concerned with during meetings. Chairs, tables, air conditioning,beverage service, catering, lighting, noise control, and toilet facilities can allcontribute to or detract from the quality and depth of negotiations. Even theability to smoke during discussions can have a deleterious effect on meetings. Theinclusion of negotiators who have heavy smoking habits or are allergic to tobaccosmoke should be reconsidered.

NOTE: Some cities, like San Francisco, forbid smoking in any office building.Specialized equipment needs such as overhead projectors, computer or Internethookups, telephone systems, voltage conversion, and wheelchair access must bereviewed by both parties well in advanced of meetings. Similarly, fax, photocopy,and secretarial services are other areas that, if required, should be reviewed inadvance. Additional cost for this equipment and services should also be budgeted.NOTE: Do not assume that every facility is as well endowed as your domestic operationor that the host company will supply requested services or equipment for free.jet lag, weather and health issues

Travel between time zones with as little as a two hour difference can causeproblems even for the experienced. Major international travel with fifteen-hourdifferences can be devastating to thought processes and even physical health. Donot underestimate its effect, and plan for a certain amount of temporalacclimatization. Negotiators need to be operating at 100 percent if success is tobe achieved, so don’t agree to meetings immediately upon arrival or early thefollowing day. Budgeting an extra day prior to meetings is a good investment.

Acclimating to the local weather is another area that will require somepreparation. Journeying from Jakarta to Montreal in December can wreak havoc

with travel plans, especially when a high degree of ground travel is required uponarrival. Similarly, arriving in central Vietnam during the rainy season can putsevere restrictions on internal travel. Weather and research go hand in hand.

Health issues can derail negotiations as easily as a suspicious balance sheet.Malaria, amoebic dysentery, and diarrhea are very real aspects of internationaltravel and hence exert influences upon negotiations. Preparation in the form ofpredeparture medical advice, over-the-counter medication, avoiding overindulgence,and the generous application of common sense will keep negotiators at thetable and away from the toilet.

NOTE : Many tropical and subtropical nations require immunizations. Carry yourimmunization record with you when you travel. It can be an expensive and timeconsumingprocess to arrive ?in country? without the proper health documents. Also,some governments currently require AIDS testing for lengthy stays.clothing

Related to weather, health, and negotiating style is the issue of proper clothing.While London financiers may prefer Saville Row suits and silk ties, theircounterparts in South Africa may sport open-collared, light-weight shirts to dothe same work. Research will supply visitors with the information they need tolook the part and feel at ease during negotiations. Dry cleaning and laundry needsshould also be reviewed before travel, as being rumpled, dirty, or underdressedcan undermine your position during important discussions. Negotiating teammembers should be properly briefed on the climatic and cultural clothingrequirements prior to departure. Once again, keep it simple and appropriate.meeting length and agendas

Time spent overseas is always expensive but there are diminishing returns whenmarathon negotiating sessions are scheduled. Visitors, especially those withpotential jet lag problems, are cautioned to keep meetings (and recaps) to roughlythe length of their normal working day. Exhaustion is the greatest enemy ofnegotiators and is sometimes plotted as a tactic by host counterparts with greaterpersonnel resources available.

Agendas should be planned jointly ahead of arrival and schedules adhered toas strictly as possible. Moving smoothly from point to point in a timely fashion

is far preferable to drawn out, disorganized sessions attended by the remains ofa haggard team. Chief negotiators, on both sides, must guard the limited resourcesof their teams if success is to be had.

NEGOTIATING AXIOM: Plan the work, work the plan.

holidays and religions

Negotiations should be planned in accordance with events occurring at thehost location as well as the needs of visitors. Discussions during Christmas inLondon or during Carnival in Rio de Janeiro will hardly be productive. Similarly,inviting a Beijing company to Minneapolis during the Lunar New Year periodwill also be met with some resistance. By monitoring the religious and traditionalholidays of all attendees, negotiations can proceed without distraction orinterruption.

Religious requirements of negotiators must also be considered. Restrictions onwork, movement, fasting, and worship periods may have a direct bearing on theprogress and outcome of negotiations. Hosts and visitors must know whom theyare dealing with and seek to accommodate. Be aware that religious biases can beas destructive to discussions as racial, sexual, or cultural prejudices. Beforemeetings are scheduled, both sides should be briefed on any special needs.flights, ground transport and traffic

Airlines spend considerable advertising funds to show business travelers thatthey can provide comfort and relaxation at 35,000 feet. Business class wasinvented on international flights to appeal to the types of people that take part innegotiations. Even a good intercontinental flight can be exhausting, so it is wiseto invest in the most comfortable flight possible. Budgets may preclude first-classtravel and even business class can be pricey on transoceanic travel. Sometimesjust the choice of the airlines can greatly contribute to comfort and that comforttranslates into acuity at the negotiating table.

RULE OF THUMB FOR INTERNATIONAL AIR TRAVEL: Money saved in economy class willeventually be spent several times over at the negotiating table.

Ground transport supplied by hosts or the choice of rental vehicles by visitorswill reflect a company’s image and standing. Unless a visiting team is familiarwith the host terrain, local drivers should be hired in advance (hotels can be auseful source) but be aware that drivers supplied by host companies may bereporting on pre- and postmeeting activity and conversations. Vehicle choiceshould, like hotels, be in line with both company image and budget.

Traffic is a growing concern throughout the world. Delays and missed meetingsdo not further the cause of negotiations. Some cities, like Bangkok, are so snarledby vehicles that business guides recommend that hotels be selected at a distanceno greater that five blocks from meetings. Schedules will also have to reflect trafficproblems when multiple meetings will be required at locations throughout a city.Schedulers should tap the hotel as a resource for information on a city’s traffic

congestion.

culinary

Visitors must be aware that most of the world’s cultures take great pride intheir culinary ability and are personally offended when the cuisine is rejected byforeigners. Some business cultures are especially keen on linking business meetingswith dining but all groups do to some degree. Arrive prepared to have new diningexperiences. Business dining or not, overseas travel can become a gastricnightmare if precautions are not taken. As mentioned earlier, fussy eaters orpeople with delicate constitutions will have a difficult time working in theinternational business arena, but even seasoned veterans should watch what andhow much they eat. Try a little of what is offered and avoid overindulging fromcup or plate. Prudence is the name of the game. Don’t let the dinner table keepyou from making it to the negotiating table.

Hosts should be briefed on any special culinary needs of visitors. These needsmay be religious or philosophy based (e. g., alcohol, meats, dairy). Some may berelated to medical problems such as salt intake or MSG allergies. It is incumbentupon visitors to inform their hosts well in advance of arrival that special dietsmay be required.medical

Specialized technical meetings or contract signings by corporate officials mayrequire the special inclusion of team members with medical problems. Medicalcare varies in degree, quality, and style throughout the world. Some of thedeveloping nations are a long way from being able to supply what many travelerswould consider basic services. The local pharmacy in such places may be thecorner herb store. If modern medical resources will be required, they should besecured in advance of arrival and costs budgeted. Do not assume that all of theworld’s major metropolitan areas have the same resources’some countries haveonly a very thin veneer of modernity. For extended stays, emergency medicalevacuation insurance can be found for what generally proves to be a steep price.gifts

Gift exchange among business associates is a standard practice in manycultures and is not to be confused with bribery. If negotiations are taking placein such a culture, visitors must prepare accordingly as neglect of this practiceshows a lack of understanding (and research). Keep the gifts small, for transportreasons, and preferably company related. Executive model pens, briefcases,binders, cufflinks, neckties, or sweatshirts or jackets with company logos aresuggested. Artwork, if produced in the visitor’s country of origin, is alsoacceptable. Do not, under any circumstances, offer gifts produced or purchasedin the host company’s market.

CHAPTER 5 Face-to-Face

Sizing Up Your Counterpartsfirst impressions are a big part of society and business as a whole, and they’reevenmore significant in international business. Starting off ?on the wrong foot? canseriously damage negotiations before they’ve even started. It does not take longto create a good impression and even less time to create a bad one. The followingtips can spell the difference between a negotiation success and a lengthy, expensivefailure.

Impressive Behavior

punctualityNo one in the history of commerce has ever erred by being on time. Plan onsetting out for meetings with time to spare, particularly when unfamiliar with thelocation. Even when counterparts have a seeming indifference to time, punctualitywill always keep the professional ball in your court.

appearance

Often, hosting companies will wish to meet their visitors at the airport.Regardless of the visitor’s fifteen-hour flight with the four-hour layover, aprofessional appearance must be maintained. Plan on changing into businessattire (or at least a set of fresh clothes) prior to arrival. Wise travelers always carrya change of clothes and their toilet kit with them, just in case their check-inbaggage gets lost. Never let your counterparts see you at your worst, especiallyif it’s the first time they see you.

The visitor’s accommodations must have facilities that permit the negotiatorsto maintain hygiene and laundry. This can sometimes be difficult in the developingeconomies and may even require equipment (e. g., irons, steamers) to be broughtalong. Negotiating staff must be capable of looking their best under the bleakestof circumstances. This is another reason why high maintenance personnelshouldn’t be selected as negotiators.

Hosting negotiators also need to be concerned about their appearance,particularly when they’re acting as sellers or attempting to attract investors.Researching their visitor’s business standards and acting in accordance with themis recommended. Stubbornly adhering to ‘the way we do it here? will only makethe negotiations an uphill battle.enthusiasm

Chief negotiators and those working solo must ?psyche up? for every round

of meetings as if it were the first round. Any feeling of ?here we go again? must

be banished. Enthusiasm must flow from the top and every member of the teammust feel its effect.

Visitors always have the more difficult time maintaining their level ofenthusiasm and even more so as their international experience grows. The charmof travel soon becomes a burden and the long stays away from home wear onone’s personal life. This isn’t just true for negotiators who leave behind families,although the effects are more telling in their cases.

Assigning new duties or allowing subordinates to take key roles (withguidance) during meetings will keep everyone on their toes and force them tofocus anew. Another technique for rejuvenation is the inclusion of novices on theteam. This can allow the old-hands to hold forth, and giving experienced teammembers the opportunity to ‘strut their stuff? can work wonders.

Keeping a good balance between work and play will also serve to maintain ahigh level of enthusiasm. Make sure enough free time is scheduled and that socialevents aren’t entirely work related. Team members and solo players will needsome time to themselves without being made to feel guilty. Burnout is rampantin international business (particularly for staff with high travel rates) and it’susually the result of overscheduling.

teamworkWhen meeting counterparts for the first time, it’s important that an organized,cohesive team spirit be evident. The first meeting with counterparts will indicateto them just how much work lies ahead. The psychological impact of meeting amonolithic team that is both organized and directed can be devastating.Conversely, disorganized, feuding teams spell success only for the opposition.It’s important that teamwork be demonstrable to some degree at the firstmeeting (airport or otherwise). Such visual cues as uniformity of dress, prominentcompany lapel pins, or even matching binders should be linked to a willingdeference to the team leader. Counterparts will know that they’ve just met a teamwith a single purpose. Maintaining this level of cohesiveness will become essentialif Divide and Conquer tactics are to be thwarted.

congeniality

Like punctuality, congeniality is conspicuous in its absence. Being affable andoutgoing at the first meeting will only serve to ingratiate you to counterparts.Ifthe time comes to take a less cooperative stance, so be it. When necessary, it’s

always easier to move from congeniality to a less agreeable posture than in thereverse direction. Be aware that not every culture expresses its friendliness inthesame way. Cultural research will provide negotiators with the verbal and visualcues necessary to pick up on (or display) friendly behavior.

WARNING: Bear hugs may be demanded one week and polite bows the next.Congeniality wears many faces.

respectThe term ?respect? is often used but greatly misunderstood. In its literal sense,it means to ?look at intently? (though few of us would consider staring a sign ofrespect). Some equate it with ?admiration,? while others construe in it a sense of

?equality.? For the purposes of this book, respect will be viewed as the oppositeof contempt.

Treating counterparts with a sense of respect (until they prove otherwiseunworthy) is the most positive way to enter negotiations. As with congeniality,moving from respect to contempt is easier than the reverse. Also, if you’re willingto fly halfway around the world to deal with contemptible companies just for thesake of profit, what does that say about your own company?

Often, people are unaware that they’re expressing contempt or that they?rebeing condescending or patronizing. Visitors who complain about food quality,accommodations, road conditions, local service personnel, or even the weathermay cause their hosts to believe that the local culture falls beneath their guest’sstandards. Hosts who comment unfavorably on the conditions of the visitor’shomeland or political situation will be causing similar harm. Feelings?andnegotiations?can be hurt in a thousand avoidable ways.

How to Host Introductions

at the airport

When meeting the visitors at the airport, check in advance to make sure flightsare on schedule. Arrive early depending on the degree of difficulty and amountof time forecasted for your visitors to get through customs and immigration. Hostsshould make every possible effort to ease both of these processes for visitorsespecially if specialized equipment is being transported for the negotiations.

Precontacting customs officials (when possible) to give them a ?heads-up? cangreatly speed the process when specifications have been forwarded by the visitors.

This bit of graciousness will impress the visiting team/ negotiator and immediatelyplace them in your debt?a very propitious position for hosts in the selling mode.

If the director, president, or general manager cannot be on hand for thegreeting, send the next highest official available. Never send just a driver. Hostpersonnel should include a translator if possible (and necessary) as well as atasteful, professional looking greeting sign to catch the eye of the visitors astheyapproach. (No marking pen on cardboard signs please.) A computer laser printof the name in extra-large type works well. The sign should also be printed in thevisitor’s native tongue regardless of their ability to understand the host’s language.It is an extra touch that will go a long way. Make sure spellings have been triplechecked. If the visitor’s company logo can be included, all the better.

If the airport is a mob scene, as most international airports are, an area off tothe side or a private room should be set apart for the ceremony (yes, ceremony).

A culturally related presentation is wise as it reinforces the idea that the visitorsare entering a new culture not just a business venture. Otherwise, a brief groupwelcome and wishes for a mutually successful outcome are in order. Individualintroductions should be done by a predesignated member of the host team. Donot let the introductions proceed in a haphazard manner. A welcoming packet ofinformation should be distributed to all members of the visiting group at this time.

Keep the ceremony brief and make it clear that the visitors will be taken to theirhotel ASAP. If it is a morning arrival, it is certainly acceptable to extend a dinnerinvitation but keep your visitor’s fatigue and jet lag in mind. No actual business

Suggested Contents for Information PacketsOfficial governmental welcome City and country maps�Meeting agendas List of local restaurants�Cultural activities list Shopping information�Sight-seeing information Local events schedule�Transportation guide Logo T-shirt or hat�

should be conducted until the visitors are prepared both physically and mentally.Let the visitors control the first day’s agenda. Rushing the process may beinterpreted as a tactical maneuver rather than efficiency. Visitors should then be

driven to their hotel (at host expense) and their check-in should be facilitatedby amember of the host team regardless of who made the reservations. Check back aftera short interval to make sure the accommodations and service are adequate.NOTE: A well-treated guest is an agreeable guest and agreements are whatnegotiations are all about.at the company facilityWelcoming visitors to the company’s facilities is an exercise in graciousnessand intimidation. Hosts must simultaneously make the visitor feel welcome andmake it clear that this is not neutral turf. Keeping home court advantage is, afterall, the reason negotiations are being conducted at the host facility.Hosts should present their company in the best possible light but should notseek to put on airs. A small electronics manufacturer on the outskirts of Caracascannot pretend to be on equal footing with IBM, and it would be counterproductiveto attempt to do so. Hosts need only to be comfortable in theirsurroundings in order to maintain advantage.A brief formal welcome should be first on the agenda with all pertinent staffmembers being introduced. (Some cultures move from least important personnelto most important while others do the reverse. Also, some cultures permit asecond-in-command to take the lead in these situations.) These introductionsshould be followed by a short (less than an hour) tour of the facilities. Specialized,detailed tours can be arranged later. Some companies may offer a small welcominggift at this time, although it is not required. Professionally printed name tagsshould be offered to visitors and worn by hosts as well. Check the spelling andbe capable of making corrections in-house.How to Make an Entranceat the airportForeign visitors must also be prepared to deal with a certain degree of inconvenienceupon arrival at airports or frontiers. Often inefficient, officious customs andimmigration personnel will add hours to an already long day. Keep frustration toa

minimum as it may only delay the process. Acting indignant or taking a ?don’t youknow who you are dealing with?? attitude simply won’t work. If particularly sensitiveequipment or personnel are brought along, the host company as well as embassypersonnel should be alerted in advance in order to facilitate entry. Keep in mind that inmany countries, any altercations at the point of entry may result in the host companybeing held responsible. This will definitely be the case when a formal invitation isinvolved. Confiscated equipment, limited visas, a fine, and a government reprimand forthe hosts is a less than auspicious way to begin negotiations.

Once the passports have been stamped and customs cleared, allow time for thehosts to offer their welcome. If infirm or elderly members of the visiting teamrequire immediate exit from the airport, let the hosts know well in advance. (Theairphone is the best way to keep hosts updated if there are flight delays or specialupdates.) Beyond the grooming concerns mentioned earlier, visiting staff shouldbe attentive and enthusiastic upon arrival. Though it may be a lot to ask aftertwenty-four hours in transit, every member of the team must exude ahappy-to-be-here attitude.at the host facilityIf the hosts have not chosen to meet at the port of entry, or there are multiplecontacts, the first meeting may occur on their turf. Visitors should arrivepunctually and be prepared for a certain amount of ceremony before work begins.Small gifts such as company logo pens should be brought along but onlydistributed in return for welcoming gifts presented by the host. Do not upstagethe host’s generosity or lack thereof.The host may wish to give a tour of facilities prior to the start of formaldiscussions. Visitors can only hope that the host has read this book and keeps thetour brief, otherwise endure the process with aplomb. Enthusiasm is required butasking too many questions will only extend the tour. Visiting staff under nocircumstances should indicate that they find the facility lacking or comment uponemployee working conditions in an uncomplimentary or concerned fashion.WARNING: Political or social activists should not be part of the negotiating team.Unsavory working conditions and low wages should have been revealed and discussedduring the research process well in advance of travel. If unforeseen and unfortunatecircumstances do arise, they should not be discussed within earshot of the host untilthe team has had a chance to formulate a position. If you are a solo negotiator,do notlet knee-jerk reactions to events jeopardize the deal. Take time to think through theproblem before stating your objections or opinions.Visitors should always dress for initial meetings with an intention to err in favorof formality. Business suits should be worn (even in hot climates) as a sign ofprofessional respect until the proper tone of the negotiations has been set by thehost. Visitors should be prepared thereafter to work in anything from suits to poloshirts. Some companies ask their hosts in advance regarding dress standards so asto facilitate packing. Business related social events that may require special clothing,such as golf or hunting, may receive this same type of inquiry.The first meeting may turn out to be a completely social event with little ?real

work? being done. The cocktail receptions, luncheons, cultural tours, and dinnersmay all appear as innocent forms of welcoming but they are in fact a means to

take the opposition’s measure. Members of either side may be engaged in idleconversation, but background information will be solicited. Social skills will beassessed and pecking orders delineated. Cultural acumen, marital status,education, strategy, and business sophistication will all be exposed then dulynoted. The opposition is looking for chinks in the armor as they pour thechampagne. Visitors must keep their guard up, and all team members should bebriefed about maintaining their dignity as well as a unified front. Generally, aword to the wise is sufficient, but special care should be taken with younger,inexperienced members of the team. Also keep in mind that turnabout is fair play.at the hotelOn occasion, the first meeting is held at the visitor’s hotel. Sometimes this isdue to a lack of proper space at the host facility or it may be a question of traveltime on the first day. Long-term scheduling of meetings at the visitor’s hotel isdiscussed later.The visitor suddenly finds himself confronted with a duty to be both host andguest for a very important part of the negotiating process. A hotel that reflectsthe company’s status should have been selected in advance with the needs of thismeeting in mind. Some companies will rent meeting rooms while others will utilizethe living room space of a suite. When these choices are not available or withinbudget, the lobby or the hotel dining room is an acceptable substitute as long assome degree of privacy can be found.Visitors will be held responsible to a degree for any shortcomings of the hotel(or its staff) and it should not be selected casually. Appearance, quality, clientele,location, service, and even union representation may all play a part in how thevisiting company is viewed by their counterparts.Guests should be welcomed by a member of the visiting team and escorted tothe proper area. If traveling alone, the negotiator should not wait to be calledfrom their room but instead anticipate their guest’s arrival in the lobby. Cordialityis appreciated worldwide. If business is to be conducted on the first day, it wouldensue after brief introductions and well wishing. Adjournment to the dining room,meeting area, or suite would be in order. Some form of food and beverage shouldbe offered throughout discussions.Regardless of a buying or selling position, the visiting team will be in chargeof running the meeting just as if they were back home. They will be judged onhow well the discussions progress and the quality of the physical surroundings.All room amenities (even air conditioning) must be in order and checked in

advance. Visitors should not assume that the hotel staff (or the physical plant)will be on par with home market hotels regardless of the classification. Whenthings go wrong, visitors should take full responsibility and never attempt toblame the local staff as this will reflect poorly on the host company. It will alsosay something about the visitor’s willingness to bear accountability.

NOTE: When visiting developing economies, do not be surprised if your counterpartsshow amazement at the hotel’s facilities. Most will have never been inside such astructure as a result of public edict or finances. If this is sensed, a brief tour by the hotelstaff may be arranged. Never approach this as ‘see how much I can afford? but morefrom the standpoint of how impressed you are with what their country has to offer.

Personality TipsNegotiators should not assume that the physical and oral cues that are usedto assess personality types are universal. Only detailed cultural research willprevent both sets of counterparts from creating or receiving the wrong impression.The following is a list of personality cues that vary from one society to the next.? A smile in one culture denotes pleasure while in another it signifies discomfort.? Reticence for one group speaks of shyness but in another it declares wisdom.? A strong handshake betokens self-assuredness for some but boorishness forothers.? Eye contact indicates honesty to many but is a source of disrespect to an equalnumber.? Touching denotes friendship for the outgoing but an invasion of privacy for theintrovert.? A sullen demeanor for one person covers anger for one but sadness for another.? Slouching signifies weariness and boredom in the West but disharmony in theEast.? Loud speech can mark an authority figure in some cultures but a loss of controlin others.These cultural signals need to be understood in order to be properly utilized.The greatest mistake that negotiators, and travelers in general, make is that theytake a great deal of time to learn and interpret what others are doing withoutassessing their own actions. Personalities can be appraised quickly and accuratelywhen all of the cues are placed in context. It is the context that requires the greatestresearch and insight.

CHAPTER 6The Function of BiasPerception versus Realitycultural biases can be both a weapon to avoid and a shield to hide behind. The dividingline between weapon and shield is that between unfavorable and favorablestereotypes. Negotiators must learn to use their counterparts? biases to achievethe most favorable result.Every culture is perceived by other cultures as having both bad and goodfeatures, and these are usually based on some kernels of truth. The Japanese areseen as intelligent but uncreative. The British are snobbish but polite. TheGermans are precise but rigid. Americans are self-centered but clever. Sometimesthese characteristics are linked to national borders and sometimes to ethnicity(Asian values demand . . . ), religion (Moslems always . . . ), geography (Westernersconsider . . . ), or politics (Communists insist on . . . ). However, human naturemakes it easy for both whole cultures and individuals to believe the positive aboutthemselves and discount the negative. Any self-respecting Japanese will staunchlydefend national intelligence while quietly rationalizing the lack of Nobel Prizewinners. Germans will likewise extol their engineering prowess whiledownplaying the inflexibility of their legal system.Using Your Counterpart’s Bias to Your AdvantageNegotiators rarely have the time to address the problem of biases head-on, andbesides, to do so means running the risk of offending a potential business partner.The most efficient technique is to play to the positive stereotypes and defy thenegatives. This method will keep the counterpart off balance and in a constantstate of trying to figure out the other side. Meanwhile, the negotiator maintainsonly a positive image in the mind of their counterpart. This requires a good bitof research, coupled with the ability to quickly pick up on the individual biasesof counterparts.WARNING: Don’t attempt this technique until you are clearly aware of thecounterpart’s biases. Otherwise, you may waste a lot of energy dispelling stereotypesthat don’t exist.Finding Achilles? HeelNegotiators must make a resolute effort to clear their own minds of prejudice,if for no other reason than that prejudices stand in the way of efficiency. Assumingthat counterparts are intelligent, reasonable, insightful, honest, forthright,precise, clever, punctual, or sophisticated is just as bad as assuming they’re not.

Skilled negotiators must be able to detect their counterparts? strong points as wellas their weak ones and to act accordingly. Rarely can success be found by being

oblivious to an opponent, and there’s only a slightly better chance in granting thebenefit, or drawback, of the doubt.Perceptions are based on available information. The axiom ?All things cometo those who wait? doesn’t apply to international negotiations. Active, directedcultural research with a great deal of input from expatriates should beaccumulated prior to negotiations. Information should be judged by its sourceand all viewpoints solicited.WARNING: Don’t use cultural materials published by the government of the targetcountry as primary sources. They’ll probably be riddled with their own particularbiases.Once introductions have passed and negotiations have begun, each side willbe attempting to check the accuracy of their respective research. Negotiatorsshould deal only with the reality facing them across the table. There’s no valuein attempting to force the facts into a preconceived pigeon hole no matter howwell researched. Predictions can depart from outcome. Negotiating, likeaccounting, must use its poor forecasts as a tool to restructure the process. Missingthe mark is a reason to improve research?not to drop it.Economic PrejudiceThe developing world and the technological economies continually eye eachother with the intention of profit. The former wants to skip a century ofnondevelopment to secure cutting-edge products at cut-rate prices. The latter seesmillions of unjaded consumers willing to snap up products that have long sincerun their course in the domestic marketplace. This economic disparity can be piledon top of the standard biases already at work.Negotiators should be aware that countries that have experienced significantcolonization during the 20th century are very sensitive to this issue. Companiesfrom foreign lands will not always be greeted with hardy welcomes. Instead, theymay be met with protests by local citizen groups, as has happened in parts ofIndia recently. The phrase ?Investment, not investors? is fast becoming a rallyingcry in many developing countries. These economies are demanding access to theworld’s cash supply without signing on for what many of them see as the ?culturaldecadence? of their benefactors. Foreign negotiators may find themselves beingheld responsible for a whole host of problems that they neither had anything todo with nor intended to profit by.In previous centuries, ?commerce follows the flag? was the rule ofinternational business (e. g, the Opium War); today’s precept is closer to ?culturechases commerce.? Negotiators in developing economies must realize thatalthough they’ve been directed to drive hard bargains, the patience of foreigninvestors has long since worn out. International companies are no longer willingto take accusations of ?cultural imperialism? seriously. For them, 20th centurytechnology brings 20th-century culture, with all its inherent problems.

Both sides of the table must realize that a take-it-or-leave-it attitude will not

produce useful results. The key for each side is the ability to understand theircounterpart’s position and, to some degree, manipulate it as part of the overallstrategy. Such planning will be discussed in detail. For now, suffice it to say thatmaking the other side believe it has won is a victory in and of itself.Playing the ?Race Card?An unfortunate reality of international negotiations is that the race of theparticipants will have an effect on the discussions. Regardless of the personalfeelings of those in charge of the process, racial characteristics need to be takeninto account. Understanding one’s own racial perceptions, as well as those ofcounterparts, is an essential part of preparations for face-to-face meetings.Researching the biases of counterparts and then either playing to them orcounteracting them can be an effective tool at the negotiating table. Racial biasis, after all, a weakness and weaknesses are to be exploited. Even where racialdiversity is limited or a single negotiator is used, the ability to reinforce orreversea stereotype at the proper stage of negotiating can completely unbalance theopposition. However, playing the ?race card? is a delicate matter that’s prone tobackfiring, so it’s best to have it well planned out in advance.Cultural AccommodationCultural considerations will arise time and again, even when they’re not thesubject of direct discussion. Each side must come prepared to accommodate theother to a reasonable extent, and such accommodations can be myriad. The daysfor meetings may be chosen to allow for holidays or religious schedules. Even thetime of day can be scheduled based on local activity, as may be the case in hotterclimates where the populace traditionally observes some form of siesta or shoushei. Similarly, negotiations may be interrupted for prayer by orthodox Islamicteams.Late-night meals, after-hour socializing, marathon sessions, and multiple ‘timeouts? for consensus taking will all require accommodation. Each side shouldrespect the other’s need to maintain some of their respective cultural patterns,even when operating on foreign turf.The Value of KindnessKindness may be universally appreciated, but it can also be interpreted as asign of weakness in some cultures. And the leap from being kind to beingobsequious can sometimes be a short one. A kindness withheld can be taken as aslight, while a kindness granted may be viewed as a patronizing act. The phrase?You are too kind? can be taken literally, with the result that the speaker nowfeels obliged to respond with an even greater benevolence. This is especially truein business cultures with a gift-giving tradition. Research will allow negotiatorsto recognize when they’ve gone too far or have been too niggardly.

Kindness is also an effective tactic. Keeping counterparts in sufficient ?debt?while negotiations progress may lead to significant concessions. Negotiators must

take care not to allow this ploy to become evident and to remain on guard forturnabout. Kindness can produce social debts that may require economicpayment.Manners That MatterWhat constitutes good manners is by no means universal. Internationaloperators are always in a position of trying to determine what is proper and when.Translators, expatriates, embassy protocol officers, and host governmentrepresentatives are all useful sources of information.Working in the international arena demands a great deal of flexibility.Extroverts may suddenly have to recognize the value of reticence. Negotiatorscomfortable with dignified bows as a greeting may be thrust into a world of bearhugs or even an exchange of salutatory kisses. Women used to being treated withdeference can find themselves excluded from important conversations. Whilenegotiators may not always find these situations pleasant, they should never besurprised by them.Table manners are another area that can have a direct effect on business. Atsome point, international negotiations put the players in a dining situation. Thedesire to ?break bread? with trusted associates is strong in all of the world’scultures. It may be at a private home, the company canteen, or an exclusiverestaurant. Wherever it is, you can be assured that the table manners of theparticipants will be observed and assessed. The inability to choose the propersilverware at a Parisian banquet will mark the perpetrator as culturally backward.Similarly, the inabilty to use chopsticks at a Shanghai luncheon will unveil thenegotiator as a cultural novice, while asking for chopsticks in a Manila restaurantmay be taken as an insult. Eating fried chicken in Atlanta with a knife and forkmay evoke a humorous response, while using a left hand to pick up food in Delhimay elicit wide-eyed stares from one’s hosts.Manners in any form?whether it’s knowing how to address someone of seniorrank or for whom to hold a door, which utensil to use or how not to dress for aparticular occasion?are small points that speak volumes. They’re the nuancesthat drive successful relationships and promote understanding. Their presencedenotes both cultural research and concern, while their absence signifies naiveteor boorishness.

For more on business protocols for individual cultures see the World TradePress Passport to the World Series (25 country-specific titles).

CHAPTER 7Site SelectionHow Do You Get There From Here?as is true of introductions , the location and conditions of the negotiation facilitycan have direct bearing on the outcome of meetings. Consequently, both sidesmust take great care to maximize their position during site selection. This isn’talways solely a question of psychological advantage but also one of cordiality andpride. Very rarely will the host company permit all, or even the majority, of themeetings to take place on neutral turf, since this reflects poorly on their ability to?hold up their end? of the deal. Hosts must host and visitors visit.Projecting the Proper ImageVisitors will be incurring a fair amount of expense just to travel to the site, andit’s a reasonable expectation, even when they are selling, that the host companywill provide a comfortable and convenient meeting facility. Visitors may alsoinsist that the meetings take place in a major city that may not contain a hostcompany office. Hosts may then be required to obtain facilities at additionalexpense. Some companies do ‘trade outs? with local purveyors or enlist theassistance of government agencies.Whether an acquired facility or a company facility is used, it must reflect thehost’s image as much as possible. If specific conference rooms aren’t available,the best office on site should be made over to accommodate the meetings. Don’tuse employee dining rooms or a vacant storeroom as a substitute. There’s no pointin putting on airs, but make the effort to promote a professional image. Hostswho take the attitude of ?why go to such bother for a single meeting?? may findthat it’s a self-fulfilling prophecy.Visitors may be called upon to provide the site for at least some of the meetingsbeyond the introductions. This will often be true when they’re in the selling modeand members of the host team don’t have local offices. In this case, any advantagethe visitors get by using neutral turf is offset by the requirements of selling.Hostswill be assessing the quality of the hotel/ meeting room as a means to determinethe status and detail-mindedness of their potential business associates. Here again,extravagance isn’t necessary, but penny-pinching will send the wrong message.Convenience, Conditions and AccoutrementEvery effort should be made to assure that the meeting facilities are convenientto all parties. Convenience is, of course, relative; a certain degree ofcommunication should take place before the arrival of visitors in-country. Theavailability of ground transport, airport location, seasonal weather, roadconditions, schedule conflicts, and, in some cases, even curfew restrictions caninfluence how visitors view the host’s selection.Besides the location, the physical conditions of the facility can make a

difference. Uncleanliness, poor lighting, inefficient telecommunications, orexcessive noise levels can greatly distract from discussions and even cause hardfeelings. Room temperature, while comfortable for hosts, may distract visitorswith too much or too little heat. And, as anyone who has visited the growingmetropolises of the world can testify, air quality can bring negotiations to astandstill as visitors take ill. While not all of these inconveniences may fall underthe host’s control, as much care as possible should be taken to correct them.Accoutrements such as furnishings, copy machines, overhead projectors,computer links, electrical converters, window views, and, most importantly,comfortable chairs will all speak to the status of the host company. (Sumptuouslyappointed board rooms are as much about marketing as they are about meetings.)There’s little doubt that comfortable surroundings allow for concentration andtherefore smooth negotiations?although some host teams do occasionally seekto make visitors (sellers mostly) uncomfortable. Luxury isn’t required, but err onthe side of efficiency and serenity.Neutral Turf versus Home Team AdvantageLong ago, skilled negotiators recognized the psychological advantage thatcomes from controlling the surroundings in which counterparts must operate. It’snot unlike the planning that the military uses when choosing the ?field of battle.?Generals who can dictate when and where a battle will take place have alreadygone beyond the halfway point toward victory.A visiting seller who must make all presentations at the host facility is at adistinct disadvantage. The host/ seller gains no advantage at all when working atthe visitor’s hotel, although it cannot truly be considered a minus, merely neutral.While sellers assess their position, buyers will be working to undermine it bycontrolling or neutralizing the situation. By constantly making a visiting sellerdependent on the host for basic needs and comfort (maybe even extending to foodand drink), the buyer can seek concessions in return. It may even take the guiseof pandering to the visitor’s every request. This approach, very much akin to?killing them with kindness,? is an effective one.Visiting buyers are faced with another set of problems. They’ll often neutralizethe host sellers ‘turf advantage? by insisting that meetings take place outside ofhost facilities. While there may be some additional expense incurred in thismethod (i. e., banquets, hotel meeting rooms), it will be an investment in potentialprice, delivery, or ownership concessions.Responding to the Selections of Your Counterpartsmaintaining controlAs mentioned above, meetings should take place in a setting that’s mutuallyconvenient for all parties concerned. Neither buyer nor seller has 100 percent say,although it should be obvious by this point which of the two has the upper hand.Novice negotiators often make the mistake of allowing themselves to be drawnonto a field of battle slyly selected by their counterparts.

For instance, visiting teams or solo acts who?ll be traveling to an unfamiliarlocale will often turn over to their hosts all of the arrangements?from hotels tovisas to meeting planning. This isn’t simply unwise, it’s foolish. Although thismay release the visitors from the burden of certain preparations, it also leavesthem vulnerable to the host’s constant influence. Uncomfortable (or over-priced)hotels that are inconvenient to meeting sites will weigh heavily on the attentivenessand time constraints of visitors, thus decreasing their effectiveness. Hotels andmeeting sites may be selected far outside of major cities, thus making visitorsdependent on hosts for transport and nonbusiness activities. Sometimes (moreoften in developing countries), visitors may even find themselves lodged at a hotelthat’s owned by one of their host’s subsidiaries or family relations.

contingency planning

The best way for visitors to maintain as much control as possible is to treat the host’s selections as suggestions. Find out their intentions in advance and check out the contingencies. Verify the need for having meetings at inconvenienttimes or locales and offer countersites and schedules. Visitors in the selling mode may find it difficult to insist, but claims of time constraints and flight schedules are effective countermeasures to a host’s claims of necessity. Regardless of how much planning the host does, visitors should always have up-to-date research on location and facilities, and they should never accept the host’s word as fact. A good map and an informed travel agent can often be effective negotiation tools.

Hosts may also run up against insistent, informed visitors who?ll attempt to control every aspect of the meeting plans. Buying mode visitors with extensive negotiating experience can be extremely demanding. Their choice of a two-hour meeting at an airport hotel may be deemed insufficient for a sales presentation.

(This let’s-get-down-to-business method is often used against business cultures that rely on extensive socializing.) Hosts may not be able to sidestep this schedule problem, but they can insist on making part of the process a meal that they host.

Besides eliminating the ?raw? efficiency of the visitor’s schedule, the host will regain some control over the actual meeting process.

Whether hosting or visiting, buying or selling, the key to site selection is to remember that, like the contract goal, it’s not unilateral. Allowing the other side a concession doesn’t require losing everything. Before site selection becomes an issue, have a preset plan and a number of contingencies. If you can’tchoose the battleground, at least be familiar with the terrain.

The Envelopment Trap

attractive traps

A common technique used to influence negotiations is ?envelopment.? Though most common in East Asia, it’s used by skilled negotiators everywhere and involves the subtle but constant control of the counterpart’s every moment, whether social or business related. It can run the gamut from the heavy-handed methods of a Chinese tour of a cultural site, replete with ‘special guides,? to the London financier who miraculously secures tickets to a sold-out show. It can also take the less seemly form of choosing a meeting site in a remote area with limited communications and transport. It may even go so far as the casual hint that visa arrangements are contingent on the successful conclusion of the discussions. The message is clear?it’s time to pay for the hospitality.

hostile hospitalityNegotiators who find themselves being offered free hotels, endless banquets, chauffeured limousines, or excessive gifts are surely the targets of envelopment.

As they become more and more comfortable, they become proportionally more susceptible. The best way to combat this is to give every appearance that whatever is offered is also expected. Negotiators should never grant themselves the luxury of assuming that their counterparts are simply being nice. Refusing hospitality may be the mark of an ingrate but falling for its charms is a sure sign of naivete.The strategy of envelopment is to shower the target with good will and then to withdraw it gradually in order to gain concessions. Envelopment is also a sure sign that the perpetrator has little to offer at the negotiating table and is relying on guile, rather than substance.

Visitors and AgendasWhen multiple business contacts will be part of a visitor’s negotiating plan, it’s essential that agendas be carefully coordinated. Particularly in countries where socializing is a big part of business, many hosts may assume that they have free rein with their counterparts? time. Because of this, visitors must make their time constraints (but not the reasons) clear prior to arrival, as well as throughout their stay. This doesn’t mean that hosts need to be informed about every aspect of the visitor’s schedule, only those related to discussions with the relevant host. (In fact, the less one’s host knows, the better for the visitor.) When multiple contacts are used, visitors are advised to allot a minimum of a full day to each company they wish to contact so as to avoid any appearance of slighting.

Hosts must keep in mind that not all visitors view socializing as part of negotiating and that they may offend their guests with excessive hospitality.

Visitors may wish to carry on with standard length working days as if they were back home. Hosts should respect this wish as much as possible. Visitors should be wary of agendas that will result in fatigue, but at the same time, they should make every effort to accommodate their host’s wishes to be sociable.

Communication about agendas, before and during negotiations, is the key.

CHAPTER 8The AgendaCarve it in Stoneconferring and agreeing upon all aspects of the agenda for the negotiations is thefirst step in the long process of the relationship building so necessary for asuccessful deal. Even when both parties are experienced and comfortable withthe legal obligation of a contract, there’s still an essential human element in play.This is true even when negotiations are conducted via phone or fax. In fact,sometimes the quality of the deal becomes secondary to that relationship.Taking a Proactive RoleOne of the surest ways to waste time and money during internationalnegotiations is to proceed without a fixed agenda. Because the greatest expensewill be generated by the visiting team, it’s essential that they take a proactive rolein crafting the meeting agenda. Hosts in many business cultures may resist theefforts to work by a fixed agenda, as it goes against the grain of their society’sview of time. Some hosts also like to ?run the clock out? as a means of forcingconcessions. Clearly, it works in the visiting negotiator’s favor to arrive in-countrywith a clearly delineated agenda.Experienced negotiators also recognize that it works well for hosts to abide byan agenda as much as possible. Although their expenses may be fewer, hostingcompanies (buying or selling) are still tying up managerial and staff time. Neitherdragging out the negotiating process nor proceeding in a haphazard manner areproductive approaches. Many practitioners of the running-out-the-clock ploy findthat their efforts have come to naught as savvy visitors leave, never to return.Even vastly promising economies like China have seen investments take adownturn as their negotiators gained a reputation for being ‘time wasters.?Time Is MoneyKeeping discussions on track may require a brief breaking-in period forcounterparts unfamiliar with, or disdainful of, the process. While the agenda mayhave been addressed and detailed well in advance, setting the tone at the firstmeeting is essential. Visitors wishing to keep to a schedule must arrive promptlyand be prepared to get right to work, regardless of their hosts preparation.Selling-mode visitors will appear eager, while those in the buying mode will givethe impression of being prepared to make immediate decisions. Hosts who areill-prepared for the arrival of guests will be put on the defensive, at least temporarily.Host/ buyers who intentionally create a let-them-wait atmosphere may be hardto hold to an agenda. Sellers must recognize this for what it is and decide whether

this same attitude is likely to spill over into the payment process. The best way

to combat this type of power play is to schedule multiple contacts with competingcompanies. Often, recalcitrant buyers must be reminded that they’re ?not the onlygame in town.? Sometimes, however, they are the only game in town (at least theonly one the government will allow you to play in), and sellers must make repeatedefforts to stick to a time line. This unfortunate battle of wills can be frustratingbut must be waged, nonetheless. Efficiency is a learned process.Surprisingly, buyers may find the negotiators from the selling side alsoincapable of abiding by an agenda, even one that works in their favor. Sometimesthis is a cultural phenomenon, at other times it’s just an indicator of inexperienceor unprofessionalism. Buyers can, of course, be more insistent about the agendaand can decide whether to continue discussions with counterparts who areunwilling or incapable of committing to deadlines.These battles of will most often take place between representatives ofdeveloping economies and those from the technological powers. The latter willregularly have their patience tried by the lackadaisical approach to schedulestaken by the former (whose countries are literally pleading for investment orproducts). Though it may require a serious investment of time, these developingcountries will eventually, through insistence and example, embrace the businesstechniques of the advanced economies, just as they have the technology.MilestonesPart of assembling an effective agenda is the recognition and listing ofachievements that enable progress to move to the next level. These ?milestones?should be mutually agreed upon as the agenda is assembled. Some will be dealbreakers, others will merely mark the step-by-step progress toward success. Often,the inclusion of certain points will be contentious. Such topics as ‘shipmentguarantor,? ?accounting standards,? ?correspondent bank,? or ?profitrepatriation? can give one side or the other reason to pause. Both sides mustrealize that the listing of milestones is precontractual and that circumstances maychange as negotiations progress.Milestones may also take the form of promised achievements that each sideagrees to if negotiations lead to a deal. They are, in effect, forecasts of?deliverables.? The content and due dates of this form of milestone need to bediscussed and made part of the formal agenda. Regardless of the developmentalbackground of the parties or their relative view of contract bondage, each sidemust recognize that business in the latter part of the 20th century moves at tooquick a pace to function well without an ordering of events. International tradelaw is too complex and domestic laws are too stringent to leave details hazy. Theuse of milestones early in the process of negotiations allows no detail to gounscrutinized.

NOTE: Whether you’re a buyer or seller, insist on the use of milestones in yournegotiations.

Accommodating the Social Aspects

Conducted in certain countries, international business requires a good deal ofsocializing, though it may have only a facade of relaxation. These dinner parties,cocktail receptions, golf outings, and cultural tours must all be discussed, agreedupon, and scheduled prior to the arrival of the visitors in-country, just as if thesewere formal negotiating sessions.Staff, visiting staff in particular, must be informed and prepared for theseevents. Both sides must recognize that their counterparts will have other schedulesand agendas that are unrelated to the discussions at hand. Neither side shouldseek to monopolize the other’s time nor present them with ‘surprise? events thatwould put them in the embarrassing position of declining.Professional negotiators must be prepared to give up varying degrees of their freetime to this social aspect of business depending upon which country they’re visitingor delegation they’re hosting (see Chapter 19, Country Guidelines). Social events arereally a continuation of the negotiations themselves and strategies must be observedand maintained. Many a negotiation has been won or lost over a glass of champagne.Handling the Reactions of CounterpartsOne party will always take the lead in formulating an agenda. Very often, it’sthe seller or the visitor because these two have the most at risk. Whichever sidebroaches the idea, it must be prepared for the reactions of counterparts. Havingawide variety of contingencies and enough wriggle-room for schedule adjustmentallows for quick and decisive responses on the part of the initiator?both verydesirable qualities for negotiators. Here are some possible reactions and responses.total agreement? This should raise a high degree of suspicion and may be a prelude to the?envelopment? mentioned earlier. Test counterparts by adding or detracting fromthe agenda in such a way as to be obviously contentious. If they agree to thechange without comment, prepare for envelopment. The counterparts are merelyhoping to get you so committed to the outcome that you will not be able to refuseconcessions late in the process.? Agreement may also be the reaction of a group who are novices to negotiationand are easily impressed with any sign of professionalism in counterparts. Theytoo can be tested with a contentious change, to which they’ll most likely raise anobjection. (They should also be informed that your schedule is such that it can’ttolerate any changes once negotiations have begun.)? Total agreement to a first draft agenda is sometimes a sign that counterparts indeveloping economies have no intention of cutting a deal but only wish to test

out their negotiating skills on a foreign team. They see this as providing a learningexperience for their domestic managers and preparation for bigger prey. Anysuspicion of this should bring a response that solicits references or some form ofbona fides. The inclusion of serious milestones with early due dates is anotherway to smoke out these ‘students.?

total disagreement? Like total agreement, this is very suspicious. Very arrogant host-buyers canrespond in this fashion because they wish to (and often do) have total control ofthe situation. In such a case, the response should be in the form of a request foran agenda prepared by the counterpart. It may turn out to be not significantlydifferent from your original proposal. Whatever it is, if you can live with it, letthe other side revel in their ?victory.? You?ve just discovered, very early on, thatego will be a big part of their strategy. Use it to your advantage. An ego exposedis an ego defeated.? Total disagreement may also indicate a novice team that is feeling its way. Seeka counterproposal from them and add portions of it to the original in smallincrements. If they remain intractable, especially if they are visitor-sellers, theymay be under government scrutiny?or simply poor negotiators. Beingunreasonable at this stage generally indicates fruitless future discussion. It maybe time to cancel the negotiations.? Review the submitted agenda and make sure that your proposal is reasonable.What you don’t want is to be written off as an arrogant host or a novice visitor.requests for meetings immediately upon arrival in-country? Hosts faced with this prospect are obviously dealing with counterparts in a hurry.This should give rise to questions regarding the need for such speed. Is it the rawefficiency of a successful company or the desperation of a company in decline?(These possibilities should be researched before the visitors arrive.)? Visitors who receive this type of request may ask themselves similar questionstothe ones listed above. Additionally, they may be playing into the schemes of acounterpart who wishes to rush fatigued visitors to a foregone conclusion. If thehost insists on meeting on the original arrival date, attempt to readjust flightschedules to arrive a day sooner. Otherwise, stay rested and prepare for a toughopening round.requests for fewer and shorter meetings? If you’re a seller, this is a very bad sign, and your company will most likelybe

given short shrift. Review your needs as originally presented and see if they?rerealistic. If so, reiterate your agenda with a detailed reasoning for the originalschedule. If the buyer’s reaction is the same, cancellation may be in order.? If you’re buying or investing, a request such as this by the seller side is usually anindication that they’re not in dire need of your input. If you’re investing, it mayalso be an indication that the target company has succumbed to another suitor.Contact the target group immediately and demand some straight answers.? Buying and selling considerations aside, such a request can also be the resultof avery busy company that simply doesn’t allot much time for discussion. They mayeven wish to conduct a large part of the negotiation via phone or fax prior toface-to-face meetings. U. S. companies, especially, tend to eschew lengthydiscussions in favor of ?getting down to business.? If your company can live withthis prospect, so be it.

requests for more and longer meetings? Some business cultures like to discuss every point of a potential contract at lengthand are very uncomfortable with the prospect of moving quickly. For the mostpart, these are companies from developing economies and they fear that theirnegotiating acumen isn’t as good as it should be. Sometimes, they’re insulted bythe fact that their company (and country) could be dealt with in such a shortperiod of time. No one likes to be thought of as ‘simple.? If they’re buying, youmay have to submit to their wishes. Otherwise, assuage their fears with promisesthat expansion of the schedule is possible if need becomes evident upon arrival.If they’re merely requesting an expansion of the social portion of the agenda, it’sbest to accommodate them.? Often companies new to international business (regardless of how developed theirnative economy is) are unsure of how to proceed, and so they tend to do so slowly.They’ll be doubly apprehensive if they’re the visiting member of the negotiations.Requesting more meetings is a way of getting themselves heard and buying time toreview counteroffers. Some hosts may wish to play on this fear by sticking to theoriginal schedule; others may wish to allay this fear by expanding portions of theagenda. Buying and selling positions should, of course, be taken into consideration.change of departments for presentations? Host-buyers who decide that your company should meet with the engineers (ratherthan with the marketing department, as you proposed) may be subtly saying‘thanks, but no thanks? to your program. Courtesy interviews don’t warrant theexpense of international travel. You may counter with a proposal for a meeting

with both departments, but don’t be surprised if the personnel from the departmentyou originally requested are suddenly called away on the scheduled date. Here aresome alternatives: (1) Offer to forward the technical data or a video presentationto the ?default? department in the hope of inspiring enough interest to justify afull-fledged trip in the future; (2) Send a small delegation (one person) to do adown-sized presentation to generate interest while saving money; (3) Schedulemultiple contacts with competitors and shop your proposal around.? Visitor-buyers are rarely shunted to courtesy interviews. If it happens cancelthe trip orstart looking at competitors. Remember, Microsoft became a software giant afteranother company said that they weren’t interested in selling operating software to IBM.excessive socializing? Some visiting companies confuse business with vacation and plan to treatnegotiations as a form of junket. Requests for cultural tours and other extracurricularactivities can be excessive. If they’re buyers, offer to assist in makingarrangements but keep the involvement (and expense) of local staff to a minimum.If they’re sellers, don’t let your hospitality or payroll be abused. Provideinformation but reiterate the business requirements for the trip.

HINT: Visiting delegations that include politicians are usually on glad-handingmissions only. Schedule accordingly. Contact business members of the delegationdirectly and feel out their intentions. While no business may be conducted on this trip,future negotiations may bear fruit.

Hosts can also be guilty of packing the agenda with social events. Sometimes, it’sstandard hospitality for that culture, and special events may be organized toimpress. It can also be a symptom of envelopment or an attempt to keep visitorsfatigued. Succinctly put, sellers must endure what they can’t deflect, while buyerscan deflect what they choose not to endure.inclusion of government receptions? Visitors from developing nations often request government receptions. This isbecause they’re unfamiliar with commerce conducted without direct governmentintervention. If they’re buyers, arrange at least an airport reception, if possible, andmore elaborate proceedings if deemed necessary. Sellers should be assured that suchreceptions are extraneous to the business at hand (if that is indeed the case).? Hosts must keep in mind that many business cultures see a governmentimprimatur as a sign that everything is above board. Others may see it as the hostcompany’s attempt to bring an outside force to bear. Therefore, don’t offer toinclude government receptions until the counterpart has been thoroughly

researched.the multisite agenda? Buyers may wish to see and meet at a host’s offices, showroom or factory in aneffort to determine the size of the operation. Within a relatively small radius thiscan certainly be accommodated. For the first round of negotiations, only thelargest players should be granted the time and expense of anything beyond a day’stravel. Keep in mind that some competitive research is conducted under the guiseof negotiations. Don’t reveal the full extent of a large operation until you’re fullyaware of a counterpart’s intentions.? Hosts in a selling mode may wish to show off facilities that may be of little interestto their visitors. Counter such agenda requests with statements to the effect thatyou can’t commit to multisite discussions until after the preliminary discussionsin-country. Don’t let counterparts ?run out the clock? on expensive travel plans.If time permits, visitors may find the visitations insightful.Using Go-BetweensAs in the case of letters of introduction, often a third party can assist in thepreparation of the agenda for the first round of negotiations. When trade focuseson sensitive goods or when investment is bound to be the subject of politicalscrutiny, a go-between can serve as a neutral (or at least dispassionate) party.Trade agency officials (generally, but not necessarily, from the host country) canbe very useful in this capacity. Management personnel with successfulinternational track records but with unrelated commercial interests can also serveas prime candidates for the go-between.Only in the most sensitive scenarios, such as the reopening of trade after anextended embargo, should go-betweens be suggested from the outset. Normally,it’s best to wait to see if there are any major ‘sticking points? in the agenda beforeresorting to third-party assistance.

NOTE: Readers should be aware that go-betweens called in for agenda setting may beasked by counterparts to join the actual negotiations as a form of referee. Consent tosuch intervention carefully, as the go-between may become an ally for the opposition.How to Avoid Being SidetrackedOnce the agenda has been set, care must be taken to assure that it’s abided bythroughout the negotiations, unless major developments dictate otherwise.Counterparts unused to working under the restrictions of an agenda may neglectits time requirements or seek to sidetrack the proceedings with new topics. Someteams continually arrive late or seek to rearrange topics for discussion in an effort

to throw off the timing and attention of counterparts.Strong leadership by the chief negotiator (or lead negotiator at subsessions)must continually insist that the agenda be observed. Even when selling, a degreeof displeasure must be shown at any attempt to rework or ?massage? the agenda.Problems can first be addressed by simply calling attention to the transgression.Continual or egregious violations should be addressed directly, with inquiriesabout the counterpart’s intentions. Sellers must use their own discretion as to howmuch diplomacy is in order; much depends on a counterpart’s culturalbackground. Buyers and investors generally need only to make their displeasureknown once before the problem corrects itself.

The Value of ‘transparency?Economies based in contract law repeatedly decry the lack of ‘transparency?(contractual or legislative clarity) in the developing world. While it’s true that theprocess of compiling ?hidden agendas? is somewhat culture based, it can also bethe reaction of any group that perceives of itself as weak or disadvantaged. Largecompanies and those from technological economies must continually be on guardagainst counterparts refusing to divulge their real motives for negotiating. Forinstance, discovering two days into negotiations that the visiting team is usingyour company solely as a foil for discussions with a competitor can be veryaggravating. Or worse, your hosts are using negotiations to gain technical acumenbefore embarking on a joint-venture in a part of their domestic market thatexcludes foreign investment. Complaining will seldom gain back the time andmoney already lost.Part of the research on potential counterparts should be inquiries into thecompanies they’ve done business with in the past. Back-channel inquiries,domestic trade agencies, and Internet forums are all good sources for thisinformation. Discretion is the best approach, but very few legitimate companiesfear due-diligence-style research.

The Foreigner Who Can Say ?No?During the 1980s, The Japan That Can Say ?No? was one of that country’smost popular books, and in the mid-1990s, a similar book on Chinese negotiatorswas mandatory reading in Beijing. ?No? has always been an effective tool forskilled negotiators, and it is especially useful when fixing an agenda. Visitorsoftenhave a difficult time turning down agenda proposals by hosts because they don’twish to appear culturally insensitive. This can even be true when the visitor isthebuyer or investor.Gaining a firm grounding in the host culture (business and social) will providethe negotiator with the insights necessary to propose or respond to a negotiatingagenda. Though airport receptions, government soirees, evening sessions, andtwelve-course luncheons may not be necessities, they may ensure smoothnegotiations. Agenda setting can be a way for each side to test the other’s acumen

and will. At other times, the research acquired during this phase may reveal thatnegotiations aren’t immediately feasible. The answer ?no? will give yourcounterparts an idea of what to expect at the negotiating table. Use it judiciously.

CHAPTER 9About TranslatorsMaking Sure Your Message Gets Throughthe ability to make oneself understood is essential if any agreement is to be reached.International negotiations often require the use of translators to attain this goal.The optimal translator will understand both the linguistic and cultural nuancesso necessary to communication. Translators must also be adept at comprehendingthe intricacies of everything from body language to seating arrangements. Rarelywill a solo negotiator or team have sufficient language skills to operate anywherein the world. The quality of the translators involved will greatly influence thenegotiation’s outcome.Using the Language Skills of Team MembersOn occasion, a member of the negotiating team will have the requisite languageskills for the target market. Their ability to translate prenegotiation documentsand set up telephone conferences will be highly useful to the group. However,they may not be a wise choice for use as the full-time translator duringnegotiations. Because their inclusion on the team was most likely for theircommercial and analytical skills, the team member would be prevented fromgiving his or her input if required to act as translator. Only if the team memberis in a very junior level staff position should his or her language skills be put touse during regular negotiation sessions. Upper-level management personnelshould only be used in extreme cases. Having the vice president of marketing actas a translator isn’t an efficient use of personnel.Looking In-House for TranslatorsLarge companies in cosmopolitan cultures have the advantage of diversestaffing. Language skills abound and should be tapped when possible. Employeeswho speak Dutch, Vietnamese, or Portuguese may already be on staff and havemany advantages over translators brought in from outside of the company. Theyare already familiar with product lines, company background, and ethics. They?llalso be eager to be part of an upper-level company program and thankful for theopportunity to take advantage of company-sponsored travel. Finally, their loyaltyto company goals during negotiations should be assured.Unfortunately, there’s a downside to using an inexperienced, in-housetranslator. Translating during fast-paced negotiations can be very nerve racking.Employees unfamiliar with the effects of stress aren’t good candidates. Also,employees new to high-level discussions may find themselves enthralled with theactivity and distracted from their translating duties. Asking the opposition torepeat itself isn’t professional grade translating.Check to make sure that an employee’s language skills are really sufficient forthe task at hand. (Schoolbook French will be of little use in Paris, andAmericanized South Vietnamese dialects will play poorly in Hanoi.) Travel andstress skills should be at the same level as the rest of the negotiating team. If theycan’t handle the negotiating atmosphere, drop them from consideration regardless

of language skills. Translators are supposed to be an aid?not a burden?duringnegotiations.Translators: What To Look For and WhereNegotiators should hire a translator familiar with both their company’sdomestic culture and that of their counterparts. When hiring from outside of thecompany, get the best talent that the budget will allow.While it may be necessary to advertise, accept only professionals withreferences. Keep in mind that merely speaking the required language fluentlydoesn’t guarantee a good translation or translator. As in the case of in-houseemployees, the ability to handle stress and the foreign travel experience, as wellas having a working familiarity with the topic of the negotiations at hand, areequally important factors.Most major metropolitan areas have translator services that can provideprofessional translators for extended use. Government agencies can also providetranslator contacts and services. These services are very practical for hosts wishingto hire for local usage. Visiting negotiators may also wish to utilize thesecompanies. Visitors who are preparing for extensive overseas negotiations arebetter served by hiring in their domestic market and making the translator partof the team. It may be expensive but it’s essential that the translator be directlyanswerable to, and paid by, the negotiators for whom they’re translating.WARNING: Don’t let counterparts provide translation services for you, and be wary ofasking one’s host to help procure a translator. Disloyal translators can do irreparabledamage.Each side of the negotiating table should have its own translators. As practicalas it may appear, using a single translator will result in quick burnout andresultant communication problems. The translation process demands intenseconcentration, even for the most fluent, and working for both sides is far tooexhausting. Additionally, translators need to be part of the pre- and postmeetingsessions that are important to keeping strategy in line. Their comments on tone,body language, and cultural nuance will provide essential information tonegotiators. A single translator will not be able to supply this service to bothsides.Proper Care and HandlingIt’s very important that translators be made to feel that they’re part of thenegotiating team and process. Keeping them ?outside of the loop? untildiscussions begin and shunting them aside at the end of each day will greatly limittheir effectiveness. They should be treated as regular and essential members ofthe team and included in social events related and unrelated to negotiations. Likeother negotiators, translators need to keep their spirits high; being treated withrespect, courtesy, and friendship helps. It also inspires loyalty beyond thepaycheck.If they’re being paid by the hour, make it clear what’s billable and what’s not.

Staff must also be clear about when (and when not) to utilize the translator. Givingthe translator bonuses for work ?above and beyond the call of duty? isrecommended.NOTE: If visitors are using a local professional in a developing market, they may wishto make payments incrementally rather than wait until the end of negotiations. Givingthe translator a little walking-around money and a few tips will help maintain theirloyalty and spirit.Translators must be well informed. This doesn’t mean they need to know allof the company secrets. They should, however, be apprised in advance of the basictechnical data and terms to be used during discussions. Some ideas and termsdon’t translate easily, and it’s unwise to expect the translator to come up withinterpretations for complex ideas or technical jargon on the spot. It’s also a goodidea to let the translator become familiar with each team member’s speechpatterns?another good reason to include them in social events. Brief forays intodialect or slang can derail the translation. Let the translator, and team members,establish a rhythm prior to negotiations.NOTE: Don’t assume that the translator knows basic business or trade jargon. Many asimple trade discussion has gone awry over even common usages such as ?free-onboard?or ?after market.?Basic ProtocolNot knowing the basic protocol for working with translators will mark thenegotiator as a novice and cause translation problems. The following are basicprotocols for using translators:1. When counterparts are speaking, look at them, not at their translator. Continueto look at the counterpart as the translation is given, with occasional glances atthe translator. Negotiators must interpret body language as well. You can’t see acounterpart smile if you aren’t looking.2. Listen intently. Unlike normal conversation, there’s no expectation of animmediate response. Don’t formulate one during the translation. Listen, thenformulate, and then respond.3. When each side has a translator, the respective interpreters should only translatewhen their team speaks. They should take notes as their counterpart works andconfirm the translation only. Negotiators should verify the translation with theirown interpreter while formulating a response. Ask for clarifications if necessary,but don’t interrupt.. Negotiators should speak in clear short sentences and never for longer than thirty

seconds at a time. Pause and allow the translator to interpret. If it’s a lengthyspeech (as in a welcoming ceremony), make sure that the translator has been givena transcript in advance. This will permit the use of rhetorical phrasing (andlengthier sentences) while still assuring that all points are covered and properlyinterpreted.5. Translators are usually seated just to the rear of negotiators, never ?at thetable.?This permits their movement among participants and a certain degree ofconfidentiality (that is, whispering), when necessary.6. When translators from opposing sides conflict on a major point of interpretation,ask for clarification. Don’t assume that your interpreter is always correct.7. Never express public displeasure with an interpreter’s performance. If thetranslator was hired by your team or is a staff member, save criticisms forpostmeeting discussions. Preserving the translator’s dignity will go a long waytoward preserving their loyalty. Also, keeping it private gives the opposition oneless weakness to exploit. If the translator was hired by counterparts (not a goodidea to begin with), express your displeasure to the counterparts. It’s theiremployee, so let them deal with the problem. Seek immediate improvement orreplacement.8. Keep translators close at hand and maintain their confidence. It’s not unusual fortranslators to be approached by the opposition in an effort to solicit information.This is especially true of a visitor’s interpreter if they happen to be indigenous tothe host country.Keeping Counterparts Off-Balance with SecrecyTranslators often speak languages beyond those germane to the negotiations.If they share these skills with team members or the chief negotiator, it can be animportant tool of communication that will keep counterparts off-balance.Reverting to a third language for intrateam discussions can be both convenientfor the team and disconcerting for counterparts?assuming, of course, that theopposition lacks similar language skills.It’s a similar tactic to the one used by hosts that insist upon (or find themselvesin the fortunate position of) providing a single translator for both teams. Hostscarry on audible side-conversations in their native tongue while visitors are toorestrained to ask the ?neutral? translator to fill them in. While considered badmanners in the West, both tactics are common in Asia. Some negotiators eschewsuch tactics, others have the mettle to ignore such a ploy by counterparts. Stillothers make clear to the opposition that such ‘secrecy? is considered a sign ofbad faith.

Tips for a Successful Trade Missionby ?jim? chin t. nguyen1. A delegation leader should be a high ranking and recognized publicfigure.2. Identify a couple of dependable and trusted contacts in the host countryand work with them on logistics and screening of foreign companies priorto your visit.3. Take advantage of your country’s contacts in the embassy and chambersof commerce in the host country.4. Organize a premission briefing prior to your departure to informparticipants about protocol, itinerary updates, and basic cultural advice.5. Bring along a qualified interpreter on your trip. If you cannot afford one,then make sure you have one waiting for you overseas.6. Create a mission profile book that contains pictures, names, anddescriptions of participating companies and personnel.7. Learn how to pronounce names of host contacts correctly and clarifytheir positions and job titles.8. Bring small, tasteful gifts for each contact. Gifts are appreciated in everyculture.9. Don’t discuss political ideology and religion.10. A small delegation is more manageable than a large one.Mr. Nguyen is the vice president of sales for Plexusnet BroadcastingCorporation, San Francisco, California USA

The Importance of Properly Translated Written MaterialsThe translation of written materials for use in negotiations is essential toefficiency, as well as being a mark of courtesy and professionalism. For those ina selling position it’s mandatory. Repeat, mandatory. Whereas a certain amountof grammatical and accentual leeway will be granted translators during the heatof discussions, none can be afforded here. Proposals, letters of introduction,references, and financial reports should all be translated, checked by a nativespeaker, and submitted along with the originals. Faxes sent to establish meetingdates and times should be composed in the native language of the receiver. If thelanguage is too obscure or a translator is unavailable, the default language forsuch correspondence is English.

WARNING: When translating financial or numerical data, take care to observe theproper use of commas and periods when denoting currency or thousand unitgroupings. These are not universal.

company marketing materials and brochuresWhile preferable, it’s not necessary to reproduce four-color companymarketing collateral or sales brochures in foreign language editions. This can waituntil a long-term position has been established in the foreign market. Prior tothat, translations placed as inserts will suffice. Triple check that translations areaccurate and have no double entendres before sending them to the printer. Whenthey return, have them checked again. Misprints can have humorous or eveninsulting results.CONFESSION: In 1986, the author approved marketing documents that had beentranslated from English into Japanese in advance of upcoming meetings. The Japanesewere less-than-impressed to find that every subheading in these lavishly printedbrochures had been printed upside down. There’s no such thing as too much checking.business cardsSome countries (like Japan and South Korea) place enormous importance onbusiness cards. Regardless of which country negotiators hail from or seek to visit,business cards should be translated into the language of one’s counterparts. It’sa small task that speaks volumes about a company’s intentions and attention todetail. As is true with other documents, take care with the translations.Well known or trademarked acronyms (e. g., IBM) need not be translated nordo words included in logos (such as Toyota). Company descriptions that arenormally included on cards should be carefully scrutinized after translation. (Theauthor’s card was once translated from the English research and analysis to theTagalog words for reading and thinking.)Job titles should also be carefully translated as they’ll be used duringnegotiations to match counterparts. Some additional research may be required todetermine the distinction between ?deputy director? and ?vice president? orbetween ‘trade assistant? and ‘sales manager.? Don’t inflate job titles but, if

error is to take place, make it to your benefit. Also, make sure the ?vice presidentof sales? doesn’t become the ?president of selling vice?? such things happen withembarrassing regularity in international business.Double-sided cards are the best format, with addresses fully translated andcontact numbers clearly stated for international usage. Email addresses shouldappear in their original format with the Internet service company clearly stated.Some visiting companies go so far as to include their temporary in-country addressand contact numbers.

NOTE: In some cases, these cards may be all that remains at the end of negotiations.Make them work for you.

CHAPTER 10Negotiating Styles, Part 1Major Personal Stylesinternational commercial negotiation is a zero-sum game that pits every gainagainst a loss. And when successfully completed, losers believe they’ve won andwinners give every indication of bearing up under defeat. Language and fortitudeare used to create a belief that everyone will walk away from the table with?enough,? even if one side’s portion (hopefully the opponent’s side) is far lessthan forecasted.Each negotiator and every negotiating team must choose a style that will bestserve their goal. The same style will not work in every situation, nor will everysituation permit every style. Negotiators and teams must be flexible, able to changestyle as easily as they change locale. The same research skills that have been focusedoutward should now be turned inward, as honest and thorough self-assessment willpermit the most appropriate choice of both personal and team styles.Choosing a Style That FitsBelow is a listing of twenty-three different personal negotiating styles. Rarelydoes a person use one style to the exclusion of all others, and there’s a great dealof crossover. It’s rare (if not impossible) for someone to adopt a style that runscontrary to their personality. Also, these styles are often countermeasures to eachother. (A full listing of countermeasures are suggested in Chapter 15.)Negotiators strive to be believed, and they must believe in their own discourseif they’re to be successful. Even the most talented actors have limits of range.(RobertDe Niro can convincingly portray a maniacal gangster, but he probably won’tsucceed as Oedipus Rex.) Potential negotiators must research their own talents andvirtues to determine which style or combination of styles best fits their personality.Chief negotiators must make similar decisions when assembling a team. Onecan’t have a soccer team comprised entirely of all-star goalies. Diversity isrequired. Assembly of the right combination of talents, styles, and flexibility willresult in a team that can handle virtually any negotiating session. Team leadersmust also be on guard against members who endeavor to utilize styles that areincompatible with team goals.aggressiveMany people see themselves as aggressive but few actually fill the bill.Aggressive negotiators run roughshod over opponents with little regard for theircounterparts? positions. They take no prisoners and grant no quarter, and theword ?concession? isn’t found in their lexicon. Aggressive negotiating does haveits place if used in small doses, while constant belligerence will rarely resultin apenned contract. Skilled negotiators will assume an aggressive posture only whensupposedly non-negotiable points are being discussed.

WARNING: As is true in daily life, aggression brings its own additional pricetag.Aggressors throughout history have been outflanked in their mad rush for successbymore patient opponents. Aggression is best used as a temporary negotiating tactic, notas an overall strategy.compliantCompliant negotiators are the archenemies of counterpart aggressors. Their styledemands that many points are readily conceded early in negotiations in an effortto draw the aggressor farther into the process. Major points are purposely kept offof the agenda until late in the negotiations when the aggressor believes they?llcontinue to receive concessions. In reality, the compliant side has ?run the clockout? and will start demanding ?payback? for earlier concessions. The aggressorhas been enveloped and placed in the position of possibly scuttling very expensivenegotiations and returning home empty-handed. Compliance can be a very effectivestyle but only when used by hosts. It requires strict control of the agenda and theability to recognize when counterparts have been sufficiently lulled.NOTE: Compliance is particularly successful when a great deal of PR surrounds theproceedings and visitors have been sending out signals of imminent success.passivePassive negotiators aren’t always what they seem. Often utilized by developingeconomies with little contract law, passive negotiating convinces the oppositionto put all of their cards on the table in the belief that everything is mutuallyacceptable. The passive side presents nothing and simply nods?and counterpartsbelieve they’re in agreement. But the nod denotes understanding only. Once allhas been revealed, the previously passive negotiators start ?cherry picking? thepoints they find palatable and actively (sometimes aggressively) reworking thosethey don’t. Passive negotiators rarely present their own program; instead, theynitpick the opposition’s program in an effort to keep them on the defensive.Passivity is also used by novice negotiators to learn about the cultural negotiatingstyles of economies with whom they’re unfamiliar. Seeking only an education andnot a contract, they pursue their research by letting the opposition reveal dataandtechniques to be used against ?bigger fish? in future negotiations. Manymedium-sized technology companies were lured to developing Asia in the late 1980sand early 1990s with promises of market penetration. But unbeknownst to them,they were there to provide practice sessions for negotiators soon to lock horns withMotorola, Seimens, and NEC. Passive ?research? negotiators also travel outside oftheir borders to see how potential counterparts behave on their own turf. Eitherway,they use up time in fruitless negotiations. This style and strategy is considered

deceptive by some cultures and ?just business? by others.One hallmark of both types of passive negotiators is that they don’t seek outany input during the agenda-setting process. Research teams can also berecognized by their requests for information unrelated to the negotiations at hand.

WARNING: It’s very costly to mistake passivity for agreement.

impassiveThe impassive negotiator is purposely unreadable. Inscrutability isn’t theexclusive domain of the Chinese; it’s been successfully used by skilled negotiatorsaround the world for centuries. By creating an image of being indifferent to eitherwinning or losing on any particular point, impassive negotiators cause theircounterparts to believe that some secret is being withheld. The impassive buyeralso causes the opposition to go to extreme lengths to please. Because they can’tsee what pleases or displeases, sellers often ‘shoot the works? in an effort to geta reaction from the sphinx across the table. Skilled, impassive buyers can get agreat deal more with silence than they can with vocal manipulations. In this case,money doesn’t talk?it stares.Impassive sellers attack from the opposite direction. Selling and indifference,though seemingly antithetical, aren’t always so. Sellers who have many suitorscan name their own price as well as pick and choose among the suitors. It’s basicsupply and demand. A seller who is impassive creates in the buyer’s mind a senseof insecurity that the sale may not be ?permitted? or that a competitor will getitinstead. This attitude of ?if you don’t meet my price someone else will? puts thebuyer in the unenviable position of begging to spend money. Impassivity by sellersis a highly effective style for both trade and investment, but it requirescounterparts who are short on research. Buyers truly must believe that theircounterparts are ‘the only game in town? for it to work. First offers, no matterhow lucrative, must be met with a dispassionate eye. Practitioners, whetherbuying or selling, must be masters of the poker face.

intimidatingIntimidation is the instillment of fear in opponents and fear is a forcefulmotivator. Unfortunately, it’s a short jump from fear to loathing, and loathing isno basis for a relationship. Therefore, fear should be applied judiciously, so thatthe recipient feels its effect but is unaware of the process. Fear in internationalbusiness is usually couched in terms of being excluded from a market or aparticular money-making endeavor.It is not easy to be intimidating, and for commerce it’s strictly a matter of

attitude rather than physical presence. It shouldn’t be confused with aggressivebehavior, although in some circumstances it can take that guise. Above all else,intimidation at the negotiation table requires the will to back up words withaction. Also, intimidation requires the cooperation of counterparts. (They mustchoose to be intimidated if this style is to be productive.) Skilled negotiatorshavehigh fear thresholds but thresholds nonetheless. Learning what intimidatescounterparts and when will determine if this style of negotiating will ultimatelywork. The following statements indicate that intimidation is at play:? ?Of course you realize that only a limited number of contracts will be issued this year.?? ?We understand how important this deal must be for your company.?? ?Yours is the third company we have spoken to this month regarding this matter.?? ?We hope you’re more successful than the other (insert your nationality orindustry) companies we?ve met with.?

? ?Are you aware of (insert your competitor’s name) interest in this project??? ?Our government takes special interest in ventures that involve foreigncompanies.?? ?We understand that your company has other interests in our country.?? ?If agreement isn’t reached by the end of today’s session, we must understandablyconsider other offers.?? ?We would like our legal counsel to review your proposition.?technicalTechnical negotiation centers on the data of the product or service underdiscussion, and it counts on the opposition being worn down by the onslaught oftechnical details. Many negotiating teams purposely include a member who ishighly knowledgeable about technical processes. Besides being able to answer theoccasional question, they can also be used to thwart the opposition’s attempts todownplay (or overplay) the monetary value of the technology.This style comes into play in joint ventures where partnership percentages aredetermined by the agreed-upon value of what each side ?brings to the table.?Manufacturing economies tend to value physical property (e. g., factories,hardware) over intellectual property (e. g., manufacturing processes, software)while technological economies have reverse values. The technical negotiating stylestrives to foster a belief in the opposition that their lack of knowledge precludesthem from being able to determine market value.WARNING: The technical style requires that the opposition be made to see the limits oftheir knowledge only in a particular area. Making the other side feel stupid will be oflittle value in the long run. Also, translators must be well-versed in the data if thistechnique is to be effective.financialOddly enough, many business negotiations (and negotiators) strive to

downplay the role of money making. Many cultures wish to avoid appearinggreedy, while others merely wish to keep the opposition focused on other issuesuntil it is time to deliver the unfortunate fiscal news. The financial style ofnegotiating specifically plays upon the discomfort that counterparts feel whendiscussing this all-important issue. When used as part of an overall buying/investment strategy, practitioners of this technique talk in terms of money at everyjuncture of the agenda. All points of discussion must be made compatible withthe bottom-line. If a subject can’t be shown to contribute to profit, counterpartsare asked why they’re wasting time talking about it.

NOTE: Americans are famous for their financial focus during negotiations and aresometimes considered boorish for their efforts. Boorish but rich.

As a tactical maneuver, financial negotiators can browbeat the oppositionmuch in the same way that technical negotiators can. Suddenly switching the focusto finance can put bogged down discussions back on track as counterparts striveto back away from issues in which they are not conversant. Besides having thefinancial knowledge necessary to make this style work, practitioners must also

be dispassionate debaters. Remaining unemotional will permit the negotiator toavoid accusations of greed and allow the pursuit of topics on a ?just business?basis.legalisticContrary to popular belief, lawyers are notoriously bad negotiators’the logicbeing that if they were good at it, judges would be unnecessary. But this isn’t tosay that a legalistic negotiating style has no place at the table. All business isconstrained by law to some degree, and negotiators must be concerned with itseffect on the business relationship they’re attempting to mold as well as the directeffect upon ownership, taxes, and staffing.In most of the developed West, legal considerations (and lawyers) are expectedat the negotiating table. Here the legalistic style is used to remind all participantsof their responsibilities and potential benefits under local and international law.Time consuming and petty it may seem, but a team or single negotiator with onlyminimal legal knowledge will be at a decided disadvantage. When one side adoptsthis posture, counterparts must be quick to respond in kind.The developing world is a different matter. Many Asian business cultures preferto carry on business both above and below the table. The same is true of manySouth American, Middle Eastern, Eastern European, and African communities.Agreement with the process is not as important as understanding andmanipulating your counterpart’s reaction to legal wrangling.Foreign buyers working in such markets will find that adapting a legalisticapproach to negotiations at key intervals will result in the granting of majorconcessions. However, using it as an overall strategy will most likely derail the

process completely, as sellers will not be able to envision any profits if kept withinthe narrow constraints of their domestic legal system. Foreign sellers who attemptto secure legal protection for every negotiated point in these cultures will find thegoing difficult, if not impossible.When you are acting as host to sellers from cultures that prefer to work outsideof a tight legal structure, the use of the legalistic style will keep the negotiationsfirmly in your hand. Counterpoints will be disconcerted and obligated throughoutdiscussions. When you are hosting a group of buyers, negotiators should uselegalistic tactics only to that degree that will protect payment or investmenttransfer.

NOTE: Regardless of the legal wrangling at the table, contract execution may notalways be ideal if the respective governments don’t have similar commercial codes.

Additionally, using or responding to a legalistic approach will require added researchtime?and therefore cost. Foreign negotiators should always have a basic knowledgeof the host’s legal system and applicable international laws.secretive

Many negotiations are conducted wholly or partly in secret. This may be theresult of personal privacy issues involving participants, high level diplomaticsensitivity, legal ramifications, or a desire to keep the press at bay. Demandingthat the discussions remain secret is also a strategy that can influence the outcome.Secrecy eliminates outside pressure and concentrates the participants on the

issues. And it can be used to keep counterparts from seeking outside assistanceor information once negotiations begin.If you or your company is the subject of such a request, regard it with care.Secrecy isn’t always easy or inexpensive to maintain. Make inquiries about thereason for such furtiveness and make sure that it will not restrict your ownnegotiating style or content. If the conditions for secrecy are accepted, negotiatorsmust prepare accordingly.

NOTE: Secrecy creates a very restrictive atmosphere and it should be requested oracquiesced to only under special circumstances.

Single negotiators from a team are often contacted by their counterpart andsolicited for special ‘side meetings? that are to be kept hush-hush. Team membersshould be instructed to agree to nothing until they’ve had time to consider thefallout. Individual negotiators must pledge to inform CNs of any attempts by

counterparts to meet with them. Team leaders must be prepared to deal with thisprospect and be aware that, oftentimes, the weakest link is singled out by theopposition. If your team initiates such secret side meetings, it should realize thatcounterparts may be offended and view the remaining sessions as suspect.deceptiveOnly the most naive of negotiators will deny the value of deception. Use variesby degree from one team to the next, but it’s omnipresent. Disputes over its usearise only between groups that commit lies of omission and those that profferoutright deceptive information or promises.Misleading counterparts and shielding intent are tools that all successfulnegotiators use. Adapting deception as the main strategy is only productive if theintent of the negotiations is short-term and doesn’t focus on contract signing (i. e.,gathering of research). Successful long-term relationships can never be based ona wholly deceptive strategy.Deception as a style is most effective when used in small doses. Because allnegotiators are guilty of it, they’re also willing to forgive a bit of deceptionbycounterparts. They may even be planning on it. Deception will be discussed inmore detail in Chapter 15 on tactics.

NOTE: Negotiators who can’t deceive effectively are destined to defeat. Lettingopponents know your every move and the depth of your strategy is no more effectiveat the negotiating table than it is on a battlefield. Deception, like truth, is but a tool.exploitive

All opponents have weaknesses that can be exploited. Negotiators mustdetermine for themselves which weaknesses to exploit and when. The zero-sumnature of the process demands a certain amount of exploitation. When bestpracticed, the exploitive style involves a careful study of counterparts before andduring discussions. As the weaknesses become apparent, the practitioner makesrational (never emotional) decisions to capitalize on the flaw immediately, to letit pass, or to reserve exploitation until later in the negotiations. Therefore, theassessment of a counterpart’s failings should be a large part of the negotiationplanning process.

Exploitive styles must be conducted with great subtlety as very fewcounterparts are so desperate as to welcome or tolerate outright exploitation.Weak, undeveloped economies are especially paranoid about any form of whatthey deem exploitive. (Unfortunately in these same economies, the term is oftenused to describe any profit made by a foreign company.) Exploitive styles willgenerally involve the use of deceptive tactics, and therefore they rarely survivelong-term scrutiny.The most common form of this style calls for taking advantage of a counterpart’s

ignorance of the true value of their resources in the global market or of their inabilityto access that marketplace directly (e. g., Southeast Asian labor).NOTE: Like deception, exploitation is used to some degree by all negotiators. Keepingan eye on the longevity of the deal will enable negotiators to determine proper dosagesand timing.stubbornThere may be no such thing as a truly non-negotiable topic, but inflexiblebehavior abounds at some negotiating sessions. Choosing stubbornness as anoverall style is risky as it may force the opposition to become equally stubbornon points it feels strongly about. Historically, immovable objects are easy to outmaneuver and real long-term stubbornness is the Maginot Line of negotiatingstyles.Some negotiators use stubbornness as a way to distract counterparts from truemotives. Relenting on a supposedly non-negotiable point will bring concessions?important ones?as a form of payback. Like many other styles it should be usedonly on occasion, as constant use results in predictability.ambivalentAmbivalence is something that negotiators never consciously choose as a style,but it’s often there as a character default. Professional negotiators and teams neversuffer from it, but may find themselves sitting across the table from counterpartsrife with its effects. Ambivalent teams and individuals that are unable to make orhold to decisions can flummox discussions as easily as stubbornness can. By beingforced to review subject matter again and again without reaching a conclusion,the opposition may become frustrated to the point of termination.Many teams that are new to the international market or those under localgovernmental scrutiny suffer from ambivalence. Their leadership works underthe premise that no decision is better than a bad decision. (No decision is adecision.) Even when the proposal works in their favor, they still believe it istoogood to be true. Most ambivalence stems from a lack of research concerning theparticulars of the deal at hand.

WARNING: As will be seen in Chapter 11 on team styles, the time consuming internaldiscussions that are associated with ambivalence should not be confused withconsensus building.pragmatic

Pragmatism can be very formidable, both as a strategy and a tactic. Taking tothe high ground of efficiency will place counterparts on the defensive and force

them to review their proposals purely from a practical standpoint. However, itdoes require that negotiators have already done the same with their own positions.

Recommending practicality when your own positions are idealistic (at best) willnot lend credibility to your maneuver.As a strategic style, pragmatism demands extensive research and a complete,well-thought-out plan that can be laid out in some detail early in the negotiationsrather than incrementally. The plan should provide potential courses of actionfor counterparts as well. If done properly, the opposition will gladly choose fromoptions provided by your plan. Pragmatic strategies require that you think ofeverything. The numbers are laid out for all to scrutinize. Prenegotiation planningsessions involve a great deal of devil’s advocate type role playing. Be aware thatsome counterparts may resent your planning of both sides of the negotiation, evenwhen the proposal plainly overshadows their own concepts and provides themwith a substantial piece of the commercial pie. Efficiency isn’t loved the worldover and it’s often seen as a relative term with cultural overtones.Pragmatism is most often used as a tactical style to get negotiations back ontrack. Statements like ?let’s cut to the chase . . .? or ‘time to cut through the haze. . .? are dropped into the discussion as an indicator that quibbling should ceaseand real issues get resolved. If diplomatically phrased, no one side will be heldculpable. Pointing fingers will merely take up more time and detract from theargument for practicality. All discussions run the risk of tangential debate; a callfor pragmatism will refocus everyone on the agenda. However, practitionersshould take care that they don’t dismiss their counterparts? proposals orarguments out of hand. Good listening skills and an understanding of the milieuin which counterparts must function will greatly assist in establishing when apragmatic style is most appropriate.NOTE: Even pragmatists must have fallback positions, in case their original proposalisn’t accepted.brinkmanshipBrinkmanship as a negotiating style is purely tactical in nature and involves theissuance of ultimatums on specific points. The threat of the ultimatum (or ‘thebrink?) is that discussions will be called off unless an issue is resolved immediatelyor in a specified manner. It’s more bullying than negotiating and can only be usedeffectively by a powerful opponent, most likely in a host-buying position.This style can’t be used very often, although many negotiators have effectivelyused it early in discussions and then held it as an implied threat throughout theremaining sessions. Counterparts that are evenly matched will rarely deploy it,and novices are warned against even considering its use, no matter how tempting.Negotiation by ultimatum, even when practiced by professionals, always?repeat,always?leads to resentment. Its use in simple trades, and short-term deals will

make any continued relationship difficult.arrogantSimilar to ambivalence, arrogance is an unconscious choice as a negotiating style.It’s also what inexperienced negotiators often call their well-organized, successfulcounterparts. Wise negotiators must be on guard against both conditions.

Regardless of your opponents position or attitude, behaving in an arrogantmanner will only add an emotional edge to your counterparts? demands. Remember that negotiating is about bending the opposition to your will, not driving them away. There are two main causes of arrogant behavior. One is a feeling of inferiority on your part. The other is not understanding that your counterpart is being made to feel inferior. Reactions and the accompanying behavior are unconscious but not uncontrollable.

In the first case, the practitioner isn’t comfortable with his own status, facility, appearance, proposal, or company. The response is to assume a supercilious pose to hide a lack of confidence. If the opposing side is skilled,they’ll see through this amateurish guise immediately. If they’re not skilled, what was the point of feeling inferior?

In the second case, where negotiators? behavior gives the appearance of arrogance, they have most likely been acting in a manner that disregards the counterparts? viewpoint. Understanding the opposition is a necessary part of thenegotiating process. If they feel inferior (and maybe rightfully so), it’s in a negotiator’s best interest to dispel that notion; keeping the discussions among ?equals? makes the granting and receiving of concessions easier. ?Inferiors? begrudge every concession they must grant and see every one received as a form of justice. Domineering agenda planning, the throwing of lavish parties that can’t be reciprocated, arriving late for meetings, constant cultural comparisons, and implications that you’re here to ?help? the oppositionwill only aggravate the situation.

NOTE: Avoid the arrogant style by being vigilant of your own behavior and the opposition’s reactions.

Self-RighteousMany negotiators exude a sense of altruism that can often backfire and is seldomappreciated. Even when successful, companies wishing to put a human rights, religious, environmental, or political equity spin on their commercial negotiations may create more problems for themselves than they solve.

If used at all, the self-righteous style should never be the driving edge of an overall negotiating style, merely a component. The I-know-what’s-best-for-you approach will cause resentment in international discussions and gain the practitioner a reputation for arrogance. Political and religious concerns, even if they’re company policy, should be addressed during the negotiation research and planning phase to make sure that counterparts share (or have the potential to share) those concerns. Springing those concerns on counterparts or demanding that they be the centerpiece of negotiations will only disrupt the business at

hand. Self-righteous negotiators must also be prepared for a grocery list of equally righteous moral demands from counterparts.

WARNING: Some countries (China and India, for instance) specifically request that you check your moral baggage on ?human rights issues? at customs if you want to do business within their borders. If you have a problem with that, it will only become an even bigger one if these issues aren’t resolved prior to thestart of negotiations.

OverwhelmingThere’s absolutely nothing wrong with overwhelming your counterparts as long as you leave them ?enough? to maintain their interest in the deal. Buyers are best served by this style and can pursue a ?money talks? plan of attack. Sellers can also be overwhelming if they come prepared to counter any misgivings the opposition may have. This requires extensive preparation and solid experience. Some negotiators are so organized and acute that they can’t help but dazzle the opposition. Others consciously maximize their preparation and research to assuresuccess. If this style isn’t diplomatically presented and seen as ?natural,? it will be heavily resisted. When properly done, counterparts may end up using yourtechniques as a standard against which to judge their own skills.

WARNING: Don’t attempt this style until you have at least several years of experience under your belt. It takes time to learn all of the angles of attack and defense. If your company is the target of this form of negotiating, keep your notebooks handy.

FleetingSome negotiators have adopted speed as a negotiating style in the belief that itwill cover deficiencies in their own position and deflect the strength of counterparts. When dealing with inexperienced opponents, moving negotiations along at a brisk pace may have its advantages. However, the hard-sell, just-signright-here attitude can often cause resentment if the deal doesn’t provide ?enough? for the opposition. If used as an overall style, be prepared to have a fallback plan when counterparts intentionally slow the pace. Additionally, nevertry to rush an experienced counterpart?it simply will not be tolerated, and it may mark you as a novice.

SternMethodical, humorless, and unruffled, the stern negotiator controls sessions with sheer discipline. The histrionics and gimmicks of counterparts pass withoutnotice. Like impassivity, the stern approach requires a poker face but unlike its sister style, motives and technique are made plain from the start. Getting down to business and numbers crunching are hallmarks of the stern. Social activity and smiling are minimal, if present at all.

This style demands a very specific personality type and can be very effective incontrolling the content and pace of sessions. Its main practitioners are older, resolute, and highly experienced. (It takes a long time to become grumpy.) If confronted with this style, remember that it’s just that’style. Don’t let it obscure the substance, or lack of substance, in your counterpart’s proposals or arguments.

NOTE: Sternness is a calm form of intimidation. You have to let it work on you if it’s to work at all. If you choose it as a style, look for opponents who willreadily succumb to its effects.

SocialNegotiation is certainly a form of social contact, but some participants choose to emphasize its social aspects in an attempt to sway counterparts. Lavish receptions with important (that is, political) guests, private dinners at popular venues, choice seats at sporting events, gambling and shopping junkets, endless cocktail parties, and inclusion at local or family festivities are all designed to make the opposition believe that their best interests are being looked after. The message is, ?let’s be friends first and business partners second.?

This friendly form of envelopment isn’t the exclusive purview of hosts. Many visitors already familiar with their host’s landscape can use the same social style to demonstrate that they’re effective and highly regarded players, both onand off of home turf. The British and the Americans have used their wealth and political connections for decades to let foreign hosts know that they ?have beenhere before? and are already hooked into the local scene. All countries with a major overseas diplomatic presence make ready use of commercial and protocol attachés to line up high-end social events to impress business contacts.

Business cultures that are relatively devoid of commercial contract law use socialization as a way to evaluate and cement relationships. The personal bond between counterparts will, in these cases, supersede the contract. But even in abusiness culture such as this, socialization can be more of a manipulative technique than a business necessity.

Social functions can be used as a means of tiring out already weary opponents (beware all you jet-lag types) or to distract them from concentrating on commerce in the hope that they’ll reveal information or dissention within their own ranks.

Less seemly, but not uncommon, is the use of socializing for the purpose of allowing counterparts to compromise themselves or their company. Alcohol and drug problems are exploited, sexual preferences exposed, marital fidelity tested, and company loyalty questioned by personnel in direct (or indirect) employ of the practitioner.

Many visitors to the cutthroat developing markets (and even in some developed ones) have found that late-night carousing with counterparts can devolve into offers of prostitutes (male and female) and the purposeful involvement of local police. Suddenly the visitor needs the counterpart’s assistance in clearing the matter up or in keeping it secret. Thus, an evening of social activity has been cleverly engineered by the practitioner into a ?debt? that will be repaid many times over at the negotiating table. There is little denying of the effectiveness of both the friendly and less friendly versions of this style of negotiating. Even the most experienced hand can be softened by continual offers of friendship or plagued by a momentary mistake. Avoiding tiring social events and compromising situations can have its problems as well. Very few people wish

to appear unsociable (see Stern, above) and turning down after-hours frolicking may convince the profferer that they’ve committed a faux pas. Understanding the social restrictions of counterparts (e. g., the Chinese, the Canadians, and the Italians have very different senses of social decorum) will keep you from offending them. Similarly, the avoidance of anything you might be ashamed of will preserve your own position. Always pay attention and never, ever let your guard down.

WARNING: International negotiation is rarely an eight-hour-a-day job, or even a twelvehour one. It’s best to consider yourself in negotiation mode every moment you?re awake. Just as peace marks time between wars, rest is something you do between negotiations.

TheftSadly, theft as a negotiating style is growing by leaps and bounds every year.As society becomes more information-based, knowledge isn’t only power but also currency. Choosing this as a style is fraught with risk but equally fraught withthe potential for profit. Unlike deception, theft isn’t universally practiced, and its discovery can bring negotiations to a crashing close. Criminal prosecution and commercial blackballing aren’t unusual. Theft is usually practiced by desperate counterparts but many internationally known companies useit on a regular basis to save research expenditures and plan strategy. Any experienced negotiators who claim never to have been victimized by it or to be unfamiliar with ‘that sort? Of counterpart are either self-deluding or not as experienced as they would have you believe.

Theft can take many forms and is used during negotiations to undermine or neutralize a counterpart’s position. Phone lines are tapped, faxes intercepted, conversations eavesdropped on, and files rifled. Laptop computers left in rooms during social events are downloaded or even stolen. Email is intercepted and cellphone conversations transcribed. Baggage handlers, cab drivers, chauffeurs, room attendants, bartenders, airline employees, PBX operators, desk clerks, and local translators can be put on the payroll to deliver even the slightest scrap of information. Some governments fully condone such operations and assist in thegathering of illicit commercial information. When laptops or software are held overnight at customs, it’s a sure sign of government complicity. Totalitarian governments are far less subtle and do nothing to hide their internal control ofinformation.

They copy every fax (many nations require that fax machines be registered), monitor every long-distance call, and send all email through a central, government-controlled gateway. Any pertinent information recovered is funneled to domestic firms, many of which are government fronts. All of this is conductedunder the guise of controlling ?political? information or of anti-pornography campaigns.

Discovering that you are a victim of this style doesn’t always solve the problem.

Unless proof is absolute, counterparts can’t be confronted, and skilled practitioners make sure the trail does not lead directly to them. When governments are involved, it’s even more sensitive. Some governmental agencies

are so bold as to question visiting negotiators about information that was intercepted.

WARNING: Remember, if knowledge is power, then sharing knowledge is sharing power. Negotiators don’t share anything until terms have been discussed. Being athief hardly guarantees success in negotiations. Though many see theft as part of the ?all’s fair in love and war? adage, others view it as an equalizer between hapless, David-like enterprises and global Goliaths. Industrial espionage can be surprisingly easy if the prey is unwary, but few successful companies are so oblivious. Many companies respond by leaving information ?doors? intentionally unlocked and planting erroneous data, hoping to mislead thieves. Even without such security measures, detection of theft prior to or during negotiations can turn an otherwise fair-minded counterpart into a ruthless opponent. They may never openly state their concerns but their reactionwill be quite visible’they’ll take on a so-that’s-how-you-want-to-play-the-gameattitude and concessions will become few and far between. Negotiations may simply be called off on the spot, with no reason given. Theft is an extremely slippery slope and its continued employment most often results in detection and punishment in one form or another. It would be naïve not to recognize that some companies (and commercial cultures) have successfully employed it over an extended period but mostly while operating under a governmental aegis. For most negotiators, it’s a tool with risks that outweigh its benefits.

IndulgentIndulging the opposition may seem an odd way to approach negotiations, but both sellers and buyers can use it to good effect. It involves an extremely longterm view. Certain trade and investment negotiations are only the first of numerous rounds of discussion, and buyers and investors are, by nature, likely to approach the talks in terms of ‘small bites? and incremental involvement. Small successes will build toward larger deals and greater involvement. It’s this future that the practitioner of the indulgent style plans around. Initial deals are negotiated and setup by sellers so that buyers/ investors are successful, perhaps beyond their original hopes. Secondary, even tertiary, negotiations havethe same result, with the counterpart being brought farther into the net each time. Once they’re sufficiently committed, the seller can change style and startmaking demands. Some sellers even use indulgence as an opportunity to undercut competitors and drive them from the marketplace. Suddenly the buyer finds that his previously indulgent counterparts now control the market and its pricing.

Buyers and investors can also turn indulgence to their advantage by creating ‘sweetheart? deals that the opposition can’t walk away from. Buyers purchase at high prices and investors offer to pump in money with few strings attached. At the next round of discussions, the result is similar. Over time, the practitioner starts demanding price cuts, reduced shipping costs, greater managerial input, or a restructuring of share ownership. Having failed to put safeguards in place during the early ?indulgent? sessions (or having overlooked clauses placed by their counterparts), the seller now finds himself outmaneuvered by a patient and clever opponent. Unwilling to lose market share or jeopardize new injections of badly needed equity, they succumb to the new, very nonindulgent demands.

CHAPTER 11Negotiating Styles, Part 2

Major Team StylesTeams must make a conscious effort to maintain a unified front. This can be accomplished through a variety of styles, with specific choices being based on member talent, cultural background, and personality type. A single style can be maintained throughout a single negotiation or turned on and off when required. Though the preservation of unity is the main concern when making a stylistic choice, that unity will flow from member compatibility. When preparing strategy fornegotiations, choose the talent first and let those choices dictate the team’s eventual style. Also keep in mind that while unity is paramount, the appearance of disunity can be used to accomplish the team’s goal as well. Much of the effectiveness of any style will be the impression created upon the opposition. consensus

Consensus allows the team to disperse authority and responsibility. The group sets policy and makes decisions. The group is consulted on issues both large andsmall. While a spokesperson may deliver the results of group decisions, no clearleadership role is taken, and the spokesperson may change, depending on the subject matter being discussed. The Chief Negotiator acts solely as a moderatorfor internal group discussions and may remain hidden at general discussions.

Such group scrutiny is a very time-consuming style, but it has the virtue of being difficult to penetrate. Every decision made by the team requires a form ofvoting and may result in an inordinate number of session breaks as the team polls itself. Counterparts will find it difficult to pry apart positions that appear seamless. Counterparts may also be worn down by the slowness of the decisionmaking process and grant concessions simply to keep things moving.

The strengths of consensus-style negotiating are also its weaknesses. No matter how well armored an object is, slow movement invites outmaneuvering, and the same is true for lumbering negotiating teams. Nimble opponents can overload the decision-making process and make consensus building untenable. This is especially true when the agenda hasn’t been rigidly set in advance. New issues can be brought to the table until the team requiring consensus gives in to inherent time constraints.

Sometimes the opposition doesn’t bother to break the consensus by maneuver but simply calls off negotiations, due to what they see as time wasting by their counterparts. To avoid the problems of the consensus style and maximize its strengths, here are a few tips.- Only adopt this style when the team is in a buying/ investing mode or in a strong selling position where the product, service, or investment opportunity istoo attractive or in demand to warrant dismissal.- Consensus tends to work best when team members are culturally homogeneous and comfortable with subjugation to the group. It can be used with less homogeneous teams but will require extensive briefing and practice.- Reticence at the negotiating table is required. Discussion must be saved for internal sessions. Counterparts present their positions with the Consensus team

requesting only clarifications and reserving rebuttals until later. Any ?at table? talk must be couched in terms of ?we? not ?I.?- Socializing with counterparts needs to be kept to a minimum, as this presents their greatest opportunity for a divide-and-conquer maneuver.- The Chief Negotiator or team leader must remain as invisible as possible, often allowing other team members to act as spokesperson. Just as the team wishes to disperse authority and responsibility, so too should the counterpart’sattention be diffused. Some teams even use false or misleading business titles to distract the opposition from the team’s true leadership.- Internal dissention must be dealt with immediately. Unresolved issues among team members will be very evident to skilled counterparts. Team members who holdgrudges or can’t separate emotions from business will make poor consensus builders.

CowboysThe term ?cowboys? generally denotes a highly individualistic approach to business. Its use hardly seems compatible with a team effort. However, cowboys were traditionally self-sufficient people who could work on their own for extended periods while contributing to the group goal: herding cattle for transport. In the case of international negotiations, the goal is to ?round up? The opposition and keep them moving in the direction dictated by the ‘trail boss? (a. k. a. the Chief Negotiator). This may seem a somewhat mawkish analogy,but it’s quite apt for certain types of negotiations.

Often negotiations requiring extensive investments do not take place with all members of both teams seated around a single large table. Specialist sessions are scheduled, such as marketing, distribution, technical, or manufacturing. Some team members may be taken to different locations altogether to view branchoffices or operation facilities. Decisions and statements made during these extracurricular sessions may dictate the success or failure of the entire negotiating mission. It’s no place for the faint of heart. Team members who may flourish in Consensus would find this type of isolation disconcerting. Cowboys revel in it.

Cowboys understand the limits of their authority and the extent of their responsibility. Cowboy teams are composed of individuals who aren’t merely specialists but staff who also exhibit generalist management talents. (For example, the head of product development may be a Cowboy, but an engineer is just an engineer.) They’re familiar with the company’s ?big picture? but can discuss it in ?little picture? terms. Cowboy teams converge for group strategy and disperse for individual tactical implementation. Team members may utilize any of the individual styles delineated in Chapter 10 when ?in the field,? as long as these are compatible with company goals.

This is an extremely flexible and adaptive style that is very attractive to upand-coming negotiators. While it grants a great deal of freedom of action to its practitioners, it also has some stringent provisos and responsibilities. Thefollowing tips apply to both sides of the negotiating table.- Cowboy teams need strong leadership. Not only must the Chief Negotiator be able to provide a clear vision of the team’s goals, but he or she must also be able to inspire loyalty and operate effectively without directly supervising theteam. Communication lines must be wide open and the ability to delegate on full-

throttle. Micromanagers can’t tolerate the Cowboy team style and laissez faire managers will similarly fail, as they don’t have the requisite ability to bring cohesion to a team that’s constantly converging and dispersing. If the CN can’t handle the demands of this style, the talents of its individual members will amount to naught.- Team members must have excellent communication skills and have no qualms aboutreporting in to the CN. At a minimum, daily contact is required to assure group goals are being met and new information circulated. Although every team member is working on a separate section, it’s still a single puzzle.- The team must be composed of staff who can ?work without a net? under adverse conditions. People who need occasional hand-holding simply won’t succeed here.Cowboys turn in reports, not requests for advice.- The loyalty of individual members should never be in question. It’s essential that they recognize the difference between self-interest and operating independently.- The team must be highly organized and well briefed. Because individuals must operate alone for extended periods, they must be armed to the teeth with information. Each team member should prepare for the upcoming negotiations as ifthey were going solo.- Agendas that disperse team members must be worked out prior to the start of negotiations. Day one is no time to find out that a Consensus team must suddenlyoperate as Cowboys.

NOTE: Contrary to what the name might imply, some of the best Cowboys are women.Many female managers are familiar with working toward group goals while being isolated from the normal company structure. Also, in some cultures, the opposition will underestimate their talent simply because of their gender?a mistake that will work in your team’s favor.

Platoon Platoons operate in a similar fashion to Cowboy teams but with small subteams that have independent team leaders answerable to a single CN. These team leadersmust fulfill all of the requirements of Cowboys but also be able to organize andsupervise a team of their own. Not all Cowboys make good Platoon leaders, and all Platoon members are not Cowboys.

Platoon style is very useful when large numbers of technical specialists must bebrought along for negotiations. Team leaders maintain control of the specialistsand run applicable negotiating sessions or side trips. This takes pressure off of the CN and allows him or her to concentrate on wider goals. Team leaders control the work of their subordinates, focusing on the Platoon’s independent goals. And while they act as spokespersons for their particular Platoon, they defer to the CN during general discussions.

NOTE: Platoon style negotiating is a good proving ground for future chief negotiators. divide and conquer

The easiest way to control negotiations is to control the counterparts? position. Of course, they’ll be doing everything possible to prevent that from happening.

Turning members of the opposition against each other goes a long way toward succeeding in this particular manipulation. Team negotiating can effectively utilize a divide-and-conquer style, either as the overall strategy or as a simple tactic for specific agenda points. Though it will be discussed here from a practitioner viewpoint, all negotiators must be on the look-out for signs thatit’s being used against them.

This style works by one of two methods and requires significant skills of observation. Method one calls for the isolation of one or more members of the other team for the purpose of soliciting information?either actual data related to the negotiations or intelligence regarding dissention in a counterpart’s ranks.

Some practitioners even take this to the extreme of offering remuneration for such information. Intelligence acquired by more subtle means (that is, subterfuge) is often more useful, though it does require a more substantial investment of time. Once acquired, the information may be used to slyly undermine a proposal or it may be boldly stated at a session and attributed directly to the wayward counterpart (?Your Mr. Chan said last night at dinner that your shipments have a four week lead time not three as you state here. Which is it??) This latter method does two things: it lets the opposition know that you’re wise to their game but it also pinpoints the leak. Targeting a key member of the opposing team greatly increases the impact of this style, as junior staff members committing such an offense will simply be sent packing. Neutralizing a second-in-command will create general havoc in the opposition. This is a very serious move and should be taken cautiously.

Of course, not attributing the inside information directly (?It has come to our attention that . . .?) also has benefits. It creates severe mistrust among the opposition and forces their Chief Negotiator to act alone, since no one on the team can now be trusted. A team effort has just very effectively been turned into a solo act.These divisive contacts are generally made under the guise of socialization.Much can be learned during a golf game, cocktail reception, or late dinner.

Cowboy team members are particularly susceptible, since they may not discover they’ve been compromised until they return for team sessions. It’s also during these dispersed sessions that Cowboys can be approached with the proposal of switching sides altogether (unscrupulous perhaps, but not uncommon).

Keep in mind that experienced teams of all styles will be expecting some form ofdivisive move by counterparts. It’s a technique older than Caesar. In some cases, practitioners are often set up for a fall with information that’s more harmful than useful.

LESSON: If you head down a road you weren’t supposed to be on, you’re hardly justified in complaining about the directions. Know the opposition and “watch your back.”

The other method of this divisive style is the constant exploitation of weakpoints and contradictions in a counterpart’s statements. Some teams assign amember of their delegation the duty of taking notes and transcribing them for

use in postsession recaps. Laptop computers are regularly put to use for this purpose, as word-for-word transcriptions allow for easy searches and comparisons. By using a counterpart’s own words to undermine their position (?But at this morning’s contract session your Ms. Hernandez stated that, and I quote . . .?), the burden remains squarely on their shoulders. No subterfuge is involved, only attention to detail. Convincing the other side that they are disorganized will greatly reduce their resistance to granting concessions.

WARNING: Only the most experienced, cohesive teams can avoid some form of contradiction or mistake in their proposals. Once the Divide and Conquer style is detected, expect to become the target of revenge.

Jekyll And Hyde

This style is also known as ?good cop, bad cop.? Part of the team takes a very hard-line approach to the negotiations, while another contingent proposes to acton behalf of the opposition. Stern stylists work hand in hand with indulgers to first browbeat the counterparts and then promise to make everything all right. This may seem quite a transparent ploy to the reader when put in these terms, but it can be, and is, a compelling style in the right situations.

Inexperienced teams are very susceptible to victimization by this style and evenmore so when they’re not operating on their own turf. Being confronted with an argumentative counterpart who is a skilled practitioner of Stern or Intimidationtactics can be very disconcerting. Just when the victim believes that negotiation will end in failure, the Indulgers intercede with offers of a wholenew (anddecidedly more pleasant) proposal. The discrepancy between the attitudesand positions of the opposition is written off by the victim as the idiosyncratic behavior of a culture they don’t fully understand. Most of the time they even thank the indulgers for their assistance in salvaging the negotiations. Ignorance is indeed bliss, and the painful truth usually doesn’t become apparent for some time. It’s an expensive education and one that most negotiators come by the hard way.

The other situation in which this style is effective is when third parties areincluded in negotiations. Often this will take the form of a governmental agency that has been invited by the host company as an ?observer.? As talks progress and the visitor’s position becomes apparent, this supposedly neutral observer begins to place roadblocks in the way of the deal. Laws and regulationsare cited and governmental review prior to contract signing is suggested. The visitor (soon to be victim) confronts the host and demands to know why such problems were not known ahead of time.

The host now offers to use his ?connections? and back-channel lines of communication to help remedy the situation. After days of delay, the government has?miraculously?relented on some, but not all, of the alleged problems. The remaining problems, all of which work to the detriment of the visitor, are no longer subject to negotiation. They’re now beyond the control of the host, who shrugs in feigned resignation. None of this takes place until after the visitorshave revealed the full extent of their proposal, but the process was planned long before their arrival.

This type of bargaining usually takes place in countries where it’s next to impossible to find the laws actually written down. Even when you do find it codified and contradictory to the recent ruling, the government observer will simply say it has since been updated. In other words, the laws work only for thehost country’s companies, not yours. Complaining is pointless. Either sign the somewhat less attractive contract or go home.

HierarchicalMany teams choose to pass all decisions through the chain-of-command for approval. This can occur when a strong CN has a weak team and prefers to agree to all decisions, large and small, as a means of maintaining control of the company position. It’s also quite common when everyone on the team is inexperienced and the CN’s choice of style reflects the normal company hierarchy.While this is safe, it’s not necessarily cost effective. Having all decisions stem from a single source can make for consistency, but it defeats the purpose of fielding a team for negotiations. Whether host or visitor, it’s still expensive to bring a team to the table and it’s best to make use of them. The one advantage that hierarchical teams have is that they can act as a training ground for novices.

However, it should be noted that hierarchies tend to preserve themselves and continue in their style even when team members have been sufficiently ?bloodied?by experience.

The hope that subordinates will act as filters during negotiations quickly evaporates as observant counterparts detect that decision making is centralized.

They no longer wish to talk to anyone but the decision maker and will not botherwith sessions in which the central authority isn’t present. Unlike Consensus (which efficiently disperses authority), hierarchies focus the power, and consequently all the responsibility, on one person. Ego-soothing perhaps, but just as in the case of the Divide and Conquer scenario, a solo act ends up facing a team effort. Unless the Chief Negotiator is very good and the opposition very weak, defeat in some form is inevitable.

WARNING: Hierarchies share the Consensus style’s sluggish vulnerability. If sucha team must be put into the field, it should be kept compact. Under no circumstances should a hierarchical team be dispersed. horizontal

Horizontal teams disperse authority and responsibility much in the same way as Consensus teams, but without the benefit of the CN’s oversight. Each small team,set up along the lines of the Platoon style, negotiates its own single feature or features of the contract as a separate entity. This style is used primarily by very large international corporations that plan to farm out parts of a contract to various subsidiaries.

Its effectiveness lies in the ability of each small unit to cut the best deal possible for its own purposes without having to consider the fallout for other parts of the company. Coming face-to-face with this style can be perplexing; in some ways, it’s meant to be. Counterparts suddenly find themselves negotiating

with several individual companies when they had only planned on dealing with oneentity.

Large companies often save this approach for the second or third round of talks,when the details of a general deal are being hammered out. When planned and executed properly, its outcome is very much a success for the practitioners, butit relies on understanding (if not accommodating) their cohorts? positions.

This style forces the opposition to disperse negotiating authority without preplanning. (‘sorry, you’ll need to discuss that with our accounting division,we only handle transnational shipping.?) Large companies can more readily succeed with this ?dispersal? when dealing with smaller firms, because it gives theimpression that this is how things operate in the ?big leagues.? The smaller company, even when in a buying position, is too embarrassed by its size to demand that all details be negotiated at the same table.

LESSON: Pride cometh before a fall.

Unfortunately, some companies (both large and small) choose this style unconsciously’ through disorganization and poor leadership. Domestic and international companies alike have been plagued for decades by sales departmentsthat make promises and sign deals that their operations department is unable to fulfill. Cutting a deal that can’t reach fruition isn’t successful negotiating, it’s short-term thinking in a long-term marketplace.

The horizontal style demands strong leadership for the individual subsidiary discussions and a firm grasp of the interplay among those affiliates. Creating intramural problems or causing dissention at headquarters will have an adverse effect on overall effectiveness.

REMEMBER: The key to this style is to make counterparts believe they’re dealing with separate entities. The reality of the situation is just the opposite. departmental

This style is a more self-conscious version of the Hierarchical method but with the dispersal result of Horizontal negotiating. The Departmental is a very common form of corporate negotiating in Asia, and growth in that region is testament to its effectiveness.

Visitors or hosts are faced with an opposing team that has maintained its basic company structure, subdivisions, and central authority. However, rather than negotiating as a single unit, counterparts send only those staff members to eachday’s sessions whose job description directly relates to the items on the agenda.

These specialty-based ?departments? can only negotiate within narrow ranges, butthey force their counterparts to reveal the entirety of their proposal for laterdissection by another department. Team leaders (and perhaps individual and departmental styles) change on a daily basis, and the CN has the option of overseeing the negotiations from a remote location. The opposition must negotiate with several parts of the same company without ever getting to confront the real decision maker. Also, they’re forced to adapt to new personnel

repeatedly, which prevents them from establishing a pattern to their counterparts? strategy.

Not only does this style wear down the opposition, but it also continually drives them off course.

The Departmental style presupposes a tight control of agenda items and clear lines of communications among the various departments and the CN. Some departmental stylists, usually visiting sellers, simply direct their members to make separate, very straightforward presentations and allow the facts to speak for themselves. This idea of “laying all of your cards on the table” (at least the ones you want the other side to see) can be a very effective way of getting key issues decided early. It requires a team composed mostly of Pragmatists.

WARNING: Counterparts being subjected to a Departmental style should recognize that early negotiating sessions can become primarily fact-finding missions for latter discussions. Lower-level departmental negotiators are given a ‘shopping list? of details needed for the planning of more important aspects of the deal.

The Importance of Stylistic Diversity

Negotiating situations and counterpart styles vary greatly, even within the samecountry. Teams and individual negotiators must be able to draw upon as many styles as possible if continued success is to be had in an ever expanding international marketplace. Being adept at only one style will limit the team or solo act to a very small number of situations, and attempting to use the same style under all conditions will result in a very small success ratio.

Another reason to become proficient with as many styles or combinations of styles as possible is that it allows negotiators to recognize the more subtle hallmarks displayed by counterparts. Adeptness may come through usage or observation. A negotiator or team may object to a particular style for moral reasons, but they must become familiar with its particulars nonetheless. Having a firm understanding of a counterpart’s style and where it leads will allow foreffective preplanning as well as adjustment once discussions begin.

NOTE: Negotiations are like chess. Visualizing all possible moves in advance leads to success.

Planning ContingenciesNothing ever goes completely according to the original design and waiting for problems to arise before considering solutions makes for poor decision making. Well-thought-out contingency planning is the surest sign that a negotiator or team has matured. Such planning must be viewed as a form of intellectual insurance? not mandatory but wise. The following nine areas should be consideredas potential troublespots during negotiations.- FINANCIAL Very often, discussions uncover financial problems that weren’t evident during the planning phase. Information may have been purposely withheld or not. Such revelations, if severe enough, can bring negotiations to a halt, but more often they call for some fancy footwork on behalf of all participants. Never enter a negotiation with all of your financial options ‘tapped out.” They should be open, wide open. If either side is on a do-or-die contract signing

mission, there?ll be more dying than doing. Finances, and the participants attitudes toward them, must be elastic.

- LEGAL As previously noted, many nations and localities have a legal structure that is flexible, or inflexible, in direct proportion to the size and scope of the deal being considered. The legal ground in developing economies can shift suddenly, dramatically, and without advance notice. More intractable styles may need quick adjustment to make the deal seem significantly more attractive to counterparts and government officials. Visitors should never make the mistake ofthrowing their mostly inconsiderable legal weight around.

NOTE: Never convince yourself that you have a complete grasp of a foreign legal systemuntil you’re in-country.

- POLITICAL Political moves from right to left, globalist to isolationist, or secular to fundamentalist can happen in the midst of negotiations. Some discussions may be put on hold until the political dust settles, as occurred during Russia’s 1997 elections. At other times, long-standing contracts must be renegotiated, as happened to Enron in India in 1996 when nationalist politicianswon control over an area undergoing a multimillion-dollar infrastructure project. Politics are very fickle and always ?local.? If the project is of any size, plan on some sort of political interference, which may range in size from the U. S. Department of the Treasury, to the People’s Committee of Da Nang, to the mayor of Lima.- MORAL In recent years, vast numbers of projects have been derailed, severely altered, or had their contracts retracted due to the moral influence of outside groups. Boycotts are threatened by ?concerned citizens? claiming moral authorityover the project itself or its participants. Negotiations in Myanmar, South Africa, and China all feel the sting of these interlopers, who tend to argue from a very limited perspective. Companies with a great deal of brand equity (i.e., Coke, Heineken, Shell Oil) must be especially attentive.

Even when no external forces are at play, participants may uncover information about the project or counterparts that is of questionable moral value.

This is always a possibility where the cultural backgrounds of the participants are vastly different. Negotiators must use their own moral compass here and determine in advance what can and can’t be tolerated. Similarly, teams must havea moral point-of-no-return worked out in advance. Prenegotiation cultural research will assist in setting these limits.

WARNING: Don’t wait until a bribe is offered (or demanded) to determine whether or not the proposition will be accepted. All business cultures have their own set of morals: know yours, know theirs.

- STRATEGIC Conditions of all types surrounding negotiations can change at a moment’s notice. Backup strategies must be ready for deployment on a timely basis. Original strategies may have failed, been outmaneuvered, or overtaken by outside events. Never, under any circumstances, should the phrase ?what do we (I) do now?? be uttered by professional negotiators. Nimbleness is not an optionhere; a minimum of two backup plans should be waiting in the wings. Don’t

confuse these contingency plans with ?last-ditch? efforts. Secondary strategies must be considered with an eye toward success, not toward limiting failure.

- TACTICAL A failed tactic does not call for a complete revamping of the overallstrategy. When attempting to win a specific point on the agenda, it’s best to have many approaches planned, all based on the conceivable reactions of counterparts.

Furthermore, each point of the agenda may have different tactical requirements.Some contract details may be bullied through, while others will be won by guile,and a third set achieved with finesse. Skilled negotiators must be able to glidefrom one tactic to the next without detracting from the main strategy. It’s not easy, but contingency planning makes it look easy. In fact, if done properly, itcan’t be detected at all.

NOTE: The more tricks (and sometimes they’re just that) negotiators have up their sleeves the better. Commercial leger de main requires much planning and practice.

- HEALTH When key members of a team are suddenly taken ill, it’s no time to start the search for replacements. This contingency should be planned in detail,especially for the visiting team, which will have far fewer sources from which to draw in an emergency. No single team member, even the Chief Negotiator, can be permitted the luxury of being inexpendable. Everyone must have some form of ?understudy? and the hoarding of information must be verboten. Besides creating aform of insurance against health problems, it’s a great way to train novice negotiators for future roles in the spotlight.

NOTE: Solo negotiators must go to extreme measures to maintain their health. No one has ever regretted being ‘too careful? with their health during overseas travel.

- CLIMATIC Climate can have very telling effects on negotiations. It can disruptflight schedules, evacuate cities, cause power outages, snap communications, andruin health. Weather conditions can even have a deleterious effects on the operation of high-tech equipment needed for presentations or financial planning.

And such difficulties can increase as negotiations move farther from urban areasto regions where backup systems are in shorter supply. The weather may not be controllable but it is predictable and to a much greater degree every year. Eventhe most seasoned team (pun intended) must plan for adverse weather conditions?and not just from a clothing or medication standpoint. Presentations must be able to be delivered effectively with or without technical gadgets, and backup communications should be readily available.

NOTE: Visiting teams must recognize that arriving in-country unprepared for the climate will mark their efforts as being underresearched.

- PERSONAL Negotiators lead lives apart from business and often those personal lives intervene with pressing needs. Problems that demand a negotiator’s immediate attention will arise at some of the most inconvenient moments during discussions. As in the case with health contingencies, the understudy system

must be used by teams when members are called away. Solo negotiators planning overseas travel must make sure that all of their personal matters are in order before embarking on important missions.

WARNING: Spouses, parents, children, and significant others must be thoroughly conditioned to recognize a true emergency.

learning to avoid overkill It’s always best to have detailed planning, copious information, skilled professionals, and conducive conditions when readying for negotiations. Fortune favors the prepared mind. However, preparation doesn’t demand usage and negotiators are to be warned about overkill. On many occasions, counterparts canturn out to be far more pliable than originally thought. What it takes to overwhelm their defenses and counter their maneuvers may be but a small portion of the strategic and tactical array that was meticulously prepared. Don’t succumb to the urge to ?go over the top? with the remaining, unnecessary portions of your plan. Beating an opponent at soccer by a score of two to one assures them some dignity, without detracting from the victor’s revelry. Runningup the score to ten to one by taking advantage of a mismatch leaves the defeatedwith less than nothing. Moving the analogy to negotiations, the concept of leaving the opposition ?enough? makes for a grudgeless long-term relationship and, in the case of simple trades, opportunities for future business. Trouncing counterparts, even when their behavior has been less than cordial, will not bodewell in the long run. Highly organized and prepared negotiators must know when to turn off their bargaining juggernaut and move on to the next set of negotiations.

LESSON: Don’t let your own style win out over the substance of your position. Overkillwastes time, energy, and opportunity.

Detecting Changes in Your Counterpart’s Modus OperandiCounterparts are under no obligation to be consistent with their stylethroughout an entire set of discussions. Their changes may be proactive in anattempt to confound the opposition, or the change may be reactions to strategicand tactical failures. Here are some indicators that a counterpart is preparing tomake a stylistic change in their negotiation approach.- Requests for additional breaks or longer breaks- Requests for postponements- The addition of new high-level participants, especially if they’re visitors who havebeen flown in ‘to beef up? the opposition- The outright replacement of high-level participants for “personal’ reasons- The reduction of support staff (counterparts may be preparing to cancel the talks)- Increased requests for technical data presumed to be -common knowledge-- Requests for a location change- Increases in the number of or length of social contacts- Requests for side meetings or specialist sessions- Prolonged use of a third language unfamiliar to translators- Increased requests for clarifications of standard topics

- Increased interruptions that require “immediate attention”

Distinguishing ?Yes? from ?I Understand?

The goal of the negotiating process is to achieve agreement among parties with opposing viewpoints. Reaching an understanding isn’t the same as reaching an agreement. Sometimes the problem is linguistic, but most often it’s stylistic. The smiling affability of the Social stylist doesn’t always indicate agreement, any more than the grimaced detachment of the Impassive practitioner denotes discord. Negotiators around the world are often shocked to find themselves in discussions that proceed rapidly, and cordially, to nowhere. Others have waged hard-pitched and uphill battles that smelled of defeat only to find on the last day that they’ve won every concession they needed. Many professionals alleviate the suspense of waiting for the final contract signing (or not) by introducing an incremental or provisional signed agreement after each major point of the agenda is resolved. While this commits neither side to the ultimate bond of a bargain, it does give a good indication of the true direction of the negotiations. No matter how experienced, negotiators can suffer from the basic human frailty of misinterpretation of the facts. The word or words to the effectof ?yes? in many languages can mean ?I understand,? ?I agree,? ?I have no idea what you are talking about but am too embarrassed to ask for an explanation,? ?Ihear you but have no intention of doing what you have requested,? or ?I?m payingabsolutely no attention to what you’re saying. Do go on.?

LESSON: Understanding is a mental process. Agreement is a contract signing process.Get it in writing.

CHAPTER 12

Planning to Win

Success is a Choice, Not a Result winning in international business must not be left up to chance. Chance is for gamblers and the vast majority of gamblers are losers, much to the delight of casino owners everywhere. Winners control risk and make it work in their favor, much like those same happy casino owners do. The choice of a proper strategy (by a negotiator or team) controls risk to the point where success is readily foreseeable. Failure is the result of poor strategy, not the level of risk.

This chapter explores the process of choosing a strategy, but it doesn’t recommend one strategy over another. Negotiators must make that choice for themselves.

Understanding the Zero-Sum GameIn the introduction to this text the concept of the zero-sum game was proffered as the essence of international negotiations. It’s a very old concept that has, on occasion, been pushed aside by such theories as ?win-win? and ?co-opetition.?

These latter theories are decidedly less confrontational, but therein lies theirweakness. International business is a very high stakes, super-competitive and often brutal form of commerce. While time may soften its edges, that softening will not occur for several generations.

RULE: My gains come at the expense of your losses, and vice versa.

Every negotiator and team must enter discussions with a clear idea of how much they’ll need (not want) to take away from the negotiations and a detailed strategy for attaining that objective. Considerations about the opposition are based entirely upon how much they can afford to give up and still remain interested in the deal. No one side will get everything it wants, but both sidesmust get exactly what they need or what they’ve been convinced they need. The role of a successful negotiator is to allow counterparts to protect their needs by bargaining away their wants. The ?pie? being negotiated can be cut into an infinite number of slices, but the pie never changes size. Some slices are more important than others (needs versus wants), but the fact remains that the more one side gets, the less the other side can have. Acquisition of 30 percent of the pie by team A means the loss of 70 percent. Team B meanwhile has attained a 70 percent gain and sustained a 30 percent loss. Both sides? gains are offset bythe total of both sides? losses. The zero-sum game seems simplistic, but it’s often misconstrued as creating winners and losers. It may, but it’s not inherentin the system. It might just as easily result in two winners or two losers, based entirely on the goals each side initially brings to the table.

Moreover, the concept of winning and losing in international negotiations is strictly self-imposed. In the example stated above, team B may indeed consider itself a loser if its goal was 75 percent and team A may return home pleased at having exceeded its 25 percent goal. At other times, team B counts itself successful at having attained its goal of 75 percent, not realizing that team A

came into negotiations looking for a mere 15 percent of the pie. Who is to say who won or lost? Answer: It’s an internal matter. Traditionally, the terms ?win?and ?lose? mean that there’s general agreement on what constitutes the prize. Such accord is rare in international commerce.

Win Enough and Lose EnoughStrategies for successful negotiations will focus on acquiring a mandatory groupof needs and as many wants as prudence and the opposition allow. The ability to concede points of the agenda that are of little import, while giving every appearance of concern about their loss, is part of every successful negotiator’sbag of tricks. Every solo negotiator or team must enter the bargaining process with a clear idea of the optimal, moderate, and minimal positions they’ll accepton any particular issue, as well as on the whole. This process entails planning for a counterpart’s position; internal and external research are key. Determining when ?enough is enough? on a playing field that may be out of your control will lead to long-term success for all parties concerned, and participants must be concerned with how the opposition is viewing the discussions. You can win too much. The following list of questions and planning exercises will help you determine what is ?enough.? It will also help determine when the process has reached a point that’s unacceptable, when benefits are too heavily outweighed by burdens.

LESSON: Knowing when to cease negotiations is just as important as knowing when tocontinue.

A suitable strategy will emerge only after the questions are given thoroughreflection. Once the answers have been given, rethink the guidelines from theopposition’s point of view. Understanding the other side greatly reduces risk andestablishes which parts of the agenda are really up for negotiation.guidelines for strategy selection1. What is the purpose of opening negotiations with this particular group?2. What is our (my) main goal in the target market? Trade or investment?3. What level of agenda control can I (we) expect?4. What level of agenda control will I (we) accept?5. Is this a buying or selling position?6. Is this a host or visitor position?7. What level of experience does our team (do I) have in negotiations of this type?8. What level of experience does the opposition have in negotiations of this type?9. What are all of the issues to be negotiated?10. What issues are considered needs for our (my) position?. List the range of settlement for each need from optimal to minimal.12. What issues are considered wants for our position?13. List the range of settlement for each want from optimal to minimal.14. Re-evaluate the needs and wants lists.15. What perceptions do we (I) hold regarding counterparts?16. Summarize the cultural research.17. Insert personal information (age, gender, marital status, etc.).18. Summarize the business research.19. Consider information received about their negotiating history.20. Is the opposition perceived to be cooperative or belligerent?21. What outside factors will affect the discussions?22. Describe the physical setting for discussions.23. If a team is to be used, will it be dispersed? If so, where?24. What communication problems can be foreseen?25. What language will discussions be held in?26. Will translators be necessary?27. What language will the legal contract be in?28. Is there good legal structure in the market where the contract will be executed?29. What is our (my) perception of fairness?30. What is the opposition’s perception of fairness?31. Summarize the ethical views of your company.32. Summarize the perceived ethical views of the opposition.33. What level of trust do we (I) have in the counterparts?34. What is the economic disparity between the participant cultures?35. What is the economic disparity between the participant companies?36. What issues do we (I) consider non-negotiable?37. What issues will the opposition likely consider non-negotiable?38. What topics do I (we) wish to avoid?39. What topics will the opposition wish to avoid?

40. What is the current political situation between the respective governments?41. What is the level of authority represented by our negotiators?42. What is the level of authority represented by the opposition’s negotiators?43. Summarize the talents and personality profiles of your company’s negotiators.44. What personal styles are available to the Chief Negotiator (or team)?45. If a team is used, list styles likely to fit with the membership’s profile.46. What is the size and composition of the opposing team?. Will team members be assigned to specific points of the agenda? If so, justifyeach.48. Will these negotiations lead to future talks or long-term relationships?49. List a minimum of three strategies for accomplishing the company’s goals.50. List possible opposition strategies and their effect on your company’s position.51. At what point will we (I) consider the negotiations untenable?52. Can I (we) afford to say ?no??53. What are the alternatives to a completed negotiation?

Avoiding ImperialismAs noted above, all participants will have needs they’ll not wish to relinquish.These needs may not be of a purely economic nature. Sometimes these are dictatedby the respective legal structure, as in the case of ?local content? laws or mandatory local veto power. The needs may be religious or ethical in root, such as Islamic rules regarding the paying of interest. Or they may be a matter of preserving personal ?face? or national dignity, as is often the case with natural resource development projects.

In this last case, large companies or those from the developed economies must becareful to adapt a negotiating strategy that doesn’t smack of imperialism.

Needs and wants may be obtained while keeping the tone of the discussions as if between relative equals. Part of the understanding of ?enough? is the ability toavoid driving counterparts past the level of acceptability before all points have been discussed. Don’t let poor strategy selection or the surfacing of imperious attitudes derail talks before all points have been made.

Pursuing Company ObjectivesCompany objectives must always be paramount in the negotiator’s mind, and doublyso when consultants are added to the mix. Once objectives have been set and strategies chosen, they should be written down and made available to all of the pertinent players. This document will serve as the mission statement for the upcoming discussions and should be referred to often.

Side issues will bombard the negotiators, sometimes as part of the opposing strategy, and it will be difficult to achieve focus. Because the documentation of objectives will present security problems, it may be best held by the Chief Negotiator for referral at daily pre- and postplanning sessions. Teams, and evensolo negotiators, that don’t take this extra step to codify the company’s objectives will run the risk of completing (what were believed to be) successfulnegotiations only to find that they’ve exchanged wants for needs or missed some points altogether.

LESSON: Objectives are just like the contract terms. Get them in writing.

Non-negotiables: Keeping Quid, Giving QuoWizened negotiators often remark that they’ve lost count of the number of nonnegotiable points they’ve managed to bargain away from counterparts. Putting an agenda point under the rubric of non-negotiable will mark the practitioner asa novice or at least a weak bargainer. Old hands will recognize this as an attempt by counterparts to avoid discussing an issue that they can ill defend.

The reader is warned against confusing a need with a non-negotiable. The best analogy is a physical one: we all need food, but how much food we need is subject to discussion. To state that an agenda point must be conceded, without the slightest discussion or alteration invites defeat from many quarters. The opposition may find the point negligible but assume a quid pro quo stance in reaction. They’ll grant the concession with the assurance that you’ll be just as accommodating when they present their non-negotiables. You get a quid that may have been conceded anyway in exchange for a quo of undetermined importance.

The grandstanding associated with presenting a non-negotiable may also cause counterparts to become obstinate on every other point up for discussion, in the belief that it’s their only hope of getting ?enough.? In other cases, especiallywhen counterparts are buying or investing, they simply get up and walk away, straight into the arms of competitors.

WARNING: It can be a short step from non-negotiable to no negotiations.The best viewpoint to adopt when formulating strategy is that nothing is nonnegotiable but that there are limits on concessions. Even the most extreme need has some wriggle-room and that’s what you want to emphasize. Contract points are only conceded by the opposition when they feel they’ve had some hand in altering your original proposal. Fight tooth and nail, if you will, against every alteration, but let counterparts feel they’ve taken ?enough.? (Negotiations are about give and take.) It’s much easier to give a little and demand the remainder than it is to insist on the whole. For this reason, extremely important needs are often overstated to enhance bargaining power.

NOTE: Counterparts should never be able to determine what your true needs and wants are during discussions. Sudden moves toward hard bargaining strategies when needs are on the table make for easy detection. Once a strategy is planned,apply it to all points, big and small.

Checking Your Ego at the DoorThe discussions and atmosphere surrounding international business can be very ego-bruising and very ego-inflating. Neither extreme should present a problem for the professional negotiator. Their equity is not tied up in personal objectives or feelings but rather in their strategy. Fawning indulgence may be called for in one situation while weeks later, the grim austerity that’s part ofimpassivity is the requisite persona. Failure of strategy A only calls for the deployment of strategy B and success is just a job done properly. Nothing personal, just good planning.

Formulating a Clear and Workable Strategy

It would be impossible within the scope of this book to lay out a detailed strategy for every type of commercial negotiation. Instead, a schematic of theprocess is offered so that readers can apply it to their specific situations.In the following example, negotiations are planned over a five-day period with the subject company aspiring to achieve satisfactory concessions on ten points. Planning is taking place thirty days prior to the start of talks and involves two teams of three each, including the Chief Negotiator.

Case History: Infrastructure Related Negotiationsby yves a. speeckaert, ma, mba

The negotiation process leading to the acquisition of a large public utility in a developing country can be a long-winded and often frustrating exercise. This case history involves my participation in a telecommunications project in a member state of ASEAN. My role was lead advisor to the communication ministry during the various rounds of negotiations and consultations leading to the sale of the national telephone operator. Particular emphasis is given to clarifying the transaction process, identifying the conflicting goals of the key players, and pinpointing the critical success factors to a profitable negotiation.

1. The stakeholdersUnlike the board-level negotiations of merger and acquisition (M& A) transactions between two private firms, the privatization process of a highly visible public utility entails consultation with a much larger pool of stakeholders. The challenge of such a transaction to the foreign bidder is compounded by the diverging goals of the following six key stakeholders of the privatization.

The primary goal of the government is usually to maximize the proceeds from the sale and hence to boost the market value of the utility. The operator’s current management team and most employees are concerned with maintaining the status quo, keeping their jobs, and ensuring a measure of continuity. The lenders want to see a return on their investments and ways to minimize the risks of disruption in cash flows. The foreign buyer may have various motivations to buy equity in an overseas operator. Usually, this is a long-term investment, bankingon the large revenue and flotation value potential of a service. Lastly, the needs of the end users (customers) are usually covered in the various service obligations of the license.

2. The processWhether you are in the business of building a new fiber optics network, a wireless local loop for increasing access, or improving the management of the network, any negotiation related to public service is bound to be complex and have lasting effects. This, along with the large sums required for capital investment, explains why the process of change is politically charged and not taken lightly by local officials. Talks usually last between six months to more than a year. The real negotiation actually starts with the release of the invitation to tender (similar to an RFP? Request for Proposal), which sets out the conditions and the schedule of bidding as well as a document concerning the license. From the point of view of bidding party negotiators, this period prior to the biddingis crucial in two ways. Firstly, it provides an opportunity to truly understand

and clarify the agenda of the selling party, the government. Secondly, your interest and preparedness are a golden opportunity to establish yourself as a strong contender and to demonstrate the seriousness of your intent. It may also provide you a chance to establish a relationship with one or two high level administrators within the ministry or the regulatory agency. Such a bridge may be both useful as an information channel and a conduit of influence.

The bids from all of the various interested parties must be submitted on the same date and time to the ministry. The bidding document has two components.

The first describes the business plan for taking the utility forward while the second offers a bidding price for acquiring the company. Upon review of the bids, and sometimes a clarification period, the government awards the license toone of the parties and executes the transfer of existing shares to the new private entity. This privatization stage is often followed by a period of restructuring via an IPO (initial public offering) or a stock flotation to realize the value of the firm and/ or enlarge the circle of investors.

3. critical factorsThere are a number of critical success factors (CSFs) that greatly enhance your chances of ending up in the top tier of bidders in a hotly contested privatization.- Do your homework on the country and the targeted company. Make sure that you spend the appropriate time and resources to fully understand the type of political, economic, labor, and corporate environment in which you will be operating.- Seek the advice of a locally based advisory firm. Seeking out a local law firm, a bank, or an accountancy firm is critical to gaining local knowledge, connections, and assistance. The advisory firm will guide you through local politics and assist you with business planning.- Familiarize yourself with the regulatory environment and government objectives.The government or tender issuing party usually has a short list of key objectives for the country and the treasury.- Develop a strategic partnership. The strategic partner should be part of the corporate establishment of the country but not necessarily from the same utilityor industry as the bid target.- Develop a sound business plan. An independent assessment of market potential, fixed assets, depreciation, liabilities, and the revenue potential of the company should be included. The business plan should also provide the governmentwith a clear vision of what you intend to do once awarded the license to operate.- Submit the bid on time and with a professional presentation. Clarity and a soundfinancial proposal prevail over volume and complexity. Government reviewers often prefer a 100- to 150page cogent document over a 400page detailed encyclopedia.

4. formal negotiations and cultureThe negotiation of infrastructure projects is a blend of structured, formal transactions and highly political, relationship-based posturing. In the developing world, for instance, the fabric of the society and culture is

profoundly different from that of the investor societies. Although some countries have the veneer of being democratic, the underlying power base is centered on seniority and preferential relationships. Moreover the sphere of influence of the business or political elite in the network is determined by wealth, the number of participants, their negotiating skills, and political connections. The trick in negotiating in these societies is to recognize who hasthat powerbase and then to be ready for quickly shifting alliances. The implication for the foreign bidder is that successfully negotiating in emerging markets in general means also raising your profile and establishing the right connections to exert below the line actions as well as building a formal case.

The following may also be considered when preparing for privatization negotiating:- Maintain and nurture relationships at all times.- Do your homework to identify who is the real power holder in the opposite negotiating team.- Attempt to understand their mindset and priority list. Country and cultural briefings, active listening, local partners, and relationship building are ways to gather such intelligence.- Often socializing will play a key role in the relationship and people everywhere like to enjoy themselves. Do not miss an opportunity to share a good time with your hosts and demonstrate your interest in making a lasting contribution to the country’s infrastructure.

As a concluding note, infrastructure-related negotiation is not a small undertaking. The right to a foreign public service utility is earned, not simplybought. However, with careful preparation, the right local partnership, and a genuine respect and understanding of the local culture and priorities, you can greatly enhance your chances of a successful bid.

Mr. Speeckaert is an executive consultant in the Information, Communications & Entertainment Practice in the London office of KPMG.

CHAPTER 13Countering Personal StrategiesHow to Get the Upper Hand Good strategy always starts off as a proactive process, but it must also have the ability to become reactive to new information. This information may be technical, political, legal, financial, or even personal in nature. Many times, it takes the form of unforeseen tactical moves or strategic changes by counterparts. Inflexible strategies and static tactics can only be used by the strongest buyer/ investors and even then are subject to defeat by nimble opponents.

Planning strategy is subject to the vagaries of guesswork, and we can all only hope to make the most educated guess possible. The only thing worse than having chosen an incorrect strategy is the refusal to admit that it needs correction. Often, the refusal to change is egobased; at other times, when it becomes obvious that the game has changed, it’s a lack of backup procedures.

How To Counteract

Aggressive Use the opponent’s belief in their own strength against them. They can be enveloped during their headlong rush or allowed to dissipate their energy against an immovable object. Aggressive stylists attack frontally and generally,they lack guile.- COUNTERSTRATEGIES: Compliant, Impassive, Indulgent, Secretive, Deceptive, Theft.

Compliant The compliant stylist proceeds with the belief that the opposition is unaware ofhis intentions until the trap is sprung. This style can be derailed by changes to the agenda or the simultaneous discussion of all important issues.- COUNTERSTRATEGIES: Pragmatic, Secretive, Stern, Brinkmanship, Theft

Passive This technique requires that the opposition reveal their plan in detail with little revealed by the Passive stylist. Becoming demanding counterparts and insisting on speedy proceedings can expose and dilute this style.- COUNTERSTRATEGIES: Aggressive, Exploitive, Fleeting, Intimidating

ImpassiveThe Impassive, especially buyers, try to convince their opponents that they are hiding something. The inscrutable founder in an atmosphere of openness. Ask questions, demand answers, hold the agenda hostage.- COUNTERSTRATEGIES: Pragmatic, Brinkmanship, Overwhelming, Technical

Intimidating Intimidators are just Aggressors with insight. Their reliance on creating fear can and must be stymied early in discussions. Addressing the style directly acknowledges its effect. Stick to business.- COUNTERSTRATEGIES: Impassive, Technical, Financial, Legalistic, Pragmatic

Technical

Whereas Aggressors and Intimidators want you to feel weak, Technical negotiatorswant you to feel stupid by bombarding the negotiations with data. Putting the focus on larger issues and avoiding minutia defangs them.- COUNTERSTRATEGIES: Legalistic, Exploitive, Self-Righteous, Stern, Social

FinancialFinance bargainers constantly put the focus on profit, to the exclusion of otherissues. If those other issues are important, you must take either the moral highground or the realistic mid-range. There is more to business than just money.- COUNTERSTRATEGIES: Self-Righteous, Pragmatic, Legalistic

LegalisticCountering this strategy depends on which side of the law you wish to remain.If you find your counterpart’s insistence on adhering to the letter of the law a bit tedious and potentially unprofitable, then you need to introduce the realityof the situation especially if the host country has little contract law.? COUNTERSTRATEGIES: Pragmatism, Deception, SternIf on the other hand counterparts seem unable to ?locate the top of the table? or the right side of the law, you must make it clear that the deal will not be concluded under nefarious circumstances.- COUNTERSTRATEGIES: Legalistic, Intimidating, Self-Righteous, Social

Secretive Agreement to secret negotiations can often cause regret as it limits outside information and protective scrutiny. If it’s at the planning stage, you can demand to know why secrecy is required. If a change in strategy is required, simply state that you find the situation untenable and can’t proceed unless the veil of secrecy is lifted. Either way, fortitude is required.- COUNTERSTRATEGIES: Intimidating, Pragmatic, Stern, Aggressive, Social,

Deceptive

Deceptive Deception is part of everyone’s style to some degree and can never be completelyeliminated. Excesses can be toned down, however, by injections of? and demands for’the truth. Don’t be too insistent, as the tables may suddenly turn against you.- COUNTERSTRATEGIES: Pragmatic, Self-Righteous, Stern, Impassive, Legalistic,

Intimidating

Exploitive Exploiting the weakness of others is rarely tolerated and never appreciated whendiscovered. Countering it requires confrontation and in some cases turnabout. Becoming emotional about the strategy is to succumb to its effect. It can best be countered by limiting weaknesses in your position prior to negotiations.- COUNTERSTRATEGIES: Impassive, Pragmatic, Technical

Stubborn People who refuse to budge on an issue or who state their position in terms of ?non-negotiable? are really expressing their lack of justification for their

position. Finding the underlying cause for such obdurance is the key to breakingthe deadlock.- COUNTERSTRATEGIES: Social, Deceptive, Indulgent, Compliant

Ambivalent Like stubbornness, searching out the underlying cause of ambivalence goes a longway toward its cure. Often it stems from simply not trusting the opposition. Unlike stubbornness, ambivalence does react well to a heavy hand.- COUNTERSTRATEGIES: Social, Deceptive, Stern, Intimidating

Pragmatic The only problem in dealing with pragmatic counterparts is that they may only see the ?practicality? of a proposal from a single perspective. Blinders aren’t rare in international business, even for pragmatists. It’s one of the few strategies wherein a ?fight fire with fire? countermove works. Whatever the case, the pragmatist must be approached with reason, not sentiment.- COUNTERSTRATEGIES: Pragmatic, Stern, Social, Legalistic, Technical

Brinkmanship Rather than being a whole strategy, driving opponents to the brink is more of a keystone tactic in an aggressive or intimidating style. It can be warded off by forcing the counterparts to place their whole plan on the table at once.- COUNTERSTRATEGIES: Impassive, Stern, Pragmatic, Self-Righteous, Overwhelming

ArrogantArrogant people tend to feel ill at ease about their own standing. This can either be played to or downplayed. Capitalizing on an opponent’s feelings of inferiority can add an emotional edge to the discussions that can reduce effectiveness. It’s best to find the root cause and alleviate it.- COUNTERSTRATEGIES: Exploitive, Compliant, Social, Stern

Self-righteousOpponents ?riding their high horses? make easy targets, but they can also be some of the most difficult people to counter. They want everyone to look at ‘thebig picture,? but only from one side. This emotional tie to their issues makes everything appear as a need. They can be maneuvered into a corner by the rapid and repeated use of the quid pro quo. They can rarely be intimidated because they believe right is on their side, so frontal attacks are useless.- COUNTERSTRATEGIES: Compliant, Indulgent, Secretive, Deceptive

Overwhelming Negotiators will have precious little time to recognize that they’re about to beoverrun. If you suspect that you’re about to confront an Overwhelming buyer (?I?ll take everything you?ve got but I won’t pay more than . . .?) or a ?driver’s seat? sales team (?Microsoft has what you need but . . .?), you’ll either have to outcharm them or outrun them.- COUNTERSTRATEGIES: Social, Indulgent, Pragmatic, Fleeting, Aggressive

FleetingSpeed can be very irritating, and irritable negotiators don’t succeed on a regular basis. Counterparts who attempt to run roughshod are either showing

their inexperience or questioning your own. Show them your mettle (buying or selling) by refusing to adjust your pace to their style.- COUNTERSTRATEGIES: Impassive, Stern, Technical, Legalistic

SternIt is wise to assume that Stern stylists didn’t come by their methods casually. The strategy puts a focus on details and can only move in a straight line. It can’t be sidetracked so it must be derailed. Don’t bother with cajoling. Just disregard the dour looks and hammer away at the weaknesses in the counterpart’s arguments.- COUNTERSTRATEGIES: Exploitive, Pragmatic, Technical

SocialSocial stylists are the most deadly, least obvious, and hardest to resist of allstrategists. They offer fun, friendship, and favorable connections as a means toexpose and control your position. Hosts practicing this strategy can be exceptionally persuasive for visitors a long way from home. The social niceties must be observed in every culture, but be wary when they cross the line into manipulation. If the effort is egregious, don’t hesitate to make a major strategic alteration.- COUNTERSTRATEGIES: Intimidating, Exploitive, Stern, Impassive, Deceptive

TheftTheft of information as a strategy is difficult and costly to repel. Its prevention is tactical. Its discovery can lead to strategic changes by the victims mostly for the purpose of assuring that they’re not victimized again. Severe measures are usually called for if discussions are to continue.- COUNTERSTRATEGIES: Intimidating, Legalistic, Exploitive, Stern

IndulgentBeing enveloped by an Indulgent stylist can be a very enjoyable experience rightup until the strategy closes off your escape. As will be seen in the Country-byCountry listing of strategies and tactics, some cultures are more given to this methodology than others. Many victims bask in its comfort, hoping to wriggle free at the last moment. It’s better to resist its charms from the outset.- COUNTERSTRATEGIES: Impassive, Technical, Pragmatic, Stern

CHAPTER 14Countering Team StrategiesHow To Keep The Upper HandTeam strategies are often difficult to expose as they are composed of many distracting personal styles. On top of this, your preset strategy has been thoroughly worked out and may already be in place so you may be unwilling to make any dramatic changes. As equally important as choosing your strategy is theability to recognize and counter the opposition’s choice. Just as each team member must master a variety of styles, so should a team be capable of switchingstrategies. Some strategies are better than others as counteractions and the weaker team will be the one that must adapt first. Stylistic superiority might give you the upper hand initially but strategic choice will maintain it.

ConsensusA Consensus team forms a lumbering beast that attempts to roll over anything andanyone that’s directly in front of it. The speed of consensus taking can be increased or decreased depending on how such a team wishes to maneuver its counterparts. Their reaction to every issue is the same, and they’re loathe to change tactics, let alone strategy. Consensus teams plan in detail and execute everything they plan, regardless of outcome. Such teams must stick to an agenda and are very disoriented by counterparts who can (and do) handle change easily countermeasures- CONSENSUS When both teams use Consensus, as is very common in Asia, negotiations can be long and drawn out as each side vies to control the field. Countering consensus with consensus is only recommended when the amount of time (and therefore money) devoted to the negotiation process isn’t a crucial factor.Host-buyers can always wield the upperhand when countering with Consensus. Weakly positioned sellers should never attempt this ?fighting fire with fire? approach.- COWBOYS Cowboy teams that keep their wits and cool about them can do very wellagainst Consensus but not from a selling position, unless they’re the only game in town. Because they can work solo as well as in a group setting, Cowboys can outmaneuver the lumbering Consensus by introducing new items (or new angles on old items) to the agenda and overload the Consensus taking process. During dispersal sessions, they can also put their counterparts on the defensive by questioning their decision-making ability and actual authority. This can be verydisconcerting for counterparts of supposedly equal rank.- PLATOON Platoons have the same advantages over Consensus teams as Cowboys do, with the added ability to include lots of support personnel. They can, in effect, form small Consensus teams to scrutinize issues, while retaining the on-the-spot authority to be decisive. This is very effective if teams have been dispersed to several areas.- DIVIDE AND CONQUER Consensus lives in deathly fear of discord and expends a great deal of time guarding against it. A divisive counterstrategy must be constant and very subtle. Many of the personal styles become tactical maneuvers (Social, Deceptive, Exploitive, Indulgent), and they can have devastating effects if practiced on an inexperienced Consensus team caught unaware. Experienced Consensus practitioners with long-term team members are virtually impervious to Divide and Conquer strategies.- JEKYLL AND HYDE Inconsistency is a death-knell for those who believe in Consensus. Buyers that counter it with a Jekyll and Hyde style will have varyingdegrees of success, depending on the experience level of the Consensus team.

Sellers, unless demand is very high, will have no success at all countering withJekyll and Hyde. The use of a third party (preferably governmental) as the Mr. Hyde portion of the strategy may assist in influencing the consensus process, but it may not break their control of the agenda.- HIERARCHICAL Hierarchies have all of the weaknesses of Consensus and none of its strengths. In the face of an experienced Consensus team, Hierarchies are no match.- HORIZONTAL These ‘subsidiary? negotiators force Consensus teams to bargain on many fronts without the benefit of a central contract. This is not recommended for sellers, as they very rarely get to control the agenda so necessary to making this counterstrategy work. Buyers, however, can greatly reduce the power of the Consensus team by adding this extra set of decisions that must be made with every subsidiary.- DEPARTMENTAL Consensus practitioners have no central authority and much preferto deal with those that do. Countering with a Departmental style will shield your central leadership while forcing the Consensus team to respond to your practical concerns. They must deal with many departments, while you deal with a monolith. This is very effective when in a selling position and unnecessary whenin a buying mode.CowboysThese teams are composed of very informed and determined soloists who have the ability to make group efforts. While most effective when used during dispersal meetings, they can also perform well at centralized negotiations that entail many social events. Cowboys can make tactical changes in a split second. They can hit moving targets as well as stationary, but they’re most vulnerable to countermeasures before they become too experienced at their trade. countermeasures- CONSENSUS Only buyer/ investor types should attempt to use Consensus strategies as a countermove. Be forewarned that Cowboys can cause Consensus users to doubt their own methods by magnifying the slowness of the process in a rapidlymoving environment. Sellers countering with Consensus methods will most likely find themselves alone on the second day of discussions. The Cowboys will have moved on, leaving behind a brief note to the effect of ?call us when you?reserious.?- COWBOYS When two opposing Cowboys meet, there’s the inevitable shoot-out and bloody result. The question is, will it be deadly or just a matter of ?flesh wounds?? If your team is in the buying position, it’s best to be slightly more aggressive than your counterpart. There’s no reason to back down from a positionof strength. Sellers, unless in particularly high demand, should tone their position down. When both sides adopt this strategy, negotiations are fast and furious. Your side must have a detailed plan of where it’s heading, because it’sa short trip. Weak hearts and slow signers should stay out of the fray. - PLATOON Solo Cowboy players can be readily handled by Platoons, especially during sessions with a great deal of technical reference. Because Platoons are really Cowboys with backup, this can be an effective countermeasure for hosts who find themselves on the losing side of discussions. While it’s an admission that your original strategy was failing, it can salvage your position. There’s no official rule book for negotiations, only a listing of successful companies. Ganging up on a counterpart is a strategic maneuver, not a moral dilemma.- DIVIDE AND CONQUER Cowboys are used to working alone so dividing them canonly occur if there’s a major discrepancy in their proposals. Experienced teamsrarely suffer from such incongruities.

- JEKYLL AND HYDE This ?good cop, bad cop? strategy can work on individualCowboys but probably not so well on the team as a whole. Even on an individual basis, Cowboys are fast on their feet and can exploit the difference in the two attitudes.- HIERARCHICAL Cowboys in a selling mode detest Hierarchies because they?re resistant to dispersal meetings. Hierarchies that face buying-mode Cowboys may meet the same fate as the Consensus teams, unless they can process the decisionsquickly.- HORIZONTAL Horizontal teams have the strength of the Cowboy’s dispersal and the added strength of being a truly independent subsidiary. Cowboys end up dealing with several separate companies (buying or selling) and this tends to diffuse their potency. This is very effective when the Horizontal practitioner is in a weakened selling position and must maintain control of the agenda.- DEPARTMENTAL Similar to Horizontal teams, countering Cowboys with aDepartmental style prevents them from getting quick decisions (that is, concessions) but without entirely slowing down the process. Though it’s best used in a weak buying position, it can also be attempted by attentive sellers.Platoon Platoons have the independent muscle of Cowboys but more depth because of the inclusion of support personnel. They are essential for dispersed sessions where technical acumen will be tested. The use of support personnel also allows for a greater number of personal styles to be utilized.countermeasures- CONSENSUS Platoons dread the lassitude that seems to come with Consensus teamsin a buying mode. By further decreasing their nimbleness, Consensus players makean already weak Platoon weaker. Consensus sellers (with reasonable demand present) can also debilitate a Platoon if the usage is discreet. Be forewarned: if the latter process stops moving altogether, it’s over.- COWBOYS Cowboy counterstrategies rely on either a strong buying position or the encountering of weak Platoons. If the Cowboys in question are highly experienced and technically astute, they may be able to withstand a deployed Platoon.- PLATOON As was true of head-to-head Cowboy matchups, Platoon scrimmages can bebloody. Buying and selling positions will dictate the level of aggression by therespective teams.- DIVIDE AND CONQUER Since Platoons are actually small teams, they’re subject todivisive techniques. It should be noted that they’re also specialized in nature and potentially very cohesive. Any new specialist recently taken into the Platoon may be targeted by Divide and Conquer practitioners, but that same specialist is most likely being shepherded by the team leader. Proceed with care.- JEKYLL AND HYDE Giving one Platoon a hard time and another an easy ride will go some way toward confusing the opposition when they regroup. It may even serveto plant some dissention regarding the relative effectiveness of the individual Platoons. Keep in mind, especially if you’re a seller, that if your counterstrategy lacks subtlety it may be viewed as a lack of consistency on yourpart (hardly a desirable trait in a purveyor). Buyers can play it to the hilt.- HIERARCHICAL Platoons can become frustrated with buyers who work hierarchically, because the dispersal is only surface level. Decisions are stillcentrally controlled, and the Platoon gets bogged own. If sellers counter with aHierarchical style due to company policy or lack of alternatives, they must keep

it as streamlined as possible if they wish to maintain the interest of Platoons in a buying mode.- HORIZONTAL Like Cowboys, Platoons have a bad case of ?authority envy? whenit comes to Horizontal teams. Though not an option for every company, these subsidiary teams are an effective countermeasure to any Platoon, buying or selling.- DEPARTMENTAL This should only be used in a buying mode as a counter-strategy.Platoons have all the strengths of departments and none of their weaknesses.Divide and ConquerThis style relies on either a) the surreptitious gathering of information from counterparts who’ve been strategically separated from the group or b) the constant exploitation of small mistakes in a counterpart’s position. While almost all teams will use this to some degree as a tactic, some teams adopt it as an overall strategy?usually with a high level of success.countermeasures- CONSENSUS Closing ranks against a divisive counterpart is often the most effective way to ward off their attack. However, it’s not easy to form a Consensus style team on a moment’s notice. Such a move must be prepositioned in order to succeed. For some groups (such as Cowboys or Platoons), it’s a very drastic change of style.- COWBOYS Cowboys are very enticing to Divide and Conquer practitioners, since the dividing is done and all that is left is the conquering. However, Cowboys are the nimblest of the nimble and can counter divisive techniques with a full array of calculated and sincerely delivered misinformation. Teams that suddenly find themselves dispersed, socially or professionally, can turn to a Cowboy strategy as long as they operate within a few prearranged parameters.- PLATOON Platoons are far more cohesive than the larger team they may represent.When meetings are dispersed, Platoons are a very effective counter to divisive techniques, with the proviso that their position has been thoroughly reviewed for discrepancies.- DIVIDE AND CONQUER Strong CNs and team leaders who are aware of a counterpart’s divisive strategy may effectively counter with a similar style. It’s not unusual for a team that’s gone on the offensive with Divide and Conquertechniques to overlook the weaknesses in their own defenses.- JEKYLL AND HYDE The attitudinal differences exhibited by members of the same team, if well coordinated, can act as a powerful defense against division imposed externally. Jekyll and Hyde teams already work well together, while still exhibiting a divided viewpoint. Conquering a team that thrives on divisionis extremely difficult for Divide and Conquer practitioners.- HIERARCHICAL Weakly controlled hierarchies are easy pickings for divisive teams because they’re usually rife with dissention. Hierarchies that are well led and highly organized are virtually impregnable because of their high degree of loyalty to the decision makers.- HORIZONTAL Close-knit subsidiary teams also thrive in a fragmented environment. It’s very difficult for divisive teams to deal with Horizontal counterparts who’ve essentially been given orders to behave independently.-DEPARTMENTAL Departments can be a useful counter to divisive techniques by sheltering the decision maker. Any discrepancies in the proposal or commitments made by Departmental team members under the duress of isolation can be easily, if humbly, overturned with statements that authority has been overstepped.

Jekyll and HydePractitioners of this style use one set of members to cajole with a congenial Dr.Jekyll attitude while another set hammers at the opposition with all the wrath of a Mr. Hyde. In its simplest form, one part of the team creates a problem for counterparts that another wing of the team offers to solve. Counterparts end up seeking the ?aid? of the opposition to make the deal work. Often a collusive third party (such as a government agency) will act out the Mr. Hyde role. countermeasures- CONSENSUS Group decision making can ward off Jekyll and Hyde practitioners by stressing the lack of consistency in their counterpart’s positions, but only if the counterpart is a seller. If the counterparts are the host company using a local government as their collusive ?Hyde,? Consensus buying teams are advised to make the solution of any problems the responsibility of the host. Consensus sellers may have to tolerate the tantrums of the Jekyll and Hyde team, but awareness of the strategy will allow them to concentrate directly on Hyde and downplay Jekyll.- COWBOYS Cowboys rarely encounter Jekyll and Hyde teams because the dispersal process limits the use of ?good cop, bad cop.? When it does occur, Cowboy buyerscan demand consistency from counterparts. Sellers must put the counterpart’s Jekyll portion of the equation to work for them by using them as a go-between, once they’ve offered their assistance. They should be very proactive once they detect the strategy and not wait for the Jekyll contingent to make their own proposals.- PLATOON Platoons should counter Jekyll and Hyde styles in much the same way asCowboys, but with the added use of their support staff’s multiple styles. They may even wish to inject a bit of Jekyll and Hyde into the process themselves.- DIVIDE AND CONQUER It’s hard for the divisive team to exploit the cleavage in theJekyll and Hyde team, since it’s so highly choreographed. It’s better for a divisive team to seek out and isolate weaker members of the Jekyll and Hyde team?in order to determine the presence of internal dissention or the financial details of their strategy.- JEKYLL AND HYDE When both sides take this approach, it can create long and acrimonious days of discussion. It’s only recommended if a team has a very limited number of styles to choose from when entering negotiations.-HIERARCHICAL When in a good buying position, a hierarchy can thwart the Hydecontingent by simply demanding to close the deal. Hierarchical sellers will findthat the situation is very much reversed, and they’re now faced with demands to see the?head honcho? at every meeting. Honchos can run but they can’t elude Hyde.- HORIZONTAL Countering with this subsidiary format, if available, greatly diffuses and defuses the Jekyll and Hyde effect because it’s very difficult to maintain the schism on so many fronts. This is true for either buying or selling. Unfortunately, not all companies lend themselves to Horizontal strategies.- DEPARTMENTAL Departments are a useful countermeasure when buying because the decision maker can be detached until problems are cleared up. When in a standardselling position, however, the same honcho problems facing Hierarchies will haunt and daunt the Departmental stylist.Hierarchical

Hierarchies maintain the centralized authority of a standard managerial flow chart and use team members to filter information for the decision maker. It’s used by teams new to negotiating or by strong CNs or consultants who have a weakstaff. The opposition must not be able to detect that authority is centralized for this approach to work effectively. countermeasures- CONSENSUS This style works well in either a buying or selling position becauseConsensus has many people at its decision core. Hierarchies crumble in the face of these highly organized megaliths.- COWBOYS Hierarchies that allow themselves to become dispersed are easy prey for Cowboys. A Cowboy counterstrategy would demand tight control of the agenda, which is rare in selling positions even when facing a rookie hierarchy.- PLATOON Like Cowboys, Platoons that find Hierarchies willing to disperse have already won the field, but the carnage will be potentially even greater. There will be no long-term, amicable relationship unless the Platoon controls the urgeto take more than ?enough.?- DIVIDE AND CONQUER If the slightest dissention or disloyalty to the central decision maker is detected, it can be thoroughly exploited by divisive teams. Hierarchies are pyramidal in form, and loss of the foundation brings down the apex.- JEKYLL AND HYDE This style should only be used to counter a Hierarchy when working from a strong buying position. Demands can then be made to deal directlywith the central decision maker, who may be more susceptible to Jekyll and Hyde techniques when relieved of the filtering effects of staff.- HIERARCHICAL This is very common when both sides are feeling their way in the international arena. Discussions appear to be between groups, but in reality it’s two individuals battling out the futures of their respective companies. Both sides have made their strategic choices, less by design than by default. Everyone has to start somewhere, and this is where newcomers get their first calluses.- HORIZONTAL The use of multiple fronts implicit in this style makes it a forceful counter to Hierarchies, compelling them to scatter themselves even whenworking in a single location. It can overload the central decision maker resulting in reliance on untried and less skilled subordinates.- DEPARTMENTAL Like Horizontal practitioners, Departments can counter a hierarchy by forcing them to deal with what they believe are separate sets of decision making teams that change with every session.Horizontal This strategy is used by large companies that have the advantage of numerous subsidiaries that can negotiate their own separate contracts or parts of contracts while still operating under the company’s aegis. This will often come into play during large infrastructure projects, technological transfers, orlarge manufacturing projects. countermeasures-CONSENSUS A Consensus buyer who controls the agenda can easily stymie a Horizontal team, regardless of its size, either by taking the subsidiaries on individually or by forcing them to work as a unit. Consensus sellers will find, however, that their decision making process will get bogged down by multifront bargaining.- COWBOYS Cowboys will only successfully counter Horizontal teams when control of the agenda is assured?by being either buyers or highly demanded sellers. Otherwise, Cowboys may be outmaneuvered by the truly independent Horizontalists.-PLATOON Platoons have the same limits on their independence and needs for agenda control as Cowboys. Their one advantage is support staff, comparable to that of the Horizontal team.

-DIVIDE AND CONQUER Unless specific subsidiaries exhibit some form of internal dissention, divisive techniques aren’t advisable as countermeasures. Pitting onesubsidiary against another will produce little of use, since their interdependence isn’t vital to the outcome of the deal.- JEKYLL AND HYDE Any effect that Jekyll and Hyde strategies might have will be diffused over many fronts. In the case of small companies, countering with a ?good cop, bad cop? routine will only result in an image of disunity or disorganization.-HIERARCHICAL Hierarchies are easily outclassed by Horizontal teams, unless the former completely controls the agenda. This is the reason why the big fish eat so many little fish in the international business arena.-HORIZONTAL When two big fish tangle for control (generally in a huge market), one usually gets swallowed whole, although some subsidiaries may get ‘spun off? from the new behemoth. The stakes are far too high for anything but these ?default? positions, and negotiations may drag on for months. The complexity of such discussions is beyond the scope of this text.-DEPARTMENTAL Departments working from a buying position will be able to blunt the effect of Horizontal strategists, forcing them to broker deals one at a timethrough separate subteams. This will, of course, elongate the time frame for finalizing a deal. Sellers may find that their departments must move swiftly to maintain the interests of the octopus? many arms.

DepartmentalThis strategy maintains the company hierarchy but arrays it horizontally, with the decision maker staying behind the scenes. Department teams are sent out to discuss individual points of the agenda, and each team may have a different leader and style. Each department gives a presentation for its portion of the deal, until the entire proposal is laid out. countermeasures-CONSENSUS Consensus buyers must be wary of Departments as they can drag out thedecision-making process to the former’s disadvantage. If Consensus is used, verify the real players from the outset and control the agenda. Finding the decision maker ?behind the curtain? will greatly speed the process. Consensus sellers must be prepared to break their proposal down to correspond to the counterpart’s Departments.-COWBOYS Cowboys in buying positions will have no difficulty with Departments, as long as they make it clear that time is of the essence and as long as meetings are dispersed. Sellers using Cowboy strategies may find themselves getting ganged-up on by Departments and wasting time giving repetitive presentations.? PLATOON Platoons have all of a Departmental style’s strength, but they’re farnimbler. In a buying position they’ll dominate easily, assuming that the sessions aredispersed. Match the Platoons to the Department structure for maximum effect.-DIVIDE AND CONQUER Divisive techniques should only be used when the decision maker can be clearly identified. When buying, insist that the counterpart’s CN be present when each presentation is given, and exploit the differences or conflict between Departments. When selling, isolate weak team members for the purpose of securing information regarding overall team goals.-JEKYLL AND HYDE Buyers can use Mr. Hyde to force the counterparts to reveal their decision maker, who will then be placated by Dr. Jekyll. After that, all attentions will be focused on the opposition’s CN. Sellers, even highly demandedones, should avoid this strategy altogether.

-HIERARCHICAL Buyer/ Investors can cut right to the chase and derail the Departmental strategy by pitting one honcho against another. Sellers may find that they have only been dealing with a ‘straw man? throughout discussions and that real power lies elsewhere. Departments usually turn out to be former Hierarchies with greater negotiating experience and a tight-lipped CN.-HORIZONTAL Buyers working from a Horizontal strategy can apply time demands that tend to frazzle Departments hoping to give detailed presentations. Sellers countering with this subsidiary method may be slowed by Departmental lumbering, but they can rely on their company’s size to awe the opposition.-DEPARTMENTAL Like head-to-head Hierarchies, Departmental match-ups are quite common, but more so among experienced international negotiating teams. It’s a preferred method because it maintains company organizational structure and linesof communication. The dominating team is usually the best informed and the most secretive about the sources of decision making. Many companies use this as theirsole strategy and only vary their tactics from negotiation to negotiation.

CHAPTER 15

Selecting Tactics

Playing to WinOnce a strategy has been chosen, tactics must be devised to assure that the goals are attained. While many strategy categories can also be used as tactics, they differ in that the latter is usually a temporary measure devised to achievea specific result. As an example, a negotiator may choose a Pragmatic strategy to acquire 25 percent of a software joint venture but rely on daily tactics thatare Technical,

Legalistic and Financial in nature.

Tactical analysis of counterparts is also very important in choosing one’s own maneuvers, and it’s at the heart of proactive negotiating. Even sellers in the weakest position should avoid having a tactical array that’s 100 percent reactive.

As is true in almost all commercial endeavors, how something is accomplished hasa great deal of influence on how much is accomplished. In highly publicized negotiations, the means may actually dictate the ends.

This chapter will deal with the various forms of tactics used in international negotiations and their connection to strategy choice. Readers will be able to formulate their own array, as well as learn to recognize tactical patterns developing across the table.

THE FIRST RULE OF TACTICS: Make the opposition believe it’s in control.

Matching Tactics to StrategyWhat tactics are available to the modern commercial negotiator? When can they beused? When should they be avoided? What are the limits? In order to answer the first question, a list of tactics and their definitions follow.

Those that are derived from strategies will be discussed in lesser detail; the reader is asked to review those categories in prior chapters. The answers for the second and third questions will rely on the choice of strategy, and a brief worksheet is provided at the end of the chapter to allow readers to make those decisions for themselves with some guidance. The answer to the last question is simple: The choice of tactics is limited only by the ability, experience, acumen, and motivation of each negotiator. It can also be a matter of legal and illegal behavior.

Legal Tactics

aggressionAggression has violent connotations in daily life, but in commerce it’s used to describe the high end of proactive behavior. While we may have very separate reactions to an aggressive salesperson and an aggressive bill collector, we’ll

all have to admit that it depends primarily on whether they’re working for us oragainst us. Aggression only bothers us when we’re on the receiving end. Aggressive tactics can run the gamut from arriving early for meetings to callingcounterparts at home to discuss business. It literally means ‘to attack? And demands that you take the initiative when dealing with the opposition. It shouldn’t be confused with tactics of intimidation, whose main design is to cause fear. The goal of aggressive behavior during negotiations is to control the time and the place of discussions.

passivityMany people respond to aggression or intimidation with docility in the hope thatbrief appeasement will lead to less demanding behavior. This is very reactive. In proactive negotiations, passivity can be a way to convince opponents that everything is going their way until parts of the topic deemed important reach the table. A sudden change of tactics by the Passive side at this point will leave their counterparts ?enveloped.? This is a useful tactic against an opponent who has confused confidence with ego. It can never be used for long, and it must be used in tandem with a reasonable tactic (e. g., Pragmatism or Impassivity) so as not to appear irrational. It’s also a tactic that requires a great deal of emotional restraint, due to the often overbearing attitude of the type of opponent on whom it is most effective.

impassivityAs mentioned earlier, it’s never wise to state that a topic is non-negotiable. But this isn’t to say that one can’t take a hard line on an issue that is particularly important to acquiring ?enough.? Although it calls for a good deal of nonchalant behavior, even the most Social of strategists can call upon Impassivity as a tactic.

It also requires that the tactician be operating from a position of strength (strong buying or high-demand selling), even if it’s just for a single point of the agenda.

In practice, it involves reticence and indifference until the opposition has stated their position. Once this has been accomplished, an attitude of ?is this the best you can do?? is maintained until all possibilities are exhausted. It’s not until the end of the process that the tactician will actually state what it is they need or want from this portion of the negotiations. By doing this, they avoid granting concessions the opposition wasn’t expecting to receive or gainingmore than the opposition had hoped to give.

EXAMPLE: China’s Aggressive style during 1984 negotiations with Great Britain usedImpassive tactics when discussing terms for the return of Kowloon and the New Territories. Unexpectedly, Great Britain offered to return Hong Kong Island as well (which had never been leased but had been granted in perpetuity). China’s Aggressive strategy had implied that Hong Kong Island would be taken by force, but their refusal to state it outright led to the concession via Impassivity.

intimidation

Using Intimidation as a tactic usually occurs when one side feels they’ve been backed into a corner on an issue that’s very important to their strategy. Unableto win the concession by means of discussion, they attempt to do so by threat. This has worked in commercial negotiations of all types for centuries. It does have two requirements for effective use. First, the threat must be believable even if you have no intention of following through on it. Strength, or the illusion of strength, must be readily apparent to the opposition. If you have toexplain your threat, it’s no threat.

Second, you must be capable of defending yourself if and when the opposition decides to respond in kind. If you can’t take a punch, don’t throw a punch.

Intimidation can be a messy business, even when it’s a brief tactical move.

Because it can change the tone of negotiations so drastically (‘the gloves are off?), it’s best reserved until late in the proceedings, when all other means have been exhausted. It should never be used as an emotional reaction to nimbler, more experienced (perhaps more intimidating) opponents. Most likely they’ve purposely driven you to the point where you’ll make threats?in the fullknowledge that you’ll have to back down. Being humble is one thing, being humbled another. Never, ever make idle threats. They can be as binding as a contract.

forthrightnessMany consider this a virtue but just as many use it as a tactic. Anytime someonestarts of a sentence with ‘to be frank with you . . .? or ?in all honesty . . .?they?ve just switched to Forthrightness as a tactic. What they’re about to say may or may not be completely true but it’s the portion of the truth that they find most useful.

By declaring their own honesty they hope to provoke a similar response in you, thereby getting you to divulge something important.

Forthrightness is most often used during a Pragmatic strategy to keep the discussions moving. It can be very potent when dealing with opponents who?ve adopted a basically Deceptive strategy. By making a tactical call for honesty, you can force counterparts to alter their plans to some degree, though rarely completely. At the very least, you?ve made them aware of the fact that you consider their scheme dishonest. Don’t assume they’ll be ashamed. Forthrightnessoften brings about nothing more than a recognition by the other side that they have to learn how to better deceive you.

For some negotiators, Forthrightness is merely a pose that covers the overall strategy. It may even be used as part of a grander deception. Forthrightness only requires the appearance of telling the truth. The “whole” truth can be heldin reserve. No successful negotiator anywhere, at anytime has ever spoken the complete truth. If negotiators convince you they’re being candid with you then they’re successful practitioners of the tactic. Belief does not demand truth.

Delay

One of the numerous oxymoronic terms used by militaries around the world

is ?delaying action.? With this tactic, an advancing enemy is held at bay by a small force using hit-and-run guerilla attacks meant to impede progress until reinforcements can be brought forward. These ?little war? tactics are practiced quite frequently in international negotiations as well (mostly when a David meets a Goliath) and they have the desired effect when used judiciously.

Delays may take the form of outright postponements, shifts of venue, calls for internal conferences, loss of paperwork, minuscule contract disputes, feigned illnesses, filibustering, transportation breakdowns, strikes, and even prearranged government intervention. If talks take a turn for the worse and the side that is outclassed lacks the ?at table? skills to retake the field, then delaying tactics are called to the fore. The hoped for ?reinforcements? can takethe form of additional personnel, changes in the economic environment, updated information, the courting of another suitor, or intervention by government officials.

The most powerful reinforcement available to the Delay practitioner is time, or more precisely, lack of time. Delays are usually last-ditch efforts by an opponent who is hoping to ?run the clock out? in order to get either what they need or to trigger the call for another round of negotiations. The tactic is best used by host companies wishing to take advantage of their visitor’s flight schedule, but it can also be deployed against any opponent that is attempting towork to a rigid time frame. Infrastructure projects, Build-Operate-Transfer schemes, highly publicized construction projects, and government contract work are just a few of the types of projects subject to the pressures that can be brought to bear by delaying tactics.

It’s not a tactic that should be trotted out often, particularly when in a weak selling position. Delay is a sign of weakness for sellers, and to display it early in negotiations will only let your opposition ‘smell the blood in the water.? Some buyers like to use Delay as a way of testing how hungry a seller isfor their business.

This ?let them wait? attitude is a very old practice in business and it’s not commensurate with the pace of modern commerce (where time is measured in nanoseconds). Unnecessary delays may mark even the strongest buyer/ investor as being part of the Old School. It also makes sellers have second thoughts about the payment process. For both buyers and sellers, delays don’t create a favorable impression in the minds of the opposition. If you can afford that sortof image or have played every other card in your deck, proceed with delaying tactics. Otherwise, get down to business.

distractionWhen negotiators have decided what’s important to them (needs) as opposed to agenda items that are merely desirable (wants), they must make every effort to keep the opposition from finding out which is which. Distraction is a common tactic for this purpose. Negotiators will argue vigorously for points that have little meaning to them, knowing full well that they’ll concede them in the end.

Important issues are then taken as concessions in a quid pro quo for these early?defeats,? or else they are quietly slipped into the standard contract language.

Socialization strategies use a great deal of distraction to elicit information, isolate counterparts, and undermine an opposing CN’s position. Late-night parties, cultural side trips, and exhausting multisite meeting schedules all give the opposing negotiator something else to think about?notably discomfort.

Besides the discomfort, the distraction that occurs when one feels they?re amongfriends will be the moment when practitioners uncover dissention or inconsistencies in counterparts. Unguarded moments are highly sought after by the practitioner.

EXAMPLES: Uncomfortable seating, lack of air conditioning in meeting rooms, and frequent interruptions by staff on ?urgent? business also serve as distractions.They?re often prearranged to do just that by practitioners of this tactic. The greater the discomfort, the greater the level of distraction. Some have been known to go as far as to place late-night anonymous phone calls and arrange for noisy ?guests? to stay in hotel rooms adjoining those of the opposition. A fatigued opposition simply can’t concentrate. Extreme but effective when dealingwith jet-lagged travelers.

linguisticOne of the challenges of international business is overcoming the barrier of language. Even when all parties involved are using the unofficial language of commerce, English, discrepancies arise?just ask the British and the Americans.

Added into this mix are the argots of specific industries, shipping, contract law, and technology. Rather than seeing this as a continual barrier, some negotiators take on linguistic differences as a useful tactic. It can take several forms, all of which contain the ?plausible deniabilty? that is often necessary to make the tactic work.

The first involves the supplying of translators to the opposition. It was discussed earlier in the text how these local hires can relay private conversations to their “real” employer, but they also serve other purposes. Hostcountries usually insist that, for legal use, the contract language be crafted in the local tongue, not the translation. Unattractive items such as veto rights, tax rates, and rules regarding the repatriation of profits are easily hidden or eliminated from the translated version and will not be discovered until well after the deal has been closed. The translated version will rarely beaccepted as having any validity. Such a tactic can definitely make negotiations ‘smoother,? but only in the short-term. Language can also be used as an all-purpose excuse when Deceptive strategies are uncovered, nefarious tactics go awry, or one side has simply been backed up against a wall on a point they “need.” Most negotiators who’ve traveled to the developing markets can relate atleast one tale of how, when discussions were just about to derail, the opposition discovered that the dispute was really the result of “poor translation.” Even when the opposition has brought their own translator, it willall be written off as a dialect problem. (‘so very sorry, we must all be very careful in the future. Now, where were we??) Much pride, as well as the bargaining session, have been saved. Like many other ploys, this one wears with age. Use it sparingly.

The introduction of jargon is also used as a way to assess an opponent’s acumenor expose their ignorance on any particular topic. It can also be used to subordinate opponents who wish to position themselves as equals. Especially in the worlds of high technology, finance, shipping, and international law, there are standard levels of knowledge that mark a negotiator as being a true ?player?or not. To find out who knows what, the practitioner will purposely use acronyms, contractions, and technical terms in an effort to elicit requests for explanation on what they consider to be basic points of discussion. They’ll keepturning it up a notch until they reach a level beyond the understanding of counterparts. If the opposition takes the bait at a fairly low level, the tacticcan be used repeatedly to manipulate them into positions that are unfavorable. It’s most often used by investors looking for a big share in a joint venture andsellers planning to make a single, sizeable transaction. (If you need confirmation of how effective this tactic is on a local level, visit any computer store and tell them you’re looking to buy. You’ll leave with enough equipment to run NASA and equally enormous ?buyer’s remorse.?)

locationLocation, or the sudden change of location, can be used to disconcert an opponent?even more so when they’re ?high maintenance? types who require ideal circumstances for optimal performance. Targeted visitors may find that the meeting facility that was touted as being ?just outside of the city? is in reality a two-hour drive through backroads. Unfamiliar territory and distance from their psychological link to getting home (the airport) make the victim of this tactic dependent on their opposition. No longer merely counterparts, they have become caregivers. Add into this the accompanying language problems, transport restrictions, and general separation anxiety (homesickness), and the picture is complete. Negotiations will proceed but under the control of the practitioner. It’s a tactic that’s best used against inexperienced negotiators, as it relies on the target being unused to the rigors of travel. Experienced teams will be only mildly inconvenienced and yawn at the ham-handedness of the ploy.

Another location tactic is commonly used by large companies to awe counterparts.Rather than inconveniencing opponents, they lavish them with every possible thing they could want. Meeting facilities and hotels are top-of-theline with furnishings designed to impress. Tours are arranged for cutting-edge manufacturing plants and high-tech compounds. No expense is spared. The message being sent out by the practitioner is ?we’re already at the top. We don’t need your (product, business, expertise), but we are more than happy to discuss it.? If you’re on the receiving end of this tactic, be aware that the underlying message is ?We really want what you have but we’re going to try and convince you that it’s not worth very much.? This tactic never works on Impassive or Stern strategists but the rest of us are highly susceptible to it. Remember, though the lap of luxury is nice, you’re still sitting on someone’s lap.

indebtednessThis gambit entails making counterparts feel as if they’re in your debt on several possible levels. The first involves financial debt and is actually best used by a negotiator who doesn’t appear to be flush with cash. Unlike the rich Location practitioner above, whose main goal is to make you feel as if their expenditures on negotiations are everyday costs, the Indebtedness tactician

subtly lets it be known that every pfennig, rupiah, or peseta they spend on counterparts is a major exception. Food, lodging, drivers, translators, sometimes even airfares are paid for by the practitioner as an investment in theultimate outcome of the negotiations.

This ploy is transparent to even the most novice negotiator, yet it still takes its toll. Inwardly, the victims always feel that they have to give their hosts ‘something for all their trouble.? If the tactic works, the victims can be assured that the practitioner has a very clear idea of which ‘something? will betaken as payment on the debt. If you’re targeted with this financial tactic, offer to pay your own way (if you choose). If the practitioner insists on picking up the tab’some will claim it’s a cultural norm for dealing with visitors?let them. Enjoy the free ride but constantly remind yourself that they’re trying to manipulate you. The sense of Indebtedness fades once the motivation is exposed.

Big companies and governments create a different form of Indebtedness. The tactic is to make the opposition believe that they’ve been granted a ?favor? just by being allowed to come to the negotiating table. The target may even be hosting and paying for the negotiations. It’s very commonly used by Impassive strategists and Cowboy teams to foster a sense that all of the concessions will flow in one direction and that they’ll be on the receiving end. The tactic worksbest from a strong selling position (we’ve got it, can you afford it??) or a single suitor buying/ investing position (?we can afford it, do you have it??). Debt can also take an emotional form and this tactic is widely practiced by

Social strategists who strive to befriend counterparts. The victim will be introduced to the practitioner’s family and friends and may even be invited homefor dinner. Weekend rounds of golf, dinner parties, and theater trips can all beused to further the friendly atmosphere. By engendering a nonbusiness relationship, the practitioner hopes to ask their new ?friend? for a favor during the course of negotiations. This favor will supposedly be paid back later, and this wonderful friendship will make doing business all that much better. Like financial

Indebtedness, this friendliness often works under the cover of a cultural norm, which it may well be and a manipulative one, at that. It’s hard to resist the charms of this tactic, especially when traveling far from home. Unfortunately, awarm-and-fuzzy feeling doesn’t make for a clear head when negotiating. If you’retargeted by this tactic, accept whatever level of friendship you feel comfortable with and, like your ego, check it at the door once negotiations start. (?Nothing personal, just business.?)

cultural

Cultural differences are often ?played? to influence a negotiator’s judgment.

This can take the form of a host practitioner reminding the opposition of its lengthy cultural history and contributions to civilization. The underlying message here is ?we have little experience in international business personally,but we hail from an ancient and esteemed background. Don’t try to push us around.? It’s a tactic that rarely works against an opponent coming from a

business culture that relies on a ‘so-what-have-you-done-lately?? premise. It serves mostly as a confidence builder for the practitioner and, in that respect,it does have some function at the negotiating table. This type of tactician willusually insist on numerous cultural events as part of the agenda in order to hammer home their point. A plethora of such events in the agenda should be a cueto expect this tactic.

Coming from the opposite direction is the practitioner of cultural imperialism.

These tacticians care little about their own ancestors, let alone those of the opposition. They present themselves as the manufacturing, technological, or financial saviors of their counterparts. (?We can get your people out of the fields and into the factory in no time.?) The tactic is deployed early to check the reaction.

If the opposition is suitably (at least partially) impressed, it will be maintained throughout discussions. If the reaction is negative (as it often is, except under the most desperate circumstances), the tactic should be dropped in favor of somewhat less offensive measures.

When the two types of tacticians mentioned above meet, the potential forfireworks is enormous. The use of these tactics is often at the root of the conflicts between technological economies and those of the developing world. Theformer should not give short shrift to the value of the past and the latter should not rely on it. As mentioned earlier in the text, researching a counterpart’s culture is as important as reviewing their balance sheets.

genderGender roles vary from society-to-society and from company-to-company. In some it’s quite common for both genders to participate in business, while in others, business is the exclusive domain of men. That dominion may even be codified intolocal law. Because it can be a controversial issue, it can be exploited tactically for negotiating purposes. Gender tactics can also lead to the consideration of sexual preferences and influences.

The presence of women at negotiations can successfully unnerve an opponent who isn’t used to dealing with women in business. This can be a very potent tactic when sellers from a male-dominated business society are forced to ‘sell? themselves to a female counterpart. The weakness of their position will be made doubly clear. Female negotiators can also be used to mollify an aggressive male counterpart who is foolish enough not to perceive a female as a threat. There’s no rule against blindsiding an opponent with their own bias. Of course, the reverse is true when female sellers face buyers from male dominated societies. Selling is always an uphill battle and in this situation it may be a 90degree incline. In extreme cases, the buyer may refuse to even speak to the female negotiator. If the sale is important enough, the wise tactic may be to bow to the cultural biases of the counterpart when selecting negotiators.

Social strategists have another spin on gender; they like to pander to the sexual preferences of their opposition when playing host. Discovering that a counterpart considers himself a capable, if aging, Lothario may result in the sudden appearance of a beautiful (and available) female among the practitioner’s

negotiating ranks. Similarly, a middle-aged female executive may find herself the object of the attentions of a dashing male counterpart a few years her junior. Both scenarios happen with a none-too-surprising frequency, and the tactic has been a staple in international business, diplomacy, and intrigue for centuries. Add adultery into the mix and the ability to manipulate is even greater. While the young may be targeted for this tactic, practitioners have found repeatedly that ‘there’s no fool like an old fool.?

Homosexuality can be tactically exploited in much the same way but with the added ingredient that in many societies it is illegal. Being set up in an unfamiliar environment is not a difficult task. Negotiators of every stripe mustkeep their wits about them at all times to ward off this tactic. Gender and sexuality are very visceral topics and should not be dallied with lightly. Use of any of the tactics mentioned in this section requires full commitment to the outcome. Once put in motion these tactics are difficult to control.

racial

Racial tactics can be just as explosive as Gender ploys. The most common form ofthis tactic involves the attempt to make counterparts personally responsible forracial prejudices of the past. Like Cultural Imperialist tactics, this ploy is put on stage early to detect any level of ?guilt,? deserved or not, in opponents. High levels of culpability or overplayed denials of responsibility will be exploited again and again throughout the proceedings. Buyers will use itto drive the price down, sellers will use it to drive the price up. Concessions will be viewed not as bargaining chips but as reparations. Most of this is directedagainst Caucasian counterparts even when their cultural background precludes them from any previous sins. The Japanese and the Koreans are also occasional targets of this tactic.

Whereas the above practitioners wish to dwell on how they’ve been held back, theother variant that plays the ?race card? likes to focus on their own advances.

These tacticians present themselves as not just racially different but superior.It’s their belief that if negative stereotypes (e. g., whites are arrogant, Asians do not value life) can be held as truths by the downtrodden, then positive ones must also be true (whites are technologically advanced, Asians aresuperior organizers).

Similar to cultural imperialism, these ‘saviors? come to the table already in a strong position hoping to make it even stronger by lording their status over counterparts. The dangers here should be self-evident, but it hasn’t prevented this tactic from being deployed often and worldwide. It’s rarely productive, never in the long-term. If you plan to use either version of this tactic, you?d better have a damn good reason and a flexible flight schedule.

technicalSimply put, this tactic calls for the withholding of technical solutions or problems until counterparts have fully exposed their position. The practitioner must never give any indication that the solution was available or the problem visible until the very last moment. Tipping your hand too soon will dilute the

impact and limit opportunities. If done with the proper degree of subtlety, thistactic can be used as often as circumstances permit.

financial

This area of tactics is probably the most familiar to the reader, but it bears some explanation. Sellers clearly overstate their asking price expecting to be bargained down to an acceptable level. Buyers state low-ball prices knowing theycan afford higher. It’s the most basic form of “dickering” known to humankind. (The word dickering comes from the term for a set of ten animal hides used as a unit of trade.) Some cultures love to dicker prices and look upon it as a natural form of business. Others, like many Western societies, will only let theseller quote prices without any feedback from the buyer beyond “yes” or “no” statements.

Other financial tactics come into play in international business. Prices may be stated in one currency, then payment demanded in another. Simple trades between the same two companies made only weeks apart may be paid in several different currencies. Negotiators use this system of “arbitrage” to play harder, stronger currencies off against softer, weaker ones. Sometimes, investment is locked intoa specific currency as a way to insure equity levels throughout the venture’s operation.

Another tactic used during investment-related negotiations is the taxing of repatriated profits. Sometimes the tax is plainly stated and could have been discovered during the research phase. In other instances, it takes the form of a‘special exchange rate? that kicks in when the foreign company attempts to convert their profits from the local currency. This isn’t proffered until late in the negotiations if at all and it’s used to keep the investment perpetually situated in country.

In some cases, the rate can be just 50 percent of the standard rate?a common practice among countries with particularly weak or inconvertible currencies. Foreign companies should be forewarned to take up this issue early in the proceedings. Also be aware that the ‘special? rate is usually subject to change without notice. If you can’t gain a waiver or lock in a reasonable rate, be prepared to spend your profits in the local market.

statutoryTrade and investment law can remain in a state of flux for decades in a target market, with changes every thirty days not uncommon. Developing markets are constantly reworking their laws in an attempt to maximize their domestic economy. Local laws can change even faster than central government statutes and some companies use their local connections to have commercial statutes changed as negotiations proceed. Zoning laws and taxes are extremely vulnerable to this type of manipulation. In most markets, this tactic can be subverted by research that’s no more than six months old. In developing markets, thirty-day-oldinformation is the oldest that should be used, and care should be taken to keep an eye on the local authorities. If the project is large and vulnerable, direct contact should be made with government officials prior to the start of discussions.

Another legal tactic used against foreign visitors is the sudden interference byimmigration officials regarding visa/ passport paperwork. Key members of the negotiations, including the CN, may be detained or sent packing in an effort to dilute the counterpart’s position. This ploy is fairly widespread and not just in developing markets. Embassy personnel who’ve been alerted in advance of your arrival can go a long way toward warding off this type of interference. If such a problem is forecasted, make an effort to have a home country commercial attaché greet you or your team at the port of entry.

Customs officials can also get in on the act by holding presentation materials for inspection. Some may even hold or confiscate luggage for the inconvenience and embarrassment it causes visitors. Don’t assume that the other side plays fairly.

stubbornnessDiscussing a point and conceding it are two different things. Even the most unctuous of Social strategists can become tactically stubborn on any particular point of the agenda. The intractability may be real if the point is considered an absolute need, or it may be feigned as a way of gaining a subsequent issue, once the subject under discussion is ultimately yielded (after much hoopla).

Stubbornness can be an effective tactic because it creates a sense of belief in the opposition that they now know “what makes you tick.”Of course, it’s the practitioner’s decision as to whether that belief is factual or not. The obstinate behavior can take the form of a tantrum or the stonefaced repetition of an unvaried viewpoint. Many practitioners prefer to state, with a smile, the same ideas in a hundred different ways. Whatever the presentation, intransigenceis the goal. If the position is a feint, care must be taken not to give in too soon and expose the ruse. When it’s real, don’t belabor the issue to a point where the opposition loses interest in further discussions. Protesting too much can be as bad as protesting too little.

When faced with a stubborn opponent, don’t take their behavior at face value. Review what you believe to be their entire strategy and determine if the issue at hand is a potential need, a want, or a feint. If you can’t make a clear determination, pose questions that go directly to the counterpart’s motivation. Even question the authenticity of their stance (?It would seem to me that this is a minor issue for your ends. Why is this so important??). If the issue is of little value to your position, concede as soon as possible don’t argue for the sake of it. However, it should be noted that those feigning stubbornness will most likely choose an issue they know is key to your strategy. If it’s an important issue for you, state so and offer compromises that only gradually chipaway at your own position. If the opposition accepts the early compromises readily, they were most likely feigning their intractability. If not, continue to subdivide the pie until ?enough? has been had by both sides. If counterparts concede the entire issue, you can be assured they’ll be looking for a payback inthe near future.

pragmatism

Practicality is something that any negotiator can suddenly claim as their own.

Of course, what’s pragmatic for one side may be onerous for another. Stating that something is just common sense assumes commonality of viewpoint. Pragmatismas a tactic can have great impact when discussions become argumentative, confrontational and emotionally charged. Multilateral negotiations, as opposed to the more common bilateral ones, are particularly conducive to the sudden introduction of pragmatic proposals by negotiators who sat on the sidelines and listened to a wide variety of viewpoints. When these ?voices of reason? finally pipe up, they can distill all of the workable viewpoints into a single, rationalstatement.

Moderators are supposed to perform this function but are often remiss.

Negotiators who take on this function informally may be called on again and again to take that role. Most who do make sure that their own needs are highlyrepresented in the pragmatic distillation. Wisdom, real or imagined, does have its advantages. Practitioners of this tactic should be warned not to take on a patronizing tone when offering their insights. If anything, make it clear that your tactic is the result of ?cherry-picking? ideas from the entire assembly. It’s the practical thing to do.

Illegal TacticsEven the most reputable companies can harbor unsavory elements. Many legitimate businesses have illicit components or beginnings. While the developing markets are very prone to illegal tactics (Russia and China are riddled with corruption), they must be considered when operating anywhere in the world. This section isn’t an endorsement of these tactics, just an exposition. Semper vigilans (ever vigilant).

surveillanceDepending on what country you’re operating in, surveillance may or may not be illegal. It can take the form of having a person ?assigned? to you by counterparts for both business and social events. At the next level it may involve teams of government operatives who ‘tail? you wherever you go. (The author has a terrible habit of being mistaken for a clandestine government agentin virtually every developing economy he has visited. The surveillance in some locales has sometimes extended through several visits over a period of years?allthis while negotiating the most mundane of business. What starts as being intimidating can quickly become irritating, but the paranoia of counterparts andtheir governments never ceases to amaze.)

The tapping of phones is quite common, while the planting of listening devices and cameras in hotels and offices is well on its way to becoming a standard. (There are stories of a hotel in a major Asian city that is frequented by foreign business travelers in which the in-room phones never actually deactivatewhen you hang up the receiver. The handset continues to act as a microphone for all conversations.) Some companies even plant listening devices over counterpart’s positions at the negotiating table to pick up whispered conversations during sessions.

This isn’t just an information-gathering tactic. Sometimes the opposition makes little effort to conceal their surveillance, in the hope that it will apply pressure to counterparts. That pressure may result in added concessions, or it

may simply remind everyone of who’s in control of the playing field. Avoiding orameliorating the effects of surveillance isn’t difficult or expensive, nor is italways necessary. If you have nothing to hide, don’t waste energy trying?let theother side expend their resources chasing shadows. If you do wish to maintain a level of security, or just plain privacy, hold important conversations at randomlocations and use public phones. Devices to detect ?bugs? are relatively inexpensive but users should be warned that not all customs officials are forgiving when they find them in your luggage or on your person.

extortionThe number of businesspeople who’ve been set up to commit an illegal or immoral act while traveling on business is legion. The objective of the set up was to blackmail the victim into influencing the outcome of negotiations. The tactic can be used against the opposing CN, but it is more likely to be deployed against a more junior member of the delegation. The influence being sought may involve the passing of inside information or the request for outright concessiongranting.

Practitioners may use prostitutes, planted drugs, ?mickey? cocktails, staged fights, planted cash, or information obtained in the aforementioned surveillanceto bring their victim to heel. The only ways to avoid these tactics are to pay attention,-keep your nose clean,? and don’t do anything you would be ashamed of if discovered. All three antidotes are easier said than done. Be forewarned that ifyou give into the demands of the extortionist there will be no end to their squeezing.They may even continue to contact you after you return to your home country.

detainmentDetainment is always possible when negotiating with a government or a company with strong political connections. Like surveillance, the legality of this tactic is a matter of perspective. When a negotiation doesn’t go as planned, or the visiting group decides unilaterally to call off discussions, detainment may be used as a means to bringing about ?resolution.? Totalitarian governments are not afraid to use it, or its threat, since detention is the way they treat theirown citizens when disputes arise. Even more democratic governments aren’t beyondseizing passports and imposing house arrest until business is completed. In somecases, when deals don’t reach fruition, foreign negotiators are seized during return visits for other business and detained until the first deal gets resolved. (There are many documented incidences of this in China where businesspeople have been seized in Macao and the then-British colony of Hong Kong to be trundled across the order on trumped up charges. The underlying charge however is that a Chinese ompany didn’t think its ?enough? was enough.)

The best way to avoid victimization by this tactic is to know whom you’re dealing with and to stay on their good side?or at least the middle. Trying to hoodwink a governmental agency or their front companies in a totalitarian country is an unjustified gamble.

fraudDo all negotiators resort to some form of lying? Yes. Is all lying illegal? No.

Lies of omission are quite common in negotiating, otherwise there would be little need for strategy and tactics. Everyone would lay all of the information on the table, and their meeting would be over in an hour or two. But not tellingabsolutely everything that you know isn’t the same as prevaricating. The deliberate misrepresentation of fact is generally considered to be immoral and if used to influence the outcome of negotiations, it’s most often illegal. But that’s not to say that it does not occur on a regular basis.

Some multibillion-dollar business deals, such as the 1997 Indonesian gold fieldsscam, are based entirely on a lie. Happily, fabrications of this magnitude aren’t that common. For the most part, lying as a tactic takes the form of overstated income statements, lightly “cooked” balance sheets, overly optimisticmarketing surveys, cleverly worded research, bogus lines of credit, doctored statistics, and falsified letters of recommendation. There’s the “little white lie” for which forgiveness can be sought and is almost immediately granted. At the other end, there’s the “big lie,”in which large groups of people must knowingly participate in order for it to work. Everything in between those two extremes can land the practitioner among the wealthy or among the incarcerated.

Some economies have stringent due diligence processes and active fraud squads topolice business activities, both domestic and international. Others assume fraudis just a part of the normal business landscape and only seek prosecution when exposure causes public embarrassment. Penitentiaries are well populated with “information jugglers” who underestimated their counterpart’s intelligence and reaction to being defrauded. While there is no 100 percent protection against this, and far less when working with translations, major problems can be avoidedby trusting no one. Everything that can be checked out, should be checked out. Make it clear from the start of negotiations that the due diligence process is astandard practice and not a personal attack. Agree to nothing and sign nothing until the important facts of the issue have been verified. Be nice but be skeptical.

stealingGeorge Bernard Shaw is credited with saying that ?fools imitate, a geniussteals.? If this is true, then genius runs rampant in some economies. Industrialespionage has become not just a major problem but almost a standard operatingprocedure in some of the world’s greatest and potentially great markets. It cantake many forms and isn’t always a tactic of last resort by a desperate negotiator.Often, it’s their opening gambit.Professional thieves abound in the world’s airports, targeting distracted travelers and their luggage. Much of this is simple larceny, but some of the travelers are the subject of a specific negotiation tactic. Proprietary information kept in presentation materials, briefcases, and laptop computers will be stolen during an ?unfortunate incident.? This information will be taken directly to the victim’s negotiating counterpart or competitor. Any such information uncovered during the surveillance mentioned above will be similarly distributed. Whole networks have sprung up in Europe, Asia, and North America for the sole purpose of stealing commercial information. (The Soviet Union’s former KGB apparatus has taken on this line of work in recent years, as have other out-of-work Cold Warriors.)

Materials and laptops left in hotel rooms and meeting facilities will be rifled through and downloaded during social events or breaks. Negotiators may even be mugged on the streets in what appears to be a common street robbery. Victims canbe assured that the thieves were after much more than their wallets. Total protection from this tactic is only possible when security teams accompany negotiators (as is quite common now for foreign firms visiting Russia).

However, reasonable precautions should be taken by anyone who travels on business with important, saleable information. Those carrying laptops should keep them close at hand and stored in cases that don’t readily identify them as computers. Another precaution is to keep proprietary information on separate disks, encrypted if possible. These disks should be carried on your person and safeguarded much in the same way as a passport or visa.

Hardcopies of information and other important presentation materials shouldbe kept as portable as possible and never mixed in with expendable collateral,like brochures. Keep these with you at all times during meetings and stored in hotel safes when not. (In very chaotic or lawless locales, even hotel safety deposit boxes should be avoided, as the staff may be in the employ of counterparts or their operatives.) The best protection against the theft tactic is to treat information as having ?priority one? importance. Sadly, most of thistactic’s victims take better care of their traveler’s checks than they do their company’s secrets.

physical forceBusinesspeople get threatened, beaten, and murdered everyday around the globe. Sometimes it’s the same random violence that we’re all subject to, but sadly, the perpetrators are often on the payroll of commercial competitors and venture partners. Physical force may be used to scare someone away from the negotiating table or to keep them at it. It may take the form of a threat or an actual attack.

The threat may be stated openly or hinted at with varying degrees of subtlety.

The attack can range from a mild roughing up to a savage beating, stabbing, or shooting. Death may be accidental or intentional. The perpetrators may be amateurish thugs or professional enforcers. Those responsible may be private businesspeople or government officials.

Most large companies discourage victimization by this tactic by supplying their traveling personnel with security teams. Those with fewer resources must look out for themselves. This tactic isn’t deployed casually, even by government officials, and rarely during early stages of negotiations. While it’s most oftendeployed against visiting negotiators, it may also victimize hosts. Its purpose is to obtain something (money, concession, ownership) that can’t be obtained readily by other means. Thorough prenegotiation research should reveal whether counterparts are ready and willing to pursue their ends through violence or other illegal means. Knowing that a counterpart will react violently when backedinto a corner is part and parcel of avoiding the tactic. Skilled negotiators should never be surprised that it could happen to them. Only the timing and the motive should be matters of conjecture.

Reacting to threats is a continuance of the war of nerves that high-pressure negotiations creates. Threats shouldn’t be ignored or mocked. Assume they?re real and pursue governmental protection if that is an option. If the host government itself poses the threat, visiting negotiators should seek out diplomatic personnel from their home country immediately. Talking your way out of the problem is an option (you are a negotiator after all), but having a backup plan will make your speaking voice a little less jittery. If the issue inquestion does turn out to be truly non-negotiable in the strictest sense, concede it and then ?get out of town? on the next flight. There may be many things worth dying or taking a beating for, but an agenda isn’t one of them.

bribery

Bribery is the grease that lubricates the axles of much of the world’s business.

Whereas it may be a felony in the United States, in China it’s simply consideredone of the costs of doing business, like an informal tax system. This isn’t to say that business in the United States is completely bribe-free or that every company in China works under the table. What can be stated without fear of contradiction is that all professional negotiators at some time in their career will be offered or solicited for a bribe. A sizeable number of them will participate willingly.

Even the very stringent Foreign Corrupt Practices Act (mandatory reading forU. S. negotiators) passed by the United States in the mid-1970s recognizes that the tactic of bribery is almost unavoidable. Though the act outlaws the bribing of officials for the sake of enhancing one’s position during negotiations, it does allow for ?facilitation payments? when the practitioner is only trying to get the official to do the prescribed job in a more timely or professional manner. Bribery of government officials is extremely common in the developing economies, where low pay for civil servants encourages the seeking of extra income. The payments can take the form of cash, automobiles, company shares, or lavish parties. Some governments even set up phony companies or country clubs and allow foreigners to become ‘shareholders? and ?members? as a way to cover the trail of payments. While the ruse may protect you in the foreign market, your domestic government may have a different attitude.

Of course, not all bribery involves government officials. Counterparts may offer‘sweetheart? deals, with side payments to cooperative management. They may boldly bribe the opposing negotiators in an effort to get them to sell out theircompany’s position or just to obtain inside information. Proffering bribes during simple trades in the world’s marketplaces has become almost pedestrian.

Accepting a bribe is both a legal and moral choice, but there’s other fallout. Once even the smallest bribe has been accepted, it marks the receiver as corruptible, and he or she can only become indignant about the amount of subsequent offers, as the moral high ground has been lost. The bribe tactic may also lead to extortion being used against you--a far cheaper method. Counterparts may threaten to inform the police or your own company unless you start to ?play ball? During negotiations.

Being solicited for a bribe brings a rash of other concerns. Some tacticians will solicit for a bribe as a matter of course when they’re in any form of buying position. They may even have budgeted for it when planning their negotiation strategy.

Turning them down may be taken as a hostile action or as a clear demonstration that you don’t understand their business culture. The same could certainly be said of their level of understanding where your culture is concerned, but they’re dealing from a position of strength. If you do decide to turn down the request, you’ll have the risk of canceling any chances for a deal-unless you’reprepared to make other, more legal, concessions to counterparts as compensation.

Tacticians have been known to solicit bribes from opponents knowing full well that they can’t comply due to legal restrictions. They use this as leverage to coax other concessions from a counterpart when trying to compensate. This cleverand effective maneuver can only be counteracted by moral indignation at having even been asked for a payoff and then only if you’re in a relatively strong selling position. Otherwise, your choices are limited to two: comply or concede.

Complying with a request for a bribe has the same drawback that any form of appeasement does: one request always leads to another. Counterparts who solicit bribes (as opposed to those who just accept them when offered) are well aware ofthe manipulative value that bribery has. As in the case of extortion, anyone whocan be convinced to pay once can be convinced again, and again, and again.

If you’re prepared-even budgeted-for it, then repetition presents no problem.

Bribery certainly does have a value, as it makes the system run a little faster and a little better. There are places on the planet where you can’t even get a phone installed without bribing someone. Some wags have even commented that bribery in the emerging markets generally works out to be roughly the same rate as licensing and lawyer’s fees in the supposedly less bribery-prone developed societies. Right or wrong, bribery must be seen for its underlying tactical effectiveness and not merely as a means of lining someone’s pockets.

Use Only What’s Necessary to Attain Goals

Being well supplied with tactics doesn’t mean that they should all be put into practice at once. Letting the opposition know your full capability can greatly limit future discussions. Negotiations can fluctuate in length and extend well beyond the original prediction. Playing all of your options early only allows counterparts to be prepared when the same tactic is trotted out a second time. Strength at the negotiating table derives from being able to maintain a balance between the means and the ends. Learning to use just enough to get ?enough? willcome with experience and the recognition that not all heat creates light.

Histrionics, power plays, grandstanding, and tantrums have very limited uses during professional negotiations. Negotiators must be great expositors while, atthe same time, clever concealers of their own options and maneuvers. Subtlety isthe norm for the professional, and finesse usually wins the day.

Daily Recaps

Negotiators should continuously review the successes and failures of their tactical plan, even when it’s a simple one. Daily recap session should be held as soon after the close of daily discussions as possible. They must be held in private and well out of the earshot of counterparts. Local translators, drivers,and hotel personnel should be excluded, as they may be providing information to the opposition. Recaps should focus on whether the desired results for that day’s session were met and whether overall talks are moving in the right direction at the forecasted pace. Mistakes must be acknowledged and remedies putin place.

Teams must keep in mind that blame is not as important as solutions. If the original plan is showing success, stick to it and make sure all members are clear on future implementations. Even a solo negotiator should take time at the end of each session for review and reflection.

One mistake that novice teams make is changing their tactics because the opposition has changed theirs. It should be kept in mind that the reason counterparts have changed is because they’re facing a well-thought-out strategy with suitably efficient tactics. There’s no reason to believe that their revamped tactics will be more successful. They may even be less so. Having backup plans in the wings will permit speedy changes, in the event that the counterparts? New plan proves more effective than their first.

Assessment Techniques During BreaksRecap sessions can vary in length depending on the agenda and the strategy of the opposition. Regardless of length, the recap must efficiently provide answersfor the negotiator or team. The same questions that were asked in Chapter 12 when formulating the strategy must be reasked for two important reasons: To assure that the areas that are currently under discussion are being resolved in a manner that fulfills the original plan. To assure that all areas that were strategized are being considered with the level of emphasis forecasted. This second reason warrants special scrutiny, because it’s easy to lose sight of agenda items during the activity and pressure of bargaining. Many negotiators have returned home with issues that aren’t just unresolved but never discussed. And it’s not always minor points that slip through the cracks.

Worksheet

The worksheet on the next page is provided so that the reader can match possibletactics (column 2) to a given strategy (column 1). The reader is also asked to choose a countertactic (column 3) as if predicting a counterpart’s reaction.

There’s no one correct choice or response for any given strategy, and the readershould consider all of the potential combinations based on the position variants(e. g., host, buyer, visiting investor, third-party visiting trader). Choices must also take into account a true assessment of the reader’s experience, technical skill, personality, and company size. Team tactics must reflect the same variables.

Strategy Tactic Counter tactic Aggressive Compliant Passive Impassive Intimidating Technical Financial Legalistic SecretiveDeceptive ExploitiveStubborn Ambivalent Pragmatic Brinksmanship Arrogant Self righteous Overwhelming Fleeting Stern Social Theft Indulgent Consensus Cowboy Platoon Divide and conquer Jekyll and Hyde Hierarchical Departmental

CHAPTER 16

Closing the DealWho Makes the Decision? the difference between a successful negotiator and a failure is the ability to close a deal when it has reached its maximum level of distributing ?enough? among all participants. It’s not that unusual for one sideto achieve all of its goals relatively early in the discussions. In other cases,experienced negotiators will ?front load? the agenda with their main needs so that they don’t waste time on lengthy discussions that end in deadlock. Visitorswith travel budget concerns do this quite often. In either case, closing the deal at this early stage leaves counterparts with many unresolved issues and mayreveal the closer’s true motives. Because of this, the deal is best closed when the agenda has been exhausted.

Don’t succumb to the urge to rush the agenda or rely on the ability to ?hammer out the details later.? If your strategy was well thought out, it should be followed to its conclusion. Consider the fact that counterparts may be dependingon your desire to wrap things up quickly as a means to get a contract signed before all of the bad news hits the table. Impatient visitors can be very susceptible to this and will find they have little legal recourse in the foreigncourts once the contract is signed.

Buyers usually have the say as to when a deal will be closed, but they can be encouraged to do so by savvy sellers. This is why every salesforce in the world has its ?closing specialist? whose job it is to convince the buyer that ?enough?has been had and it’s time to transact the deal. International negotiations differ only in the fact that the buyer/ investor is usually much better informedthan a standard customer. Both sides have an equal chance to close the deal, andthe more proactive the decision maker is, the greater the chance of controlling the process.

When Is It Time To Close?Here are the ten questions that must be asked directly or indirectly of all participants to determine if it’s time for closure.1. Have all points of the agenda been discussed?2. Have the financial ramifications of all points been thoroughly delineated?3. Have the technical aspects of the deal been reviewed?4. Have the local and international laws applicable to the deal been researched?5. Are all active parties to the deal logistically capable of performing their functions?6. Is the time line set for the deal realistic?7. Do all parties recognize the short- and long-term consequences of the deal?8. Are all parties in agreement as to the language and terms of the deal?9. Do all the parties to the deal trust each other?10. Do all potential signatories have the requisite authority to act on their company’s behalf?

Knowing When to Say “No”Sometimes the appropriate response to an offer laid on the negotiating table is “no.” Declining a deal, and doing so in the proper manner, is sometimes the Silver Medal of international business not ideal, but respectable. There are

many reasons to decline, and doing so doesn’t necessarily mean that no deal can be cut.

Declining may just initiate the call for future talks once the deal-breaking aspects have been resolved. In other cases it may expose the need for the participation of additional parties. Because this potential for future dealings is so important, declining the deal must be done with the greatest diplomacy, even when the counterpart is suspected of the most egregious subterfuge. Although you may have no intentions of ever dealing with these particular counterparts in the future, maintaining your reputation within the internationalbusiness community for levelheaded dealings is important.

reasons to decline or postpone

Here are some valid reasons for declining or postponing a deal.1. Cannot resolve financial issues2. Unable to obtain proper contract assurances3. Unfavorable legal environment or criminal intent by counterparts4. The deal is too exposed to political instability5. Counterparts are noncommittal6. Counterparts become intransigent7. Counterparts lack the wherewithal to fulfill contract requirements8. Counterparts lack the organizational skills to make the deal function9. Corruption reduces profit to unacceptable levels10. Economic environment becomes unfavorable11. Counterparts prove untrustworthy or unprofessionalTrue failure only occurs during negotiations when a bad deal is cut. Such a dealmay even turn out to be bad for all parties concerned. On the other extreme, a perfect deal is rare, because it demands that all parties maintain both their needs and wants. Negotiations are like any other form of business in that they involve risk. Risk management demands that skilled players know when they’ve won“enough” and when they should stay out of the game.

Avoiding Being Victimized by “Practice Negotiations”

The desire to enter the exciting and profitable world of international business can often lead to becoming a victim of someone else’s learning curve. Some companies like to use what appear to be formal negotiation sessions as a way of practicing for upcoming discussions with another company. This subterfuge is most often practiced by host companies new to the international marketplace, andthey will most likely cast their net from developing economies. They’re hobbled either by a lack of research materials in their home country or by budgetary restrictions that prevent them from the foreign travel necessary to securing - on the ground- information about potential counterparts.

Discussions may be conducted in a conventional, even friendly, manner with no indication that they’re heading nowhere. Victims may be given every indication that their proposals are sound and acceptable, or they may be fought on every point, regardless of importance. In either scenario, the side with the information deficit is simply testing its strategies and tactics against an opponent similar to its future opposition. The victims of this simulation may have been chosen for their national, cultural, racial, technological,

industrial, or economic characteristics. Negotiators must use their own discretion when they suspect that counterparts or potential counterparts are none too serious about the outcome of discussions. Here are some basic ways to determine the seriousness of counterparts before entering into expensive and time-consuming negotiations.-Ask counterparts during the early contact phase why they’ve chosen your companyspecifically for these talks. If their answers are vague, pursue the next topic.-If this is their first foray into a technological or industrial sector and you’re not a leader in that sector, ask what other competitor companies they’ve contacted. If they say “none,” ask why and proceed with caution. If they refuse to say specifically what companies were contacted don’t bother with follow up. If they do indicate contact with competitors, ask if actual negotiations took place and the reasons for their results.-Ask counterparts to give a clear indication of their time line for the project.If they are sellers, ask what quantities can be shipped and when. If they’re seeking investment, ask how much of the control of the company they’re willing to relinquish. If they’re buyers, ask if they’ve already secured their lines of credit and what quantities will be required for shipment. If they’re investors and their inquiries were unsolicited, ask for reference letters.

Some of these questions may appear to be somewhat blunt; the exact wording is left to the discretion of the negotiator. However, getting answers to these questions early on can save a lot of time and expense that would otherwise be wasted on research, travel, and negotiations.

CHAPTER 17

Reporting ResultsIs 99 Percent Enough? International negotiating isn’t only a business process, it’s a learning opportunity as well. Each session-large or small, productive or unproductive, heated or boring-can offer the participants the occasion to add totheir own store of knowledge and skill. After strategies have been formulated, tactics deployed, decisions made, and contracts either signed or declined, detailed reports should be compiled and reviewed. This can aid greatly in several company processes and should be considered part of a company’s information database.

The Value of Record Keeping1. It keeps other members of management informed of important dealings that are taking place far from their view or direct control. It bears repeating that negotiations are very expensive for host or visitor and that cost must be justified. This will be even more important when no contract is forthcoming fromthe negotiations. The introduction to this book remarked on the need for informed management, and the reader is reminded that such information flow is paramount.2. Negotiators can review their own actions as well as those of counterparts once they’re distanced from the heat of discussions. It can be very surprising how transparent a tactic can be when viewed in retrospect. Just the process of organizing the reports and putting them on paper can lend insight in to what really happened. Negotiators may sometimes have to face up to what appears to beglaring mistakes on their own part. Painful as they may be, the lessons of twenty/ twenty hindsight tend to stick.3. Consultant negotiators must make detailed reports if they plan to continue inthat line of work. Simply returning from negotiations waving a contract, or worse nothing at all, isn’t going to win the favor of the client. While consultants may not wish to give their negotiating secrets away or expose every blunder, a reasonably straightforward report will, at the very least, let the client know what their money was spent on besides airline tickets and hotel rooms.4. Perhaps the greatest value of a detailed report is its use as a teaching tool. Every negotiation opens new opportunities for a company to expand into theworld’s markets. A small company may start with a solo negotiator, then proceed to using a small team and then several teams operating simultaneously. It will need records so that each negotiator or team can build upon the successes and avoid the mistakes of their predecessors. If these reports become lost in the myriad of company documents or they’re hoarded by upper management, a valuable companywide resource has been lost.

Guidelines for Post-Negotiation ReportsThe following guidelines for writing post-negotiation reports will allow for their long-term use.1. Compose the report as if the reader knows nothing of the companies or participants involved. The reports may still be in use long after the compiler has left the company or ceased to be employed as a negotiator. The report will have little use as a learning tool if major points have been treated as givens.

2. Treat the negotiations as a whole, from planning through completion. Personnel selection processes, planning sessions, travel arrangements, facility selection, and contract follow up should be included. Negotiations don’t take place in a vacuum,so there’s no reason to report them as such.3. Be specific. Reports are filed so that both participants and nonparticipants will have a clear understanding of what went on during discussions. Details about anything and everything that affected negotiations should be included. Generalizations such as ?morning sessions went well . . .? or ?our offer was notwell received . . .? don’t address root causes. These types of reports are oftenreferred to as ?postmortems? and should have a detailed factual base to match the scientific, though unfortunate, nickname.4. Give the bad news as well as the good. Few people like to admit their own mistakes, let alone commit them to paper. However, it must be understood that learning comes from mistakes as well as success. If the negotiations were ultimately successful, then the emphasis will be on the positive. If they were less than hoped for or a complete failure, attempts to whitewash them will be readily transparent. State the facts and let them speak for themselves.5. Summaries should be prepared daily while negotiations are in process. Don’t wait for discussions to finish in order to try and remember what happened on dayone. Teams should have discreet notetakers at every session, and solo negotiators should commit their memories to paper (or pocket recorder) as soon after each session as possible. Talks may drag on for days, and the whirl of travel may turn a whole week into a blur. Accuracy counts. 6. Each daily summary should be followed by a brief analysis of the proceedings to that point. Tactical changes should be noted and their effect on strategy weighed.7. Since the overall document is retrospective reporting, each daily summary andanalysis should also be followed by recommendations for future discussions and advice on how to avoid pitfalls. These recommendations often turn out to be the most valuable part of the report-filing process.8. Prepare an executive summary. If negotiations are lengthy and the reports contain the requisite detail, the account can run to hundreds of pages. The summary will allow those members of management interested in ‘the big picture? to get a handle on the process. The summary should contain a recapitulation of the entire negotiation, an analysis and an overall recommendation. Consultant negotiators should gain a clear level of understanding about how detail orientedtheir client company is prior to embarking on negotiations. Consultants should keep detailed records for themselves.

CHAPTER 18

CommitmentThe Strain of ImplementationThe burdens of travel are over, tense negotiations have come to a close, the sixteen-hour work days have reverted to normal length, and the detailed reports have been written. Now the real work begins. A common problem among negotiators is that they return to their companies, contract in hand, with the belief that the job is complete. Unfortunately ‘the deal’ is only a piece of paper at this point. Proper follow through by all participants will really be the test of whether negotiations were a success or a failure. Follow through can even save negotiations that were a ‘wash.’

Exploiting the InvestmentInvestors rarely move into a market unless the timing is right. Those seeking investment generally have strenuous time constraints. Both groups also understand that the window of opportunity can close quickly. Political upheaval,exchange rates, and market movements can turn twenty-four hours into an eternity. And yet, after spending a great deal of time and money on negotiating a venture, either side or both may start to drag their respective feet during execution of the contract. This can happen because investors suddenly become wary of their new partners or because the recipients of the investment feel that, in retrospect, they got a poor deal.

In the first case, the company receiving the investment must do everything they can to assure the investor that the whole process will go as planned. A sudden change in the legal or political environment may even require a return to the negotiating table. Both sides must be committed to making the deal work to overcome these hurdles, but the greater part of the burden is on the investment’s recipient. In the second case, the burden of commitment is reversed. Investors must convince their new partner that the deal as contracted will be to the benefit of both parties. While the counterpart’s lack of commitment should have been discovered during the original negotiations, new information (or suitors) may be at the root. Here again, a return to the table may be required to save the venture. Of course, many times there’s no real problem, only different senses of urgency.

When investment is at the center of the deal, the pace will be set by whichever party has the lesser need. Companies hungry for investment will move at the whimof the investor.

Investors hoping to gain market share in advance of competitors will find that the commencement of the venture will be very much controlled by their new partner. While a certain amount of gamesmanship is to be expected, all parties contracted are recommended to operate in compliance with the stated terms. In today’s marketplace, positions of power change rapidly, and the puppeteer can swiftly become the puppet.

Buyers and SellersThe commitment between buyers and sellers in a simple trade may be significantlyshorter in duration than that of investment venture, but it should be no less

strong. Sellers that ship late, ship partial orders, or ship inferior or no product at all can put the quietus on the best of negotiations. Buyers that return specified goods, refuse delivery, renege on letters of credit, or pay late or never at all can have an equally devastating effect. Barring extreme circumstances, such behavior by either party shows a lack of commitment to the deal. If the offending party is a long-time player in international business, their procedures should have been uncovered during proper pre-negotiation research, and the victims can only blame themselves. A degree of patience and recognition that failure may be an option will be required. Commitment requires that the victims salvage what they can.

If these deal busters are novices, the opportunity exists to save the deal and educate the offenders as to the value of commitment. Often times new players in the arena aren’t fully aware of their responsibilities or the ramifications of poor performance in trade. Those on the receiving end of the poor service or products need to make these novices aware that reputations make the difference between long-term and short-term players. They must be assured that they’ll be unable to solicit other business unless the contract is fulfilled as written. This posture may ring hollow with the truly devious who make up a small portion of traders. Commitment to completion here will not guarantee full success but will secure enough to make continued contact worthwhile.

Following Up on Failure

Even when negotiations have been a true failure and a bad deal has been cut, follow through can lead to success. A contract is a contract, and novices as well as experienced negotiators will, on occasion, sign ‘bad’ ones. It doesn’t change the fact that the contract must be fulfilled if there’s to be any expectation of long-term operations in the marketplace. Besides avoiding the legal fallout, following through on a less-than-ideal contract will secure a reputation for commitment and honesty that can be exploited in other deals. It may also lead to a chance to renegotiate the original ‘sour’ deal once counterparts recognize your integrity not always, but sometimes.

Negotiations that have resulted in one side declining the proposed venture also demand follow through from professionals. Rarely are the differences irreconcilable and they may only hinge on changes in the marketplace uncontrolled by the negotiation’s participants. If your’s is the side that declined the deal, assuming you did so gracefully, maintain contact with the counterparts and express your continued interest in future dealings with their company.

Maintaining some form of relationship, even if it’s as simple as a company newsletter or seasonal greetings, will keep your company in the ‘mix’ if a potential deal does arise. It may even lead to a referral to a company that can provide the goods, services, or investment opportunity desired.

If your company was on the receiving end of the refusal, take heart and don’t take it personally. Find out the cause of the rejection and make every effort toseek a correction. Proposals may be rewritten, budgets reconsidered, product lines reworked, and policies reinterpreted. Maintain contact with the counterpart, thanking them for their considerations while expressing your

continued desire to work with them. Resubmit your reworked proposal and offer toreopen negotiations. In the words of experienced salespeople everywhere, ‘‘No’ just means ‘not now.’? The worst that could happen is that you get a reputation for persistence.

Rules of Follow Through

ONE: BE PROFESSIONALThe term professional is used for those who’ve attained a high level of expertise in business. They have gotten that far because they’ve learned to separate personal feelings from their business life. This isn’t to say that theyaren’t passionate about business. Professionals are the most committed of any participants in a deal. For them, ‘a deal is a deal’ and whatever was agreed to must be acted upon by all concerned parties. Personal differences, emotions, wounded pride, or inflated egos aside, a professional will follow through on a contract. Anything less is unthinkable.

TWO: BE OBSERVANTFollowing through isn’t the same as plunging ahead blindly. Circumstances that surrounded negotiations may have changed significantly. Politics, finance, and even geography may have all taken a turn for the worse since the deal was signedor maybe for the better. Few contracts have zero wriggle-room and negotiators must build as much of it into a deal as they can to allow for unforeseen circumstances. Those following through must be observant in order to catch thosecircumstances when they arise. Being able to observe what new found partners aredoing is also part of follow through. Whenever possible, members of the negotiating team should be left ‘on the ground’ until the contract is in full force and running smoothly. It’s okay to trust the other party, but that trust must be verified.

Three: Be NiceEven when the sternest of strategies has been used to close a deal, there is always room for cordiality. Avoid quibbling over meaningless details and proceedwith the execution of the contract. Patience will be required to some degree in all business dealings and in the early stages of follow through, especially withnovice counterparts, who may put you to the test. Keep in mind that the relationship may last for decades and there’s little to be gained by enmity among the participants. It’s also best to remember that in the future, your mistakes may require the cordial patience of your new partner.

FOUR: BE RIGHTNo one is right all of the time. Successful people learn to keep quiet unless they’re sure of their position. Follow through is the period in which all of theproblems that weren’t worked out at negotiations rear their ugly little heads and the chances to offer solutions are myriad. Your way of doing something may be a right way, but don’t assume it’s the right way. New deals in foreign lands or involving foreign companies can bring a whole new set of ‘tools’ to the tablefor fixing these problem areas. International business has a hundred times more commercial, political, legal, cultural, racial, and geographical variables than the already complex world of your domestic economy. Experts are few and far between in international business circles and their areas of true expertise are

limited. Don’t pretend to be one on every issue. Study the options, all the options, and choose the best.

FIVE: BE ON TIMEMuch of the follow-through process revolves around the setting of standards to be utilized for the duration of the commercial relationship. Each side is demonstrating their interpretation of professional behavior and testing the limits of the counterparts methods. Fair enough. Your goal should be to do all things required of you in a punctual manner. Attendance at meetings, filing of reports, submittal of financial information, shipment of goods, payment of bills, injections of capital, and distribution of profits should always be done on schedule with no exceptions. This will be particularly important in the early stages of follow through, when reputations are won or lost. Setting high performance standards allows you to make similar demands of counterparts. Start early, maintain standards, garner profits.

The LessonsBe clear on these points when approaching international negotiations.- Negotiating is a complex process that requires extensive research.- Paying attention to details isn’t optional. It’s mandatory.- Success is a well-planned choice.- Every moment is crucial.

CHAPTER 19

Strategic and Tactical Guidelines byCountry

ARGENTINA

commercial environmentArgentina is one of the more affluent countries in South America and on the continent, it’s second only to Brazil in GDP per person. Food processing, with an emphasis on beef and grain exports, is a major industry and there are also considerable manufacturing and tourism sectors. It’s the most heavily European influenced of the Latin American countries, and these influences carry over intothe negotiation styles. Although Argentina has a past history of inflation and excessive state intervention, its new government is committed to a stable currency and foreign investment. The government has also put a new emphasis on attracting technology firms to this formerly agricultural country. Spanish is the primary language (for business and contracts), although English, Italian, and German are widely spoken.

common strategies- FOR TRADE: Impassive, Aggressive, Stubborn- FOR INVESTMENT: Social, Hierarchical, Departmentalnotes for negotiators

The Argentineans see few rivals for themselves in the realm of sophistication. This is conceivable from a cultural if not commercial viewpoint. They’re hard bargainers, willing to dig in their heels if they feel they’re not being treatedas equals.

Concessions are granted in small increments, even when the Argentinians are bargaining from a weak position. Every point of the agenda will be hard fought. Come prepared for the long haul.

Although there has been a great deal of privatization in recent years there are still pockets of entrenched bureaucrats. Proceeding with discretion and keeping a low profile will do much to limit interference.

Argentina is a land of connections and a wide range of ‘inside tracks’ rangingfrom family to the industrial sector to politics. The overlap between one’s social and business life is substantial, and a recommendation (or condemnation) carries a lot of weight here.

Make contact as far up the organizational chain as possible. Hierarchies arethe predominant management structure, with very little decision-making powerfiltering down the chain of command. Starting in the middle will only prolongthe process and extend your negotiating budget.

While written contracts will be detailed, Argentinians prefer to do business with friends. Visitors who exhibit a cultured interest in Argentina and its people will have an advantage at the negotiating table. Meetings will be very

formal and pecking orders are observed for seating and introductions. While meals may be part of the protocol, business is rarely discussed during mealtimes. Be punctual, but don’t become upset if your Argentinian counterpart exhibits a more casual approach to time. Visitors, whether buying or selling, are held to a higher standard.

When discussing your own company or business culture, take care to not make unfavorable comparisons with Argentina. And under no circumstances should Argentina be lumped in with the rest of South America. Politics is a very sensitive issue, and the country’s militaristic past is a topic to be avoided atall costs. Even mentioning that you saw the film or the play Evita may set off atorrent of comment. British companies, and perhaps even their American allies, may find some residual resentment from the Falklands conflict. In all cases, thefewer political references the better.

AUSTRALIAcommercial environmentAustralia is a Western-style democracy. Over the years, its various governmentaladministrations have, in their turn, embraced Asia and shunned it. Because it’s 95 percent Caucasian, it’s often seen by its Asian neighbors as a Western outpost. A well-educated nation, it has one of the highest per capita GDPs on the Asian Pacific Rim. Labor unions are quite strong; mining and manufacturing are key industries, although agriculture is a mainstay. Australians are very active as investors throughout Asia, and they export a great deal of food to neighboring ASEAN countries. Foreign investment is welcome. Australia is a technological leader in the Pacific, especially in telecommunications.

common strategies- FOR TRADE: Aggressive, Pragmatic, Indulgent- FOR INVESTMENT: Social, Cowboy, Platoon

notes for negotiators:Australians shun formality and are recognized as some of the friendliest businesspeople on the planet. This belies a tough bargaining ability. They’re masters of the Social strategy.

Be direct while negotiating, as the Australians are keen to spot deception and they have no qualms about walking away from the table if they feel you’re holding back information. Since formalities are minimal, negotiations move at a quick pace. Show up on time and come prepared. Australian managers tend to be more ‘hands on’ than most, so technical details will be welcomed and understood.Even when bargaining from a very strong position, avoid the appearance of takingcontrol. Attempting to ‘lay down the law’ will only create resistance. The

Australians will already understand the secondary nature of their own position, and reminders of it could foul the deal.

The Australians don’t mind putting on a little pressure when they’re buying or investing. The limitations of your proposal and the availability of competitors will be cited on a regular basis. Waiting for the price to drop is an Australianpastime.

Keep your offers realistic but leave yourself some wriggle-room. The Australianswill haggle, but only to a small degree. Making a hyperbolic offer at the start will not be perceived as the opening of bargaining but as an indication of your lack of realistic goals.

Contracts will be written, detailed, and enforceable. All parties are expected to adhere to the letter of the contract, as the Australians have well-developed commercial law. Handshakes are an amenity; signatures mean business. Because of their relatively small population and remote locale, the Australians have becomeexperienced travelers and negotiators. They do detailed research on target economies and companies, with an eye toward limiting surprises at the table. Be assured that they’ll know all about your company and culture before the first meeting.

The Australians are a tough breed and they enjoy competition. They never shy away from confrontation and will go toe-to-toe with anyone. While their outlook on success and failure is somewhat fatalistic, they encourage long-term relationships and prefer to work with people they count as friends.

BELGIUMcommercial environmentThe city of Brussels is considered by Belgians, as well as by many other continentals, to be the ‘capital’ of Europe. All major economic and political decisions regarding the European Union flow from there. Antwerp is the third largest seaport in the world, and it guarantees Belgium’s leadership in international trade and transport. The country has a strong engineering component and a robust steel industry, and it’s a top player in the world’s diamond market. Because of its role in European shipping, transportation equipment also accounts for a great deal of its exports. The country is a hybridof Dutch (Flemish) and French (Walloon) cultures, though the twain seldom meet in this country of ten million. This conflict seems inexplicable to outsiders but can have an enduring effect on business negotiations and social gatherings.

common strategies:- FOR TRADE: Pragmatic, Stern, Technical- FOR INVESTMENT: Pragmatic, Hierarchical, Departmental

notes for negotiatorsThough socially the Belgians tend toward the casual, business meetings are somewhat formal. First names are rarely used, except among friends; Mr., Mrs., and so on are customary. French or Dutch equivalents can be used as well. The Belgians are technically astute and prefer presentations with a great deal of factual information. Get right to the point and avoid trying to ‘sell’ The concept. The facts will have to speak for themselves.

This is the land of commercial pragmatists; outlandish schemes will receive scant consideration. Proven technologies and recognized services tend to do the best.

Do detailed research into the background of the company you’re contacting. Written materials should be translated into the appropriate Flemish or Walloon. Don’t under any circumstances confuse the two cultures when negotiating, as it

will cause considerable conflict. Belgians are generally recognized as tough but likable negotiators. They’ve established themselves in Europe by being able to understand and absorb other cultures. Belgians have little fear of economic colonization and always bargain as equals.

Don’t attempt to ‘throw your weight around’ or otherwise remind the Belgians that they’re a tiny country in a very large world. They’ve heard it all before and can afford to say ‘no’ to just about any deal.

Because of this nation’s limited resources and land area, thrift is highly prized. Proposals that squander assets, whether financial or personnel, will be highly criticized. Keep it conservative and watch those pennies. Set up meetingsfar in advance and confirm them upon arriving in-country. Be punctual, you can assume your Belgian counterparts will be.

Though the Belgians pride themselves on their polyglot tendencies, contracts areenforceable only in the local dialects of French or Flemish. English is widely spoken, as is German and a multitude of other European languages. Beer production is a national treasure, and business visitors can be expected to enjoy the social aspects of its consumption. The Belgians drink for taste ratherthan quantity, and they appreciate a fine palate. Visitors who can hold forth onbrewing varietals and production methods will find themselves in good stead at the negotiating table. (The same holds true for those with an appreciation for Belgian art.)

BRAZIL

commercial environmentBrazil is the largest country in South America, with a GDP close to that of China in the years just prior to its acquisition of Hong Kong. Primarily an agricultural society, Brazil exports a great deal of beef, leather, and textiles, but it also supports flourishing chemical and consumer goods industries. Plagued by recurrent debt and inflationary problems, the government has instituted numerous ‘austerity’ measures to keep the country on track. The communications infrastructure and high-tech industries are target areas for investors and government-backed schemes alike, and they’ll remain so for the next decade.

common strategies- FOR TRADE: Compliant, Deceptive, Social- FOR INVESTMENT: Divide and Conquer, Departmental, Socialnotes for negotiators

Titles are very important in Brazil and business conversation remains formal. Calling a counterpart by their first name may be reserved for social occasions or for business after a long-term relationship has been established. Brazilians are very proud of their language (Portuguese) and resent being confused with their Spanish-speaking neighbors. Never refer to them as South Americans and never attempt to speak Spanish in place of Portuguese although most businesspeople will understand both. Translate business cards and presentation materials into Portuguese, but avoid speaking it unless you’re fluent.

Brazil is a lively place and its people emotional. Presentations should have a bit of panache, and the presenters should exhibit a good deal of excitement about the proposal. Sticking to the facts and figures will not impress counterparts, whether buying or selling. Conversely, don’t be surprised when your Brazilian counterparts erupt into emotional exchanges among themselves. Such passion is not to be seen as outright dissent but as part of the histrionics that accompany much of life in Brazil.

Brazilians aren’t shy about bargaining, and they tend to grant concessions only toward the end of negotiations. While the pace here may be quicker than in otherSouth American cultures, don’t expect lightning fast results. If your schedule becomes known, time constraints will be used against you. If you’re unfamiliar with the commercial landscape, use an intermediary to guide you to the proper contacts. There’s a very large social component to doing business, and meeting the right people will not only lead to fruitful negotiations but will also ensure long-term viability of the project.

For all of their formality and relationship building, Brazilians have a reputation for loading a lot of dubious factual information into the early negotiations. It’s their way of keeping you interested while supplying the requisite wriggle-room if things go sour. They’re expecting the same from counterparts, participation is up to the individual negotiators.

Regardless of what your hosts may say, get everything in writing, with as many specifics as possible. Never assume that you’ll be able to work out those irksome details later or that business can be conducted on a handshake alone. While legal protection for foreigners is good by developing market standards, there’s little advantage in putting it to the test.

CHINAcommercial environmentChina is attempting to become a world economic power but still suffers from substandard GDP per capita and infrastructure. Commercial law is nascent and highly favors domestic companies. However, since little commercial law exists, asystem of quanxi (connections) functions in lieu of contract enforcement. Foreign companies invest in China primarily for its cheap labor rates and in thehope of accessing future consumers as per capita wealth increases. Most large companies are either state owned or family run. Foreign domination of joint ventures is rare. Corruption, both public and private, is rampant and virtually unavoidable.

common strategies- FOR TRADE: Deceptive, Indulgent, Social, Exploitative- FOR INVESTMENT: Deceptive, Impassive, Departmental, Hierarchical

notes for negotiators:The Chinese have little compunction about deceiving foreigners. Don’t rely on the other side’s sense of fair play. The Chinese recognize how interested foreigners are in accessing this developing market. Investors may be led into agreements that are difficult to either execute profitably or to dissolve quickly. Profit repatriation is difficult at best and should be an early part ofthe agenda.

Don’t wait until the end to find how much you can take back home. When buying, write explicit quality requirements into trade deals, as quality tends to taper off after the first delivery. When selling, extend no credit whatsoever. If all of the people who are still owed money by Chinese importers got together, they could apply for nationhood.

Friendship, or the appearance thereof, is a common ploy to secure concessions. There may be ulterior motives behind lavish dinners and invitations to meet family members. Accept these events as gestures only.

Competitors are regularly pitted against each other, sometimes at the negotiating table. Letting foreigners fight over them is a long-standing tradition here, but now the Chinese set the terms. Some form of graft will be built into the agreement.

Don’t assume that the person who appears to be in charge is actually in charge. Verify, in writing, important issues before moving on to other parts of the agenda. Referring to a two-day old spoken statement will have no weight unless,of course, you said it.

Never use a translator supplied by your Chinese counterparts. If you’re a nonAsian and speak Mandarin fluently, don’t be surprised if the Chinese pretend they can’t understand you. The difficulty of their language has been a tactical tool for centuries, and they resent having the code broken. Whenever their statements appear contradictory, it will be blamed on an interpreter. Take notesand be prepared to exploit inconsistencies across the table. They’ll be doing the same.

Patience is greatly appreciated, while anger and impatience are considered signsof instability.

Never reveal proprietary information until a deal is completed. The Chinese don’t recognize ‘nondisclosure agreements.’ In all negotiations, make it clear early on that you’re ready, willing, and able to say ‘no’ to their proposals.

The Chinese make much of the ‘harmonious relationship,’ and the leader never delivers ‘bad news.’ The downside is always delivered late in the negotiations by a second-in-command often at the banquet that follows a contract signing. Damage can be limited (not eliminated) by early statements to the effect that the contract will be subject to renegotiation if ‘unforeseen’ circumstances change the deal’s outcome.

EGYPTcommercial environmentCompared to the other Arabic oil-producing nations, Egypt has a surprisingly lowGDP per capita, US$ 600. Its other big industries, textiles and food processing,are keeping the country afloat, and the government has recently held off an Islamic fundamentalist movement that threatened another big money maker’tourism.The country has been a crossroad for international trade for millennia. But, dealing with foreign investors is quite another matter, one that’s very much bound up with the nation’s colonial past. While not sporting any high-growth

economic figures, Egypt still attracts a great deal of both trade and investmentinterest.

common strategies- FOR TRADE: Aggressive, Secretive, Exploitative- FOR INVESTMENT: Consensus, Jekyll and Hyde, Self-Righteousnotes for negotiators

Haggling is a national pastime in Egypt. Foreign traders had better come prepared for some schooling in how to bargain. Nothing has a set price from dayto-day, and a sharp haggler is greatly respected. In fact, not attempting to bargain aggressively will be taken as an insult.

The legacy of Egypt’s British colonial past is a bureaucracy not unlike India’s.Lots of delays, official reviews, and rubberstamping of documents will be part of any medium to large project. Use Egyptian contacts to help smooth the way or circumvent officialdom, but in no way should the bureaucracy be confronted or criticized. Once it closes ranks against your project, Moses himself couldn’t find an escape route.

While you may admire punctuality, your Egyptian counterpart will most likely have a more relaxed approach to time. Lateness and postponements aren’t unusual and they fit in quite well with the local tradition that whatever happens was meant to be. Arrange appointments in advance of travel and confirm them regularly upon arrival in-country.

By North African and Middle Eastern standards, the Egyptians are quite familiar with modern business practices, although they don’t always apply them to local enterprises. Their own system is somewhat formal and hierarchical. Rarely are first names used among business acquaintances, and titles abound. Foreign firms are warned to have a solid agenda agreed upon before arriving at the negotiatingtable. All but the largest Egyptian firms will take their cues from what they perceive to be more successful foreign companies. Much of the Egyptian strategy is reactive, even when in a buying position.

Contracts, regardless of detail, are considered guidelines for business relationships rather than full delineations. The content of the document may be renegotiated, revised, and appended many times throughout the length of that relationship. Constant contact must be maintained with Egyptian partners and their commercial ‘temperature’ constantly monitored. In addition, government interference or outright interdiction in the negotiation or contract process mayoccur for large projects or those involving internationally recognized brands. Don’t enter into business negotiations until a fairly long period of relationship building has taken place. Having the right connections and doing business with the right people can (in and of itself) prevent a great deal of delay and expense. Intermediaries may be used early in the process, but long-term and close contact must take place on a personal basis.

FRANCEcommercial environment

The French view their business culture as singular, much in the same way that they view themselves as a special European people. Business is a means to an end, not an end in itself. The French don’t often define themselves in terms of what they do for a living. Business is rarely conducted with a sense of urgency,and personal relationships are important. The French are generally considered tobe a highly educated and sophisticated people. Well-read and cosmopolitan counterparts are appreciated. The economy tends toward the Socialist, and many of the largest industries are state owned. Social issues are often a major concern when business is discussed.

common strategies- FOR TRADE: Indulgent, Intimidating- FOR INVESTMENT: Intimidating, Hierarchical, Social

notes for negotiatorsUnless you speak fluent French, use an interpreter. Proper use of the language is a sensitive cultural issue. Even when selling, the French consider rushing tobe vulgar. The more you rush, the more they’ll slow the process down. Don’t try to out-French the French. Even if your counterpart lacks basic social graces, allow him his sense of superior sophistication. Exploit it if you choose. Corruption is tolerated rather than promulgated. If graft is part of your program, be discreet.

Be well prepared for every negotiation session. ‘Getting back’ to someone willnot do.

The French will discuss every point at length and will have a position on every topic. Avoid direct confrontation unless you’re in a strong buying position. TheFrench love debate but not intense criticism. It will be taken as a personal attack.

All French men and women fancy themselves to be philosophers. Early meetings mayhave a large component of nonbusiness discussion. Your opinions will be solicited and evaluated. Not having an opinion in France is worse than having a badly formulated one. Even if you’re in an extremely strong buying position, resist the urge to ‘cut to the chase.’

The French are notorious for coming to the table with a single strategy and its accompanying tactics. If they’ve made a completely inappropriate choice, major postponements may result while they reformulate their position. Possibly exploitable, always annoying.

This is a very social culture, and negotiators may find themselves at two-hour lunches. Drinking wine will be part of the process. Keep your wits about you. You may be wearing a $2000 suit, but it will mean nothing if you pick up the wrong silverware or shy away from the oysters.

Contracts may be long and involved, even when you are buying. All contracts mustbe completely in French, and commonly used foreign words cannot be substituted (e. g., computer).

This is the land where bureaucracy was invented. Red tape can be a big part of negotiating, especially when dealing with government-run companies. Business abounds with regulations. No matter how intense negotiations become, avoid raising your voice. Doing so is a sign of poor breeding.

GERMANYcommercial environmentGermany’s very efficient business sector is devoted to ordnung (order). It has the most expensive labor force in the world but maintains a respectable productivity level. The workforce is highly unionized, and union members sit on the controlling boards of companies. As many of the country’s firms have moved their manufacturing overseas to remain competitive, unemployment has skyrocketed. Consequently, the German government (as well as regional officials)have actively sought out foreign investment. The Germans are considered to be the powerhouse of Europe and the keystone of the European Union. While the absorption of East Germany has continued to be a drag on the overall economy, noone foresees the Germans relinquishing their leadership role anytime soon.

common strategies- FOR TRADE: Impassive, Intimidating- FOR INVESTMENT: Technical, Pragmatic, Hierarchical

notes for negotiators

Codes and regulations dominate the business environment, so be prepared to comply with a rule for virtually every aspect of your project. Contracts in Germany are even more detailed than in the litigious United States. Contracts, once signed, are strictly adhered to by all parties. When selling, make straightforward presentations. The Germans will be interested in the reasons forpurchasing goods or services, rather than the image that surrounds the purchase.

Maintain formality and observe all hierarchies. While the Germans aren’t averse to the occasional raucous social event, business-related events should be designed to maintain the dignity of all parties.

Be punctual. This goes for meetings, delivery dates, payments and social gatherings. If you’re allotted thirty minutes for a presentation, don’t exceed it. All meetings are planned with a start and a finish time. Germany is a land of precision; a lax attitude toward time is seen as an indication of general slovenliness.

German is a difficult and precise language. Translated materials must be perfector the content will be disregarded. The Germans appreciate anyone who has taken the time and trouble to master their language, but they tend to denigrate those who’ve taken half measures.

You must be thoroughly prepared to answer any and all questions regarding your proposals. The Germans have little regard for people who ‘have to get back’ to them.

The Germans tend toward a just-the-facts approach when conducting business. Introductions and preliminaries are brief, so be prepared to get right to the

point. If your technique relies on charm and guile, this country will be difficult for you to tackle. The Germans frown on workaholics (the average vacation is four weeks). Business is seen as a means to enjoy the finer things of life, not an all-consuming passion. Personal lives are kept separate from business. Avoid personal inquiries or the volunteering of information about yourhome life.

Don’t criticize your competitors or those of your German counterparts. Each company is judged on its own merits, without comparison to others. The Germans love to delve into the details of a proposal and shun ‘big picture’ Type presentations. They tend toward the hierarchical and view dissension in the ranks as an indication of poor preparation.

Statistics and charts are a mainstay of the German negotiator and are often usedto hammer home their superior technical knowledge.

INDIAcommercial environmentIndia started making the transition from socialist to market economics in the early 1980s. Its currency, the rupee, is convertible, and the heavily bureaucratic control of business by the ‘license-quota-subsidy raj’ has been greatly diminished, though not eliminated. All industries (with the exception ofinsurance and rail transport) are open to varying level of foreign investment. The stock market has a functioning oversight board and is generally more sophisticated than that of rival China. While it’s had trouble with a somewhat xenophobic nationalist movement in recent years, India is generally considered to be one of the more welcoming of the Asia’s emerging markets. Predicted to have the largest population of any nation on the planet early in the 21st century, India is ‘in need’ in virtually every economic sector.

common strategies- FOR TRADE: Social, Deceptive, Compliant- FOR INVESTMENT: Consensus, Departmental

notes for negotiatorsIndia is an ancient culture with splashes of modernity throughout its business sector. Some companies run on a strict consensus basis, while others maintain more horizontal styles. Research each company thoroughly (at the highest contactlevel available) and find out the nature of their management style. India has numerous dialects, and contracts must be written in the vernacular.

English is widely spoken and will most likely be the language of negotiation. Regardless of the efficiency of counterparts, bureaucracy at local and central government levels remains lethargic. Expect delays and kick your patience into high gear.

Avoid the use of your left hand for passing items especially food. The left handis considered unclean as it’s used by Indians for personal hygiene. Be aware that much traditional Indian food is eaten with one’s fingers, rather than with utensils.

Although it has numerous female political leaders, women rarely take part in business, let alone important negotiations. Female team members may be taken to be secretaries by Indian counterparts, and every effort must be made during discussions to establish their credibility.

Internal religious feuds and India’s colonial past are very sensitive subjects. Avoid discussing them unless they have a direct bearing on the outcome of the project.

Many large companies are family owned and operated, with upper management the purview of siblings. Don’t assume that good relations with a single family member constitutes access to the source of commercial power. Internal rivalries can be bitter, personal, and long-standing. Make associations carefully and onlyafter dutiful research. Choices, good and bad, can follow you throughout this large but closely knit country.

Indians are a warm and welcoming people who enjoy harmonious relationships. Confrontation isn’t considered a respectable form of discussion. Like many Asiancultures, directly saying ‘no’ is thought to be rude. Indians would sooner postpone meetings or send along subordinates until the message gets across.

India is very diverse and regionalized. Don’t assume that strategies that were successful in one city will necessarily work in another.

INDONESIAcommercial environmentIndonesia is the largest Islamic nation in the world. Its more than 13,000 islands and close to 200 million people are ruled by a strong central authority.Much of the commercial class is of Chinese ancestry and subject to considerable resentment by the native population. President Suharto and his immediate family are ‘mandatory’ players in any large project. Key industries are petroleum production, tourism, textiles, and mining. Indonesia is one of the rising stars of Asia and has considerable resources, both natural and human. Primarily agrarian until just twenty years ago, the country has made enormous strides toward industrialization an accomplishment for which it’s held up as an exampleto other developing Asian nations.

common strategies - FOR TRADE: Deceptive, Compliant, Brinkmanship - FOR INVESTMENT: Consensus, Hierarchical, Departmental, Indulgent

notes for negotiatorsIndonesians negotiate virtually every aspect of their daily lives, from taxi rides to groceries, so you can expect considerable haggling over even the smallest point. Part of this is a cultural norm, but much of it is an attempt towear down the opposition.

This is an Islamic culture but hardly fundamentalist. Only in rare circumstanceswill foreign businesses have to make religious-based concessions beyond basic dietary and prayer requirements.

The Indonesians are hospitable by nature but are not beyond putting a foreigner ‘in debt’ for kindnesses rendered. If you attempt to reciprocate for every indulgence offered, you may find yourself giving away important concessions for very little.

Like many societies in Asia, this one is prone to hierarchy. Managers only bargain with their equals, so you may find that negotiations take place at levels that correspond directly to job titles. The greater the number of people in your party, the more complex the discussions will become. Keep it simple. While contract signings may be treated with great hoopla, don’t assume that the document will be strictly adhered to by an Indonesian partner. Contracts are simply guidelines for the ‘harmonious’ relationship. Be prepared for the continual monitoring of the contract’s requirements.

Keep relationships healthy and avoid making the Indonesian side feel subordinate. Confrontation can cause enormous ‘loss of face,’ even when counterparts are clearly in the wrong. Subtlety and finesse must rule the day. Keep in mind that Indonesian courts and arbitrators rarely produce findings in favor of foreign companies. It’s either get along or go home.

Bureaucracy is deep in a government rife with patronage jobs. There’s no gettingaround it, and large projects will necessitate local input as to how to navigatethrough the red tape.

Bribery is a standard form of getting things done, and the price goes up if the recipient has to ask. These bribes may extend to the lowest level of transaction(you often have to make payoffs just to get your car through an intersection), so be prepared to grease some wheels, both big and small. Failure to negotiate areasonable payoff will mark your company for continuous shake-downs. If your home country has severe restrictions on bribery, you may find that a number of ‘consultation’ fees will be attached to your project. Budget accordingly.

IRELAND

commercial environment

Ireland has emerged from the shadow of being one of Europe’s ‘sick men’ To achieve the highest rate of GDP growth in the European Union. Many of the world’s high-tech companies have flocked here to take advantage of the island’s educational excellence and investment incentives. Though still fighting a battleagainst unemployment, it’s fast making the transition from agriculture to services, with many financial institutions using the workforce for back-office operations. Conflicts from British-held Northern Ireland rarely spill over into the Republic.

The infrastructure has been massively improved through the injection of EuropeanUnion funding, and no recipient country has matched Ireland’s successful implementation. In response to its Asian-like growth pattern, it’s often referred to as the Emerald Dragon.

common strategies- FOR TRADE: Compliant, Secretive, Social

- FOR INVESTMENT: Platoon, Divide and Conquer, Horizontal

notes for negotiatorsThe Irish are noted for their shrewdness and are renowned as the best horsetraders in Europe. They can drive a very hard bargain and always appear ready to walk away from the table. Ireland has been absorbing invaders for centuries and treats commercial arrivals much the same. Smiling hosts will charmeven the most hardened negotiator into making concessions thought unthinkable days before. If you’re charmed easily, watch out.

This a land of highly educated people; masters degrees abound at the managerial level. Highly technical presentations will be readily understood and appreciated. Any attempt to treat Irish counterparts as second rate will be met with much resistance. The error in judgment will be made evident quickly and pointedly. The Irish language, Gaelic, is alive and well, especially in western Ireland, but English is used for most business. Government documents will be presented in both languages. The Irish are accomplished linguists, and translators for most European languages are easily obtained.

These are a very social people, and there is no such thing as a short conversation in Ireland. Politics, religion, and many other topics are wide openfor discussion. Bear in mind that the Irish are extremely well read and will know more about your country than you will. Confrontation isn’t something the Irish fear, so don’t enter into one lightly, whether business-related or not.

The Irish have always been a clever people but have only recently had access to the capital necessary to maximize their skills. Centuries of poverty have made them very pragmatic, though not adverse to risk. Always willing to bet on a surething, they’ll give equal consideration to a ‘long shot’ if the odds are right. When making presentations, offer the upside first, but don’t worry about presenting the downside. The Irish will have no compunction about calling your bluff if they think you’re hiding something. They’re masters of secrecy themselves and can spot it in counterparts immediately.

Business and pleasure are regularly mixed, and your tongue may be loosened at the pub as part of a divisive strategy. Both guest and host are expected to ‘buya round.’ Though drinking is quite prevalent, getting inebriated at a social function isn’t considered businesslike. Enjoy yourself but stay on your toes.

ISRAELcommercial environmentStarting in the mid-1980s, Israel changed its economic model from socialist to market-driven. Given its tumultuous internal political environment and its seemingly ceaseless conflicts with its Arab neighbors, the country has managed to remain one of the most successful emerging markets in the Middle East. It’s aleader in food production, food processing, and diamond cutting. Recently both government and industry have placed a great deal of emphasis on research and development, with an eye toward making Israel a high-tech center. The governmentis very protective of domestic enterprises and issues many subsidies for start-ups. Foreign investors are rarely permitted to have controlling stakes, except

in the largest of enterprises involving guarantees of technology transfers. Israel has few natural resources; imports tend to run 40% above exports.

common strategies- FOR TRADE: Aggressive, Exploitative- FOR INVESTMENT: Brinkmanship, Intimidating, Horizontal, Jekyll and Hyde

notes for negotiators:Generally Israelis see themselves as a special people and are thus not bound by rules’any rules. Internally, this independence is accepted behavior, but it can cause conflicts in the global marketplace. Israeli negotiators will often disregard the requirements of counterparts, even when they are in a weak sellingposition. A clear reminder early in negotiations about who is calling the shots can prevent misunderstanding.

Israel exists in a constant state of controlled chaos, which Israelis refer to as balagan. Punctuality and deadlines are demanded of foreigners but not of themselves. Israelis often attribute this approach to the country’s tenuous political and geographical position and the Jewish history of rootlessness. Be prepared for late arrivals and a lack of urgency to get things done.

During discussions, expect to be interrupted repeatedly. While in most cultures this is considered rude behavior, Israelis consider it a sign of interest. Israelis are very proactive negotiators and like to anticipate their opponents’ moves. Unveiling your plans slowly keeps them preoccupied with guesswork and less focused on their own maneuvers. Sudden changes in personal style also tend to spoil their plans.

There’s very little socializing attached to business; lengthy introductions or small talk will fall on deaf ears. Israel is a great place to do business if youenjoy a brisk pace and quick yes-or-no discussions. If your strategy involves long, drawn-out negotiations with numerous postponements, Israel will be a toughnut to crack. Israeli discussions usually take the form of straight talk called ‘talking dugri,’ which is a no-frills, in-your-face approach to repartee. They’ll have little compunction about calling your proposal unworkable or poorlyresearched. Expect no sugar coating. However, don’t make the mistake of responding in kind. Israelis are very thin-skinned when it comes to foreigners and their criticisms. Don’t underestimate the role of Jewishness in doing business here. If you or members of your team are Jewish, play it to the hilt. If neither case is true, avoid discussion of religion. Don’t try to disregard the fact that preference will be given to Jewish-owned businesses and their representatives. Finding and fostering the right connections in Israel will result in long-term success.

Avoid discussions about Middle East politics or the founding of Israel. You may be sounded out on this topic by Israeli hosts, but it’s best to avoid the bait. Keep the talk focused on business.

ITALYcommercial environmentItaly is often considered a problematic member of the European Union. Its volcanic domestic politics, frequent bouts with inflation, mounting public debt,

high unemployment, and confiscatory tax rates (51 percent) have combined to makeit almost impossible for the country to meet its European Monetary Union (EMU) goals. Despite these problems, Italy has turned in some surprising domestic market successes. Its manufacturing, auto, and clothing industries have continued to make progress, while high-tech companies are burgeoning. Italy tends to run trade surpluses (10 to 12 percent), and non-EU investors will find that acquiring an Italian partner is the most efficient way to gain market access.

common strategies- FOR TRADE: Social, Compliant, Exploitative- FOR INVESTMENT: Consensus, Divide and Conquer, Social

notes for negotiators

Time is not of the essence in Italy, but punctuality is appreciated. Schedule meetings far in advance and confirm them upon arrival in-country. Only deadlinesthat are repeatedly insisted upon will be met.

Connections are very important, a process the Italians refer to as clientelismo.This amounts to someone, or some company, giving a good reference about you to your potential counterpart. These are very personal references, much deeper thanthe standard letter of introduction. These connections take some time to developas personal integrity and loyalty are at stake.

Italy is highly regional (there’s very serious talk of the country splitting into three politically separate areas); much research and relationship building must precede any investment move. Even with simple trading, on-the-ground research is recommended. More so than most other EU countries, Italy will require a patient outlook when approaching business deals. The Italians like to do business with not just friends but respected friends. It may take a while to gain their confidence, but the effects will be long lasting.

The Italian manufacturing sector is known for a high level of quality and accompanying prices. While cost control is everyone’s concern, any indication that you want to do something ‘on the cheap’ will get a poor reception. It’s allin the phrasing, and interpreters have to be well-schooled in your country’s vernacular. Italians are impressed with counterparts who share their cosmopolitan tastes. Expressing a genuine appreciation of art, music, food, and fashion will keep you in good stead with the locals. Avoid the just-here-on-business approach. Count on participating in a good number of social events and lengthy meals as part of business protocol. When it’s your turn to reciprocate, seek the aid of a local hoteliers or restaurateurs are good sources.

Italians can be argumentative about virtually everything. The raising of voices and flailing hand motions are national pastimes. Don’t be fooled. This is just passionate discourse, not signs of anger. It’s rarely directed at counterparts, but witnessing such an interaction across the table may give the wrong impression about the cohesiveness of the other team’s position.

JAPANcommercial environment

It’s a given that the ‘bubble economy’ of Japan burst long ago. Today, Japan’s economy is what may be described as ‘sputtering.’ However, the country is a longway from destitution and will hold its status as the second-largest economy in the world for some time to come. Japan is slowly (some say almost imperceptibly)moving away from its more interventionist approach to market economics and is breaking down the protective walls used for decades to shield its now-powerful industries. Illicit behavior in both the government and private sectors is now regularly exposed in a culture that, just ten years ago, would have considered the process unthinkable. Most observers regard this change as a sign of a more mature, less insular Japan.

common strategies- FOR TRADE: Consensus, Impassive, Ambivalent- FOR INVESTMENT: Consensus, Divide and Conquer, Deceptivenotes for negotiators

Letters of Introduction from a chukaishu (well placed go-between) are essential for doing business here. As in much of Asia, having connections in Japan is the only way to get through the front door, unless you represent an internationally recognized brand name.

Individualism is not a characteristic of Japanese negotiators; they rarely come to the table in groups smaller than three. If you’re a solo act, you’ll still beconfronted with a team even for simple trades. Be prepared for a number of informal trade barriers and restrictions on foreign investment they’ll make no apologies for their protective system. Meetings will be very formal and the company hierarchies will be observed. Keep in mind that the person doing the most talking for the Japanese side will most probably not be the person in charge of the negotiations. This permits all mistakes to be covered by ‘speakingout of turn’ excuses and prevents the company from making commitments until they’ve seen the entire proposal. The Japanese will not discuss points that are not part of the prearranged agenda.

Small talk will be kept to a minimum and inquiries into personal lives will rarely be made or accepted. Meetings will be highly orchestrated; the Japanese don’t like surprises. Have your presentation materials translated into Japanese and keep them detailed.

Japanese negotiators are famous for their ambiguous responses to proposals. Theyview vagueness as a form of protection from ‘loss of face’ in case things go sour. Contracts are viewed as guidelines and any problems are arbitrated, ratherthan litigated. Contracts will almost always include a jijo henko clause that permits complete renegotiation if circumstances change. The system works well inJapan but many foreigners, especially Westerners, find it disconcerting. Consensus is a life-style in Japan and the ringi system of moving information upand down the chain of command can be a true test of patience for foreign companies. The Japanese aren’t noted for being able to ‘think on their feet’ So don’t expect quick answers to any question or problem.

Cost of capital is very low in Japan (often less than 1 percent), and they can afford to take a long-term approach to profit making. The Japanese have traditionally sought market share over quick returns and they expect foreigners

(especially investors) to share their commitment to long relationships. Be forewarned: a ‘quick’ return on investment in Japan is about ten years. The Japanese maintain harmony at all costs and will smile the most when they’re the least comfortable. At the negotiating table, a toothy grin is a sign of trouble,not acquiescence. If your proposal is unacceptable, you won’t be told ‘no’ in a direct manner. Postponements and requests for further research should be interpreted as a prelude to failure.

MALAYSIAcommercial environment

Thirty years ago, Malaysia was little more than rice paddies and rubber plantations. Today, it’s constructing its ‘high-tech corridor’ and touting the world’s tallest building. Essentially an Islamic (though secular) nation, it hascombined the innate talent and energy of its native population with the mercantile strength of its Chinese minority to produce one of the economic miracles of Asia. While it still maintains strong agricultural, petroleum, and rubber manufacturing components, this nation has hitched its wagon to high-tech and is positioned, physically and economically, to become the major technical player in ASEAN. Though it suffered a recent de facto currency devaluation, the economy remains strong and attractive to investors and traders alike.

common strategies- FOR TRADE: Aggressive, Impassive, Ambivalent- FOR INVESTMENT: Consensus, Hierarchical, Jekyll and Hyde

notes for negotiatorsMalaysia has a very formal, almost ritualized, culture. In a country with a potential for numerous ethnic and religious conflicts, the preservation of ‘face’ and the importance of mutual respect keep things running smoothly. The country’s colonial past makes Malaysians highly suspicious of foreigners-at least initially. When in doubt, stick to the formal and err on the side of appearing overly respectful. If it’s too much, your Malaysian counterpart will discreetly make it known.

As in much of Asia, the direct approach is considered rude and lacking in finesse. Pleased reactions will be downplayed and negative ones completely covered with distractions and forced smiles. This isn’t lying, per se, but a wayof avoiding embarrassment for both sides. Until something is in writing, assume ‘yes’ means ‘we can continue discussions,’ and don’t ever expect a direct refusal. The Malaysians are a detail-oriented people; discussions may drag on asevery point is exhaustively dissected. Foreigners can take such nit-picking as asign of great interest. Short discussions mean it may be time to reschedule yourflight for an earlier one.

Consensus decision making and hierarchical lines of communication will be an additional drag on negotiations. Even the most powerful head of a Malaysian company will submit to group thought. You can’t rush it and you can’t avoid it, so just allow time for it.

Most large companies are Chinese owned, but by government edict they must have anative Malaysian component. Most of the ethnic Chinese have taken Malaysian-

style names to downplay any resentment. Foreigners should avoid any mention or exploitation of this rift, and it’s a criminal offense to incite ethnic rivalry.As far as you’re concerned, all counterparts are simply citizens of Malaysia.

Most business discussions will involve some form of socializing, usually over a meal. The Malaysians are rightfully proud of their cuisine and see it as a national treasure. Don’t expect alcohol to be served unless the major players are nonIslamic. If your in-country stay is lengthy, you’ll be expected to reciprocate with a banquet of your own. Seek local help in setting this up, as the protocol is fairly rigid.

Contracts are considered secondary to the quality of the personal relationship of the principals. You must keep the relationship strong and current if you expect to succeed here. Almost all contracts contain some form of escape clause to release both parties if things go sour.

MEXICOcommercial environmentMexico has been economically and politically turbulent over the last ten years. Massive currency and debt problems have been exacerbated by political assassinations and corruption at the highest levels of government. None of this,however, has seriously damaged the country’s attractiveness to foreign investors.

From the maquiladoras established just inside its borders by its northern neighbors to the growth of Japanese auto plants, Mexico continues to make a serious contribution to both NAFTA and world trade. Low labor rates and liberal (by other emerging market standards, at least) foreign investment packages further Mexico’s drive for success.

common strategies- FOR TRADE: Compliant, Self-Righteous- FOR INVESTMENT: Hierarchical, Consensus, Social

notes for negotiatorsFormality marks Mexican business at all levels. The system is very hierarchical,and communication is directed downward. Only ‘equals’ address each other on familiar terms and only after a lengthy relationship. Meetings consequently takeon a very stilted air and much care will be given to seating arrangements and introductions. Mexican society, both cultural and commercial, puts a great deal of emphasis on the showing of proper respect among its participants. Slights, whether real or imagined, are potential dealbreakers, and Mexicans are noted fortheir sensitivity to foreign opinions. The smile that looks like a smirk or the fatigue that’s mistaken for boredom can bring the most lucrative deal to a screeching halt. Even investors and buyers must steer clear of these sensitivities.

Relationships are extremely important here and even short-term business will require them. The establishment of these palancas is part of the system of reciprocity that’s at the economy’s core. There’s little doubt that some of thisrelationship building will result in graft; foreign visitors should be prepared for that contingency.

Mexico has a well-deserved reputation for bureaucratic lethargy’the result of the entrenchment of the PRI as the nation’s ruling party. While the situation isimproving, projects involving foreigners (especially U. S. citizens) receive extra scrutiny. Even barring government intervention, life is slow-paced and patience will be required for even small trades. Those in a hurry are advised tolook elsewhere for business opportunities.

Attitudes toward punctuality and deadlines are nowhere near the extremes of the mañana stereotype, but Mexicans do view work and business as a means rather thanan end. If punctuality or a deadline are important, that sense of urgency must be instilled early in the relationship. Mexican businessmen will readily agree to deadlines and payment schedules that (in their eyes, at least) will be regarded merely as guidelines.

Contracts are a matter of personal interaction in Mexico, and this attitude is reflected in the scant commercial law. Contracts are only honored among ‘friends’; lawyers hold little sway. Foreigners should be reminded that Mexican courts are heavily weighted toward domestic companies.

Mexico is the land of machismo, with male dominance and gender roles placing high on the list of sensitive issues. Female foreign executives may find the going very tough when attempting to maintain their business role, and they’ll see no female counterparts across the table. Mexican men simply don’t take direction from women and they have little respect for men who do. Bucking the system will unquestionably have a deleterious effect on the deal.

PHILIPPINEScommercial environmentThis island nation has come a long way from its status as the ‘sick man’ Of Asia. It has learned a great deal from the mistakes made by the other emerging markets of ASEAN and has sought growth at a manageable pace. Foreign investment laws have been revamped to grant majority ownership even in the banking industry. The country has pursued build-operate-transfer-style infrastructure investments to solve its energy and communications needs while attempting to avoid environmental degradation. It remains an agrarian-based economy with pockets of industrialization, and it sees itself as having a productive future in shipping and tourism due to its prime location in the Pacific Rim. The government has instituted a ‘Philippines 2000’ program to emphasize deregulationand modernization while creating numerous Export Processing Zones and Special Development Programs throughout its far flung archipelago.

common strategies- FOR TRADE: Compliant, Secretive, Social- FOR INVESTMENT: Indulgent, Hierarchical, Deceptive

notes for negotiatorsNegotiations in the Philippines are conducted in a very formal manner. Company titles are very precise and are used to maintain the hierarchy. Locals will takeon a very rigid manner when dealing with foreigners in an effort to preserve what they believe is a professional appearance.

The Filipinos are strong believers in forging relationships and maintaining pakikisama (smooth relations) at all costs. Confrontation is unthinkable and a sign of disrespect. Part of this process is the utang na loob (reciprocity) system whereby one business (or political) connection leads to other, more lucrative, deals. Acceptance of a favor or reference will call for a larger one in return. Beware the Filipino bearing gifts’a simple ‘thank you’ will not suffice.

While the government has made a genuine effort to attract foreign investment, itstill takes action to override contracts and nullify their terms. This is all part of the ‘Filipino First’ policy that it has pursued in recent years to protect domestic industries from foreign ‘exploitation.’ The policy usually comes in to play when lucrative deals are given to the more competitively pricedforeign firms. Having pakikisama with powerful people will limit your risk of being victimized by this policy.

Tsismis (gossip) is both a hobby and a business weapon. Competitors, both foreign and domestic, can be the subject of the most ridiculous rumors imaginable. This effort to set up intrigues, thereby derailing negotiations or even contracts, is a standard procedure. Keep an eye on your pakikisama.

Like many former colonies, the Philippines puts a great deal of emphasis on maintaining one’s amor propio (self-respect) when dealing with foreigners. If you’re buying, make sure you do nothing to demean your counterparts as the revenge will be in missed deadlines and quality problems. If you’re selling, learn how to bend over backward.

Laws of all kinds are very flexible in the Philippines and are applied in directproportion to the amount of money at stake. Lagay (bribery) is very much a part of any business, especially big business. The money will be paid in some form oranother, and individual negotiators must be prepared to satisfy both their Filipino counterparts and their home country judiciary. Leave your moral baggageat home and pack extra savvy.

Higher education and advanced academic degrees are held in very high esteem. If you have some academic initials to include after your name, do so and expect favorable results. When introduced to counterparts with similar distinctions, inquiries into the particulars of their education will be met with enthusiastic responses.

POLANDcommercial environmentPoland has moved from the sluggishness of a centrally planned economy to become the strongest commercial entity in Eastern Europe. Its growth figures are on parwith the emerging markets of Asia, and its government is making a sincere effortto dismantle unproductive state-owned companies. Poland has a strong iron and steel sector, as well as formidable machine manufacturing facilities. It still imports a great deal of fuel and foodstuffs, often in exchange for manufactured goods. The Poles have a dynamic culture, clear-cut ideas about their economic future, and little desire to permit a repeat of the colonization that plagued their past.

common strategies- FOR TRADE: Intimidating, Stubborn, Social- FOR INVESTMENT: Consensus, Departmental, Social

notes for negotiatorsWhile its culture and language are quite old, Poland as a nation is relatively young, and it has only recently emerged from under the shadow of the Warsaw Pact. Foreign negotiators must recognize that this is a country with a mission to make up for lost time. Don’t start negotiations unless you-re serious. If you’re here to do research, make that clear.

Poland achieved a fairly high state of industrialization under Soviet dominance and is now looking for technical development. Negotiators will be pressed for technological transfers, not just for investment funds and plant construction. It’s best to hold this concession until all other points have been dealt with effectively. For all of their desire to move ahead, the Polish decision-making process is woefully slow. Consensus rules the day and communication is rigidly hierarchical. Much of their internal debate may take place away from the table, but it’s time consuming nonetheless. Any postponements will most likely be the result of internal problems and not necessarily the result of a proposal’s shortcomings. Foreign negotiators from longtime capitalist economies must keep in mind that properly prepared financial statements and property valuation are new concepts.

Trying to get an accurate answer about what the counterpart’s company is worth or its potential for growth will be just that a trying experience. It may seem that you’re being intentionally deceived, but for the most part it’s lack of training. If such documentation will be required, get preliminaries prior to travel so that you’ll know how much work is ahead of you.

Don’t arrive in Poland with only a single plan for trade or investment. Develop a variety of positions that can be presented as the negotiating terrain changes.Be punctual and be prepared. This highly educated population sees punctuality and follow through as indicators of respect. Remember, this is the former SecondWorld, not the Third World.

Socializing, especially drinking, is a big part of business life. If you’re not a big imbiber, keep a low profile; it’s better to abstain than to make fool of yourself. Women are rarely found at the managerial level, although the Poles will not object to female counterparts. Still, after-hours socializing may not include these female executives.

RUSSIAcommercial environmentRussia is the largest sovereign nation on earth, with a wealth of natural resources that alternately suffers from exploitation and neglect. The fall of the Soviet empire left Russia with massive debts and a currency that was inconvertible until just recently. Even now, U. S. dollars and German marks are the preferred scrip. Russia has made enormous strides in its effort to throw offthe burden of central planning. Its ‘shock treatment’ of the early 1990s broughtenormous suffering but is now hailed by economists as the preferable method (compared to China’s slow changeover to market economics). Solid predictions of

long-term, high single-digit growth are attracting large but prudent investmentsin many former state owned monopolies. Russia’s only black eye during this process has been the steady rise of the mafiya in business.

common strategies- FOR TRADE: Aggressive, Intimidating, Deceptive- FOR INVESTMENT: Hierarchical, Social, Intimidating, Brinkmanshipnotes for negotiators

Russians may be new to international commercial negotiations but they’re old hands at negotiating with foreign powers. They have clear agendas (although you may never see them) and no strategy or tactic is off-limits. Russia is no place for amateurs. Send your best.

Arrive at the table with clear objectives and a hard-line stance. Make few concessions early in the discussions, but know that your Russian counterparts will make numerous, inconsequential ones. If you play by their rules, you’re doomed. Remember that Russia needs practically everything’including you. The Russian people are extremely warm and gregarious. It’s very difficult to dislikethem on a personal level and this can be used against you. Parties, dinners, andintroductions to friends and family, while socially standard, can lull the foreigner into a belief that they’ll be treated as friends at the negotiating table.

Enjoy yourself but separate business from pleasure.

Much of the difficult discussion at the table will be about how the buyer pays the seller. If the Russians are selling, they’ll want to be paid in advance witha ‘hard currency,’ which to them is just about anything but the ruble. When they’re buying, payment will be delayed and you can guess what the preferred currency will be. Foreign investors should never, under any circumstances, agreeto single block transfers of cash. Keep the transfers small and dependent on preset benchmarks.

Although it has left central planning behind, the Russian decision-making apparatus is very bureaucratic. Even the simplest deals will take a great deal of time when compared to other industrialized powers. Numerous trips will be required for medium to large ventures.

Just as the geography lies between Europe and Asia, so does Russia’s attitude toward contracts. It’s best to get as many details written into the document as possible, in the hope that most will be complied with during the course of the agreement. Important points must be continually emphasized, as the Russians tendto look at the totality rather than the details of a contract.

The mafiya is a major player in Russian business. Foreign businesses are regularly ‘shaken down’ and their personnel ‘roughed up’ by its representatives.Don’t expect that you’ll be able to exact any kind of pressure against them at the negotiating table. They’re a de facto subgovernment and must be courted accordingly. Bribery is as common as taxation. If you can’t deal with this unsavory aspect of business, Russia isn’t for you.

SAUDI ARABIAcommercial environment

Saudi Arabia is both the center for Islamic culture and a wealthy petro-state headed by a royal family with absolute power. Oil is its only industry, and its huge land mass contains only 15 million people. Due to its wealth, the majority of the labor force (and the population) is expatriate, imported from the poorer nations of Asia. The nation is dependent on foreign firms for the majority of its infrastructure and its construction. The Saud family oversees all major commercial deals and has tried to move the economy into the steel and cement industries with limited success. Most private businesses are services directed at the petroleum and petro-chemicals industry.

common strategies- FOR TRADE: Impassive, Arrogant, Social- FOR INVESTMENT: Hierarchical, Stern

notes for negotiatorsMost of the people you’ll be negotiating with will be directly associated with the royal family. While your punctuality will be taken as a sign of respect, your counterpart’s lateness is a sign of power. The Saudis rarely see themselvesas ‘needing’ foreigners and do little to ingratiate themselves.

The Saudis are very wealthy but unwilling to admit to their limited business skills when it comes to dealing with nonpetroleum issues. Impassivity and stern countenances often belie confusion. It’s best to permit the Saudis their facade of shrewdness, as long as you understand its depth.

Your Saudi hosts will want to ‘size you up’ before getting down to business. Social banter will precede business; it should be left to the host to decide when there has been enough chit-chat. This social aspect of business requires that a lengthy ‘courtship’ predate the actual deal. All business, regardless of contracts, is conducted on a person-to-person basis.

The Saudis see themselves as a special people. They take a very arrogant, almosttake-it-or-leave-it, attitude toward foreigners. Most of the country’s wealth came after World War II, and its people are still trying to overcome a past in which they were subject to foreign rule. Negotiators must understand the cultural background in order to understand their counterpart’s posturing.

This is an Islamic (though not fundamentalist) state and home to the most sacredsite in the religion, Mecca. Usury (the charging of interest for loans) is forbidden under Islamic law. Therefore, negotiators need to come equipped with avariety of imaginative financial packages in order to comply. Islamic banks don’t charge interest but become partners in the project, thereby fully risking their investment. Bargaining usually starts at an artificially high level when the Saudis are selling and below ground level when they’re buying. Don’t be put off by these sometimes ridiculous offers. It’s just a traditional starting pointand is used to provide the maximum room for maneuvering.

Women have absolutely no role in Saudi business. Bringing female executives to the negotiating table to wrangle with Saudi counterparts may spell disaster. If

your company wishes to force the issue, do so only after performing in-depth research into the local customs regarding the appearance of women in public. Even the U. S. military had to make concessions on this point during the Gulf War’and they were in the strongest of ‘buying’ positions.

SINGAPOREcommercial environment

Singapore is often held up as an economic model for other Asian countries. Strict civil and criminal laws are matched by regular government intervention incommercial activity. Its meteoric rise as a commercial power in Asia was funded largely by outside groups.

Singaporeans recently fought international funding agencies in an effort to avoid being classified as a ‘developed’ nation and the subsequent loss of funding avenues. This continued dependence on subsidies doesn’t keep the city-state from attracting private investment. It’s a shipping and transportation powerhouse, and its wealthier companies are very active in investment throughoutAsia.common strategies- FOR TRADE: Aggressive, Impassive- FOR INVESTMENT: Secretive, Consensus, Exploitative

notes for negotiatorsSingapore is a former colony and its independence is relatively new. Singaporeans are very suspect of outsiders, especially Westerners, and fear being bested at the negotiating table as much for the economic loss as the perceived loss of status. When you’re winning, avoid any appearance of smugness.Pay close attention to details. There’s scant legal protection for foreign companies here, and all loopholes will be exploited massively. Don’t be shy about getting everything in writing, as your counterparts will be relying on your lack of confrontation to get their way.

The Singaporeans are practitioners of realpolitik and don’t put much emphasis onthe value of the personal relationship. While socializing may be part of the negotiation process, it’s something that will be used to lull the visitor into afalse sense of trust. The smiling face that treated you to dinner last night is the grimace that meets your gaze across the negotiating table today. Singapore is a mixture of Chinese and Malay cultures but its pace is more on par with thatof Tokyo or New York. Deals often move along quickly, and the tempo may quicken if they fear they’re losing control of negotiations. Set a comfortable pace and stick to it, and under no circumstances should your counterparts know when you’re pressed for time.

If you’re selling, start high and work down. Starting off with a ‘fair price’ willget you nowhere. If you’re buying, assume that the price the Singaporeans areasking for is far higher than the one they expect to get in the end.

Arrive at the table with many options, including the possibility that this roundof negotiations may fail. Singaporeans like to drive hard bargains and they

have no mercy for counterparts who have a do-or-die negotiating mission. If theysense that you have no alternatives, expect a good hammering.

English is the language of business here and its study is a mandatory part of education. Older businesspeople may not be as fluent as their younger subordinates. Singapore is very cosmopolitan, and interpreters for most languages are available locally. Keep in mind that ‘misinterpretations’ are a standard way for Singaporeans to cover mistakes in their tactics.

Contracts are taken very seriously in Singapore and aren’t meant to be broken orcontinuously renegotiated. The contract may also contain language about how to maintain harmonious relations with your new Singaporean partners. Corruption is minimal, especially when compared with the rest of Southeast Asia. The country has a very high GDP per capita and bureaucrats are well paid. Foreign negotiators offering bribes are dealt with harshly. This country is lawabiding to the nth degree. In fact, some expats have nicknamed Singapore ‘Disneyland with a death sentence.’

SOUTH AFRICAcommercial environment

South Africa spent many years in a state of international embargo and ‘divestment’ by foreign firms. The end of apartheid has seen the return of investment and the restructuring of the nation’s industries, but results have been far from stellar. High crime rates coupled with the induction of inexperienced managers into top positions has made South Africa decidedly unattractive to all but the most altruistic. It’s rich with mineral resources and even in its current state continues to be the most industrialized of Africannations. South Africa is also touted as having a bright future in shipping, due to its locale. Many investors are waiting for the cultural and political dust tosettle before making a final assessment of the nation’s potential.

common strategies- FOR TRADE: Pragmatic, Stern, Social- FOR INVESTMENT: Consensus, Hierarchical, Self-Righteous

notes for negotiatorsThe business atmosphere is as racially charged as South Africa’s politics. Many new managers and CEOs are black and view their role as establishing a new order.

Some take a very self-righteous view toward foreign investors, whites in particular. Visitors may play to this perception for advantage or downplay it altogether. Confronting or disparaging it will have disastrous effects. White-run companies, for their part, refuse to be held responsible for the history of apartheid and view opinionated foreigners as meddlesome. It’s best to keep opinions on racial topics to yourself.

South Africans of all colors are somewhat new to the international arena and many believe that the outside world needs them more than South Africa needs foreigners. Don’t be surprised if you encounter take-it-or-leave-it attitudes across the table even when you’re buying. All negotiations should start off with

a clear picture of how both sides stand to benefit from the completion of the deal.

This is a nation used to self-sufficiency, and its businesspeople tend to bristle when they feel they’re being pressured. Trying to apply artificial deadlines or ultimatums will only further delay the process. South Africans likestraight talk and low-key sales approaches. When South Africans are in a strong buying position, they’ll intentionally slow down the pace of talks in order to extract concessions. Socializing is a big part of South African business protocol. Attending sporting events, after-hours partying, back-country tours, and even hunts are used as a way to ‘size up’ foreign counterparts. If they don’t like you personally, you may find it difficult to make headway at the negotiating table. This isn’t a litigious society, and businesspeople here don’tlike to quibble over details. Bringing an army of lawyers to the table will not be of great benefit. Contracts are composed very much along European lines, and South Africans prefer to allow the quality of the relationship to fill in any vagaries. English is the language of commerce; interpreters for many European languages are readily available. Afrikaans businesspeople, who speak a form of Dutch in addition to English, will often bring their own translators to meetingswith foreign companies.

SOUTH KOREAcommercial environmentThe Republic of Korea (ROK), as opposed to the Democratic People’s Republic of Korea due north, has made enormous strides in the last few decades and is now one of Asia’s powerhouses. It’s striving to become more of a global player and less of an Asian one. Modeling themselves on the success of their rival, Japan, the South Koreans continue to use their central government as the overseer and occasional planner of the nation’s major industries. But moving quickly from an industrial base to technology has caused the South Koreans to suffer growing pains. The country has a number of Special Economic Zones set up to entice foreign investment as well as technology transfers. Despite its outward-looking commercial policies, the South Koreans still regard foreigners, of all types, with suspicion.

common strategies “- FOR TRADE: Aggressive, Intimidating, Secretive- FOR INVESTMENT: Consensus, Divide and Conquer, Deceptive

notes for negotiators

South Korea still maintains an air of siege mentality in its approach to foreigners. These are a tough people who will go toe-to-toe with anyone regardless of size. South Koreans have zero compunction about signing agreementswith which they have no intention of complying. Foreigners are meant to be fleeced and there’s no shame in it. If you sign a contract in the ROK be prepared to supervise its compliance on a regular basis.

Wearing down an opponent through constant repetition and lengthy negotiation sessions is a time-honored practice. It’s also a way of making sure that every detail has been covered. Mistakes by Korean managers are dealt with severely, especially if they cause the company to ‘lose face’ at the hands of a foreigner.

Being direct isn’t considered a Confucian virtue; thus, such behavior is incompatible with Korean business practices. Even if your counterpart is tellinga bold-faced lie, diplomacy must be your response.

Koreans often make emotional pleas part of their negotiating style. They’re also not beyond painting themselves as poor, humble peasants, even though they have one of the higher GDPs per capita in Asia. If you demonstrate any compassion, it will be tapped again and again with no hope of reciprocation. In reality, the Koreans only respect hard-line, strong opponents.

Koreans always negotiate in teams, and they’ll always attempt to be numerically superior. Exploiting dissent or contradictions in foreign counterparts is a common ploy. Unless your team is composed of highly skilled Cowboys, don’t let anyone get separated from the group. The weakest members will be culled first, so keep a special eye on novices.

Much of the ROK’s success is the result of sacrifice by the general population.

Koreans work hard and play hard. Negotiations will be exhausting and afterhours socializing will be more a test of fortitude than a chance for relaxation. If you’re not willing to gun pei (raise the cup) until the wee hours with counterparts, it’s best to decline altogether.

Women play a very subservient role in Korean business and will only appear at negotiations as secretaries or interpreters. Visiting female executives will have to make a special effort to make their status known. Female negotiators, regardless of rank, will not be invited along for the after-hours carousing.

SWEDENcommercial environmentSweden is the most socialized country in the world, with close to 65 percent of its economy being in the public sector. Consequently, it also has one of the highest tax rates in the world, just lowered to 50 percent. Sweden’s once highlytouted social welfare system, folkhemmet, has taken its toll on the economy and unemployment runs above 8 percent. Its major industries are steel, automotive, precision machinery, and wood products. This densely populated country is very dependent on foreign oil and imported foodstuffs. Foreign investors have been continually attracted to the highly skilled and educated workforce but are oftendeterred by what are viewed (at least by outsiders) as confiscatory taxes.

common strategies- FOR TRADE: Pragmatic, Social- FOR INVESTMENT: Impassive, Horizontal, Technical

notes for negotiatorsMake appointments well in advance and be punctual. Rest assured that Swedish counterparts will do the same. These are a precise and disciplined people, and they expect the same from those wishing to work on their turf.

The high level of education makes technical acumen quite common, and theSwedes are reknown for their engineering skills. Presentations should be detailed with additional data at the ready. Keep proposals realistic and play up

the pragmatic aspects. Exaggeration or melodramatic presentations will be met withclassic Scandinavian indifference.The Swedes are tough bargainers but they rarely haggle. Their approach is to remain staunch in the own position while constantly demanding concessions from counterparts. They will comb through the details of your proposal looking for loopholes. Be prepared.

This is a very formal, law-abiding society, and bribery is completely out of thepicture for negotiations. If your strategy relies on conducting business under the table, you’ll find yourself alone under there, or worse, incarcerated.

Upper-level Swedish managers often delegate a good deal of decision-making authority to middle-level management. Don’t assume all power is at the top and do your research to make sure that you have decision makers sitting across the table from you. Many Swedish companies use the executive suite as a preretirement holding area. A company president may be so in name only. Contracts are very detailed; expect them to be followed to the letter. The Swedes will expect the same from counterparts. While this seems quite efficient,be reminded that only that which is in the contract will be attended to and little more. Swedish counterparts will most likely request to see your entire proposal before coming to the negotiating table. This is not just to limit surprises but an efficient use of time. It also serves to avoid potential conflicts or confrontations’both highly undesirable here.

The Swedes like to combine business with pleasure but not of the raucous type. Business meals will be fairly formal and toasting will be moderate. Avoid all signs of inebriation. Women make up 48 percent of the workforce and hold high positions in government and business. Contrary to the image of sexual abandon, Swedish men actually maintain a rather traditional attitude toward women in society as a whole. Foreign female negotiators can expect to be subjected to a good deal of Old World manners and ‘ladies first’ deference.

TAIWANcommercial environmentTaiwan, along with Korea and Japan, was one of the early Asian miracles of the 1960s and 1970s. Its commercial sector is still a leader in the global market and its wages are twenty times higher than those of its larger cousin across thestraits. Taiwan is both an industrial and a technical power that has seen a sharp decline in foreign investment in the last few years, due to higher labor rates and uncertainty about its relationship with mainland China. To hedge its bets, Taiwan has poured investments into China and its neighbors. The island’s businesspeople are highly schooled in international business, and thousands of them are scattered throughout the world, on a regular basis, searching for opportunities.

common strategies- FOR TRADE: Aggressive, Compliant, Secretive, Social- FOR INVESTMENT: Consensus, Hierarchical, Indulgentnotes for negotiators

The Taiwanese are more expert at international negotiations than any other Asiangroup. The insular nature of their economy and their tenuous political position have kept them on the global scene for decades. They’ll know more about your society, culture, business, and company than you will. Similar research on your part is absolutely vital. Learn everything you can about your counterparts, but be discreet when tapping for information in Taiwanese business circles’they’re quite clannish. Expatriates with on-the-ground experience are the best source.

The Taiwanese are Chinese by heritage but ‘special Chinese’ by circumstance.

Attempting to treat them like naive mainlanders or cosmopolitan Hong Kongers will meet with disappointment. These Chinese are believers in realpolitik and have no delusions about their position in world economics. If they’re buying, expect a tough stance; if they’re selling, be prepared for a healthy dose of indulgence, but keep your hands on your wallet.

Come to the table prepared. The Taiwanese are highly educated, more so than HongKongers, and they take business very seriously. Poorly prepared counterparts will be quickly shown the door, though very politely.

Under no circumstances should you go on a ‘fishing expedition’ under the guise of true negotiations. While the Taiwanese aren’t beyond doing this themselves when overseas, they frown on turnabout. Foreigners who are caught doing it will find it difficult to get appointments anywhere on the island when they wish to negotiate in earnest. News travels fast.

The Taiwanese tend to front-load their concession process with numerous, inconsequential ones early on. Bigger concessions are saved for the end and given with great reluctance. The Taiwanese often practice the envelopment of opponents. You’ll be wined and dined, hotels (perhaps offered airfare) and drivers will be provided, and you may even be taken to a remote resort for the negotiations. All of this puts you ‘in debt’ to your hosts. It also makes you psychologically dependent on them for even the simplest things. Enjoy the ride, but stay on your toes.

Visiting foreigners are often amazed by the amount of after-hours partying that accompanies business here. Your host will most likely pull out the stops during negotiations in an attempt to wear you down. Remember, they can always find new team members for the following day’s discussion and none of their team will be suffering from jet lag. Take it easy and when in doubt, call it an early night.

THAILANDcommercial environmentThailand has, until recently, been one of the ‘minidragons’ of Asia. It has longbeen a target for foreign investment, especially hotels and resorts, and tourism is the major source of foreign currency. The economy also supports sizable textile, agricultural, and aquiculture industries. Thailand’s recent devaluation of its own currency (the baht), along with numerous banking industryscandals has caused the country to seek international bank funding. This has brought with it a great deal of external scrutiny and the rethinking of many projects involving foreign private funding. The downturn in the high-growth rate

of Thailand has had a chilling effect on other ASEAN nations and is seen as leading to a general pullback of foreign investment in Asia’s emerging markets.

common strategies- FOR TRADE: Aggressive, Social, Exploitative- FOR INVESTMENT: Consensus, Divide and Conquer, Indulgentnotes for negotiatorsPersonal relationships are a very important part of doing business in Thailand. Having the right connections and knowing when to use them will greatly facilitate long-term success. Start working on these relationships well in advance of attempting to schedule negotiations.

Patience is highly regarded in Thailand, and Buddhist countries in general. Thais believe in keeping a ‘cool heart’ during negotiations and meetings. Showing open frustration or making demands to speed up the proceedings will not be seen as a show of strength but rather as personal weakness. Any concerns in this area should be discussed via back-channels never in public. It’s very important to maintain a united front when dealing with Thais. Although they’ll be just as willing to exploit discrepancies as the next negotiator, disunity also carries the burden of disharmony, which will cause Thai counterparts to doubt the project’s potential.

Punctuality is very much appreciated, although its appeal declines in proportionto the distance one is from Bangkok. Agendas should be discussed and agreed uponprior to arrival in-country, but don’t be surprised if your Thai counterpart suddenly attempts to add or detract from the original. Spontaneity is a big partof Thai business culture.

Bargaining should be done in such a manner as to be obviously concerned about all sides of the deal. Any appearance of haggling just as a show of superiority will have detrimental effects. Proceed as if the relationship was more importantthan the profits.

Thai is a difficult language to master and your attempts at it will be appreciated. While English and Chinese are widely spoken, translate all materials, including business cards, into Thai for presentation. Since Thai speakers aren’t all that commonoutside of the country, this procedure may have to be done upon arrival in Thailand.Thailand is a functioning monarchy and the people are devoted to the royal family. Criticizing or insulting the king or his family can result in criminal charges. Very few, if any, Thais will take kindly to a foreigner makingeven the smallest\ critique of the monarchy.

Graft and corruption are part and parcel of the commercial sector. Requests for ‘tea money’ and the inclusion in projects of inflated consulting fees for government officials are all part of the price of doing business in Thailand. Prepare your counterstrategy for these requests before getting to the negotiating table.

TURKEYcommercial environmentFree-market policies adopted in the 1980s have moved Turkey from being a

fringe economy to being one of the most thriving of the emerging markets. Recently rebuffed by the European Union, the country still remains a major supplier to the global marketplace. More than 55 percent of the workforce is devoted to agriculture, but the economy does support substantial manufacturing and textile industries. There are still a substantial number of large state-owned companies (KITs) that put a drag on growth as they operate in subsidized, protected industries. Istanbul is a major transportation link for trade throughout Europe, the Middle East, and the Asian subcontinent. Investors continue to be attracted to the educated workforce and strategic locale Turkey offers.

common strategies- FOR TRADE: Aggressive, Exploitative, Indulgent- FOR INVESTMENT: Hierarchical, Jekyll and Hyde, Social

notes for negotiatorsThe Turks are known for their hospitality. Foreigners are often taken aback by the extent of their hosts’ generosity. Experienced negotiators may see this outpouring of goodwill as a manipulative technique, and, to a degree, it is. However, it can be taken at face value as part of a long-standing Turkish custom.

Punctuality is considered standard operating procedure, and its absence is considered a sign of disrespect. Make appointments well in advance of travel andconfirm upon arrival in-country. This common courtesy can make or break early negotiation sessions.

Like much of the commerce in this part of the world, haggling is commonplaceand nothing has a set price. If you’re selling, start high, almost absurdly so, and work back down. When buying, start at the bottom and begrudge every move upward.Always give the impression that you can walk away at anytime. If theTurkish counterpart sees that your needs exceed your wants, this weakness will be immediately exploited.

Much general conversation precedes business discussion, and there’s a Turkishdislike of ‘cutting to the chase’ just for the sake of expediency. Business moves at a slow pace; the Turks don’t like to be rushed, especially by foreigners. Even when you’ve come to buy with cash in hand, expect a lot of chit-chat before a deal is cut.

Due to its location, Turkey is chock full of polyglots. English, French, and German are widely spoken, and translators for most European and Asian languages can be easily located. Contracts will be signed in the local dialects, and all business materials should be translated for presentation.

Contracts are usually stated in general terms with the specifics being hammered out over the extent of the relationship. Any insistence that quality control be made part of the contract will be met with considerable resistance. Counterpartswill consider it insulting that a foreigner believes a Turk would deliver anything but the highest standard. Don’t belabor the point.

Western business dress is favored among executives, and it’s always best to remain conservative in appearance. Overly casual or exotic dressers will not be taken seriously regardless of wealth or title. Temperatures run the gamut in Turkey; visitors should do some meteorological research prior to negotiations. Home and family are sacred in Turkey and to be invited to a counterpart’s home is a great honor. Never refuse this invitation unless it’s absolutely impossibleto comply; it’s not offered lightly, and a casual refusal is a grave insult. While there’s a good deal of socializing, don’t expect wild after-work partying.Alcohol isn’t always offered, as this is an Islamic, albeit secular, country.

UNITED KINGDOMcommercial environmentThe United Kingdom is currently the boom economy of Europe’s major players. Highgrowth and low unemployment (by European standards, at least) seem to vindicate the U. K.’ s standoffish approach to the European Union and its singlecurrency policy. The United Kingdom has been a top player in international trade and it’scertainly its first global practitioner (‘the sun never sets on the British Empire’). It also attracts an enormous amount of foreign investment to its own shores for high-tech, automotive, and food processing. The country supports considerable financial services, insurance, and transportation industries. Few international companies would consider their reach total without some form of U.K. presence.

common strategies- FOR TRADE: Financial, Stern, Arrogant- FOR INVESTMENT: Hierarchical, Platoon, Legalisticnotes for negotiators

The British are old hands at international business; their history of negotiation in that area goes back centuries. The depth of their knowledge is without comparison. Arrive in the U. K. thoroughly prepared and equipped with numerous options. Don’t attempt to learn how things work ‘at the table’ or your British counterpart will ‘hand you your head.’

British business moves at a more deliberate pace than American business. Presentations should be detailed, with a minimum of hyperbole. The British have seen everything ‘under the sun’ and there’s nothing new there, so get to your point.

The class system is still very much alive and proper connections will make a difference for long-term projects. Government agencies and industrial associations are good starting points for small- and medium-size deals. Larger projects may require social introductions. Britain is an orderly society and punctuality is mandatory. Arrange appointments in advance and present an agenda as early in the process as possible. The British side will insist on having one,so it’s best to get your version in first.

Start your bargaining at a point only slightly distant from your projected goal.You can leave yourself some negotiating room but don’t be excessive. Your British counterpart will have already researched the true value range of the deal.

Finance is a major sector of the British economy; you should have no problem exploring options. British manufactured goods are generally of high quality and there’s little need to build provisos on that matter into the contract.

Transportation and delivery requirements should be stated clearly. The British tend toward detailed contracts littered with legal lingo. They may also insist upon having the contract bound under British law, although most international disputes on large matters will be settled in Brussels. If you’re not from a society bound up with commercial contract law, be careful what you sign. Contracts in the U. K. are very binding and penalties can be severe. Even in thepost-Thatcherite U. K., unions are still very strong. Joint-ventures should be heavily researched to uncover the possible effects of respective union involvement. Political intervention in this area isn’t unusual; keep in mind that the most recently elected government is the Labor Party.

The business lunch has been institutionalized in Britain; much negotiating will be done with knife and fork in hand. The British can be exceedingly charming andtheir manners put the world to shame. Enjoy the surroundings but resist the charm. It’s all just so much posturing usually perfect.

UNITED STATEScommercial environmentThe United States is the largest economy in the world with its nearest competitor, Japan, being only half its size. Low inflation, low interest rates and low unemployment have stymied economists and thrilled foreign investors. TheUnited States has the ‘hardest’ currency in the world and, like it or not, everycountry measures themselves against an ‘American’ yardstick another blow to themetric system. Its companies have some of the most commonly recognized international brand names and its entertainment industry dominates world culture. Talk of an approaching ‘Asian Century’ has cooled as those economies falter and Uncle Sam remains the sole superpower in the marketplace. The United States has hollowed out its manufacturing sector in recent decades and moved solidly into services and high-tech.

British business moves at a more deliberate pace than American business. Presentations should be detailed, with a minimum of hyperbole. The British have seen everything ‘under the sun’ and there’s nothing new there, so get to your point.

The class system is still very much alive and proper connections will make a difference for long-term projects. Government agencies and industrial associations are good starting points for small- and medium-size deals. Larger projects may require social introductions. Britain is an orderly society and punctuality is mandatory. Arrange appointments in advance and present an agenda as early in the process as possible. The British side will insist on having one,so it’s best to get your version in first.

Start your bargaining at a point only slightly distant from your projected goal.You can leave yourself some negotiating room but don’t be excessive. Your British counterpart will have already researched the true value range of the deal.

Finance is a major sector of the British economy; you should have no problem exploring options. British manufactured goods are generally of high quality and there’s little need to build provisos on that matter into the contract. Transportation and delivery requirements should be stated clearly. The British tend toward detailed contracts littered with legal lingo. They may also insist upon having the contract bound under British law, although most international disputes on large matters will be settled in Brussels. If you’re not from a society bound up with commercial contract law, be careful what you sign. Contracts in the U. K. are very binding and penalties can be severe.

Even in the post-Thatcherite U. K., unions are still very strong. Joint-venturesshould be heavily researched to uncover the possible effects of respective unioninvolvement. Political intervention in this area isn’t unusual; keep in mind that the most recently elected government is the Labor Party.

The business lunch has been institutionalized in Britain; much negotiating will be done with knife and fork in hand. The British can be exceedingly charming andtheir manners put the world to shame. Enjoy the surroundings but resist the charm. It’s all just so much posturing usually perfect.

UNITED STATEScommercial environmentThe United States is the largest economy in the world with its nearest competitor, Japan, being only half its size. Low inflation, low interest rates and low unemployment have stymied economists and thrilled foreign investors. TheUnited States has the ‘hardest’ currency in the world and, like it or not, everycountry measures themselves against an ‘American’ yardstick another blow to the metric system. Its companies have some of the most commonly recognized international brand names and its entertainment industry dominates world culture. Talk of an approaching ‘Asian Century’ has cooled as those economies falter and Uncle Sam remains the sole superpower in the marketplace. The United States has hollowed out its manufacturing sector in recent decades and moved solidly into services and high-tech.

common strategies-FOR TRADE: Aggressive, Legalistic, Arrogant, Technical-FOR INVESTMENT: Cowboy, Platoon, Intimidating

notes for negotiators

The Americans (as they’re called, to the chagrin of the other occupants of Northand South America) have only recently gained a grudging respect for other economies in the international marketplace. Formerly labeled naive, Americans now use this stereotype to their favor as unsuspecting counterparts approach thenegotiating table. Their business schools are the best in the world and their society combines aspects of every other one on the planet. You may not like their style but don’t underestimate their acumen. They aren’t number one by accident. True to history, Americans believe in winning wars by accepting a few lost battles. U. S. negotiators are extremely nimble and can change strategy andtactics during a ten-minute break. You had better be able to respond in kind.

They’re the practitioners of the original Cowboy mentality, and an American company will usually send its negotiators into the field with an unusual amount of authority. They often assume that counterparts have similar authority and arevery disappointed with ‘errand boys’ masquerading as executives. Individualisticby nature, they can also be good team players, but only when they get to select the team. Americans have a blindspot in that they believe everyone else in the world wants to be like them. They also believe that all markets should be as open as theirs purports to be. Even when you’re on your own turf, the Americans want to play by their own rules. If you’re on their turf, their lawyers will take great care in laying out the rules for you.

The American style is very direct, and they try to demand the same from counterparts. To not do so is to be labeled deceitful. Americans want you to lookthem straight in the eye and ‘lay it on the line.’ They love confrontation and are not subtle in their intimidation techniques. The Americans play for big money and they play for keeps. As they’re fond of saying, ‘if you can’t take theheat, stay out of the kitchen.’

U. S. negotiators generally start off from a strong position (at least in their minds) and are quite miserly with concessions. They’ve learned patience over theyears, mostly from dealing with the Japanese, and can wait until the end of negotiations to concede major points if necessary. Americans do, however, preferspeedy negotiations and chafe under too much extraneous socializing or postponement. They used to cut deals early (and to their disadvantage) just to save time. Nowadays, they can afford to just leave.

VIETNAM

commercial environmentThe Socialist Republic of Vietnam is one of the few remaining economies that’s controlled by a communist leadership. Its doi moi policy, established in the mid1980s, was designed to remedy the shortcomings of the centrally planned, profitless commercial sector. Foreign investment, both private and government subsidized, flooded in during the early 1990s but has slowed to a trickle as theless than stellar results have been tallied. The country has a formidable bureaucracy, and corruption is rampant in both the government and private sectors. Vietnam’s economy is 80 percent agricultural and it is one of the world’s top rice exporters. The government has licensed twelve foreign automotive companies to operate assembly plants, and some inroads have been madein developing other light industry. Tourism and agriculture still remain the country’s top sources of foreign currency. The local currency, the dong, is inconvertible on the open market. common strategies- FOR TRADE: Aggressive, Secretive, Self-Righteous- FOR INVESTMENT: Consensus, Hierarchical, Deceptive

notes for negotiatorsThe Vietnamese are accustomed to exercising enormous patience, something they perceive others, especially Westerners, as being unable to do. ‘time is money’ isn’t a Vietnamese concept; they’re patient because the current pace of their culture makes patience feasible. Make sure that you’re not locked into too tighta schedule. It will only work against you.

The Vietnamese will often change agreed upon terms overnight, and seemingly arbitrarily, as a way of shifting the balance in their favor. Since there is little commercial law to enforce contracts, make sure that only the minimum amount of capital necessary for a project is turned over to the Vietnamese at any one time. It’s not advisable to extend unsecured credit to a Vietnamese partner.

Until recently, the Vietnamese were able to play one anxious suitor off againstanother. But an investment downswing has tipped the scales in favor of foreign capital. Let it be known that your company is willing to do business, but only in areas that show promise of investment returns within a reasonable period of time. This may be the most effective negotiation tool available to you.

Many terms will be left unspecified by the Vietnamese, especially if they feel it’s not to their advantage to clarify them. Your attempts to obtain a specific response will be met with vague nods or rapid changes of subject. Don’t sign anything until the contract terms are ‘transparent.’ It’s hard enough to enforcea contract in Vietnam without adding vagueness to the procedure.

Bureaucratic red tape is often used as an excuse for delays. The easiest way to deal with this is to play off of the competitive spirit of the Vietnamese. Make it known early on in your discussions that your company will be pursuing many other projects within the country, that your appointments are numerous, and youragenda organized. Any business that can’t be completed in the time allotted willbe postponed indefinitely. Most delays will evaporate when the specter of competition enters the negotiation’but make sure that you can back up your claims. The Vietnamese will generally hire their own interpreter. In many cases,this is a necessity, as the primary decision maker will not be fluent in your language.

If the negotiations aren’t proceeding in their favor, however, the Vietnamese will often claim that most of the problems are the result of linguistic or cultural lmisunderstanding. Bringing your own interpreter can counter this tactic.

Chapter 5. StrategyWe have now staked out the framework for a successful negotiation. We know our needs. We know exactly what we want. We also have an idea what our negotiation partner wants of us, and what we can offer him. To put all this together in a single package will require considerable patience, creativity and cooperation. We are clear about that. So we can start preparing for the first meeting. First of all, we need to make a careful decision about strategy and tactics. These arefamiliar terms, but what exactly is the difference between them? And above all, which of them is the more important?

Strategy and tactics

Both are necessary, but a clear distinction needs to be made between them. Strategy is the overall guideline, indicating the direction we need to take fromour wishes and needs to our objectives. If, given a set of specific interests and objectives, we choose the wrong strategy, we will be setting a wrong course from the very start. We would then be very lucky to get where we want to go.

Tactics, on the other hand, always follow after strategy, fleshing it out with aconcrete line of action. If strategy is the thought, then tactics are its formulation. If we are going to get our message across, both will be necessary ? but the thought comes before the word. Tactics should not be directly oriented towards the objectives, but towards the strategy. For this reason they may sometimes take an unexpected turn, which may appear to be at odds with the general direction we are going. But as long strategy has been served, the choice of tactic will have been a good one.

Nor is the shortest route necessarily the best sometimes we first need to overcome an obstacle, or work our way around it. Any tactic is suitable, as longas it achieves its aim ideally of course with the smallest possible expenditureof time and effort. Tactical action is considerably more flexible that strategy

in this regard: it is also correspondingly more versatile and adaptable to changing conditions, as we shall soon see in Chapter 6.

Positions in the conflictIn the case of strategy, our room for maneuver is considerably narrower. Blake and Mouton (1964) have developed the managerial grid, in which various management styles are represented. Each position in a conflict can be charted along two axes: assertion and cooperation. The assertion element describes the fervor with which someone goes about having his wishes satisfied, while his readiness to cooperate will bring the interests of the other side into the equation. We can construct a grid based on these two axes, which allows us to define five different behaviors in conflict management (see Figure 52).

On account of the major significance they have on the course of negotiations, these positions and their advantages and drawbacks will be discussed in detail in the sections that follow. The choice of which of the five basic positions is the most appropriate for a given conflict depends on

the type of task at hand, the situation, and the personality of the negotiator (Thomas and Kilmann, 1974, Dupont, 1982). Later in the chapter, we shall see howthis choice is made, using different examples. So let us start with the five basic positions in a given conflict.

Competition To push hard to get what we want may be effective, but it is not cooperative. Its thrust is to put through our own aims exclusively, without heed to the other, in the shape of a distributive result, a zero-sum game. Such power-oriented behaviour uses all available means to attain the goal sought after

persuasive powers, pulling rank, or quite simply a stronger economic position, for example. We might fight for our rights, for a good cause, or simply for our own profit. Nothing is more appropriate if it is a matter of demonstrating our own strength, stamina or authority ? even if we don?t really have them. Such conduct has all the romance of the Wild West: a real man wins against all the odds!

This may indeed be impressive, but it is also extremely disturbing, such as whena street trader or door-todoor salesman just won?t give up and obdurately pressurizes his hapless victim into a sale. Nobody likes that. The person who advocates his cause energetically will have the advantage of initiative ? like the white pieces on the chessboard, which are always one move ahead. But such hectic pressure and activity gets in the way of receptivity. It leads to impatience and loss of flexibility. The warrior obsessed by the pursuit of victory in his campaign is also at risk of missing important signals from his adversary. He wants to exert his will and master the other. If both parties resort to such tactics, the inevitable result is confrontation, a battle of wills. One of them must give way or be bettered in the final showdown. In certain cases such stubborn maintenance of a position may be a good idea, but itleaves little room for cooperative approaches and a constructive solution to theconflict.

CollaborationConstructive collaboration is also demanding in its way, but it is much more than that. It represents an attempt to find a solution in tandem with the other,that takes full account of the desires and interests of both parties.

In the terminology expressed in this book, it corresponds to integrative bargaining. Collaboration simply requires that both parties familiarize themselves thoroughly with the conflict and its causes, and work towards findinga joint approach. This is almost always possible: there is a creative solution to be found for most problems if both sides pull together. With a little goodwill they can work through the differences that separate them and ? without losing sight of their own principles ? learn something from the other?s point ofview and experience. They might consider specific points as a separate issue, orput them to one side straight away, so as to open up the way to an overall agreement. As we have already seen, a decisive factor in such an agreement is tosatisfy at least some of our partner?s wishes. This implies the greatest possible understanding of the other?s needs. Why should the negotiating partnersnot address their personal differences and clear them up in a climate of cooperation? Such a strategy creates mutual trust and has the great merit of far-sightedness. It does not have any real weaknesses, but does require a readiness to collaborate from both parties.

CompromiseA compromise is possible when each party meets the other half way. Something is demanded, but it is not absolute. Some cooperation occurs, but not the whole way. The purpose of compromise is to achieve a solution that is tolerably acceptable to both parties, that is at least partially satisfactory to each of them. Splitting the difference also lies halfway on the assertion and cooperation axes ? illustrated by the diagonal from top left to bottom right in Figure 52.

\When we reach a compromise we don?t relinquish everything, but nor do we get everything we want, either.

Such a solution will lie between the positions of avoidance and collaboration: it does not avoid the conflict, but nor does it go so far into the sort of detail a readiness for new alternatives would require. It is much more superficial. The compromise also lies at the centre point of the other diagonal.

This aptly illustrates the expression, to meet one another half way, where the parties make moves towards one another or look for a rapid agreement that is just about acceptable to them. At least then, some agreement will have been struck. The compromise is widely used as a device in politics and diplomacy, where it is highly esteemed as the art of the possible. If neither side is able or willing to make further concessions (because his mandate is limited), it is often the only option, which by definition is therefore the best. In another context a mixture of cowardice and avidity may lead to a bad compromise, where the partners apparently did not have the courage or the generosity of mind to look for better alternatives, even though their mandate would have allowed one. A compromise may well be the best solution in many cases, but it is more likely only to appear so.

AvoidanceAvoidance is always possible as a no-win solution. Instead of insisting on his demands or cooperating, the negotiator withdraws from the conflict and forgoes an agreement. In this he is serving neither his own interests nor those of his opponent. He simply avoids coming to grips with the problem; perhaps because hisopponent seems too powerful and a confrontation does not appear to have any prospects of success. In such a case a tactic worth recommending might be to let the opponent thrash about in the air for a moment similar to the technique used to such effect in the Japanese martial arts aikido and jujitsu, which indeed constitutes a favourite ploy of Japanese management. The avoidance strategy may have a very diplomatic quality, with awkward issues being put on ice and postponed until a more favourable moment. If an agreement does not yet seem possible, conscious avoidance may help to prevent damaging an otherwise good relationship with the other party. It is far better to duck away at the right moment than to experience disappointment later, or set it up. But avoidance may also come up in the shape of the ostrich policy, when one of the parties sticks his head in the sand and plays the waiting game. This is one way of deflecting a situation that threatens to be dangerous, but it will rarely be sufficient to defuse it completely. In cases such as this evasive action is a very circumspect and conservative way of responding. It does not involve much risk: nothing is ventured, but nothing much is lost. It also has the characteristic of covering up one?s own interests or positions quite effectively. It forestalls the sort of discussion in which the other side might be apprised of important information. Certainly, such an attitude does not exactly make a friendly impression on the partner at the receiving end of the rebuff, but to opt out at a later date could cause much greater damage. Avoidance is an extremely versatile and thus useful position to take in such a situation. But like the other positions, it should only be used in a very targeted manner. Certainly, it should not be seen as a stock solution. The over-

frequent avoidance of conflict whittles down our own expectations and thus minimizes the chances of truly satisfactory results in the future.

AccommodationAccommodation is the opposite of competition. It is not assertiveness, but rather it is very cooperative. The negotiator renounces most of his objectives. In order to satisfy his opponent, he sacrifices his own interests ? either from selfless generosity, munificence or forced obedience. Were the arguments of the other side so convincing, that our negotiator could only be convinced? Was he perhaps even converted? Straightforward capitulation is an effective strategy inits way, when it?s a matter of defusing an escalating conflict or simply to re-establish a friendly atmosphere.

But it may be read as an invitation for more demands, as our example of the Munich Conference in Chapter 1 showed. Giving in may also frequently be interpreted as weakness and as a sign of naive gullibility (or a just punishmentfor it!). But as a strategy it should not be rejected out of hand ? everything depends on the objective and the circumstantial details.

Which position, when?Since these various positions are diametrically opposed to one another, the question automatically arises, which position should we adopt in a given situation? Although as a matter of principle cooperation is the best choice, it is not always available as an option. In this section we present four important criteria on which to evaluate strategies when confronted with a specific problem.

Let us begin with the vertical axis in Figure 53.

How do we know how far we can go with our demands, and how forcefully we should present them? How much cooperation should we offer, and how much can we expect from the other side?

What is at stake?The first consideration underpinning this decision is: how vital is this negotiation for me? What is at stake here? If a failure would drive me to the wall, I am going to want to put more of my energy into it than if it were just amatter of buying a new telephone answering machine. I will want to fight every inch of the way to maintain my position or, better, work together with my opposite number to achieve an optimum outcome.

At the very least I will want an acceptable comprise, if that is the best alternative the circumstances have to offer ? always a better solution than to give up an important negotiation without any agreement at all.

But one thing is certain, I am not going to give up if the outcome means everything to me, or when a precedent would be established. For if I giveway now, then other people are going to expect a similar deal in comparable cases inthe future. To give way now would mean to give way again, and again, ? and again?

Power play

The power balance between the participants has a similar impact on the course ofevents. This is something of a self-evidence: the one who has the power to impose his demands is in general likely to do so. Unless of course he is pursuing a quite different objective. The mere availability of power thus does not necessarily mean that it is going to be brought to bear in a given case. Butclearly the very possibility that it might ? whether on our own part or that of the other ? is going to have a considerable or even decisive impact on the choice of strategy. For the side that has the power in its hands can resort to it at any time. That is the principle of deterrence. There is no point in attacking an adversary who is stronger than you. As important as an accurate assessment of one?s own power, therefore, is the most accurate possible assessment of the adversary. For this, we need to understand the sources and basis of power (see Chapter 2).

Common interestsLet us now turn our attention to the horizontal axis in Figure 53,

Which introduces two new variables that affect the level of cooperation: common interests and the quality of the personal relationship. Let us start with the first of these: it is natural to expect that the more the interests of the parties coincide, the more they will want to cooperate. If both are going for the same objective, they are more likely to pull together than if their aims arediametrically opposed. Conversely, the fewer interests the two sides have in common, the less cooperation will be an ingredient of their bargaining efforts. We don?t need to dwell on that. But it is a good idea to be clear about even such simple steps of logic when we are devising our strategy. A similar situation obtains when it comes to adapting our own position in the course of the negotiation, as we shall see later in the chapter.

Relationship qualityThe scope for cooperation also depends on the quality of the personal relationship between the negotiating partners. This too is such an obvious pointthat it sometimes risks being forgotten. Clearly, all of us behave differently towards a friend than we would towards a completely unfamiliar discussion partner, not to speak of a notorious double dealer in the trade.

If we have had positive experience of a negotiating partner, who has proved himself or herself to be serious and reliable in our eyes, the way is wide open to cooperation. And of course the converse is equally true: our partner is goingto need to feel that we are sufficiently trustworthy before wanting to cooperatewith us. Both parties have to earn their right to cooperation.

But there is of course always the possibility that despite a good personal relationship too many differences of interest stand in the way of an agreement being obtained through cooperation. In such a case the result is likely to be a compromise, or one of the parties will give way in order not to sully the good relations. Both may even choose to side-step the conflict between interest and relationship, and not pursue the deal. As we have

seen, each position on the grid described by Gladwin and Walter (1980) canbe defined by four readily assessable criteria ? relative power, outcomestakes, interest interdependence and relationship quality. On this basis, wecan plot our own position on the grid as well as that of our partner in termsof demands and cooperation. True, this is not enough to resolve any conflicts

that may arise, but an appreciation of the positions on both sides maybe quite valuable when it comes to developing an appropriate strategy.

For example: Business lunch with IBMThe following example will show how effective it is to cultivate good personal relations. The movement along the horizontal axis in this case made it possible to pass from avoidance (on the part of the IBM representative) to collaboration.

Long before she became president of the advertising agency?s North American operations, Ogilvy & Mather?s Rochelle Lazarus had a sense of personal relationswith clients. For several years she had lunched every day with former or currentclients, cultivating relationships and the proverbial good connections, and not only at top executive level. In every company that she worked for ? in the firstthird of her career, that included American Express ? she knew armies of people in influential positions at all levels and in all sorts of departments. This enormous effort ? to say nothing of the restaurant checks ? paid off after several years for her company: in 1992 she won back American Express?s chargecard advertising account for Ogilvy. But the really big deal came two years later, when her good relations enabled her to reel in the $400 million-plus account of the computer giant IBM. She would of course never have landed such a prize without the qualifications and proven successes of her employer. But an internal note at IBM indicated that the contacts of many years standing between Ms Lazarus with IBM president Louis V. Gerstner and his vice-president of corporate marketing, Abby Kohnstamm, were instrumental in swinging the giant?s decision to put the account in the hands of Ogilvy & Mather. Ms Lazarus?s relations with client executives went a long way to making IBM feel that the risk of investing in a new campaign was considerably less than it might have been. Indeed she had begun to cultivate her good connections with her clients Gerstner and Kohnstamm when they were still on the payroll of American Express. At that time she could have no notion of the exceptional deal with IBM she was to snare years later.

In addition to illustrating the important role of good personal relations with major negotiating partners, this example once again demonstrates the strategic significance of the long view. (based on Wall Street Journal, 1994)

For example: PerestroikaThe example that follows illustrates movement along the vertical axis.The Soviet Head of State and Party Chairman Mikhail Gorbachev received a warm welcome from the Western world shortly before he was installed as General Secretary in 1985. The American news magazine Time even featured him as Man of the Century on its front cover. After years and decades of confrontation, there now stood a man at the helm of the Soviet Union whose ideas of reform brought a powerful and welcome wind of freedom and democracy into the eternally repressed giant empire, long eschewed by the rest of the world. Real cooperation with the West, or at the very least an end to the arms race, now appeared to be a viable prospect. But was Gorbachev really the man to push through the results of negotiations with the West in his own country? For all the appeal of the new policies of perestroika (restructuring) and glasnost (openness), the capitals ofthe Western world could not rid themselves of the justified worry that the long-hoped-for change might be blocked by tough resistance from groups who sensed a risk to their personal privileges. Against this was the backdrop of a population

that was body and soul behind the new man in the Kremlin. Numerous strategic analyses were undertaken with a view to pinpointing the individual groups involved.

Table 5-1

provides an illustration of the groups among the Soviet population that supported or opposed Gorbachev?s reformist policies. This analysis was required if the Western governments and their various organizations were to address the supporters and opponents of perestroika with carefully defined measures. The intention was to shift relations with the Soviet Union away from competition (attop left in Figure 52) towards