In Focus:  International Negotiation

If your goal is to grow your international business, no situation presents greater risks to strategy execution and bottom line than a cross-cultural negotiation.  Two factors often amplify this:

  • The negotiation partner is not well known, and their strategies and objectives are unclear.

  • Interacting with the other culture is a first for one or both of the parties involved, and they are not well-prepared.

The challenge to understand the other party also exists in domestic negotiations, but understanding strategies and objectives across cultures makes it much more difficult.  Without prior cross-cultural experience or preparation, even skilled American negotiators will assume that both sides share an implicit agreement on what is and isn’t a legitimate negotiation tactic, and that both sides believe in or at least respect the value of a win-win approach.  Furthermore, they will trust in their ability to correctly interpret clues about where the other side stands in the decision making process.  None of these may work well in international negotiations.

Cultural Differences That Affect Negotiations

1. Negotiation Objectives

In the United States, negotiation objectives follow a logical, factual approach.  The underlying objective is near-to-mid-term business success as defined by the bottom line.  Foreign negotiations can look quite different in contrast.  Long-term aspects will likely weigh more heavily.  Negotiators may have a less holistic view of the package being discussed, focusing on narrow details rather than the overall value.  It is important not to assume that the objectives of the foreign side will be identical with those you would expect in a domestic negotiation.  Spending the time and effort to learn about them prior to engaging can give you a strong advantage.

2. The Importance of Relationships

In the U.S., business relationships don’t have to be extensive and can usually be quickly established.  In most cases, evidence that you are a valid business partner and an indication that you are willing to negotiate in good faith will suffice.  Successful negotiation abroad usually takes a lot more upfront relationship building.  In most cultures in Asia, Europe, and Latin America, strong relationships will be a prerequisite for entering into any formal or informal negotiations.

3. Decision Makers

Americans negotiating in some Asian and Latin American countries often find it hard to get access to the decision maker, feeling that they are talking to the wrong person or group of people.  The reality may be that a single decision maker, a person with the authority and willingness to make a direct decision, may not exist at all.  In many cultures, decisions are made by groups.  Organizations in these countries may have powerful leaders and clear hierarchies.  However, the role of the leader is not so much to make decisions themselves, but rather to orchestrate and manage the process of how group decisions are being made and implemented.  Influencing such a decision process requires different approaches and skills.

4. Negotiation Techniques

People around the world are very creative when it comes to negotiating, bargaining, and haggling.  Numerous negotiation techniques are used frequently that would be considered unusual or exotic in America.  It is important to know what to expect and how to best respond.

5. Reaching Closure

When approaching the final stages of an international negotiation, you'll need to carefully look for clues that the other side is ready to close.  They may look very different from what you are familiar with, and you will pay a price if you miss them.  Also, closing an agreement and signing a contract may still not end the negotiation. In China and especially in South Korea, a contract is viewed a ‘snapshot in time’.  New demands are still likely to be brought up later, so you’ll want to reserve some maneuvering room.


Proper preparation for your international negotiation will require studying in-depth material about the target culture and/or engaging a coach who commands extensive knowledge of the country and its business practices.  A successful international negotiator will never engage without careful preparation.  It is a pivotal step towards achieving your objectives, and a very risky one to skip.

(The above is an excerpt from an in-depth article available on our web page)
  Read the full article

Book Of The Month
The Intelligent Negotiator


Excellent introduction into commonly used negotiation techniques.  For each of them, the author both delivers a clear description and gives sound advice how to deal with it.

Although it does not focus on international negotiations, the book covers many aspects you will find relevant when doing business abroad.

(click title for full book review)


Web Site Of The Month
Executive Planet


Introduction to business do's and don'ts in more than 40 countries.  Includes many useful hints about negotiation techniques and practices for each of them.

The site also features a discussion forum where you may get answers to country-specific questions.

(click title to visit this web site)


Quote Of The Month

Good judgment comes
from experience.

However, experience comes from bad judgment.

(source unknown)


Leadership Crossroads
is a global resource for

  • International Team Development
  • Global Business Coaching
  • Cross-Cultural Project Management Assistance
  • Outsourcing Preparation
  • Cross-Cultural Negotiation Training and Assistance
  • Organizational Learning and Development
  • Executive Coaching
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and your company's
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competency development

Lothar Katz is the founder of Leadership Crossroads.  He has a wealth of experience in achieving productive coopera-tion across cultures and driving business success on a global scale.
A seasoned former executive of a For­tune 500 company, he regularly interacted with employees, cus­tomers, out-sourcing partners, and third parties in more than 25 countries around the world.


Contact :
Leadership CrossroadsTM, 2004

Global Business Practices:
Ten Tips For Doing Business in India

  • Slow down. 'Time is money' is an alien concept for most Indians.
  • Be eloquent, but remain humble and respectful. Let people know you value them.
  • Share your ideas freely. Indians admire creativity.
  • 'No' is not a good word. An Indian trying to let you know they don't like your proposal may still praise some aspects of it.
  • People tend to be on the serious side. Be careful when using humor - it may be counterproductive.
  • Know your stuff. In the U.S., managers are expected to know where to get information; in India, they have to know it themselves.
  • Indians like passionate bargaining and may be offended if you 'refuse to play along'.
  • Decisions are usually made at the top, with inputs from middle management.
  • Understand legal aspects well, but don't bring a legal counsel to the negotiation table. It will likely be read as a lack of trust.
  • The government still controls many aspects of doing business, and bureaucracy can be tedious. Prepare well.

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