3 Stages to Bridge the Cultural Differences in Business Negotiation

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Written by: pTranslate Contributors

THE GLOBAL ENTREPRENEUR | CULTURE

When global businesses come together, they need to find a common ground where they understand and embrace cultural differences. It can be as minor as different expectations to full-on non-acceptance of the other person’s culture.

In a highly globalized environment, we need to find ways to bridge the cultural differences in business negotiations and interactions. Achieving this will allow a stronger connection between countries and bring unique business ideas around the world. On a smaller scale, acceptance of cultural differences can increase diversity, which brings a global perspective to the local office.

3 stages to bridge the cultural differences in business negotiation

Here we propose 3 stages to achieve that understanding. These are the stages that we developed after having interacted with people from a lot of cultures and nations. 

Establishing a connection beyond cultural differences is a complicated process, but by adopting a methodical approach, we have been able to connect and work with each other in a non-judgmental way. That has also laid the foundation for future cooperative communication as well as creating a comfortable, positive environment in the present.

We will analyze the process of accepting cultures from the very first stage: ignorance and rejection

Stage 0: Ignorance / Rejection

Ignorance is a lack of understanding of cultural differences. 

People in this stage don’t understand that the foreigners they are interacting with have a completely different view of the world. 

Ignorance is neutral. It doesn’t improve the quality of the communication, nor does it worsen it. However, in some cases, ignorance can lead to culturally inappropriate behaviors and cause misunderstanding, confusion, or even anger.

Marketing is where this ignorance shows up the most. We have seen too many marketing fails and blunders because the marketers don’t understand the culture of the country they are dealing with. For example, Walmart failed in South Korea when it didn’t understand that Koreans prefer buying at smaller local stores.

When we bring ignorance into a business negotiation, the results can be just as bad. Failure to follow the country’s etiquette and culture can be awkward in social interactions, and somewhat disrespectful to the locals.

Rejection, however, is a lot more negative. 

Rejection of a country’s culture and its people usually comes from historical conflicts. Countries have had thousands of years of international relations, and whatever they did to each other in the past carries into the present. 

If you are interacting with people who expressed cultural rejection and bias, it can be hard to find a mutual understanding. This is usually the hardest stage to overcome. Cultural rejection usually takes years to form, and it takes the person even longer to unlearn. However, with efforts, we can totally erase cultural rejection and bring people together.

Stage 1: Recognition

Reaching this stage means that we are ready to overcome biases and willing to raise our awareness of cultural differences. When doing business with people from other cultures, you may want to ask yourself a few questions to help you gain a better understanding:

  • What do I know about this culture?
  • What are the main differences between this culture and mine?
  • What are the similarities?
  • How to show appreciation and respect for their culture?
  • What can I do to still express the values of my culture?

For example, when you are working with a business in Mexico as an American, you can start asking yourself specific questions:

  • What do I know about the Mexican culture?
  • What are the differences between the US culture and Mexican culture?
  • Where is the common ground?
  • What should I do to fit in with the Mexican business culture?

The Mexican culture, and the Latino culture in general, places a strong emphasis on the community. They are a collectivist culture. They are also a hierarchical society, so they value the command of the authorities and superiors. Meanwhile, the US culture is more individualistic, and they appreciate things that align with their personal, inner values. This almost opposing difference can cause a lot of friction if not resolved properly with sensitivity.

Acknowledging the difference is already stepping the first step. It is much better than rejection and ignorance of the culture. Going to Mexico and doing business the American way is not going to be effective. The Mexicans and the Americans have contrasting expectations in business.

You can have a read of our post on the differences between the US culture and Mexican culture in business. In this post, we explore the main differences between the 2 cultures and how we can work to bridge them.

You can also find a lot of other resources to read up on the cultural gap between your country and your business partner’s country. 

For example, you can go to travel forums, global business forums, or anything related to the country you’re researching and post questions there. Soon enough, you will receive authentic answers from natives or people who had experience with the culture. 

Remember to find forums that are well-moderated, where people can only post high-quality, non-bias answers. You can also consult the managers, or people in your company who have experience with the culture of the country, to receive insights. If need to, you can find a cross-cultural consultant who has a deep understanding of the local people.

There are a lot of cultural dimensions to consider. Each cultural difference requires a different approach. 

You don’t necessarily have to learn all of the differences from the beginning. Learning from practice is a much better way to do it. However, you still need to pinpoint one or two crucial cultural dimensions that you find to be the most different from your culture or the most important for your next negotiation. For example, you can examine the language aspect, or the way hierarchy is structured there.

1. Language

Language is already a gap in itself. However, culture can be conveyed through language. In highly hierarchical cultures, proper use of language is a way to pay respect to the superiors. Unlike individualistic societies, highly hierarchical societies have a lot of ways to address someone. Different pronouns are used for different rankings on the social ladder. Misuse of these words can make the conversations awkward, or straight-up offensive.

Mistranslation can be unexpectedly offensive, too. One hilarious example is when an Iranian razor company used the brand name “Tiz” for its razor products. When it expands to Qatar, the word “Tiz” turns out to be offensive. In Arabic, the word “Tiz” means “buttock”, which is not at all a beautiful word. Nobody wants to use a brand that is associated with such an image. As a result, the company fails in Qatar – a highly potential market.

In a negotiation or other business situations, these mishaps can totally happen. The consequences can range from embarrassment to loss of trust and reputation. We tend to think in and translate from our native language when speaking. However, the same expression may have a lot of different meanings in different languages. If not careful, we may use words that are considered offensive in foreign cultures, although it has a completely normal meaning in our culture.   

2. Hierarchy

Eastern and Latino cultures have a stronger sense of hierarchy. The further eastwards, the stronger and stricter the system of hierarchy is. However, there is almost no hierarchy in Western countries. Western countries see everyone as equals, and people treat even their boss and leaders in the same way they would do to their coworkers. People from Eastern countries, on the other hand, can be looked down upon, even ostracized, if they dared to show disrespect to their superiors.

Understanding the system of hierarchy becomes crucial when you enter the Eastern world. People there have high expectations of being placed in a hierarchy. If you treat them as your equals, they may be confused and uncomfortable. Similarly, if you are from Eastern cultures and you work with Western companies, the high individualism offered can be unfamiliar. It is because you are used to deriving values from the community and the group.

If you want to negotiate and interact with businesses in a culture with opposing values, make sure to consider this dimension. Another dimension that arose from the emphasis on the hierarchy is the relationship-based approach in business. In hierarchical societies, relationships are really important. Your relationships, in a way, show where you are in society. If you are in a higher class, you will have relationships with people of the higher class, and vice versa. It determines your value.

Because they value it so much, you should show an attempt to “establish a connection” with them. By simply inviting each other to events, having dinner with each other, golfing, or drinking, you are showing that you want to be in the same class with them. Sometimes, if you treat them better than they expected, they will pay their respect back to you. That can be extremely beneficial in the future. This attitude towards doing business in the Western world is not appreciated, since people focus more on the results than the connections they make.

One of the iconic countries of this approach towards doing business is China. China has a word for it: guanxi and the word made its way into the dictionary for its widespread recognition in the global business world. Guanxi literally means “connections”, or “relationship”. You can read more on the Chinese culture in business as well as in daily life here. China is the representation of East Asian culture, and it is similar to Japanese, Vietnamese, and Korean culture. We can apply a relationship-based approach when negotiating in these countries. Rather than showing them what they can get from the deal, try to show your interest in establishing a long-term relationship with them first.

Stage 2: Work to bridge the gap

Once you have received the insights, it is necessary that you apply them to your business negotiation and interaction. 

Focus on a few dimensions relevant to your business. You can then create a strategy to approach the people from different cultures in a way that fits their expectations. There will be more and more things to learn that you haven’t yet seen through the research. Stepping into the world and interacting with people from other countries will give you a better understanding. The incredibly subtle nuances will show themselves, and you may even start to develop your own stereotypes of the culture.

Although people in the same culture usually follow a similar set of values, you will still find people who stand out of the cultural norms. Try to be flexible and adjust yourself throughout the negotiation and interaction. Understand that applying rigid stereotypes to the people there might not work, and you probably will have to unlearn a few stereotypes that you had before. Whatever happens, still acknowledge the fact that the cultural differences won’t make a difference in the way you and they cooperate. Notice the positives in both cultures and work to nurture that.

Stage 3: Consolidation

Of course, when you are planning for long-term collaboration, try to spread the understanding and cultural empathy to more and more people. We are trying to bring the understanding to the employees and the international workers, who also need to develop their own cultural intelligence. At the same time, you are also trying to learn more and more about the little details of life in another culture. You start to see how people interact with each other, how to set expectations, and sometimes even the dark sides of its culture. 

Despite all, it is a rewarding journey to walk on. Personal growth, as well as organizational growth, comes along with that. Actively trying to engage in the local culture means that you are showing an interest in their culture. It develops a connection between the organizations. A company where cultural intelligence is encouraged is a company that excels in the global environment.

At the end of the day, when cultural differences are bridged and people come closer to do business, we will soon see less division and more cohesion in the global business landscape. Not only will we be able to see the business challenges from a more diverse perspective but we will also foster strong, strategic relations with local companies. In the world today, it is no longer a difficult thing. In fact, bringing the cultures together is already a need in any global business.

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