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Haggling in a Hot Place
When I first arrived in China, I did not negotiate at all; I was American and wasn't comfortable with the concept. Then, as time went on, I became very comfortable and I couldn't buy an orange without needing at least 50% off. Then, I moved to the Philippines...
One of my first negotiations in the Philippines went like this: "How much is this?" "1000 Pesos". "I'll give you 250". Cue the look of shear horror and disgust, followed by (in no uncertain terms) a colourful verbal rejection as well.
Lucky for me, this negotiation was only over some house ware item. Had it been a business conversation, I probably wouldn't still be here! My grave mistake? Assuming that all Asian countries were as hard negotiators as the mainland Chinese and not properly learning about the country in which I now lived.
"How much is this?" (smile) "1000 pesos". "Hmm, that is a bit expensive, (smile) I don't have that much, (smile) what would be your best price (smile)?" "900." "Really? (smile) You can only give me 10% discount? (smile) But it is early morning... Buena mano...(laugh and smile)! Can't you go a little lower?" In the later I had learned to take my time, to be gentle, to negotiate softer on the rates, to reference local insight, and always to smile and be friendly while delivering my position.
Cross- cultural negotiations are one particular aspect of business where the stakes are high, the ground very unsteady and where the concept of understanding and flexibility of style are most important. When confronted with a negotiator from a different culture, how much should one adapt their style and how much should one remain true to their own and what are the consequences of both? Negotiations can be challenging to begin with and when compounded with different communication styles, and potentially conflicting expectations of behaviour, it can feel like a one legged unicycle – sometimes going around in circles, other times feeling completely off balance and falling over.
Awareness, both of one's self and of the other is extremely important in negotiation where respect of the other and a trust built on that respect is imperative. Most of our behaviours are so ingrained in who we are that we don't notice how we are acting and the message we may subconsciously be conveying. Many cultures in the East are particularly conscious of nonverbal communication and so failing to recognize our own subliminal messages in word choice, body positioning and body language can affect the success of our negotiation. One common example of western versus eastern contextual behaviour is the presentation of the business card; in the West, the business card is not critical, however, in the East it is one of the first and most crucial moments to show respect; it should be presented with 2 hands and the recipient should spend time looking at the card; failing to do something as (seemingly) basic as this could ruin the negotiation from the start.
Below are some key cultural characteristics and their affect on negotiation style. (Fells, R., 2010).
| Western Characteristic | Negotiating Style | Eastern Characteristic | Negotiating Style |
| Importance on the deal and less on the relationship | Direct & Efficient Straight to business | High importance on relationships | Lengthy build up Lengthy discussion Social aspect |
| Shorter time orientation | Will want an outcome | Long term orientation | Slower process |
| Low Context | Unacceptable offers will be rejected outright | High Context | Will not reject a proposal outright but will offer an alternative or circle back to a previous suggestion |
| Low Context | Comfortable with differences and disagreements | High Context | Avoid disagreements, change topic |
| Individualistic | More outside of the box direct suggestions | Collective and hierarchical | Repeat of the standard party line |
As part of the negotiation preparation, it is imperative to research the specific style of the other party to be prepared for certain behaviour to arise and to consider how that might contribute to strategy. For instance, if you are from the west going into negotiation with someone from the east, it would be wise to counsel yourself on patience, as commitment to a longer negotiation can often represent commitment to the relationship and to the business; this is not a "fly in, do a deal, and fly out" kind of culture, relationships need to be built over time. Furthermore, patience not to acquiesce to certain requests despite an elongated timeframe can be a challenge for those of us who may prefer more immediate results; this can be used as a strategy for concession by a team accustomed to longer negotiations.
While it may be tempting to attribute all behaviour to culture, there are a great number of other influences on a person's negotiation style - education, upbringing, time spent in other countries, personality etc. Doing one's homework means looking at both cultures involved, as well as the actual persons. Most business people are well travelled and wellversed in doing business in a multi-cultural environment so their styles have blended over time and through experience, and they may also be attempting to understand and meet aspects of your style so the stereotypical behaviour may be quite different than expected. More than just knowing a culture's behaviours, one needs to be savvy at interpreting the many shades of grey that may appear in their place and considering how you would behave when encountering those shades. A cross cultural training that focuses less on the typical "do's and don'ts" agenda, but rather takes a more encompassing framework is particularly helpful for developing the ability analyze and react as the situation requires.
Doing business in countries outside of one's own, be it in the context of negotiating, managing and/or everything in between, is a mind game of understanding, both oneself and why we do certain things, and others and why they do certain things. It's about occasional concession, occasional contending and often, compromise. In the end, it's a lot like Tinikling – it's a spirited dance, steadily increasing in difficulty; at minimum, you should aim to stay in step, at best, cooperatively follow each other's lead. While it appears easy from as a spectator, you must remember that once you start the dance, you can't easily stop and, if you lose your concentration, it will hurt. Most importantly, as with most things in the Philippines, despite the difficulty in the dance and the potential for injury, you should never forget to always look good and smile while doing it.
Fells, R (2010). Effective Negotiation; From Research to Results. Cambridge University Press, Melbourne.
Sebenius, J.K. (2002) 'Caveats for Cross-Border Negotiators' Negotiation Journal 18(2) pp 121-133.
