Negotiating Attitudes

By kekepana.com / blog

Attitudes determine negotiating outcomes.

In most Western societies, we believe in the “rule of law” and it is the actual language of a contract that prevails. That is why we spend so much time negotiating the details of an agreement. It’s why we bring lawyers into negotiating sessions and have grown dependent on them. Don’t assume that your foreign negotiating partners feel the same way. Many cultures are governed by the “rule of relationship”. The actual language of an agreement or a contract is less important than the quality of the relationship. I find that Chinese are more likely to live up to the “spirit” of an agreement than they are to the specific language – and that the Japanese are more likely to follow the language than the spirit. That’s fine as long as you know which attitude to expect and can cope with it. I used to joke that the French were the toughest negotiators because they couldn’t be relied on to live up to either the letter or the spirit. That’s too rough, but I was up against a French negotiator when I resorted to the laborious “back translations” mentioned in yesterday’s post. Just recognize that the sanctity with which we hold contracts in the United States does not necessarily exist in other societies. That’s not good or bad, it just is.

Your use of lawyers in a negotiation should change depending on who you are dealing with. Lawyers are more acceptable now, but there was a time the Chinese wouldn’t even talk if they thought you had a lawyer in the room. I advised a trade group on a trip through China and there was an American lawyer traveling with us. He introduced himself as a lawyer in the first meeting; the Chinese clammed up. He did not tell them his profession in the second meeting, which went fine until he spoke. As soon as words came out of his mouth, the Chinese figured it out and clammed up again. Before we met with a third group of Chinese, I told him to write down any points he wished to make and I would speak for him. That worked. That wouldn’t happen today in China, but it is an attitude to bear in mind.

There is a more insidious influence that lawyers have had on doing international business deals. Most lawyers feel they are paid to protect their clients, and that is correct up to a point. Some, however, are so protective that they demand far too many safeguards in international contracts – far more than they would put into a domestic agreement. This either turns the other side off and an agreement is never reached, or – worse – an agreement is done that does not have the flexibility to succeed. I have seen more business deals prevented or undone by lawyers than for any other reason. Remember, when negotiating a business deal, do what makes business sense. Take the legal advice, but don’t let it destroy a good deal. Make it clear that you are paying the lawyer to help you get a deal that works for all parties.

In international transactions, you are generally looking for an agreement that is win-win. You want both sides to have a good deal and you want that deal to have every chance of being successfully  implemented. So, the last thing you want to do is be dishonest in a negotiation. Much is made ofnegotiating “in good faith” and it is generally assumed internationally that you are doing so. If you ever fail to do so and are caught at it, you will never be able to negotiate with those people again. We got a lesson about that as the United States prepared for the Tokyo Round trade talks. We had a fair number of fledgling negotiators, myself included, so it made sense for us to get some training. Trainers were brought in, but the wrong kind. They were labor negotiators, a type of negotiation in which the object is to win at any cost. Our practice negotiations degenerated into the old “Lie, Cheat & Steal” game. Not only did we not learn from it, but working relationships were damaged when a team negotiating in good faith came up against a team acting as if trade were a labor negotiation. Wrong game, wrong attitudes. Negotiate internationally on the assumption that you will be working with the other side for many years, not just once. That requires getting to know their wants and needs as well as you know your own. And making sure their core needs are met. If either side cannot meet its core needs, it is best not to do the deal.

How not to negotiate

Americans have a particular failing that makes us awful negotiators.We are afraid to come back without a deal. Perhaps it is pressure from the home office, or merely the expense of the trip, or wanting to make sure we can keep going back to exotic places. But too many Americans think they can’t go home without an agreement, that a trip without a contract is a wasted trip. Not so. Often the best deal you can get is not to have a deal. That costs your company a lot less than a bad deal would.