Academic journal article Journal of Purchasing & Materials Management

The Nuances of Negotiating Overseas

Academic journal article Journal of Purchasing & Materials Management

The Nuances of Negotiating Overseas

Article excerpt

The Nuances of Negotiating Overseas

American industry spends billions of dollars to purchase supplies and capital equipment from foreign sources. Virtually all of these purchases are the result of negotiations. The success of each of these negotiations is influenced, in part, by the American negotiator's ability to understand the needs and the ways of thinking and acting of representatives of the foreign firms.

Negotiating is a process that is greatly enhanced when negotiators understand their counterparts--the wants, needs, and frame of reference of those at the other side of the table. This type of understanding helps all negotiators reach a satisfactory agreement. U.S. negotiators perform more effectively in these negotiations if they understand the cultural and business heritage of their opposites and the effect of this heritage of their opposites and the effect of this heritage on the opposite's negotiation strategies and tactics.

Recently, research was conducted on this important issue under the sponsorship of the United States Air Force. A majority of the individuals contacted in conjunction with this research believe firmly that most American negotiators need this information to assist them in their work.

Intercultural communication can be difficult. Even when one overcomes the natural barriers of language difference, it is still possible to fail to understand and to be understood. When one is unaware of the significant role culture plays in communication, there is a tendency to place the blame for communication failure on the other person. It may be obvious that there are language differences between cultural groups. But many busy American executives believe that a competent interpreter is all that is necessary to overcome these differences. The use of interpreters, while allowing communication to take place, does not obviate the need for an understanding of the non-American's culture.

During the research, it became clear that the ability to understand a non-American's cultural background is of great practical advantage. It puts the non-American off his guard. He expects most Americans to be clumsy and able to do business only in the American way. The American heritage of team sports appears to result in what can best be described as good team players. This is not the case in Europe. The Europeans tend not to be as well prepared nor as coordinated as their American counterparts. The teamwork and team play commonly present on the American side was usually absent on the European side. The Japanese, on the other hand, are excellent team players.


All the individuals interviewed in conjunction with this research emphasized the need for extensive preparation for the face-to-face phase of the negotiation. In addition to the conventional preparation for any negotiation, the need for extensive study of the culture(s) was repeatedly stressed. This should include reading about the history and customs of the country in question and discussions with others who have had experience dealing with citizens of the foreign country. The focus of these preparations should be on the culture, not the language.

A second aspect of the "cultural" preparation process emerged as the research progressed. This second step apparently became important in cases where there was a strong likelihood of continuing relations, i.e., one or more transactions that would require a year or so for completion. Under such circumstances, the non-Americans (accompanied by their wives) normally would visit the United States firm. The American hosts went to considerable lengths to become acquainted with their counterparts (and their wives) on a social basis. The Americans hosted the visitors in their homes (a rarity in Europe and Japan). The Americans and their wives developed "good" relations with their counterparts. This bank of goodwill, while not a means of co-opting the opposition, provided a desire and willingness to understand, which frequently proved to be invaluable during subsequent transactions. …

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