Project Management Institute

Negotiate to win across cultures

Muhammad A. B. Ilyas

CEO, LIFELONG, Kuwait

Mohamed Khalifa Hassan

Director, LIFELONG, Kuwait

The ability to negotiate successfully is considered a valuable skill in all professions across the globe. Many leaders report spending most of their project, program, and portfolio management effort on communicating and negotiating with stakeholders. Given the fact that many projects today involve interaction with stakeholders from around the globe, sound cultural awareness has become a key enabler for effective negotiations.

Negotiations are always influenced by perceptions and beliefs shaped by past relationships, respective views of strength, competitive outlook, and precedents. Cultural stereotypes also play an important role in framing the negotiation strategy. Preparation undertaken by negotiating parties has an important bearing on the outcome.

Many project leaders often overlook the fact that negotiations extend from inception of a possible relationship to its conclusion. During this time, hundreds of negotiated events, both internal and external, contribute directly to the outcome of portfolio, program and project management efforts. The fact that negotiations are increasingly going virtual—through increased reliance on technology as an alternative to face-to-face meetings—makes it even more imperative to understand the issues and challenges that may be encountered in a global village.

In this paper, the authors provide an in-depth guide to negotiations across cultures. The authors emphasize the overall understanding of negotiations and also offer practical hints and tips in reaching better and more sustainable agreements. They encourage a collaborative approach because the evidence points to the fact that collaboration is more likely to yield higher benefits to both parties.

Global Cultural Dispositions

Cultural stereotyping is fixing a set of ideas about what a particular type of nationality is like, based on perceptions formed through experience, hearsay, and the media. Careless stereotyping can often lead to wrong assumptions. Some examples are given in the following:

  • Assumption: French refusal to compromise indicates obstinacy.
    Reality: The French see no reason to compromise if their logic stands undefeated.
  • Assumption: Japanese negotiators cannot make decisions.
    Reality: The decision was already made before the meeting, by consensus. The Japanese see meetings as an occasion for presenting decisions, not changing them.
  • Assumption: Mexican senior negotiators are too “personal” in conducting negotiations.
    Reality: Their personal position reflects their level of authority within the power structure back home.

It must be noted that stereotyping is not something to be completely avoided. Stereotyping based on facts and thorough knowledge is a valuable tool and it must be:

  • Consciously held,
  • Descriptive rather than evaluative, and
  • Managed properly.

According to Richard D. Lewis, several hundred national and regional cultures of the world can be roughly classified into three groups (Lewis, 2006):

  • Task-oriented, highly organized planners (Linear Active);
  • People-oriented, loquacious inter-relators (Multi Active); and
  • Introverted, respect-oriented listeners (Reactive).

The classification helps in understanding the behaviors when dealing with people from different cultures. It also helps in better understanding the possible reaction of stakeholders to proposals put forth during negotiations. A good understanding of the attributes of cultural classes can help with predicting an individual’s behavior and knowing why certain people did what they did. These attributes should form the basis of any stereotypes we develop and maintain about other nationalities. A diagrammatic disposition of major nations into cultural classes is given in Exhibit 1.

As mentioned earlier, Linear Active cultures are task oriented and highly organized. Nations that belong to this class include, among others, the United States, Switzerland, Germany, and the United Kingdom. Negotiators in Linear Active cultures rely more on solid data, processes, and clear steps defined through a system. All interactions are more process oriented and stakeholders from this cultural class plan ahead methodically and mostly tend to focus on one major issue at any given time.

Multi Active cultures are people-oriented and loquacious inter-relators. Nations characterized by this cultural class include Hispanic Americans, nations of the Middle East, Arabs, Africa, Russia, Italy, and Spain. Negotiators in Multi Active cultures rely more on high-level details. Interactions are more people oriented and stakeholders from this cultural class only plan grand outlines but can discuss several issues simultaneously.

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Exhibit 1 – Cultural types model.

Vietnam, China, Japan, Korea, and Singapore are considered examples of Reactive cultures. Members of this class are introverted and respect-oriented listeners. Negotiations are characterized by heavy reliance on communal harmony and respect of hierarchy. Interactions are more people oriented and negotiators from this cultural class tend to collect information that will let them envision the bigger picture before reaching a decision.

Another key attribute that is critical in planning negotiations is understanding how different cultures collect information. In data-oriented cultures, a lot of research is done to produce information that is then acted on. The more developed societies turn to printed sources and databases to collect facts, which are then parsed through information systems to help in decision making. Dialogue-oriented cultures, on the other hand, rely more on their own personal information network. Dialogue-oriented people tend to use their personal relations to solve the problem from the human angle. Exhibit 2 shows a ranking of dialogue-oriented and data-oriented cultures around the globe.

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Exhibit 2 – Relative ranking of dialogue and data-oriented cultures.

The Science of Negotiations

Successful negotiations require a lot of preparation before the actual interaction with the other party takes place. Appropriate preparation can eliminate some of the confusion that results in stalled negotiations. The first component of preparation centers on the concept of framing (Ury, 1993).

Negotiation Framing

Framing is characterized by how we see the world around us. It results from both how the world really is and the perspectives of the person involved in framing. Different people can perceive the same object very differently and are often not fully aware of the particular frames they use themselves. Though framing is driven by many factors, cultural stereotypes play a key role in shaping perceptions. The following are the most common types of negotiation frames (Bazerman, 2001):

Substantive

  • Addresses a specific conflict;
  • Focuses on a single key issue or concern at any given time, for example, price, or payment terms; and
  • Resembles a linear active approach to problem solving.

Loss-Gain

  • Attempts to achieve a compromise,
  • Focuses on the risks associated with commitments, and
  • Mostly resembles a multi active approach to problem solving.

Characterization

  • Attempts to build a favorable view in front of other party,
  • Focuses on what the parties think of each other, and
  • Is closer to reactive approach to problem solving.

Outcome

  • Attempts to discover what predispositions the other party has for achieving a specific result or outcome from the negotiation;
  • Focuses on getting a particular outcome above all else; and
  • Combines the linear active and multi active approaches of problem solving.

Aspiration

  • Attempts to discover what predispositions the other party has toward satisfying a common set of interests or needs in negotiation,
  • Each party tries to assure that his or her needs and interests are met, and
  • Is closer to reactive approach of problem solving.

Process

  • Defines the steps parties will go through to resolve their dispute;
  • Focuses less on specific negotiation issues than on who is at the table, how the deliberations will proceed, what rules are explicitly and implicitly being followed throughout the negotiation, and if they are fair; and
  • Resembles the linear active approach of problem solving.

Evidentiary

  • Provides facts and supporting evidence that parties present to support data or “evidence” that argues for or against a particular outcome or loss-gain frame,
  • Parties with this frame are focused on the evidence that is offered to support or refute positions, and
  • Resembles the linear active approach of problem solving.

Negotiation Goals

The second component of preparation involves defining the goals of any negotiation exercise. Good negotiators must understand:

  • The goals they want to achieve,
  • The priorities among those goals,
  • Potential multi-goal packages, and
  • The possible trade-offs among goals.

Frames and goals mostly evolve together. Goals must represent what we can realistically get. Defining achievable goals also helps in identifying trade-offs. Goals must incorporate what the other party is willing to accommodate. Goals can be tangible (price, volume, delivery date, damage limitations etc.) or intangible (relationship, image, reputation, etc.).

Negotiation Strategy

Negotiation strategy represents a plan, which specifies what choices a negotiator will make in every probable situation. Goals and frames have a direct bearing on negotiation strategy. A good strategy consists of four elements:

  • Strategy must not be coercive;
  • Strategy must account for uncertainties;
  • Strategy must deal with interdependence as goals of each party may require the cooperation of the other; and
  • Strategy must deal with the fact that other party's interests, needs, and strengths cannot be fully comprehended.

Negotiation Tools

Many negotiators decry the fact that lack of essential data hampers an appropriate level of preparation. Poor information flow and non-availability of suitable knowledgebase result in shortcomings during negotiation. It is often assumed that the other side has much greater knowledge than is in fact the case. Some tools ,which may help in preparation are described in the following.

Negotiations Checklist

These typically contain:

  • Indicators of a bad deal,
  • Actual and/or hypothetical causes of conflict, and
  • Range of interventions that may prove to be helpful.

Business Intelligence

Business intelligence leverages quantitative data that is often extracted from enterprise business systems. This might include detailed financials, budgeting, forecasting, and business process data. The outcomes enable:

  • Knowing history and forecasts to predict multiple complex scenarios, and
  • Leveraging fact-based decision making.

Knowledge Management

Knowledge management leverages qualitative data and information that is captured and stored in a knowledgebase or retrieved from third party resources. Such information typically includes:

  • Best practices or lessons learned,
  • Competitive assessments,
  • Past pricing or contract information, and
  • Processes and templates.

Negotiation Styles

Negotiation style has a major effect on the outcome of the negotiation. In this section, we are going to describe the alternatives and outcomes they typically produce. Deciding negotiation style must be driven not only on your own goals but also by the expectation you have about the style that will be adopted by the other side to meet their goals. You have be ready to change or adapt based on what you encounter during the negotiation. In this section, we’ll describe using different styles and discuss the benefits and risks associated with them (Cummins, David, & Kawamoto, 2014).

Perspective and Precedent

Negotiation must be viewed in the context of a wider process. That means negotiations are always impacted by the perceptions or beliefs the parties bring to the table. These include fundamental issues like past relationships, respective views of strength, beliefs about competitors or alternatives, precedent, history, or market perception. Culture also plays an important part. The negotiation will also be affected by views of fairness and the degree of planning and coordination undertaken by the parties. Often corporations overlook the fact that negotiations extend from inception of a potential relationship through to its eventual conclusion; during this time, there may be hundreds of individual negotiated events, internal and external, that contribute to the eventual outcome—successful or unsuccessful. Like any series of events, individual elements may be deemed a success, but they do not guarantee ultimate satisfaction or victory.

Critical Factors

There is a range of factors that influence your choice of negotiation style. The same factors will play with the other side, so you will need to have thought these through, not only from your team’s perspective, but the other team’s perspective as well. Authority is a good example: Do you have people on your team authorized to make commitments on all areas of the contract and agreement? Does the other side have those players? If not, you are going to find areas that are constrained where inevitably the negotiation is going to be more positional in its approach. If you have the authorized parties on board, then it can become more principled.

Now you have to decide whether that matters and you have to determine whether you either insist on the right experts or authorized individuals from their side being on their team and equally whom you want on your team. Is this a deliberate elimination, or is it something that you wish to include?

The same applies when you look at things like relative power and the beliefs the parties have over their power and influence over the negotiation. Do you consider yourselves to be the dominant party or do you see the other side as the dominant party? How do you think they see this? It will have a major influence on the style and approach that they adopt.

The great thing about all of this is that negotiation creates opportunities for us to change the factors. Through effective planning we can adjust many of these elements in either direction. As we go through the rest of this process; we are going to be talking extensively about how we achieve those changes.

Positional versus Principled Negotiation

There are two core approaches to negotiation and they are commonly called Positional and Principled. Essentially positional negotiation is appropriate if you are trying to stifle and limit discussion. Principled negotiation is employed when you are serious about finding a mutual acceptable solution. The positional style is competitive in its nature and tends to lead to what are termed Win-Lose results, as opposed to the collaborative style of a principled approach and its results, which tend to be termed Win-Win.

First let’s look at the key points about negotiation style. Most negotiators have a natural preference for one method or the other, but experienced negotiators need to be able to employ both. That means that you should understand and practice both styles. And you also need to find methods to understand and establish the preferred styles of the members of your negotiation team. You need to be able to employ and protect against those members during the negotiation.

In general, for example, functional specialists from areas like finance or legal are perhaps narrower in their outlook and perhaps more likely to have positional attitudes; they show less interest in the validity of the views or arguments of the other side, or indeed of their own team members. Employed effectively this can be an asset.

Now you must select your style to accord with your objectives, and of course you must have established a planned and consistent approach throughout your team. As we will discuss later, that does not mean that you will all follow the same approach all of the time, it just means that variations, changes, and inconsistencies must be planned. And finally you must have researched and planned for the style of the other side, and the individual members of their team. We'll talk about methods to obtain this information so that you can be best prepared.

“I don’t expect them to make concessions, but they should at least negotiate.” This statement—or one very much like it—was attributed to the mother of a hostage in a recent international kidnapping. If you are unwilling to make concessions, it is not truly a negotiation. A positional approach involves a person adopting a position and aiming to negotiate an agreement as close to that position as possible, without even exploring alternative outcomes or paying real attention to the other side. It is a style that allows for only limited and fairly predictable negotiating. In many instances it degenerates into a battle of wills, each party wondering who is going to give in first. People adopting a positional style will assume that only one party can emerge from the negotiation a clear winner. This is often termed the “WIN/LOSE” approach.

Now the principled approach, on the other hand, has a different set of primary assumptions; namely, the parties share some common interests, that the outcome will be improved if there is full discussion of each participant’s perspectives and interests, and that we live in an integrated and complex world and our problems can be best resolved through an application of intelligence and creativity.

Conclusion

Negotiation can be defined as the process by which parties come to terms on a particular matter in which they have corresponding or complementary desires. Both selling and negotiating are about getting others to agree to your ideas and the key word here is persuasion. To achieve your goals, you must have understood relative strengths and weaknesses and have an appreciation of theories of human motivation. This understanding and appreciation matter as much in marshalling your own side as they do the other side. Indeed, the internal negotiation can be more complex due to the lack of willingness by key players to cooperate.

Bazerman, M.H. (2001). Judgment in managerial decision making. New York, NY: John Wiley & Sons.

Cummins, T., David, M., & Kawamoto, K. (2014). Contract and commercial management: The operational guide. The Netherlands: Van Haren Publishing.

Lewicki, R.J., Saunders, D.M., Bruce, B., & Minton, J.W. (2003). Essentials of negotiation. Columbus, OH: McGraw Hill.

Lewis, R.D., (2006). When cultures collide: Leading across cultures. (3rd ed.). Boston, MA: Nicholas Brealey International.

Ury, U. (1993). Getting past no: Negotiating your way from confrontation to cooperation. New York, NY: Bantam.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2015, Muhammad A. B. Ilyas, Mohamed Khalifa Hassan
Originally published as part of 2015 PMI Global Congress Proceedings – Orlando, Florida, USA

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