Negotiations: the role of cultural differences

Explore how cultural differences impact international negotiations with examples from the US, Scandinavia, Germany, and the Middle East.

Key Takeaways

Cultural awareness is essential for successful international negotiations.
Different regions have distinct negotiation styles: direct and competitive vs. collaborative and relationship-focused.
Building trust and relationships can be as important as the negotiation content itself.
Flexibility and preparation, including leveraging networks, improve cross-cultural negotiation outcomes.
Avoid assumptions based on nationality; individual backgrounds and corporate cultures matter.

What the video covers

International negotiations require understanding cultural differences to succeed.
American negotiators tend to be straightforward and task-oriented, often adopting a win-lose approach.
Scandinavian negotiators generally have a collaborative mindset with trust given upfront.
German negotiators are punctual, structured, and rely heavily on contracts during negotiations.
In the Middle East, building relationships and trust before negotiations is crucial, often involving social dinners and personal conversations.
Alcohol consumption can play a strategic role in some cultures during negotiation to reveal true intentions.
Corporate culture and internal negotiation strategies also influence negotiation styles.
Negotiators should avoid stereotyping based solely on nationality as personal experiences vary.
Networking with international business professionals helps prepare for cross-cultural negotiations.
Awareness of cultural differences can help negotiators find mutually beneficial agreements despite differing approaches.

Chapters

How do American negotiation styles differ from Scandinavian ones?

American negotiators tend to be straightforward, task-oriented, and often adopt a win-lose approach, while Scandinavian negotiators usually start with a collaborative mindset, giving trust as a benefit of the doubt and focusing on problem-solving.

Why is relationship-building important in Middle Eastern negotiations?

In Middle Eastern cultures, building trust and relationships before negotiations is crucial, often involving spending time together socially, such as dinners and personal conversations, to establish a strong foundation for business discussions.

What role does alcohol play in some international negotiations?

In certain cultures, alcohol consumption during negotiations can be a strategy to reveal true intentions or underlying motives, although it requires careful consideration to avoid offending negotiation partners.

Full Transcript — Download SRT & Markdown

Speaker A

So, I mean, we have now talked about these success drivers and pitfalls, and you also talked or touched upon at least some international business examples. Could you maybe give us one or two examples of an IB situation, and maybe how the culture had played a role in this or how this was affected by maybe some cultural challenges? That would be interesting, I think, for us to learn a little bit from.

Speaker A

a role in this or how this was affected by maybe some some cultural challenges um so that would be interesting I think for us to to learn a little bit from uh International negotiation is a really interesting area of negotiation and as

Speaker A

International negotiation is a really interesting area of negotiation, and as we touched upon, understanding the culture of the other side is really important.

Speaker A

they are they are not so eager to build a good relationship so you might feel like they are because they would invite you for dinner during negotiation processes and so on but they could be really tough in the negotiation room

Speaker A

When I was a younger negotiator, I found it more difficult to negotiate with, for example, American negotiators because they are quite straightforward, to the point, and sometimes it feels that they are not so eager to build a good relationship. So you might feel like they are, because they would invite you for dinner during negotiation processes and so on, but they could be really tough in the negotiation room.

Speaker A

um if we take a Scandinavia for example where mindset is already more collaborative from the beginning it's a little bit like trust is already given you as a benefit of a doubt it's uh easier in a way to negotiate between two

Speaker A

They would go straight to business. They would say, "We need this," and a bit more like a win-lose approach, if you ever heard that term. However, with time, I learned also to deal with those types of negotiations.

Speaker A

topics and it can really be very fruitful fruitful negotiation process at least in my experience if we talk about Middle East they are the relationship and Trust place a very big role so uh counting in the time before negotiation

Speaker A

If we take Scandinavia, for example, where the mindset is already more collaborative from the beginning, it's a little bit like trust is already given to you as a benefit of the doubt. It's easier, in a way, to negotiate between two Danish companies because if they are in that collaborative mindset, they'll come in and they'll say, "Okay, we have this goal. Let's treat it as a more common problem-solving and find that solution. Let's not avoid difficult topics."

Speaker A

you go into the negotiation topics and I like that you you mentioned Germany I I my experience with German negotiators is very similar like you mentioned that they are quite straight forward and they are task oriented like if you already

Speaker A

And it can really be a very fruitful negotiation process, at least in my experience.

Speaker A

even within Europe you can notice you would think it's it's one continent even some differences between swedes and Danes so you can find but of course we should never look um um at every negotiator on a country level because it's it's important to

Speaker A

If we talk about the Middle East, the relationship and trust place a very big role. So counting in the time before negotiation really starts is really important because you'll probably spend a lot of time together. There'll be dinners. You'll also allow yourself to talk a bit more about personal topics, like your family, just to build that trust together before you go into the negotiation topics.

Speaker A

strategy how internally you're taught to be and all of those elements makes the negotiation a very interesting topic I have heard from some colleagues that in some countries it seems to be a strategy that you go out in the evening

Speaker A

And I like that you mentioned Germany. My experience with German negotiators is very similar. Like you mentioned, they are quite straightforward and they are task-oriented. If you already have a contract, it would often go back to the contract and say, "But we had this in the contract." It's very well structured, punctual, on time, if you have a clear agenda, and so on.

Speaker A

more visible if somebody has had some alcohol and I found that quite interesting did you have you ever had a situation where you need to drink a lot and yes I also had a situation where I was presented the well alcohol a glass

Speaker A

So there are those differences culturally, and even within Europe, you can notice—you would think it's one continent—there are even some differences between Swedes and Danes. So you can find that.

Speaker A

you do it because maybe what if I if I say no will they get offended right what do you you you cross that you draw that line for them it's really important and what did you do did you have the wine or

Speaker A

But of course, we should never look at every negotiator on a country level because it's important to remember that the person across the negotiation table might have lived in different countries and might have had a lot of different experiences.

Speaker A

the rest of the topics um what kind of preparations do you do for these cross-cultural negotiations do you I mean just in quotation marks build on your experience that you have developed throughout the years or do you also use some of these conceptual

Speaker A

And it's important to mention that corporate culture also plays a role. What's the internal strategy? How internally you're taught to be? And all of those elements make the negotiation a very interesting topic.

Speaker A

rely on my network so um I am very um very grateful to have a network of business professionals and also people who negotiate or have their own businesses that live across the across the world and can advise from their

Speaker A

I have heard from some colleagues that in some countries, it seems to be a strategy that you go out in the evening and you drink a lot of alcohol together, and you also want to see the negotiation partner in a not-so-sober mood anymore to find out what is really the real intentions or what are the underlying motives that might become more visible if somebody has had some alcohol.

Speaker A

are there any kind of of country by country combinations that you say you already said in between Danish companies it seems to be a little bit easier to come to a win-win situation are there more of these yeah good combinations I

Speaker A

And I found that quite interesting. Did you ever have a situation where you needed to drink a lot?

Speaker A

there any daring question right I I mean overall that's where my uh legal part of me comes in I have to put a disclaimer no but overall um I think it really depends on your negotiation and negotiation strategy and

Speaker A

Yes, I also had a situation where I was presented with, well, alcohol, a glass of wine or two glasses of wine already around lunchtime during negotiation. And yeah, that's where you think, "Okay, that's a different setting." And it's always like thinking, "Is that right? Is that correct? Okay, others are doing it. Should you do it? Because maybe what if I say no? Will they get offended?"

Speaker A

competing approach more outcome oriented and on the other side you would have somebody from let's say uh Middle East relationship oriented um of course if they're both aware of their differences they they might still reach a really good agreement and there

Speaker A

Right? What do you—you cross that, you draw that line for them. It's really important.

Speaker A

like let's solve this problem together um while some American companies would have this competing strategy and although I am the fan of the collaborative approach um it's important to recognize that if you come into negotiation with this let's solve the problem together but the

Speaker A

And what did you do? Did you have the wine or one glass idea?

Speaker A

together into a collaborative um that's it so thank you very much Uno for sharing all your experiences with us this was very helpful for me and I guess this was also very helpful for for the audience to learn a little bit from your

Speaker A

Yes, it was with one of the Spanish potential business partners, and it's also important. The relationship is important for them, so it's important to spend some time. But I also drew the line saying, "Let's continue in the evening after we finish the rest of the topics."

Speaker A

shared has been useful and will be useful for the students and I'm sure sure it will thank you foreign

Topics:international negotiationcultural differencesbusiness negotiationcross-cultural communicationnegotiation strategiesrelationship buildingtrust in negotiationAmerican negotiation styleScandinavian negotiationMiddle East business culture

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