Secrets To Conducting A Successful International Negotiation

by drjim on September 16, 2011

International Negotiations Requires Awareness Of Local Customs

International Negotiations Requires Awareness Of Local Customs

Got a great email from reader Nadir Benouali the other evening. Nadir has a fantastic set of negotiating experiences and was willing to share them. Nadir is a US citizen of Algerian origin, and speaks Arabic, Spanish, and French. He has spent the last 20 years negotiating business around the world which provided exposure to all of the differences that the world of negotiations has to offer.

Just Being An American Can Boost Your Negotiating Position

Nadir points out that the word “American” still resonates as a dream to many people around the world. He takes advantage of this fact without being arrogant. During his training sessions, he always makes sure to invite his distributor’s employees for training in the US.

He creates enthusiasm and then makes them an offer that they can’t refuse such as “We usually offer free training at a specific stage such as when reaching 40% of the sales goal so that the training in the US will be to tweak that missing link for your sales and marketing reinforcement…”.

As an international negotiator, one must observe and understand the minute things that set Americans apart from other negotiators.

Negotiators Need To Remember That You Are Not In Kansas Any More

One major aspect that Nadir has noticed is how space is thought of. In the US we have so much space to a point where we can accommodate just about anything. Not so in Asia, Europe and other countries!

In the US one parking space can accommodate two Korean or French cars. An American house can accommodate Maytag’s washer and dryer, but never in a Japanese house.

This goes the same for restaurants where an Olive Garden restaurant offers large tables and chairs, a French restaurant would never be able to do so. A Spanish or Dutch hospital can never house a US made medication cart or a fully automated hospital pharmacy. Therefore, a Maytag international executive will never succeed in his negotiation to place a fixed numbers of washers and dryers on a Japanese or Korean or a French apartment.

Besides space, size also matters in the rest of the world. A US garment manufacturing executive will be shocked to find out that size L, M and S are different in Europe, Asia and other countries than the US. A large size vest in France is considered a 42 in the US! And a large fries at McDonald in Geneva is a medium size in the US.

To Close A Deal, Negotiators Need To Understand The Other Side’s Customs

One final point that Nadir brought up that I though was very important had to do with being aware of local customs during a negotiation. Customs can deal a major setback to any negotiation if they aren’t accounted for.

As an example, take a negotiation that is about exporting Texas meat products to the Middle East. The Middle East is a net importer and the market is worth 100’s of millions of dollars. The point that can be overlooked during a negotiation is that by local customer, the Middle East buys only Halal meat.

Imagine that our Texan negotiator offered to sell his meat at X dollars, and then the contract was signed. The Islamic Services of America’s certification and approval can only be authenticated in front of a religious man or Imam. The process calls for specific people to carry out the Halal ritual. This process not only slows the production line, but also adds extra costs that our Texan executive did not factor in during his negotiation. Local customs can change everything when it comes to negotiations.

Another example of just how important it is for a negotiator to be aware of local customs relates to the pharmaceutical industry. Imagine a pharmaceutical executive negotiating to sell his company’s medicine to a Muslim country.

Some medicine and supplements use pork gelatin capsules which is forbidden under Muslim law. Also pork-based synthetic insulin, and non-halal beef insulin are unacceptable to devoted Muslims. Non-porcine synthetic (human) insulin should be offered and negotiated instead in order to avoid a potential loss of contract worth $100s of millions.

Viva Pharmaceutical, a Canadian firm opened a factory in Brunei to cater to the 1.9 billion Muslims around the world! This is what Nadir calls Optimum Targeted Profit Generated negotiation skills.

What All Of This Means For You

Nadir makes a good set of points in his discussions about international negotiations. It’s often what we don’t know that can cause us the greatest challenges.

The country that you come from, especially America, can have a significant impact on the impression that you make on the other side. Where you come from also shapes how you see the world and this means that you need to be sensitive the simple fact that what you take for granted may not be viewed the same way by the other side of the table.

Finally, you can negotiate for as long as you want to, but if you are not aware of the other side’s customs you risk losing the deal. Take the time to find out how the other side of the table sees the world and you’ll be able to close more deals and close them faster!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: What do you think is the best way to discover what customs the other side of the table has?

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What We’ll Be Talking About Next Time

Can you remember back to when you were in school? At the end of the term in each class there would be a big test that would determine if you had learned what had been taught to you. You’d do all of your homework and then you’d take extra time to study for the test hoping that most of that information would stay in your head long enough for you to pass the test. Well good news, sales negotiations are not like school tests – you don’t have to know everything in order to do just fine.

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