3 Cross-Cultural Negotiation Examples to Learn From

Cross-cultural negotiation is a skill that is essential for anyone who wants to do business in a globalized world. Negotiating across cultures can be challenging, as different values, norms, and communication styles can create misunderstandings and conflicts. However, with some preparation, research, and cultural awareness, cross-cultural negotiation can also be an opportunity to build trust, rapport, and mutual benefit.

KEY TAKEAWAYS

Cross-cultural negotiation is a skill that is essential for doing business in a globalized world.

Cross-cultural negotiation can be challenging due to different values, norms, and communication styles.

Cross-cultural negotiation can also be an opportunity to build trust, rapport, and mutual benefit.

Cross-cultural negotiation requires preparation, research, and cultural awareness.

Cross-cultural negotiation involves adapting your style, building trust and rapport, seeking common ground, managing conflicts, and being self-aware.

In this article, we will look at some cross-cultural negotiation examples from various contexts and industries and analyze what we can learn from them. We will also provide some tips and best practices for successful cross-cultural negotiation.

Cross-Cultural Negotiation Examples

1. Nestle and Shanghai Delicacies

One example of successful cross-cultural negotiation involved a Swiss company, Nestle, and a Chinese company that specialized in the manufacture of Chinese delicacies. Nestle was interested in acquiring the Chinese company, but there were cultural differences that needed to be addressed.

The Swiss negotiators initially approached the negotiation as a transactional deal, focusing on the financial and legal aspects. They also expected a quick and straightforward process. However, they soon realized that the Chinese negotiators had a different perspective. They viewed the negotiation as a relationship-building exercise and wanted to establish trust and rapport before discussing the details. They also preferred a more flexible and holistic approach, rather than following a strict agenda.

The Swiss negotiators adapted their style and expectations to suit the Chinese culture. They engaged in social activities with the Chinese negotiators, such as dinners and sightseeing tours. They also showed respect for the Chinese culture by learning some basic phrases in Mandarin, using formal titles, and bringing gifts. They also allowed more time for the negotiation process and were open to making adjustments along the way.

The result was a successful acquisition that benefited both parties. Nestle gained access to the Chinese market and local expertise, while the Chinese company gained access to Nestle’s global network and resources.

2. NBA and China

Another example of cross-cultural negotiation involved the National Basketball Association (NBA) and China. The NBA is one of the most popular sports leagues in China, with millions of fans and lucrative broadcasting deals. However, in 2019, a tweet by an NBA executive expressing support for the pro-democracy protests in Hong Kong sparked a backlash from the Chinese government and public.

The NBA faced a dilemma: how to balance its values of free speech and social justice with its business interests in China. The NBA initially issued a statement that acknowledged the tweet as “regrettable”, but also defended the right of its employees to express their opinions. This statement was criticized by both sides: the Chinese side saw it as insufficient and insincere, while the American side saw it as appeasing and compromising.

The NBA then tried to repair the damage by engaging in dialogue with its Chinese partners, such as broadcasters, sponsors, and officials. The NBA also emphasized its respect for China’s culture and history, and its commitment to promoting basketball as a bridge between cultures. The NBA also suspended some of its activities in China until the situation calmed down.

The result was a gradual restoration of trust and cooperation between the NBA and China. The NBA was able to resume its broadcasts and events in China, while also maintaining its stance on social issues.

3. Boeing and Japan

A third example of cross-cultural negotiation involved Boeing, an American aerospace company, and Japan Airlines (JAL), a Japanese airline company. Boeing had been supplying aircraft to JAL for decades, but faced increasing competition from Airbus, a European rival. Boeing wanted to secure a contract with JAL for its new 787 Dreamliner model, which was designed to be more fuel-efficient and comfortable than previous models.

Boeing approached the negotiation with confidence, based on its long-term relationship with JAL and its superior product features. However, Boeing underestimated the cultural differences between American and Japanese business practices. Boeing expected JAL to make a quick decision based on rational criteria, such as price and performance. However, JAL preferred to take more time to consult with various stakeholders, such as employees, customers, regulators, and suppliers. JAL also valued loyalty and harmony over competition and innovation.

Boeing realized that it needed to adjust its strategy to suit the Japanese culture. Boeing showed more patience and respect for JAL’s decision-making process. Boeing also demonstrated its commitment to JAL’s success by offering customized services, such as training programs, maintenance support, and spare parts supply. Boeing also leveraged its existing relationships with JAL’s executives and engineers to build trust and rapport.

The result was a win-win outcome for both parties. Boeing secured a contract with JAL for 35 787 Dreamliners worth $5 billion USD. JAL gained access to Boeing’s advanced technology and customer service.

TIP

One important tip for cross-cultural negotiation is to be aware of your own culture and how it influences your perception, judgment, and behavior. By being self-aware, you can avoid ethnocentrism (the belief that your own culture is superior or normal) and stereotyping (the assumption that all members of a culture are alike). You can also appreciate the diversity and complexity of other cultures, and learn from them.

Cross-Cultural Negotiation: A Growing Industry

Negotiation is a process of communication and decision-making between two or more parties who have different interests, goals, and preferences. Negotiation can be used to resolve conflicts, create agreements, or exchange resources. However, negotiation can also be challenging, especially when it involves people from different cultural backgrounds.

Cross-cultural negotiation is the practice of negotiating across cultures, which may differ in language, values, norms, behaviors, and expectations. Cross-cultural negotiation requires not only knowledge and skills in negotiation techniques, but also awareness and sensitivity to cultural differences and similarities. Cross-cultural negotiation can be seen as an opportunity to learn from each other, build trust and rapport, and create mutually beneficial outcomes.

According to a report by Grand View Research, the global cross-cultural training market size was valued at USD 6.9 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 15.2% from 2020 to 2027. The report attributes this growth to the increasing globalization, migration, and diversity of the workforce, as well as the rising demand for effective communication and collaboration in various sectors such as business, education, healthcare, and diplomacy.

Cross-Cultural Negotiation: A Case Study

One example of successful cross-cultural negotiation involved a Japanese company and an American company. The Japanese company was interested in acquiring the American company, but there were cultural differences that needed to be addressed.

The Japanese company was used to a hierarchical and collectivistic culture, where decisions were made by consensus and seniority. The American company was used to a individualistic and egalitarian culture, where decisions were made by merit and initiative. The Japanese company valued long-term relationships and harmony, while the American company valued short-term results and competition. The Japanese company preferred indirect and polite communication, while the American company preferred direct and assertive communication.

To overcome these differences, the negotiators from both sides adopted a collaborative and integrative approach. They spent time to get to know each other personally and professionally, building trust and rapport. They also learned about each other’s culture, values, norms, and expectations, avoiding stereotypes and assumptions. They used interpreters and translators to ensure clear and accurate communication. They focused on common interests and goals, rather than positions and demands. They explored various options and alternatives, rather than sticking to fixed proposals. They also respected each other’s face and dignity, avoiding criticism or confrontation.

As a result of their cross-cultural negotiation skills, the negotiators were able to reach a win-win agreement that satisfied both parties’ needs and interests. The acquisition was completed successfully, and the two companies were able to integrate smoothly.

Cross-Cultural Negotiation: Tips for Success

Cross-cultural negotiation can be rewarding and productive if done properly. Here are some tips for success:

Do your homework: Before entering a cross-cultural negotiation, research the culture of the other party. Learn about their history, geography, religion, politics, economy, society, values, norms, behaviors, etiquette, communication styles, negotiation styles, etc. This will help you understand their perspective, preferences, expectations, and motivations.

Be flexible: During a cross-cultural negotiation, be ready to adapt your style and strategy according to the situation. Be open-minded and curious about the other party’s culture. Be willing to listen and learn from them. Be respectful and tolerant of their differences. Be creative and innovative in finding solutions that work for both sides.

Be patient: Cross-cultural negotiation may take longer than expected due to cultural differences. Be patient and do not rush the process. Take time to build rapport and trust with the other party. Take time to clarify any misunderstandings or ambiguities that may arise. Take time to review and confirm any agreements or commitments that are made.

FREQUENTLY QUESTIONS

Q: What is cross-cultural negotiation?
A: Cross-cultural negotiation is the process of reaching an agreement between parties from different cultural backgrounds, who may have different values, norms, and communication styles.

Q: What are some challenges of cross-cultural negotiation?
A: Some challenges of cross-cultural negotiation include:

Misunderstandings and conflicts due to different expectations, assumptions, and interpretations.
Lack of trust and rapport due to different preferences, emotions, and behaviors.
Loss of time and resources due to inefficient and ineffective processes.

Q: What are some benefits of cross-cultural negotiation?
A: Some benefits of cross-cultural negotiation include:

Access to new markets, opportunities, and resources.
Learning from diverse perspectives, experiences, and expertise.
Building long-term relationships and goodwill.

Q: What are some tips for successful cross-cultural negotiation?
A: Some tips for successful cross-cultural negotiation include:

Do your homework: research the culture, history, and context of the other party, and understand their goals, interests, and concerns.
Adapt your style: adjust your communication, behavior, and strategy to suit the other party’s culture, preferences, and expectations.
Build trust and rapport: show respect, empathy, and curiosity for the other party’s culture, values, and perspectives. Engage in social activities, use appropriate language and etiquette, and give gifts or compliments.
Seek common ground: find areas of agreement, mutual benefit, or shared values. Use objective criteria, such as facts, data, or standards. Avoid imposing your own culture or values on the other party.
Manage conflicts: acknowledge and address any differences or disputes that arise. Use active listening, open questions, and constructive feedback. Seek win-win solutions that satisfy both parties’ needs.

Q: What are some examples of cross-cultural negotiation?
A: Some examples of cross-cultural negotiation are: