Have you ever come back from a meeting with an international customer, supplier or colleague and remarked, perhaps in exasperation, about the arrogance/stubbornness/inflexibility of people of their nationality? Of course you haven’t. That would be an outrageous thing to even think, let alone say—especially in the context of business networking, where understanding and respecting cultural differences is key to building trust and fostering strong professional relationships.
The Global Business Landscape
But conversely, perhaps you have remarked with admiration on the efficiency and orderliness, or spontaneity and creativity, or warmth and generosity, of nationalities? That arguably feels more acceptable in that it embraces the notion of cultural diversity and celebrates the fact that the tapestry of humankind is so rich and varied. Understanding these cultural nuances is essential for building meaningful relationships in business networking.
Irrespective of whether either of those two scenarios resonates with you, the fact is that the world is getting smaller. The march of globalization, the development of emerging markets, increased migration, the influence of social media, enhanced opportunities to travel – all of these factors mean that we are exposed to people and cultures other than our own in ways that were unimaginable 20 or 30 years ago.
To put this into a personal context, my youngest son is 17 and has by a conservative estimate visited 20 different countries on 4 different continents. At his age, I had left Ireland once – for a week’s holiday in Scotland!
Impact of Cultural Differences Today
Source: Freepik
The multinational nature of the modern business world has implications for negotiators as well. In the past year alone, we have worked with clients in over 61 different countries, and we often get asked the question, “What is the impact of cultural difference on negotiations?” In some ways the answer is, “Not as significant as it used to be.” When business started to internationalize in the 1960s and ‘70s, there was nowhere near the level of familiarity with other cultures that exists today. This growing familiarity has not only transformed international negotiations but also revolutionized business networking, enabling professionals to connect across borders with greater ease and understanding.
Business people and negotiators were often clueless about the unwritten rules and customs of other societies, a gap that also extended to business networking practices. There are a host of stories about failed deals, imploded relationships, and disastrous misunderstandings. Among my favourites is the launch of a vacuum cleaner in the USA by Swedish manufacturer Electrolux with the literal translation of their Swedish strapline, “Nothing sucks like an Electrolux”. Unsurprisingly, the brand didn’t really take off with US consumers.
So where does that leave us today? Is cultural difference still something an international negotiator needs to factor into their thinking as they negotiate a deal with a foreign counterpart? Well, the answer is still “yes”, but there are a few caveats. In global business networking and negotiations, cultural awareness plays a critical role, though it must be balanced with individual-level understanding.
First, we must never forget that we negotiate with people, and a keen understanding of an individual’s character and negotiating style will yield more insight than a comprehensive knowledge of their national culture.
The knowledge that your counterparty is Italian, for example, is of less importance than an understanding of their priorities in any given deal, their level of empowerment, the quality of their BATNA, the size of their ego and multiple other considerations.
Equally, although there are certain generalizations we can make about different cultural groups and certain factors we can identify which determine cultural difference, it is dangerous to assume that all people of a particular nation will behave and negotiate in a similar and predictable way. Effective business networking requires recognizing both cultural nuances and the unique traits of individuals involved.
(White) “It is dangerous to assume that all people of a particular nation will behave and negotiate in a similar and predictable way.”
Second, nationality is only one part of your cultural makeup. Your family background, gender, education, social status, relative affluence, leisure pursuit, the company you work for, and many other factors, will all have had an influence on your psychological makeup and negotiating style. These diverse influences also shape how you approach business networking, as personal and cultural experiences often determine the way you build connections and establish trust in professional settings. In many cases a combination of these may even transcend nationality.
A middle-aged, professional, multilingual working mother from Warsaw will arguably have more in common with a similar individual from Seattle than with a young, unemployed, monolingual single man from her own city. This shared professional identity often shapes interactions in business networking and negotiations, transcending cultural boundaries.
Third, I would suggest that cultural difference will have even less of an impact on international negotiation in the coming decades. The generation who will be negotiating big multinational deals in 2040 is currently either still in full-time education or in the very early stages of their career. Their exposure to digital platforms, virtual business networking, and globalized learning environments will likely diminish the influence of traditional cultural barriers.
They will have grown up in a much more cosmopolitan society than the current generation, they will have been exposed to international influence through social media, and they will very possibly be fluent in more than one language; indeed, they may well have lived and worked in more than one country. This global perspective will inevitably shape their approach to business networking, allowing them to build connections across cultures with greater ease and adaptability.
Key Considerations in Cross-Cultural Negotiations
Source: Freepik
The Gap Partnership has worked with clients and on deals all over the world and our experience has taught us that virtually all of the principles of negotiation are universal. The negotiation Clockface and the factors which determine where a negotiation sits on the Clockface are understood and adopted all over the world.
The concept of negotiation power, how it is derived and exercised, the importance of BATNAs, and how these influence the formulation of a negotiation strategy – none of these change from one culture to the next.
Equally, the fundamental techniques of skilled negotiators –- conditional trading, anchoring, opening extreme, creating satisfaction through movement, the use of levers, the application of deadlines, preconditioning to manage expectations – all of this work equally well across the globe. These same principles are often just as effective in business networking, where building trust and managing expectations are essential for forming successful professional relationships.
Understanding Cultural Frameworks
It is when we come to traits and behaviours that we start to notice differences. That is hardly surprising, since this is where the human factor starts to play a part. We use two frameworks in our work to develop negotiation capability with our clients: The 10 Traits of the Negotiator and The 14 Behaviours of the Negotiator. These frameworks are equally valuable in business networking, as understanding and leveraging these traits can help build stronger, more effective professional relationships across diverse cultural and individual contexts.
Our experience is not that these are challenged or rejected in different countries. They are almost always accepted and understood. However, these traits and behaviors also play a crucial role in business networking, as understanding and adapting to cultural nuances can significantly enhance your ability to build meaningful professional relationships across diverse regions. But we can start to make cautious generalizations about how different nationalities naturally exhibit these traits and behaviors.
Let’s pick out a few examples.
Humility is an important trait, particularly in more collaborative negotiations, and cultures where the collective is more important than the individual – Japan and India for example – tend to display this trait more readily. In societies where the individual takes prominence over the collective – USA is an example – humility is less evident but assertiveness, another significant trait of a negotiator, comes more naturally.
We can also make generalizations about the 14 behaviours. The ability to exert self-control, manage discomfort and use silence comes more naturally to the Scandinavians than to Mediterranean cultures.
Arab cultures tend to embrace and understand the principle of opening extreme and trading satisfaction more easily than northern European cultures where strong societal values of justice, fairness and community can act as inhibitors.
So what, precisely, are the key drivers of cultural difference? What makes the Mexicans recognisably Mexican or the Japanese unmistakably Japanese? Any number of academics and authors have written on the subject and there is a wealth of literature for those who are interested. I can recommend two particular books which offer further insight into the ways in which cultures differ: “When Cultures Collide” by Richard D Lewis; “Riding the Waves of Culture” by Fons Trompenaars and Charles Hampden-Turner.
The Gap Partnership has also published a lengthier article, “Negotiating Across the Globe”, which offers a more detailed analysis of how cultures differ and the extent to which negotiators need to incorporate cultural difference into their thinking as they prepare for international negotiations.
For the moment, let’s just pick a couple of examples that will illustrate how cultures differ and how these differences create dissonance in negotiations. One significant axis of difference is that of Principle vs Pragmatism.
Principle vs Pragmatism
Highly Principled cultures tend to organise themselves around a set of shared laws, codes, rules and norms and there tends to be a shared belief in absolute rights and wrongs. These values often influence how people approach business networking by emphasizing formal structures and rules. Adherence to these is expected and deviation from them is frowned upon. Switzerland or the Netherlands would be prime examples.
Pragmatic cultures rely less on a set of universally shared rules, laws and standards and tend to make different decisions depending on the circumstances, the people involved, the possible consequences and any number of other considerations. Venezuela and Russia are two examples of more pragmatic cultures.
In negotiation terms, you can begin to see the friction that may ensue. A Principled negotiator will seek to do business on “standard” terms based on logic, with specified timeframes laid down in a more rigid contractual framework. Similarly, in business networking, they might favor structured interactions and formal agreements.
The Pragmatic negotiator, on the other hand, will resist this, viewing timeframes as more elastic and placing greater emphasis on the personal relationship as the foundation of the deal rather than the contract. This approach is equally relevant in business networking, where building trust and flexibility can often lead to more meaningful and adaptable connections, especially in dynamic or multicultural environments.
Individualist vs Community
Another dimension of difference is that of Individualist vs Community. An Individualist culture is one which sets great store by the values of competition, self-reliance, self-interest, and personal fulfilment, often reflected in their business networking practices. A Community culture places greater emphasis on the values of collaboration, social wellbeing, group harmony and the greater good of society. Individualist negotiators are empowered operators with a mandate from their organization to make quick decisions, often based on their own personal KPIs.
Community oriented negotiators frequently negotiate in teams, ask for adjournments to consult with their bosses before making decisions, evaluate deals from a corporate perspective and are more reluctant to make binding commitments, preferring these to be provisional or contingent on other factors. This team-based approach often extends to their business networking strategies, which prioritize collaboration and long-term relationship building.
To conclude, cultural difference remains a consideration for the international negotiator, but it is only one of many things to take into account and it is slowly decreasing in importance as the business world evolves. Similarly, modern business networking practices are adapting to bridge cultural divides and foster more inclusive, global partnerships.
I would like to leave you with two final thoughts. First, just because they are different doesn’t mean they are being deliberately difficult or obstructive; they are just doing what comes naturally and quite possibly think your behaviour is just as deviant as you deem theirs to be.
Second, we all view other nationalities through the lens of our own. Just because you perceive your overseas colleague in a certain light, doesn’t mean that your boss of a different nationality will share your view.
Frequently Asked Questions
How significant are cultural differences in modern negotiations?
Cultural differences remain relevant but are decreasing in importance as business becomes more globalized. Focus on individual characteristics while maintaining cultural awareness, especially when engaging in business networking.
What are the key cultural frameworks to consider?
The main frameworks are Principle vs Pragmatism and Individualist vs Community orientations. Understanding these frameworks is crucial for effective business networking and negotiations.
How can negotiators prepare for cross-cultural deals?
Focus on understanding individual counterparts, maintain flexibility, and apply universal negotiation principles while respecting cultural nuances. These skills are equally valuable in business networking, ensuring meaningful and authentic connections.
About the Author: Alistar White is a seasoned commercial consultant with 25 years of experience. He joined The Gap Partnership in 2004, becoming a partner for 12 years. With expertise in business-to-business negotiations and international markets, he holds a degree in Modern Languages, speaks fluent French and German, and has a postgraduate MBA.
