Negotiating Successfully

South Americans prefer to do business with people they like and trust. Formal negotiation may seem unnecessary among friends but it still clarifies specific activities. Negotiations do not have to be adversarial. Ideally you should approach negotiations as if you are all on the same side—you are each contributing to a common goal.

Getting down to business

Negotiations in South America can be fast and emotional. People express themselves openly and may mistrust those who seem to be holding back. The focus of negotiations in South America tends to be on agreeing to general principles of a contract, not on the specific details of execution, so don’t jump into the fine print until everyone is comfortable with the basic parameters.

Resist the temptation to be time efficient. Give yourself plenty of time to complete negotiations. This may mean a few days instead of a few hours. South Americans will focus on the task at hand and concentrate on working out a contract to everyone’s satisfaction. If you are focused on finishing by a certain time, you may end up making more concessions than necessary because you are feeling time pressure while your counterpart is not.

Compromise is expected on both sides, so start your negotiations at a point that leaves plenty of room to move without passing your comfortable limits. Do not make concessions as these may be perceived as weakness; propose trade-offs that require both sides to move simultaneously. The most successful trade-offs will be those in which each party wins something important to them while giving up something less important. Know your own priorities and listen carefully so that you understand what matters to your counterpart.

Conduct talks

Keeping it friendly

As you work through the various points in a negotiation, start with everything you agree about first. Don’t skip these points just because they are easy. By agreeing repeatedly on many points, you establish a positive cooperation with your counterpart. Only after you have established a great rapport and long list of agreement should you broach the difficult points. In tense moments, you may want to take a break so that both parties can regroup. Focus on a win-win approach, working together on a common project for collaborative ends. You will be more productive and get better terms if you are perceived by your counterpart as being on the same team. Do not make power plays that make your counterpart seem weak or inferior. If offended or pushed too far, South Americans may abruptly cancel a negotiation no matter how much effort has been invested and how much potential reward could be gained. Negotiations are part of an ongoing relationship, not an isolated activity. If you don’t negotiate reasonably, you won’t be trusted to execute reasonably.

Documenting an agreement

The written contract in South America is still an important document, although it may be perceived more as a statement of expectations than as a specific promise to perform. No matter how solid, a contract is a living document that is managed throughout the relationship. If your counterpart insists on many disclaimers this may be a sign that they are not certain they can perform. Include dispute resolution in the contract itself, such as identifying a third-party arbitrator, or terms of a buyout. Independently verify all claims, as exaggeration is a common negotiating tactic and due diligence is the responsibility of each party.