Chapter 47
Negotiating Characteristics of Non-Americans
There’s an old joke that the restaurants in heaven have a German manager, a French maitre d’, English waiters, and an Italian cook. On the other hand, the restaurants in hell have an Italian manager, a German maitre d’, French waiters, and an English cook. Comedian George Carlin says, “If there’s a heaven, there are German mechanics, Swiss hotels, French chefs, Italian lovers, and British police. If there’s a hell, there are Italian mechanics, French hotels, British chefs, Swiss lovers, and German police.” These are stereotypes, sure, but it would also be wrong to ignore national business characteristics in the name of avoiding any stereotyping.
Let’s look at the negotiating characteristics of non-Americans. I would be guilty of massive stereotyping if I implied that all people from these countries or of these national backgrounds had these tendencies. However, it’s realistic enough to assume that a large percentage of people from these countries behave this way. So, it’s well worth being aware of the propensities and observing the non-Americans with whom you’re negotiating to see if they do fit the mold.
English People
Be sensitive to national origin. Great Britain includes England, Wales, and Scotland. The United Kingdom also includes Northern Ireland. Of the four countries that compose the U.K., 82 percent are English, so unless they have a brogue, you can assume they are English. English people prefer to be called English, not British. Part of this sensitivity comes from massive immigration problems. Until the 1960s, anyone who was born in one of the colonies (which included 60 percent of the land surface of the Earth at one time) carried a British passport and was free to immigrate to England. A refrain you will frequently hear is, “I don’t wish to be called British. If you are British, you might be from just about anywhere. I am English.”
Make appointments well in advance, because the English live by their calendars. Be punctual but never early. Ten minutes late is better than one minute early for social engagements. The English are excessively polite. Remember that there are 60 million Britons jammed into a country half the size of Oregon, and most of them live in the counties surrounding London. In such a crowded country, it is important to have boundaries on one’s behavior. Understanding this is the key to understanding the English. If someone on a crowded train started to play a saxophone off key, it is unlikely that anyone would protest. In America, that person would be yelled down.
This is why you will see such outrageous styles of dress and hair styles on young people in England. It appears to an outsider that a youth with spiky orange hair wearing a leather outfit with chrome studs can exist in harmony with a bowler-hatted banker who carries an umbrella year-round and has a handkerchief stuffed up his sleeve. This is deceptive. They don’t approve of each other’s behavior—they are just too polite to protest.
You will find it rare for an English person to ask you a personal question. Although it’s acceptable in America to open a conversation with, “What do you do?” or “Where do you live?” that would be a hopeless invasion of privacy to an English person. Because they are excessively polite, they would answer the question if you asked them, but would never reciprocate by asking you what you do.
England is still a very class-conscious society, although that is changing rapidly. Indicative of the change is that Margaret Thatcher, John Major and Tony Blair were the first three prime ministers who did not come from the upper classes. You will still run into a great deal of class consciousness especially with older people. If they are evasive about where they live, for example, don’t press them because they may feel self-conscious about living in a working-class suburb.
The English do not feel at all comfortable talking to strangers in the same way that Americans do. The proper way to initiate a conversation with a stranger in England is to mention the weather with an innocuous comment such as, “Nice day today,” or “Might get some rain.” If the response is an unintelligible one syllable that sounds like “Hurrumph” they are not being impolite, they simply don’t feel comfortable talking to you at that time. If they want to pursue a conversation, they will respond with an equally innocuous response such as, “My roses need some rain,” or “Wouldn’t be surprised to see rain at this time of year. Wouldn’t be surprised at all.” You may then start a conversation, but remember do not ask them any personal questions.
It’s okay to politely decline the offer of tea or coffee, whereas in many parts of the world it’s an insult. Be aware that the English view Americans with suspicion. We are seen as too slick for English tastes. They are somewhat wary of getting involved with Americans for fear of being bamboozled by a fast talker.
The English business executive does not move at the frantic pace of the American. I remember having lunch with my nephew when he worked for Lloyds of London. He took me to an old tavern in the city that had been serving lunches in that location for more than 700 years. We sat at a long bench-type table with a group of three English businessmen. They had several gin and tonics before lunch and then launched into a huge roast beef and Yorkshire pudding lunch, washed down with two bottles of red wine.
After a large dessert, they ordered brandy. I put on my best American accent and said to one of them, “Excuse me, buddy, could I ask you something? Do you go back to work after a big lunch like that?” His reply told a great deal about the English attitude toward work and success. He politely said, “Here in England we have a different approach to success than do you chaps in the States. Here we consider that success in business entitles us to work less hard. You chaps think that success requires you to work even harder.”
French People
I have never had the trouble with French people that most Americans seem to have. I think that much of that comes from Americans being exposed to only Parisians. Paris is to the French what New York is to Americans. It’s a pressure cooker of frantic business activity—a very competitive environment—so they come across as less courteous than we would prefer. Remember that France is very centralized. The government, the banking and industrial powers, and the entertainment and fashion industry all emanate from Paris.
Apart from those living in Paris, French people are warm and friendly. Even in Paris, I find people treat you as you treat them. If you have a chip on your shoulder and are expecting to find them hostile that’s exactly what you will get. If you are excited and eager to meet them and explore their culture, you’ll find people who are eager to share with you.
The French take pride in Paris being a world center for high fashion. They appreciate elegance, so dress more formally than you would at home. Add some extra touches such as a pockethand kerchief or a silk scarf. Remember the French pride themselves on their language skills. This love of language means that even those who speak a few words of English may be reluctant to do so because they don’t want to speak it poorly. It’s not because they have the attitude, “If you want to speak to me, you must learn my language.” It’s true that there is a strong movement to prevent English words from becoming a part of the French language, but that’s another matter.
The French take pride in being eloquent and love to argue and converse. Nothing is more enjoyable than an abstract argument over their morning croissant and coffee. The point over which they are arguing is less important than the logic they use to win their argument. The French are logical thinkers, and sell with logic and reason rather than an appeal to emotion. In negotiations when the French say yes, they mean maybe. When they say no, it means, “Let’s negotiate.”
Just as everything in France is centered in Paris, so are French businesses centralized. In large corporations, offices are arranged by rank and spread out from the president’s suite. Similarly, authority is organized to emanate from the top down. As with the English, the French value principle over result. Making a fast buck is not reason enough to violate their traditional way of doing business. Be punctual, because to be late is an insult to the French. Shake hands briefly when you meet them. Kissing cheeks is for only close friends. Call all adult women Madame, even if they’re single.
Above all, don’t ruin a meal by trying to talk business. A French lunch can last two hours and can be an exquisite experience. Unless your host starts talking business, avoid it. You’ll be doing yourself far more good by showing them how much you appreciate their cuisine. Be prepared to pick up a huge bill for the meal. I remember hosting a dinner party at a French restaurant where a guest selected a duck salad as an appetizer. I should have known that I was in trouble when they carved the duck tableside. This appetizer alone was $80!
Germans
Germany (and the German-speaking part of Switzerland) is a low context country; they put their emphasis on the deal rather than the relationship of the parties or the environment in which they signed the contract. Germans are one of the few nationalities to expect more detailed contracts than Americans. They really are masters of the deal that, once they have hammered it out, they will never change. Shake hands firmly when you arrive and leave. Do be punctual because it’s very important to them. Don’t put your hands in your pockets when you’re talking business, as it seems too casual to them. Don’t tell jokes in the workplace. Germans consider it totally inappropriate.
Germans appear formal and aloof at first. It takes them a long time to get relaxed with you. In business, they are much more formal than Americans, both in attitude and style. They have a formal and informal distinction in their language. To use the informal (Du) style with a superior, rather than the formal (Sie) style, would be a major mistake. Don’t call people by their first name unless invited to do so.
Germans place great emphasis on titles. Use yours if you have one and respect theirs. Address people as Herr, Frau, or Fräulein followed by their professional designation, for example, Herr Dokter Schmitt, or Frau Professor Schmitt. German workers who have worked together for decades will still call each other by title and last name.
Germans drive very fast. Posted speed limits are universally ignored. Remember that the fast lane is for overtaking only, however fast you’re going. You can be doing 100 mph in the fast lane and still have a car come zooming up behind you and flashing its lights for you to get out of the way.
Asians
Asians are very relationship based. They far prefer to trust the person with whom they negotiate than they do the contract they signed. In Thailand and other Asian countries, you may be greeted with a slight bow and both hands pointed toward you with palms together. You should respond with the same greeting but hold your hands level with or slightly higher than theirs. The height of the hands indicates the respect that the person has for the person they are meeting. Someone meeting a servant may hold his or her hands well below their waist. Someone meeting a holy person, or a great leader, might touch his hands to his forehead. Don’t get carried away, but indicate respect by holding your hands a little higher than theirs.
Asians often consider promises made during the negotiation as being made to the individuals who negotiated, not to the organization. Americans call the signing of an agreement “the closing.” Asians consider it an opening of the relationship. With Asians, it is very important to convey that you consider the signing of the contract a beginning not an ending. Do not expect eye contact, because they think it’s impolite. It’s not a sign of shiftiness. Many a Vietcong soldier suffered at the hands of American troops because they couldn’t look the American in the eye. The American assumed that this meant the Vietcong was lying.
Koreans
Koreans also look at the agreement as a starting point, not the final solution. They don’t understand how any agreement can be expected to anticipate every possible eventuality, so they see a contract as an expression of an understanding on the day that the contract was signed. If conditions change, they don’t feel bound by the contract they signed. Your response to this should not be to place less emphasis on the contract, but to draft a contract that is flexible enough to move with changing conditions. If you can predict a shift in conditions, rather than resisting it, you should accept that it could happen and provide penalties and rewards for the way each side responds to the changing conditions.
Koreans don’t believe in fault. They consider that if they fail to stick with agreement, it is an act of God. Unfortunately, they may have planned to take advantage of you with this.
The Chinese
The Chinese have a saying: “He ging, he li, he fa.” It means first examine the relationship between the parties, then look at what is right, and only then worry about what the law says. Many Chinese now shake hands when they meet Americans, but first wait to see if they offer their hands. The traditional greeting is a slight bow from the shoulders that is almost an exaggerated nod and is much less pronounced than the Japanese bow, which is from the waist.
Appear to be low key in your approach because loud behavior easily offends the Chinese. The Chinese do business based on building a relationship with you, but they are not above using this as a pressure point and accusing you of breaking a friendship if you hesitate to go ahead with the project.
A strong tendency in Chinese culture is to put the group’s needs ahead of personal needs. Remember that for thousands of years Chinese focus was on the family unit and beyond that the needs of the village. Confucianism also emphasizes the importance of the family, the extended family, and the community.
So Chinese negotiators work in teams and arrive at group decisions. The communists eliminated religions from the culture, but Confucianism and Taoism are philosophies, not organized religions. Confucianism puts emphasis on the organization of family, village, and social life. Taoism stresses the importance of being in balance and harmony with nature.
A part of this emphasis on the group dynamics is the Chinese concept of Guanxi. This refers to the time honored concept of reciprocal concessions. It is subtle in its application but it is the underpinning of Chinese society. When one person does a favor for the other, he expects something in return. He doesn’t specify what he expects or when he expects it, but the obligation incurred has now become part of the fabric of their relationship. You will encounter Guanxi relationships everywhere you go: in your dealings with business people and government officials, and in every other aspect of Chinese life.
Another strong part of Chinese culture is respect for a person’s position. Try to understand the rank of the people with whom you deal. It surprised me to find that there is no simple word in the Chinese language for brother or sister. The words that they use for that specify whether it is an older or younger sibling. Infants are raised with that kind of concern for position and it stays with them throughout their lives. In the workplace, age rather than ability usually make promotions. Everyone is expected to defer to his or her elders.
You know, of course, that the Chinese attach great importance to saving face. In business meetings, do not expect them to speak out in support or opposition to your suggestions. They will be concerned that they may lose face or cause you or others to lose face.
I spent two weeks in China when it was still under tight communist control and my observation was that every Chinese person is an entrepreneur at heart and loves to bargain and haggle. Expect them to start high and be willing to make concessions. You should do the same and not be offended by what appears to you to be grinding you down on price. Have fun and enjoy the bargaining.
The Japanese
In Japan, they are reluctant to say no. Yes to them means only that they heard you. So, don’t ask questions that they can answer with a yes or no; ask open ended questions. “When can you do that?” is better than, “Can you do that?”
It is impolite for a Japanese person to say No to an elder. However Westernized they may have become they still have trouble with this. I know a man who owns a large fencing company. He sold out to a Japanese concern and now reports to a business executive who is younger than he. “Roger,” he told me, “I’ve been dealing with him for years now, and I have never known him to turn down a proposal that I made to him. The problem is that I can never tell whether he likes the proposal or is so uncomfortable saying no to an older man that he would rather approve it.” When the Japanese say, “It will be difficult,” they mean no.
So, Japan is a very high context country. In a culture that values tact and courtesy over honesty, words do not always mean what they appear to mean. There is a big difference between what they say (tatemae) and what they think (honne). “We” comes before “I” in Japan. The group is more important than the individual, which is the opposite of American culture, which glorifies and rewards independence. To punish a child in America you ground them—keep them in. To punish a child in Japan, you send them out of the house.
As with other Asian cultures that have been influenced by Confucius, the emphasis here is on the hierarchy. Observe how Japanese people bow to each other. The person lowest in the hierarchy will bow first and will bow lowest.
The concept of Wa is strong in the culture. We would translate that as meaning harmony. They want to find a harmonious solution to every problem. To this end, they believe that every situation has unique factors that enable them to bend a solution to maintain harmony. Until Western culture reached Japan in the 19th century, they didn’t understand the concept of objectivity. From their point of view, everything is subjective.
The Japanese prefer to work in groups. Don’t try to identify the lead negotiator, the one who will make or break the negotiation. There probably isn’t one. Don’t expect much feedback on your proposal, for several reasons:
There is a hierarchy in Japanese companies. Individuals do not want to embarrass themselves by speaking out.
The Japanese businessperson wants to save face and allow you to save face.
They are adverse to risk and therefore unwilling to state their opinion for fear that it will be rejected by the group.
As I told you, the Chinese have a concept of Guanxi meaning reciprocity. If I do a favor for you, you now owe me a favor. The Japanese call this Kashi, which literally translates as loan. In restaurants, you will see associates pouring sake or beer for their friends. It is accepted as creating a subtle form of obligation that will be reciprocated. At that level, it’s charming. It becomes more complicated when you realize that your Japanese business associates are doing favors for you in full expectation that you will return the favor.
The opening position that the Japanese take depends on how well they know you. If they don’t know you or your industry well they will start high, not to take advantage of you, but because they learn about you by judging your reaction. It’s called the “banana no tataki uri” approach to negotiating, a term that refers to the way that banana vendors would ask an outrageously high price from people they didn’t know and then lower it quickly if the buyer protested. It sounds unethical to us, but it does make sense. You don’t know the negotiating style of the stranger. He may be accustomed to hard bargaining. If you start high, you will quickly learn about them and take a different approach the next time you do business with them.
In my book The Confident Decision Maker (William Morrow 1993), I devoted a chapter to explaining how the Japanese make decisions. Here are some key points:
They make decisions in large groups, so we have trouble figuring out who is making the decision. The truth is that no one person is making the decision. They consider defining the problem to be far more important than searching for the right answer. The group is there to absorb information and feels that once they fully understand the situation, the choice will be obvious. So each member of the group will give their input, starting with the lowest ranking person and moving up to the top.
Japanese executives see their job as requiring them to come up with creative ideas, not to be held accountable for the results. Where as we prefer to have one person make the final decision so that they can be held accountable, the Japanese let the entire group collectively make the decision. When everyone has given all of their input the choice may be obvious to the group. If is still not obvious they may retreat, knowing that they need to absorb more information. This makes Americans frustrated because they feel nothing is happening. The good part of all this is that once they do decide to go ahead, everybody is on board and fully committed to the course of action.
Russians and Ukrainians
I spent two weeks in the Soviet Union when Gorbachev was trying to push through reforms. Frankly, I doubted that they would ever make a transition to a free market economy because the Russians are not entrepreneurial at heart. Understand that the communist system removed all incentives from their way of life. Banning religion meant that there was no moral incentive to do good in their society. Banning profitable private enterprise meant that there was no financial incentive to do good. Remember that for 70 years they lived under a system where everybody worked for the government—there was no other employer.
Money was almost meaningless to them because even if they had any, there wasn’t anything to buy with it. (President Reagan loved to tell the story of the Russian who saved all his life for an automobile and got a permit from the government to buy one. He took the money and the permit down to the car showroom and said, “When do I get my car?” “You will get your car in exactly seven years,” they told him. “Seven years?” “Yes, on this day seven years from now you will get your car.” “Will it be in the morning or the afternoon?” “Comrade, we are talking seven years. What difference does it make?” “Because on that day, in the morning, the plumber has promised to come.”) Although some Russians have taken to capitalism like a duck to water, for many it is a difficult transition, so don’t expect them to be motivated by profit the way that we would be.
Russians are not afraid to make tough initial demands. They expect you to express your respect for them. That might be considered patronizing to an American. Not so with Russians. Learn about the person with whom you will be negotiating and let them know how impressed you are. They have a very bureaucratic mind-set, so they are not afraid to say they don’t have the authority. This will give you the most frustration. Russians have learned to protect themselves from blame by getting a dozen other people to sign on to every decision. This is a throwback to the old Soviet days, when mistakes could have very serious repercussions.
Another mindset you’ll encounter is that Russians think that, unless they are authorized to do something, it is forbidden. We Americans think just the opposite. We think that if something is not forbidden, it is okay to proceed. They can say no endlessly to test your resolve.
Russians are not afraid to vocalize their concerns, even if it causes you to squirm. Try to appreciate this openness and not let it bother you. As with any angry person, try to move him off of the position that he has taken and get him refocused on your mutual interests. (See Chapter 36 for more on conflict resolution.) They are self-centered. They’re not interested in win-win.
Russia is a higher context country than you would think. You may get the impression that they are hard and cold in their business dealings because they are very direct. However, underlying that tough negotiating style is a need to feel good about the person with whom they are dealing. This is done at a deeper level than the superficial friendliness of American business relationships. Don’t think that because you downed a case of vodka with them and engaged in bear hugs all around, that you have built a trusting relationship.
If Russians say that something would be inconvenient, they mean that it would be impossible. It took me a while to figure this out, and I’m still not sure why it is, but presumably it’s because of a misunderstanding in translation. For example, I asked the desk clerk at our Moscow hotel to move us to a larger room. She told me, “That would be inconvenient.” I took that to mean that if I pushed harder I could get her to accommodate me. That wasn’t what happened at all. She was telling me that it was impossible. It took me nearly 15 minutes of hard negotiating to get us upgraded to a suite!
Middle Easterners
Be sensitive to ethnic differences when you’re negotiating in the Middle East. Above all, don’t refer to them as Arabs unless they come from the Arabian peninsula, which includes Saudi Arabia, Iraq, Jordan, and the Gulf States. Egyptians do not appreciate being called Arabs, and Iranians are horrified because they are proud to be Persians.
Do expect to spend a great deal of time, perhaps many days, getting to know the person before he feels comfortable negotiating with you. When people from the Middle East sign a contract, they see it as the start of negotiations, not the end. They sign the contract first and then negotiate. Most Americans who do business there understand this and call them “contract collectors.” It’s important to understand this and not see it as devious; it’s simply the way they do things. A contract to them means less than a letter of intent does to us.
In their world, the ground floor is where shopkeepers ply their trade and shopkeepers are a lower class than business people. Don’t insult your Middle East trading partners by asking them to do business in a ground floor office. The higher floor you are on the more they see you as having prestige.
Don’t be offended if they show up late for an appointment, or perhaps don’t even show up at all. Appointments are not the firm commitments that they are in this country, and time in general is not prized the way that we value it.
You will often be overwhelmed with hospitality and gifts by the non-Americans with whom you’ll be negotiating. This is an overt attempt to win your favor, and you must deal with it. Rather than giving offense by refusing their favors, the best plan is to reciprocate, which eliminates the personal obligation that may have been created. And you have twice the fun.