Negotiating with International Customers, Partners and Regulators

It is not so much that speaking only English is a disadvantage in international business. Instead it’s more than being bilingual is a huge advantage. Observations from sitting in on an aisatsu (a meeting or formal greeting for high level executives typical in Japan) involving the president of a large Japanese industrial distributor and the marketing vice president of American machinery manufacturers are instructive. The two companies were trying to reach an agreement on a long term partnership in Japan.

Business cards were exchanged and formal introductions made. Even though the president spoke and understood English one of his three subordinates acted as an interpreter for the Japanese president. The president asked everyone to be seated. The interpreter sat on a stool between the two senior executives. The general attitude between the parties was friendly but polite. Tea and a Japanese orange drink were served.

The Japanese president controlled the interaction completely asking questions from all the Americans through the interpreter. Attention of all the participants was given to each speaker in turn. After this initial round of questions for all the Americans the Japanese president focused on developing a conversation with the American vice president. During this interaction an interesting pattern of non verbal behaviors developed. The Japanese president would ask a question in Japanese. The interpreter then translated the questions for the American vice president. While the interpreter spoke, the America’s attention (gaze direction) was given to the interpreter. However, the Japanese president’s gaze direction was at the American. Thus, the Japanese president could carefully and unobtrusively observe the American’s facial expressions and nonverbal responses. Conversely, when the American spoke the Japanese president had twice the response time. Because the latter understood English he could formulate his responses during the translation process.

What is this extra response time worth in a strategic conversation? What is it worth to be able to carefully observe the nonverbal responses of your top level counterpart in a high stakes business negotiation?
Face to face negotiations are an omnipresent activity in international commerce. Once global marketing strategies have been formulated, marketing research has been conducted to support those strategies and once product service, pricing, promotion, and place decisions have been made then the focus of managers turns to implementation of the plans. In international business such plans are almost always implemented through face to face negotiations with business partners and customers from foreign countries. The sales of goods and services, the management of distribution channels, the contracting for marketing research and advertising services, licensing and franchise agreements and strategies alliances all require managers of different cultures to sit and talk with one another to exchange ideas and express needs and preferences.

Executives must also negotiate with representatives of foreign governments who might approve a variety of their marketing actions or in fact be the actual ultimate customer for goods and services. In many countries governmental officials may also be joint venture partners and in some cases vendors. For example negotiation for the television broadcast rights for the 2008 Summer Olympics in Beijing China, included NBC the international Olympic Committee and Chinese governmental officials. Some of these negotiations can become quite complex, involving several governments, companies and culture. Good examples are the European and North American talks regarding taxing the Internet, the on going interactions regarding global environmental issues or the ongoing WTO negotiations begun in Doha Qatar in 2001. All these activities demand a new kind of business diplomacy.

One authority on international joint ventures suggests that a crucial aspect of all international commercial relationships is the negotiation of the original agreement. The seeds of success or failure often are sown at the negotiation table vis-à-vis (face to face) where not only financial and legal details are agreed to but perhaps more importantly the ambience of cooperation is established. Indeed the legal details and the structure of international business ventures are almost always modified over time usually through negotiation. But the atmosphere of cooperation initially established face to face at the negotiations table persist or the venture fails.
Excerpts from International Marketing