11.16.07
International Negotiating - Step 4 - End Game
Concluding a negotiation is the difficult part of the process. The end can be dictated by either achieving consensus on all points in an agenda (say a contract, shipping, pricing, delivery, etc.) or coming up against a certain deadline (legal or end of fiscal year). Sometimes the end can be decided by the fact that there is agreement on some issues and no likelihood of finding common ground on the remaining issue.
In the cross-cultural context there are some unique challenges:
- Face - Can your counterpart take the agreement back to his/her bosses and still retain their respect. If you have negotiated such a tough deal that the negotiator is discredited, then you have won a short term victory and lost a long-term relationship. Good negotiators leave something on the table for the counterpart to take home.
- Language - if the contract is in two languages, you have to have professional translators conform the two documents. Don’t cut corners on this step - words have exact meanings and mistaken usage can cost you money. Even if the contract is in English, make sure you are using it in the same way. Again certain concepts don’t translate easily and terms have different legal connotations from country to country.
- Country of governing law - Ideally, you want to have any legal issues resolved in your local courts or in a country with a developed legal system. Many companies in the technology space specify California law, even when neither has a home in the State.
- Compliance - You have the ability to set up mediation or arbitration for dispute settlement as a way to avoid taking it to the courts. Many companies choose to use the International Chamber of Commerce arbitration system. It is pricey but is considered more fair.
- Enforceability - You have an agreement now - will the other side live up to it? In some cultures, agreements will only be honored if pressure is applied to enforce it. Cheating a foreigner is not considered “wrong” but allowable. You also have the further problem that agreement does not imply willingness to implement the agreement. Case in point: When I was with the US Trade Representative in the 1970’s, the then-Ambassador came back from Tokyo and announced that with an agreement to allow in US aluminum baseball bats, the Japanese market would now be open to Americans. The actual import of the aluminum bats took place almost a decade later. The Japanese negotiators were saying “Hai” to the point presented. It was translated as “yes” but the context was that “I hear you” not that “I agree with you.” There was a book on negotiating with the Japanese written in 1975 by Masaaki Imai entitled “Never Take Yes for an Answer.” The US negotiators should have read that book.
