Owner / Clients are always looking for cost optimization to build Capital Plants (It may be a Power Plant or Refinery or Petrochemical Complex etc.) within the available Budget and schedule. So, Owners allow Engineering, Procurement & Construction (EPC) Contractor’s to source project material from the Global market (it includes local as well as Suppliers situated in different counties across the Globe). Each & every country has its own culture (it might be a language, way of communication & presenting the things). It is also observed that many time we have a common language, but still business negotiators from different cultures face difficult challenges.

Here in this article, the author wants to share his project experience on effective ways of doing cross-cultural communication & negotiation leading to a win-win situation.

In negotiation, both Buyer & Seller uses verbal & non-verbal communication.

  • Verbal communication consists of Speaking, Listening, Writing and Reading.
  • Non-verbal communication consists of Facial expression, Body movement, Gestures, Voice & Touch.

It has been noticed even after the business negotiations conducted and recorded (Minutes of meetings, Technical documents, Purchase Orders & Contract Agreements, etc.), during order execution or post-award phase there is misinterpretation resulting in major backlash & thus not able to achieve the results defined during agreements.

It is proven that one cannot eliminate 100% cross-cultural communication & business negotiation issues & conflicts. However, we can minimize/avoid unfortunate outcome by having an understanding of other party’s cultures and languages. Knowing the verbal language is not enough and an effective negotiator must aware of the subtlety presents in other culture.

1.) Research your counterpart’s background and experience.

At the time of inviting the Supplier for business deal negotiation, we should inquire about the team.

Few tips are:-

  • Is there only one person or a team of 3-4 coming for negotiation?
  • What are individual roles, responsibilities & designations within the team?
  • Do they understand a common language? Is there any translator with them? Is the translator from the same country & from another country?

Answers of above questions shall help Buyer to frame their own strategy for the successful negotiation & closing the deal in collaborative manner.

2.) Engage an adviser from your counterpart’s culture:-

There is a situation, where a person with whom Buyer likely to negotiate a business deal has little or no international or cross-cultural experience. In such situation engaging someone from their culture to serve as Buyer “second” in negotiation discussion process. In this manner, Buyer appointed cultural “guide” can help handle the situation & explain the doubts & expectation of the buyer to the seller. The guide will also help to rectify an egregious error or misinterpretation.

3.) Pay attention to the negotiation talks:-

Be a good listener during negotiation talks. If you find unsatisfactory answers from the seller, it is advisable to reframe the questions and try again. Sometimes it is advisable to repeat the discussion points for the correct understanding of the view point.

4.) Take steps to reduce stress:-

There are several researches which talk about buyer & seller stresses due to the closer of business deals within the deadline given by the management. This deadline pressure converts negotiation as a stereotype, resulting in improper analysis of sellers proposals and similarly, sellers also miss-interpret the negotiation key discussion points as per their wish.

To reduce stress & avoid stereotypes, it is recommended to do all preparation well in advance to face such cross-cultural business negotiations. That might mean sharing Negotiation meeting Agenda with concern parties well in advance, keep the timeline disclosed, enlisting of discussion points, taking frequent breaks, ensuring to offer enough time to seller for private discussions, or retreat the key discussion points, or ensure proper engagement of a mutually trusted third party to help you resolve any differences or conflicts that arise during your talks. By doing so, Buyer shall able to reduce the pressures associated with cultural barriers and begin dealing with one another as negotiators, not stereotypes.

5.) Understanding of Nonverbal Communication in Negotiation:- In smart negotiation skills, nonverbal communication also plays key roles. For example, whether a person shakes the hand, stands, points a finger, holds eye contact or makes a certain gesture express realistic impression about opponent’s feelings, thoughts, intentions, thoughts, and their changes.

Conclusion: Both Buyer & Seller need to work collaboratively to achieve the end goal of successful business negotiation. It is recommended to read the meeting discussion points in front of all attendees & than signed & distribute to all concerns, it may avoid future execution conflicts. In the race of getting material & services from low-cost countries, demands of cross-cultural negotiation are increasing exponentially, Supply Chain professional should learn to enhance their skills to align themselves to today’s business needs.

Ashok Kumar

Ashok Kumar Suwalka is Principal Specialist in Material Management, part of Supply Chain Department in Fluor Daniel India Private Limited, New Delhi, India He has a Bachelor of Engineering from Rajasthan University and MBA in Operations from ICFAI University, Tripura. Mr. Suwalka prior to his present assignment at Fluor Daniel also served Siemens Power Engineering Pvt. Ltd., Foster Wheeler India Pvt. Ltd., and Punj Lloyd Ltd in India, Oman & Qatar during the last 13 years.

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