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How to negotiate with the Americans
Anirban Dutta
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May 24, 2006

How many times have you felt that you were being pushed around, pointed at and critically judged at a business meeting involving American customers? You wanted to convey your thoughts, explain why it is unrealistic to expect a service request completion by certain date, only to realise that your entire plea to negotiate fell on deaf years.

Welcome to the world of cross-cultural negotiation. If this makes you feel any better, your American customers are constantly feeling the same level of desperation on not being able to communicate and come to conclusions while negotiating with you.

We are constantly negotiating whether we call it negotiation or not. In business environments, negotiation ranges from a request on when one can go on vacation to pricing on complex sales.

Due to the nature of today's flat business world, many times we work with customers, partners etc who live across the globe from us who we never see face to face. Our means of successful communication depend on our ability to understand cultural differences and present our thoughts accordingly.

I have seen from close quarters how many of my American and Indian business associates struggle culturally while negotiating. If you are aware of what the person across the table is expecting, you will handle the situation much better than other others who are not prepared.

In this article, I have provided a few business culture tips for negotiating with the Americans. My thoughts on this topic are not based on any thorough academic research, but comprise of what I have observed time and time again while doing business in India and the US. But before we go any further, here is a true case study that is close to heart on how culture affects business negotiation.

Case Study

I have been a loyal Friday lunch customer at an Indian restaurant in Dallas for eight years. Ravi, (real name withheld) the owner of the restaurant, is a very enterprising young man full of passion who has recently ventured into real estate in Hyderabad.

About three weeks back, he sought a meeting with me to invest in one of his land deals in India. Over a two-hour lunch, Ravi provided me a lot of details about the people he is working with and the reason behind why he is going through with the deal.

We talked about politics, business environment and, of course, cricket. He promised a very handsome expected ROI (return on interest) with an approximate investment time frame.

There was only one problem; his business pitch lacked any substantial hard metrics that backs up the merits of the deal. I knew Ravi very well and am well aware of his sound management capabilities.

Instead of making a judgment on the spot, I set a date to have another meeting where I brought in an American friend and a mentor Bob (real name not used again for privacy), a person who is proficient in carving out high end complex real estate deals in North America.

Below were some of the things Bob was looking for:

The list goes on and on, all questions basically screaming one thing; show me some facts.

Instead of providing the hard measurable facts about this opportunity, Ravi was constantly reminding us about the executive backing he had for his project from top politicians, government officials etc. Ravi's approach was to provide us credible sources who can give us their opinion about this deal rather than supplying the core metrics.

While this may be an extreme case of two different mind frames and ways of doing business, I have seen many times that Indian businesses provide a lot of emphasis on situation and feelings coupled with some facts versus providing pure facts without any seasoning.

As a culture, traditionally we have always liked mingling with people and getting engaged in detailed discussions about everything under the sun. This approach described above puts the prime focus on relationship building and trust creation.

Although a lot of the bigger organisations that are doing more business with Americans have moved on to a pure fact based pitch to make their presentation more American mainstream, there are still many small to mid size Indian businesses who pitch purely from a relationship seeking detailed discussion approach.

Unless you are dealing with an American counterpart who is familiar with Indian ways and understand this type of Indo centric negotiation, I recommend you to focus mainly on providing your views from primarily a fact based approach with maybe a little bit of seasoning.

A few lessons

Articulation of fact based information: I should have known better that Ravi and Bob have two different ways of going about business. Before I engaged Bob, one thing I could have done was to send a proposal template to Ravi asking him to fill it up with facts about this project.

Ravi might have had to go and dig them up, but it would have provided him a strong business case to convince Bob and me about this land deal.

When you are dealing with an American, it may work to your best interest if you send a simple proposal with information about your agenda prior to your meeting, and make a list of things you want to know from the other person.

You should keep this document as simple as possible for clarity. Jeanne Brett, a distinguished professor from Northwestern University who specialises in cross-cultural negotiations, suggests this approach of applying proposals to gather information as very effective.

I have personally used this approach in other occasions where I have seen a lot of success via this method of understanding.

Setting up the right expectation to reach true discovery: In my current sales role in IBM, I have to meet many people from different cultures from all over the world. One thing that I have started doing has provided me good help in bridging the business culture gap while negotiating. Typically all of us are proficient in going over the meeting agenda before the meeting starts.

What we do not do is acknowledge the fact that there are many people from different cultures and their ways of deducing information may be completely different. I acknowledge upfront the fact that there is a lot of cultural diversity in the group and suggest everybody to ask more questions for clarity.

Throughout the meeting I provide little nudges to ask more leading questions related to the topic. This approach leaves little to interpretation and more to the problem discovery aspect of negotiation.

Understanding status-based persuasion versus reference based persuasion: Americans by nature value independence and self-dependence more than hierarchy and status. Indians, like most Asians, put a lot of focus on hierarchy and standing of an individual.

We grow up in a society where we learn to respect and listen to adults, in many cases even if they are wrong. We address our neighbours by calling them uncle or aunts from early childhood.

When we move into business, we tend to show a lot of respect and value to the folks who are higher up in the organisation or higher up in society. So, when they endorse something, it really means a lot to us.

In our story, Ravi was trying to convince Bob with a status based persuasion approach. Bob on the other hand was constantly asking if these ministers, senior officials were engaged in similar real estate deals. Bob was trying to understand if Ravi was providing these names as credible references who 'has been there, done that' with Ravi. The fact that these guys did not participate in a deal like this but were willing to vow for success criterion regarding this effort did not go well with Bob.

Again, if you are negotiating with an American who is not prone to Indian ways, it may be better to provide credible reference that may not be big names rather than using big names to receive status based concession.

Above were a few observations and suggestions that helped me bridge the business negotiation gap between Indians and Americans. I wish you all the best in your business negotiations with the Americans.

Anirban Dutta works with the IBM Software Group. He lives in Dallas, Texas, with his wife Julie. He can be reached at

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