Russians
- It is said that Russians are great “sitters” during negotiations. Traditionally, Russians regard compromise as a sign of weakness. Some even see compromise as morally incorrect. Russians would rather out-sit the other negotiator—and gain more concessions from the other side.
- Be certain that all members of your negotiating team know and agree on exactly what you want out of the deal. Write this down (perhaps adding a few “nice to haves” that can be given away later) and bring it with you. Do not show the Russians anything other than unity among your team.
- Be factual and include all levels of technical detail.
- “Final offers” are never final during initial negotiations. Be prepared to wait; the offer may be made more attractive if you can hold out.
- Until you have a signed a formal agreement, do not get overconfident about the deal at hand. And never expect that you can renegotiate later for a better deal. This contract is as advantageous as you will ever get.
- The Russians may request that some funds be paid to them directly in cash, or to an account in a foreign bank. This may be because of their historic concern over the oppressive Russian tax system and the rarity of being paid in cash. Be prepared to propose various options.
- One Russian tactic is to allow (after long negotiations) the foreign partner to own 51 percent of a joint venture. However, contracts usually require unanimity among the partners for major decisions anyway, so 51 percent is not a controlling interest.
- Include a clause requiring the joint venture partners to submit to arbitration in a neutral country if they can’t come to an agreement. Sweden is the most popular choice for third country arbitration.
- Russian regulations represent the biggest liability to a successful joint venture. These regulations are in constant flux (reforms are being made all the time), so don’t count on your Russian partner to have a full grasp of the legal issues involved. Get your own expert in Russian law. Don’t be surprised when something you did yesterday is disallowed tomorrow; some laws are nebulous, and their interpretation is subject to change.
- Appearances can be deceiving. Russian firms may look prosperous and full of potential. Select a partner based upon full knowledge of the assets it owns or controls.
- Since it is not customary for Russians to disclose their home phone, or other personal telephone numbers, no official residential phone books are issued at all. However, various directories are produced, and many of them are accessible free on the Internet.
- In many countries—such as Japan—people tend to respond to a question by saying “yes.” In the USSR the tendency used to be just the opposite; managers and bureaucrats said “no” at every opportunity. However, Russian executives now often say yes to proposals—even if they lack the authority to do so. They make promises to buy time, and expand the contacts they want with foreigners.
- Historically, there were many reasons why Russians said no to business proposals. One was that innovation was traditionally discouraged. Also, Russians were afraid that if they gave the go-ahead and a project failed, they would be held responsible. Another reason had to do with the position of an individual in a rigid, hierarchical bureaucracy. You rarely met a Russian bureaucrat who had the power to push a project forward without the agreement of others. But one individual could cancel a project, all by himself or herself. Often, the ability to say no was the only real power many bureaucrats possessed; not surprisingly, they used it frequently.
- Peace, international relations, the changes in Russia, and difficult economic situations are all common topics of conversation. People will ask what you think of Russia and what life is like in your home country.
Americans
- Business is done at lightning speed in comparison to many cultures. U.S. salespeople may bring final contracts to their first meeting with prospective clients. In large firms, contracts under $10,000 can often be approved by one middle manager in one meeting.
- Send all relevant information electronically to prospects prior to your visit, and be prepared to process invoices through their paperless online systems.
- Appointments are made by e-mail, conferences are broadcast live over the Web, information and presentations are archived on corporate intranets so employees can access them worldwide at their leisure. Speakers and presenters should remember that their recorded words may ring over speakers, through the Web, for years to come.
- Executives should keep up to date with new electronic gadgets and means of communications in the United States. Hot zones (wireless access) are proliferating; you can access e-mail and surf the net from a multitude of locations—including your airplane seat. The gadgets will only get faster and smaller, so stay current.
- The use of handhelds, cell phones, and associated devices are common in business meetings. Taking calls while others are in the room can be highly irritating to international visitors—but be aware that it is common practice.
- In response to an increase in the vehicular accident rate, some states (for example, New York and New Jersey) have made it illegal to talk on a hand-held cell phone while driving.
- While knowing the right people and having many contacts in an industry is valuable, it is not seen as being as important for a salesperson as a good history of sales. Sales staff are evaluated and compensated on their “track records” rather than the potential for exploiting their contacts.
- The “bottom line” (financial issues), new technology, and short-term rewards are the normal focus in negotiations.
- U.S. executives begin talking about business after a very brief exchange of small talk, whether in the office, at a restaurant, or even at home.
- Whether a colleague is a man or a woman should be ignored, except when it comes to personal questions. Women should not be asked if they are married. If a woman mentions that she is married, you should simply ask a few polite questions about her husband or children.
- Remember that the United States is the most litigious society in the world. There are lawyers who specialize in every industry and segment of society, from corporate tax attorneys to “ambulance chasers” (personal injury lawyers).
- The standard U.S. conversation starter is “What do you do?”—meaning “What kind of work do you do, and for whom?” This is not considered at all rude or boring. Actually, to many U.S. citizens, you are what you do.
- Compliments are exchanged very often. They are often used as conversation starters. If you wish to chat with someone, you can compliment something that person has (e.g., clothing) or has done (a work or sports-related achievement).
- Until you know a person well, avoid discussing religion, money, politics, or other controversial subjects (e.g., abortion, race, or sex discrimination).
- Some common topics of conversation are a person’s job, travel, foods (and dieting), exercise, sports, music, movies, and books.
- Before smoking, ask if anyone minds, or wait to see if others smoke. Smoking is generally prohibited in public places: in airplanes, office buildings, in stadiums, and even in bars. Large restaurants in some states usually have a section where smoking is permitted. Many hotels designate rooms as smoking and nonsmoking.
- While business people always have business cards, they are not exchanged unless you want to contact the person later. Be sure to include your e-mail address, Web site, etc., on your card.
- Your card will probably be put into a purse, wallet, or back pocket. People may write on your card as well. This is not meant to show disrespect.
I do not know anything about negotiating with Russians, but having lived in the U.S. I can relate to some of the mentioned points about Americans. “The use of handhelds, cell phones, and associated devices are common in business meetings. Taking calls while others are in the room can be highly irritating to international visitors—but be aware that it is common practice.“ I agree with this statement. One of my former supervisors always seemed to be super busy taking phone calls and answering new emails during meetings, no matter who the meeting was with or where it took place. “Compliments are exchanged very often. They are often used as conversation starters. If you wish to chat with someone, you can compliment something that person has (e.g., clothing) or has done (a work or sports-related achievement).“ I also agree with this statement, but I am not sure if this is really business related or does rather apply in a more general way.
ReplyDeleteI also think or at least was under the impression that people in the U.S. often tend to exaggerate a lot, like how great the school is they graduated from, how many great contacts they have, how important their job or role in the company is,… just to give a few examples. Perhaps this could be added to the list.
I find so many interesting things about negotiating with Russians and Americans in this article. The first one is with Russians. It is really interesting on how the way they deal with businesses. One of the most interesting things is the Russians may request that some funds be paid to them directly in cash, or to an account in a foreign bank. The reason is because of their historic concern over the oppressive Russian tax system and the rarity of being paid in cash. Well, it’s great to know about that. The second one is with Americans. It is interesting about how fast they do the businesses. They may even bring final contracts to their first meeting with prospective clients. It was just wow, I’m a bit speechless. In this article, we can assume that the Americans get advantages of the new technology pretty well. Everything is done in a modern way. For example, we have to send all relevant information electronically, make appointments by e-mail, archive information and presentations on corporate intranets, etc.
ReplyDeleteWell, for me, this article is really helpful. It shares the knowledge that may uses for the economics, business, or even accounting student like us which in our future is really possible to face the negotiating situation. Not only with local people, but also with foreign people. And in this article, said that it is important to give a compliment to American. Are American people easy to negotiate just if only we start it with a compliment? I think probably yes. And maybe it’s not only happens with American people, but also almost people in the world are happy to be complimented by other. And I wholeheartedly agree with that statement. Every moment would be better if we start with the good one. Like for moslems, we start everything with bismillah. And compliments are usually exchanged really often, as the article said that “they are often used as conversation starters”.
ReplyDeleteThis is a very interesting article because it explains the two countries that have a very different business culture one and another Russian still have the communism ideology because of they are an uni soviet before. And a Russian may have the money to paid in cash and the rest can be transferred into a bank account in a foreign country because the taxes in Russia is huge it’s a good way to attract the investor. Because taxes is one of the problematical matters to investors because they avoid to paid a lot of taxes in order to maximize their profit and in the us a fast culture makes them to do the business in every place not only in office but they also can do it home, restaurant and so on. So this two countries are maybe one of the leading countries in the world but with their own business culture.
ReplyDeleteDifferent national cultures call for different approach in business, as shown in the comparison article between the Russians and Americans above. I think it's quite interesting being able to spot the quite significant differences between the two countries. The Russians seem to encourage egalitarian approach to the fellow business clients, and they like to keep their ways traditional and at a slow pace.
ReplyDelete"Business is done at lightning speed in comparison to many cultures... conversation starter is “What do you do?”—meaning “What kind of work do you do, and for whom?”"
Meanwhile, the business activities in the USA seem to be done at lightspeed, and more to-the-point, as shown in the quote above. This means that they're able to take care of a small business deal within less than a day, and that they do not favor too many small talks. I prefer the American's approach to doing business, although I think more pressure and time will be consumed.
At first, I thought the following article about the Americans will present a completely different way of doing business negotiation compared to the Russians. No, this is quite intriguing to be able to know how people from different country applying their very culture in form of conversations. The way of Russians handle a business agreement seems very strict. Observing from their bureaucracy gives this simple only “yes” or “no” word required in order to settle an agreement. But it said that initial negotiation wouldn’t give you a final result unless we wait for a better opportunity. Now this is interesting, we have to be able to judge our business partner candidate by their mastery and control in their offer while we are waiting patiently to shoot at the right timing. And no more thing, looks like they are the type of “for the sake of the country” persons looking at their common interest. Ah right, he is Americans? Fast paced business, compliments as based to start a conversation, gadgets and newest communication technology. Business oriented mental? Nope, powerful culture become their main attractions (especially in business)
ReplyDeleteAfter read this article, I asked my Russian friends about all of those things above. She said that almost all of the things about negotiating with Russian are true. I think this part is the most correspond with the Russian, ‘In many countries—such as Japan—people tend to respond to a question by saying “yes.” In the USSR the tendency used to be just the opposite; managers and bureaucrats said “no” at every opportunity. However, Russian executives now often say yes to proposals—even if they lack the authority to do so. They make promises to buy time, and expand the contacts they want with foreigners.’ She said that if we have a deal with them, we have to prepare that Russian will lie to us about their answer and that’s a usual thing for them. They just want to think more about their decision and after that they will decide which one is the best even if the answer is different with their first decision.
ReplyDeleteAmerican’s way of negotiating differs greatly from Asian countries where they are slow paced in making decision, where American’s can close a deal in one meeting. Sometime making a decision too fast might become one of our losses, we might not know too well about whom we are dealing with. It’s never wrong to crosscheck their company records and history. In Asian countries, it’s considered appropriate to use personal calls where in America they just use emails. They also value small talk and compliments like in Asian countries; it shows that they are trying to be polite and friendly to build a deeper relationship. Cards indicate rank and very important in Asia, in America it is common for people to scribble down notes on your card, in Asia it shows disrespect. Avoid conversation that will trigger argument by talking about confrontational subjects such as race, religion even though small talk is suggested. It’s important to know the way to negotiate in different countries to build mutual trust, but it should not be confused from one to another.
ReplyDelete