Get them to say 'Yes'

Five variables FMs needs to consider for effective contract negotiation.

ANALYSIS, Facilities Management

Five variables FMs needs to consider for effective contract negotiation.

The FM industry in the region is projected to skyrocket in the next five years as today's designed projects are quickly becoming tomorrow's built ones.

From pest control and interior furnishings to labour shortages, executive searches and financial asset management, all of these services become available to organisations only after successfully negotiating a contract between the players.

As Middle Eastern cities continue to expand and lure professionals from every corner of the globe, a solid understanding of how to recognise cultural differences and understand differing value systems is paramount when negotiating across cultures.

In the Arabic world, for example, never show the sole of your shoe to anyone or attempt to shake hands by offering your left; and always look directly and intently into a French associate's eye when making an important point.

A signed contract in China represents the beginning of a relationship, not the finality of a business deal; while negotiators in Russia should be prepared to dress formally for meetings and offer their own toast to friendship and cooperation.

Touching the side of one's nose in Italy is a sign of distrust; while putting away a host's business card before the end of the meeting in Japan is a sign of disrespect.

These examples offer a small glimpse into how behaviours that can seem perfectly natural in one culture, become causes for offence in others. Cultural factors inevitiably affect behaviour and thus, the direction of business, so some degree of cultural understanding is crucial for FMs hoping to demonstrate respect, enhance cameraderie, strengthen communications and avoid giving offence.

To that end, FMME looks at the five most important variables for FMs to consider before entering the negotiating room.

Time orientation

Without getting too technical, the world consists of cultures that are monochronic and polychronic. Put simply, different cultures approach the concept of time differently.

According to Michelle LeBaron, director of the dispute resolution program at the University of British Columbia (Canada), if monochronic cultures approach time as linear and sequential, polychronic ones see time as involving simultaneous occurrences of many things and the involvement of many people.

Generally speaking, monochronic cultures tend to be the United States, Germany, Switzerland, and Scandinavia, where Mediterranean and Latin cultures as well as some Middle Eastern and African cultures tend to be polychronic.

Negotiators from polychronic cultures tend to start and stop meetings at flexible times, be comfortable with a high flow of information, read each others' thoughts and sometimes talk over one another. Monochronic negotiators, on the other hand, prefer prompt beginnings and endings, address one item at a time, rely on explicit communication, talk in sequence and view lateness as disrespectful.

Space orientation

According to John Paul Lederach, professor of international peacebuilding at the Unversity of Notre Dame (US), space orientation includes everything from divisions between private and public space, to comfortable personal distance, to attitude toward physical contact and expectations about where and how contact will occur.

A German or Swedish person, for example, might think Italians or Greeks get too close; an American businessman might be offended by Indian or Mediterranean men holding hands; a Japanese negotiator might be put off by Middle Eastern men looking to kiss them on the cheek as a form of greeting.

Space orientation also relates to comfort with eye contact and attributions related to eye contact or lack thereof, explains LeBaron.

In the United States and Canada as well as many Arab cultures, eye contact is taken as a sign of reliability and trustworthiness.

In Asian settings, however, looking toward the ground is usually interpreted as a sign of respect. Likewise, a slight movement of the eyes-particularly when speaking with Central American clients-may indicate embarrassment, a show of respect or disagreement.

Power distance

According to Geert Hofstede, an influential Dutch organisational anthropologist who focuses much of his research on the interactions within large multinational corporations, power distince is, "the degree of deference and acceptance of unequal power between people."

Cultures in which one subsection of society is considered superior to other subsections because of socioeconomic status, tend to have a higher power distance. Conversely, cultures with low power distance tend to assume equality among people, and focus more on earned status than ascribed status.

Generally speaking, the more unequally wealth is distributed, the higher the power distance in a culture will be. According to Hofstede, high power distance cultures include Arab countries, Guatemala, Malaysia, the Philippines, Mexico, Indonesia, and India. Low power distance cultures, on the other hand, tend to include Austria, Germany, Switzerland, New Zealand, Ireland, the UK and Scandinavia.

High power distance negotiators tend to be comfortable with hierarchical structures, clear authority figures, and the right to use power with discretion. Conversely, negotiators from low power distance countries tend to be comfortable with democratic structures, flat organizational hierarchies and shared authority.

Uncertainty avoidance

Again drawing on Hofstede's research, ‘uncertainty avoidance' is about how well certain cultures relate to uncertainty and ambiguity-i.e. how well they adapt to changing circumstances.

According to Hofstede, countries that show the most discomfort with ambiguity and uncertainty include Arab, Muslim, and traditional African countries, where a high value is placed on conformity and safety, risk avoidance, and reliance on formal rules and rituals. Trust tends to be vested only in close family and friends, which makes it difficult for outside negotiators to establish relationships of confidence and trust with clients or negotiators from these cultures.

The United States, Scandinavia, and Singapore, explains Hofstede, have a higher tolerance for uncertainty. Members of these cultures tend to value risk-taking, problem-solving, flat organisational structures and tolerance for ambiguity. It may be easier for outsiders to establish trusting relationships with negotiating partners within cultural contexts more adaptable to change.

Masculinity/Femininity

These terms are used to describe the degree to which a certain culture uses predominantly assertive or nurturing techniques to make decisions and/or solve problems.

Business culture norm #1: A meeting scheduled for noon in Brazil would be expected to start no earlier than 12:30 or 12:45.

Business culture norm #2: Belching after a meal in China demonstrates you enjoyed the food.

Business culture norm #3: The person 'in charge' of a meeting in Japan often does little of the talking, leaving it to his/her subordinates to ask questions and share information.

Business culture norm #4: In India, high-level executives often have two or three subordinates with them at all times, although they will generally not speak unless prompted to do so.

Business culture norm #5: In parts of Southeast Asia, the use of hand gestures when speaking is considered distracting and should be avoided as much as possible.

Business culture norm #6: In a meeting in Japan, the highest-ranking person in the room will sit the furthest from the door.

Business culture norm #7: Formal tea is generally served during business meetings in India by servants. The Indian executives will generally not thank the servants for bringing the tea nor acknowledge their presence in the room.

Business culture norm #8: Even if business isn't conducted over a meal in Russia, food is often a part of the meeting. It is good etiquette for the visitor to bring cookies or some other food item to be shared with the group.

 

They can also be applied to cultures in which men and women have clearly defined gender roles.

Hofstede cited Japan and Latin America as cultures that are decidely more masculine due to the emphasis placed on assertiveness, task-orientation, and achievement.

In these cultures, there also tends to be slightly more rigid gender roles.

On the other hand, cultures considered feminine-Scandinavia, Thailand and Portugal-value cooperation, nurturing, and relationship solidarity with those less fortunate.

Undoubtedly, however, associations with gender vary greatly across cultures, so that elements considered masculine in one culture might be considered feminine in another. Negotiators may find it useful to consider the way gender roles play out in the cultural contexts of their negotiating partners.

"Know thyself"

Greek philosophers coined it. It's a concept that shows up in the Christian Bible as well as the Holy Quran. It's central to Confucianism and a driving force in Buddhism.

Knowing thyself is an ancient concept that's about understanding human behaviour, morality and thought processes. The implication of it is simple: understanding yourself, allows you to more easily understand others.

Recognising one's own culturally-specific reference points-i.e. values, assumptions and expectations-allows us to recognise the same in others. For example, if negotiator A is Spanish and negotiator B is German, neither should be surprised if their negotiations begin 45 minutes late but follow a strict point-by-point agenda.

While correctly interpreting cultures can lead to better negotiations, there is no 'right' approach. There are only effective and less effective approaches which, like the cultures they aim to quantify and categorise, shift like the sands of the desert.

Things to consider when negotiating across cultures

Greetings

How do people greet and address one another? What role do business cards play and when should they be presented?

Degree of formality

Will my counterparts expect me to dress and interact formally or informally?

Gift giving

Do businesspeople exchange gifts? What gifts are appropriate? Are there cultural taboos associated with giving gifts?

Eye contact

Is direct eye contact polite or rude? Is it expected?

Demeanour

How should I carry myself? Formally? Casually?

Emotions

Is it rude, embarrassing or normal to display emotions during a business negotiation?

Silence

Is silence awkward in this culture? Is it expected? Is it insulting? Is it respectful? Is it strategic?

Eating

What are the proper manners for dining in this culture? Are certain foods taboo? Are certain times of the year better/worse for planning negotiations over a meal?

Body language

Are certain gestures or forms of body language rude?

Punctuality

Should I be punctual and expect my counterparts to be as well? Are schedules and agendas fluid? How many break should I allow for?

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