"Just make them wait." Everyone else in the world knows that no negotiation tactic is more useful with Americans, because no one places more value on time, no one has less patience when things slow down and no one looks at their wristwatches more than Americans do. Edward T. Hall in his seminal writing is best at explaining how the passage of time is viewed differently across cultures and how these differences most often hurt Americans.
Even Americans try to manipulate time to their advantage, however. As a case in point, Solar Turbines Incorporated (a division of Caterpillar) once sold $34 million worth of industrial gas turbines and compressors for a Russian natural gas pipeline project. Both parties agreed that final negotiations would be held in a neutral location, the south of France. In previous negotiations, the Russians had been tough but reasonable. But in Nice, the Russians were not nice. They became tougher and, in fact, completely unreasonable, according to the Solar executives involved.
It took a couple of discouraging days before the Americans diagnosed the problem, but once they did, a crucial call was made back to headquarters in San Diego. Why had the Russians turned so cold? They were enjoying the warm weather in Nice and weren't interested in making a quick deal and heading back to Moscow! The call to California was the key event in this negotiation. Solar's headquarters people in San Diego were sophisticated enough to allow their negotiators to take their time. From that point on, the routine of the negotiations changed to brief, 45-minute meetings in the mornings, with afternoons at the golf course, beach, or hotel, making calls and doing paperwork. Finally, during the fourth week, the Russians began to make concessions and to ask for longer meetings. Why? They could not go back to Moscow after four weeks on the Mediterranean without a signed contract. This strategic reversal of the time pressure yielded a wonderful contract for Solar.
Differences in thinking and decision-making processes
When faced with a complex negotiation task, most Westerners (notice the generalization here) divide the large task up into a series of smaller tasks. Issues such as prices, delivery, warranty and service contracts may be settled one issue at a time, with the final agreement being the sum of the sequence of smaller agreements. In Asia, however, a different approach is more often taken wherein all the issues are discussed at once, in no apparent order and concessions are made on all issues at the end of the discussion. The Western sequential approach and the Eastern holistic approach do not mix well.
That is, American managers often report great difficulties in measuring progress in negotiations, particularly in Asian countries. After all, in America, you are half done when half the issues are settled. But in China, Japan, or Korea nothing seems to get settled. Then, surprise, you are done. Often, Americans make unnecessary concessions right before agreements are announced by the other side. For example, one American department store executive traveling to Japan to buy six different consumer products for her chain lamented that negotiations for the first product took an entire week. In the United States, such a purchase would be consummated in an afternoon. So, by her calculations, she expected to have to spend six weeks in Japan to complete her purchases. She considered raising her purchase prices to try to move things along faster. But before she was able to make such a concession, the Japanese quickly agreed on the other five products in just three days. This particular manager was, by her own admission, lucky in her first encounter with Japanese bargainers.
This American executive's near blunder reflects more than just a difference in decision-making style. To Americans, a business negotiation is a problem-solving activity, the best deal for both parties being the solution. To a Japanese businessperson, on the other hand, a business negotiation is a time to develop a business relationship with the goal of long-term mutual benefit. The economic issues are the context, not the content, of the talks. Thus, settling any one issue really is not that important. Such details will take care of themselves once a viable, harmonious business relationship is established. And, as happened in the case of the retail goods buyer above, once the relationship was established—signaled by the first agreement—the other "details" were settled quickly.
American bargainers should anticipate such a holistic approach to be common in Asian cultures and be prepared to discuss all issues simultaneously and in an apparently haphazard order. Progress in the talks should not be measured by how many issues have been settled. Rather, Americans must try to gauge the quality of the business relationship. Important signals of progress can be the following:
1. Higher-level executives from the other side being included in the discussions
2. Their questions beginning to focus on specific areas of the deal
3. A softening of their attitudes and position on some of the issues—"Let us take some time to study this issue"
4. At the negotiation table, increased talk among themselves in their own language, which may often mean they are trying to decide something
5. Increased bargaining and use of the lower-level, informal and other channels of communication