Negotiation is a type of communication between contractual partners with a goal in mind, a mutually agreed-upon goal to attain. Negotiation’s core concept, what is negotiable, and what happens when we negotiate can vary dramatically among cultures. In an international negotiation, the parties engaged, must understand their counterpart’s culture, to approach them in accordance with their language, habits, traditions, moral and religious conventions. Americans, for example, tend to see negotiations as a competitive process of offers and counteroffers, but the Japanese see it as a chance for information sharing (BAICU, 2014).

As far as Europe is concerned, there are two types of cultures: monochronic and polychronic cultures, and some scholars define the cultural triad (Northern, Central and Southern geographical oriented cultures). The trend in the European countries is toward “Unity in Diversity”, which is appropriate for the future European family and is defined by tolerance, understanding, competitive alliances, and win-win agreements.

Traveling, social-business networks, diplomatic relationships, e-commerce, foreign languages, local traditions, habits, history, geographically oriented customs, business knowledge, legislation, and intercultural cross differences are all required to conclude agreements in a win-win situation. Individuals, groups, communities, organizations, and even nations all have different values, beliefs, and assumptions that make sense to them (YINGYUSHIJIE, 2019).

Four Dimensions of Culture to Consider in International Negotiations

1. Power Distance

For example, in Russia, power tends to be concentrated at the top. Executives or government officials may negotiate a deal, only to have it renegotiated by higher-level authorities, in different time.

2. Individualism/Collectivism

Individuals, in a society, may view of themselves as individuals or as members of a linked group, or collective. This mental process has an impact on how societies are organized and under which scope, how decisions are made.

3. Masculinity/Femininity

The third factor is how much society accepts traditional or stereotypical masculine and feminine features. Aggression and competition, for example, are traditionally “masculine” traits, whereas an emphasis on relationships and collaboration are traditionally “feminine” traits. Many Scandinavian countries rank better in terms of relationship quality, whereas other cultures rank higher in terms of competition.

4. Uncertainty Avoidance

Uncertainty avoidance refers to how comfortable a person feels in an unstructured or uncertain environment. Because some cultures are uncomfortable with ambiguity, companies look for norms and rules to help them negotiate. Other cultures are less afraid of uncertainty and feel more comfortable negotiating.

Business negotiators in some countries, such as Spain, may have signing a contract as their main goal, but negotiators in other cultures may be more interested in building a strong, long-term connection with their counterpart.

These characteristics describe cultural values in a broad sense, and not everyone in each culture would agree with each and every one of them. However, these can be general definitions of how other cultures approach negotiations (Conlon, 2019).

Important parts of signing and respecting an agreement.

Organizations may engage with partners and clients from different countries, at some point in the future, in order, to expand their network. When dealing with parties from various nations, being aware of cultural differences can help you develop long-term, workable collaboration agreements. When negotiating contracts, ignoring these tiny cultural variations might lead to undesirable outcomes.

When is this going to happen? To be more specific, when the contract was formed, one party overlooked cultural differences and brought their thinking to the table, resulting in the inevitable fallout, later. As a result, cultural differences were not considered when signing the contract at the time, resulting in its disregard.

Classifying cultures based on particular qualities and behaviors is one technique to gain a better understanding of other cultures and how that information may be applied in the business world.

Even if the parties involved are not from an English-speaking country, international contracts are commonly written in English. The disadvantage of contracts drafted in English by non-native speakers is that problems may occur after the contract has been signed, and one or more parties may dispute the deal because they did not comprehend what they were signing (QUILLEN, 2017).

To avoid disagreements over contracts signed in English, the parties can agree to relinquish their rights to argue that they did not understand the contract and that it is – therefore – invalid. The alternative option is to use English as the lingua franca in dual-language contracts. You can always do a mix of the two choices.

Additionally, when working with an overseas company, there may be discrepancies in the way things are treated legally, as well as in the commercial climate. Because of the disparities in approach across different legal systems, there may be considerable differences in contracting practice. Even before beginning negotiations, the parties are obligated by their own laws, as well as the laws of the states to which other parties are subject, as well as any international regulations that may apply. Disagreements emerge in international contracts in a variety of ways. One contracting party or nation may fail to follow the terms of a contract, resulting in a conflict or breach that the parties must immediately address. Therefore, it is considered important for the procedure of contracting to respect the counterparts’ cultural differences, and determine common communication channels (e.g., English as lingua franca) (UPCOUNSEL, 2020). More information is available at: https://www.upcounsel.com/international-contracts

1. Types of differences in negotiation.

When negotiating, one should always take into consideration some particularly important factors, regarding the person their talking with. Language, habits, traditions, moral and religious concerns, and respect may lead to positive, or negative outcome of the negotiation subject (BAICU, 2014).

2. European culture dimensions in negotiating.

There are four different cultural dimensions in European culture that affect the negotiating process.

1. Power Distance – The orientation of power concentration.
2. Individualism/Collectivism – regarding how each society is organized and how decisions are made.
3. Masculinity/Femininity – the acceptance of traditional or stereotypical masculine and feminine features, in each society.
4. Uncertainty Avoidance – How comfortable each society is, in terms of ambiguity and uncertainty, in negotiating procedures (Conlon, 2019).

3. Language and cultural differences in business contracts procedures.

Language and cultural barriers quite often lead to unpleasant situations, when signing and respecting a contract. The importance of adapting the English language, when building a contract, is imperative, as it leaves little room to misunderstandings (QUILLEN, 2017).