How To Negotiate In China, Saudi Arabia, and Russia
For many Western business investors and entrepreneurs, working with international partners and companies is quickly become the fastest route to profitability and growth.
Our global economy holds the promise of better business and increased revenue for everyone, but it also creates cultural challenges as foreign partners attempt to understand each other.
The rules of home, sometimes so ingrained as to be imperceptible, often don’t apply in international business dealings. When approaching prospective clients or partners in powerhouse countries like China, Saudi Arabia, and Russia, it’s crucial to first understand the rules of negotiation in these particular countries. Sometimes that means tossing out tried-and-true negotiation strategies and adopting a completely open mind when it comes to doing business.
While there are exceptions to every rule and situation, here’s a general guide of how to negotiate business deals in China, Saudi Arabia, and Russia.
Negotiating a deal in China reminds me of living in Los Angeles: everyone’s all smiles and nods and “yes”s, right up until the deal falls through.
All niceties all the time is the norm in China, where “losing face” or engendering conflict is to be avoided at all costs. That’s why it often comes as a shock when Chinese negotiators stand their ground and make demands – all with a steadfast smile. Keep in mind that friendliness in China does not translate into an automatic or easy deal.
Negotiations take longer in China, and are almost always conducted in person. You’re certain to face an entire team of negotiators, and from there have to identify the person who is truly in charge and appeal to their demands.
When facing prospective clients in person, take care to adopt a tone of modesty – boastfulness and big talk aren’t considered virtues in Chinese culture.
Saudis don’t separate business affairs from personal affairs, so treat all business dealings with a personal touch. This means cultivating long-term relationships and building a strong network within the country, a phenomenon known as “wasta.” Wasta makes it virtually impossible to make quick ‘n dirty deals, and necessitates long, sometimes arduous relationship-building before any business takes place.
In Saudi Arabia, status and hierarchy are highly important in business negotiations. Never send a subordinate to negotiate a deal unless they have the authority to close.
In the same way, those in power positions will usually only discuss high-level aspects of the deal, while those underneath them will discuss technical and administrative aspects of the deal. Asking a “principal” (manager) to discuss mundane details like paperwork is a sign of disrespect. In the negotiation, a person’s role and the fact that they’re speaking are considered more important than what’s being said.
Forget pointing out profits when discussing the benefits of the deal. Instead, Saudis are lured by other factors like beneficial relationships, public prestige, and the overall growth of the Saudi economy.
In Russian business culture, a firm, face-to-face relationship must be established before committing to a business deal. This relationship will help to overcome the automatic Russian tendency to distrust anyone in a negotiation.
Always be early to meetings with Russians. Being 30 minutes early is considered on time, and being late is a huge sign of disrespect.
Don’t be surprised if your Russian clients appear rude, arrogant, or threaten to walk out of the negotiation. These are all simply negotiation strategies that can be overcome by showing respect to the main decision maker in the room.
Russians tend to say exactly what they mean, and will expect the same of you. Don’t boast, speak in generalities, or exaggerate the benefits of the deal. A Russian negotiation is not benefits-focused, but instead seeks to abate loss. If you can show your Russian counterparts how they are losing less than you by entering into a deal, you’re sure to win the negotiation.
Finally, stay connected with Russian business contacts by networking on VK, the most popular social networking site in Russia.
When entering into negotiations with some of the world’s toughest negotiators, it’s critical to do your research and set aside your expectations. Only with an open mind and a great deal of respect for cultural differences can you win the business of your foreign counterparts.
Just make sure to give ample time for business relationships to grow. Unlike business in the West, deals in the rest of the world don’t happen overnight.
What’s the toughest business negotiation you’ve ever been in?
Rebekah Voss is an author, travel writer, and the creator of TheHappyPassport.com.