The Western Union Business Solutions Learning Center is a blog provided for general informational purposes only and should not be construed as legal, financial, tax  or accounting advice. Consult your own independent advisors regarding your particular needs and circumstances.

image

Create a Tailored Negotiation Plan for Working in a Foreign Market

From collaborating with vendors and suppliers to handling customer relations, small business owners know a thing or two about negotiating. But when it comes to negotiating with international business partners in a foreign market, details such as language barriers and cultural differences can introduce new complications.

Here are some negotiation strategies business owners should think through when planning for their next round of negotiations.

Consider Their Negotiation Style

Vince Scacchitti, a partner with eXegy Partners, a supply-chain consultancy based in Punta Gorda, Fla., has been helping companies tailor their approaches to negotiating for almost three decades both as a senior leader in procurement and as a consultant. He says it's important for business owners who are engaged in international business negotiations to ask themselves a few questions before creating their negotiation plans:

As they prepare for negotiations, one facet business owners should take into account is how the person sitting across the table relates to time.

Learn More About Using Online FX

·      What's the negotiation style of the other party's culture?

·      What impact could cultural differences have on the negotiation?

·      Do they like to be argumentative?

Currency Converter
convert to

·      Do they place a high value on facts?

For example, negotiators from some Asian cultures have a top-down strategy, where the parties involved in the business transaction gather information for their superiors, says Jim Anderson, owner of Blue Elephant Consulting, a business communication consultancy located in Tampa, Fla.

"Asians - whether Koreans, Japanese or Chinese - uphold respect from their customer or boss as the pinnacle of their professional achievement," Anderson says. By anticipating what a negotiator's boss would want, business owners can use this to their advantage.

For example, when dealing with a customer from this foreign market, try framing information in terms of what would make his or her boss happy. "This deal would allow your company to expand 20 percent over the next two years," an owner might tell the customer contact. This type of information offers something tangible that he or she can report back to more senior executives.

Consider Views of Time

As they prepare for negotiations, one cultural difference business owners should take into account is how the person sitting across the table relates to time, Scacchitti says.

Typically, cultures tend to fall into one of two categories: "monochronic," meaning that time is viewed in increments, often at a faster pace, or "polychronic," where time is viewed through a long-term lens, and decisions tend to be made at a slower place.

When there are two different approaches to time, business owners need to ensure that time constraints don't compromise their negotiating power. "If the party you are negotiating with knows you are constrained by deadlines, they will consciously delay and stall the negotiations to force a 'last minute' decision, which will then weaken your negotiating position," Scacchitti says.

Consider How a Culture Builds Trust

In some cultures, building a deep and expansive rapport with a negotiating business partner must happen outside of a business context first, Scacchitti says.

"If you go into a negotiation in Spain or in Latin America, the reality is, the first thing you need to do is build a rapport with people," he says. "Trust is built in those countries by getting to know the people, getting to know their families and asking about their families and by allowing them to get to know you."

Document Your Negotiation Plan

After processing these negotiation strategies, it's important for business owners to include specific details in their written negotiation plans.

According to Scacchitti, a complete and tailored negotiation plan should contain a few key elements:

·      A most desirable outcome

·      A least desirable outcome

·      A reasonable outcome

·      Negotiable topics

·      Non-negotiable topics

The plan may also include terms and conditions for sending and receiving international payments, and guidelines for executing money transfers or using a trusted online foreign exchange service. This would enable a business to manage its exchange-related expenses, which makes it easier to reduce costs and gain greater control over future cash flow and international payments.

A straightforward negotiation plan would range between three to five pages and a complex one may go up to 10 pages. "The plan should be long enough to cover the big steps you need to get there," Scacchitti says.

Taking the time to think through and then write down a formal negotiation plan can give business owners more control over the outcomes of their negotiations and help build stronger relationships with partners abroad.



Live Cross Rates

INR CAD GBP PHP USD EUR
USD 63.8140 1.3446 0.7714 49.6850 1.0000 0.8911
CAD 47.4330 1.0000 0.5734 36.9350 0.7430 0.6624
AUD 47.6220 1.0035 0.5757 37.0820 0.7460 0.6650
EUR 71.5750 1.5083 0.8653 55.7340 1.1213 1.0000
GBP 82.6710 1.7419 1.0000 64.3740 1.2949 1.1544

Example: 1USD = xx INR

Set a Rate Alert

Have an ideal rate in mind? Set up a Market Alert, and we’ll email you if your rate becomes available.

Set Rate Alert