Negotiating agreements abroad challenging.

• Author: CLAYTON, GRAHAM
• Position: Brief Article

One of the more interesting and challenging areas of pursuing business internationally is that of negotiating agreements. I'm not talking about something simple, like setting, the terms for a pro forma invoice for a single export sale, but about more involved dealings covering business activities over an extended period of time. When approaching such dealings it is well to keep in mind three factors: the Self Reference Criterion (SRC); your Best Alternative to a Negotiated Agreement (BATNA); and the zone of doability.

How often have you heard the expression "business is business" used to imply that certain things either go without saying or else are so commonplace in our business dealings as to constitute a standard practice? Fairly often in all probability.

We generally conduct business within a larger set of social norms, values, expectations, interpretations and practices that are part of our de facto business culture and which are widely understood, plus we speak a common business language and comply with a common body of commercial law. This makes it easier to both talk and conduct business by relieving us of the need to identify, explain and agree upon a huge range of items that permeate our routine business dealings herein Canada.

Unfortunately, once we step outside of Canada in the pursuit of business we make any such assumptions at our peril. SRC is the term that is used in connection with certain people's ethnocentric thinking and behaviour when they go abroad. A critical part of the process of preparing to negotiate business agreements internationally entails research. Your foreign business counterparts live in a different society and business environment, and that fact can result in their thinking and behaving in ways quite different from what we encounter here in Canada. Do your cross-cultural homework. Learn about their culture, their economy and their commercial practices. Pay particular attention to how they approach negotiating business agreements, to the kinds of agreements that they sign, and to how they view and honour such agreements.

Part of the process of preparing for negotiations entails determining your objectives and priorities and deciding what is to be on the negotiating table. This will entail consideration of both quantitative and qualitative targets, determining ranges of acceptable outcomes, and developing an understanding of what you have to...