Effective Agreements' Blog

International Business Negotiation - Additional Details

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I have worked on commercial agreements from a simple international sales contract to an international M&A transactions in places as diverse as England, Ireland, Holland, Israel, Germany, Brazil, and India. For an illustrative and amusing “war story” about misconceptions concerning the definition of business terms, click here. There is additional information on international transactions at Creating International Business Alliances – 5 Pointers.

Different Culture, Different Negotiation Strategy

• No business person should even be allowed to represent your company unless that person is very familiar with the company's culture or has at least studied it;

• If you have employees from the country in question, use them if there are no cultural barriers to doing so. For some countries there is.

• There are companies that do nothing but train business people to be effective in the other culture. The cost of such training will be offset by the ability to create a useable negotiation strategy;

• There are also companies that will help you prepare and provide guidance while you are in the foreign country. I would be very hesitant to do any kind of deal in China without consulting Pacific Rim Resources;

• Read the books. There are now several books in the Kiss, Bow or Shake Hands series, some on business in certain areas and all designed to help the business person.

Business Terms

• Do not forget that a company in Holland does not have to keep its books according to GAAP. (See the “war story” via the link above;”)

• A different culture means a different negotiation strategy. That does not mean that you should not have one. Your overall strategy may have to include a year of developing relationships. Eventually, though there will be a negotiation, and a negotiation strategy that takes into account all of the cultural differences between the parties will be required;

• The European Union has a body of law that will have to be taken into account. This is a legal point to be discussed with counsel; I just know the EU laws impacted acquisitions upon which I worked.

Canada

I throw this in because Americans forget it so frequently. Canada is a foreign country, not the 51^st state. You may think they do business just like us, but you would be wrong. If nothing else, remember that their legal system and way of doing business come from England, not the United States.