OLEGARIO LLAMAZARES
How to negotiate successfully in 50 countries
www.globalmarketing.es
HOW TO NEGOTIATE SUCCESSFULLY IN 50 COUNTRIES No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any forms or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of the copyright holder. Any violation of these rights shall constitute a crime against intellectual property (articles 270 and following of the Penal Code). © Olegario Llamazares García-Lomas © Global Marketing Strategies, S.L., 2006 Nuñez de Balboa, 35 28001 Madrid. Spain. Tel: 34-91-5782667 Fax: 34-91-5759009 www.globalmarketing.es ISBN 84-609-6725-5 Editor: Ana Nieto Translated by: Anita Haney Cover design and typeset by: Mónica R. Klecker Illustrated by: Daniel Rosell Printed in Spain by Publidisa, S.A.
Contents 05 INTRODUCTION 07 ACKNOWLEDGEMENTS 09 COUNTRIES: 09 13 17 21 27 31 35 41 45 49 53 57 61 67 73 79 83 87 93 97 101 105 109 115 119
Argentina Australia Belgium Brazil Canada Chile China Colombia Czech Republic Denmark Ecuador Egypt Finland France Germany Greece Hungary India Indonesia Ireland Israel Italy Japan Malaysia Mexico
125 129 133 139 143 147 151 155 159 163 169 175 181 187 191 197 201 205 211 217 223 229 235 239 243
Morocco Netherlands Nigeria Panama Peru Philippines Poland Portugal Romania Russia Saudi Arabia Singapore South Africa South Korea Spain Sweden Switzerland Thailand Taiwan Turkey United Kingdom United States Uruguay Venezuela Vietnam
Introduction Executives working in an international environment spend most of our time negotiating and it is therefore crucial that we get it right. Furthermore, the huge differences in each country's business culture highlight how important it is to possess and perfect our negotiating skills to deal with foreign customers, suppliers, distributors, partners or subsidiaries. This book aims to provide clear, concise and, above all, useful information for negotiating in 50 countries that together account for over 90% of the world’s economy. The book is to be used as a reference book as regards to what strategies and behaviour should be adopted in negotiations with foreign companies. The information on each country is divided into five sections: key facts, business environment, negotiation strategies, etiquette and essential web sites. An executive travelling to a country for the first time can quickly read the guidelines in each section and significantly improve his/her negotiating and intercultural skills at business meetings. Learning how to negotiate in each country is a complicated task that requires a high degree of motivation and persistence. However it is satisfying to gain an insight into relationships between people with very different cultural and professional backgrounds and who, besides, will keep their distinctive cultures, despite the effects of globalisation. One of the major shortfalls that our company, Global Marketing Strategies, has detected in the implantation of one of the most successful programs: Neg Power Check Š (a program to analyse and improve companies' and their international executives' negotiating behaviour) is the international negotiator's inability to adapt to the proposals and negotiating style of his counterpart's culture, and put forward arguments by putting him or herself in the other person's shoes. In this book we aim to enlighten readers on the different ways of negotiating in each country so that they can judge for themselves how important the differences are and bear them in mind when doing business with foreign companies. We are convinced that if they do, they will become better negotiators.
OLEGARIO LLAMAZARES Global Marketing Strategies Managing Director www.globalmarketing.es
Acknowledgements This book has been prepared from the information available in numerous official sources and publications and from a hundred business professionals' comments and experiences of negotiation in the different countries. Many people have been consulted and it would therefore be impossible to mention all of them. We would however like to express our special thanks to the following people who have devoted their time to reviewing and adding details to the information on each country: Ouadii Amou (Morocco), Rosa Asensio (Malaysia), José Bada (South Africa), Luciano Berrocal (Belgium), Carlos E. Botero (Colombia), Jaime Castanedo (Mexico), Enrique Fanjul (China), Peter Furesz (Canada), Agustí García (Singapore), Janine García and the staff at the Madrid Austrade office (Australia), Manel García Sanz (China), José María Guillén (Mexico), Lim Jong Ho (Korea), Janette Loft (United Kingdom), Félix López (Nigeria), Héctor López (Ecuador), Günter Lorenz (Germany), Lennart Loven (Sweden), Adriana de Luca (Brazil), José Félix Merladet (India), Julián Morales (Saudi Arabia), Isidro Moyano (Czech Republic), Ana Nieto (Netherlands), Tiina Nousiainen (Finland), Eduardo Olivares (Turkey), Rodolfo Oppenheimer (Uruguay), Adolfo de Pedro (India), Rául Peralba (Argentina), Manuel Rivero (Panama), José Luis Rebollo (Brazil), Susana Roth (Israel), Hortensia Rozas (Venezuela), Anselmo Santos (Russia), Juan Sirvent (France), Nelson Stevenson (Chile), Tesuo Mizuyoshi (Japan), Niina Touré (Finland), Martín Uriarte (Spain), Carlos Vila (Peru) and Emma Whelan (Ireland). I would also like to express my most sincere thanks to the people who have collaborated in the edition of this book, particularly Ana Nieto, the editor, who very effectively and efficiently coordinated its design and preparation; Mónica R. Klecker, who designed the cover and contents, and patiently laid out the texts and made all the necessary corrections; and Daniel Rosell, the book's illustrator, who, with his ingenuity and art, produced the illustrations on each country's introductory page (www.danielrosell.com).
Argentina KEY FACTS
Buenos Aires
Population: 37.5 million inhabitants Area: 2,766,890 sq km Form of government: Federal republic (23 provinces and 1 federal district) GDP per capita (PPP): USD 9,684 Currency: Argentine peso (ARS) = 100 cents Official language: Spanish Languages for business: Spanish, English and French
REMEMBER... The Argentinian optimistic and talkative character may give the impression on a first visit to the country that business deals are going to be easy and agreements will be strictly adhered to. But appearances can be deceptive: the tango may look simple, but putting a foot wrong is all to easy.
Religion: Catholic (90%), Jewish (2%), Protestant (1%) Capital: Buenos Aires (12.5m) Main cities: C贸rdoba (1.4m), Rosario (1.3m), Mendoza (0.9m) Telephone code (country): 54 Telephone code (cities): Buenos Aires (11), C贸rdoba (351), Rosario (341) National holiday: 25 May and 9 July
10 Argentina
BUSINESS ENVIRONMENT • Apart from the drastic recession at the beginning of the twenty-first century, Argentina has great potential in the medium and long term for foreign companies investing in the primary sector (fruit, fish, timber), the food and agriculture industry, and services. • In spite of its natural wealth, Argentina is not a country where it is easy to do business. Macroeconomic imbalances (inflation, external debt, unstable exchange rate) make foreign trade operations and new business projects difficult. • An essential factor for the country's external image is the negotiation of its debt with the International Monetary Fund. • Argentina is the most European country in Latin America. Most Argentines are of Spanish or Italian descent and they greatly admire European culture, especially French and English. It is said that Argentines are Italians who speak Spanish, dress like the English and would like to live in Paris. • Although they prefer Europe for its social and cultural life, as far as business is concerned, the USA comes first and Japan second. • Argentina is a country of contacts. A network of family, political and business relations dominate the business world. • Argentina's population is concentrated in the main urban centres. A third of the population and half of the country's wealth are in the greater Buenos Aires area.
NEGOTIATION STRATEGIES • To gain access to the Argentine market it is best to have a representative to take the product into the country. Representatives operate more like distributors than agents, and are responsible for retail distribution, logistics, after-sales service, etc. • For foreign trade operations you must register at the National Registry of Importers and Exporters (Registro de Importadores y Exportadores de la Administración Nacional de Aduanas). This institution can provide listings of Argentinian companies whith each product they import as well as their overseas suppliers. • It is essential to find out the international experience of the company or the managers that you are dealing with. The more overseas business dealings they have, the easier it will be to wrap up agreements. • You should be punctual even if the other party turns up at least half an hour late, which is to be expected. • The negotiating atmosphere is formal. In the initial meetings you should be polite and formal. • Business customs and habits are similar to Europe; however, they are less scrupulous about honouring their commitments. • The conversation usually begins very generally. The time it takes to get down business depends on the speaker, but is usually no more than twenty minutes. • Negotiation is relaxed. Argentines hate to feel pressurised in business deals. Aggressive or confrontational tactics are sure to be counterproductive.
Argentina 11
• Argentines approach matters subjectively. They accept facts as long as they do not contradict their own ideas. • You should invest time in personal relationships. Social activities are very important and are the key to doing business. • The organisational structure of companies is very hierarchical. Nearly all decisions are taken at the very top of the pyramid. Dealing with middle managers is not usually effective. • Argentines are hard negotiators. Each point in a proposal is analysed separately and they will want it to be improved upon. Concessions are granted gradually and reluctantly even if they start from a weak position. You should be prepared for long discussions. • Argentines have a reputation for being unreliable when doing business, so the foreign businessman should beware. It is understood that people are more unreliable in cities in the interior of the country than in Buenos Aires. The word chanta (from the Spanish word chantaje, meaning blackmail) is used for people who cannot be trusted or whose apparent power is baseless. Another social type to look out for is the canchero, the person who thinks that he knows everything and is superior to everyone else. • It is advisable to establish the agreements in a contract covering the functions and obligations of both parties are established. In Argentina there is no specific legislation regulating business deals between companies, so disputes may lead to litigation.
ETIQUETTE • Shaking hands is the usual form of greeting; one should greet every person individually and not the group as a whole. Once a certain degree of familiarity has been obtained, one may kiss a woman on the cheek. • Argentines usually greet each other with a kiss on either cheek quite informally. In Buenos Aires they give just one kiss, but in some provinces two kisses are given. • In general, negotiators look straight into each other’s eyes, but one should be careful not to overdo it. • The use of the Spanish forms usted and tú depends on age and professional status. People with a high status and older are addressed as Mr (Señor) and Mrs (Señora). Young executives are immediately called by their first name. • Professional titles (Doctor, Graduate, Engineer) are used less than in other Latin American countries. In any case their use is quite strict. For example, an engineer is called "engineer" and not "doctor" as in other Latin American countries. Doctor is only used for doctors in the medical profession and lawyers. • Argentine executives use sophisticated language. Eloquence is highly prized. You should be prepared to participate in intellectual debates. In this respect, the business culture bears a resemblance to that of France. • Unlike other Latin American countries and Spain where two surnames are used, Argentines use only their paternal surname. • It is better not to express any political opinions; in particular you should not mention the military dictatorship, the Falkland conflicts or the frequent corruption scandals.
12 Argentina
Argentines do not like being compared to other Latin American countries, especially Brazil. • Topics for conversation are football, music (opera is very popular), history and literature -the twentieth century produced great authors like Borges, Cortazar or Sábato-. • Argentina is not the ideal place for vegetarians. You should be prepared to try and make compliments on all kind of meats, especially when you are invited to a "roast" (barbecues that are usually held in the open air). Many houses also have indoor barbecues to roast offal (achuras). • Business should not be discussed during meals since these are considered social events. • Gifts are usually exchanged between companies when a business deal has been established. Gifts should be of good quality, but not too expensive in order to avoid any misinterpretation. • When visiting regular clients, a present to the negotiator's secretary (perfume, a scarf, etc.) may help you gain access to appointments at a later date. • When you receive a gift, you should open it in front of the person who has given it to you and express gratitude. • Of all Latin America, Argentine is the country where dress matters most to create a good impression. Conclusions are drawn about a person's personality, social and professional level from his external appearance. Suits, shirts, shoes, ties, wallets, etc., will be carefully observed and, even commented on. They should be of good quality, modern design and prestigeous brands. • Social status is basic for doing business. Status is derived, among other things, from summer holidays in Punta del Este (Uruguay).
INTERNET INFORMATION Local press: www.clarin.com.ar www.lanacion.com.ar www.buenosairesherald.com (Business newspaper) Foreign institutions: www.mrecic.gov.ar (Ministry of Foreign Relations and Trade) www.afip.gov.ar (Ministry of Economy) www.mecon.gov.ar/cnce (National Commission for Foreign Trade) www.exportar.org.ar (Export Foundation) www.invertir.com (Foundation Invest in Argentina) www.afip.gov.ar/dga/sin_cargo.ar (Customs) www.indec.mecon.ar (Institute of Statistics) Other: www.cac.com.ar (Argentine Chamber of Commerce) www.argentinavip.com.ar (Directory of companies) www.feriasycongresos.com.ar (Fairs and exhibitions) www.paginasamarillas.com.ar (Yellow pages) www.turismo.gov.ar (Tourist information)