Chapter 18: COMMITMENT The Strain of Implementation

FOUR : BE RIGHT No one is right all of the time. Successful people learn to keep quiet unless they’re sure of their position. Follow through is the period in which all of the problems that weren’t worked out at negotiations rear their ugly little heads and the chances to offer solutions are myriad. Your way of doing something may be a right way, but don’t assume it’s the right way. New deals in foreign lands or involving foreign companies can bring a whole new set of “tools” to the table for fixing these problem areas. International business has a hundred times more commercial, political, legal, cultural, racial, and geographical variables than the already complex world of your domestic economy. Experts are few and far between in international business circles and their areas of true expertise are limited. Don’t pretend to be one on every issue. Study the options, all the options, and choose the best.

FIVE: BE ON TIME Much of the follow-through process revolves around the setting of standards to be utilized for the duration of the commercial relationship. Each side is demonstrating their interpretation of professional behavior and testing the limits of the counterparts methods. Fair enough. Your goal should be to do all things required of you in a punctual manner. Attendance at meetings, filing of reports, submittal of financial information, shipment of goods, payment of bills, injections of capital, and distribution of profits should always be done on schedule—with no exceptions. This will be particularly important in the early stages of follow through, when reputations are won or lost. Setting high performance standards allows you to make similar demands of counterparts. Start early, maintain standards, garner profits.

The Lessons

Be clear on these points when approaching international negotiations. ■ Negotiating is a complex process that requires extensive research. ■ Paying attention to details isn’t optional. It’s mandatory. ■ Success is a well-planned choice. ■ Every moment is crucial.

CHAPTER 19

Strategic and Tactical Guidelines by Country

ARGENTINA

COMMERCIAL ENVIRONMENT Argentina is one of the more affluent countries in South America, and on the continent it’s second only to Brazil in GDP per person. Food processing, with an emphasis on beef and grain exports, is a major industry and there are also considerable manufacturing and tourism sectors. It’s the most heavily European influenced of the Latin American countries, and these influences carry over into the negotiation styles. Although Argentina has a past history of inflation and excessive state intervention, its new government is committed to a stable currency and foreign investment. The government has also put a new emphasis on attracting technology firms to this formerly agricultural country. Spanish is the primary language (for business and contracts), although English, Italian, and German are widely spoken.

COMMON STRATEGIES ■ FOR TRADE: Impassive, Aggressive, Stubborn ■ FOR INVESTMENT: Social, Hierarchical, Departmental

NOTES FOR NEGOTIATORS The Argentinians see few rivals for themselves in the realm of sophistication.

This is conceivable from a cultural if not commercial viewpoint. They’re hard bargainers, willing to dig in their heels if they feel they’re not being treated as equals. Concessions are granted in small increments, even when the Argentinians are bargaining from a weak position. Every point of the agenda will be hard fought.

Come prepared for the long haul. Although there has been a great deal of privatization in recent years there are still pockets of entrenched bureaucrats. Proceeding with discretion and keeping a low profile will do much to limit interference. Argentina is a land of connections and a wide range of “inside tracks”— ranging from family to the industrial sector to politics. The overlap between one’s social and business life is substantial, and a recommendation (or condemnation) carries a lot of weight here. Make contact as far up the organizational chain as possible. Hierarchies are the predominant management structure, with very little decision-making power filtering down the chain of command. Starting in the middle will only prolong the process and extend your negotiating budget.

While written contracts will be detailed, Argentinians prefer to do business with friends. Visitors who exhibit a cultured interest in Argentina and its people will have an advantage at the negotiating table. Meetings will be very formal and pecking orders are observed for seating and introductions. While meals may be part of the protocol, business is rarely discussed during mealtimes.

Be punctual, but don’t become upset if your Argentinian counterpart exhibits a more casual approach to time. Visitors, whether buying or selling, are held to a higher standard.

When discussing your own company or business culture, take care to not make unfavorable comparisons with Argentina. And under no circumstances should Argentina be lumped in with the rest of South America.

Politics is a very sensitive issue, and the country’s militaristic past is a topic to be avoided at all costs. Even mentioning that you saw the film or the play Evita may set off a torrent of comment. British companies, and perhaps even their American allies, may find some residual resentment from the Falklands conflict. In all cases, the fewer political references the better.

AUSTRALIA

COMMERCIAL ENVIRONMENT Australia is a Western-style democracy. Over the years, its various governmental administrations have, in their turn, embraced Asia and shunned it.

Because it’s 95 percent Caucasian, it’s often seen by its Asian neighbors as a

Western outpost. A well-educated nation, it has one of the highest per capita GDPs on the Asian Pacific Rim. Labor unions are quite strong; mining and manufacturing are key industries, although agriculture is a mainstay. Australians are very active as investors throughout Asia, and they export a great deal of food to neighboring ASEAN countries and China. Foreign investment is welcome.

Australia is a technological leader in the Pacific, especially in telecommunications.

COMMON STRATEGIES ■ FOR TRADE: Aggressive, Pragmatic, Indulgent ■ FOR INVESTMENT: Social, Cowboy, Platoon

NOTES FOR NEGOTIATORS: Australians shun formality and are recognized as some of the friendliest businesspeople on the planet. This belies a tough bargaining ability. They’re masters of the Social strategy. Be direct while negotiating, as the Australians are keen to spot deception and they have no qualms about walking away from the table if they feel you’re holding back information. Since formalities are minimal, negotiations move at a quick pace. Show up on time and come prepared. Australian managers tend to be more

“hands on” than most, so technical details will be welcomed and understood. Even when bargaining from a very strong position, avoid the appearance of taking control. Attempting to “lay down the law” will only create resistance. The

Australians will already understand the secondary nature of their own position, and reminders of it could foul the deal.

The Australians don’t mind putting on a little pressure when they’re buying or investing. The limitations of your proposal and the availability of competitors will be cited on a regular basis. Waiting for the price to drop is an Australian pastime.

Keep your offers realistic but leave yourself some wriggle-room. The Australians will haggle, but only to a small degree. Making a hyperbolic offer at the start will not be perceived as the opening of bargaining but as an indication of your lack of realistic goals.

Contracts will be written, detailed, and enforceable. All parties are expected to adhere to the letter of the contract, as the Australians have well-developed commercial law. Handshakes are an amenity; signatures mean business.

Because of their relatively small population and remote locale, the Australians have become experienced travelers and negotiators. They do detailed research on target economies and companies, with an eye toward limiting surprises at the table. Be assured that they’ll know all about your company and culture before the first meeting.

The Australians are a tough breed and they enjoy competition. They never shy away from confrontation and will go toe-to-toe with anyone. While their outlook on success and failure is somewhat fatalistic, they encourage long-term relationships and prefer to work with people they count as friends.

BELGIUM

COMMERCIAL ENVIRONMENT The city of Brussels is considered by Belgians, as well as by many other continentals, to be the “capital” of Europe. All major economic and political decisions regarding the European Union flow from there. Antwerp is the thirdlargest seaport in the world, and it guarantees Belgium’s leadership in international trade and transport. The country has a strong engineering component and a robust steel industry, and it’s a top player in the world’s diamond market. Because of its role in European shipping, transportation equipment also accounts for a great deal of its exports. The country is a hybrid of Dutch (Flemish) and French (Walloon) cultures, though the twain seldom meet in this country of ten million. This conflict seems inexplicable to outsiders but can have an enduring effect on business negotiations and social gatherings.

COMMON STRATEGIES: ■ FOR TRADE: Pragmatic, Stern, Technical ■ FOR INVESTMENT: Pragmatic, Hierarchical, Departmental

NOTES FOR NEGOTIATORS Though socially the Belgians tend toward the casual, business meetings are somewhat formal. First names are rarely used, except among friends; Mr., Mrs., and so on are customary. French or Dutch equivalents can be used as well. The Belgians are technically astute and prefer presentations with a great deal of factual information. Get right to the point and avoid trying to “sell” the concept. The facts will have to speak for themselves.