September 23, 2013

International Business Perspectives: How Different Countries View Contracts


Doing business internationally means becoming aware of cultural differences. One cultural paradigm not often touted is different countries’ attitudes towards negotiation and the sanctity of the contract.

Obviously, not all individuals and companies will share these general attitudes, but an understanding of a general perspective can help maintain goodwill and decrease frustration during negotiations.
 
 
         
Country Perspective on Contracts Negotiating Style Value Helpful Practices
         
US/Canada Terms viewed as final and binding. Directness and efficiency Brevity and integrity.  
         
India Seen as flexible, to be further negotiated. Idealistic standards can lead to prolonged negotiations. Fairness Document interactions as terms may be questioned throughout term of contract.
         
China Tendency to re-open negotiations to get the best deal; collective mindset. Trust is slowly earned. Hierarchy and formality. Status conscious. Prefer one on one relationships and discussions. Contracts can be difficult to enforce, so prepayment clauses can be beneficial.
         
Europe Varies by country and sub-culture; can be prolonged negotiation. Diplomatic, guarded, self deprecating.   Discuss how VAT will be handled and consider necessary pricing adjustments to cover this tax.
         
Japan Take time to consider various fine points. Sense of honor leads to adhere to and seek to surpass agreed upon points. Prolonged, attention to detail, customer service. Honor and respect of hierarchy. Remember to spend time on social interaction before getting to the heart of business discussions.
         
Russia/Mid East Careful negotiators Thoughtful, reserved. Verbal Communications, long term relationships Discuss how foreign taxes will be handled and consider necessary pricing adjustments to cover this tax.
         
Latin America Focus on spirit of the contract rather than letter of the contract. Use of humor is not usually appropriate. Verbal communication stressed over written communication. Expressive styles are common. Eye contact, physical touch. Follow up on written documents with a phone call or visit.
 
Do you agree with these cultural paradigms? Do you have any perspectives to offer other readers?

Useful perspectives on world business cultures can be found at the websites below:


 
The CECON Group, Inc. has over 1300 technical consultants, located in 21 countries and has done business in 22 different countries. Specializing in science and engineering technical support, CECON has 28 years’ experience placing consultants for technical due diligence, expert witness services, regulatory & compliance audits, interdisciplinary preliminary design, and materials properties and processing.