Why can negotiating sometimes be so difficult in the Arabian Gulf?
All around the world, we negotiate based on our beliefs and culture. It is positive to show assertiveness in some regions but impolite in others. Thus certain people shy away from negotiating with strangers. Others may abuse their position when a gain is possible. That doesn’t make them better negotiators, although they may judge themselves as such. In the past 10 years in the Gulf region, I have observed some specific negotiation habits. If unprepared, negotiating can be difficult.
Experts identify five major negotiation styles.
Collaborators look for win-win agreements. They invest time in the preparation and negotiation itself. They make efforts to understand the interests and needs of each party and want to build opportunities for both.
Accommodators want to avoid conflicts and ensure they please every party.
Compromisers will look for the easiest way out of the negotiation. They will “split the difference” and might offer too much.
Competitors are ready to use all means to serve their interests. They feel comfortable in a win/lose outcome if they have the upper end.
Avoiders are the toughest category of negotiators to deal with. Not that they are fiercely fighting for their share. They tend to consider avoiding a negotiation is the easier path.
Understanding your negotiation style will help you identify your strengths and weaknesses as well as opportunities to better negotiate.
In my discussions on negotiation with managers and executives in the region, many mentioned challenges linked to the importance of trust and relationship.
An Emirati executive indicated he felt obliged to accommodate or compromise when negotiating with Emirati peers. He mentioned avoiding certain negotiations, as it would mean accepting certain unwanted requests, simply to maintain the relationship. My first recommendation to him was to separate the relationship from the interests. The Gulf culture puts a strong emphasis on relationships, but negotiating should not be seen as a risk. As a businessperson, your role requires you to defend your company’s interests. You should inquire about the other party’s interests and objectives and get them to acknowledge yours. Once done, you engage in finding a suitable solution for both. If emotions are to come into play, bring back the discussion on to your respective business interests.
As a rule, the more emotions you bring to a negotiation, the poorer the outcome. In the same way, parties shouldn’t leverage their position or power if they wish to maintain or develop a positive relationship. Competitors and Avoiders are both concerned the other party may take advantage of them. They defend their position or delay the negotiation. In both cases they may lose an opportunity to create value. If you must deal with Competitors or Avoiders, or if you are one of them, get emotions out of your way.
Several businesspeople mentioned the difficulty of negotiating with over-assertive counterparts. There are many stories that can illustrate that concern. For example, a global infrastructure company repeatedly refused to reduce its bid on a multibillion dollars contract in Saudi Arabia. Its negotiators explained that their margin was very low and their offer very competitive. Taking note, the client looked for and obtained a significantly lower bid, from a company with an older technology. Receiving information about the competitor offer a few days before the decision was to be announced, the first company offered a double-digit discount to its initial offer. Its bid was rejected and was considered inconsistent with its previous consistent refusal.
In this example, the company lost the client’s trust. In this region, this isn’t a risk to take lightly. Your product or service may be good, but the trust you enjoy should be as high.
When facing a counterpart using “hardball” tactics, a good response is to simply ignore them. If you ask the people to repeat their ultimatum, they’ll put themselves into a situation where backing up isn’t possible any more. You want to prepare for the day during which they will most probably be ready for trade-offs to close the deal. Otherwise they will not be able to change their position without losing face. You want to ensure escalation does not become an obstacle to your final goal.
On another note, you should understand the motivation behind their position. Once you understand their interests, you can offer a variety of solutions, helping you to avoid the initial “take it or leave it”. By demonstrating your engagement and willingness to help solve their issues, you can uncover opportunities. You’re now leading the negotiation.
The Harvard Business Review in 2010 published an article called Extreme Negotiations. The authors illustrated the importance of best practices when negotiating under duress, for example with a major client threatening to leave you unless you reduce your prices. They first warn negotiators not to react too promptly to pressure. Unless you have all the facts, you may make unnecessary concessions. Second, the writers encourage you to avoid retaliating to threats. Responding will escalate. Giving in will open the door to more arbitrary demands. They also recommend building trust. Dealing with possible relationship issues, which may explain the tough position of the other party, can only help.
Because trust is important in Gulf culture, and with more than 200 nationalities living in the UAE, negotiating can be a difficult exercise. Many businesspeople tend to negotiate with the fear that a wrongly managed discussion may have a lasting negative effect. For this reason, some may avoid negotiations. If forced to, they will probably accommodate or compromise. Others may be tempted to avoid negotiation intricacies and adopt a “hardball” position – “take it or leave it”.
Acknowledging the importance of relationships shouldn’t be a reason to refuse negotiating. Developing a process that separates the emotions from the interests, together with your counterpart, you increase the opportunities of a successful agreement. Because of the global competition between countries and companies, you may be required to challenge existing agreements. Can you really afford to refuse to negotiate?
The writer manages the Abu Dhabi activities of Chalhoub Group and is a guest lecturer on business negotiation at Paris Sorbonne University Abu Dhabi.
business@thenational.ae
Follow The National's Business section on Twitter
