Understanding Cultural Pitfalls in B2B Negotiations: Case Studies

In the realm of B2B negotiations, navigating cultural pitfalls is paramount. Nowadays, as markets globally become increasingly saturated, finding new opportunities and sealing deals pose significant challenges. Picture this scenario: after months of diligent lead generation efforts, you finally secure a crucial meeting with a potential partner. Initial interactions seem promising, with warm greetings and gestures of hospitality. Yet, abruptly, communication ceases, and potential opportunities vanish. What could have gone wrong? Amidst numerous potential explanations, cultural faux pas emerge as a significant factor. Was it a misinterpreted joke? Inappropriate conversation topics? Perhaps a misstep in dress code?

Examples of cultural faux pas inspired by real stories:

• Not reading between the lines in Oriental cultures. People in the East rarely say what they mean. An author of the text (from Eastern Europe) made the mistake over and over asking business contacts from India to deliver something they didn’t plan to engage with for some reason. They couldn’t directly refuse to do it because of local culture and mutual respect (refusal is considered impolite etc.) but at the end of the day, the job wasn’t done. It’s very important in this situation to read between the lines and see the signals: they might say “yes” but indirectly they will say no (for ex. saying: “Maybe I will do it…”). Good old push doesn’t work in this case.

• Rejecting the hospitality. In some countries (Middle East, Asia, South America, and some countries in Africa) people don’t separate their personal and business lives. It’s seen as extremely rude to reject invitations. A few years back we organized a business matchmaking during a trade fair in Saudi Arabia for one of the biggest producers of agricultural products from Eastern Europe. The exhibition was dedicated to HORECA suppliers and our colleagues in Saudi did a great job organizing meetings. One of the leads was a buyer from the Ritz Hotel in Riyadh. She invited export managers to visit her office and discuss opportunities. But they continuously insisted she had to show in the trade fair instead… Obviously, the opportunity was lost.

• Beating around the bush during the meetings in the USA, Canada, and the UK (and some other countries in Northern Europe). While in India the basis of the business agreement would be personal relationships and it’s normal to talk about family, friends, and hobbies 90% of the business meeting time, in Anglo-Saxon countries it’s inappropriate and considered to be a time waste. The trust is built on the ability to deliver the job on time (they say exactly that: he or she “delivers” or “doesn’t deliver”), and the decisions are made quickly during the meetings. All the discussions are fixed in bullet points. The author has seen it many times – the Americans, Canadians, and British mean what they say. They get truly disappointed when their counterparts stop answering emails, don’t follow a plan that is agreed upon, and waste a lot of time signing agreements. In these countries, professionalism and speed are highly appreciated.

• Humor doesn’t always translate well across cultures. For instance, during a $100,000 deal negotiation with a major European airline in the Middle East, a colleague intended to compliment Dutch business culture for its toughness in negotiation. However, they inadvertently offended the counterparts by humorously comparing them to a neighboring culture, leading to the loss of the contract.

• Destroying trustworthy relationships because of a lack of understanding and respect. This happens very often. A story comes to mind. A consultant from the Middle East was working hard to deliver a market research project to the Russian company. The draft version of the research was a paper almost 50 pages long. Although Russians have never submitted an example of what they expected, the export manager repeatedly criticized the consultant and didn’t allow him to say a word to explain his approach. As a result, relationships were spoiled, and a consultant who was initially 100% committed to the idea of bringing the company to the market, completed the project and wrapped up the collaboration. Why? He knew that this kind of people treatment wouldn’t work in his country anyway.

• Expecting quick decisions in countries where the decision-making process is teamwork and vice versa. Consensual decision-making is known to be part of the culture in many countries (like Germany, Japan, and Sweden). The author spent years working in a Japanese corporation in the past. Sales targets and action plans were discussed twice a month, and top management of the subsidiary (Japanese people) always participated and led the discussion, but the decisions were made collectively. Contrary to that, coming to many countries don’t expect that meeting participants will decide during the meeting if their boss isn’t presented. For example, in Poland, a top management team might put a decision on hold if the business owner hasn’t approved it.

Here you can read more on B2B Matchmaking pitfalls: https://manatex.co/b2b-matchmaking-case-studies-how-effective-is-your-strategy/