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Personal Relations Critical To Successful Business Negotiations

June 29, 2010

What role does cultural distance play in international business negotiations? And what factors are the most critical to successful business relations in a globalised world? Ellinor Torsein, researcher at the School of Business, Economics and Law, University of Gothenburg, set out to find the answers to these questions in her recently presented doctoral thesis. Torsein interviewed Swedish business negotiators regarding their work with Norwegian and Spanish counterparts, and found that the differences between the two countries are smaller than expected.

‘A business negotiation refers to a long-lasting relation with a business contact; it is not a mere meeting where two parties sit down and negotiate a business deal. This implies that long term commitment and social competence are critical to success,’ says Torsein.

In order to explore how cultural distance affects business relations, Torsein interviewed international business negotiators at small and medium-sized Swedish companies. She paid special attention to whether, and if so how, they consciously adapt to the ways of their counterparts in an effort to reduce the cultural distance. To be able to explore cultural differences, Torsein chose to focus on Norway and Spain ““ one country considered to be culturally similar to Sweden and one that is generally seen as more different. Somewhat surprisingly, it turns out that the Norwegian and Spanish ways of doing business are not that different.

‘Contrary to the stereotype, the Spanish were for example seen as very punctual. According to the interviewees, the two cultures differ mostly in terms of communication. For example, the Norwegians were perceived as more quiet,’ says Torsein.

The two factors that seem to be the most critical to successful business relations ““ also found by many other researchers ““ are communication and personal relations. According to Torsein, a successful negotiation is generally a result of ‘soft’ values. It is not uncommon that business relations develop into true friendship.

‘One thing the interviewed individuals have in common is that to form successful relationships, they focus on similarities rather than on differences. They look at and treat their counterparts as individuals. Good negotiation skills don’t come easy. Most individuals I met with have extensive experience with this type of work, and have usually learned their skills the hard way,’ says Torsein.

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