Navigating Cultural Differences: Recent Trends and Challenges in Cross-Cultural Negotiation

By RED BEAR April 13, 2023 | 6 min read

Organizations have needed to navigate strained relationships, inflexible shipping constraints, and a heightened geopolitical environment in the post-COVID era.

For those looking to shore up manufacturing and strengthen international relationships, the importance of building robust skills for multicultural negotiations stands as a critical skill set for growth. 

To stay ahead means developing not only the knowledge and understanding of effective negotiations but also a firm grip on recent trends and challenges facing international businesses.

At RED BEAR, we believe cross-cultural negotiations rely on universal behaviors and core beliefs — and different parties reach agreement in vastly diverse ways.

To help organizations gain an edge in these shifting waters, keeping a close eye on business trends can help inform negotiation decision-making.

Let’s explore recent trends in cross-cultural negotiation and international business. 

Face-to-Face or Online? Business Travel Bounces Back

With lifting restrictions and a positive general attitude toward travel, businesses are beginning to move back toward more in-person international meetings. 

In a recent study from Morgan Stanley, researchers found over half of business organizations are projecting a 6% to 10% increase in travel budgets relative to the year 2019. In-person meetings may be making a resurgence after years of remote interaction.

Even so, the general trend toward virtual and hybrid communication is here to stay — and possibly grow.

Survey data from the International Association of Contract and Commercial Management shows contract managers reporting a recent decline in the number of face-to-face negotiations.

What can organizations pick up from these findings? 

Effective negotiation training will teach the principles needed for successful sessions regardless of location, cultural differences, or method of communication.

“Effective negotiation training will teach the principles needed for successful sessions regardless of location, cultural differences, or method of communication.”

With RED BEAR, businesses work through unique activities and simulations to give participants real-world insight into the working of international negotiations. Individuals not only learn universal negotiation behaviors but also the knowledge needed to understand and manage information via words, tone, and body language.

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This kind of training is essential to both in-person and virtual meetings — and also a crucial tool in mastering emerging markets.

The International Monetary Fund (IMF) projects growth in emerging markets and developing economies at 4.0% for 2023. Organizations looking to capture this explosive growth need to understand the dynamics of trust.

While many argue about the competitive edge of in-person meetings over virtual options, understanding how to build trust in any communication environment gives individuals an advantage.

In truth, organizations still need in-person relationships to grow.

But that’s only part of the equation.

Virtual options like video chat, email, and phone calls are the other.

For organizations looking ahead, leveraging the power of effective cross-cultural negotiation training to master both in-person and virtual communication is essential to making the most out of this rebound in travel and cornering emerging market growth.

Rethinking Global Trade After Supply Chain Issues

Global supply chains saw a stress test like no other in 2020. We’re still feeling the repercussions of those hiccups three years later.

In an almost retaliation to the diverse supply chains of the 2010s, recent research is showing more and more importing countries relying on three or fewer nations for the supply of a given resource or goods.

This is true across 40% of all global trade.

Moreover, developing geopolitical risks are further driving reshoring efforts.

But, while a degree of concentration is normal, large economies have not worked on the necessary level of diversification to optimize supply chain dynamics. Diversification and resiliency are the keys to navigating possible future issues in supply chain logistics — and that means expanding business operations globally.

Organizations looking ahead must leverage the power of quality cross-cultural negotiation training to gain an advantage over other entities missing the shift back toward diverse supply chains.

A recent RED BEAR Negotiation survey found that sales and purchasing professionals from Fortune 100 organizations report that the amount of negotiating with people from different countries has increased by 72.7% during the past three years.

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To combat supply chain concentration, businesses must look ahead and embrace the power of international relationships. The growing globalized business environment means organizations that can effectively manage and build cross-cultural relationships have an advantage over those that don’t.

The Rising Role of AI Technology in Cross-Cultural Negotiations

AI has become one of the leading trends in technology in recent years. The world is just now starting to leverage these tools en masse to see useful results.

What impacts might we expect from AI on international business and trade?

According to the Brookings Institute, “AI also has the potential to be used to improve outcomes from international trade negotiations.”

From understanding possible economic trajectories to weighing assumptions and outcomes, AI tools are putting powerful insights into the hands of the world’s top negotiators. Even so, overreliance on these tools could spell trouble for some organizations.

While AI and other related technologies can provide individuals an edge in international negotiations, data overload is an ever-present danger.

When too much information floods the negotiator's mind, it’s easy to lose track, forget the plan, and stumble.

Instead, teams should leverage the power of AI alongside actionable models that stick with learners for a lifetime.

By understanding the core principles and behaviors that drive multicultural negotiations, organizations can better implement these new tools to their advantage. 

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Technology isn’t going to solve all our problems. 

But, it would be foolish not to see the potential for these technologies to impact the dynamics of international negotiations. 

Putting It All Together with RED BEAR Negotiation Training

Trends around cross-cultural negotiations and international business are shifting from year to year. While the world has witnessed a time of unprecedented change in the post-COVID era, the core tenets of effective negotiation stand strong.

Trends in business travel, supply chain concentration, and AI tools for negotiation mean organizations must choose the right negotiation training to stay ahead.

RED BEAR provides unforgettable educational experiences that help individuals understand their blind spots, identify cultural gaps, and adjust and refine their negotiation strategy in real-time.

Master cross-cultural negotiation with expert training. Get in touch with RED BEAR today.

Fill out our contact form and we will be back to you in no later than one business day.

 

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