After losing an important deal in Dubai, an Israeli medical device company learned in hindsight that his Emirati counterpart would have appreciated a slower pace and more time for relationship building. Furthermore, the "fast-paced" concept of time, valued in Israel, became a barrier in Dubai for the lack of understanding their hesitation to move forward early in the process. These two cultures have different concepts on how to conduct negotiations, which prevented a positive outcome.
According to the Minister of Economy, Abdulla Al Marri, the UAE estimates the value of future business deals, after the normalization of relations with Israel, to be between $300 to $550 million. With such a staggering number, how to negotiate with our new business partners becomes a must-have skill.
Negotiations are the core of most business interactions. Research shows that negotiating across cultures leads to worse outcomes compared with negotiations conducted within the same culture (Harvard Business Review), primarily due to cultures being categorized by different communication styles, behaviors and norms.
Negotiations fall into two classifications: Collaborative (win-win) or competitive (win/lose). The UAE negotiation style is competitive, but ultimately, they look for win-win solutions. The Emiratis are shrewd negotiators and bargaining is part of the culture and can be quite extensive. It is best not to build overly narrow expectations and to apply flexibility in the negotiation process. Having a clear strategy and leaving room for concessions at the different stages of the negotiations without losing your business objective is important. The Emiratis are looking for long-term commitments and as such focus on long-term benefits.
Friends, not business partners – In a traditional society such as the UAE, family values and friendships are vital, hence building lasting and trusting relationships are at the heart of the Emirati business culture. The Emiratis prefer to do business with people they know and like, hence building relationships takes time and requires long-term perspective and commitment on your side.
The UAE is characterized by one huge network and leveraging relationships when negotiating with the Emiratis can be a deciding factor in determining whether people want to do business with you.
Selection of negotiators: In Israel, where emphasis is given to competency, experience, and qualifications, negotiating with Emiratis is quite different. Coming from a hierarchical culture, the Emiratis place importance on status, rank, and age. Many organizations employ family members in the various levels of management. As an Israeli driving for decisions, negotiate with someone who has the authority to make decisions.
Patience is a virtue. The UAE's sense of time and pace of business is slower than in the western world. As Israelis, we may become frustrated by the slow process it takes to reach decisions. Using tactics such as applying time pressure, opening with your best offer, or making expiring offers, could be interpreted as signs that you are impatient and not willing to invest time in building a relationship. It is not uncommon for Western organizations to become frustrated and discouraged and give up.
Remain calm and collected – The Emirati culture values harmony and politeness. Though they can become emotional during the negotiation process, it is in your interest not to create a direct conflict situation. Stay calm, friendly, patient and do not take anything personally. Respect is earned by maintaining a positive and persistent attitude. If you find yourself in a dispute, seek a resolution outside the negotiation table, in a one-on-one setting as not to cause loss of face for your Emirati business partner.
Communication style: Israelis are direct communicators, they do not talk in circles and expect others to also be clear in their style of communicating. This can be challenging when negotiating with the Emiratis whose communication style is circular and fluid. An Israeli will turn down a proposal in direct language, but in the UAE, silence is often used as a tactic to signal a rejection of a proposal. Lastly, it is important to "save face" and conduct all communication in a harmonious and non-aggressive style.
When dealing with the UAE market, there are three main ingredients to guarantee success: trust, patience, and flexibility.
