Cross Border Negotiated Deals: Why Culture Matters?

King Christopher and Segain Hubert
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King Christopher: King is Vice President and General Counsel of Hunter Douglas NV. King is admitted as an Attorney-at-law in New York, is on the Roll as Solicitor if the Supreme Court of England and Wales, is a Rechtsanwalt in Germany and is a European Lawyer in Switzerland.
Segain Hubert: Segain is an Attorney with Herbert Smith LLP. Segain is admitted as an Attorney-at-law in New York and is an Avocat à la Cour in France.

European Company and Financial Law Review, 2007, vol. 4, issue 1, 126-166

Abstract: Different negotiation styles in the negotiation of complex contracts observed in different cultures reflect both different allocations of responsibility within organizations as well as the degree of trust in the business relationship. Complexity of documentation associates with a low degree of trust and a desire for rent-seeking by the draftsmen. There appear to be inherent inefficiencies that prevent a simpler approach, although such an approach would result in a net benefit both in transaction costs and certainty of execution. Neither the “Harvard” approach to negotiations, nor a low context approach to communication characteristic of some very successful business cultures (e.g. USA or Germany) is universally accepted. Accordingly, however well they (demonstrably) work in a national context, the high-context approaches to negotiation (e.g. Japan or to a lesser extent England) can create risks to a transaction with parties who do not share the same context.

Date: 2007
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DOI: 10.1515/ECFR.2007.009

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