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Published on Apr 30, 2013 in Europe, Featured Articles, News

Negotiating Transactions in France

A short while ago we published a blog on Negotiating a Transaction in Germany. Subsequent to that we’ve received both calls and e-mails requesting a similar blog for other countries. Since my partner Dave Dodge and I have conducted negotiations in a number of countries, we wanted to select a country that we’ve found is very often misunderstood at the negotiating table. In other words, where a great many businessmen negotiating with their counterparts in that country tend to get it wrong. One of these countries is France.

Characteristics of French Negotiations:

  1. 1.    They focus on the long term. Negotiations proceed slowly in France. The French are planners. In business, they’re most often looking for the long term hold. Therefore, they don’t want, or expect, a quick interaction between parties. Instead, they want to establish and maintain a business relationship for a long period of time. In this respect they don’t want to date, they want to marry. French businesspeople, in general, tend to be plodders. They don’t move fast. In addition, they’ll appear as non-emotional and unflappable and will rarely display their anger publicly. They’ll expect the same from you. They’re here to build a relationship and get the transaction done. Therefore, anything that interferes with this, such as emotional responses, is frowned upon. In the initial phase of your discussions your French counterpart will typically discuss with you the details of the transaction based on the knowledge obtained from his research, as well as the information he’s been provided. He’s building the foundation for the negotiations and he wants to make sure that, first and foremost, the information he has is accurate. Once this is accomplished, and he knows everyone is moving in the same direction, he’ll continue forward into the more substantive portions of the discussion.

 

  1. 2.    Trust between parties is a necessity. Another objective of your French counterpart is to establish trust. If he can’t establish this, then you’ll never, in our opinion, consummate the transaction. It’s that important to the French. Whereas in other countries, such as China, the negotiations are transactional and trust between parties is secondary. In France, they’re personal. So how do you establish trust? There are several ways. The most obvious is to ensure that the information you provide is accurate and that you’re straightforward with your counterpart at all times. Even if he’s less than forthcoming on his end, it’s important that you maintain honesty and directness throughout the discussions. In addition, try and avoid discussions of a personal nature and the appearance of casualness. To your French counterpart business negotiations should be taken seriously and therefore they’ll expect to see a degree of formality and decorum from you. Lastly, stay focused on what your counterpart is saying. This sounds obvious but many times we see business executives sitting next to us texting or taking a phone call during a meeting. Listening to your counterpart, and showing respect for his opinions, goes a long way towards establishing trust between parties.

 

  1. 3.    French business people tend to be very logical and rational. When you arrive at a meeting with a French business person, he’ll be looking at the transaction before him in a very logical and rational manner. Not that this is unusual. You’re probably looking at it in the same manner. However, your counterpart has done his research and he’s rationalized and customized a transaction that makes sense to him. In his mind he’s figuratively built a set of railway tracks taking the both of you from the negotiating table to the signing ceremony. This is because the French negotiate linearly. They’ll give you their thoughts revolving around how they made their decisions, and then they’ll take you step-by-step down the track, answering questions, dissuading arguments, and trying to gain consensus in order to get to a successful resolution. However, as with all negotiations, you may not agree with what he’s proposing. Instead, you may have ideas of your own that you’d like to put forward. In this case the best thing to do, if you disagree with what your counterpart is saying, is give him your argument. He’ll respect your for that as long as your position is well thought out and logical. However, if it isn’t, then you’re very likely to lose your counterpart’s respect thereby making your negotiations that much more difficult. In addition, in making your arguments, recognize that the French respect oratory skills. If you present your positions in a positive and eloquent manner, the French will most likely elevate their respect for you and better consider your points of view.

 

  1. 4.    Negotiations are personal. We believe all negotiations, in the end, are personal. In France, they’re even more so. A French business person will only negotiate with someone he trusts. It’s personal. Moreover, once you establish this bond of trust you’re inside the castle and, since both sides trust each other, you’ll now begin to make more substantive progress with your discussions. However, all that can go away in an instant by bringing in another person. We so often see companies bring in their expert, or their CEO, to seal the deal. Instead, the negotiations are no longer personal. Trust will have to be re-established and you’ll have to re-enter the castle in order to get the transaction done. Therefore, don’t bring in someone else to take over the negotiations at a certain point. Select your team and team leader and stay with them throughout the transaction.

 

  1. 5.    The French are nationalistic. The French may act logical and rational in their business dealings and in your presence, but underneath this veneer they’re actually quite emotional and thin-skinned. They don’t take insults well, even those that are unintended. They’re a proud people with a stellar history. Therefore, when you go into a negotiating session it’s best to be a little humble and not come across as this is the way we do things in the United States. If you take this attitude, it’s likely going to be a long and difficult negotiating session. The French know the U.S. is a superpower. They also know that in another time they used to be. Consequently, the best approach is to try and speak in their language, if possible, even if you do it badly. This will show your respect for them and their country. Consequently, if you don’t speak even a little French, a small apology for not speaking their language will also go a long way. Another approach that will help to diffuse the US-French superpower gap is to try and bring up various historical facts about France that extoll their culture and heritage. A little bit of research into French history will go a long way. The French are a very proud people and any demonstration that you have respect for French historical accomplishments, their language, and their people will help create a bond between you and your French counterpart.

 

  1. 6.    The French dislike haggling. Unlike the Chinese and some other cultures, the French do not like to bargain. One of the reasons for this is that they’ve already, in their minds at least, set a value for the transaction based on their internal calculations and the linear pathways they’ve earlier established. Therefore, if you feel there’s going to be a disconnect on value, then it’s best to approach this area early so that you can both be on the some railway track when you reach this stage of the discussion.

 

  1. 7.    They consider themselves underdogs. We spoke earlier about the fact that the French are very nationalistic. And indeed they are. They’ve had a storied history, but have also suffered defeats along with their victories, such as the collapse of the French Army in 1940 and what Charles Cogan, a senior research at Harvard University’s John F. Kennedy School of Government calls a culture of opposition to dominant norms. It’s a general feeling within France that they too easily give into foreigners. This also manifests itself in an enhanced sensitivity to not be regarded as an equal to someone, for example, from the United States. The best way to address this is to be acutely aware of remarks that may be interpreted as a slight or as regarding France as not being of equal or superior stature to any country.

 

  1. 8.    There are no working lunches. The French do not work through lunch, or really any meal for that matter. They enjoy their food and place a premium on etiquette. Therefore, don’t bring up business at a meal unless your counterpart does so first. If that doesn’t happen, then it would be considered rude to interrupt a meal in France with business talk.

 

  1. 9.    Gender is not an issue. Women are not discriminated against in the French negotiating process. This comes as a surprise to many of those Dave and I have spoken with as most assume that French men may not accept women as equals. However, this is not true as French women permeate the country’s businesses and are highly regarded in their positions for their business acumen. However, female negotiators should expect French men to act as, well, French men. They will often open doors for their female counterparts, stand up when they arrive or leave, and perform other feats of chivalry that makes Western men, such as ourselves, look bad in front of our wives. If you’re a female negotiator don’t take it as their regarding you as less than an equal. They’re just being French. Enjoy!

 

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