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An Ethiopian private limited company began operations some five years ago. I will call it TMA-Ethiopia. It was set up by two individuals and has now grown to five shareholders. The company is becoming successful, its profits are growing steadily and recently a manager was employed to run the company, while the middle aged shareholders now oversee it, as a board of directors. Recently a new opportunity to do business with a foreign company had presented itself. There had been communications by telephone and email and an appointment had been made to discuss the possibilities in more detail, hopefully resulting in a deal. The foreign company was to send a consultant to negotiate with TMA-Ethiopia. The manager and three of its shareholders were prepared to meet the delegate.
When arriving at the agreed venue, the TMA-Ethiopia team was puzzled not to find their counterpart. This seemed strange as the foreigner was expected to show up in time. After wondering around for a few minutes, a young looking woman approached them and inquired whether they were from TMA-Ethiopia. She looked only about 30 years of age. The manager greeted her with a surprised smile. The shareholders felt embarrassed. How could they send such a young person, a woman for that matter, to negotiate with them? After all, they were much more senior and experienced than she could ever be. How could she be a consultant, advising men much older than herself? What could she know of their business sector in the first place? The young woman on her part felt uneasy as she could not imagine how to strike a deal with this team of elderly men around. What a starting point for negotiations! How will this ever turn into a deal? After exchanging the usual welcome and introductions they sat down for a while over a mekiato (the best in the world, I’d say) and it was agreed that the consultant and TMA’s manager would meet together to negotiate. This sounded good to the consultant. With the younger manager, it seemed possible to strike a deal quickly. As they sat down, they indeed seemed to agree over many issues rather quickly and all seemed to progress steadily. After lunch they would continue. During lunch however, the TMA-Ethiopia manager had consulted his directors. While the consultant had already prepared her draft contract, her counterpart came with an entire new set of observations and issues. This continued for the next two days until finally all was set for the deal. At this time the directors arrived on the scene again, with some final adjustments. A contract was signed, at last.
The meetings had been pleasant, with many social invitations by the Ethiopians in between. But to arrive at a deal had been a complex process. How can we understand both parties better, so that things may go smoother a next time?
In the first place, our foreign consultant may come from a society, a culture, a company, in which it is quite acceptable to delegate one person to negotiate with another company. Coming from quite an individualistic society, she is appreciated as competent individual. She will have been given a framework by her supervisors, within which to operate; the boundaries are set. She will also have been given the authority to negotiate and make a deal, or refrain from making a deal if it cannot be done within the framework provided. In the second place, she is respected by her superiors for the work she has done before, by the results she has achieved over the past few years since she joined the company. She has proved to be effective, to the point and has she has a good educational background supporting her actions. This is referred to as status by achievement. The Ethiopian culture is quite different and may in this respect be compared with other African and also some Asian cultures. It is rather uncommon to delegate the negotiations to one person only. That is why the manager had to refer back to his board of directors frequently, coming back with new insights or approval. Secondly, in Ethiopia it is often more important who you know than what you know. Respect is earned by age, experience, connections, degree and is easier gained by men than by women. This is referred to as status by ascription. To have a PhD and knowing many important people does not automatically mean that this person is able to run an effective business though. In any case, the different cultural backgrounds and perceptions may hinder effective negotiations. What can be done from your side to avoid unnecessary bottlenecks? Here follow two suggestions:
Do not underestimate. Realise that the young person you are dealing with may be quite senior in his or her profession. He or she may indeed be a professional. Be aware that he or she may indeed have the delegated authority to negotiate and conclude a deal.
Be prepared. Send one or more persons for negotiations, who have sufficient technical know how and information to do the job. Your potential business partner must be convinced that your company has what it takes to enter into a business deal.