U.S. Professor Tells Soviets How to Cut Best Deal : Russians Don’t Understand Business Negotiations, Market Research, He Says
Because of the dollars and cents involved, it was perhaps as clear a sign as any of the end of the Cold War: an American professor in Moscow teaching Soviet businessmen how to outwit their American counterparts.
The Soviets seemed more than willing to put aside ideological questions of capitalism versus communism in favor of issues viewed as far more important--how to use the glassy stare or the pregnant pause to clinch a profitable deal.
John L. Graham, an energetic professor from UC Irvine who taught negotiating techniques to 60 Soviets during four days, said the Soviet Union is the 12th country where he has studied trading practices.
“In the Soviet Union, everything is upside down,” he said. “In most of the cultures I’ve studied, the buyer is in a stronger position. But here, because there is such a shortage of goods, if you are the seller--if, in other words, you’ve got the goods--you’re king.”
As a consequence, he said, Soviet businessmen do not understand the importance of market research and are not used to having to negotiate a price.
Graham, a visiting associate professor of marketing and international business at UC Irvine’s graduate school of management, is best known for his studies of Japanese businessmen interacting with Americans. He analyzes everything from how much eye and physical contact traders from various countries use in making a deal to the patterns of businessmen’s conversations--how often they interrupt each other, how long they remain silent.
These characteristics, he said, are usually determined by one’s culture, and they often directly affect a businessman’s success. But the Soviets, in many cases, are starting from scratch.
One Moscow businessman, who was asked to take part in a marketing exercise, was eager to help but a little mystified.
“You gave us all this information,” he told Graham, “but I don’t understand. You didn’t tell me what price the goods are supposed to sell for.”
Graham said: “I told him, ‘That’s what bargaining is all about. You have to see what the market will bear.’ So, you see, it’s a whole different way of thinking.”
He said that because salaries have nothing to do with job performance, customer service--as many visitors to the Soviet Union will confirm--is a little-known concept. Graham said he had gone into a Soviet bar to order a beer and was told that there wasn’t any.
“But you must have beer,” he told the waitress. “The people over there are drinking beer.”
“Well,” she responded, “they must have got the last of it.”
Graham said he became interested in taking his program to the Soviet Union in the early 1980s but knew that it probably was not possible until the country got “a leader that wasn’t of World War II vintage.” After President Mikhail S. Gorbachev came to power, he said, “I began to get more motivated about bringing my program here.”
The Soviets also became more interested. Gorbachev, in an effort to reform the country, is encouraging limited supply-and-demand economics, both inside the country and internationally.
In the past, only Soviet government bureaucrats with the Foreign Trade Ministry made deals with foreign businesses. Now, directors of state-owned enterprises are being encouraged to negotiate for themselves.
Also, the directors are beginning to bargain with their suppliers and customers within the country. This is a change from the days when goods were allocated and distributed in strict accordance with the Kremlin’s five-year plan.
Some of the people in Graham’s class here felt that they already had a bargaining style, even if they seldom had a chance to use it.
“Ours is like the American style,” Moscow businessman Valentine K. Emelyanov said. “We are a bit aggressive, willing to compromise just a little, and not much interested in chatting.”
By a show of hands, class members said they believe that most Soviet businessmen either interrupt their trading partners in bargaining sessions or begin speaking as soon as their counterparts pause. Graham has made videotapes of Soviets negotiating, and he said this will help him develop a breakdown of national traits.
The experience in the Soviet Union has been like no other, he said. Soviet businessmen have been isolated from Westerners for so long that, for many, the sessions with Graham were their first experience with an American.
Peacemaker Role
“They were curious,” he said. “After one session, the class asked me all kinds of personal questions--how many hours I work, how old I am, how many children I have. That has never happened before.”
Although Graham is teaching the Soviets how to strike better deals with Americans and other foreigners, he sees himself not as a traitor to American business interests but as a peacemaker whose techniques in deal making will put real muscle into arms treaties.
“I don’t feel that I’m working both sides of the table,” he said. “I’m interested in promoting trade between our two countries because I think it provides the motivation for peace. Trade is the real incentive for getting rid of weapons.”
