For parties in dispute, achieving a workable, amicable resolution in a prompt, cost-conscious manner is paramount. Irrespective of the form the dispute resolution takes, the most important feature of negotiation is that a fair outcome is achieved and the parties return to normality quickly.

Becoming embroiled in a lengthy, bitter corporate dispute can be costly for all parties. It can divert key resources and focus away from value generation, and undo a potentially lucrative business relationship for both parties.

The globalisation of commerce in recent decades has ushered in a new era of business. Companies are willing to enter new markets and encounter different cultures. They have opened new revenue streams, benefited from diverse and cost-effective supply chains and formed partnerships and joint ventures with local entities. However, while globalisation has allowed companies to prosper, it can also be problematic. Cultural misunderstandings can cause a negotiation to fail or a business relationship to dissolve, sometimes before the agreement has even really begun. Different behaviours, communication styles and business norms may not necessarily cross over into other regions.

Indeed, culture is multilayered and multifaceted and underpins everything we do in the workplace. However, culture is not static. As conditions and conventions change, so too do cultural dynamics. Companies must be mindful of cultural nuances throughout any commercial agreement, as well as in any disputes that may emerge. This may prove challenging. Culture dictates how we frame all interactions, including disputes and how we resolve them. Parties approach disputes from different mindsets, informed by underlying cultural forces. Cultural fluency defines the way parties communicate, frame conflicts and approach and understand different identities and roles. As such, understanding cultural attitudes toward business in a particular jurisdiction is vital.

Jan-Mar 2018 issue

Richard Summerfield