Business negotiations in Iran

There is a fundamental leitmotif constantly in the back of the minds of most post-revolutionary Iranian negotiators: “Sign the contract first … there will be plenty of time to negotiate the price later”. I cannot remember how many times I have been called into negotiations to help resist pressure from customers, state and private alike, to further decrease the price or to add extra products and services gratuitously to a duly signed and sealed contract. Such pressure may be applied throughout the contract, most frustratingly just after initial signature on the pretext, for example, that some aspect of the tendering procedure was not correctly observed… confounded by allusions to a more competitive rival offer. You can also be sure that further pretexts will be found when it is time for the customer to release final performance or guarantee bonds after completion of the contract. Be warned and make sure your jurist drafts the contract and make sure he has adequate support from reliable local experts.

“What’s a Win-Win agreement?”

You are likely to find your customer hell-bent on going that little bit too far in the negotiation. Unless he is convinced that he has gone beyond what you really were prepared to give he will not be satisfied. This is particularly true for negotiators hailing from the rural provinces and who have been placed in a position of responsibility thanks to the revolution, i.e. most of the managers you are likely to meet within the state and quasi-state organizations. I recall trying to explain to a team of negotiators from a state industrial company that what they were demanding was unacceptable and that it was essential that both parties, supplier and customer, benefit from the project. If not, then in the long term the project would not be successful and neither party would profit. I used the “Win – Win” argument; they looked at me blankly as if to say: “If you don’t lose then we haven’t won!”

This is an extreme case but I use this example to highlight that any negotiating team needs to set clear limits on what makes an acceptable deal for their company beforehand and then stick these boundaries; if not they are venturing down a very slippery slope.

The above is a short extract from a chapter on business negotiations in Iran from the book “Iran, Hussein’s dilemma” by Nigel COULTHARD.

About the author:

Nigel Coulthard is a specialist in International Management particularly in complex multicultural environments in the High Technology Industry and Engineering sectors.

He has held engineering, business development and senior general management responsibilities in large international industrial groups, notably in the Semiconductor and Power Engineering industries in both the UK and France, where he managed several industrial and commercial subsidiaries and business units. Prior to founding Luzigneul Management Enterprises he was Country President in IRAN for the ALSTOM group.

Nigel holds a B.Sc. in Electrical and Electronic Engineering, a Doctorate in Applied Physics and an Executive MBA from HEC, the prestigious French business school. He also has an advanced diploma in Persian studies from the National Institute of Oriental Languages and Civilisation in Paris (INALCO).