I recently saw how culture affects our outlook and expectations and, as a result, our ability to communicate and negotiate agreements, a critical part of commercial real estate negotiations.
In his new book, "The Social Animal," New York Times columnist David Brooks describes how culture is the major force in our lives. As an example, he suggests that federal programs to combat poverty have failed because they targeted components of poverty, such as education and housing, instead of the culture of poverty.
Brooks illustrates his point with the example of a teacher. Some people see a teacher as a person who helps you learn, and thus enables you to have a better life. But others see the teacher as a threatening authority figure to guard against. The result is vastly different educational experiences and learning.
Another example comes from a recent Charlie Rose interview on public television. Former Secretary of State Dr. Henry Kissinger and current Secretary of State Hillary Clinton were discussing U.S. foreign policy. Kissinger said that one of the biggest problems in foreign policy is the misunderstandings that occur because of differences in national cultures. To illustrate, he pointed out that the Chinese view events in terms of their total relationship with a party, including the history of the relationship. Americans, on the other hand, tend to be more "transaction-orientated," thinking only of the subject at hand.
Clinton recounted how the difference between Chinese culture and ours caused an international problem with her first trip to China as secretary of state. The first thing the Chinese told her when they met was that they were upset and disappointed that the U.S. had taken an action they considered detrimental to the relationship: The U.S. was not participating in their national exposition.
The U.S. was not participating because Congress had decided the previous year not to participate in any expositions anywhere. The decision was not aimed at the Chinese; it was a congressional policy decision, and not considered a big one at that.
Yet the Chinese saw the U.S. as snubbing their exposition and therefore their relationship. They wouldn't buy Clinton's explanation. She ended up arranging for the U.S. to participate in the exposition. A comparatively small policy decision by Congress had undermined the entire relationship with China.
I recently saw how differences in business cultures can play out in a commercial real estate transaction. The buyer and seller were competitors, but moving forward with negotiating the sale and purchase of a commercial property. Party A had delegated authority to an executive who could make decisions on her own. Party B had a corporate procedure requiring step-by-step approval by senior management. Due to their business cultures, Party B moved more slowly than Party A.
Offers went back and forth. When Party A made an offer that was acceptable to Party B, Party B needed time for its team to review and formally accept the offer. Party A became frustrated at the delay and wondered if Party B was jerking it around because they were competitors. This was not the case; Party B was just following its normal procedure for approval.
This problem in communication is certainly not on the scale of U.S.-China relations or America's war on poverty, but it is rooted in the same cause. A miscommunication occurred because one party viewed the actions of another though its own cultural lens, not understanding that the other party had a different culture.
Chris Stephens, CCIM, is a local associate broker specializing in commercial and investment real estate. His column appears every month in the Daily News.