Introduction

The cultural variation that distinguishes northern Italy from southern Italy plays a significant role in the business environment. Northern Italians are oriented to the "time is money" attitude and will want to get deals done quickly before economic conditions change. On the other hand, southern Italians will be more cautious and look to long-range prospects. In either case, don’t underestimate the ability of Italian businesspeople to negotiate the best deals for themselves. They are hard, confident bargainers, though economic uncertainly may affect the negotiating style of your Italian counterparts.

Goal of Negotiations

The Italians feel that the real strength of an agreement lies in the personal commitment of both sides, rather than in its written documentation. Keeping one’s word is very important to Italians; a handshake is as binding as a written agreement (but you shouldn’t consider it a substitute; see "Agreement Form").

Building commitment takes time, a personable character, and tact. Embarrassing another person can certainly cause irritation, especially in the south, where "saving face" is more important. Should a gaffe occur, however, don’t panic. The Italians are experienced negotiators and good hosts, and they can stand a misstep or two.

Attitude

A long-term relationship with benefits for both parties is the ideal goal for most Italian negotiators. This means that emphasizing mutual benefits of your proposal is helpful because it demonstrates your good faith. However, you’ll need to identify exceptions to the win-win philosophy early on; negotiators out to triumph over their counterparts do exist, and will be looking for points of weakness.

Even when the end result is a win/win outcome, remember that this is a competitive engagement. The Italians, especially those from the south, enjoy haggling; they’ll expect you to play along and will be disappointed if you don’t share their enthusiasm. You must stay the course and not become flustered by competitive strategies.

In economically stressful times, the hard-bargaining tradition may take a back seat to pressure to get deals done so that the economy can get back on track, and short-term rewards may take precedence over the ideal of the long-term relationship.

If you are confused or overwhelmed by the tactics of your counterparts, the best thing to do is slow down the process and be patient. If you believe the negotiations are not going in the right direction, take a break and suggest a social event that involves food and drink, where you pick up the bill.

Personal Style

Since relationship building is important, during the first meeting you should focus on getting to know your Italian counterparts. The Italians believe in formality on first acquaintance, but taking time for small talk will generally bring out the more personal style of your hosts and give you the opportunity to adapt better. Italy’s northern and southern personalities may be present at your negotiating table, sometimes in different people, sometimes in the same person. You’ll need time to get a sense of the styles of your counterparts.

Gift-giving in business settings is acceptable, but not common. Because bribery and corruption have been significant issues in Italy, you may be tested as to your authority to engage in such extra-contractual activities as giving a gift. Make sure that you have a clear understanding from your superiors as to how you are to handle inquires in this regard. If you do give a gift, remember that Italians regard themselves as experts in the finer things such as wine and art and will look unfavorably on a gift that is not an excellent example of its type. 

Communication Style

Communication in Italy may seem vague and indirect early on in the negotiations. You will find that Italian businesspeople quickly become more open and direct as the relationship strengthens. Still, be prepared for some tactical withholding by your Italian counterparts.

For example, Italians give the appearance of believing in the honest exchange of information and will expect you to share your "secrets." This is a negotiation ploy, as Italians recognize the value of undisclosed information and will present it, if at all, at the very end of the negotiations. Surprise announcements at a late date are a hallmark of Italian negotiation strategy.

It is important to maintain eye contact while speaking, since Italians take this as a sign of honesty and sincerity. 

Time Sensitivity

Meetings are expected to start close to their scheduled time. In general, the nearer you are to the northern border, the more time-sensitive you can expect Italians to be. However, even in Milan, Italians tend to take business at a more relaxed pace than their neighbors north of the border. As usual, you should try to schedule negotiating sessions a couple of weeks in advance and follow up with a confirmation, but be aware that last-minute cancellations are common.

Negotiations in Italy often get started in a positive direction only after everyone has been invited out to lunch or dinner. You will probably use these breaks for a combination of socializing and business. In Italy, food is a natural lubricant for negotiations, so be prepared to eat and drink (especially wine). The Italians are known for their hospitality, in the meeting room as well as out; drinking coffee with pastries in a meeting is common, as is smoking cigarettes.

If your counterparts appear to be delaying the negotiation, try to evaluate whether this is a negotiation strategy or simply Italian bureaucracy. If it is the former, you should address the issue directly, but tactfully. If, however, there is red tape that is impossible to cut through quickly, remember that both sides are equally feeling the adverse effects, and you can use this opportunity to strengthen the bond with your counterparts.

Emotionalism

Northerners tend to be less emotional and more formal; southerners tend to be the opposite. Generally, younger businesspersons are cooler and less expressive than the older generations.

Once negotiations get rolling, however, any perceived distance can quickly give way to an emotional attachment to the outcome. Be on guard to see whether this commitment is to your benefit. If your counterpart is intensely focused on gaining the upper hand, for example, you should try to be detached from the emotional components and focus on the practicalities of getting things done. If the commitment is to a win-win outcome and a long-term relationship, then by all means encourage and reciprocate it.

Risk Taking

Generally speaking, Italian businesspeople are adept at assessing risk, and they will engage in calculated risk-taking. For the majority, this translates into more caution in a weak economy, as the economy itself is fraught with risk. However, in tough times you will probably be able to find a canny Italian businessperson who recognizes an opportunity to take a chance at making a lot of money.

Team Organization

Decision making can go quickly in small businesses, where the owner is present and can decide more or less immediately. In larger companies, proposals will have to be evaluated by lower-level experts and then passed on for approval by senior managers. The Italian business environment is essentially a hierarchy, and you must determine where in that hierarchy your negotiating partner resides. The sooner you are facing the decision-makers, the nearer you are to closing the deal.

Small organizations are usually run by dynamic individuals who do not need to consult with many people. In the larger, more complex modern corporations, you may not meet with senior decision-makers until after a number of preliminary relationship-building sessions. It is important for you to identify the rank of the members of your team and then ask for equivalent information from your counterparts. You should strive for equivalency in the negotiating teams.

Agreement-Building Process

Italians characteristically see the big picture and then bring that vision down to the details of the agreement. By default, you should expect this approach and work on laying out the larger scheme of your venture before gradually narrowing the focus until the details are resolved. In the early and middle stages, prices can fluctuate widely and easily from initial offers. You can expect that as you get closer to the final point, the process will become very difficult and your counterparts’ position will clearly harden. You must leave yourself plenty of room for concessions at different stages and especially at the end, when the Italians will be most intransigent. As with negotiations in any country, you must have clarity about your position before you walk into the room. You need not only to know your bottom line, but how you got to that number. This will prevent you from conceding too much when your hosts play hardball and do not compromise easily.

Harder economic times may bring about a more detail-based approach as your Italian counterparts try to nail down specifics early on.

Agreement Form

Coming to terms that make everyone happy is very satisfying, and you’ll probably want to celebrate over dinner. Don’t let your guard down, however; put everything in writing to minimize disputes at the time of performance. The flexible, drawn-out process of negotiating in Italy makes it difficult to reduce understandings to a fixed document. But you have to try. Verbal statements are unreliable.

Final contracts tend to be long and cover the specifics of the agreements, while subsequent written amendments are very common. Whenever possible, try to have the final agreement written in your native language, but if the agreement must be written in Italian, you will need to obtain an authorized translation, which should be initialed by both parties.

Italians tend to have a neutral view of the presence of attorneys in negotiations. Early on in the process you should determine whether attorneys will be needed and if so, when they can be brought into the negotiations. As always, you should have your attorney available by phone or online. Contract enforcement mechanisms are generally well regarded under the Italian legal system, so you should not have to look around for alternative enforcement procedures.

After the agreements have been signed, you will need to stay in touch with your counterparts and maintain the level of trust established at the negotiations. Since the political and economic forces in the region are in flux, you will need to monitor the terms of the final contract and be flexible in adjusting to material changes of circumstances. 

The assessments detailed in this article are intended for informational purposes only. They reflect typical attitudes within a given country or culture, and are not intended to describe any specific individual or business. World Trade Press is not responsible for any action taken on the basis of the information contained herein.

World Trade Press would like to acknowledge the research of Jeswald W. Salacuse (“Ten Ways That Culture Affects Negotiating Style: Some Survey Results,” Negotiation Journal, July 1998, Plenum Publishing Corporation) as the basis, with modifications, for the assessment categories described in this article.