Cultural Differences Global Negotiation Who negotiates

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Cultural DifferencesGlobal Negotiation
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Who negotiates better?

• Different nationalities negotiating within
  national boundaries
• Similar outcomes across nations
• Different processes (Americans increase profits
  by making opponent uncomfortable, Japanese
  opposite is true Brazilians increase profit by
  power and deception tactics Chinese ask more
  questions, say no less, interrupt more
• True cross-cultural negotiations
• Poorer outcomes for Japanese and English-Canadian
• No harm for American (more satis.) or
  French-Canadian (more coop)

Little is really known
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American negotiators from an international
perspective

• STRENGTHS
• Preparedness
• Pragmatism
• Candor, honesty, friendliness
• Cooperative and fair
• Win-win orientation
• Willingness to make concessions

• WEAKNESSES
• Cultural insensitivity
• Impatience
• Lack of unified constituencies
• Poor listening skills
• Too quick to concede
• Dont understand small talk

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What are some shared American values?
What are some assumptions underlying American
culture?
How would these affect how we negotiate with
other cultures and how others view us?
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Levels of cultural understanding

• Observable behavior
• Can learn a lot, but likely to focus on dos and
  donts
• Often leads to superficial understanding
• Shared values
• Requires inferences from observed behavior and
  learning about a culture
• More powerful, because values drive (partially)
  behavior
• Shared assumptions
• Very abstract these drive our values but are
  very hard to determine
• Very powerful, helps truly understand a culture

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Hofstedes Dimensions and Negotiation

• Power Distance
• extent to which power differentials are expected
  and honored
• Low Anglo/Germanic/Scandanavian
• High Developing Nations, particularly Pacific
  Rim
• Effect As power distance increases, more
  approval from higher ups and less involvement
  from lower levels. Also, can expect more
  formality in Ns with people from high PD
  cultures, and they may be upset if you do not
  appear to be of sufficient status.
• Individualism/Collectivism
• extent to which society is organized by
  individuals vs. groups
• Ind. Western European - based societies
• Coll. Latin America, Pacific Rim
• Generally, wealthier societies tend to be more
  individualist
• Effect Relationship stability over time
  emphases, individual negotiators vs. group of
  negotiators, importance of consensus, value
  placed on individual winner, emphasis on group
  vs. individual goals, rewards, communication in
  Ns, etc.

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Hofstedes Dimensions and Negotiation 2

• Masculinity/Feminity
• extent to which values fit traditional
  gender-based stereotypes
• M Japan, Anglo/Germanic
• F Scandinavia.
• Effect Masculinity associated with
  competitiveness vs. empathy compromise should
  expect strong relationships with distributive vs.
  integrative styles.
• Uncertainty Avoidance
• degree of discomfort with unstructured situations
• High no strong pattern, but many Hispanic
  nations
• Low no strong pattern, but Anglo/Scandinavia
• Effect High prefers stable rules and procedures,
  less adaptive. High also tends to be more
  risk-averse risk aversion has played into many
  N. dynamics. High tends to do business
  ritualistically formally.

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Other cultural variables

• Time
• present vs. future vs. past orientation
• Time as linear vs. time as circular
• Can affect timing/urgency of Ns, and also what
  sorts of time-related objectives (short-term vs.
  long-term) are valued more
• Americans often seen obsessed with time.
• Universalism vs. particularism
• Can ideas/practices be applied everywhere every
  time, or do circumstances dictate application?
• Use of precedent vs. adapting styles/processes/agr
  eements to situations
• Emotionality
• Great potential for misunderstandings here!!!
• Achievement vs. ascription
• Is status conferred by what youve done or who
  you are?
• How will a person be viewed in a N situation?

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Some communication differences

• Verbal communication
• Is message conveyed in context, or is it
  explicitly what is stated?
• Americans often believed to be blunt, even to
  point of rudeness.
• Non-verbal
• Handshakes
• Conversational distance
• Facial bodily expressiveness animation,
  gestures, etc.
• Very difficult to interpret because subtle and
  great differences across cultures
• Look for patterns in order to interpret
• The concept of face

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Example of communication patterns
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Negotiation process/timing for Americans in
domestic vs. international negotiations
Domestic 1 2
3 4 5 6
International 1
2 3 4
5 6
Key 1- orientation fact-finding 2-
resistance 3- reformulation of strategies
4- hard bargaining decision-making 5-
agreement 6- follow-up
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Negotiating Strategies in Other Countries

• Opening offer
• Close to final settlement where haggling is not
  customary (e.g. Australia, Sweden)
• Expect lots o haggling in some nations (e.g.
  Russia, Egypt, China)
• Rule of thumb (that wont always work, so apply
  with caution) if a culture has a long history of
  bartering bargaining, expect to haggle.
• Detail vs. big-picture in presentation
• Detail where culture emphasizes formality, logic,
  data, organization (e.g. Germany, UK, Swiss,
  Japan)
• Broad concepts preferred in some other areas
  (e.g. Latin America, Middle East)

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More Negotiation Strategies in Other Countries

• Dealing With Disagreement
• Subtle, quiet vs. demonstrative
• In Pacific Rim, no is almost a dirty word
• In Middle East, histrionics (to our eyes ears)
  are normal
• Patterns of concessions
• In some nations, given grudgingly (US, S.Afr.,
  Brazil, e.g.)
• In others, declining pattern is norm (Australia,
  NZ, Taiwan, Thailand, e.g.)
• Escalating in others (Indonesia, Philippines,
  India, Kenya, e.g)
• Calling other on dirty tricks
• Be EXTREMELY cautious where face is important
  (Pacific Rim, Middle East)

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Cultural Differences affecting other Negotiation
Processes

• Relationships orientation
• Lack of trust across cultural differences ? trust
  building essential
• Some cultures are standoffish (e.g. British,
  Germanic), so get down to business before too
  long
• Emotional Aspects
• Sensitivity is low for US, high for Latin America
• Loyalty to self in US, to organization in many
  other cultures
• Decision Making Frame
• In US change is acceptable, even encouraged,
  decisions made quickly
• In many other nations, status quo is the normal
  frame of reference
• US is relatively prone to using agendas, may be
  restrictive to some others

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More Cultural Differences

• Contracts
• Advisable to use more paper, since cultural
  misunderstandings more likely
• Bureaucracy
• You think US businesses/organizations are
  bureaucratic?
• Womens issues
• US is relatively progressive regarding womens
  roles
• Rule of thumb less developed nations, greater
  disparity
• Women negotiating in these countries should be
  introduced by a very high-status person
• Because you look different than local women, you
  may be viewed as executive
• Demonstrations of expertise critical
• Women can and do often perform well even where
  cultures do not give women status

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Negotiating in Specific Regions

• The next 4 slides are FYI only and far from
  complete
• There are important differences across nations
  within regions (e.g., Israel vs. Iran in Middle
  East)
• Remember you are negotiating with an
  individual(s) who may or may not fit cultural
  norms to a T!!!

Source How to Negotiate Anything with Anyone
Anywhere in the World, Frank Acuff
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Negotiating in Western Europe

• Timing punctual, relatively fast-paced
• Individualistic, status-conscious,
  slow-developing friendships, emphasis on
  initiative achievement
• Loyalty hard work are valued
• Greater hierarchy than in US
• Speakers s/b articulate intellectual, formal,
  logical, and subtle
• Low emotionality, reserved
• Moderate initial demands, issues sequentially
  processed, slow concessions

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Negotiating in the Middle East/North Africa

• Bargaining is a way of life Youre
  supposed to haggle! Monty Python
• Time not punctual or planning-oriented (too
  much attempt to control the future invites
  trouble). Ramadan is especially slow for
  business.
• Group oriented, and very deferential to those of
  status
• Much time upfront spent in developing
  relationships
• Masculine Arabs read poetry, use intuition, and
  are emotional. Feminine Arab qualities are
  coolness and pragmatism.
• Israelis are direct, Arabs indirect, vague
  expressive, often to point of exaggeration
  filled with fantastic metaphors
• No is uncommon look for a hesitant yes
  instead white lies common form of courtesy
• Saying I dont know ? you are of little account
• Strong eye contact, close personal space, touchy
• High initial demands, slow concessions, issues
  sequential, extreme face orientation, truth is
  revealed very slowly because it is considered
  dangerous

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Negotiating in the Pacific Rim

• Old cultures, socially stratified, Confucian
  ethic
• Courtesy rituals, formality, politeness, modesty,
  loyalty to group and deference to elderly,
  non-confrontational
• Negotiations slow, relationship orientation
  group negotiation style with team consensus
  critical implementation usually quick, though
• Very collectivist
• Words mean little, conversation very indirect
• he who speaks doesnt know, he who knows doesnt
  speak
• No uncommon might get a well study this
  further instead
• Reserved body language, average-to-close personal
  space, not touchy
• Sensitivity valued but not overstated
• Moderate-high initial offers, multiple issues
  presented at once, slow concessions, logical
  decisions
• Face is critical

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Doing as the Romans do

• This is common advice when negotiating
  internationally
• BUT
• Negotiators may not be able to modify their
  approach effectively
• Other side may also try to modify
• Knowing how a given nationality negotiates with
  its peers may be misleading for your negotiations
  with them
• SO
• Moderate adaptation may be better
• May be able to adapt completely or transcend
  culture entirely when very familiar with a
  country
• Consider cultural brokers when very unfamiliar
  with a country
• Articulate the cultural difference, agree in
  advance to work through it.
• BEST ADVICE
• Prepare, prepare, prepare.

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BOOZE NEGOTIATION

• Avoid when
• wanting to use impression management
• professional boundaries are important
• social pressure is a big concern
• negotiation involves many issues
• negotiation involves calculations
• diplomacy, tact, and careful communication are
  crucial
• interpersonal conflict is likely to escalate

• May be OK when
• social norms favor drinking
• opportunities for social exchange gt alcohols
  risks
• value of developing bonds gt alcohols risks
• focus is long-term relationship
• appealing to emotional criteria
• learning information about the other party is
  crucial
• your relative tolerance level is high

Note There are important cultural aspects to
this, too!!!