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CHAPTER 3 INTERNATIONAL NEGOTIATION AND CROSS-CULTURAL COMMUNICATION

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Title: CHAPTER 3 INTERNATIONAL NEGOTIATION AND CROSS-CULTURAL COMMUNICATION


1
Chapter 5
Cross-Cultural Negotiations and Decision Making
2
Negotiation
  • Negotiation is the process in which at least two
    partners with different needs and viewpoints try
    to reach an agreement on matters of mutual
    interest.
  • A negotiation becomes cross-cultural when the
    parties involved belong to different cultures and
    therefore do not share the same ways of thinking,
    feeling, and behaving.

3
INTERNATIONAL NEGOTIATION
  • More complex than domestic negotiations
  • Differences in national cultures and differences
    in political, legal, and economic systems often
    separate potential business partners

4
Cross-Cultural Negotiation Variables(Exhibit 5-6)
Culture Goals
National/corporate Principles versus
specific details
Negotiating styles
objective/subjective/axiomatic
Negotiating behavior defense/attack/trust deceptio
n/pressure/concessions Verbal and nonverbal
behavior Attitudes toward time/scheduling
Trust level and duration relations
Task versus interpersonal relationships
Composition of teams Level of preparation
Culture
5
Steps in the International Negotiation Process
STEP 1 PREPARATION
STEP 2 RELATIONSHIP BUILDING
STEP 3 EXCHANGING INFORMATION
STEP 4 PERSUASION
STEP 5 CONCESSIONS and AGREEMENT
6
STEP 1 PREPARATION
  • Is the negotiation possible?
  • Know what your company wants
  • Know the other side
  • Send the proper team
  • Agenda
  • Prepare for a long negotiation
  • Environment
  • Strategy

7
DIFFERENCES IN CULTURES IN KEY NEGOTIATING
PROCESSES
  • Negotiation goal - signing the contract or
    forming a relationship
  • Personal style - formal or informal
  • Communication styles - direct or indirect
  • Sensitivity to time - low or high
  • Forms of agreement - specific or general
  • Team organization - a team or one leader

8
STEP 2 RELATIONSHIP BUILDING
  • No focus on business
  • Partners get to know each other
  • Social and interpersonal matters
  • Duration and importance vary by culture

9
STEP 3 EXCHANGING INFORMATION
  • Task-related information is exchanged
  • First offer

10
STEP 4 PERSUASION
  • Heart of the negotiation process
  • Attempting to get other side to agree to a
    position
  • Numerous tactics can be used

11
VERBAL AND NONVERBAL NEGOTIATION TACTICS
  • Promise
  • Threat
  • Recommendation
  • Warning
  • Reward
  • Punishment
  • Normative appeal

12
OTHER NEGOTIATION TACTICS
  • Commitment
  • Self disclosure
  • Question
  • Command
  • Refusal
  • Interrupting

13
FREQUENCIES OF VERBAL NEGOTIATION BEHAVIORS
14
DIRTY TRICKS IN INTERNATIONAL NEGOTIATIONS
  • Dirty tricks are negotiation tactics that
    pressure opponents to accept unfair or
    undesirable agreements or concessions

15
PLOYS/DIRTY TRICKS - POSSIBLE RESPONSES
  • Deliberate deception - point out what is
    happening
  • Stalling - do not reveal when you plan to leave
  • Escalating authority - clarify decision making
    authority

16
  • Good guy, bad buy routine - do not make any
    concessions
  • You are wealthy and we are poor - ignore the ploy
  • Old friends - keep a psychological distance

17
GENERAL RESPONSES TO DIRTY TRICKS
  • Avoid using the tricks yourself.
  • Point out the dirty tricks when they are used.
  • Be ready to walk out of the negotiation if the
    other side fails to play fairly
  • Realize that ethical systems differ by culture
    and understand that ...

18
STEPS 5 CONCESSIONS AND AGREEMENT
  • Final agreement The signed contract, agreeable
    to all sides
  • Concession making requires that each side relax
    some of its demands

19
STYLES OF CONCESSION
  • Sequential approach - consider each issue as a
    separate point. Each side reciprocates
    concessions
  • Holistic approach - more common in Asia.
    Concession making begins after all issues are
    discussed

20
BASIC NEGOTIATION STRATEGIES
  • Competitive
  • The negotiation as a win-lose game
  • Problem solving
  • Search for possible win-win situations

21
BASIC NEGOTIATION STRATEGIES
  • Cultural norms and values may predispose some
    negotiators to one strategy
  • Most experts recommend a problem solving
    negotiation strategy

22
The Successful International Negotiator PERSONAL
CHARACTERISTICS
  • Tolerance of ambiguous situations
  • Flexibility and creativity
  • Humor
  • Stamina
  • Empathy
  • Curiosity
  • Bilingual

23
Successful negotiators
  • Understand the negotiation steps
  • Build cross-cultural communication skills
  • Understand nonverbal communication
  • Avoid attribution errors

24
Profile of a Successful American Negotiator
  • Knows when to compromise
  • Takes a firm stand at the beginning of the
    negotiation
  • Refuses to make concessions beforehand
  • Keeps his or her cards close to his or her chest
  • Accepts compromises only when the negotiation is
    deadlocked
  • Sets up the general principles and delegates the
    detail work to associates
  • Keeps a maximum of options open before
    negotiation
  • Operates in good faith

25
Profile of a Successful American
Negotiator(contd.)
  • Respects the opponents
  • States his or her position as clearly as possible
  • Knows when he or she wishes a negotiation to move
    on
  • Is fully briefed about the negotiated issues
  • Has a good sense of timing and is consistent
  • Makes the other party reveal his or her position
    while keeping his or her own position hidden as
    long as possible
  • Lets the other negotiator come forward first and
    looks for the best deal

26
Profile of a Successful Indian Negotiator
  • Looks for and says the truth
  • Is not afraid of speaking up and has no fears
  • Exercises self-control
  • Seeks solutions that will please all the parties
    involved
  • Respects the other party
  • Neither uses violence nor insults
  • Is ready to change his or her mind and differ
    with himself or herself at the risk of being seen
    as inconsistent and unpredictable

27
Profile of a Successful Indian Negotiator(contd.)
  • Puts things into perspective and switches easily
    from the small picture to the big one
  • Is humble and trusts the opponent
  • Is able to withdraw, use silence, and learn from
    within
  • Relies on himself or herself, his or her own
    resources and strengths
  • Appeals to the other partys spiritual identity
  • Is tenacious, patient, and persistent
  • Learns from the opponent and avoids the use of
    secrets
  • Goes beyond logical reasoning and trusts his or
    her instinct as well as faith

28
Profile of a Successful Arab Negotiator
  • Protects all the parties honor, self-respect,
    and dignity
  • Avoids direct confrontation between opponents
  • Is respected and trusted by all
  • Does not put the parties involved in a situation
    where they have to show weakness or admit defeat
  • Has the necessary prestige to be listened to
  • Is creative enough to come up with honorable
    solutions for all parties
  • Is impartial and can understand the positions of
    the various parties without leaning toward one or
    the other

29
Profile of a Successful Arab Negotiator(contd.)
  • Is able to resist any kind of pressure that the
    opponents could try to exercise on him
  • Uses references to people who are highly
    respected by the opponents to persuade them to
    change their minds on some issues
  • Can keep secrets and in so doing gains the
    confidence of the negotiating parties
  • Controls his temper and emotions
  • Can use conference as mediating devices
  • Knows that the opponent will have problems in
    carrying out the decisions made during the
    negotiation
  • Is able to cope with the Arab disregard for time

30
Profile of a Successful Swedish Negotiator
  • Very quiet and thoughtful
  • Punctual (concerned with time)
  • Extremely polite
  • Straightforward (they get straight down to
    business)
  • Eager to be productive and efficient
  • Heavy-going
  • Down-to-earth and overcautious
  • Rather flexible
  • Able to and quite good at holding emotions and
    feelings

31
Profile of a Successful Swedish
Negotiator(contd.)
  • Slow at reacting to new (unexpected) proposals
  • Informal and familiar
  • Conceited
  • Perfectionist
  • Afraid of confrontations
  • Very private

32
Profile of a Successful Italian Negotiator
  • Has a sense of drama (acting is a main part of
    the culture)
  • Does not hide his or her emotions (which are
    partly sincere and partly feigned)
  • Reads facial expressions and gestures very well
  • Has a feeling for history
  • Does not trust anybody
  • Is concerned about the bella figura, or the good
    impression, he or she can create among those who
    watch his or her behavior
  • Believes in the individuals initiatives, not so
    much in teamwork
  • Is good at being obliging and simpatico at all
    times

33
Profile of a Successful Italian
Negotiator(contd.)
  • Is always on the qui vive, the lookout
  • Never embraces definite opinions
  • Is able to come up with new ways to immobilize
    and eventually destroy his or her opponents
  • Handles confrontation of power with subtlety and
    tact
  • Has a flair for intrigue
  • Knows how to use flattery
  • Can involve other negotiators in complex
    combinations

34
Implement and Evaluate
Define the Problem
Decision- Making Process
Specify objectives and Criteria /Gather and
analyze relevant data
Select the best one
Analyze Alternatives
Develop alternatives
35
Cultural Variables Affecting Decision-Making
  • Objective (basing decisions on rationality)
    versus subjective (basing decisions on emotions)
    approach
  • Risk tolerance
  • Locus of control internal (managers in control
    of events), or external (managers have little
    control over events)

36
Cultural Variables in the Decision-Making
Process(Exhibit 5-9)
Culture
Individualism/collectivism Locus of decision
making
Utilitarianism/moral ideals
Risk tolerance
Past/future orientation
Problem Data Consideration of
Decision Implementation Definition
gathering alternative solutions
Objective/subjective perspective
Internal/external locus of control
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