Intercultural Negotiation
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This slide about the negotiation between two parties which are in different culture.
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Intercultural Negotiation
- 1. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.1 Topic 7: Intercultural Negotiation Negotiation: Process of discussion between two or more people aimed at reaching a mutually acceptable agreement International Negotiation More complex than domestic negotiations Differences in national cultures and differences in political, legal, and economic systems
- 2. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.2 The Negotiation Process
- 3. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.3 The Negotiation Process • Preparation – What are the goals? – How will I work with the other party? • Relationship building – taking time to build mutual trust before starting business discussions • Exchanging task related information – during this stage each side makes a presentation and states its position, normally followed by a question-and-answer session
- 4. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.4 The Negotiation Process • Persuasion – during this stage both parties try to persuade the other to accept more of their position while giving up some of their own; there are recognizable tactics for this stage • Concessions and Agreements – at this point each side will make various concessions so that an agreement can be reached and signed
- 5. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.5 VERBAL AND NONVERBAL NEGOTIATION TACTICS • Promise • Threat • Recommendation • Warning • Reward • Punishment • Normative appeal • Commitment • Self disclosure • Refusal • Command • Interruption
- 6. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.6 Comparison of Brazilian, U.S., and Japanese Negotiators (in half-hour bargaining session)
- 7. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.7 “DIRTY TRICKS” IN INTERNATIONAL NEGOTIATIONS • Dirty tricks are negotiation tactics that pressure opponents to accept unfair or undesirable agreements or concessions
- 8. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.8 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 • 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
- 9. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.9 Persuasion Tactics
- 10. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.10 Differences in Negotiator Strategies and Tactics in Three Countries TACTIC Japanese N = 6 American N = 6 Brazilian N = 6 Promise Threat Recommendation Warning Reward Punishment Positive normative appeal Negative normative appeal Commitment Self-disclosure Question Command 7 4 7 2 1 1 1 3 15 34 20 8 8 4 4 1 2 3 1 1 13 36 20 6 3 2 5 1 2 3 0 1 8 39 22 14 Individual Tactics as a Percentage of Total Tactics
- 11. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.11 13-11Differences in Negotiator Strategies and Tactics in Three Countries TACTIC Japanese N = 6 American N = 6 Brazilian N = 6 Number of times word “No” used Silent periods of 10 seconds or more Conversation overlaps (interruptions) Gazing (minutes per random 10 minute period) Touching 5.7 5.5 12.6 1.3 min. 0 9.0 3.5 10.3 3.3 min. 0 83.4 0 28.6 5.2 min. 4.7 Occurrences in a 30-Minute Bargaining session
- 12. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.12 Basic Negotiation Strategies • Competitive negotiation: each side tried to give as little as possible and tries to “win” for its side – The negotiation as a win-lose game • Problem solving: negotiators seek out ground that is beneficial to both companies’ interests – Search for possible win-win situations Most experts recommend a problem solving negotiation strategy
- 13. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.13 Preferences for Problem-Solving Negotiation 0 20 40 60 80 100 Japan C hina A rgentinaFrance India U SA U K M exico G erm anyN igeria Brazil Spain % Win-Win
- 14. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.14 Understanding Negotiation Styles
- 15. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.15 Understanding Negotiation Styles • For North Americans, negotiations are businesslike; their factual appeals are based on what they believe is objective information, presented with the assumption that it is understood by the other side on a logical basis. • Arabs use affective appeals based on emotions and subjective feelings. • Russians employ axiomatic appeals – that is, their appeals are based on the ideals generally accepted in their society.
- 16. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.16 Profile of an 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
- 17. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.17 Profile of an American Negotiator • 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
- 18. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.18 Profile of an Arab Negotiator • 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
- 19. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.19 Profile of an 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
- 20. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.20 Negotiating with the Chinese • Business people have two major areas of conflict when negotiating with the Chinese – Amount of detail about product characteristics – Apparent insincerity about reaching an agreement • Chinese negotiation process is affected by three cultural norms – Politeness and emotional restraint – Emphasis on social obligations – Belief in the interconnection of work, family, and friendship
- 21. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.21 Negotiating with the Chinese • Tips to foreigners conducting business in China – Practice patience – Accept prolonged periods of stalemate – Refrain from exaggerated expectations – Discount Chinese rhetoric about future prospects – Expect the Chinese to try to manipulate by shaming – Resist the temptation to believe that difficulties are your fault – Try to understand Chinese cultural traits
- 22. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.22 Differences Between American and Chinese Culture and Approach to the Negotiation Process Contrast of Basic Cultural Values American Task and information oriented Egalitarian Analytical Sequential, monochronic Seeks the complete truth Individualist Confrontative, argumentative Chinese Relationship oriented Hierarchical Holistic Circular, polychronic Seeks the harmonious way Collectivist Haggling, bargaining
- 23. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.23 13-23 Differences Between American and Chinese Culture and Approach to the Negotiation Process Approach to the Negotiation Process American Quick meetings Informal Make cold calls Full authority Direct Proposals first Aggressive Impatient A “good deal” Chinese Long courting process Formal Draw on intermediaries Limited authority Indirect Explanations first Questioning Patient A long-term relationship nontask sounding information exchange means of persuasion terms of agreement
- 24. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.24 Conceptualizing Culture and Negotiation • Culture as learned behavior – A catalogue of behaviors the foreign negotiator should expect • Culture as shared values – Understanding central values and norms • Individualism/collectivism • Power distance • Career success/quality of life • Uncertainty avoidance
- 25. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.25 Impact of Culture on Negotiation Negotiation Factor Goal Contract Relationship Attitudes Win/Lose Win/Win Personal Styles Informal Formal Communication Direct Indirect Time Sensitivity High Low Emotionalism High Low Agreement Form Specific General Agreement building Bottom Up Top Down Team Organization One Leader Consensus Risk Taking High Low
- 26. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.26 Managing Negotiation • Successful management of intercultural negotiations requires the manager – To gain specific knowledge of the parties in the upcoming meeting – To prepare accordingly to adjust to and control the situation – To be innovative
- 27. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.27 Managing Conflict
- 28. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.28 Twelve Variables in the Negotiation Process
- 29. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.29 The Influence of Culture on Negotiation • Effect of culture on negotiator ethics and tactics – Differences exist in the tolerance of different negotiation tactics in different cultures – Negotiators who trusted the other party were less likely to use questionable negotiation tactics • Effects of culture on conflict resolution – Within collectivistic countries, disagreements are resolved based on rules, whereas in individualistic countries, conflicts tend to be resolved through personal experience and training
- 30. Browaeys & Price, Understanding Cross-Cultural Management, 2nd Edition © Pearson Education Limited 2011 Slide 15.30 Major Points Regarding Successful International Negotiation 1. Few negotiations succeed without extensive preparation. 2. Building personal relationships is a key step in a negotiation. 3. Managers should be aware that first offers may differ by cultural background. 4. Many tactics are used in persuasion. 5. Know how counterpart views the concession-making process. 6. Culture and legal traditions influence the content and force of law regarding business contracts. 7. Competitive negotiation seldom leads to long-term relationships. 8. Problem-solving negotiation is more flexible and probably more successful strategy. 9. Must be flexible, empathic, and physically tough.
Notas del editor
- The negotiation process comprises five stages, the ordering of which may vary according to the cultural norms; for most people, relationship building is part of a continuous process in any event: (1) preparation, (2) relationship building, (3) the exchange of task related information, (4) persuasion, and (5) concessions and agreement.
- This slide highlights steps two and three in the negotiation process. During relationship building many non-task events (social events, tours, and ceremonies) take place so that the parties can get to know one another. Once stage three begins the parties begin to present their positions and discussion follow so that a mutually beneficial solution can be found. Negotiators should focus not only on presenting their situation and needs but also on showing an understanding of their opponents’ viewpoint. Focusing on the entire situation confronting each party encourages the negotiators to assess a wider range of alternatives for resolution, rather than limiting themselves to their preconceived, static positions. Researchers suggest that to be most effective, negotiators should prepare for meetings by practicing role reversal.
- This slide highlights the final two stages in the negotiation process. Follow the hyperlink to the persuasion tactics. Well-prepared negotiators are aware of various concession strategies and have decided ahead of time what their own concession strategy will be. Familiar with the typical initial positions that various parties are likely to take, they know that the Russians and the Chinese generally open their bargaining with extreme positions, asking for more than they hope to gain, whereas the Swedes usually start with what they are prepared to accept. Research in the United States indicates that better end results are attained by starting with extreme positions. With this approach, the process of reaching an agreement involves careful timing of the disclosure information and of concessions. Most people who have studied negotiations believe that negotiators should disclose only the information that is necessary at a given point and that they should try to obtain information piece by piece to get the whole picture gradually without giving away their goals or concession strategy.
- Global managers can benefit from studying differences in negotiating behaviors (and the underlying reasons for them), which can help them recognize what is happening in the negotiating process.
- The Chinese are among the toughest negotiators in the world. American managers must anticipate various tactics, such as their delaying techniques and their avoidance of direct, specific answers: Both ploys are used to exploit the known impatience of Americans. The Chinese frequently try to put pressure on Americans by “shaming” them, thereby implying that the Americans are trying to renege on the friendship—the basis of the implicit contract. Whereas Westerners come to negotiations with specific and segmented goals and find it easy to compromise, the Chinese are reluctant to negotiate details. They find it difficult to compromise and trade because they have entered negotiations with a broader vision of achieving development goals for China, and they are offended when Westerners don’t internalize those goals.
- Skillful global managers must assess many factors when managing negotiations. They must understand the position of the other parties in regard to their goals—whether national or corporate—and whether these goals are represented by principles or specific details. They should have the ability to recognize the relative importance attached to completing the task versus developing interpersonal relationships. Managers also must know the composition of the teams involved, the power allotted to the members, and the extent of the teams’ preparation. In addition, they must grasp the significance of personal trust in the relationship.
- Much of the negotiation process is fraught with conflict—explicit or implicit—and such conflict can often lead to a standoff, or a lose–lose situation. This is regrettable, not only because of the situation at hand, but also because it probably will shut off future opportunities for deals between the parties. Much of the cause of such conflict can be found in cultural differences between the parties—in their expectations, in their behaviors, and particularly in their communication styles.