3 Key Areas to Consider Prior to any major cross cultural negotiation: Hierarchy, Individualism v. Collectivism and Importance of Context. Consideration of these areas will not guarantee agreement but can help minimize the chance of impasse in a situation where an agreement is possible as well as reduce time and cost of the negotiation.

1. Cross Cultural Negotiation
3 Key Areas to Consider Prior to
any major cross cultural
negotiation
Bill Kohnen
Global Purchasing
Fundamentals 2014

2. 3 Key Areas to Consider
Cross
Cultural
Negotiation
Importance of
Hierarchy
Individualism
vs.
Collectivism
Importance of
Context
Bill Kohnen Global Purchasing Fundamentals 2014

3. Bos
Manager VP Director
VP President
Hierarchy Context Collective vs.
Individual
Bill Kohnen Global Purchasing Fundamentals 2014

4. Impact of Hierarchy
• To What degree do the people
you are negotiating with need to
get approval from.
• To what degree does hierarchy
or lack of it create goals and
expectations to be meet that are
not directly related to
negotiation
• What will be your relationship if
any to others in the
organization? Is that a risk to
you?
Examples
Important
Malaysia, Japan,
Large Global Corporations
May never directly meet people
will real authority
Moderately Important
Germany, Singapore
Generally authority given to reach
agreement within a set range
Less Important
United States
Technology Start Ups
Bill Kohnen Global Purchasing Fundamentals 2014

5. Individualism vs. Collectivism
• Important when trying to
identify the decision maker(s)
• Impact on and decision
criteria
• Impact on timing
• How to close the deal
• Once deal is made may impact
way it is executed
Examples
Collectivism
Brazil, Philippines
Middle Ground
Israel, India
Individualism
Australians, Texans
Bill Kohnen Global Purchasing Fundamentals 2014

6. Importance Of Context
• Method of stating goals
• How fast and direct can you be
to get to stating your specific
goals
• Extent discussion will focus on
past, present or future
• Whether negotiation give and
take will be direct or indirect
• Of the 3 areas the one most
often derails discussions that
otherwise could have reached
agreement
Examples
Context Important
Arab Cultures
Japan
Moderately Important
France
Not Important
Germany, US,
Street Vendors anywhere in the
world
Bill Kohnen Global Purchasing Fundamentals 2014

7. Impact on Negotiation
Examples
Hierarchy Individualism Context Negotiation
Outlook
High Low High Patience, Prepare
for Long Discussion
Multiple Meetings
Solution and Benefit
for Group
Low High Low Expect getting to
point quickly
Pressure to agree
fast
Expectation you can
make a deal
Bill Kohnen Global Purchasing Fundamentals 2014

8. Impact on Negotiation - Example
Hierarchy Individualism Context Negotiation
Outlook
High High High Expect other side to
be confident and
straightforward and
want to talk
However final
agreement will need
to be approved by
people not in
negotiations
Example: Big
Western
Multinational,
Military
Organization
Bill Kohnen Global Purchasing Fundamentals 2014

9. Summary
• Thoughtful consideration of background views of other sides
is an important part of planning for cross cultural
negotiations
• Recognizing different approaches does not mean you should
alter your style
• Ultimately the negotiation, like any other, can only reach an
agreement based on whether there is overlap between each
sides maximum and minimum expectations
• However the possibility of an agreement is less likely to be
derailed and may conclude relatively fast and for less cost
with an understanding of the other sides background views
Bill Kohnen Global Purchasing Fundamentals 2014