intercultural negotiation process

International Business Communication, 4th ed., Chaney & Martin

Intercultural Negotiation

Process

Chapter 10

International Business Communication, 4th ed., Chaney & Martin

Topics

Steps in the Negotiation ProcessMistakes Commonly Made During NegotiationsIntercultural Negotiation ModelsNegotiation StrategiesTrade Agreements

International Business Communication, 4th ed., Chaney & Martin

Definition

Intercultural negotiation involves discussions of common and conflicting interests between persons of different cultural backgrounds who work to reach an agreement of mutual benefit.

Dr. Chester L. Karrass, Leader in Negotiating

“In business, you don't get what you deserve, you get what you negotiate.”

Why take “no” for an answer? Successful people don't. They get what they want by negotiating better deals for both parties.

International Business Communication, 4th ed., Chaney & Martin

Steps in the Negotiation Process

Preparation and Site Selection

Team Selection

Relationship Building

Opening Talks

Discussions

Agreement

International Business Communication, 4th ed., Chaney & Martin

Preparation and Site Selection

Hire a consultant in the country.

Consult resource videos and written materials on negotiation.

Choose a site—here or there can be important.

International Business Communication, 4th ed., Chaney & Martin

Team Selection

• Consider number, age, gender, and rank of team members.

• Consider background of players.

• Evaluate other negotiators - their political affiliation, social class, age, and risk-taking propensity.

International Business Communication, 4th ed., Chaney & Martin

Relationship Building

Time required

Intermediaries or agents

Friendship versus business relationship

International Business Communication, 4th ed., Chaney & Martin

Opening Talks and Discussions

Observe opening rituals - small talk, humor, etc.

Consider the appropriateness of an agenda.

Expect a variety of behaviors.

Plan ahead for concessions.

Move to an informal location when appropriate.

International Business Communication, 4th ed., Chaney & Martin

Agreement

Close negotiations properly.

Expect delays .

Get tax and legal advice.

Anticipate a long wait until final approval.

Remember that contracts are not always considered final.

International Business Communication, 4th ed., Chaney & Martin

Common Negotiation Mistakes

Making negative initial impression

Failing to listen and talking too much

Assuming understanding by the other culture

Failing to ask important questions

Showing discomfort with silence

Using unfamiliar and slang words

Interrupting the speaker

Failing to read the nonverbal cues

International Business Communication, 4th ed., Chaney & Martin

Failing to note key pointsMaking statements that are irritating or contradictoryFailing to prepare a list of questions for discussionBeing easily distractedFailing to start with conditional offersFailing to summarize and restate to ensure understandingHearing only what you want to hearFailing to use first-class supporting materials

International Business Communication, 4th ed., Chaney & Martin

Intercultural Negotiation Models

Problem-solving approach — considers national and organizational cultural differences

Competitive approach — individualistic and persuasive orientation

Compromising — seeks a middle ground

Forcing — makes the other party comply

Legalism — uses legal documentation to force the partner to comply

Kozicki, Creative Negotiating

Four - Stage Negotiation Model

Investigative

Presentation

Bargaining

Agreement

International Business Communication, 4th ed., Chaney & Martin

Negotiation Strategies

People act on the basis of their own best interests.Truth in negotiations:

FaithFactFeeling

U.S. negotiators make fewer adjustments to their opponents.Strategies include: preparation; tactics; conflict resolution and mediation; and observation, analysis, and evaluation.

International Business Communication, 4th ed., Chaney & Martin

Trade Agreements

General license – never actually issued

Validated license — allows specific exporter to export specific products to specific places

Free trade zones or trade blocs — products enter without customs duties

International Business Communication, 4th ed., Chaney & Martin

NAFTA Benefits

To eliminate barriers to trade and facilitate cross-border movement of goods and servicesTo promote fair competitionTo increase investment opportunitiesTo provide adequate and effective protection for intellectual propertyTo develop effective procedures to handle disputesTo expand cooperation and increase benefits to the three countries

International Business Communication, 4th ed., Chaney & Martin

The U.S. Negotiator’s Global Report Card

Preparation B-Synergistic approach (win-win) DCultural I.Q. DAdapting the negotiating process to the host country environment DPatience DListening DLinguistic abilities FUsing language that is simple and accessible CHigh aspirations B+Personal integrity A-Building solid relationships D

Competency Grade

International Business Communication, 4th ed., Chaney & Martin

Statements Characteristic of U.S. Negotiating Style

"I can handle this myself" (to express individualism).

"Please call me Steve" (to make people feel relaxed by being informal).

"Pardon my French" (to excuse profanity).

"Let's get to the point" (to speed up decisions).

"Speak up; what do you think?" (to avoid silence).

"A deal is a deal" (to indicate an expectation that the agreement will be honored).

International Business Communication, 4th ed., Chaney & Martin

China

Reserved; known for hospitality and good mannersGive small, inexpensive presentsDo not like to be touchedConsider mutual relationships and trust very importantTechnical competence of negotiators necessaryPrefer to use an intermediaryRarely use lawyersAmple room for compromise

International Business Communication, 4th ed., Chaney & Martin

France

Have a sense of pride sometimes interpreted as supremacy

French logic ("Cartesian" logic) proceeds from what is known in a point-by-point fashion until agreement is reached

Protocol, manners, status, education, family, and individual accomplishments are keys to success with the French

International Business Communication, 4th ed., Chaney & Martin

GermanyProtocol is important

Dress is conservative; correct posture and manners are required

Use titles when addressing members of the negotiating team

Prefer keeping a distance between themselves and the other team

Have technical people as part of the negotiation team as Germans are detail oriented

Punctuality is expected

Contracts are firm guidelines to be followed exactly

International Business Communication, 4th ed., Chaney & Martin

India

Bribery is common; having connections is importantAvoid using the left hand in greetings and eatingRequest permission before smoking, entering, or sittingBuilding relationships is important; an introduction is necessaryIntermediaries are commonUse titles to convey respectKnowledge of local affairs is importantNegotiation process can be long

International Business Communication, 4th ed., Chaney & Martin

JapanBusiness etiquette is very important, including business card exchangeMeeting should be arranged by an intermediary Subtle and complex verbal and nonverbal cues are used to avoid having someone lose face or lose the group harmonyThe Japanese use more silence and less eye contact than U.S. personsConsider contracts as flexible instrumentsAre suspicious of a negotiating team that includes lawyers

International Business Communication, 4th ed., Chaney & Martin

Latin AmericaRelationships are importantBribery is commonGovernment is very involved in businessNegotiators chosen based on family connections, political influence, education, and gender (females should be in the background)Social competence is importantMost agreements are consummated over lunchNumerous meetings is the norm; time is not seen as importantAvoid gestures

International Business Communication, 4th ed., Chaney & Martin

NigeriaNigerians are skillful negotiators; they view negotiation as a competitive process

When selecting negotiators, consider age (equated with wisdom), gender, cultural background, and educational credentials

Developing a personal relationship is important

Time is not particularly important so negotiations may be lengthy

Use titles and last names

Use an intermediary to make initial introductions

Being well dressed is important; courtesy and consideration are also expected

Contracts (oral or written) are flexible

A bribe may be needed to expedite business

International Business Communication, 4th ed., Chaney & Martin

Russian States

In the past, negotiation sessions have been long, with Russians controlling the agendaAre concerned with age, rank, and protocolTend to be formalFriendships are not crucial to businessContracts interpreted rigidlyConcerned with maximizing their profits

International Business Communication, 4th ed., Chaney & Martin

Negotiating globally can present many opportunities. Corporations can expand their markets, increase their markets, increase their profits and productivity, and lower their costs by negotiating globally.