chap019 ibm negotiating

29
Negotiating with International Customers, Partners, and Regulators McGraw-Hill/Irwin International Marketing 14/e Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

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Page 1: Chap019 IBM Negotiating

Negotiating with International Customers, Partners, and Regulators

McGraw-Hill/IrwinInternational Marketing 14/e

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Page 2: Chap019 IBM Negotiating

19-2

What Should You Learn?What Should You Learn?

• The problems associated with cultural stereotypes

• How culture influences behaviors at the negotiation table

• Common kinds of problems that crop up during international business negotiations

• The similarities and differences in communication behaviors in several countries

Page 3: Chap019 IBM Negotiating

19-3

What Should You Learn?What Should You Learn?

• How differences in values and thinking processes affect international negotiations

• The important factors in selecting a negotiation team

• How to prepare for international negotiations

• Managing all aspects of the negotiation process

• The important of follow-up communications and procedures

Page 4: Chap019 IBM Negotiating

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Global PerspectiveA Japanese AisatsuGlobal PerspectiveA Japanese Aisatsu

• Face-to-face negotiations

– An omnipresent activity in international commerce

• Executives

– Must also negotiate with representatives of foreign governments

• Negotiation of the original agreement

– A crucial aspect of all international commercial relationships

• Taking cultural differences into account

– Enhances business agreements– Leads to long-term, profitable relationships across borders

Page 5: Chap019 IBM Negotiating

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The Dangers of StereotypesThe Dangers of Stereotypes

• Negotiations

– Are conducted between people, not national stereotypes

• Cultural factors often make huge differences

• Negotiation behaviors are different

– Across regions, genders, and type of industry

• Age and experience also make important differences

• Consider the culture of customers and business partners, but treat them as individuals

Page 6: Chap019 IBM Negotiating

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The Pervasive(แพร่�หลาย) Impact of Culture

on Negotiation Behavior

The Pervasive(แพร่�หลาย) Impact of Culture

on Negotiation Behavior• Regional generalizations very often are not

correct

• Cultural differences cause four kinds of problems in international business negotiations

– Language– Nonverbal behaviors– Values– Thinking and decision-making processes

► Order is important

Page 7: Chap019 IBM Negotiating

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Differences in Language and Nonverbal BehaviorsDifferences in Language and Nonverbal Behaviors

• Americans are near the bottom of the languages skills list

• Americans don’t like side conversations by foreigners in their native language

• The variation across cultures is greater when comparing linguistic aspects of language and nonverbal behaviors than when the verbal content of negotiations is considered

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Verbal Negotiation Tactics(The “What” of Communications)

Verbal Negotiation Tactics(The “What” of Communications)

Exhibit 19.1

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Linguistic Aspect of Language and Nonverbal Behavior (“How” Things are Said)

Linguistic Aspect of Language and Nonverbal Behavior (“How” Things are Said)

Exhibit 19.2

Page 10: Chap019 IBM Negotiating

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• Japan

• Korea

• China (northern)

• Taiwan

• Russia

• Israel

• Germany

• United Kingdom

Differences in Language and Nonverbal BehaviorsDifferences in Language and Nonverbal Behaviors

Page 11: Chap019 IBM Negotiating

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• Spain

• France

• Brazil

• Mexico

• French-speaking Canada

• English-speaking Canada

• United States

Differences in Language and Nonverbal BehaviorsDifferences in Language and Nonverbal Behaviors

Page 12: Chap019 IBM Negotiating

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Differences in ValuesDifferences in Values

• Objectivity

– “Separating people from the problem”

• Competitiveness and equality

– Japanese appear to be the best negotiators with the highest profits

– Japanese appear to be more equitable with buyers

• Time

– The passage of time is viewed differently across cultures– These differences most often hurt Americans

Page 13: Chap019 IBM Negotiating

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Cultural Differences in Competitiveness and Equality

Cultural Differences in Competitiveness and EqualityExhibit 19.3

Page 14: Chap019 IBM Negotiating

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Differences in Thinking and Decision-Making Processes

Differences in Thinking and Decision-Making Processes• Western approach – sequential

• Eastern approach – holistic

• Americans – business negotiation is a problem-solving activity

• Japanese – a business negotiation is a time to develop a business relationship with the goal of long-term mutual benefit

Page 15: Chap019 IBM Negotiating

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Implications for Managers and Negotiators

Implications for Managers and Negotiators

• Four steps for more efficient and effective international business negotiations

1. Selection of the appropriate negotiation team

2. Management of preliminaries, including training, preparations, and manipulation of negotiation settings

3. Management of the process of negotiations

4. Appropriate follow-up procedures and practices

Page 16: Chap019 IBM Negotiating

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Negotiation TeamsNegotiation Teams

• Willingness to use team assistance

• Listening skills

• Influence at headquarters (senior executive)

• Gender should not be used as a selection criterion for international negotiation teams

Page 17: Chap019 IBM Negotiating

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Negotiation PreliminariesNegotiation Preliminaries

• Checklist for planning international negotiations

1. Assessment of the situation and the people

2. Facts to confirm during the negotiation

3. Agenda

4. Best alternative to a negotiated agreement (BATNA)

5. Concession strategies

6. Team assignments

Page 18: Chap019 IBM Negotiating

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Negotiation PreliminariesNegotiation Preliminaries

• Aspects of the negotiation setting that should be pre-manipulated

1. Location

2. Physical arrangements

3. Number of parties

4. Number of participants

5. Audiences (news media, competitors, fellow vendors, etc.)

6. Communications channels

7. Time limits

Page 19: Chap019 IBM Negotiating

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At the Negotiation TableAt the Negotiation Table

• Business negotiations proceed through four stages

1. Nontask sounding

2. Task-related exchange of information

3. Persuasion (ชักจู ง, โน้�มน้�าว)4. Concessions and agreement

Page 20: Chap019 IBM Negotiating

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Nontask SoundingNontask Sounding

• Learn the mood of the other side

• Learn about the client’s background and interest for cues about appropriate communication styles

• Judgments about the “kind” of person in the negotiation

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Task-Related Information ExchangeTask-Related Information Exchange

• Let the foreign counterparts bring up business

• Expect a large number of questions but little feedback

• Allow periods of silence

• Use multiple communication channels

• Understand the lack of, or the bluntness of negative feedback

• Meet aggressive first offers with questions, not anger

Page 22: Chap019 IBM Negotiating

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Summary of Japanese and American Negotiation Styles

Summary of Japanese and American Negotiation Styles

Exhibit 19.4

Page 23: Chap019 IBM Negotiating

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PersuasionPersuasion

• Task-related information exchange versus persuasion

• Avoid threats, warnings, and other aggressive negotiation tactics

• Avoid emotional outbursts

• Ask more questions

• Use third parties and information channels of communication

Page 24: Chap019 IBM Negotiating

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Concessions and AgreementConcessions and Agreement

• Write down concession-making strategies

• Understand differences in decision-making styles

• In many cultures, no concessions are made until the end of the negotiations

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After NegotiationsAfter Negotiations

• In most countries other than America– Legal systems are not depended upon to settle disputes

• Japan – Contacts primarily contain comments on principles of the

relationship

• China – Contracts are more a description of what business partners view

their respective responsibilities to be

• Many foreign CEOs expect a formal contract signing ceremony

• Follow-up communications are very important

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ConclusionsConclusions

• Experience levels are going up worldwide

• Culture still counts

• Differences between countries and cultures, no matter how difficult, can be worked out when people talk to each other in face-to-face setting

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SummarySummary

• It is important to take cultural differences into account when meeting clients, customers, and business partners across the international negotiation table

• Negotiators’ personalities and backgrounds influence their behavior

– Making it important to get to know the individuals who represent client and customer companies

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SummarySummary

• Four kinds of problems frequently arise during international business negotiations

1. Level of language

2. Nonverbal behaviors

3. Values

4. Thinking and decision-making processes

• Much care must be taken in selecting negotiating teams

• Situational factors such as the location for meetings and the time allowed must be carefully considered and managed

Page 29: Chap019 IBM Negotiating

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Summary Summary

• Business negotiations involve four steps1. Nontask sounding

2. Task-related information exchange

3. Persuasion

4. Concessions and agreement.

• The time spent on each step can vary considerably from country to country

• Americans tend to be deal oriented

– More care should be taken in follow-up communications with foreign clients and partners who put more emphasis on long-term business relationships