s-3 - negotiation & decision making

8/2/2019 S-3 - Negotiation & Decision Making

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5-1 Copyright 2011 Pearson Education, Inc.publishing as Prentice Hall


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Chapter Learning Goals

1. Learn how to prepare for cross-culturalbusiness negotiations.

2. Recognize the need to build trusting

relationships as a prerequisite forsuccessful negotiations and long-termcommitments.

3. Be aware of culturally-based

behavioral differences, values, andagendas of the negotiating parties.

4. Learn the complexities.

5-2Copyright 2011 Pearson Education, Inc.publishing as Prentice Hall


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Chapter Learning Goals

5. Appreciate the variables in thedecision-making process andunderstand the influence of culture on

decision making.6. Become familiar with the Japanese

decision-making process and how it isinfluenced by their cultural norms.



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Opening Profile: BPs Troubled

Joint Venture (JV) in Russia

In August 2003, the British Petroleum (BP)formed a $6.7 billion JV called TNK-BP.

At the time of signing, the JV was hailed as amajor project because it brought tangible

FDI to Russia.

However, between 2007 and 2009, BP wasasked to negotiate and surrender its controland ownership of oil and gas fields in

Russia. In 2006 and 2007 BP started to witness state

interference in the TNK-BP project and TNK-BP ended up losing its control to a state-

controlled gas company.5-4Copyright 2011 Pearson Education, Inc.publishing as Prentice Hall


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Opening Profile: BPs Troubled

Joint Venture (JV) in Russia

In early 2008, state interventions,investigations, and other allegationssurfaced regarding labor and employment-related inquiries that pressured BP to hire

more Russian staff. As of April 2009, TNK-BP continued to

struggle with its boards appointments and

selection of a CEO.

The relationship-building and cooperationbetween BP and Russian partners is far fromhealthy.



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Negotiation


The process ofdiscussion by which twoor more parties aim for

mutually acceptableagreement


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Stakeholders inCross-Cultural Negotiation



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The Negotiation Process



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Stage One: Preparation


Develop profile ofcounterparts.

Find out likely demands, teamcomposition, and counterpart

authority.Uzbekistan had to learn

from scratchChoose a negotiation site.

British/French Chunnelnegotiations


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Stage Two: Relationship Building


Getting to know ones

contactsand building mutual trust

Non-task sounding

(nemawashi)

Use an intermediary.

I have come as a

mediator


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Stage Three: ExchangingTask-Related Information


Cultural differences remainan issue.The French enjoy debate andconflict.Mexicans can be suspicious and

indirect.The Chinese ask many questions,but provide ambiguousinformation in return.

Show understanding of theother viewpoint.


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Stage Four: Persuasion


Dirty tricks are in theeye of the beholder

False information

Ambiguousauthority

UncomfortableroomsRudeness, threats

Calculated delays


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Stage Five: Concessionsand Agreement

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Copyright 2011 Pearson Education, Inc.

publishing as Prentice Hall

Russians and theChinese start withextreme positionsSwedes start with what

they will acceptStarting with extremesmay be most effective


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Management Focus: CulturalMisunderstandingJoint Venture in

China Sino-French joint venture was formed in

March 1995 by Group Danone andHangzhou Wahaha Group Co. and took thetrade mark name of Wahaha.

Between 1996 and 2006, a number ofissues and disputes took place within theJV.

Public rows erupted between the twocompanies when they kept on blaming each

other for breach of contract. The DanoneWHH case became so much

embroiled that Chinese and Frenchgovernments asked the companies tonegotiate an amicable resolution.

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Management Focus: Joint Venture inChina

A Few Lessons We Learn Cross-cultural misunderstandings and

unfamiliarity with the JV partners were atthe heart of the dispute.

Both companies used media and PR

companies instead of having opennegotiations.

Relationship building and exchange ofinformation is critical in any JV.

There was lack of open communication inday-to-day management of the JV.

In JVs, relationship building takes timeand a good amount of interaction betweenthe partners.

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Comparison of Negotiation Styles

JapaneseNorth

AmericanLatin

American

Hide

emotions

Deal

impersonally

Emotionally

passionateSubtle powerplays

Litigation, notconciliation

Great powerplays

Step-by-step

approach

Methodologic

alorganization

Impulsive,

spontaneous

Group goodis the aim

Profit is theaim

Group/individ-ual good is aim

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Successful Negotiators: Americans

Knows when to compromise, but standsfirm at the beginning. Acceptscompromises only when there is adeadlock.

Refuses to make concessions beforehandand keeps his/hers cards close to chest.

Keeps a maximum of options open beforenegotiation, operates in good faith.

States his/her position as clearly aspossible, respects the opponents.

Is fully briefed about the negotiatedissues, has a good sense of timing and is

consistent.5-17Copyright 2011 Pearson Education, Inc.



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Successful Negotiators: Indians

Look for and say the truth, not afraid tospeak up.

Exercise self-control.

Respect other party, look for solutions

acceptable to all parties.Will change their minds, even at risk of

seeming inconsistent and unpredictable.

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Successful Negotiators: Arabs

Protect honor, self-respect, dignity, and,thus, are trusted and respected.

Avoid direct confrontation.

Come up with creative, honorable solutions.Are impartial and can resist pressure.

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Successful Negotiators: Swedes

Quiet, thoughtful, polite, straightforward

Overcautious, but flexible

Slow to react to new proposals, but eager tobe productive and efficient

Able to hide emotions, afraid ofconfrontation

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Successful Negotiators: Italians

Have a sense of drama, do not hideemotions

Good at reading facial expressions andgestures

Want to make a good impression and useflattery, but are distrusting

Handle confrontation with subtlety and tact

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Managing Negotiation

Examples

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Avoid person-relatedconflicts.

Low-contextAmericans appear

impatient, cold, and

blunt to Mexicans.

Americans mustapproach negotiations

with Mexicans with

patience; refrain fromattacking ideas.


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Cross-Cultural Negotiation Variables

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EXHIBIT 5-5 Cross-cultural Negotiation Variables


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Using the Internet toSupport Negotiations

Negotiation SupportSystem (NSS)

Web Application

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Increase likelihoodof agreement

Decrease direct andindirect costs

Maximize optimaloutcomes

Provide support forphases and

dimensions such as: Multiple-issue, multiple-

party businesstransactions of a buy-sell nature

International disputeresolution

Internal companynegotiations andcommunicationsCopyright 2011 Pearson Education, Inc.



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E-Negotiations

Advantages Disadvantages

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Speed

Less travel

Laying out muchobjectiveinformation overtime

Not being able tobuild trust and

interpersonalrelationships

Nonverbal nuances arelost

Video conferencing may bea good compromise




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Comparative Management in Focus:Negotiating with Chinese

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EXHIBIT 5-6 Influence on Western-Chinese Business Negotiations


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publishing as Prentice Hall5-27

Two problems: Chinese desire for

details

Apparent insincerity

Saving face:

Lien

Mien-tzu

Importance ofharmony Guanxi

Guanxihu networks

Two stages ofChinese negotiation

Technical

Commercial


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Some recommendations:

Practice patience.

Accept prolonged stalemate.

Refrain from exaggerated expectations. Expect shaming.

Resist blaming for difficulties.

Understand Chinese cultural traits.

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Managing the Conflict Resolution

To negotiate on the basis offactual information andlogical analysis

Instrumental-OrientedConflict

To handle a situationindirectly and implicitly,without clear delineation ofthe situation by the personhandling it

Expressive-OrientedConflict

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Low-Context, High-ContextSources of Conflict

Low-Context High-Context

Why Analytic, linear logicSynthetic, spirallogic

WhenIndividualistic-

oriented violationsGroup-oriented

violations

WhatRevealment,

confrontational

Concealment, non-

confrontational

HowExplicit, open,

directImplicit, ambiguous,

indirect

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The Influence of Culture onDecision Making

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Individualism VSCollectivism

Objective VS

Subjective

Risk Tolerance VS RiskAvoidance

Uncertainty VS Familiarity


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Approaches to Decision Making

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Utilitarianism VS MoralIdealism

Autocratic VSParticipative

Slow Pace VS Fast

Pace


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Cultural Variables inDecision-Making Process

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EXHIBIT 5-8 Cultural Variables in the Decision-Making Process

Comparative Management in Focus


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Comparative Management in Focus:Decision Making in Japanese

Companies

Wa

Amae

Shinyo

Ringi

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Comparative Management in Focus:


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Comparative Management in Focus:Decision Making in Japanese

Companies

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EXHIBIT 5-9 Decision Making Procedure in Japanese Companies

s-3 - negotiation & decision making

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