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Intercultural NegotiationMr.PhongwarinBuranasathitwong
Outlinedefinition of negotiation intercultural negotiationcultural contrasts in negotiation
how to negotiate successfully
Culture and Negotiations
Negotiation always involves two individuals (usually representing groups) exchanging a series of offers.
Negotiations are not limited to direct “deal making” over fixed resources.
Often we engage in negotiation to resolve disputes and to make decisions in teams.
Culture and Negotiations
How does culture influence negotiation? It comes down to values. Cultural values guide us in determining what issues are more or less important and also influence negotiators’ interests and priorities.
Culture is always at the negotiation table.
How important are the following things in intercultural negotiations and why?
Location of meetingTime of meetingDuration of meetingNumber and status of negotiators
Gender of negotiators
Social talk before the meeting
Making notes during the meeting
Making a report of the meeting
Negotiating over dinner
Talking about details
Reaching agreement very quickly
1. Culture shock: 4 phases: anticipation and enchantment, awakening, disillusionment, realization and productivity. Where are u? Find culture mentor, be flexible , withhold judgment, realize awakening and disillusionment are normal, sense of humor, be self-sufficient, learn from experiences
2. Negotiating with the boss back home: Wining and dining the client. The boss thinks? Unrealistic expectations. Stress that takes time, be clear as to your decision making power, educate boss in key cultural and legal factors, keep lawyers away, don’t surprise them.
3. Dealing with your own team: Strength and comfort in numbers, but expensive, more negoes, and have to prenegotiate. For teams, limit the number (no more than 5, clarify roles, make sure all members are clear as to strategy and tactics, and use good negotiators
International Negotiations: Core Principles
4. Resolving bribery: what is a bribe in the US? In Afghanistan? In France? In China (贿赂,行贿,开后门,塞红包) ATO rules. Be careful and be aware of Foreign Corrupt Practices Act, but be aware of local culture. Americans don’t 塞红包 but Chinese don’t tip. Think about it.
5. Joint ventures: skip as already covered somewhat
6. Your place or mine? Home court advantage. More comfortable= more confident. Also can treat other like a King or Queen. Try inviting them. If not, don’t tell when u are leaving, don’t allow circumstance to destroy your key goals (time & money), and know when to fold ‘em. Finally, arrive early.
International Negotiations: Core Principles (cont.)
© 2006 Prentice Hall 5-8
Stage One – Preparation
Negotiator must familiarize themselves with The entire context and background of their counterparts To the specific subjects to be negotiated Differences in culture, language, and environment
Managers must have an understanding of their own negotiating style
© 2006 Prentice Hall 5-9
Stage One - Preparation
Managers should find out as much as possible about
The kinds of demands that might be made The composition of the opposing team The relative authority that the members possess
Develop a profile of their counterparts They consider different variables during this process as well
© 2006 Prentice Hall 5-10
The Negotiation Process
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
© 2006 Prentice Hall 5-11
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
© 2006 Prentice Hall 5-12
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.
© 2006 Prentice Hall 5-13
Profile of an American NegotiatorKnows when to compromiseTakes a firm stand at the beginning of the negotiation
Refuses to make concessions beforehandKeeps his or her cards close to his or her chestAccepts 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
© 2006 Prentice Hall 5-14
Profile of an American NegotiatorRespects 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 issuesHas a good sense of timing and is consistentMakes 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
© 2006 Prentice Hall 5-15
Profile of an Indian NegotiatorLooks for and says the truthIs not afraid of speaking up and has no fearsExercises self-controlSeeks solutions that will please all the parties involved
Respects the other partyNeither uses violence nor insultsIs ready to change his or her mind and differ with himself or herself at the risk of being seen as inconsistent and unpredictable
© 2006 Prentice Hall 5-16
Profile of an Indian NegotiatorPuts things into perspective and switches easily from the small picture to the big one
Is humble and trusts the opponentIs able to withdraw, use silence, and learn from withinRelies on himself or herself, his or her own resources and strengths
Appeals to the other party’s spiritual identityIs tenacious, patient, and persistentLearns from the opponent and avoids the use of secrets
Goes beyond logical reasoning and trusts his or her instinct as well as faith
© 2006 Prentice Hall 5-17
Profile of an Arab Negotiator
Protects all the parties’ honor, self-respect, and dignity
Avoids direct confrontation between opponentsIs respected and trusted by allDoes not put the parties involved in a situation where they have to show weakness or admit defeat
Has the necessary prestige to be listened toIs 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
© 2006 Prentice Hall 5-18
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 emotionsCan use conference as mediating devicesKnows 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
© 2006 Prentice Hall 5-19
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
© 2006 Prentice Hall 5-20
Comparative Management in Focus: Negotiating with the ChineseThe Chinese think in terms of process
that has no culmination. Americans think in terms of concrete
solutions to specific problems. . . . The Chinese approach is impersonal,
patient and aloof . . .To Americans, Chinese leaders seem polite but aloof and condescending. To the Chinese, Americans appear
erratic and somewhat frivolous.
—Henry Kissinger,Newsweek, May, 2001
© 2006 Prentice Hall 5-21
Comparative Management in Focus: Negotiating with the ChineseBusiness 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
© 2006 Prentice Hall 5-22
Comparative Management in Focus: Negotiating with the ChineseTips 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
© 2006 Prentice Hall 5-23
Negotiations across CulturesAmericans - linear, fact driven and numbers oriented - impatient and the contract is their central focusAsians - avoid conflict - express opinions indirectly and maintain a face of surface harmony
when too direct can be seen as rudeFrench - enjoy emphasising distinctions and differences - blunt and logical approach to conflicting points of views that can seem
antagonistic to people from other culturesMiddle Easterners and Latinos - passionate expression of differences - save face and preserve dignityRussians a great deal of posturing and theatrics
© 2006 Prentice Hall 5-24
Guidelines on Negotiation acrossCulturesCheck whether they think like you Spend time on non-task sounding matters to establish personal relationships
Know the differences between your opponent’s social, political and economic systems and yours
Know how the above differences affect his thinking, authority and negotiating methods
Know your opponent’s legal, technical and financial systems
Know how the above will affect our choice of tactics
Know the effects of ethical standards (right, wrong, reasonable)
Know the importance of face saving
© 2006 Prentice Hall 5-25
Guidelines on Negotiation across Cultures
Recognize the role of status Understand the role of government in the affairs of your opponent
Identify the levels of approval Ask questions, but don’t put pressure Ensure there is a suitable communication system with Head Office
Identify the right leader for the situation Make sure when using an interpreter he is skilled in both languages and negotiation.
Have a dummy run with him. Get him to translate gestures etc
Avoid using jargon Confirm in writing and use words carefully to avoid ambiguity
Use team approach by using experts Recognize differences in perceiving contractual differences and agreements
Make concessions only after issues are discussed.
Negotiating internationally
Cultural background of the negotiating parties is different.
Thus, successful negotiations require:– Knowledge of the other party’s culture– Respect– Flexibility
Some examples of cultural shocks when negotiating from the Arab World, China etc.
The cross-cultural negotiation process
1 Status distinction
2 Impression formation accuracy
3 Interpersonal attraction
Non-task related interaction
4 Exchange of information
6 Concession making and agreement
5 Persuasion and bargaining strategy
7 Negotiation outcome
Task related interaction
Seller’s culturalbackground
Buyer’s culturalbackground
Cultural distance between
seller and buyer
Source: Adapted from Simintiras, A.C. and Thomas, A.H. (1998)and Simintiras, A.C. and Reynolds, N. (2001).
Negotiating tactics
•Extreme demands
•Tactic of slices
•“Best offer” tactic
•“Good guys, bad guys” tactics
Some suggestions for good negotiations
•Be on time!•Prepare for negotiations!•Study the opponents negotiation style!•Try to negotiate at your place or a neutral place!•Never let the other side know when your deadline is or that you are in a hurry!
•Think strategic!•Mix and mingle!•Be considerate and sensitive to other side’s culture and rituals!
•Be patient!
13-30
Comparison of Cultural Approaches to Negotiation
American Negotiator Indian Negotiator Arab Negotiator
Accepts compromise when deadlock occurs
Has firm initial and final stands
Sets up principles but lets subordinates do detail work
Has a maximum of options
Respects other parties
Is fully briefed
Keeps position hidden as long as possible
Relies on truth
Trusts instincts
Seeks compromises
Is ready to alter position at any point
Trusts opponent
Respects other parties
Learns from opponent
Avoids use of secrets
Protects “face” of other parties
Avoids confrontation
Uses a referent person to try to change others, e.g. “Do it for your father”
Seeks creative alternatives to satisfy all parties
Mediates through conferences
Can keep secrets
13-31
Swedish Negotiator Italian Negotiator
Gets straight to the point of the discussion
Avoids confrontation
Time conscious
Overly cautious
Informal
Flexible
Reacts slowly to new propositions
Quiet and thoughtful
Dramatic
Emotional
Able to read context well
Suspicious
Intrigues
Uses flattery
Concerned about creating a good impression
Indefinite
Comparison of Cultural Approaches to Negotiation
13-32
Differences Between American and Chinese Culture and Approach to the Negotiation Process
Contrast of Basic Cultural ValuesAmerican
Task and information orientedEgalitarianAnalyticalSequential, monochronicSeeks the complete truthIndividualistConfrontative, argumentative
Chinese
Relationship orientedHierarchical
HolisticCircular, polychronic
Seeks the harmonious way
CollectivistHaggling, bargaining
13-33Differences Between American and Chinese Culture and Approach to the Negotiation Process(cont.)Approach to the
Negotiation ProcessAmericanQuick meetingsInformalMake cold callsFull authorityDirectProposals firstAggressiveImpatientA “good deal”
ChineseLong courting
processFormal
Draw on intermediaries
Limited authority
IndirectExplanations
firstQuestioning
PatientA long-term relationship
nontask sounding
information exchange
means of persuasion
terms of agreement
Support for the Negotiation Process by Decision Support Systems
Reducing the amount of time that is necessary for feedback from headquarters in order to carry out effective negotiationsProviding a large amount of data and information on alternative scenarios that may result from the negotiation processIncreasing the likelihood that important data and information are available when needed
Nature of Conflict Between Members of Low and High Context Culture
Key Questions Low-Context Conflict High-Context Conflict
Why Analytic, linear logic; instrumental oriented; dichotomy between conflict and conflict parties
Synthetic, spiral logic; expressive oriented; integration of conflict and conflict parties
When Individualistic oriented; low collective normative expectations; violations of individual expectations create conflict potentials
Group oriented; high collective normative expectations; violations of collective expectations create conflict potentials
What Revealment; direct, confrontational attitude; action and solution oriented
Concealment; indirect, nonconfrontational attitude; “face” and relationship oriented
How Explicit communication codes; line-logic style: rational-factual rhetoric; open, direct strategies
Implicit communication codes; point-logic style: intuitive-effective rhetoric; ambiguous, indirect strategies
13-36
Decision-Making
The conscious process of moving toward objectives after considering various alternatives. It is concerned with making an appropriate choice among a multitude of possible scenarios.
13-37
Steps in the Decision-Making Process
1. DEFINE THE PROBLEM
2. ANALYZE THE PROBLEM
3. IDENTIFY DECISION CRITERIA AND THEIR IMPORTANCE
4. DEVELOP AND EVALUATE ALTERNATIVE SOLUTIONS
5. CHOOSE THE BEST SOLUTION
6. IMPLEMENT THE SOLUTION
7. EVALUATE THE OUTCOMES
Prentice Hall 2003 Chapter 5 38
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.
Prentice Hall 2003 39
Profile of a Successful American Negotiator
Knows when to compromiseTakes a firm stand at the beginning of the negotiation
Refuses to make concessions beforehandKeeps his or her cards close to his or her chestAccepts 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
Prentice Hall 2003 40
Profile of a Successful American Negotiator(contd.)
Respects the “opponents”States his or her position as clearly as possibleKnows when he or she wishes a negotiation to move on
Is fully briefed about the negotiated issuesHas a good sense of timing and is consistentMakes 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
Prentice Hall 2003 41
Profile of a Successful Indian NegotiatorLooks for and says the truthIs not afraid of speaking up and has no fearsExercises self-controlSeeks solutions that will please all the parties involved
Respects the other partyNeither uses violence nor insultsIs ready to change his or her mind and differ with himself or herself at the risk of being seen as inconsistent and unpredictable
Prentice Hall 2003 42
Profile of a Successful Indian Negotiator(contd.)
Puts things into perspective and switches easily from the small picture to the big one
Is humble and trusts the opponent Is able to withdraw, use silence, and learn from within Relies on himself or herself, his or her own resources and strengths
Appeals to the other party’s spiritual identity Is tenacious, patient, and persistent Learns from the opponent and avoids the use of secrets
Goes beyond logical reasoning and trusts his or her instinct as well as faith
Prentice Hall 2003 43
Profile of a Successful Arab Negotiator
Protects all the parties’ honor, self-respect, and dignity
Avoids direct confrontation between opponentsIs respected and trusted by allDoes not put the parties involved in a situation where they have to show weakness or admit defeat
Has the necessary prestige to be listened toIs 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
Prentice Hall 2003 44
Profile of a Successful Arab Negotiator(contd.)
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
Prentice Hall 2003 45
Profile of a Successful Swedish Negotiator
Very quiet and thoughtfulPunctual (concerned with time)Extremely politeStraightforward (they get straight down to business)
Eager to be productive and efficientHeavy-goingDown-to-earth and overcautiousRather flexibleAble to and quite good at holding emotions and feelings
Prentice Hall 2003 46
Profile of a Successful Swedish Negotiator(contd.)
Slow at reacting to new (unexpected) proposals
Informal and familiarConceitedPerfectionistAfraid of confrontationsVery private
Prentice Hall 2003 47
Profile of a Successful Italian Negotiator Has a sense of drama (acting is a main part of the culture)
Does not hide his or her emotions (which are partly sincere and partly feigned)
Reads facial expressions and gestures very well Has a feeling for history Does not trust anybody Is concerned about the bella figura, or the “good impression,” he or she can create among those who watch his or her behavior
Believes in the individual’s initiatives, not so much in teamwork
Is good at being obliging and simpatico at all times
Prentice Hall 2003 48
Profile of a Successful Italian Negotiator(contd.)
Is always on the qui vive, the “lookout” Never embraces definite opinions Is able to come up with new ways to immobilize and eventually destroy his or her opponents
Handles confrontation of power with subtlety and tact
Has a flair for intrigue Knows how to use flattery Can involve other negotiators in complex combinations
Prentice Hall 2003 49
Negotiation Support Systems
Negotiation Support Systems (NSS) can provide support for the negotiation process by:
Increasing the likelihood that an agreement is reached when a zone of agreement exists (solutions that both parties would accept)
Decreasing the direct and indirect costs of negotiations, such as costs caused by time delays (strikes, violence), and attorneys’ fees, among others
Maximizing the chances for optimal outcomes
Prentice Hall 2003 50
Stages in the Rational Decision-Making Process
Defining the problemGathering and analyzing relevant data
Considering alternative solutionsDeciding on the best solutionImplementing the decision
Thank You!
Question?