Negotiating with International Customers, Partners and Regulators .Chapter 19 Modular: Afjal Hossain Assistant Professor, Department of Marketing PSTU McGraw-Hill/Irwin International Marketing, 13/e

The 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

The Pervasive 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

Differences 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

Differences in Language and Nonverbal Behaviors (continued) Japan Korea China (northern) Taiwan Russia Germany United Kingdom Spain France Brazil Mexico French-speaking Canada English-speaking Canada United States

Differences in Values Objectivity Competitiveness and equality Time “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 difference most often hurt Americans

Cultural Differences in Competitiveness and Equality Insert Exhibit 19.3

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

Implications for Managers and Negotiators Four steps for more efficient and effective international business negotiations: Selection of the appropriate negotiation team Management of preliminaries, including training, preparations, and manipulation of negotiation settings Management of the process of negotiations Appropriate follow-up procedures and practices

Negotiation 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

Negotiation Preliminaries Checklist for planning international negotiations: Assessment of the situation and the people Facts to confirm during the negotiation Agenda Best alternative to a negotiated agreement (BATNA) Concession strategies Team assignments

Negotiation Preliminaries (continued) Aspects of the negotiation setting that should be pre-manipulated: Location Physical arrangements Number of parties Number of participants Audiences (news media, competitors, fellow vendors, etc.) Communications channels Time limits

At the Negotiation Table Non-task sounding Task-related exchange of information Persuasion Concessions and agreement

Nontask 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

Task-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

Persuasion 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

Concessions 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

After 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

Conclusions 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