Managing across Cultures MGMT 544: Managing across Cultures Professor Xiao-Ping Chen University of Washington Spring, 2005

Intercultural negotiation Agenda Basic concepts in business negotiation BATNA Positions vs. interests Bargaining zone Distributive vs. integrative bargaining Cross-cultural negotiation Alpha-beta simulation Summary

Basic concepts in business negotiation BATNA Positions vs. interests Bargaining zone Distributive vs. integrative bargaining

Simulation: the alpha-beta game

The Alpha-Beta Simulation Alpha team preparation (10 minutes) Beta team preparation Negotiation between alpha and beta (20 minutes)

Alpha - Beta What did Betans do that frustrated the negotiation? What inferences did you draw from their behavior? What about your negotiation style made you feel powerful? What did Alphans do that frustrated the negotiation? What inferences did you draw from their behavior? What about your negotiation style made you feel powerful?

Alpha-Beta How did you get an agreement despite cultural barriers? Why did you fail to get an agreement? What can you do when you are faced with an inter-cultural negotiation like this?

Principled negotiation Separate the people from the problem Focus on interests, not on positions Insist on objective criteria, and never yield to pressure Invent options for mutual gains Fisher and Ury, Getting to Yes

A synergistic approach Preparation cross-cultural training; define interests Relationship building separate the people from the problem adjust to their style and pace Information exchange exchange task and participant related info. clarify interests and customary approaches

A synergistic approach Inventing options mutual gain appropriate to both cultures Choice of best option insist on using criteria appropriate to both cultures Agreement translate and back-translate agreement if necessary, renegotiate

Cross-cultural communication and negotiation Cross-cultural differences in verbal negotiating behaviors Cross-cultural differences in nonverbal negotiating behaviors National styles of persuasion Negotiation styles from a cross-cultural perspective

Cross-cultural differences in verbal negotiating behaviors --------------------------------------------------------------------------------------- Average # of times tactic used in 30-min. sessions Behavior Japan USA Brazil ------------------------------------------------------------------------------------------------ Promise 7 8 3 Threat 4 4 2 Recommendation 7 4 5 Warning 2 1 1 Normative appeal 4 2 1 Commitment 15 13 8 Self-disclosure 34 36 39 Command 8 6 14 No’s 5.7 9.0 83.4 Profit level of first offers 61.5 57.3 75.2 Initial concessions 6.5 7.1 9.4 ---------------------------------------------------------------------------------------------

Cross-cultural differences in nonverbal negotiating behaviors --------------------------------------------------------------------------------------- Behavior Japan USA Brazil ------------------------------------------------------------------------------------------------ Silent Periods 5.5 3.5 0 (# of silent periods > 10 sec) Conversational overlaps 12.6 10.3 28.6 (# per 10 minutes) Facial gazing 1.3 3.3 5.2 (minutes of gazing/10 min.) Touching 0 0 4.7 (not including handshaking, Per 30 minutes)

National styles of persuasion -------------------------------------------------------------------------------------------- North America Arabs Russians ----------------------------------------------------------------------------------------------------- Primary negotiating Factual: appeals Affective: Axiomatic: Style and process made to logic made to emotions made to ideals Conflict: counterparts’ Objective facts Subjective feelings Asserted ideals Arguments countered with… Making concessions Small concessions Concessions made Few, if any, made early to throughout as a concessions establish a Part of the process made relationship --------------------------------------------------------------------------------------------------------

National styles of persuasion (cont.) ------------------------------------------------------------------------------------------- North America Arabs Russians ----------------------------------------------------------------------------------------------------- Response to concessions Usually Almost always Viewed as reciprocate reciprocate weakness and almost never reciprocated Relationship Short term Long term No continuing Initial position Moderate Extreme Extreme Deadline Very important Casual Ignored -------------------------------------------------------------------------------------------------------

Negotiation styles -------------------------------------------------------------------------------------------- Japanese North America Latin Americans ----------------------------------------------------------------------------------------------------- Emotional sensitivity Emotional sensitivity Emotional sensitivity Highly valued not highly valued valued Hiding emotions Dealing straightforwardly Emotionally passionate Subtle power plays Litigation Great power plays Conciliation not as much conciliation use of weakness Loyalty to employer Lack of commitment to Loyalty to employer Employer takes care employer; breaking ties (who is often family) Of employees by either if necessary Group decision making Team provides input to Decisions come down By consensus a decision maker from one individual --------------------------------------------------------------------------------------------------------

Negotiation styles (cont.) -------------------------------------------------------------------------------------------- Japanese North America Latin Americans ----------------------------------------------------------------------------------------------------- Face-saving crucial; Decisions based on Face-saving crucial Decisions often made to cost-benefit analysis; making to preserve honor, Save someone from face-saving not generally dignity Embarrassment Decision makers openly Decision makers influenced Inclusion of special interests Influenced by special by special interests, but of decision maker expected Interests often not considered ethical and condoned Not argumentative; Argumentative when right Argumentative when right Quiet when right or wrong, but impersonal or wrong; passionate Good of group is the Profit motive or good of What is good for group Ultimate aim individual ultimate aim is good for the individual --------------------------------------------------------------------------------------------------------