Chapter 10: Intercultural Negotiation Process Intercultural Business Communication, 3rd ed., Chaney & Martin

Topics Characteristics of Effective Negotiators Cross-cultural Negotiation Considerations Variables Affecting Intercultural Negotiations Defining the Process Observing, Analyzing, and Evaluating Intercultural Negotiation Models Perspective Conflicts Conflict Resolution Stereotypes that Affect Intercultural Negotiations

Intercultural Business Communication, 3rd ed., Chaney & Martin Definition Intercultural negotiation involves discussions of common and conflicting interests between persons of different cultural backgrounds who work to reach an agreement of mutual benefit. Intercultural Business Communication, 3rd ed., Chaney & Martin

Dr. Chester L. Karrass, Leader in negotiating “In business, you don't get what you deserve, you get what you negotiate.” Why take “no” for an answer? Successful people don't. They get what they want by negotiating better deals for both parties. Dr. Chester L. Karrass, Leader in negotiating

Characteristics of Effective Negotiators Observant Patient Adaptable Good listeners Use humor with discretion Mentally sharp

Think before they speak Speak in an agreeable, civil manner Knowledgeable about history, customs, values, and beliefs of both cultures Praise what is praiseworthy; refrain from criticism Keep their promises and negotiate in good faith

Cross-Cultural Negotiation Considerations The Players and the Situation how team was selected background of players expectations of other negotiators, their style, and the role they played in past negotiations environment free of tension Fisher, International Negotiation

Fisher, International Negotiation Decision-Making Styles U.S. attitude on making export decisions is “Anything is permitted unless restricted by the state." In many cultures the attitude is “Nothing is permitted unless it is initiated by the state." National Character Personality patterns exist for groups that have a common culture. Differences in values, such as punctuality, could hamper negotiations to a great degree, no matter how attractive the terms. Fisher, International Negotiation

Fisher, International Negotiation Cultural Noise - anything that would distract or interfere with the message being communicated includes nonverbal messages, such as body language and space giving an inappropriate gift Interpreters and Translators Positive aspect - have more time to think about your next statement; more inclined to state message succinctly. Negative aspect - translators may not convey the intended message because of the nuances of the languages involved. Fisher, International Negotiation

Variables Affecting Intercultural Negotiation The Framework for Global Business Negotiations divides 4 components into 12 variables that can influence the success or failure of global negotiations: 1. Policy Basic concept of negotiation Selection of negotiators Role of individual aspirations Concern with protocol Significance of type of issue Moran & Stripp, Dynamics of Successful International Business Negotiation

Complexity of language Nature of persuasive argument Value of time 2. Interaction Complexity of language Nature of persuasive argument Value of time 3. Deliberation Bases of trust Risk-taking propensity Internal decision-making systems 4. Outcome Form of satisfactory agreement Moran & Stripp, Dynamics of Successful International Business Negotiations

Protocol Classifications Tribal - involves the family unit, close relationships, and a connection to the past. Collective - an extension of tribal and includes larger groups such as a town, nation, or race. Pluralist - many different groups and combinations of groups; individuals are free to join those they wish. Leaptrott, Rules of the Game

Intercultural Business Communication, 3rd ed., Chaney & Martin Defining the Process Involves choosing where the meeting will be held. Turf matters. When on your own territory, you have more power, but you have more responsibility for seeing to the opponent's comforts. When held at a neutral location, each side is responsible for its own comforts. Intercultural Business Communication, 3rd ed., Chaney & Martin

Brett, Negotiating Globally Observing, analyzing, and evaluating - completed for each of these 8 steps in negotiation: Physical location Agenda/issues Preliminary statements and limitations Solution of some issues and identification of issues of no agreement Preliminaries to final negotiations Final negotiations Contract or confirmation of agreement Implementation of the agreement Brett, Negotiating Globally

Factors to be Considered When Negotiating Interculturally Negotiation is . . . a situation mutual understanding communication need satisfaction compromise or settlement a deal a bargaining process anticipation achieving consensus practicing empathy searching for alternatives conflict management Casse & Deol, Managing Intercultural Negotiations

Casse & Deol, Managing Intercultural Negotiations Negotiation is . . . winning a means of getting what you want from others gaining the favor of people from whom you want things managing power and information time and opportunity management more of an art than a science selling the least troublesome method of settling disputes Casse & Deol, Managing Intercultural Negotiations

Intercultural Negotiation Models Socio-psychological Model Principles Model Directional Model Interaction Model Package Deal Model Ghauri, Negotiating International Package Deals

Socio-Psychological Model 5 parts: Goals parties want to reach Communication and actions leading to the negotiations Expected outcomes Preexisting relationship and cultural factors of both parties Conditions under which negotiations are conducted (Assumes a certain amount of ethnocentrism.)

Principles Model (Comparative Model) 2 assumptions: 4 parts: Negotiators are problem solvers Negotiators share a goal they wish to reach efficiently and amicably People are separate from problems Focus is on interests The options have mutual gains The criteria used to judge the gains is objective (Assumes negotiators have knowledge of each other's behaviors.)

Directional Model Based on prediction that tough or soft moves will be reciprocated by the other party; used when foreign buyers have few alternatives and U.S.-made products sell themselves.

Interaction Model 4 aspects: Environment Atmosphere Parties Process political, social, and cultural Atmosphere distance, power, variables, and expectations Parties their corporate and national cultures Process history and preconceived ideas of negotiators

Package Deal Model Background factors (objectives, environment, and market position) Process (time, issues, contacts) Atmosphere (cooperation/conflict) Outcome (allows for win-win, lose-lose or continued negotiations)

Perspective Conflicts Substantive differences include use and control of resources. Relationship-based differences center on long-term friendship or partnership.

Cognitive dissonance (logic and reasoning differences due to cultural differences) occurs because perspectives are based on one's own cultural training and way of reasoning. Interpreters/translators may unintentionally translate communications inaccurately. Subjective meanings of words may cause conflict. (“Fair play” is a culturally bound phrase used in U.S. business.)

Intercultural Business Communication, 3rd ed., Chaney & Martin Conflict Resolution To avoid conflict, prepare, plan, and respect the host culture. Know and respect customs of other negotiator's culture. Be careful of gestures and respect taboos of the other culture. Avoid using jargon, idioms, or slang. Intercultural Business Communication, 3rd ed., Chaney & Martin

Intercultural Business Communication, 3rd ed., Chaney & Martin Use photographs, drawings, etc. to clarify explanations. If you still have conflicts, turn to a 3rd party (a mediator). Steps involved with a mediator: Stabilize the setting. Give each side a chance to speak. Assist in solving disagreements. Clarify the agreement and make sure both sides understand the terms. Intercultural Business Communication, 3rd ed., Chaney & Martin

Stereotypes that Affect Intercultural Negotiations U.S. Persons’ Views Foreigners’ Views of U.S. Persons Informal, friendly, casual Undisciplined, too personal, familiar Egalitarian Insensitive to status Direct, aggressive Blunt, rude, oppressive Efficient Obsessed with time, opportunistic Goal/achievement oriented Promise more than they deliver Profit oriented Materialistic Resourceful, ingenious Work-oriented; deals more important than people Individualistic, progressive Self-absorbed, equating the “new” with “best” Dynamic, find identity in work Driven Enthusiastic; prefer hard-sell Deceptive, fearsome Open Weak, untrustworthy

Culture-Specific Negotiation Information Element U.S. Japanese Mexicans Group composition Marketing Function Friendship oriented oriented oriented Number involved 2-3 4-7 2-3 Space orientation Confront- Display Close, ational; harmonious friendly competitive relationship Establishing rapport Short period; Longer period; Longer period; direct to task until harmony discuss family Exchange of information Documented; Extensive; Less emphasis step-by-step; concentrate on on technology, multimedia receiving side more on relationship Use of language Open/direct; Indirect; Respectful; sense of appreciative; graciousness urgency cooperative Elashmawi & Harris, Multicultural Management 2000

Elashmawi & Harris, Multicultural Management 2000 Element U.S. Japanese Mexicans Persuasion tools Time pressure; Maintain Emphasis on loss of saving/ relationship family and social making money references; concerns, goodwill intergroup measured in connections generations First offer Fair +/-5 to 10% +/-10 to 20% Fair Second offer Add to package; -5% Add an incentive sweeten the deal Final offer Total package No further Total package package concessions Decision-making Top mgmt. Collective Senior manager team and secretary Decision maker Top mgmt. Middle line Senior manager team with team consensus Risk taking Calculated; Low group Personally personal responsibility responsible responsibility Elashmawi & Harris, Multicultural Management 2000

U.S. Negotiator’s Global Report Card Competency Grade Preparation B- Synergistic approach (win-win) D Cultural I.Q. D Adapting the negotiating process to the host country environment D Patience D Listening D Linguistic abilities F Using language that is simple and accessible C High aspirations B+ Personal integrity A- Building solid relationships D Intercultural Business Communication, 3rd ed., Chaney & Martin

Statements Characteristic of U.S. Negotiating Style "I can handle this myself" (to express individualism). "Please call me Steve" (to make people feel relaxed by being informal). "Pardon my French" (to excuse profanity). "Let's get to the point" (to speed up decisions). "Speak up; what do you think?" (to avoid silence). "A deal is a deal" (to indicate an expectation that the agreement will be honored).

Canada People appear to be friendly but are reserved and formal. Observe strict rules of etiquette. Are individualistic. Speak a variation of British English – also French in Québec. Negotiation practices similar to the U.S.

China Reserved; known for hospitality and good manners. Give small, inexpensive presents. Consider mutual relationships and trust very important. Technical competence of negotiators necessary. Prefer to use an intermediary. Rarely use lawyers. Ample room for compromise.

France Have a sense of pride sometimes interpreted as supremacy. French logic ("Cartesian" logic) proceeds from what is known in a point-by-point fashion until agreement is reached. Protocol, manners, status, education, family, and individual accomplishments are keys to success with the French.

Germany Protocol is important and formal; punctuality is expected. Dress is conservative; correct posture and manners are required. Use titles when addressing members of the negotiating team; use please and thank you often. Prefer to keep a distance between themselves and the other team negotiators. Have technical people as part of the negotiation team as Germans are detail oriented. Contracts are firm guidelines to be followed exactly.

India Bribery is common; having connections is important. Avoid using left hand in greetings and eating. Request permission before smoking, entering, or sitting. Building relationships is important; an introduction is necessary; intermediaries are common. Use titles to convey respect. Knowledge of local affairs is important. Negotiation process can be long.

Japan Business etiquette is very important; business card exchange is common. Intermediary arranges meetings. Negotiating parties usually consist of five people. The Japanese use more silence and less eye contact than U.S. persons. Consider contracts as flexible instruments. Negotiating practices based on the keiretsu system – viewed as a long-term commitment. Are suspicious of lawyers on the team.

Latin America Relationships are important; negotiators chosen based on family connections, political influence, education, and gender. Bribery is common. Time is not seen as important; numerous meetings is the norm with most agreements consummated over lunch. Avoid gestures. Social skills are important; will ask about one’s health and well-being of family members.

Nigeria Nigerians are skillful negotiators; they view negotiation as a competitive process. Age, gender, cultural background, and education are considered when selecting negotiators. Developing a personal relationship is important. Time is not particularly important so negotiations may be lengthy. Intermediaries are used to make initial introductions. Contracts (oral or written) are flexible. A bribe may be needed to extradite business.

Russian Federation In the past, negotiation sessions have been long, with Russians controlling the agenda. Are concerned with age, rank, and protocol. Tend to be formal. Friendships are not crucial to business. Contracts are interpreted rigidly. Concerned with maximizing their profits.

True or False? In intercultural negotiation the meeting location is associated with power and responsibilities. Russian negotiating strategies include a need to control. The Socio-Psychological Negotiation Model assumes no use of power or negative tactics. The Principles Negotiation Model assumes a certain amount of ethnocentrism.

The Interaction Negotiation Model involves environment, atmosphere, parties, and process. Social class is unimportant in negotiator selection. Gender is important when negotiating in the Latin American countries. The Japanese prefer negotiating teams, rather than a single negotiator. Bribery is a common part of conducting business in India. Protocol is very important when dealing with the French.