INTERNATIONAL NEGOTIATION F More complex than domestic negotiations F Differences in national cultures and differences in political, legal, and economic systems often separate potential business partners

EXHIBIT 3-1: STEPS IN THE INTERNATIONAL NEGOTIATION PROCESS

STEP 1: PREPARATION STEP 2: BUILDING THE RELATIONSHIP STEP 3: EXCHANGING INFORMATION/FIRST OFFER STEP 5: CONCESSIONS STEP 6: AGREEMENT STEP 4: PERSUASION

STEP 1: PREPARATION F Is the negotiation possible? F Know what your company wants F Know the other side F Send the proper team F Agenda F Prepare for a long negotiation F Environment F Strategy

DIFFERENCES IN CULTURES IN KEY NEGOTIATING PROCESSES F Communication styles—direct or indirect F Sensitivity to time—low or high F Forms of agreement—specific or general F Team organization—a team or one leader

STEP 2: BUILDING THE RELATIONSHIP F No focus on business F Partners get to know each other F Social and interpersonal matters F Duration and importance vary by culture

STEP 3: EXCHANGING INFORMATION AND THE FIRST OFFER F Task-related information is exchanged F First offer

STEP 4: PERSUASION F Heart of the negotiation process F Attempting to get other side to agree to a position F Numerous tactics can be used

VERBAL AND NONVERBAL NEGOTIATION TACTICS F Promise F Threat F Recommendation F Warning F Reward F Punishment F Normative appeal

OTHER NEGOTIATION TACTICS F Commitment F Self disclosure F Question F Command F No F Interrupting

EXHIBIT 3-4: FREQUENCIES OF VERBAL NEGOTIATION BEHAVIORS

“DIRTY TRICKS” IN INTERNATIONAL NEGOTIATIONS Dirty tricks are negotiation tactics that pressure opponents to accept unfair or undesirable agreements or concessions

PLOYS/DIRTY TRICKS - POSSIBLE RESPONSES F Deliberate deception - point out what is happening F Stalling - do not reveal when you plan to leave F Escalating authority - clarify decision making authority

F Good guy, bad buy routine - do not make any concessions F You are wealthy and we are poor - ignore the ploy F Old friends - keep a psychological distance

STEPS 5 AND 6: CONCESSIONS AND AGREEMENT F Final agreement: The signed contract, agreeable to all sides F Concession making requires that each side relax some of its demands

STYLES OF CONCESSION F Sequential approach - consider each issue as a separate point F Each side reciprocates concessions F Holistic approach - more common in Asia F Concession making begins after all issues are discussed

BASIC NEGOTIATION STRATEGIES F Competitive – The negotiation as a win-lose game F Problem solving – Search for possible win-win situations

COMPETITIVE OR PROBLEM SOLVING INTERNATIONAL NEGOTIATION F Cultural norms and values may predispose some negotiators to one approach F Most experts recommend a problem solving negotiation strategy

THE SUCCESSFUL INTERNATIONAL NEGOTIATOR: PERSONAL CHARACTERISTICS F Tolerance of ambiguous situations F Flexibility and creativity F Humor F Stamina F Empathy

F Curiosity F Bilingual

BASICS OF CROSS-CULTURAL COMMUNICATION

LANGUAGE AND CULTURE F The Whorf hypothesis

LOW CONTEXT F The words provide most of the meaning F Most northern European languages including German, English, and the Scandinavian languages are low context

HIGH CONTEXT F Communications have multiple meanings interpreted by reading the situation F Asian and Arabic languages are among the most high context in the world

PRACTICAL ISSUES IN CROSS- CULTURAL VERBAL COMMUNICATION

INTERPRETERS F Provide simultaneous translation of a foreign language F Requires greater linguistic skills than speaking a language or translating written documents F Insure the accuracy and common understanding of agreements

COMMUNICATION WITH NONNATIVE SPEAKERS F Use the most common words with most common meanings F Select words with few alternative meanings F Follow rules of grammar strictly F Speak with clear breaks between words

F Avoid “sports” words or words borrowed from literature F Avoid slang/words that represent pictures F Mimic the cultural flavor nonnative speaker’s language F Summarize F Test your communication success

NONVERBAL COMMUNICATION - COMMUNICATING WITHOUT WORDS

KINESICS F Communicating through body movements F Facial expressions F Body posture

PROXEMICS F The use space to communicate F The personal bubble of space - nine inches to over twenty inches F North Americans prefer more distance than from Latin and Arab cultures

TOUCH F A basic form of human interaction F In greeting - shake hands, embrace, or kiss F Latin European and Latin American cultures-more touching than Germanic, Anglo, or Scandinavian cultures

AVOIDING ATTRIBUTION ERRORS F Attribution - process by which we interpret the meaning and intent of spoken words or nonverbal exchanges F Attribution errors

CONCLUSIONS F Successful negotiators – Understand the negotiation steps – Build cross-cultural communication skills – Understand nonverbal communication – Avoid attribution errors