WEEK INTERCULTURAL NEGOTIATIONS MNGT 583 – Özge Can

International Manager Today  Handle foreign labor force  Negotiate with overseas vendors  Tent to unsatisfied clients  Deal with partners  Manage supplies  Lobby governments  Soothe relations with outside pressure groups  Convince employees with conflict interests

Conflict  Occurs when disagreements and frictions arise in the course of interaction because of opposing interests, cultural differences and more

Cultural Causes of Conflict  Language  Cultural norms (different fames of reference)  Decision making methods (centralized vs. decentralized decision making)  Propoensity to be involved in a conflict

Conflict Management Styles  Competition  Style of dealing with conflict in which one prefers to deal head on with the conflict  Avoidance  Style of conflict that entails avoiding as long as possible any disagreements

Conflict Management Styles  Accomodation  Conflict style that involved high concern with the interests of others, sometimes at the expense of one’s own interests  Compromise  Conflict style involving characteristically suggesting middle positions that involve both parties giving up something to reach an agreement

Diverse Cultural Norms of Conflict  Equity Norm  The belief that rewards should be closely tied to one’s performance  Equality Norm  A cultural preference for every group member to get a more or less equal share of the rewards, which functions to conflict at a minimum

Giving and Receiving Accounts  Accounts  Explanations of negative actions that in part are designed to soothe or mitigate the pain of such actions  How people respond when conflict appears in the form of anger, frustration or loss of face?

Account Giving Types  Concession:  The person acknowledges the conflict, takes responsibility for it, and offers regrets or perhaps even compensation  Justification:  Provides a less extreme form of mitigation: A person admits that action occurred, but claims that it wasn’t intentional or couldn’t be helped

Account Giving Types  Ideological Account:  A person owns up to their part in the conflict, but argues that it was legitimate under the circumstances  Refusal:  One either denies the existence of one’s negative actions or declines to provide the reasons for one’s actions

Work-Family Conflict  Cultural factors may impact how work-family overlad occurs and the problems it creates  How employees allocate their time in this equation?  American and Chinese perspectives

Negotiation  A forms of social interaction  The proces of communicating back and forth with another person or gorup witht he exlicit purpose of making a joint decision or reaching agreement about a dispute

Negotiation  Two or more parties are involved  Conflicting interests (mixed motives) typically exist  The goal of reaching an agreement  An initially undefined outcome  A means of communication between parties and movement of positions across time  A control and decision-making structure

Two Basic Approaches to Negotiations 1. Macro-strategic negotiation  How negotiation outcomes are affected by the relative bargaining power of the parties 2. Comparative negotiation  Primary emphasis is on what happens between negotiatiors during face-to-face interactions and how those interactions shape the outcomes that result (= cultural factors)

Culture & Negotiations  Cultural differences in negotiations with respect to:  Basis of power in negotiation  The extent to which information is viwed as important  The approach to sharing information with others  Emphasis placed on interests, rights and power in dispute resolution

Culture & Negotiations  Power distance will affect the centralization of the control and decision making structure and the importance of the status of the negotiatiors  Collectivism will affect the need for stable relations between negotiators  Uncertainty avoidance will affect the (in)tolerance of ambiguity and (dis)trust in opponents  Long-term orientation will affect th perseverance to achieve desired ends even at the cost of sacrifices

Culture & Negotiations  Individualism vs Collectivism  Because of their strong self-interests, individualists set high personal goals in negotiations  Because of their identification with in-groups, collecivist goals are more aligned with their in-group’s goals.  Whether the other negotiator is an in-gorup or out-group member => Important for collectivists  Emphasis on the behavior of the other person => individualists go on their own way regardless of the behavior of the other

Culture & Negotiations  Power Distance (Egalitarianism vs Hierarchy)  Conflict within high power distance cultures pose a threat to the social structure since the norm is not to challenge the demands of the high status members  Thus, conflict between members of different social ranks is less frequent in hierarchical yhan egalitarian cultures  Egalitarian cultures empower conflicting members to resolve the conflict by themselves  These cultures support direct, face-to-face negotiations and group decision making to resolve conflict

Culture & Negotiations  High vs Low Contest Cultures  The willingness of parties in conflict to confront and negotiate directly versus to avoid confrontation and conceal ill feelings, or to confront indirectly by involving third parties  Collectivist, high-context, high power distance cultures are more likely to use non-confrontational, third-party involved negotiations

Framework for International Negotiations:  Basic model used by negotiators  How the negotiation process might be conceived  What the most significant issues might be  Perspectives on individuals  How negotiators are chosen  Aspirations for individuals  Groups decision making

Framework for International Negotiations:  Dispositions affecting interactions  Time orientation, risk taking orientation  How trust is determined  Views about the interaction process  Importance of protocol  Complexiy of communication  Tactics for persuasion  Outcomes  Agreement preferences

Advices for Intercultural Negotiations  Allowing time – negotiations are complex and long. Particularly spend significant time and effort in preparation process.  Basic familiarity with customs and norms – cultural awareness  Bringing an international team or expertise – Indepth understanding of the other side; seek help if necessary expertise or knowledge is missing  Use interpreters of language skilss are weak  Getting training on international negotiation tactics

Four-Stage Process 1. stage: Nontask sounding  Often the longest stage (especially in non-Western cultures) where the purpose is to establish rapport or to get to know the other party 2.stage: Task-related echange of information  Both parties share their needs and preferences

Four-Stage Process 3.stage: Persuasion  Parties make attempts to modify the positions of others 4. stage: Agreement  The agreement is reached, but also different models are used for agreement (e.g., contract, handshake, etc.)

Example: Different Negotiation Syles American StylePrescriptions for Use in Other Countries 1.Just call me John1. Follow local customs about informality 2. Get to the point2. Getting to konw the other party 3. Lay your cards on the table3. Hold something back 4. don’t just sit there, speak up4. Silence can be a powerful tool 5. don’t take no for an answer5. Minds are often changed behind the scenes 6. One thing at a time6. Postpone concessions 7. A deal is a deal7. What we take as a commitment means different things to others

Question:  Is it useful to know about to other party’s cultural approach to negotiation?  Can this knowledge be harmful?