Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 15.1 CHAPTER 15 NEGOTIATING INTERNATIONALLY Concept 15.1: Approaches to negotiating in an international context Understanding Cross-cultural Management

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 15.2 The ‘western’ approach: Negotiating is a problem-solving exercise Focus is on what happens between parties Two types of negotiation strategy predominate: –the distributive (win-lose) –the integrative (win-win) strategy Implicit is the assumption that the participants in negotiations share similar approaches, attitudes and principles The nature of negotiation

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 15.3 The nature of negotiation (Continued) In an international context the assumptions and expectations of the west may not be shared Even if behaviour displayed by both parties is similar in nature, it may reflect different motives The very act of negotiating can be a concept which is fundamentally alien to other cultures, e.g. for Japanese negotiators. Meetings are to establish relationship_ceremonial. The real negotiation is behind the scene

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 15.4 Table 15.1 Facets of negotiation Source: Usunier, 2003 (adapted) Key facets of negotiation Iron-cast deal or less explicit agreement Outcome orientations Work towards specific, concrete goals, or more towards principles, concepts Styles of negotiation Logical, finite process or ongoing dialogue Strategic time-frame Trust or mistrust as basisNegotiation strategies Underlying concept of negotiation Negotiation party’s degree of delegated decision-making, and (lack of) uncertainty. Willingness to take risks Formal power, (informal) influence Power orientation Harmony, self-interestInterpersonal orientation Behavioural predispositions of the parties. Japan high uncertainty but not risk adverse KEY CONCEPTSKEY ELEMENTSNEGOTIATION FACET Negotiation process

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 15.5 Cross-cultural negotiation in practice: the USA and China (1) The USA sees the deal as the main objective of any negotiation Very focused bottom-line approach For the Chinese, a negotiation is just part of developing a life-long relationship Need to establish a good rapport before talking of a deal Interpersonal orientation: fundamental opposition Americans might feel that the wish by their Chinese counterparts to establish friendship is one way to get a better deal later on in the negotiation(s)

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 15.6 Cross-cultural negotiation in practice: the USA and China (2) Clear hierarchy in US team Deference shown, even if the language used is informal The boss will probably be given much leeway – already discussed with HQ Risk-taking seen as inherent to getting the best deal possible Often difficult to know who the Chinese team leader is The consensus-building process occurs also within the Chinese team (parties both from within as well as outside company) Will resist pressure from the American side until all Chinese parties satisfied. Any risk-taking must be carefully orchestrated Power orientation

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 15.7 Cross-cultural negotiation in practice: the USA and China (3) US concerned with specifics, the information which allows them to pursue their way of negotiating Need to gain a clearer idea of the other party’s concerns and interests to establish or modify their goals Ready to give a lot of information if this part of an exchange Gaining trust + confidence more important for Chinese than facts and figures May not have information asked for (possible face loss) Collection of information is becoming more systematic Younger managers more in tune with western behaviour norms Style of negotiation

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 15.8 Cross-cultural negotiation in practice: the USA and China (4) For US negotiators, a detailed contract is the ideal conclusion to a negotiation: signed, sealed and delivered In the final phase detailed points are hammered out: –Implementation –Legal aspects Chinese tend to avoid legalistic details Prefer short contracts which show commitment to project A contract is only a formal moment in development of a relationship Further negotiations will happen using the goodwill and friendship established Outcome orientations

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 15.9 Cross-cultural negotiation in practice: the USA and China (5) The Chinese and American negotiators therefore face innumerable potential difficulties The opposition in expectations and attitudes are clear, the expected frustrations and irritations evident How can both sides resolve this dilemma? One possible way to deal with apparently conflicting cultural values is to use Weiss’s strategic framework

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide Background to Weiss’ framework When in Rome, do as the Romans do? To what extent should a negotiator adapt to the cultural values of the other party. Are international negotiators expected to adapt totally? This is a simplistic approach –It does not account for the dominant role of one or the other partner –Is it ever possible to ‘do as’ the Romans? –It wrongly assumes that a ‘Roman’ will always act as a Roman with a non-Roman in Rome!

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide Background to Weiss’ framework (Continued) Stephen Weiss (1994) considers a ‘one-size-fits- all’ approach to be inappropriate Weiss proposes instead a range of strategies which are –culturally responsive –reflect the skills of the individuals involved –take account of the circumstances in which they are working

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide Background to Weiss’ framework (Continued) One basic aim in any communicative event: to make sense of the interaction In negotiations this means that the least both parties must be able to do is: –recognize each other’s ideas and the types of behaviour evident –detect common and differing standpoints as well as changes made to these during the negotiating process –ensure that communication is maintained as the negotiation proceeds

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide Background to Weiss’ framework (Continued) However, the knowledge and skills required to perform these crucial acts is often limited What is needed, Weiss says, is a strategic framework which allows the parties to –make sense of the negotiating process as best as they can, –use their own attributes –(where necessary) use the skills of others

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide Table 15.2 Strategic frame for negotiating Weiss (1994a, Figure 2, p. 54) ‘Culturally responsive strategies and their feasibility’ Source: Source text here Weiss’ Strategic Framework Counterpart’s familiarity with Negotiator’s culture High Low Induce counterpart to follow one’s own script Improvise an approach (Effect symphony) Adapt to the counterpart’s script (Co-ordinate adjustment of both parties) Employ agent or advisor (Involve mediator) Embrace the counterpart’s script Low High Brackets indicate a joint strategy, which requires deliberate consultation with counterpart. At each level of familiarity, a negotiator can consider feasible strategies designated at that level and any lower level Negotiator’s familiarity with Counterpart’s culture

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide Which strategies to use? Which strategy is: the most feasible, i.e. the extent to which it will fit with the counterpart’s possible approach the most appropriate in terms of the relationship and circumstances surrounding the interaction the most acceptable in terms of the manager’s own values

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide Which strategies to use? (Continued) Choosing the strategy therefore involves: considerable reflection on one’s own culture as well as careful investigation into the counterpart’s culture both parties considering their relationship as individuals as well as members of different cultures

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide The five steps The five steps which Weiss proposes for selecting a negotiating strategy take account of these complexities 1. Reflect on your culture's negotiation script 2. Learn the negotiation script of the counterpart's culture 3. Consider the relationship and circumstances 4. Predict and influence the counterpart's approach 5. Choose your strategy

Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide Conclusion One key facet of negotiating: what do participants consider important in the negotiating process? Is it basically seen as a question of problem- solving? Is it seen as just one aspect of beginning or continuing a harmonious, mutually beneficial relationship?