Prentice Hall 2003Chapter 51 Cross-Cultural Negotiation and Decision Making

Prentice Hall 2003Chapter 52 Important elements in the Negotiation Process  The amount and type of preparation for a negotiation  The relative emphasis on tasks versus interpersonal relationships  The reliance on general principles rather than specific issues  The number of people present and the extent of their influence

Prentice Hall 2003Chapter 53 What is Negotiation?  Negotiation describes the process of discussion between two or more parties aimed at reaching a mutually acceptable agreement

Prentice Hall 2003Chapter 54 Negotiation Defined “Negotiation is a discussion between two or more people with a goal of reaching agreement on issues separating the parties when neither side has the power--or the desire to use its power--to get its own way.” Byrne 1987

Prentice Hall 2003Chapter 55 An Expert Negotiator An expert negotiator is one who has committed every conceivable mistake in the area of negotiations.

Prentice Hall 2003Chapter 56 Common Negotiation Mistakes  Failure to negotiate  Inadequate preparation  90% of negotiation success comes from preparation  Accepting the first offer  Not leaving enough room for concessions  Making concessions too quickly  Failure to consider the other side’s needs  Negotiating too much – pyrrhic victories

Prentice Hall 2003Chapter 57 Common Negotiation Mistakes  Focusing too much on your weaknesses  Failure to consider intangibles  Forgetting your best alternative to a negotiated agreement (BATNA)  Failure to recognize other side's tactics – e.g. the good guy - bad guy, exploding offer, 1 st one who accepts, short fuse, “We don’t negotiate,” etc.  Failure to ask enough questions  Failure to use an integrative approach when appropriate

Prentice Hall 2003Chapter 58  Beginning with a distributive style or hard ball style  Inadequate face saving opportunities for the other side  Displaying too much interest: “You should not convey to an opponent, either by word or action, that you want whatever the opponent has.” John Ilich, professional negotiator Power Negotiating Common Negotiation Mistakes

Prentice Hall 2003Chapter 59  Failure to limit information: “Have more than thou showest, Speak less than thou knowest.” William Shakespeare, Common Negotiation Mistakes

Prentice Hall 2003Chapter 510  Responding with anger: “…whatever accounts for the person’s bluster, nothing can be gained by you reacting in anger… and if it’s a personality trait you’re dealing with, an emotional response on your part isn’t going to cure it…seeing you respond in anger will just convince him that the tactic is working.” Fuller, Manager’s Negotiating Answer Book Common Negotiation Mistakes

Prentice Hall 2003Chapter 511 A Matter of Perspective “A dog will look up to you, A cat will look down on you, But a pig, A pig will look you in the eye and see an equal.” Sir Winston Churchill Pigs don’t care don’t care about what you deserve and neither do some at the top of the food chain. You get what you negotiate – not what you deserve!

Prentice Hall 2003Chapter 512 The Negotiation Process Preparation Relationship building Exchange of task-related information Persuasion Concessions and agreement

Prentice Hall 2003Chapter 513 Stakeholders in Cross-Cultural Negotiations Home (HQ) Country Firm Negotiators Host country Home consumersAll citizens Special interest groups Host local employees Host consumers HQ employees Suppliers Home government Investors Alliance partners Contractors Host government Distributors Expatriate employees

Prentice Hall 2003Chapter 514 Variables in the Negotiation Process (Exhibit 5-3)  Basic conception of negotiation process: Is it a competitive process or a problem-solving approach?  Negotiator selection criteria: Is selection based on experience, status, expertise, personal attributes, or some other characteristic?  Significance of type of issues: Is it specific, such as price, or is the focus on relationships or the format of talks?  Concern with protocol: What is the importance of procedures, social behaviors, and so forth in the negotiation process?  Complexity of communicative context: What degree of reliance is placed on nonverbal cues to interpret information?  Nature of persuasive arguments: How do the parties attempt to influence each other? Do they rely on rational arguments, or accepted tradition, or on emotion?

Prentice Hall 2003Chapter 515 Variables in the Negotiation Process (contd.)  Role of individuals’ aspirations: Are motivations based on individual, company, or community goals?  Bases of trust: Is trust based on past experience, intuition, or rules?  Risk-taking propensity: How much do the parties try to avoid uncertainty in trading information or making a contract?  Value of time: What is each party’s attitude toward time? How fast should negotiations proceed, and what degree of flexibility is there?  Decision-making system: How does each team reach decisions – by individual determination, by majority opinion, or by group consensus?  Form of satisfactory agreement: Is agreement based on trust (perhaps just a handshake), the credibility of parties, commitment, or a legally binding contract?

Prentice Hall 2003Chapter 516 Negotiation Styles  For North Americans, negotiations are businesslike; their factual appeals are based on what they believe is objective information, presented with the assumption that it is understood by the other side on a logical basis.  Arabs use affective appeals based on emotions and subjective feelings.  Russians employ axiomatic appeals – that is, their appeals are based on the ideals generally accepted in their society.

Prentice Hall 2003Chapter 517 Profile of a Successful American Negotiator  Knows when to compromise  Takes a firm stand at the beginning of the negotiation  Refuses to make concessions beforehand  Keeps his or her cards close to his or her chest  Accepts compromises only when the negotiation is deadlocked  Sets up the general principles and delegates the detail work to associates  Keeps a maximum of options open before negotiation  Operates in good faith

Prentice Hall 2003Chapter 518 Profile of a Successful American Negotiator (contd.)  Respects the “opponents”  States his or her position as clearly as possible  Knows when he or she wishes a negotiation to move on  Is fully briefed about the negotiated issues  Has a good sense of timing and is consistent  Makes the other party reveal his or her position while keeping his or her own position hidden as long as possible  Lets the other negotiator come forward first and looks for the best deal

Prentice Hall 2003Chapter 519 Profile of a Successful Indian Negotiator  Looks for and says the truth  Is not afraid of speaking up and has no fears  Exercises self-control  Seeks solutions that will please all the parties involved  Respects the other party  Neither uses violence nor insults  Is ready to change his or her mind and differ with himself or herself at the risk of being seen as inconsistent and unpredictable

Prentice Hall 2003Chapter 520 Profile of a Successful Indian Negotiator (contd.)  Puts things into perspective and switches easily from the small picture to the big one  Is humble and trusts the opponent  Is able to withdraw, use silence, and learn from within  Relies on himself or herself, his or her own resources and strengths  Appeals to the other party’s spiritual identity  Is tenacious, patient, and persistent  Learns from the opponent and avoids the use of secrets  Goes beyond logical reasoning and trusts his or her instinct as well as faith