1. Negotiations Units 11 and 12 November 18 – December 1

2. Objectives Define the intercultural negotiation process
Understand the steps in the negotiation process
Learn how to avoid mistakes commonly made in intercultural negotiations
Become knowledgeable about intercultural negotiation models
Understand negotiation strategies, including conflict resolution
Understand various trade agreements that affect intercultural negotiations

3. 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.

4. “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.

5. 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

6. Steps in the Negotiation Process
Preparation and Site Selection
Team Selection
Relationship Building
Opening Talks
Discussions
Agreement

7. Preparation and Site Selection
Hiring a consultant in the country
Negotiating resource videos and written materials are helpful
Choosing a site—here or there can be important

8. Team Selection
how team is selected
background of players
expectations of other negotiators, their style, and the role they have played in past negotiations
environment free of tension

9. Relationship Building
Time required
Intermediaries or agents
Friendship versus business relationship

10. Opening Talks
Should they start promptly or should you engage in small talk?
Is an agenda proper or not?
Who should be present?

11. Discussions
Variety of behaviors and norms
Emotions
Concessions

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Agreement
Close negotiations properly
Delays may happen
Get tax and legal advice
A long wait until final approval may happen
Contracts are not always considered final
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13. Common Negotiation Mistakes
Making negative initial impression
Failing to listen and talking too much
Assuming understanding by the other culture
Failing to ask important questions
Showing discomfort with silence
Using unfamiliar and slang words
Interrupting the speaker
Failing to read the nonverbal cues
Failing to note key points
Making statements that are irritating or contradictory
Failing to prepare a list of questions for discussion
Being easily distracted
Failing to start with conditional offers
Failing to summarize and restate to ensure understanding
Hearing only what you want to hear
Failing to use first-class supporting materials
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14. Intercultural Negotiation Models
Problem-solving approach—considers national and organizational cultural differences
Competitive approach—individualistic and persuasive orientation
Compromising—seeks a middle ground a compromise
Forcing—makes the other party comply
Legalism—uses legal documentation to force the partner to comply

15. Four Stage Negotiation Model
Investigative
Presentation
Bargaining
Agreement

16. Negotiation Strategies
People act on basis of their own best interests
Truth in negotiations
Faith
Fact
Feeling
U.S. negotiators make fewer adjustments to their opponent
Include: preparation, tactics, conflict resolution and mediation, and observation, analysis, and evaluation

17. Trade Agreements
Validated license—specific exporter and specific products
Free trade zones or trade blocs—products enter without customs duties
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18. NAFTA Benefits
To eliminate barriers to trade and facilitate cross-border movement of goods and services
To promote fair competition
To increase investment opportunities
To provide adequate and effective protection for intellectual property
To develop effective procedures to handle disputes
To expand cooperation and increase benefits to the three countries
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19. The 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
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20. 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).
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21. China Reserved; known for hospitality and good manners
Give small, inexpensive presents
Do not like to be touched
Consider mutual relationships and trust very important
Technical competence of negotiators necessary
Prefer to use an intermediary
Rarely use lawyers
Ample room for compromise
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22. 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 accomplish-ments are keys to success with the French
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23. Germany Protocol is important and formal
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
Punctuality is expected
Contracts are firm guidelines to be followed exactly
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India
Bribery is common; having connections is important
Avoid using the 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
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25. Japan Business etiquette is very important
Meeting should be arranged by an intermediary who has a relationship with both parties
Negotiating parties usually consist of five people
Business card exchange is common
Subtle and complex verbal and nonverbal cues are used to avoid having someone lose face or lose the group harmony
Negotiating practices are based on the keiretsu system (a company group formed by the principal company and the partner companies that supply parts, equipment, financial support, or distribution of the final products); a keiretsu group is viewed as a long-term commitment
The Japanese use more silence and less eye contact than U.S.
Consider contracts as flexible instruments
Are suspicious of a negotiating team that includes lawyers

26. Latin America Relationships are important Bribery is common
Government is very involved in business
Negotiators chosen based on family connections, political influence, education, and gender (females should be in the background)
Latinos are very individualistic but group oriented concerning family and friends
Social competence is important; will ask about one's health and well-being of family
Most agreements are consummated over lunch
Numerous meetings is the norm; time is not seen as important
Avoid gestures
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27. Nigeria
Nigerians are skillful negotiators; they view negotiation as a competitive process
When selecting negotiators, consider age (equated with wisdom), gender, cultural background, and educational credentials
Developing a personal relationship is important
Time is not particularly important so negotiations may be lengthy
Use titles and last names
Use an intermediary to make initial introductions
Being well dressed is important; courtesy and consideration are also expected
Contracts considered flexible; they may be oral or written
A bribe may be needed to expedite business

28. Russian States
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 interpreted rigidly
Concerned with maximizing their profits
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29. “Negotiating on a global scale can present tremendous opportunities
“Negotiating on a global scale can present tremendous opportunities.” Corporations can expand their markets, increase their markets, their profits, and their productivity, and lower their costs by negotiating globally.
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30. © 2011 Pearson Education, Inc
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