1. Negotiating with International Customers, Partners and Regulators
.Chapter 19
Modular:
Afjal Hossain
Assistant Professor, Department of Marketing
PSTU
McGraw-Hill/Irwin International Marketing, 13/e

2. The Dangers of Stereotypes
Negotiations are conducted between people, not national stereotypes
Cultural factors often make huge differences
Negotiation behaviors are different across regions, genders, and type of industry
Age and experience also make important differences
Consider the culture of customers and business partners, but treat them as individuals

3. The Pervasive Impact of Culture on Negotiation Behavior
Regional generalizations very often are not correct
Cultural differences cause four kinds of problems in international business negotiations:
Language
Nonverbal behaviors
Values
Thinking and decision-making processes

4. Differences in Language and Nonverbal Behaviors
Americans are near the bottom of the languages skills list
Americans don’t like side conversations by foreigners in their native language
The variation across cultures is greater when comparing linguistic aspects of language and nonverbal behaviors than when the verbal content of negotiations is considered

5. Differences in Language and Nonverbal Behaviors (continued)
Japan
Korea
China (northern)
Taiwan
Russia
Germany
United Kingdom
Spain
France
Brazil
Mexico
French-speaking Canada
English-speaking Canada
United States

6. Differences in Values Objectivity Competitiveness and equality Time
“separating people from the problem”
Competitiveness and equality
Japanese appear to be the best negotiators with the highest profits
Japanese appear to be more equitable with buyers
Time
The passage of time is viewed differently across cultures
These difference most often hurt Americans

7. Cultural Differences in Competitiveness and Equality
Insert Exhibit 19.3

8. Differences in Thinking and Decision-Making Processes
Western approach: sequential
Eastern approach: holistic
Americans: business negotiation is a problem-solving activity
Japanese: a business negotiation is a time to develop a business relationship with the goal of long-term mutual benefit

9. Implications for Managers and Negotiators
Four steps for more efficient and effective international business negotiations:
Selection of the appropriate negotiation team
Management of preliminaries, including training, preparations, and manipulation of negotiation settings
Management of the process of negotiations
Appropriate follow-up procedures and practices

10. Negotiation Teams Willingness to use team assistance Listening skills
Influence at headquarters (senior executive)
Gender should not be used as a selection criterion for international negotiation teams

11. Negotiation Preliminaries
Checklist for planning international negotiations:
Assessment of the situation and the people
Facts to confirm during the negotiation
Agenda
Best alternative to a negotiated agreement (BATNA)
Concession strategies
Team assignments

12. Negotiation Preliminaries (continued)
Aspects of the negotiation setting that should be pre-manipulated:
Location
Physical arrangements
Number of parties
Number of participants
Audiences (news media, competitors, fellow vendors, etc.)
Communications channels
Time limits

13. At the Negotiation Table
Non-task sounding
Task-related exchange of information
Persuasion
Concessions and agreement

14. Nontask Sounding Learn the mood of the other side
Learn about the client’s background and interest for cues about appropriate communication styles
Judgments about the “kind” of person in the negotiation

15. Task-Related Information Exchange
Let the foreign counterparts bring up business
Expect a large number of questions but little feedback
Allow periods of silence
Use multiple communication channels
Understand the lack of, or the bluntness of negative feedback
Meet aggressive first offers with questions, not anger

16. Persuasion Task-related information exchange versus persuasion
Avoid threats, warnings, and other aggressive negotiation tactics
Avoid emotional outbursts
Ask more questions
Use third parties and information channels of communication

17. Concessions and Agreement
Write down concession-making strategies
Understand differences in decision-making styles
In many cultures, no concessions are made until the end of the negotiations

18. After Negotiations
In most countries other than America, legal systems are not depended upon to settle disputes
Japan – contacts primarily contain comments on principles of the relationship
China – contracts are more a description of what business partners view their respective responsibilities to be
Many foreign CEOs expect a formal contract signing ceremony
Follow-up communications are very important

19. Conclusions Experience levels are going up worldwide
Culture still counts
Differences between countries and cultures, no matter how difficult, can be worked out when people talk to each other in face-to-face setting