1. Negotiating Across Cultures
Understanding and Adjusting to Different Values
Dr. Melanie Billings-Yun

2. Cultural Differences in Negotiation
National/regional differences
Collectivism/Individualism
Power distance
High- vs. low-context speech
Ethical values
Institutional values
Business vs. government
Copyright © 2012 by Melanie Billings-Yun.

3. Collectivism/Individualism
Group Loyalty Self-Orientation
Copyright © 2012 by Melanie Billings-Yun.
Source: Geert Hofstede, Cultures and Organizations

4. Most non-Western cultures
Effect on Negotiation
Collectivistic
Prefer harmony
Compromising
Face (external)
Need to earn trust
Pass information to group for decision
Slow-paced, tentative
Individualistic
Aim to win
Polarizing
Pride (internal)
Give trust easily
Make decisions based on personal opinions
Fast-paced, decisive
Most non-Western cultures
Most Western cultures
Copyright © 2012 by Melanie Billings-Yun.

5. Power Distance Equal Rights Social Hierarchy
Copyright © 2012 by Melanie Billings-Yun.
Source: Geert Hofstede, Cultures and Organizations

6. Two-thirds of all countries Anglo-Saxon, Germanic and Nordic countries
Effect on Negotiation
High Power Distance
Status/rank valued
Power persuades
Form is essential
Resistance to change
Agreement at the top is normally sufficient
Low Power Distance
Expertise/talent valued
Reason persuades
Substance over form
Change accepted
Agreements must be sold to all stakeholders
Two-thirds of all countries
Anglo-Saxon, Germanic and Nordic countries
Copyright © 2012 by Melanie Billings-Yun.

7. High vs. Low Context Speech
Copyright © 2012 by Melanie Billings-Yun.

8. Effect on Negotiation High Context Indirect/ non-verbal Circular
Intuitive
Past-oriented
Avoid disagreement
Low Context
Direct / verbal
Linear
Rational
Future-oriented
Open disagreement
Asia, South America, Africa and Middle East
Europe, North America, Australia and NZ
Copyright © 2012 by Melanie Billings-Yun.

9. Culture and Ethical Values
Particularism
Relationships paramount
Emotional persuasion
Goal is relationship
A good partner honors changing circumstances
Loyalty to in-group
Universalism
Rules paramount
Logical persuasion
Goal is contract
A good partner honors his contract/word
Equal treatment for all
Asia, South America, Africa and Middle East
Western countries and Singapore
Copyright © 2012 by Melanie Billings-Yun.

10. Which Are You?
Question one:
You are riding in a car driven by a close friend. He hits a pedestrian. You know he was going at least 75 km/hr in an area of the city where the maximum is 50 km/hr. There are no other witnesses. His lawyer says that if you testify under oath that his speed was only 50 km, it may save your friend from serious consequences.
What right does your friend have to expect you to protect him?
As a close friend, he has a definite right to expect me to testify that he was only going 50 km/hr.
He has some right to expect me to testify that he was going 50.
He has no right to expect me to testify that he was going 50.
Copyright © 2012 by Melanie Billings-Yun.

11. Culture and Ethical Values
Respondents who feel he has no right
Copyright © 2012 by Melanie Billings-Yun.
Source: Fons Trompenaars and Charles Hampden-Turner, Riding the Waves of Culture

12. Negotiating with Chinese
Build trust slowly and incrementally
Upheavals of past century have undermined trust-based system
Focus on long-term mutual benefits and step-by-step growth
Build personal connections at all levels
China is a big country with overlapping authority centers
Favors received must be reciprocated
Respect for seniority
A junior speaking out in front of a senior is considered quite rude
Be precise on technical issues
Chinese pay close attention to details; errors destroy trust
Check for understanding and problems
Great concern for face means an unwillingness to speak out
Copyright © 2012 by Melanie Billings-Yun.

13. Negotiating with Thais
Build your credibility
Thais value seniority, luxury and a calm, professional demeanor
Be polite in a ‘Thai’ way
If Thais give you a compliment, deny it and compliment back
Speak gently and try to avoid direct confrontation
Prefer indirect communication style
Dislike negative speech therefore difficult to get honest feedback
Do not like detailed contracts; will not feel bound by them
Focus on information
Prefer detailed instructions to avoid later error
Back up your assertions with expert opinions
Build up consensus with informal informational meetings
Copyright © 2012 by Melanie Billings-Yun.

14. Negotiating with Americans
Be frank and honest
They will feel betrayed or lied to if you agree only to be polite
Are comfortable with open disagreement
Be direct
Not trained to pick up subtle signals
Be open
Americans like to “lay their cards on the table”
But are also quite competitive
Be informal and friendly, but firm
Don’t be offended by detailed contracts
Respect their time and space needs
Get to the point quickly
Don’t overwhelm their need for free time
Copyright © 2012 by Melanie Billings-Yun.

15. Businesses and Governments Have Different Interests
Profit
Expansion
Investment opportunities
Government
Providing public service
Maintaining public goals
Economic growth
Resource maintenance
Sovereignty
Covering program costs
Satisfying voter demands
Re-election
Historical reputation
Copyright © 2012 by Melanie Billings-Yun.

16. And Differing Constituencies
Business
Shareholders
Consumers
Employees
Government
Voters
Contributors/Supporters
Local business
Unions
Consumer groups
Environmentalists
Other lobbies
Other governments
Media
Copyright © 2012 by Melanie Billings-Yun.

17. Steps to Influencing Governments
Identify entire influence network
Build coalitions
Understand the power of media
Focus on your goals, not your politics
Power shifts over time
Build relationships with key players
Approach relationships as a 2-way street
But don’t confuse access with influence
Or that you’re the only influencer
Relationships will never win over voter opposition
Put in the time in advance of needing anything
Be patient!
Copyright © 2012 by Melanie Billings-Yun.

18. Dealing with Cultural Differences
Learn about the other culture
A local expert will start you on the right foot.
Be clear and precise in meanings
Don’t assume they understand and don’t leave concerns unspoken. Problems not dealt with now will come back to bite you later.
Get to know the other side carefully
Is this the right fit? Best to find out if you can work together before you have committed yourself
Cross-cultural negotiation shouldn’t be rushed
Don’t let the other side force you into making unwise agreements or include terms that you don’t understand
Copyright © 2012 by Melanie Billings-Yun.