1. PowerPoint slides by Susan A. Peterson, Scottsdale Community College PowerPoint slides by Susan A. Peterson, Scottsdale Community College Chapter 12: Communication and Negotiation Chapter 12: Communication and Negotiation m a n a g e m e n t 2e H i t t / B l a c k / P o r t e r

2. © 2008 Prentice-Hall Business Publishing 2 Learning Objectives After studying this chapter, you should be able to: Explain why communication is vital for effective management Describe the basic process of communication Discuss how to choose the best mode and the appropriate media richness for effective communication Analyze the impact of the organizational context on communication After studying this chapter, you should be able to: Explain why communication is vital for effective management Describe the basic process of communication Discuss how to choose the best mode and the appropriate media richness for effective communication Analyze the impact of the organizational context on communication

3. © 2008 Prentice-Hall Business Publishing 3 Learning Objectives Identify key barriers to effective communication Explain various approaches to overcoming communication barriers, including intercultural barriers Describe the basic process of negotiation Identify key barriers to effective communication Explain various approaches to overcoming communication barriers, including intercultural barriers Describe the basic process of negotiation

4. © 2008 Prentice-Hall Business Publishing 4 Communication: the process of transferring information, meaning, and understanding from sender to receiver Encoding Medium Decoding Noise Communication: the process of transferring information, meaning, and understanding from sender to receiver Encoding Medium Decoding Noise Basic Model of Communication

5. © 2008 Prentice-Hall Business Publishing 5 Sender Encodes message chooses a medium (channel) Sends the message Sender Encodes message chooses a medium (channel) Sends the message Receiver Receives message Decodes message May send feedback for clarification Receiver Receives message Decodes message May send feedback for clarification Noise: Can interfere at any point Noise: Can interfere at any point Adapted from Exhibit 12.1 Basic Model of Communication

6. © 2008 Prentice-Hall Business Publishing 6 Modes of Communication Adapted from Exhibit 12.2 VERBAL MODE (Language used to convey meaning) NONVERBAL MODE ORALWRITTENNONVERBAL ExamplesConversation Speeches Telephone calls Videoconferences Letters Memos Reports E-mail Fax Dress Speech intonation Gestures Facial expressions AdvantagesVivid Stimulating Commands attention Difficult to ignore Flexible Adaptive Decreased misinterpretation Precise Effectiveness of communication increases with congruence to oral presentation Emphasize meaning DisadvantagesTransitory Subject to misinterpretation Precision translation loss Inflexible Easier to ignore Meanings of nonverbal communication not universal

7. © 2008 Prentice-Hall Business Publishing 7 Media of Communication Different media have different characteristics (media richness) -Personal-impersonal nature -Speed in sending and receiving -Availability of multiple cues -Opportunity to receive immediate and continuing feedback from the receiver Message should be matched to best medium

8. © 2008 Prentice-Hall Business Publishing 8 Factors in Media Richness Rich Media Personal Multiple cues to aid in decoding Immediate feedback Rich Media Personal Multiple cues to aid in decoding Immediate feedback Lean Media Impersonal Few cues to aid in decoding Delayed feedback Lean Media Impersonal Few cues to aid in decoding Delayed feedback Examples: RichLean Face to faceTelephoneE-mails, memos Adapted from Exhibit 12.3

9. © 2008 Prentice-Hall Business Publishing 9 Organizational characteristics that affect communication: Composed of individuals and groups Oriented toward goals Differentiated functions Intended coordination Continuity through time Organizational characteristics that affect communication: Composed of individuals and groups Oriented toward goals Differentiated functions Intended coordination Continuity through time Organizational Context of Communication

10. © 2008 Prentice-Hall Business Publishing 10 Directions of Communication Supervisor Subordinate Lateral communication DOWNWARD COMMUNICATION Goals, objectives, directions, decisions, feedback LATERAL COMMUNICATION Information, (formal or informal) for joint problem solving UPWARD COMMUNICATION Information, questions, suggestions, problems, requests for clarification Adapted from Exhibit 12.4

11. © 2008 Prentice-Hall Business Publishing 11 Channels of Communication FORMAL CHANNELS Specify individuals responsible for tasks Specify individuals responsible for communicating information above and below them Indicate persons to whom work-related messages should be sent FORMAL CHANNELS Specify individuals responsible for tasks Specify individuals responsible for communicating information above and below them Indicate persons to whom work-related messages should be sent INFORMAL CHANNELS Tend to operate laterally more than vertically Move information quite rapidly Carry both work- related and nonwork information INFORMAL CHANNELS Tend to operate laterally more than vertically Move information quite rapidly Carry both work- related and nonwork information

12. © 2008 Prentice-Hall Business Publishing 12 Channels of Communication CEO Vice President of Marketing Manager Toy Manufacturing Manager Toy Manufacturing Advertising Manager Promotions Manager Supervisor Board Games Testing Supervisor Board Games Testing Supervisor Electronic Games Testing Supervisor Electronic Games Testing FORMAL channels of communication INFORMAL channels of communication Adapted from Exhibit 12.5

13. © 2008 Prentice-Hall Business Publishing 13 Patterns of Organizational Communication INFORMAL CHANNELS Develop through interpersonal activities of organization members Not specified by the organization May be short-lived or long- lasting Are more often lateral than vertical Information flow can be very fast Used for both work-related and nonwork information Adapted from Exhibit 12.6 FORMAL CHANNELS Authorized, planned, and regulated by the organization Reflect the organization’s formal structure Define who has responsibility for information dissemination and indicate the proper recipients of work-related information May be modified by the organization Minor to severe consequences for ignoring them FORMAL CHANNELS Authorized, planned, and regulated by the organization Reflect the organization’s formal structure Define who has responsibility for information dissemination and indicate the proper recipients of work-related information May be modified by the organization Minor to severe consequences for ignoring them

14. © 2008 Prentice-Hall Business Publishing 14 Example of Communication Networks Salt Lake City Salt Lake City San Diego San Diego Denver Seattle Irvine Portland San Francisco San Francisco New York Boss New York Boss Chicago, Retired former colleague Chicago, Retired former colleague Marketing Researchers Marketing Researchers New York Managers Los Angeles Subordinates Network 1 Network 2 Adapted from Exhibit 12.7 Divisional Marketing Manager, Los Angeles Divisional Marketing Manager, Los Angeles

15. © 2008 Prentice-Hall Business Publishing 15 Barriers to Communication LevelOrigin of barrierAffects communication between: Inter- personal Selective perception Frame of reference Individual differences Emotion Language Nonverbal cues Individuals or groups Organi- zational Hierarchical Functional Individuals and/or groups within an organization Individuals and/or groups in different organizations CulturalLanguage High/low-context culture Stereotyping Ethnocentrism Cultural distance Individuals or groups in different organizations with different national cultures Individuals or groups from different organizational cultures Individuals or groups form diverse cultural backgrounds Adapted from Exhibit 12.7

16. © 2008 Prentice-Hall Business Publishing 16 Communication Differences in High and Low Context Cultures HIGH-CONTEXT CULTURES More adjustments in messages Rank of receiver affects message and medium Nonverbal communication cues may be very important Medium may be as important as message HIGH-CONTEXT CULTURES More adjustments in messages Rank of receiver affects message and medium Nonverbal communication cues may be very important Medium may be as important as message LOW-CONTEXT CULTURES Fewer and smaller adjustments in messages Rank or receiver may or may not affect message or medium Nonverbal communication cues not as important Message is more important than medium

17. © 2008 Prentice-Hall Business Publishing 17 Japan Italy France Canada USA South Korea China Saudi Arabia Vietnam Germany Australia New Zealand High-Context Cultures Low-Context Cultures Communication Differences in High- and Low-Context Cultures Adapted from Exhibit 12.9

18. © 2008 Prentice-Hall Business Publishing 18 Cross-Cultural Barriers ETHNOCENTRISM The belief in the superiority and importance of one’s own group ETHNOCENTRISM The belief in the superiority and importance of one’s own group STEREOTYPING The tendency to oversimplify and generalize out groups of people STEREOTYPING The tendency to oversimplify and generalize out groups of people CULTURAL DISTANCE Difference between two cultures’ basic characteristics such as language, economic development, and traditions and customs CULTURAL DISTANCE Difference between two cultures’ basic characteristics such as language, economic development, and traditions and customs

19. © 2008 Prentice-Hall Business Publishing 19 Improving Listening Skills Listen rather than talking yourself Be more open-minded Develop empathy Listen actively Observe nonverbal cues Listen rather than talking yourself Be more open-minded Develop empathy Listen actively Observe nonverbal cues

20. © 2008 Prentice-Hall Business Publishing 20 Improving Sending Skills Simplify the language Organize your writing Understand the audience

21. © 2008 Prentice-Hall Business Publishing 21 1.Study general principles that apply to all types of intercultural communication 2.Learn about the fundamental characteristics of the other cultures with which you will be working 3.For high-context cultures, learn as many details in advance about the target organization(s) and their specific individual representatives 4.For high-context cultures, use at least a few words or phrases in the listener’s language 5.For high-context cultures, be especially careful about body language and tone of voice 6.For low-context cultures, organize written communications so that the major points are immediately and directly stated 7.Study and respect communicators’ preference for greater degrees of formality, especially compared with the typical American approach of casual informality 1.Study general principles that apply to all types of intercultural communication 2.Learn about the fundamental characteristics of the other cultures with which you will be working 3.For high-context cultures, learn as many details in advance about the target organization(s) and their specific individual representatives 4.For high-context cultures, use at least a few words or phrases in the listener’s language 5.For high-context cultures, be especially careful about body language and tone of voice 6.For low-context cultures, organize written communications so that the major points are immediately and directly stated 7.Study and respect communicators’ preference for greater degrees of formality, especially compared with the typical American approach of casual informality Overcoming Cross-Cultural Communication Barriers Adapted from Exhibit 12.10

22. © 2008 Prentice-Hall Business Publishing 22 Gatekeepers are at the communication interface between separate organizations or different units. They: Increase formal communication Replace face-to-face communication with electronic communication Develop networks Create centralized office to manage communication activities Gatekeepers are at the communication interface between separate organizations or different units. They: Increase formal communication Replace face-to-face communication with electronic communication Develop networks Create centralized office to manage communication activities Improving Communication: Organizational Level

23. © 2008 Prentice-Hall Business Publishing 23 Negotiation Process of conferring to arrive at an agreement between different parties, each with their own interests and preferences Two negotiation activities -Day-to-day activities of the managers organizational unit -Part of a formally appointed negotiating team representing unit or organization Negotiation Process of conferring to arrive at an agreement between different parties, each with their own interests and preferences Two negotiation activities -Day-to-day activities of the managers organizational unit -Part of a formally appointed negotiating team representing unit or organization Communication and Negotiation

24. © 2008 Prentice-Hall Business Publishing 24 Achieving Effective Negotiations Less effectiveMore effective  Positions  People Involved  Maintaining/ Increasing Competition (Win/Lose Focus)  Interests  Problem/Issue  Decreasing/ Lessening Competition (Collaborative Focus) Adapted from Exhibit 12.11

25. © 2008 Prentice-Hall Business Publishing 25 Key Factors in Cross-National Negotiations People Listening skills Orientation toward people High self-esteem Influence in the home organization People Listening skills Orientation toward people High self-esteem Influence in the home organization

26. © 2008 Prentice-Hall Business Publishing 26 Important Characteristics Needed by Negotiators U.S. Managers Japanese Managers Taiwanese Managers Brazilian Managers 1.Preparation and planning skill 2.Thinking under pressure 3.Judgment and intelligence 4.Verbal expressiveness 5.Product knowledge 6.Ability to perceive and exploit power 7.Integrity 1.Dedication to job 2.Ability to perceive and exploit power 3.Ability to win respect and confidence 4.Integrity 5.Listening skill 6.Broad perspective 7.Verbal expressiveness 1.Persistence and determination 2.Ability to win respect and confidence 3.Preparation and planning skill 4.Product knowledge 5.Interesting 6.Judgment and intelligence 1.Preparation and planning skill 2.Thinking under pressure 3.Judgment and intelligence 4.Verbal expressiveness 5.Product knowledge 6.Ability to perceive and exploit power 7.Competitiveness Adapted from Exhibit 12.12

27. © 2008 Prentice-Hall Business Publishing 27 Key Factors in Cross-National Negotiations (cont.) Situation Location Physical arrangements Emphasis on speed and time Composition of the negotiating teams Negotiation process Situation Location Physical arrangements Emphasis on speed and time Composition of the negotiating teams Negotiation process

28. © 2008 Prentice-Hall Business Publishing 28 Stages in the Negotiation Process Planning and preparation Advance planning and analysis Background research Gathering of relevant information Planning of strategies and tactics Setting objectives Predetermining possible concessions Adapted from Exhibit 12.13 STAGE 1 Planning and Preparation

29. © 2008 Prentice-Hall Business Publishing 29 Stages in the Negotiation Process Relationship building between negotiation parties Developing trust Developing personal rapport Establishing long-term association Adapted from Exhibit 12.13 STAGE 1 Planning and Preparation STAGE 2 Relationship Building Between Negotiating Parties

30. © 2008 Prentice-Hall Business Publishing 30 Stages in the Negotiation Process Information exchange Learning about the needs and demands of the other set of negotiators Acquiring and exchanging other information Adapted from Exhibit 12.13 STAGE 1 Planning and Preparation STAGE 2 Relationship Building Between Negotiating Parties STAGE 3 Information Exchange

31. © 2008 Prentice-Hall Business Publishing 31 Stages in the Negotiation Process Persuasion attempts American managers treat as the most important stage Mixture of approaches -Assertive and straightforward -Warnings or threats -Calculated delays Adapted from Exhibit 12.13 STAGE 1 Planning and Preparation STAGE 2 Relationship Building Between Negotiating Parties STAGE 3 Information Exchange STAGE 4 Persuasion Attempts

32. © 2008 Prentice-Hall Business Publishing 32 Stages in the Negotiation Process Concessions/Agreement Permit each party to take away something of value American managers tend to have less leeway for concessions Some use normative appeals such as “it’s your obligation” Adapted from Exhibit 12.13 STAGE 1 Planning and Preparation STAGE 2 Relationship Building Between Negotiating Parties STAGE 3 Information Exchange STAGE 4 Persuasion Attempts STAGE 5 Concessions and Agreement