Intercultural Negotiation Process

1. Chapter 10 Intercultural Negotiation Process International Business Communication, 4th ed., Chaney & Martin

2. Topics • Steps in the Negotiation Process • Mistakes Commonly Made During Negotiations • Intercultural Negotiation Models • Negotiation Strategies • Trade Agreements International Business Communication, 4th ed., Chaney & Martin

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. International Business Communication, 4th ed., Chaney & Martin

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. Dr. Chester L. Karrass, Leader in Negotiating

5. Steps in the Negotiation Process • Preparation and Site Selection • Team Selection • Relationship Building • Opening Talks • Discussions • Agreement International Business Communication, 4th ed., Chaney & Martin

6. Preparation and Site Selection • Hire a consultant in the country. • Consult resource videos and written materials on negotiation. • Choose a site—here or there can be important. International Business Communication, 4th ed., Chaney & Martin

7. Team Selection • Consider number, age, gender, and rank of team members. • Consider background of players. • Evaluate other negotiators - their political affiliation, social class, age, and risk-taking propensity. International Business Communication, 4th ed., Chaney & Martin

8. Relationship Building • Time required • Intermediaries or agents • Friendship versus business relationship International Business Communication, 4th ed., Chaney & Martin

9. Opening Talks and Discussions • Observe opening rituals - small talk, humor, etc. • Consider the appropriateness of an agenda. • Expect a variety of behaviors. • Plan ahead for concessions. • Move to an informal location when appropriate. International Business Communication, 4th ed., Chaney & Martin

10. Agreement • Close negotiations properly. • Expect delays . • Get tax and legal advice. • Anticipate a long wait until final approval. • Remember that contracts are not always considered final. International Business Communication, 4th ed., Chaney & Martin

11. 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 International Business Communication, 4th ed., Chaney & Martin

12. 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 International Business Communication, 4th ed., Chaney & Martin

13. Intercultural Negotiation Models • Problem-solving approach — considers national and organizational cultural differences • Competitive approach — individualistic and persuasive orientation • Compromising — seeks a middle ground • Forcing — makes the other party comply • Legalism — uses legal documentation to force the partner to comply International Business Communication, 4th ed., Chaney & Martin

14. Four - Stage Negotiation Model • Investigative • Presentation • Bargaining • Agreement Kozicki, Creative Negotiating

15. Negotiation Strategies • People act on the basis of their own best interests. • Truth in negotiations: • Faith • Fact • Feeling • U.S. negotiators make fewer adjustments to their opponents. • Strategies include: preparation; tactics; conflict resolution and mediation; and observation, analysis, and evaluation. International Business Communication, 4th ed., Chaney & Martin

16. Trade Agreements • General license – never actually issued • Validated license — allows specific exporter to export specific products to specific places • Free trade zones or trade blocs — products enter without customs duties International Business Communication, 4th ed., Chaney & Martin

17. 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 International Business Communication, 4th ed., Chaney & Martin

18. 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 International Business Communication, 4th ed., Chaney & Martin

19. 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). International Business Communication, 4th ed., Chaney & Martin

20. 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 International Business Communication, 4th ed., Chaney & Martin

21. 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 accomplishments are keys to success with the French International Business Communication, 4th ed., Chaney & Martin

22. Germany • Protocol is important • Dress is conservative; correct posture and manners are required • Use titles when addressing members of the negotiating team • Prefer keeping a distance between themselves and the other team • 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 International Business Communication, 4th ed., Chaney & Martin

23. 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 International Business Communication, 4th ed., Chaney & Martin

24. Japan • Business etiquette is very important, including business card exchange • Meeting should be arranged by an intermediary • Subtle and complex verbal and nonverbal cues are used to avoid having someone lose face or lose the group harmony • The Japanese use more silence and less eye contact than U.S. persons • Consider contracts as flexible instruments • Are suspicious of a negotiating team that includes lawyers International Business Communication, 4th ed., Chaney & Martin

25. 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) • Social competence is important • Most agreements are consummated over lunch • Numerous meetings is the norm; time is not seen as important • Avoid gestures International Business Communication, 4th ed., Chaney & Martin

26. 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 (oral or written) are flexible • A bribe may be needed to expedite business International Business Communication, 4th ed., Chaney & Martin

27. 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 International Business Communication, 4th ed., Chaney & Martin

28. Negotiating globally can present many opportunities. Corporations can expand their markets, increase their markets, increase their profits and productivity, and lower their costs by negotiating globally. International Business Communication, 4th ed., Chaney & Martin