International Negotiation and Cross-Cultural Communication

1. 13 International Negotiation and Cross-Cultural Communication

2. Learning Objectives • Understand the basics of verbal and nonverbal communication • Understand the basic international negotiation processes • Understand the basic tactics of international negotiations • Recognize and respond to the “dirty tricks” in international negotiation

3. Learning Objectives • Know the difference between the problem-solving and competitive approaches • Identify the personal characteristics of the successful international negotiator

4. International Negotiation • Process of making business deals across cultures • Precedes any multinational project • Without successful negotiation and the accompanying cross-cultural communication, there are seldom successful business transactions

5. The Basic of Cross-Cultural Communication • Successful negotiation requires successful communication • Negotiators must understand all components of culturally different communication styles (both verbal and nonverbal) • Avoid attribution errors • Attribution: process by which we interpret the meaning of spoken words or nonverbal exchanges

6. Language and Culture • Whorf hypothesis: theory that language determines the nature of culture • Words provide the concepts of understanding the world • All languages have limited sets of words • Restricted word sets constrain the ability to conceptualize the world • As language structures the way we think about what we see, it determines cultural patterns

7. High- and Low-Context Languages • Low-context language: people state things directly and explicitly, and you do not have to understand contexts - Most northern European languages including German, English, and the Scandinavian languages • High-context language: people state things indirectly and implicitly • Asian and Arabic languages • Multiple meanings depending on the context

8. Exhibit 13.1: Country Differences in High-Context and Low-Context Communication

9. Basic Communication Styles • Direct communication: communication that comes to the point and lacks ambiguity • Formal communication: communication that acknowledges rank, titles, and ceremony in prescribed social interaction

10. Exhibit 13.2: Cultural Differences in Communication Styles

11. Nonverbal Communication • Communication without words • Face to face communication that is not oral • Includes array of behaviors that enhance/supplement spoken communication (gestures, smiles, etc) • Include - Kinesics, proxemics, haptics, oculesics, and olfactics

12. Kinesics • Communication through body movements - E.g., facial expressions, body posture, gestures - Most Asian cultures use bowing to show respect - No universal code for what body movements mean - Easy to misinterpret gestures

13. Proxemics • Use of space to communicate - Each culture has appropriate distances for various levels of communication - The personal bubble of space may range from 9 inches to over 20 inches - North Americans prefer more distance than Latin and Middle East cultures

14. Seating in a Typical Japanese Office

15. Haptics or Touching • Communication through body contact • Shaking hands, embracing, or kissing when greeting one another - No touching • E.g., Japan, U.S., England, and many Northern European countries - Moderate touching • E.g., Australia, China, Ireland, and India - Touching • E.g., Latin American and Latin European countries

16. Oculesics • Communication through eye contact or gaze - U.S. and Canada: people are very comfortable and expect eye contact to be maintained for a short moment during conversations - China and Japan: eye contact is considered very rude and disrespectful, and respect is shown by avoiding eye contact

17. Olfactics • The use of smells as means of nonverbal communication - U.S. and U.K: find body odor offensive - Arab: consider body odors natural

18. Using Interpreters in Cross-Cultural Communication • Interpreter’s role: to provide a simultaneous translation of a foreign language - Require greater linguistic skills than speaking a language or translating written documents - Have the technical knowledge and vocabulary to deal with technical details common in business transactions - Have to ensure the accuracy and common understanding of agreements

19. Tips for Successful Use of Interpreters • Spend time with the interpreter • Go over technical and other issues with interpreter for proper understanding • Insist on frequent interruptions when it’s necessary • Look for feedback and comprehension by watching the eyes

20. Tips for Successful use of Interpreters (cont.) • Discuss the message beforehand • Request that your interpreter apologize for your inability to speak in the local language • Confirm that all key components of the message have been properly comprehended

21. Communication with Nonnative Speakers • Use the most common words with most common meanings • Select words with few alternative meanings • Follow rules of grammar strictly • Speak with clear breaks between words • Avoid sports words or words borrowed from literature

22. Communication with Nonnative Speakers (cont.) • Avoid words or expressions that are pictures • Avoid slang • Mimic the cultural flavor of the nonnative speaker’s language • Summarize • Test your communication success • Repeat basic ideas using different words when your counterpart does not understand • Confirm important aspects in writing

23. International Negotiation • More complex than domestic negotiations • Differences in national cultures and in political, legal, and economic systems • Steps in international negotiation - Preparation, building the relationship, exchanging information, first offer, persuasion, concessions, agreement, and post agreement • May combine two or more steps together

24. Exhibit 13.3: Steps in International Negotiations

25. Step 1: Preparation • Determine if the negotiation is possible • Know what your company wants • Be aware of what can be compromised • Know the other side • Send the proper team • Understand the agenda • Prepare for long negotiation

26. Cultural Differences in Negotiating Processes • Negotiation goal—signing the contract or forming a relationship • Formal or informal personal communication style • Direct or indirect communication style • Sensitivity to time—low or high • Forms of agreement—specific or general • Team organization—a team or one leader

27. Cultural Differences in Negotiating Processes • Attitude towards negotiation – win-lose or win-win • High or low emotions • Latin Americans and the Spanish: show their emotions through negotiations • Japanese and Germans: tend to be more reserved

28. Exhibit 13.4: Cultural Differences in Preference for Broad Agreements

29. Exhibit 13.5: Understanding Negotiators from Other Countries

30. Step 2: Building the Relationship • First stage of the actual negotiation process - Do not focus on business - Partners get to know each other - Social and interpersonal exchanges - Duration and importance vary by culture

31. Step 3: Exchanging Information and the First Offer • Both parties exchange information on their needs for the agreement • Parties exchange task-related information and first offer - Task-related information: actual details or the proposed agreement - First offer: first proposal by parties of what they expect from the agreement

32. Exhibit 13.6: Information Exchange and First-Offer Strategies

33. Step 4: Persuasion • Stage when each side in the negotiation attempts to get the other side to agree to its position - Heart of the negotiation process • Numerous tactics used Two general types of tactics : Standard verbal and nonverbal negotiation tactics, and dirty tricks

34. Verbal and Nonverbal Negotiation Tactics • Promise • Threat • Recommendation • Warning • Reward • Punishment

35. Verbal and Nonverbal Negotiation Tactics • Normative appeal • Commitment • Self disclosure • Question • Command • Refusal • Interruption

36. Exhibit 13.7: Comparison of Brazilian, U.S., and Japanese Negotiators (in half-hour bargaining session)

37. Dirty Tricks • Negotiation tactics that pressure opponents to accept unfair or undesirable agreements or concessions

38. Ploys/Dirty Tricks and Responses • Deliberate deception or bluffing—point out what you believe is happening • Stalling—do not reveal when you plan to leave • Escalating authority—clarify decision making authority • Good-guy, bad-guy routine—do not make any concessions

39. Ploys/Dirty tricks and Responses • You are wealthy and we are poor—ignore the ploy • Old friends—keep a psychological distance

40. Step 5 and 6: Concession and Agreement • Final agreement: signed contract, agreeable to all sides • Concession making: requires that each side relax some of its demands

41. Styles of Concession • Sequential approach: each side reciprocates concessions made by the other side • Holistic approach: each side makes very few, if any, concessions until the end of the negotiation

42. Basic Negotiation Strategies • Competitive negotiation: each side tried to give as little as possible and tries to “win” for its side • The negotiation as a win-lose game • Problem solving: negotiators seek out mutually satisfactory ground that is beneficial to both companies’ interests • Search for possible win-win situations • Helps develop long term relationships, is flexible, and probably more successful strategy

43. Exhibit 13.8: Competitive and Problem-Solving Negotiation in the Negotiating Steps

44. Exhibit 13.9: Cultural Differences in Preference for a Problem-Solving Negotiation Strategy

45. Step 7: Post Agreement • Commonly ignored step • Consists of an evaluation of the success of a competed negotiation • Allows the garnering of insights from understanding strengths and weaknesses of negotiation

46. The Successful International Negotiator: Personal Characteristics • Tolerance of ambiguity • Flexibility and creativity • Humor • Stamina • Empathy • Curiosity • Bilingualism

47. Conclusion • Chapter examined the negotiating process and other elements of cross-cultural communication • International negotiations involves several steps including: preparation, building the relationship, persuasion, making concessions and reaching agreement • Successful negotiators prepare and understand these steps and adapt them to local host countries