Mastering 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”

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)

6. Language and Culture • Whorf hypothesis: theory that language determines the nature of culture • All languages have limited sets of words • Words provide the concepts of understanding the world • Restricted word sets constrain the ability to understand the world

7. High- and Low-Context Languages • Low-context language: people state things directly and explicitly - Most northern European languages including German, English, and the Scandinavian languages • High-context language: people state things indirectly and implicitly - Asian and Arabic languages

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 • Includes array of behaviors that enhance/supplement spoken communication • Include - Kinesics, proxemics, haptics, oculesics, and olfactics

12. Kinesics • Communication through body movements - E.g., facial expressions, body posture - 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 communication - The personal bubble of space may range from 9 inches to over 20 inches - North Americans prefer more distance than Latin and Arab 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 countries, Italy, and Greece

16. Oculesics • Communication through eye contact or gaze - U.S. and Canada: people are very comfortable and expect eye contact to be maintained - China and Japan: eye contact is considered very rude and disrespectful

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. Practical Issues in Cross-Cultural Business 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. Avoiding Attribution Errors • Attribution: process by which we interpret the meaning of spoken words or nonverbal exchanges - Attribute meaning based on our taken-for-granted cultural expectations - Easy to make mistakes of attribution - Need to observe carefully - Avoid subtleties of a foreign language - Avoid complex nonverbal behaviors

24. International Negotiation • More complex than domestic negotiations • Differences in national cultures and differences in political, legal, and economic systems • Steps in international negotiation - Preparation, building the relationship, exchanging information, first offer, persuasion, concessions, agreement, and post agreement

25. Exhibit 13.3: Steps in International Negotiations

26. 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 • What is the agenda? • Prepare for long negotiation • What is the environment like? • Plan a strategy

27. Cultural Differences in Key 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

28. Cultural Differences in Key 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

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

30. Exhibit 13.5: Understanding Negotiators from Other Countries

31. Step 2: Building the Relationship • First stage of the actual negotiation process - No focus on business - Partners get to know each other - Social and interpersonal exchange - Duration and importance vary by culture

32. 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

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

34. 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

35. Verbal Negotiation Tactics • Promise • Threat • Recommendation • Warning • Reward • Punishment

36. Verbal Negotiation Tactics • Normative appeal • Commitment • Question • Command • Refusal • Interruption

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

38. Nonverbal Communication • Body posture, facial expression, hand gestures, and the use of personal space are a natural part of any international negotiation

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

40. 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

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

42. 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

43. Styles of Concession • Sequential approach: each side reciprocates concessions • Holistic approach: each side makes very few concessions until the end of the negotiation

44. 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 ground that is beneficial to both companies’ interests - Search for possible win-win situations

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

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

47. 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

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

49. Major Points Regarding Successful International Negotiation • Few negotiations succeed without extensive preparation. • Building personal relationships is a key step in a negotiation. • Managers should be aware that first offers may differ by cultural background.

50. Major Points Regarding Successful International Negotiation • Many tactics are used in persuasion. • Know how counterpart views the concession-making process. • Culture and legal traditions influence the content and force of law regarding business contracts. • Competitive negotiation seldom leads to long-term relationships.