Module Four: Managing Negotiations

1. Module Four: Managing Negotiations

2. Objectives Compare the American negotiating style to the Japanese negotiating style Understand how the negotiating process varies across cultures Describe the stages of negotiation Identify the profile of your negotiating counterpart

3. Negotiation The process in which at least two partners with different needs and viewpoints try to reach an agreement on matters of mutual interest.

4. To negotiate To deal or to bargain To bring about a satisfactory settlement

5. “When in Rome, do as the Romans do?” NO!

6. Five Skills Needed by Intl. Negotiators To see the world as others see it To be able to demonstrate the advantages of what one’s proposal offers To be able to manage stress and cope with ambiguity To be able to communicate one’s ideas effectively To be sensitive to the cultural background of others To adjust suggestions to the constraints/limitations of the situation

7. The Typical American Negotiating Style I can go it alone Just call me John Pardon my French Check with the home office Get to the point Lay your cards on the table Don’t just sit there, speak up Don’t take “no” for an answer One thing at a time A deal is a deal I am what I am, “Take it or leave it”

8. The Typical Japanese Negotiating Style TATE SHAKAI - Living and working in a vertical society AMAE - Indulgent dependency NAGAI TSUKIAI - Long-term relationships SHINYO - Gut feeling NANIWABUSHI - A seller’s approach BANANA NO TATAKIURI - The banana sale approach WA - Maintaining harmony RINGI KESSAI - Decision-making by consensus ISHIN-DENSHIN - Communication without words NEMANWASHI - preparing the roots

9. Negotiating styles vary across cultures Individual characteristics Situational contingencies Strategic and tactical process

10. Individual Characteristics Good listening skills An orientation toward people A willingness to use team assistance High self-esteem High aspirations An attractive personality Credibility and influence within the home organization

11. Characteristics of the Situation Location Physical Arrangements Participants Time Limits Status Differences

12. Negotiation Strategy:A Principled Approach Separating the people from the problem Focusing on interests, not positions Insisting on object criteria Inventing options for mutual gain

13. Stages of a Negotiation Preparation Non-task sounding/relationship building Task-related exchange of information Persuasion Concession and agreement

14. Negotiation Tactics: Adaptive Behavior in Cross-Cultural Encounters Recognize that a negotiator can make people uncomfortable by consciously or unconsciously creating “noise” Stress relating to confusion can create emotional states ranging from anxiety to feelings of displeasure or shame. These emotions will cause your counterpart to take action Therefore, one must know how to gauge the degree of emotional intensity in a particular culture

15. Framework for International Business Negotiations Framework by Stephen Weiss and William Stripp (1985) maintains there are 12 variables in every international negotiation that impact the success of the negotiation

16. 1. Basic Conceptions of the Negotiating Process distributive bargaining joint problem-solving debate contingency bargaining nondirective bargaining

17. 2. Negotiator Selection Criteria knowledge negotiating experience personal attributes (affability, loyalty, trustworthiness) status (seniority, political affiliation, sex, ethnic ties, kinship)

18. 3. Significance of Type of Issue Substantive - price and no. of units to be sold Relationship-based - compatibility of styles Procedural - type of structure/format (preconditions, agenda-setting) Personal - internal respect, reputation and dissent within one’s team

19. 4. Concern with Protocol Adherence to rules for acceptable self-presentation and social behavior Informality Formality

20. 5. Complexity of Communicative Context Low context High context (distance, gaze, gestures, silence)

21. 6. Nature of Persuasive Arguments, i.e., how do you present your goals and respond to others Empirical reason/logic Experience Dogma Emotion Intuition

22. 7. Role of Individual’s Aspirations Individualism Collectivism

23. 8. Bases of trust to regulate conduct, enforce agreement External sanction - “bargaining in good faith” Past record - past experience, professional reputation Intuition - status/visibility, knowledge/expertise

24. 9. Risk-Taking Propensity Differences in uncertainty avoidance (low/high) Includes willingness to divulge information if counterparts trustworthiness is questionable; openness to novel approaches; willingness to go beyond superior’s directives and authorizations; responses to proposals with unknowns or contingencies

25. 10. Value of Time Monochronic Polychronic Importance of setting appointments, the punctuality expected, urgency of deadlines

26. 11. The Decision-Making System Authoritative Consensus

27. 12. Form of Satisfactory Agreement Contractual Implicit (based on many concerns and practices - trust, communication, credibility, salience of certain types of issues, commitment, enforceability)

28. Tips from the experts in protocol and negotiation: Present your business card the way the Japanese do: Turn it so the person you are handing it to can read what’s on the card. When someone hands you his/her business card, take a few seconds to read it and say the name aloud so you will begin to associate the name with the face. In a business setting, women should stand for introductions just as men do. Whoever gets to the door first should open it.

29. SUMMARY Negotiating across cultures carries the risk of misperception arising from misinterpretation of cues. An understanding and acceptance of these differences can smooth the bargaining process Trust is an essential component in effective negotiations