Global Marketing Management Multinational Negotiations

1. Global Marketing ManagementMultinational Negotiations MKTG 3231-001 Spring 2014 Mrs. Tamara L. Cohen Class #6

2. KEY TERMS • Non-task sounding = part of negotiation process in which conversation topics do not include business; typically a preliminary phase of negotiations • Cultural stereotypes = commonly held public beliefs about specific social groups (cultures), based on simplified prior assumptions • Non-verbal communication (NVC) = communicating without language; e.g. gestures, touch, body language, facial expression, voice, intonation, symbols, emotion, architecture, dance, handwriting style

3. KEY CONCEPTS • Impact of cultural STEREOTYPES • “You get what you negotiate” • “Use what you have” • Single most important activity of negotiating is LISTENING

5. Dangers of Stereotypes • Negotiations • conducted between people, not national stereotypes • Cultural factors often make huge differences • Negotiation behaviors are different • across regions, genders, types of industry • Age & experience make important differences • Consider culture of customers & business partners, but treat them as individuals

6. Cultural differences [4 common problems: • Language - use interpreter - learn languages 2. Non Verbal Communication - almost always hidden / below radar • Values - objectivity (“business is business”) - competitiveness - equality - time • Thinking & Decision-making processes - Western sequential approach vs Eastern holistic approach

7. Differences in Language & Nonverbal Behaviors • Americans have poor languages skills • Americans don’t like side conversations by foreigners in native language • Variation across cultures increases when including linguistic aspects of language & nonverbal behaviors

8. Differences in Thinking & Decision-Making Processes • Western approach – sequential • Americans – business negotiation is a problem-solving activity • Eastern approach – holistic • Japanese – business negotiation is time to develop business relationship with goal of long-term mutual benefit French

9. All business negotiations involve 4 steps: • Non-task sounding • Task-related information exchange • Persuasion • Concession & agreement TIME spent on each step varies considerably.

10. the art of wooRichard Shell & Mario Moussa • WOO is Winning Others Over (Marcus Buckingham & Donald Clifton: Now, Discover Your Strengths) • Relationship-based, emotionally intelligent persuasion • Without coercion e.g. Nelson Mandela won over guards in prison and reinvented a nation • “You can have brilliant ideas, but if you can’t get them across, your ideas won’t get you anywhere …” Lee Iacocca, former Chrysler Chairman & CEO

11. Confront the 5 Barriersas adapted from Richard Shell • What characterizes my relationship to the person/company I am trying to influence? • What is the basis for my/my company’s credibility with this person/company? • What channels of communication should I use (authority, rationality, vision, relationships, interest, politics)? Do I need to adjust my style? • What beliefs & valuesdoes this person/company hold that could block or support my case? • What are the other party’s interests and how can I address them?

12. Cultural Orientation = model for understanding & predicting results of intercultural encounters, i.e. how people in different cultures will speak, act, negotiate & make decisions Cognitive style: • how we organize & process info. • thought patterns • people are open-minded or closed-minded • how people process info (associative or abstractive) – influenced by education • how thinking & behavior are focused (particular vs universal thinkers)

13. Negotiation Strategies Value system basis for behavior • Value of individualism vs collectivism (decision-making) • Source of Anxiety Reduction • Interpersonal relationships • Religion • Technology • Law • Equality / Inequality

14. DO YOUR HOMEWORK before you travel! Prepare Listen • Columbus may have been the best-known traveler who didn’t know where he was going, but he wasn’t the last.

15. Do your homework before negotiations!

16. USA Negotiators state what they want Lay cards on table Explanations if necessary Questions should be asked once Only ask questions that can be answered Value directness and efficiency of time in negotiation Use of English preferred Japan Extensive warming up time and effort Long explanations, foll. by request, foll. by expressions of sorrow/regret Consensus-based decision-making Understand/expect that some questions can’t be answered Use native language of bargaining partner

17. Japanese question… question… question… • Long explanations must be expected, so come with appropriate technical details/experts. • Extensive questioning is normal and necessary (consensus). Several people may ask same question. • Use patience and detailed preparation. • Explanations under close scrutiny; consistency. • Offer to write down required info. • If question repeated 2nd time, answer < 3 min. • If question repeated 3rd time, answer < 1 min. • If question repeated 4th time, probably persuasive tactic, not info-gathering; response: silence / change subject

18. “Tricks of the Trade” - Bargaining with Japanese companies • Formal communication at negotiating table • Informal communication after hours • Include lower level management on team • Behind scenes negotiations MUST remain behind scenes • Take notes at / record meetings • Keep tally of topics of questions arelative importance of topics • Persuasive tactics - subtle bluff vs. direct threat

19. Non-Verbal Communication (NVC) • “… happens in the limbic system of the brain that predates human speech. Understanding these non-verbal clues can be crucial to international dealings”Paul Thorne • Much NVC works across boundaries of language; some is subject to culture • NVC includes • the way we use speech • facial & body expressions & hand gestures are major elements • 250,000 facial expressions alone • NVC covers all senses

20. The Silent Language of International Business • Concepts of space & time are tools all humans use to transmit messages • Space is outgrowth of animal's instinctive defense of his lair • Time varies from Western precision to Eastern vagueness • 60% communication is non-verbal • Daniel Goleman, (‘emotional intelligence’) 90% communicable emotion is expressed non-verbally.

21. Body Language • ProximityUSA & N.Europe: 18in - 3ft S.Europe, Latin America, Middle East: 0 - 18 in most Asians: > 3ft • Eye contactUSA & N.Europe: moderate S.Europe, Latin America, Middle East: minimal most Asians: very direct • TouchingSome cultures comfortable with some touching for building rapport. • Interpretation; lethal combinations; time to acclimate/ learn

22. Eat, drink and be wary! Acceptance of what’s on your plate tantamount to acceptance of host, company & country Tastiness is in the eye of the beholder – squeamishness from unfamiliarity Slice thinly / swallow quickly / “tastes just like chicken” Find out local customs about refills Drinks customs Which hand to use / not use for eating FOOD

23. FOOD choices ? OR

24. FOOD –same or different? dumplings dumplings dumplings dumplings dumplings  dumplings dumplings

25. Egalitarian in USA • Viva la Difference • Southern Europe • Middle East • Japan • China • Africa • Latin America • After hours conduct

26. Communication Breakdowns • 80% of misinterpretations & breakdowns are caused by inefficient communication • 20% of time or less it is likely that your counterpart is being difficult

27. The single most useful universal form of communication? 6easy 6transcends language 6unequivocal SMILE huh?

28. What do we know about Multinational Negotiations? • Impact of culture on negotiating behaviors. Culture [ 4 common problems: • Language • NVC • Values • Thinking & decision-making • Selection of negotiating team • Follow-up after negotiation Orange case simulation exercise

29. Next class: Global Political & Legal Environment Preparation: - 0 - Homework #5: Foreign Corrupt Practices Act