Intbusiness comn. presentation

Intercultural NegotiationMr.PhongwarinBuranasathitwong

Outlinedefinition of negotiation intercultural negotiationcultural contrasts in negotiation

how to negotiate successfully

Culture and Negotiations

Negotiation always involves two individuals (usually representing groups) exchanging a series of offers.

Negotiations are not limited to direct “deal making” over fixed resources.

Often we engage in negotiation to resolve disputes and to make decisions in teams.

Culture and Negotiations

How does culture influence negotiation? It comes down to values. Cultural values guide us in determining what issues are more or less important and also influence negotiators’ interests and priorities.

Culture is always at the negotiation table.

How important are the following things in intercultural negotiations and why?

Location of meetingTime of meetingDuration of meetingNumber and status of negotiators

Gender of negotiators

Social talk before the meeting

Making notes during the meeting

Making a report of the meeting

Negotiating over dinner

Talking about details

Reaching agreement very quickly

1. Culture shock: 4 phases: anticipation and enchantment, awakening, disillusionment, realization and productivity. Where are u? Find culture mentor, be flexible , withhold judgment, realize awakening and disillusionment are normal, sense of humor, be self-sufficient, learn from experiences

2. Negotiating with the boss back home: Wining and dining the client. The boss thinks? Unrealistic expectations. Stress that takes time, be clear as to your decision making power, educate boss in key cultural and legal factors, keep lawyers away, don’t surprise them.

3. Dealing with your own team: Strength and comfort in numbers, but expensive, more negoes, and have to prenegotiate. For teams, limit the number (no more than 5, clarify roles, make sure all members are clear as to strategy and tactics, and use good negotiators

International Negotiations: Core Principles

4. Resolving bribery: what is a bribe in the US? In Afghanistan? In France? In China （贿赂，行贿，开后门，塞红包） ATO rules. Be careful and be aware of Foreign Corrupt Practices Act, but be aware of local culture. Americans don’t 塞红包 but Chinese don’t tip. Think about it.

5. Joint ventures: skip as already covered somewhat

6. Your place or mine? Home court advantage. More comfortable= more confident. Also can treat other like a King or Queen. Try inviting them. If not, don’t tell when u are leaving, don’t allow circumstance to destroy your key goals (time & money), and know when to fold ‘em. Finally, arrive early.

International Negotiations: Core Principles (cont.)

© 2006 Prentice Hall 5-8

Stage One – Preparation

Negotiator must familiarize themselves with The entire context and background of their counterparts To the specific subjects to be negotiated Differences in culture, language, and environment

Managers must have an understanding of their own negotiating style


Stage One - Preparation

Managers should find out as much as possible about

The kinds of demands that might be made The composition of the opposing team The relative authority that the members possess

Develop a profile of their counterparts They consider different variables during this process as well


The Negotiation Process

Relationship building – taking time to build mutual trust before starting business discussions

Exchanging task related information – during this stage each side makes a presentation and states its position, normally followed by a question-and-answer session


The Negotiation Process

Persuasion – during this stage both parties try to persuade the other to accept more of their position while giving up some of their own; there are recognizable tactics for this stage

Concessions and Agreements – at this point each side will make various concessions so that an agreement can be reached and signed


Understanding Negotiation Styles

For North Americans, negotiations are businesslike; their factual appeals are based on what they believe is objective information, presented with the assumption that it is understood by the other side on a logical basis.

Arabs use affective appeals based on emotions and subjective feelings.

Russians employ axiomatic appeals – that is, their appeals are based on the ideals generally accepted in their society.


Profile of an American NegotiatorKnows when to compromiseTakes a firm stand at the beginning of the negotiation

Refuses to make concessions beforehandKeeps his or her cards close to his or her chestAccepts compromises only when the negotiation is deadlocked

Sets up the general principles and delegates the detail work to associates

Keeps a maximum of options open before negotiation

Operates in good faith


Profile of an American NegotiatorRespects the “opponents”States his or her position as clearly as possible

Knows when he or she wishes a negotiation to move on

Is fully briefed about the negotiated issuesHas a good sense of timing and is consistentMakes the other party reveal his or her position while keeping his or her own position hidden as long as possible

Lets the other negotiator come forward first and looks for the best deal


Profile of an Indian NegotiatorLooks for and says the truthIs not afraid of speaking up and has no fearsExercises self-controlSeeks solutions that will please all the parties involved

Respects the other partyNeither uses violence nor insultsIs ready to change his or her mind and differ with himself or herself at the risk of being seen as inconsistent and unpredictable


Profile of an Indian NegotiatorPuts things into perspective and switches easily from the small picture to the big one

Is humble and trusts the opponentIs able to withdraw, use silence, and learn from withinRelies on himself or herself, his or her own resources and strengths

Appeals to the other party’s spiritual identityIs tenacious, patient, and persistentLearns from the opponent and avoids the use of secrets

Goes beyond logical reasoning and trusts his or her instinct as well as faith


Profile of an Arab Negotiator

Protects all the parties’ honor, self-respect, and dignity

Avoids direct confrontation between opponentsIs respected and trusted by allDoes not put the parties involved in a situation where they have to show weakness or admit defeat

Has the necessary prestige to be listened toIs creative enough to come up with honorable solutions for all parties

Is impartial and can understand the positions of the various parties without leaning toward one or the other


Profile of an Arab Negotiator

Is able to resist any kind of pressure that the opponents could try to exercise on him

Uses references to people who are highly respected by the opponents to persuade them to change their minds on some issues

Can keep secrets and in so doing gains the confidence of the negotiating parties

Controls his temper and emotionsCan use conference as mediating devicesKnows that the opponent will have problems in carrying out the decisions made during the negotiation

Is able to cope with the Arab disregard for time


Managing Negotiation

Successful management of intercultural negotiations requires the manager

To gain specific knowledge of the parties in the upcoming meeting

To prepare accordingly to adjust to and control the situation

To be innovative


Comparative Management in Focus: Negotiating with the ChineseThe Chinese think in terms of process

that has no culmination. Americans think in terms of concrete

solutions to specific problems. . . . The Chinese approach is impersonal,

patient and aloof . . .To Americans, Chinese leaders seem polite but aloof and condescending. To the Chinese, Americans appear

erratic and somewhat frivolous.

—Henry Kissinger,Newsweek, May, 2001


Comparative Management in Focus: Negotiating with the ChineseBusiness people have two major areas of conflict when negotiating with the Chinese

Amount of detail about product characteristics Apparent insincerity about reaching an agreement

Chinese negotiation process is affected by three cultural norms

Politeness and emotional restraint Emphasis on social obligations Belief in the interconnection of work, family, and

friendship


Comparative Management in Focus: Negotiating with the ChineseTips to foreigners conducting business in

China Practice patience Accept prolonged periods of stalemate Refrain from exaggerated expectations Discount Chinese rhetoric about future prospects Expect the Chinese to try to manipulate by

shaming Resist the temptation to believe that difficulties

are your fault Try to understand Chinese cultural traits


Negotiations across CulturesAmericans - linear, fact driven and numbers oriented - impatient and the contract is their central focusAsians - avoid conflict - express opinions indirectly and maintain a face of surface harmony

when too direct can be seen as rudeFrench - enjoy emphasising distinctions and differences - blunt and logical approach to conflicting points of views that can seem

antagonistic to people from other culturesMiddle Easterners and Latinos - passionate expression of differences - save face and preserve dignityRussians a great deal of posturing and theatrics


Guidelines on Negotiation acrossCulturesCheck whether they think like you Spend time on non-task sounding matters to establish personal relationships

Know the differences between your opponent’s social, political and economic systems and yours

Know how the above differences affect his thinking, authority and negotiating methods

Know your opponent’s legal, technical and financial systems

Know how the above will affect our choice of tactics

Know the effects of ethical standards (right, wrong, reasonable)

Know the importance of face saving


Guidelines on Negotiation across Cultures

Recognize the role of status Understand the role of government in the affairs of your opponent

Identify the levels of approval Ask questions, but don’t put pressure Ensure there is a suitable communication system with Head Office

Identify the right leader for the situation Make sure when using an interpreter he is skilled in both languages and negotiation.

Have a dummy run with him. Get him to translate gestures etc

Avoid using jargon Confirm in writing and use words carefully to avoid ambiguity

Use team approach by using experts Recognize differences in perceiving contractual differences and agreements

Make concessions only after issues are discussed.

Negotiating internationally

Cultural background of the negotiating parties is different.

Thus, successful negotiations require:– Knowledge of the other party’s culture– Respect– Flexibility

Some examples of cultural shocks when negotiating from the Arab World, China etc.

The cross-cultural negotiation process

1 Status distinction

2 Impression formation accuracy

3 Interpersonal attraction

Non-task related interaction

4 Exchange of information

6 Concession making and agreement

5 Persuasion and bargaining strategy

7 Negotiation outcome

Task related interaction

Seller’s culturalbackground

Buyer’s culturalbackground

Cultural distance between

seller and buyer

Source: Adapted from Simintiras, A.C. and Thomas, A.H. (1998)and Simintiras, A.C. and Reynolds, N. (2001).

Negotiating tactics

•Extreme demands

•Tactic of slices

•“Best offer” tactic

•“Good guys, bad guys” tactics

Some suggestions for good negotiations

•Be on time!•Prepare for negotiations!•Study the opponents negotiation style!•Try to negotiate at your place or a neutral place!•Never let the other side know when your deadline is or that you are in a hurry!

•Think strategic!•Mix and mingle!•Be considerate and sensitive to other side’s culture and rituals!

•Be patient!

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Comparison of Cultural Approaches to Negotiation

American Negotiator Indian Negotiator Arab Negotiator

Accepts compromise when deadlock occurs

Has firm initial and final stands

Sets up principles but lets subordinates do detail work

Has a maximum of options

Respects other parties

Is fully briefed

Keeps position hidden as long as possible

Relies on truth

Trusts instincts

Seeks compromises

Is ready to alter position at any point

Trusts opponent

Respects other parties

Learns from opponent

Avoids use of secrets

Protects “face” of other parties

Avoids confrontation

Uses a referent person to try to change others, e.g. “Do it for your father”

Seeks creative alternatives to satisfy all parties

Mediates through conferences

Can keep secrets

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Swedish Negotiator Italian Negotiator

Gets straight to the point of the discussion

Avoids confrontation

Time conscious

Overly cautious

Informal

Flexible

Reacts slowly to new propositions

Quiet and thoughtful

Dramatic

Emotional

Able to read context well

Suspicious

Intrigues

Uses flattery

Concerned about creating a good impression

Indefinite

Comparison of Cultural Approaches to Negotiation

13-32

Differences Between American and Chinese Culture and Approach to the Negotiation Process

Contrast of Basic Cultural ValuesAmerican

Task and information orientedEgalitarianAnalyticalSequential, monochronicSeeks the complete truthIndividualistConfrontative, argumentative

Chinese

Relationship orientedHierarchical

HolisticCircular, polychronic

Seeks the harmonious way

CollectivistHaggling, bargaining

13-33Differences Between American and Chinese Culture and Approach to the Negotiation Process(cont.)Approach to the

Negotiation ProcessAmericanQuick meetingsInformalMake cold callsFull authorityDirectProposals firstAggressiveImpatientA “good deal”

ChineseLong courting

processFormal

Draw on intermediaries

Limited authority

IndirectExplanations

firstQuestioning

PatientA long-term relationship

nontask sounding

information exchange

means of persuasion

terms of agreement

Support for the Negotiation Process by Decision Support Systems

Reducing the amount of time that is necessary for feedback from headquarters in order to carry out effective negotiationsProviding a large amount of data and information on alternative scenarios that may result from the negotiation processIncreasing the likelihood that important data and information are available when needed

Nature of Conflict Between Members of Low and High Context Culture

Key Questions Low-Context Conflict High-Context Conflict

Why Analytic, linear logic; instrumental oriented; dichotomy between conflict and conflict parties

Synthetic, spiral logic; expressive oriented; integration of conflict and conflict parties

When Individualistic oriented; low collective normative expectations; violations of individual expectations create conflict potentials

Group oriented; high collective normative expectations; violations of collective expectations create conflict potentials

What Revealment; direct, confrontational attitude; action and solution oriented

Concealment; indirect, nonconfrontational attitude; “face” and relationship oriented

How Explicit communication codes; line-logic style: rational-factual rhetoric; open, direct strategies

Implicit communication codes; point-logic style: intuitive-effective rhetoric; ambiguous, indirect strategies

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Decision-Making

The conscious process of moving toward objectives after considering various alternatives. It is concerned with making an appropriate choice among a multitude of possible scenarios.

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Steps in the Decision-Making Process

1. DEFINE THE PROBLEM

2. ANALYZE THE PROBLEM

3. IDENTIFY DECISION CRITERIA AND THEIR IMPORTANCE

4. DEVELOP AND EVALUATE ALTERNATIVE SOLUTIONS

5. CHOOSE THE BEST SOLUTION

6. IMPLEMENT THE SOLUTION

7. EVALUATE THE OUTCOMES

Prentice Hall 2003 Chapter 5 38

Negotiation Styles

For North Americans, negotiations are businesslike; their factual appeals are based on what they believe is objective information, presented with the assumption that it is understood by the other side on a logical basis.

Arabs use affective appeals based on emotions and subjective feelings.

Russians employ axiomatic appeals – that is, their appeals are based on the ideals generally accepted in their society.

Prentice Hall 2003 39

Profile of a Successful American Negotiator

Knows when to compromiseTakes a firm stand at the beginning of the negotiation

Refuses to make concessions beforehandKeeps his or her cards close to his or her chestAccepts compromises only when the negotiation is deadlocked

Sets up the general principles and delegates the detail work to associates

Keeps a maximum of options open before negotiation

Operates in good faith


Profile of a Successful American Negotiator(contd.)

Respects the “opponents”States his or her position as clearly as possibleKnows when he or she wishes a negotiation to move on

Is fully briefed about the negotiated issuesHas a good sense of timing and is consistentMakes the other party reveal his or her position while keeping his or her own position hidden as long as possible

Lets the other negotiator come forward first and looks for the best deal


Profile of a Successful Indian NegotiatorLooks for and says the truthIs not afraid of speaking up and has no fearsExercises self-controlSeeks solutions that will please all the parties involved

Respects the other partyNeither uses violence nor insultsIs ready to change his or her mind and differ with himself or herself at the risk of being seen as inconsistent and unpredictable


Profile of a Successful Indian Negotiator(contd.)

Puts things into perspective and switches easily from the small picture to the big one

Is humble and trusts the opponent Is able to withdraw, use silence, and learn from within Relies on himself or herself, his or her own resources and strengths

Appeals to the other party’s spiritual identity Is tenacious, patient, and persistent Learns from the opponent and avoids the use of secrets

Goes beyond logical reasoning and trusts his or her instinct as well as faith


Profile of a Successful Arab Negotiator

Protects all the parties’ honor, self-respect, and dignity

Avoids direct confrontation between opponentsIs respected and trusted by allDoes not put the parties involved in a situation where they have to show weakness or admit defeat

Has the necessary prestige to be listened toIs creative enough to come up with honorable solutions for all parties

Is impartial and can understand the positions of the various parties without leaning toward one or the other


Profile of a Successful Arab Negotiator(contd.)

Is able to resist any kind of pressure that the opponents could try to exercise on him

Uses references to people who are highly respected by the opponents to persuade them to change their minds on some issues

Can keep secrets and in so doing gains the confidence of the negotiating parties

Controls his temper and emotions Can use conference as mediating devices Knows that the opponent will have problems in carrying out the decisions made during the negotiation

Is able to cope with the Arab disregard for time


Profile of a Successful Swedish Negotiator

Very quiet and thoughtfulPunctual (concerned with time)Extremely politeStraightforward (they get straight down to business)

Eager to be productive and efficientHeavy-goingDown-to-earth and overcautiousRather flexibleAble to and quite good at holding emotions and feelings


Profile of a Successful Swedish Negotiator(contd.)

Slow at reacting to new (unexpected) proposals

Informal and familiarConceitedPerfectionistAfraid of confrontationsVery private


Profile of a Successful Italian Negotiator Has a sense of drama (acting is a main part of the culture)

Does not hide his or her emotions (which are partly sincere and partly feigned)

Reads facial expressions and gestures very well Has a feeling for history Does not trust anybody Is concerned about the bella figura, or the “good impression,” he or she can create among those who watch his or her behavior

Believes in the individual’s initiatives, not so much in teamwork

Is good at being obliging and simpatico at all times


Profile of a Successful Italian Negotiator(contd.)

Is always on the qui vive, the “lookout” Never embraces definite opinions Is able to come up with new ways to immobilize and eventually destroy his or her opponents

Handles confrontation of power with subtlety and tact

Has a flair for intrigue Knows how to use flattery Can involve other negotiators in complex combinations


Negotiation Support Systems

Negotiation Support Systems (NSS) can provide support for the negotiation process by:

Increasing the likelihood that an agreement is reached when a zone of agreement exists (solutions that both parties would accept)

Decreasing the direct and indirect costs of negotiations, such as costs caused by time delays (strikes, violence), and attorneys’ fees, among others

Maximizing the chances for optimal outcomes


Stages in the Rational Decision-Making Process

Defining the problemGathering and analyzing relevant data

Considering alternative solutionsDeciding on the best solutionImplementing the decision

Thank You!

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Intbusiness comn. presentation