2006 prentice hall5- 1 chapter 5 cross-cultural negotiation and decision making powerpoint by...

© 2006 Prentice Hall 5- 1

Chapter 5 Cross-Cultural Negotiation

and Decision Making

PowerPoint byKristopher Blanchard

North Central University& Dr Asma Abdullah (Malaysian Interculturalist)

© 2006 Prentice Hall 5-2

Negotiation

Management’s ability to negotiate productively effects their ability to implement strategiesNegotiation is the process of discussion by which two or more parties aim to reach a mutually acceptable agreementNegotiating across borders is more complex because of the number of stakeholders involved


The Negotiation Process


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 counterpartsThey consider different variables during this process as well



Relationship building – taking time to build mutual trust before starting business discussionsExchanging task related information – during this stage each side makes a presentation and states its position, normally followed by a question-and-answer session



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


Understanding Negotiation Styles


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 Negotiator

Knows when to compromiseTakes a firm stand at the beginning of the negotiationRefuses to make concessions beforehandKeeps his or her cards close to his or her chestAccepts compromises only when the negotiation is deadlockedSets up the general principles and delegates the detail work to associatesKeeps a maximum of options open before negotiationOperates in good faith


Profile of an American NegotiatorRespects the “opponents”States his or her position as clearly as possibleKnows when he or she wishes a negotiation to move onIs 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 possibleLets the other negotiator come forward first and looks for the best deal


Profile of an Indian Negotiator

Looks for and says the truthIs not afraid of speaking up and has no fearsExercises self-controlSeeks solutions that will please all the parties involvedRespects 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 oneIs humble and trusts the opponentIs able to withdraw, use silence, and learn from withinRelies on himself or herself, his or her own resources and strengthsAppeals to the other party’s spiritual identityIs tenacious, patient, and persistentLearns from the opponent and avoids the use of secretsGoes 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 dignityAvoids 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 defeatHas the necessary prestige to be listened toIs creative enough to come up with honorable solutions for all partiesIs impartial and can understand the positions of the various parties without leaning toward one or the other


Profile of an Arab NegotiatorIs able to resist any kind of pressure that the opponents could try to exercise on himUses references to people who are highly respected by the opponents to persuade them to change their minds on some issuesCan keep secrets and in so doing gains the confidence of the negotiating partiesControls his temper and emotionsCan use conference as mediating devicesKnows that the opponent will have problems in carrying out the decisions made during the negotiationIs able to cope with the Arab disregard for time


Managing Negotiation


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


Using the Web to Support Negotiations

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 othersMaximizing the chances for optimal outcomes


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 Chinese

Business 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 Chinese

Tips 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


Managing Conflict


Decision Making

Stages in the Rational Decision Making Model– Defining the problem– Gathering and analyzing relevant data– Considering alternative solutions– Deciding on the best solution– Implementing the decision


Cultural Variables Affecting Decision Making

Objective (basing decisions on rationality) versus subjective (basing decisions on emotions) approachRisk toleranceLocus of control – internal (managers in control of events), or external (managers have little control over events)


Cultural Variables Affecting Decision Making


Comparative Management in Focus: Decision Making in Japan


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 dignityRussiansa great deal of posturing and theatrics


Guidelines on Negotiation across CulturesCheck 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.


Behaviours of Successful NegotiatorsHave greater flexibility - wider range of influence styles Recognize that an agreement can only be reached through exchange Label their behaviors - I want to propose..... - I want to give three reasons why.. Limit their reasons to two or three strongest points and repeat them if necessary Evaluate behavior they like positively attributing it to themselves Use incentives and find alternative currencies of value to the other party Summarize and test understanding Identify areas of agreement not on areas of conflict Avoid provoking the other party Use both verbal and nonverbal techniques to support ideas e.g. Use “ I”

language to convey that the speaker accepts responsibility for what he or she is saying

Maintain eye contact with others as eye contact communicates sincerity, concern and involvement

Show a relaxed attitude towards time and do not place unnecessary pressure on themselves by creating artificial deadlines

Have persistence and see a difficult task through its completion Value organizational goals above and over their own


Looking Ahead

Chapter 6 - Formulating Strategy– Reasons for going international– Strategic Formulation Process– Steps in Developing International and Global

Strategies


Stakeholders

Return


Twelve Variables in the Negotiation Process


Persuasion Tactics

Return

2006 prentice hall5- 1 chapter 5 cross-cultural negotiation and decision making powerpoint by...

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