negotiating golbally

39
NEGOTIATING GLOBALLY By Melissa Egan, Joanne Lieu, Jeremy Rome, and Alexandru Caratas TIPPING THE SCALE IN OUR FAVOR THE PERSUADERS

Upload: alexandru-caratas-ghenea

Post on 05-Aug-2015

122 views

Category:

Recruiting & HR


4 download

TRANSCRIPT

NEGOTIATING GLOBALLY

By Melissa Egan, Joanne Lieu, Jeremy Rome, and Alexandru Caratas

TIPPING THE SCALE IN OUR FAVOR

THE PERSUADERS

WHAT IS NEGOTIATION?

• Negotiation is a process in which at least one individual tries to persuade another individual to change her or her ideas or behavior

• Business Negotiations usually involve one party trying to influence another party to make a particular decision or sign a contract.

• When the parties involved belong to different cultures and do not share the same ways of thinking, feeling, and behaving

• All global negotiations are cross cultural, some domestic

WHEN DOES A NEGOTIATION BECOME CROSS- CULTURAL?

WHY IS CROSS-CULTURAL NEGOTIATION IMPORTANT?

• Single most important business skill

• Global managers spend more than 50% of their time in formal and

informal negotiations

• Poor communication and cross cultural misunderstandings can all

have harmful consequences

• Negotiation and persuasion styles vary highly across cultures

• Emotional sensitivity is highly valued

• Hides emotions• Demonstrates loyalty towards

employer• Group decision made by consensus• “Face-Saving” is crucial• Non Argumentive, Quiet when right• Written statements must be

accurate and valid• Focused on good of the group

Japanese

STYLES OF NEGOTIATION VARY ACROSS CULTURES

• Emotional sensitivity is not highly valued

• Very straight-forward• Little commitment towards

employer• Team provides input to decision

maker• “Face-Saving” is not important• Argumentative but impersonal • Give importance to documentation

as evidence• Profit motive or individual benefit is

aim

North America

n

STYLES OF NEGOTIATION VARY ACROSS CULTURES

• Emotional sensitivity is valued• Emotionally expressive and

passionate• Loyal to employer (often is family)• Decisions come from one individual• “Face-Saving” is crucial• Argumentative and passionate

when right or wrong• Impatient with documentation

(obstacle)• Good of group is good for individual

Latin America

n

STYLES OF NEGOTIATION VARY ACROSS CULTURES

CLASS ACTIVITY• 3 Volunteers

• Engage in Negotiation Process

• The rest of the class are observers

WHEN SHOULD WE NEGOTIATE?

• Negotiation is not always the best way to doing business

• “Take it or Leave it” Strategy can sometimes be better (take less time, etc)

CONSIDER NEGOTIATION WHEN THESE CONDITIONS EXIST:

HOW TO NEGOTIATE SUCCESSSFULLY?

• Depends on 3 things: People, Situation, and Process

• Negotiators have most control over the “Process” – strategy and tactics

QUALITIES OF A GOOD

NEGOTIATOR Varies by culture

• Situational contingencies influence success as much as individual

characteristics, but they are rarely as critical to success as the strategy

and tactics used

• Location: Meet at your place or at a neutral location

• Physical Arrangements: sitting face-to-face encourages competition.

Sitting at a right angel facilities cooperation.

• Participants: Go it alone or bring your team? Depends on cultural

context.

• Time Limits: is one party limited to a time constraint?

• Status Differences: Do they value titles, formalities, age, etc

HOW TO NEGOTIATE SUCCESSSFULLY?

NEGOTIATION PROCESS

STAGES OF A NEGOTIATION

3 approaches to each stage:

1. Traditional Approach

– Competitive

2. Principled Approach

– Collaborative/Individual

3. Synergistic Approach

– Collaborative/Cultural

PLANNING & PREPARATION

Planning behavior of successful negotiators:

• Planning time: quality over quantity

• Exploring options: look for a wide array of actions and outcomes

• Establishing common ground: look for similarities rather than

differences

• Long Term vs. Short Term: place greater emphasis on long term

issues

• Setting limits: set a range of objectives for greater flexibility

• Issue vs. Sequence Planning: discuss each issue independently

INTERPERSONAL RELATIONSHIP BUILDING

• Similarities become basis for relationship building

• Separate people from the problem

• Example: Americans are very task-orientated

– Want to get straight to business with little time spent on getting to know

the other party

– Place great value on the written contract

– Many other countries place higher value on relationships vs. contracts

EXCHANGING TASK-RELATED INFORMATION

• Stating a position restricts the ways in which

your interests can be met

• Focus on interests to gain greatest range of

mutually acceptable solutions

• Communication barriers significantly affect

understanding and outcomes

• Implement role reversal to appreciate other

party’s point of view

PERSUADING

• Effective negotiators regard their counterparty’s issues as their

own

• Emphasize creating mutually beneficial options by:

– Understanding party’s interests, values, and needs

– Pinpoint areas of similarity and difference

– Generate new options based on party differences

• Opportunities for developing mutually beneficial solutions greater in

cross-cultural negotiations than single-cultures

MAKING CONCESSIONS & REACHING AGREEMENT

• Use objective criteria rather than “dirty tricks”

• Those who make concessions earlier in the negotiation are

disadvantaged

• Example: Americans negotiate sequentially

– Make small concession throughout the negotiation

– Asian countries prefer to discuss all issues prior to making any

concessions

– Russians make little to no concessions

Discussion Question

What similarities/differences can you identify

between the various negotiation processes

presented here, and typical negotiation practices in

your country?

NEGOTIATION TACTICS

• Includes verbal and nonverbal tactics

• Words communicate 7% of meaning

• Tone of voice communicates 38%

• Facial expression 55%

• “It’s hard to read the writing on the wall if you don’t know the

language, much less where to find the wall”

NEGOTIATING TACTICS

INITIAL OFFERS• Different Opening Strategies (Russia Sweden)

• What do extreme initial positions show us?

– Demonstrate that the counterpart will not be exploited

– Allow the negotiator to gain more than expected

– Prolong the negotiating process

– Modify the counterparts’ beliefs about the negotiators

preferences

– Create more room to make subsequent concessions

exhibit cooperation

– Communicate the negotiator’s willingness to play the game

according to the norms

VERBAL TACTICS

RANGE OF TACTICS

Tactic Description Example

Promise Conditional/ positiveI will lower the price if you

...

Threat Conditional/negativeI will walk out of this meeting if you ...

Recommendation Third party positiveIf you lower your price, more teenagers will ...

Warning Third party negativeIf you settle, the press will

...

Reward Unconditional/ positive I‘ll buy you a coffee

Tactic Description Example

Punishment Unconditional/negativeI refuse to listen to your screaming. I‘m leaving

Normative Appeal I appeal to a societal normEverybody else buys our

product for $5 per unit

Commitment Unconditional/positiveI will deliver 100 units by June

15

Self-DisclosureI will tell you something about

myself

We really need to sign a major contract by the end of

the year

QuestionI ask you something about

yourself

Can you tell me more about your brazilian operation?

Command I order you to do something Lower your price

RANGE OF TACTICS

VERBBAL NEGOTIATING BEHAVIORS

VERBAL BEHAVIOR

Irritators Counterproposals

Behavioural Labeling

Defend/attack spiral

Active Listening Questions Feelings Commentary

Argument Dilution

NONVERBAL TACTICS

Touching

Silence

Conversational Overlaps

Facial Gazing

How you reduce the use of dirty tricks

• Not using them yourself

• Recognising them when your counterparts use them, explicitly

pointing them out establish the rules of the game

• Knowing what the best alternative is to a negotiated solution

• Realizing that tactics that appear dirty to people from another

culture may be acceptable to your team

NONVERBAL TACTICS

WHOSE STYLE TO USE?

Discussion Question

What verbal and nonverbal negotiating tactics are

most frequently used in Austria and why?

HOW NEGOTIATORS GET TO YES

Catherine H. Tinsley

GENERAL

“Managing conflict is critical for sustaining organizational efficiency

and effectiveness”

• Conflict management strategies of Japanese, American and

German subjects

– USA: focus on interests polychronicity

– GER: focus on regulations explicit

– JPN: focus on status power hierarchy

• Persuasion was relatively universal, persuasive arguments differ

• Integrating interest– cognitive problem solving– Prioritize interests & trade-off

• Applying regulation– relying on mutual standards & regulations– Connecting proposal with universal standards

• Deferring status power– Force conciliation on basis of social status – Quick solving to avoid social disruption

CONFLICT MANAGEMENT STRATEGIES

VALUES CONGRUENT WITH STRATEGIES

Interest strategy: individualism, egalitarianism, polychronicity

Hypothesis 1: Values for individualism and polychronicity are positively correlated with each other and each negatively correlated to hierarchy

Regulations strategy: explicit contracting, egalitarianism

Hypothesis 2: Value for explicit contracting positively related, value for hierarchy negatively correlated to regulations strategy

Power strategy: hierarchy, collectivism, low explicit contracting

Hypothesis 3: Values for hierarchy are positively correlated, values for individualism and explicit contracting are negatively correlated to power strategy

• Hypothesis 4a: The interest strategy will be used most

by American negotiators, then German negotiators, then

Japanese negotiators

• Hypothesis 4b: The regulations strategy will be used

most by German negotiators, then American negotiators,

then Japanese negotiators

• Hypothesis 4c: The power strategy will

be used most by Japanese negotiators,

then German negotiators, then American

negotiators

CONSTELLATION OF STRATEGIES

• 104 business people: 38 Japanese, 36 Germans, 30 Americans

• CASE: engineering director hired 2 interns, violating the HR

director’s summer intern programme

• ISSUES:

a. Whether students will be part of the HR programme

b. Who would pay for their salary

c. Who would hire interns in the future

d. Intern qualifications

e. Timing of hiring

f. Use of an orientation programme

g. Continuation of a membership programme

METHOD

UNITS USED:

- persuasions based on regulations

- persuasions based on social power

- persuasions based on interests

- positive remarks

- negative remarks

- procedural remarks

- questions

- offers of information or proposals

- interruptions

- residual category

ANALYSIS AND RESULTS

21%

17%

9%

15%

5%

6%

7%

6%

6%

8%

• 70% of the variance in management behaviour could be

explained by the value dimensions

• Hypothesis 1, 3 and 4c generally supported

• Hypothesis 2, 4a and 4b partially supported

• 4 characteristics of an effective strategy:• The current conflict is resolved in a way that satisfies the

parties in conflict,

• Future-related conflicts are prevented,

• The time and money spent are minimal,

• The relationship between parties is preserved.

ANALYSIS AND RESULTS

Discussion Questions

What type of strategy (“Interest”, “Regulation, “Power”)

would you pursue and why?

CLASS ACTIVITY

Conduct the test yourselves• Two rounds• 2 volunteers for each round