Global Negotiations

1
Global Negotiations

• We must build a new world, a far better world
  one in which the eternal dignity of man is
  respected.
• Harry S. Truman, 1945

Module 3, Week 2
2
Culture Defined

• Socially transmitted
• Behavior patterns
• Norms
• Beliefs
• Values
• within a given community

3
Cultural Context

• Psychological Elements
• Values
• Norms
• Social Structural Elements
• Economic
• Social
• Political
• Religious

4
Negotiation Strategies and Behaviors
Strategy
Behavioral Continuum
Confrontation
Direct
Indirect
Motivation
Individual
Collective
BATNA
Status
Influence
Information
Indirect
Direct
5
Cultural Values/Norms in Negotiation

• Individualism versus Collectivism
• In-Groups
• Out-groups
• Egalitarianism versus Hierarchy
• Geert Hofstedes Power Distance
• Based on differentiated cultural status
• Low-Context versus High-Context Communications
• Extent of communication networks
• Degree of context

6
Individualism v. Collectivism
Individualistic Cultures
Intermediate
Collectivistic Cultures

• United States
• Australia
• Great Britain
• Canada
• Netherlands
• New Zealand
• Italy
• Belgium
• Denmark
• Sweden
• France
• Norway
• Germany

• Austria
• Israel
• Spain
• India
• Japan
• Argentina
• Iran

• Brazil
• Turkey
• Greece
• Philippines
• Mexico
• Portugal
• Hong Kong
• Chile
• Thailand
• Taiwan
• Peru
• Pakistan
• Columbia

7
Relative Status of Egalitarian Cultures
Relative Status of Hierarchical Cultures

• Portugal
• Italy
• Spain
• Denmark
• France
• Netherlands
• Germany
• Greece
• Finland
• Switzerland
• New Zealand
• Turkey

• Thailand
• China
• Turkey
• Japan
• Taiwan
• Hong Kong
• Singapore
• Brazil
• Poland
• United States
• New Zealand
• Australia

United States Mexico Australia Brazil Israel Hong
Kong Poland Singapore Japan Taiwan China Thailand
Mexico Germany Netherlands Switzerland France Port
ugal Spain Finland Greece Denmark Italy
8
Low versus High Context

• Low-Context Cultures
• Germany
• Scandinavian cultures
• Switzerland
• United States

• High-Context Cultures
• Arab cultures
• France
• Japan
• Mediterranean cultures
• Russia

9
Effects of Cultural Differences on Negotiation

• Misunderstandings in communication
• Misinterpretation of behavior
• Form and substance of bargaining
• Negotiating style

10
Ten Factors of Negotiation

• Goal
• Attitudes
• Personal styles
• Communications
• Time sensitivity

• Emotionalism
• Agreement form
• Agreement building
• Team organization
• Risk taking

11
Negotiating Goal

• Contract or Relationship?
• Americans focused primarily on concluding
  negotiations as soon as possible, reaching an
  agreement
• Many cultures other than American instead focus
  primarily upon relationship, the agreement is
  merely a formality

12
Negotiating Attitude

• Win-Lose or Win-Win?
• Some cultures, especially the Japanese, perceive
  negotiations as a win-win proposition.
• The U.S. has changed its attitude recently, but
  still has a strong streak of competitiveness in
  negotiations.
• Numerous countries are still in the win-lose
  bargaining mode.

13
Personal Style

• Informal or Formal
• Formal negotiator uses titles (instead of first
  names as do the not so formal)
• Familiarity is perceived as an intrusion or
  slight
• Informal negotiator uses personal anecdotes
  instead of avoiding them
• Formality perceived as stuffiness, impersonal
• Americans traditionally are informal

14
Communication

• Direct or Indirect?
• Indirect cultures rely on figurative forms of
  speech and make the assumption that the
  counterpart is knowledgeable in the topic
  discussed.
• Emphasis also on nonverbal communication
• Directness can be perceived as rudeness by
  counterparts raised in an indirect culture

15
Sensitivity to Time

• High or Low?
• Punctuality versus lack of urgency
• Prenegotiation sessions more prolonged in
  cultures with low sensitivity to time
• Details may be discussed more leisurely and
  repeatedly in a culture with low sensitivity to
  time.

16
Emotionalism

• High or Low?
• In some cultures, display of emotions are an
  intrinsic part of negotiating
• Dramaturgy is a practiced form of communication
  among some cultures
• Stoicism is preferred in other cultures

17
Form of Agreement

• General or Specific
• Americans prefer detailed contracts and attempt
  to cover all contingencies
• Majority of countries appear to prefer the more
  specific form
• Japanese negotiators prefer general principles
  which continue dialogue
• Cultures preferring the general form tend to
  consider relationships more

18
Building an Agreement

• Top Down or Bottom Up?
• Top Down, or deductive negotiations, start with
  general principles that guide negotiations to the
  specifics. Favored by the French.
• Bottom Up, or inductive negotiations, favored by
  Mexicans, in which specifics lead to general
  principles

19
Team Organization

• One Leader or Group Consensus?
• One-Leader form is usually quicker
• Consensus form has more caucusing
• Americans tend to favor a supreme leader
• Some cultures are very strong in the direction of
  the one-leader form, while the consensus form
  does not reach the same intensity

20
Risk Taking

• High or Low?
• Risk averse cultures tend to require a great deal
  of information before making commitment
• While Americans tend toward the high risk end,
  France and India perceive themselves as risk
  takers

21
Important Caveat

• Dont Stereotype
• Negotiators are occasionally selected because
  their personal traits match that of their
  counterparts not that of their countrymen
• Organization values, norms, and issues are not
  always consistent with national values, norms,
  and issues
• Negotiating Contexts can change traits
• Individual negotiators have idiosyncrasies that
  may differ from their national culture

22
Themes of Interest-Based Negotiations

• Relationship
• Interests
• Options
• Criteria
• Alternatives

23
Manipulations and Violations

• Misrepresentation of Relationship
• Manipulation of Interests
• Misrepresentation of Alternatives
• Extreme Opening Offers
• Taking What You Want
• Escalating Demands
• Scams

24
Weaknesses of American Negotiators

• Interagency rivalries
• Separation of power between Congress and the
  administration
• Influence of interest groups on negotiations
• Difficult to keep confidences
• Impatience
• Cultural insensitivity