Intercultural Negotiation Process

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Intercultural Negotiation Process
Chapter 10
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Topics

• Steps in the Negotiation Process
• Mistakes Commonly Made During Negotiations
• Intercultural Negotiation Models
• Negotiation Strategies
• Trade Agreements

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Definition
Intercultural negotiation involves discussions of
common and conflicting interests between persons
of different cultural backgrounds who work to
reach an agreement of mutual benefit.
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In business, you don't get what you deserve, you
get what you negotiate.Why take no for an
answer? Successful people don't. They get what
they want by negotiating better deals for both
parties.
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Steps in the Negotiation Process

• Preparation and Site Selection
• Team Selection
• Relationship Building
• Opening Talks
• Discussions
• Agreement

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Preparation and Site Selection

• Hire a consultant in the country.
• Consult resource videos and written materials on
  negotiation.
• Choose a sitehere or there can be important.

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Team Selection

• Consider number, age, gender, and rank of team
  members.
• Consider background of players.
• Evaluate other negotiators - their political
  affiliation, social class, age, and risk-taking
  propensity.

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Relationship Building

• Time required
• Intermediaries or agents
• Friendship versus business relationship

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Opening Talks and Discussions

• Observe opening rituals - small talk, humor, etc.
• Consider the appropriateness of an agenda.
• Expect a variety of behaviors.
• Plan ahead for concessions.
• Move to an informal location when appropriate.

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Agreement

• Close negotiations properly.
• Expect delays .
• Get tax and legal advice.
• Anticipate a long wait until final approval.
• Remember that contracts are not always considered
  final.

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Common Negotiation Mistakes

• Making negative initial impression
• Failing to listen and talking too much
• Assuming understanding by the other culture
• Failing to ask important questions
• Showing discomfort with silence
• Using unfamiliar and slang words
• Interrupting the speaker
• Failing to read the nonverbal cues

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• Failing to note key points
• Making statements that are irritating or
  contradictory
• Failing to prepare a list of questions for
  discussion
• Being easily distracted
• Failing to start with conditional offers
• Failing to summarize and restate to ensure
  understanding
• Hearing only what you want to hear
• Failing to use first-class supporting materials

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Intercultural Negotiation Models

• Problem-solving approach considers national and
  organizational cultural differences
• Competitive approach individualistic and
  persuasive orientation
• Compromising seeks a middle ground
• Forcing makes the other party comply
• Legalism uses legal documentation to force the
  partner to comply

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Four - Stage Negotiation Model

• Investigative
• Presentation
• Bargaining
• Agreement

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Negotiation Strategies

• People act on the basis of their own best
  interests.
• Truth in negotiations
• Faith
• Fact
• Feeling
• U.S. negotiators make fewer adjustments to their
  opponents.
• Strategies include preparation tactics
  conflict resolution and mediation and
  observation, analysis, and evaluation.

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Trade Agreements

• General license never actually issued
• Validated license allows specific exporter to
  export specific products to specific places
• Free trade zones or trade blocs products enter
  without customs duties

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NAFTA Benefits

• To eliminate barriers to trade and facilitate
  cross-border movement of goods and services
• To promote fair competition
• To increase investment opportunities
• To provide adequate and effective protection for
  intellectual property
• To develop effective procedures to handle
  disputes
• To expand cooperation and increase benefits to
  the three countries

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The U.S. Negotiators Global Report Card
Competency Grade

• Preparation B-
• Synergistic approach (win-win) D
• Cultural I.Q. D
• Adapting the negotiating process
• to the host country environment D
• Patience D
• Listening D
• Linguistic abilities F
• Using language that is simple
• and accessible C
• High aspirations B
• Personal integrity A-
• Building solid relationships D

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Statements Characteristic of U.S. Negotiating
Style

• "I can handle this myself" (to express
  individualism).
• "Please call me Steve" (to make people feel
  relaxed by being informal).
• "Pardon my French" (to excuse profanity).
• "Let's get to the point" (to speed up decisions).
• "Speak up what do you think?" (to avoid
  silence).
• "A deal is a deal" (to indicate an expectation
  that the agreement will be honored).

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China

• Reserved known for hospitality and good manners
• Give small, inexpensive presents
• Do not like to be touched
• Consider mutual relationships and trust very
  important
• Technical competence of negotiators necessary
• Prefer to use an intermediary
• Rarely use lawyers
• Ample room for compromise

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France

• Have a sense of pride sometimes interpreted as
  supremacy
• French logic ("Cartesian" logic) proceeds from
  what is known in a point-by-point fashion until
  agreement is reached
• Protocol, manners, status, education, family, and
  individual accomplishments are keys to success
  with the French

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Germany

• Protocol is important
• Dress is conservative correct posture and
  manners are required
• Use titles when addressing members of the
  negotiating team
• Prefer keeping a distance between themselves and
  the other team
• Have technical people as part of the negotiation
  team as Germans are detail oriented
• Punctuality is expected
• Contracts are firm guidelines to be followed
  exactly

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India

• Bribery is common having connections is
  important
• Avoid using the left hand in greetings and eating
• Request permission before smoking, entering, or
  sitting
• Building relationships is important an
  introduction is necessary
• Intermediaries are common
• Use titles to convey respect
• Knowledge of local affairs is important
• Negotiation process can be long

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Japan

• Business etiquette is very important, including
  business card exchange
• Meeting should be arranged by an intermediary
• Subtle and complex verbal and nonverbal cues are
  used to avoid having someone lose face or lose
  the group harmony
• The Japanese use more silence and less eye
  contact than U.S. persons
• Consider contracts as flexible instruments
• Are suspicious of a negotiating team that
  includes lawyers

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Latin America

• Relationships are important
• Bribery is common
• Government is very involved in business
• Negotiators chosen based on family connections,
  political influence, education, and gender
  (females should be in the background)
• Social competence is important
• Most agreements are consummated over lunch
• Numerous meetings is the norm time is not seen
  as important
• Avoid gestures

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Nigeria

• Nigerians are skillful negotiators they view
  negotiation as a competitive process
• When selecting negotiators, consider age (equated
  with wisdom), gender, cultural background, and
  educational credentials
• Developing a personal relationship is important
• Time is not particularly important so
  negotiations may be lengthy
• Use titles and last names
• Use an intermediary to make initial introductions
• Being well dressed is important courtesy and
  consideration are also expected
• Contracts (oral or written) are flexible
• A bribe may be needed to expedite business

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Russian States

• In the past, negotiation sessions have been long,
  with Russians controlling the agenda
• Are concerned with age, rank, and protocol
• Tend to be formal
• Friendships are not crucial to business
• Contracts interpreted rigidly
• Concerned with maximizing their profits

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Negotiating globally can present many
opportunities. Corporations can expand their
markets, increase their markets, increase their
profits and productivity, and lower their costs
by negotiating globally.