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Cross-Cultural Negotiations. Scott Bearder , Eric Bulthuis , Kathryn Davis, Eric Launer , Philip Lawson, Destinie Martinez, Raz Sanchez, William Turner, Chandra York. Fundamentals & Best Practices. Two major types of bargaining: Distributive Integrative - PowerPoint PPT Presentation
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CROSS-CULTURAL NEGOTIATIONSScott Bearder, Eric Bulthuis, Kathryn Davis, Eric Launer, Philip Lawson, Destinie Martinez, Raz Sanchez, William Turner, Chandra York
Fundamentals & Best Practices• Two major types of bargaining:
• Distributive • Integrative
• It is preferable to make no assumptions whatsoever about what is in the mind of the other person and to probe gently, but constantly to find out.
You Can Negotiate Anything• Herb Cohen (1980)• Three key elements in any negotiation:
• Time: The negotiator must be willing to commit a good amount of time to the negotiation process if success is to be attained.• Ex: refrigerator
• Information: the more information the negotiator possesses, the more power he or she gains in the negotiation process.• Ex: open ticket
• Power: this is achieved in multiple ways. Having the upper hand time and information wise is the biggest way.
Ronald Burke (1979)• Asked manager about when they solved problems
satisfactorily and unsatisfactorily.• Satisfactorily= genuinely integrative style was employed by 58.5%
of the managers.• Needs, preferences, and desires of both the managers and employees
received full consideration and the pie was viewed as expansive.• Highest probability of success even over compromise.
• Unsatisfactory: 79.2% were classified as being forceful, tough, or hard style that totally disregarded the other party’s needs, preferences, and desires.• This is successful when the negotiator is tough and the person they are
negotiating with is soft. BUT, this is not desirable for business.
Fisher, Ury, & Patton (1991)• Four parts or principles to deal with all types of
bargainers:• Separate the people from the problem• Focus on interests of both parties, not their positions.• Invent options, or complex solutions, for mutual gains by means of
brainstorming, taking time out to analyze whether additional options exist, and so on.
• Use objective criteria• Fisher et al also recommend that negotiations have a best
alternative to a negotiated settlement (BATNA)
Key Rules for Negotiating • Listen more than you talk• Do not become emotional• Don’t agree to a settlement immediately• Be reasonable, but make initial high offers, or initial high counteroffers if an offer has
already been made.• If it is a difficult bargainer, openly bring up this issue and indicate that your position
is the desirability of satisfying both parties.• Do your homework, be prepared, and take noted periodically during the
negotiations.• Periodically summarize, identifying key points.• Focus on a settlement range and not a specific point within it, indicate you are
willing to bargain.• Be sensitive to cross-cultural issues (saving face)• Focus on getting to know the other party in the beginning, let the stages flow.• Don’t finalize a deal unless you are satisfied both logically and emotionally.• Use simple language to avoid misunderstandings.• Don’t overestimate your ability to “read” body language.
Japanese Negotiations• The Japanese are non-confrontational. • They have a difficult time saying 'no', so you must be vigilant at observing their non-
verbal communication.• It is best to phrase questions so that they can answer yes.
o For example, do you disagree with this? • Group decision-making and consensus are important.• Written contracts are required.• The Japanese often remain silent for long periods of time. Be patient and try to work
out if your Japanese colleagues have understood what was said.• Japanese prefer broad agreements and mutual understanding so that when problems
arise they can be handled flexibly.• Never lose your temper or raise your voice during negotiations.• Some Japanese close their eyes when they want to listen intently. • The Japanese seldom grant concession. They expect both parties to come to the table
with their best offer.• The Japanese do not see contracts as final agreements so they can be renegotiated.
• http://www.kwintessential.co.uk/resources/global-etiquette/japan-country-profiles.html
Weiss (1994)• Low familiarity with counterpart’s culture:
• Employ an agent or advisor• Involve a mediator• Induce the counterpart to follow the script• Adapt to counterpart’s script
• Moderate familiarity with counterpart’s culture:• Try to coordinate the adjustment of both parties and embrace
counterpart’s script or ways of responding.• High familiarity with counterpart’s culture:
• Improvise an approach or creative “symphony”
Case Study: Entering the Chinese Market
• Sent top lawyer to settle agreement quickly• Lawyer was extroverted and eager to learn about culture• Trust developed quickly• Result: opening with a high, reasonable offer and gaining
trust between parties is best
Negotiating • Westerners are encouraged to establish trust before
making an offer• Terminating a negotiation early is not advised• U.S. companies have to be careful with bribery when
expanding internationally
Paradox 6.1• Is Chess more influential than the Chinese board game of
Go for strategy and negotiation?
Paradox 6.1• Chess- game of war (western game)• Object is to eliminate other opponent• And to “kill” the other opponent• Chris Nielson argues that chess metaphor is to blame for
losses for some American firms
Paradox 6.1• Go- the “competitive game” (eastern game)• Object is to occupy as much space on the board as
possible to render the opponent helpless • Example of this paradox is GM and Toyota
Paradox 6.2• Why do veteran international negotiators from one
national culture frequently complain that their counterparts from a dissimilar national culture are simultaneously very sincere and very deceptive?
Chinese Negotiation Tactics• Instability in China (going back 5,000 years)• Sun Tzu’s book, “The Art of War”• Turbulent history of China
Problems with Western Negotiators• No respect• Want to get down to business too quickly• Try to win the deal no matter what• Spanish negotiators making fun of there US counterparts.
Paradox 6.3• When negotiating, is it best to make the opening offer or
respond to it?
Best Practices• Best practice of negotiating is to open with a high offer
and make it high• If other party opens, respond with a high counteroffer as
long as trust is involved• Trust is rarely developed in enough time• High and low context cultures vary greatly in negotiating
techniques
Low Context: United States & Germany
• Don’t allow time to develop trust• Opens with high, but reasonable offer they’re willing to go
down on• Engage in less haggling
High Context: China & Thailand• Devote more time to gaining trust• Once they know other parties perspective they make an
opening offer• Chinese companies that want to be global offer have
introduced training to negotiate with Westerners
Paradox 6.4• How can time be considered as three circles(past,
present, and future) as well as only one circle?
Past Present Future
Paradox 6.4• Linear vs Nonlinear perspective of time and views on
negotiation
• Nonlinear orientations to time are dominant in Asia, Africa, and Latin America
• Linear orientations are common in the United States
Paradox 6.4• Different Cultures vary in their preferred orientation of time
• Focus on past, present, or future achievements
• Buddhism emphasizes one circle (past, present, and future)
Paradox 6.5• Is the Yin-Yang dynamic exclusively Asian?
Paradox 6.5• The underlying concept of the Yin-Yang Dynamic is
change and transformation• When Yin reaches its extreme it becomes Yang, and
when Yang reaches its extreme it becomes Yin. Therefore, Yin and Yang are dependent on each other.
Paradox 6.5• When a person understands the concept of the Yin-Yang
dynamic, they see the world in tones of gray.• Westerners may see the gray in situations, while Asians
possess a superior talent in doing so.• Basically, the Yin-Yang dynamic is not exclusively Asian;
however, it is much more prevalent there.
Paradox 6.6• Is there only one type of face?
Definition of Face• Face- unwritten set of rules by which negotiators
cooperate with one another to avoid damaging one another’s honor
Types of Faces• Saving face• Giving face• Respect person you are negotiating with• Never know when you will need them in the future• No set winner and loser
Types of Face in Asia• Self-face- personal or moral integrity• Other-face- face person shows in negotiation• Mutual-face- saving and giving face
• United States don’t like to tie• Asia a lot more comfortable with a tie