Chapter 13 International Negotiation and Cross Cultural Communication

Chapter 13 International Negotiation and Cross. Cultural Communication Copyright© 2007 Thomson Learning All rights

Learning Objectives • Understand the basics of verbal and nonverbal communication • Understand the basic international negotiation processes • Understand the basic tactics of international negotiations • Recognize and respond to the “dirty tricks” Copyright© 2007 South-Western/Thomson Learning All rights

Learning Objectives • Know the difference between the problemsolving and competitive approaches • Identify the personal characteristics of the successful international negotiator Copyright© 2007 South-Western/Thomson Learning All rights

International Negotiation • Process of making business deals across cultures • Precedes any multinational project • Without successful negotiation and the accompanying cross-cultural communication, there are seldom successful business transactions Copyright© 2007 South-Western/Thomson Learning All rights

The Basic of Cross-Cultural Communication • Successful negotiation requires successful communication • Negotiators must understand all components of culturally different communication styles (both verbal and nonverbal) Copyright© 2007 South-Western/Thomson Learning All rights

Language and Culture • Whorf hypothesis: theory that language determines the nature of culture • All languages have limited sets of words • Words provide the concepts of understanding the world • Restricted word sets constrain the ability to understand the world Copyright© 2007 South-Western/Thomson Learning All rights

High- and Low-Context Languages • Low-context language: people state things directly and explicitly - Most northern European languages including German, English, and the Scandinavian languages • High-context language: people state things indirectly and implicitly - Asian and Arabic languages Copyright© 2007 South-Western/Thomson Learning All rights

Exhibit 13. 1: Country Differences in High-Context and Low-Context Communication Copyright© 2007 South-Western/Thomson Learning All rights

Basic Communication Styles • Direct communication: communication that comes to the point and lacks ambiguity • Formal communication: communication that acknowledges rank, titles, and ceremony in prescribed social interaction Copyright© 2007 South-Western/Thomson Learning All rights

Exhibit 13. 2: Cultural Differences in Communication Styles Copyright© 2007 South-Western/Thomson Learning All rights

Nonverbal Communication • Communication without words • Includes array of behaviors that enhance/supplement spoken communication • Include - Kinesics, proxemics, haptics, oculesics, and olfactics Copyright© 2007 South-Western/Thomson Learning All rights

Kinesics • Communication through body movements - E. g. , facial expressions, body posture - Most Asian cultures use bowing to show respect - No universal code for what body movements mean - Easy to misinterpret gestures Copyright© 2007 South-Western/Thomson Learning All rights

Proxemics • Use of space to communicate - Each culture has appropriate distances for communication - The personal bubble of space may range from 9 inches to over 20 inches - North Americans prefer more distance than Latin and Arab cultures Copyright© 2007 South-Western/Thomson Learning All rights

Seating in a Typical Japanese Office Copyright© 2007 South-Western/Thomson Learning All rights

Haptics or Touching • Communication through body contact • Shaking hands, embracing, or kissing when greeting one another - No touching • E. g. , Japan, U. S. , England, and many Northern European countries - Moderate touching • E. g. , Australia, China, Ireland, and India - Touching • E. g. , Latin American countries, Italy, and Greece Copyright© 2007 South-Western/Thomson Learning All rights

Oculesics • Communication through eye contact or gaze - U. S. and Canada: people are very comfortable and expect eye contact to be maintained - China and Japan: eye contact is considered very rude and disrespectful Copyright© 2007 South-Western/Thomson Learning All rights

Olfactics • The use of smells as means of nonverbal communication - U. S. and U. K: find body odor offensive - Arab: consider body odors natural Copyright© 2007 South-Western/Thomson Learning All rights

Practical Issues in Cross. Cultural Business Communication • Interpreter’s role: to provide a simultaneous translation of a foreign language - Require greater linguistic skills than speaking a language or translating written documents - Have the technical knowledge and vocabulary to deal with technical details common in business transactions - Have to ensure the accuracy and common understanding of agreements Copyright© 2007 South-Western/Thomson Learning All rights

Tips for Successful Use of Interpreters • Spend time with the interpreter • Go over technical and other issues with interpreter for proper understanding • Insist on frequent interruptions when it’s necessary • Look for feedback and comprehension by watching the eyes Copyright© 2007 South-Western/Thomson Learning All rights

Tips for Successful use of Interpreters (cont. ) • Discuss the message beforehand • Request that your interpreter apologize for your inability to speak in the local language • Confirm that all key components of the message have been properly comprehended Copyright© 2007 South-Western/Thomson Learning All rights

Communication with Nonnative Speakers • Use the most common words with most common meanings • Select words with few alternative meanings • Follow rules of grammar strictly • Speak with clear breaks between words • Avoid sports words or words borrowed from literature Copyright© 2007 South-Western/Thomson Learning All rights

Communication with Nonnative Speakers (cont. ) • Avoid words or expressions that are pictures • Avoid slang • Mimic the cultural flavor of the nonnative speaker’s language • summarize • Test your communication success • Repeat basic ideas using different words when your counterpart does not understand • Confirm important aspects in writing Copyright© 2007 South-Western/Thomson Learning All rights

Avoiding Attribution Errors • Attribution: process by which we interpret the meaning of spoken words or nonverbal exchanges - Attribute meaning based on our taken-forgranted cultural expectations - Easy to make mistakes of attribution - Need to observe carefully - Avoid subtleties of a foreign language - Avoid complex nonverbal behaviors Copyright© 2007 South-Western/Thomson Learning All rights

International Negotiation • More complex than domestic negotiations • Differences in national cultures and differences in political, legal, and economic systems • Steps in international negotiation - Preparation, building the relationship, exchanging information, first offer, persuasion, concessions, agreement, and post agreement Copyright© 2007 South-Western/Thomson Learning All rights

Exhibit 13. 3: Steps in International Negotiations Copyright© 2007 South-Western/Thomson Learning All rights

Step 1: Preparation • • • Determine if the negotiation is possible Know what your company wants Be aware of what can be compromised Know the other side Send the proper team What is the agenda? Prepare for long negotiation What is the environment like? Plan a strategy Copyright© 2007 South-Western/Thomson Learning All rights

Cultural Differences in Key Negotiating Processes • Negotiation goal—signing the contract or forming a relationship • Formal or informal personal communication style • Direct or indirect communication style • Sensitivity to time—low or high • Forms of agreement—specific or general • Team organization—a team or one leader Copyright© 2007 South-Western/Thomson Learning All rights

Cultural Differences in Key Negotiating Processes • Attitude towards negotiation – win-lose or win -win • High or low emotions • Latin Americans and the Spanish: show their emotions through negotiations • Japanese and Germans: tend to be more reserved Copyright© 2007 South-Western/Thomson Learning All rights

Exhibit 13. 4: Cultural Differences in Preference for Broad Agreements Copyright© 2007 South-Western/Thomson Learning All rights

Exhibit 13. 5: Understanding Negotiators from Other Countries Copyright© 2007 South-Western/Thomson Learning All rights

Step 2: Building the Relationship • First stage of the actual negotiation process - No focus on business - Partners get to know each other - Social and interpersonal exchange - Duration and importance vary by culture Copyright© 2007 South-Western/Thomson Learning All rights

Step 3: Exchanging Information and the First Offer • Both parties exchange information on their needs for the agreement • Parties exchange task-related information and first offer - Task-related information: actual details or the proposed agreement - First offer: first proposal by parties of what they expect from the agreement Copyright© 2007 South-Western/Thomson Learning All rights

Exhibit 13. 6: Information Exchange and First-Offer Strategies Copyright© 2007 South-Western/Thomson Learning All rights

Step 4: Persuasion • Stage when each side in the negotiation attempts to get the other side to agree to its position - Heart of the negotiation process - Numerous tactics used Copyright© 2007 South-Western/Thomson Learning All rights

Verbal Negotiation Tactics • • • Promise Threat Recommendation Warning Reward Punishment Copyright© 2007 South-Western/Thomson Learning All rights

Verbal Negotiation Tactics • • • Normative appeal Commitment Question Command Refusal Interruption Copyright© 2007 South-Western/Thomson Learning All rights

Exhibit 13. 7: Comparison of Brazilian, U. S. , and Japanese Negotiators (in halfhour bargaining session) Copyright© 2007 South-Western/Thomson Learning All rights

Nonverbal Communication • Body posture, facial expression, hand gestures, and the use of personal space are a natural part of any international negotiation Copyright© 2007 South-Western/Thomson Learning All rights

Dirty Tricks • Negotiation tactics that pressure opponents to accept unfair or undesirable agreements or concessions Copyright© 2007 South-Western/Thomson Learning All rights

Ploys/Dirty Tricks and Responses • Deliberate deception or bluffing—point out what you believe is happening • Stalling—do not reveal when you plan to leave • Escalating authority—clarify decision making authority • Good-guy, bad-guy routine—do not make any concessions Copyright© 2007 South-Western/Thomson Learning All rights

Ploys/Dirty tricks and Responses • You are wealthy and we are poor—ignore the ploy • Old friends—keep a psychological distance Copyright© 2007 South-Western/Thomson Learning All rights

Step 5 and 6: Concession and Agreement • Final agreement: signed contract, agreeable to all sides • Concession making: requires that each side relax some of its demands Copyright© 2007 South-Western/Thomson Learning All rights

Styles of Concession • Sequential approach: each side reciprocates concessions • Holistic approach: each side makes very few concessions until the end of the negotiation Copyright© 2007 South-Western/Thomson Learning All rights

Basic Negotiation Strategies • Competitive negotiation: each side tried to give as little as possible and tries to “win” for its side - The negotiation as a win-lose game • Problem solving: negotiators seek out ground that is beneficial to both companies’ interests - Search for possible win-win situations Copyright© 2007 South-Western/Thomson Learning All rights

Exhibit 13. 8: Competitive and Problem. Solving Negotiation in the Negotiating Steps Copyright© 2007 South-Western/Thomson Learning All rights

Exhibit 13. 9: Cultural Differences in Preference for a Problem-Solving Negotiation Strategy Copyright© 2007 South-Western/Thomson Learning All rights

Step 7: Post Agreement • Commonly ignored step • Consists of an evaluation of the success of a competed negotiation • Allows the garnering of insights from understanding strengths and weaknesses of negotiation Copyright© 2007 South-Western/Thomson Learning All rights

The Successful International Negotiator: Personal Characteristics • • Tolerance of ambiguity Flexibility and creativity Humor Stamina Empathy Curiosity Bilingualism Copyright© 2007 South-Western/Thomson Learning All rights

Major Points Regarding Successful International Negotiation • Few negotiations succeed without extensive preparation. • Building personal relationships is a key step in a negotiation. • Managers should be aware that first offers may differ by cultural background. Copyright© 2007 South-Western/Thomson Learning All rights

Major Points Regarding Successful International Negotiation • Many tactics are used in persuasion. • Know how counterpart views the concessionmaking process. • Culture and legal traditions influence the content and force of law regarding business contracts. • Competitive negotiation seldom leads to long -term relationships. Copyright© 2007 South-Western/Thomson Learning All rights

Major Points Regarding Successful International Negotiation • Problem-solving negotiation is more flexible and probably more successful strategy. • Must be flexible, empathic, and physically tough. Copyright© 2007 South-Western/Thomson Learning All rights

Conclusion • Chapter examined the negotiating process and other elements of cross-cultural communication • International negotiations involves several steps including: preparation, building the relationship, persuasion, making concessions and reaching agreement • Successful negotiators prepare and understand these steps well Copyright© 2007 South-Western/Thomson Learning All rights