Chapter 5 Crosscultural Negotiation and Decision Making Power

Chapter 5: Cross-cultural Negotiation and Decision Making Power. Point by Hettie A. Richardson Louisiana State University © 2008 Pearson Prentice Hall

Opening Profile: The Art of the Deal Meets China Syndrome n China mobile called off the deal with Millicom when it seemed the deal was closed n As a result, some expect US and European companies to become wary of China and outside Chinese acquisitions to fall 2 © 2008 Pearson Prentice Hall

Opening Profile: The Art of the Deal Meets China Syndrome n Chinese managers proceed slowly n Chinese businesses often face many internal problems n Foreign negotiators become frustrated with Chinese tactics 3 © 2008 Pearson Prentice Hall

Negotiation n The process of discussion by which two or more parties aim for mutually acceptable agreement 4 © 2008 Pearson Prentice Hall

Stage One: Preparation n Develop profiles of counterparts n Find out likely demands, team composition, and counterpart authority n Uzbekistan had to learn from scratch n Choose a negotiation site n British/French Chunnel negotiations 5 © 2008 Pearson Prentice Hall

Stage Two: Relationship Building n Getting to know one’s contacts and building mutual trust n Nontask sounding (nemawashi) n Use an intermediary n “I have come as a mediator…” 6 © 2008 Pearson Prentice Hall

Stage Three: Exchanging Taskrelated Information n Cultural differences remain an issue n Mexicans can be suspicious and indirect n The French enjoy debate and conflict n The Chinese ask many questions, but provide ambiguous information in return n Show understanding of the other viewpoint 7 © 2008 Pearson Prentice Hall

Stage Four: Persuasion n Dirty tricks are in the eye of the beholder n False information n Ambiguous authority n Uncomfortable rooms n Rudeness, threats n Calculated delays 8 © 2008 Pearson Prentice Hall

Stage Five: Concessions and Agreement n Russians and the Chinese start with extreme positions n Swedes start with what they will accept n Starting with extremes may be most effective 9 © 2008 Pearson Prentice Hall

Comparison of Negotiation Styles North Japanese American Deal Hide emotions impersonally Subtle power Litigation, not plays conciliation Step-by-step Methodical approach organization Group good is Profit is aim Latin American Emotionally passionate Great power plays Impulsive, spontaneous Group/individual good is aim 10 © 2008 Pearson Prentice Hall

Successful Negotiators: Americans n Know when to compromise, but stand firm at beginning n Refuse to make concessions beforehand n Keep cards close to chest, but make other party reveal his/her position n Keep maximum options open, operate in good faith 11 © 2008 Pearson Prentice Hall

Successful Negotiators: Indians n Look for and say the truth, not afraid to speak up n Exercise self-control n Respect other party, look for solutions acceptable to all parties n Will change their minds, even at risk of seeming inconsistent and unpredictable 12 © 2008 Pearson Prentice Hall

Successful Negotiators: Arabs n Protect honor, self-respect, dignity and, thus, are trusted and respected n Avoid direct confrontation n Come up with creative, honorable solutions n Are impartial and can resist pressure 13 © 2008 Pearson Prentice Hall

Successful Negotiators: Swedes n Quiet, thoughtful, polite, straightforward n Overcautious, but flexible n Slow to react to new proposals, but eager to be productive and efficient n Able to hide emotions, afraid of confrontation 14 © 2008 Pearson Prentice Hall

Successful Negotiators: Italians n Have a sense of drama, do not hide emotions n Good at reading facial expressions and gestures n Want to make a good impression and use flattery, but are distrusting n Handle confrontation with subtlety and tact 15 © 2008 Pearson Prentice Hall

Managing Negotiation n Avoid person-related conflict n Examples n Low-context Americans appear impatient, cold, and blunt to Mexicans. n Americans must approach negotiations with Mexicans with patience and tolerance; refrain from attacking ideas 16 © 2008 Pearson Prentice Hall

Using the Web in Negotiations n Negotiation support systems (NSS) n Increase likelihood of agreement n Decrease direct and indirect costs n Maximize optimal outcomes 17 © 2008 Pearson Prentice Hall

Comparative Management in Focus: Negotiating with the Chinese n Two problems n Chinese desire for detail n Apparent insincerity n Saving Face n Lien n Mien-tzu 18 © 2008 Pearson Prentice Hall

Comparative Management in Focus: Negotiating with the Chinese n Importance of harmony n Guanxihu networks n Two stages of Chinese negotiation n Technical n Commercial 19 © 2008 Pearson Prentice Hall

Comparative Management in Focus: Negotiating with the Chinese n Some recommendations: n Practice patience n Accept prolonged stalemate n Refrain from exaggerated expectations n Expect shaming n Resist blaming for difficulties n Understand Chinese cultural traits 20 © 2008 Pearson Prentice Hall

Managing Conflict Resolution n Instrumental oriented n Expressive oriented 21 © 2008 Pearson Prentice Hall

Low-context, High-context Sources of Conflict Low-context Why When What How High-context Analytic, linear logic Synthetic, spiral logic Individualistic Group oriented violations Revealment, Concealment, nonconfrontational Explicit, open, Implicit, ambiguous, direct indirect 22 © 2008 Pearson Prentice Hall

The Influence of Culture on Decision Making n Individualism vs. collectivism n Objective vs. subjective approach n Risk tolerance n Comfort with unfamiliar solutions 23 © 2008 Pearson Prentice Hall

Approaches to Decision Making n Utilitarianism vs. moral idealism n Autocratic vs. participative leadership n Speed of decision making 24 © 2008 Pearson Prentice Hall

Comparative Management in Focus: Decision-making in Japan n Wa n Amae n Shinyo n Ringi 25 © 2008 Pearson Prentice Hall