answer the questions based on international negotiation

International and Cross-Cultural Negotiation

Cross-Cultural Simulation The case of Potsdam Prunes

Represent one of the negotiating parties ◦ Confidential information

Negotiate online using Google translate

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PREPARATION  Read your confidential information sent to your fake

email account and prepare for negotiations  Log in into Gmail  Invite your counterpart to start the chat

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NOTE:

In the chat-sections:

type in the e-mail-

address of your

counterpart and

invite him or her to

chat

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Split screen oSplit your screen so that you can chat and have your translation on the same screen

oTimeline:

o 60 min to read one page script and prepare a plan – write it down and submit by 7:00 pm BEFORE you begin negotiations

o40 min to negotiate – 7:00-:7:40

o60 + min for analysis and write up - remaining class time. The assignment link will close at 10.

DR. ASHA RAO, CSUEB

International/crosscultural negotiations

- single most important IB skills

- domestic negotiations + cultural/political

- international managers spend 50%+ in negotiations

- variations in planning, emphasis on relationships, negotiating principles, players, etc..…

- rooted in cultural values, religion, history

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What’s the difference Two overall contexts have an influence on international negotiations:

Environmental context ◦ Includes environmental forces that neither negotiator controls

that influence the negotiation

Immediate context ◦ Includes factors over which negotiators appear to have some

control

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Environment Factors that make international negotiations more challenging than domestic negotiations include: Political and legal pluralism

International economics

Foreign governments and bureaucracies

Instability

Ideology

Culture

External stakeholders

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Immediate context “Factors over which the negotiators have influence and some measure of control”:

Relative bargaining power

Levels of conflict

Relationship between negotiators

Desired outcomes

Immediate stakeholders

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Context

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DR. ASHA RAO, CSUEB

Negotiating Internationally

N.Americans Arabs Russians

Primary Factual Affective Axiomatic

Style logic emotions ideals

Counter facts feelings asserted

arguments ideals

concessions small throughout few

early

relationship short long no

term term relationship

initial position moderate extreme extreme

deadline v. imp casual ignored

Culture and negotiations Culture as learned behavior ◦ A catalogue of behaviors the foreign negotiator

should expect

Culture as shared values ◦ Understanding central values and norms

◦ Individualism/collectivism

◦ Power distance

◦ Career success/quality of life

◦ Uncertainty avoidance

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Hofstede Individualism/collectivism

Power distance

Masculinity/femininity

Uncertainty avoidance

Hofstede cultural maps

Country comparisons

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Individualism Definition: the extent to which the society is organized around individuals or the group

Individualism/collectivism orientation influences a broad range of negotiation processes, outcomes, and preferences ◦ Individualistic societies may be more likely to swap

negotiators, using whatever short-term criteria seem appropriate

◦ Collectivistic societies focus on relationships and will stay with the same negotiator for years

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Power distance Definition: “The extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally”

Cultures with stronger power distance will be more likely to have decision-making concentrated at the top of the culture.

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Masculinity-Femininity Definition: the extent cultures hold values that are traditionally perceived as masculine or feminine Influences negotiation by increasing the competitiveness when negotiators from masculine cultures meet

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Uncertainty avoidance Definition: “Indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations”

Negotiators from high uncertainty avoidance cultures are less comfortable with ambiguous situations--want more certainty on details, etc.

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Hofstede rankings of some cultures

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CONCEPTUALIZING CULTURE AND NEGOTIATION

• Culture as dialectic  All cultures contain dimensions or tensions that are

called dialectics Example: Judeo-Christian parables “too many cooks spoil the

broth” and “two heads are better than one” offer conflicting guidance

This can explain variations within cultures

• Culture in context  No human behavior is determined by a single cause

 All behavior may be understood at many different levels simultaneously

Impact of culture on negotiations Definitions of negotiation Negotiation opportunity Selection of negotiators Protocol Communication Time sensitivity Risk propensity Groups versus individuals emphasis Nature of agreements Emotionalism

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Negotiation outcomes

◦ Research suggests that culture has an effect on negotiation outcomes, although it may not be direct and it likely has an influence through differences in the negotiation process in different cultures

◦ Some evidence suggests that cross-cultural negotiations yield poorer outcomes than intracultural negotiations

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Process Negotiation process

◦ Culture has been found to have significant effects on the negotiation process, including: ◦ How negotiators plan

◦ The offers made during negotiation

◦ The communication process

◦ How information is shared during negotiation

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Ethics Effect of culture on negotiator ethics and tactics

◦ Perception of ethics

◦ Differences exist in the tolerance of different negotiation tactics in different cultures

◦ Negotiators who trusted the other party were less likely to use questionable negotiation tactics

Effects of culture on conflict resolution ◦ Within collectivistic countries, disagreements are resolved based on rules,

whereas in individualistic countries, conflicts tend to be resolved through personal experience and training

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Cultural responsiveness When choosing a strategy, negotiators should: ◦ Be aware of their own and the other party’s culture in general

◦ Understand the specific factors in the current relationship

◦ Predict or try to influence the other party’s approach

Strategies are arranged based on the level of familiarity (low, moderate, high) that a negotiator has with the other party’s culture

(Steve Weiss – When in Rome)

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When you don’t know the culture

Employ agents or advisers (unilateral strategy) ◦ Useful for negotiators who have little awareness of the other

party’s culture

Bring in a mediator (joint strategy) ◦ Encourages one side or the other to adopt one culture’s

approaches or mediator culture approach

Induce the other party to use your approach (joint strategy) ◦ The other party may become irritated or be insulted

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Moderate familiarity Adapt to the other negotiator’s approach (unilateral strategy)

◦ Involves making conscious changes to your approach so it is more appealing to the other party

Coordinate adjustment (joint strategy) ◦ Involves both parties making mutual adjustments to find a common process

for negotiation

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High familiarity Embrace the other negotiator’s approach (unilateral strategy)

◦ Adopting completely the approach of the other negotiator (negotiator needs to completely bilingual and bicultural)

Improvise an approach (joint strategy) ◦ Crafts an approach that is specifically tailored to the negotiation situation,

other party, and circumstances

Effect symphony (joint strategy) ◦ The parties create a new approach that may include aspects of either home

culture or adopt practices from a third culture

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DR. ASHA RAO, CSUEB

A Japanese model

• avoid conflict, promote harmony

•status - buyer is “kinger”

•amae “indulgent dependency” - buyers take care of

sellers

•long term relationships - geographic isolation

• naniwabushi “sellers approach”- kikkake

(opening), seme (narrative) , urei (sorrowful request)

• wa - lack of feedback, honne (true mind) and

tatemae

• third parties

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Points of conflict in styles

•U.S.

•individualism, low power

distance

•short, informal, non-task

sounding

•full authority, “cards on the

table”, immediate reciprocity,

explicit communication

•persuasion - aggressive,

“you need this”

•goal = good deal

•Japanese

•collectivism, high power

distance

•long, expensive, formal

•limited authority, tatemae

and honne, long term recip,

implicit communication

•naniwabushi

•holistic rather than

sequential concessions

•goal =deal + relationship