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Negotiating with International Customers, Partners, and Regulators. Global Perspective A Japanese Aisatsu. Face-to-face negotiations are an omnipresent activity in international commerce. Executives must also negotiate with representatives of foreign governments.

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Global perspective a japanese aisatsu
Global Perspective RegulatorsA Japanese Aisatsu

  • Face-to-face negotiations are an omnipresent activity in international commerce.

  • Executives must also negotiate with representatives of foreign governments.

  • A crucial aspect of all international commercial relationships is the negotiation of the original agreement.

  • If cultural differences are taken into account, business agreements can be made that lead to long-term, profitable relationships across borders.

The dangers of stereotypes
The Dangers of Stereotypes Regulators

Europeans Stereotype Themselves

The dangers of stereotypes1
The Dangers of Stereotypes Regulators

  • Negotiations are conducted between people, not national stereotypes

  • Cultural factors often make huge differences

  • Negotiation behaviors are different across regions, genders, and type of industry

  • Age and experience also make important differences

  • Consider the culture of customers and business partners, but treat them as individuals

The pervasive impact of culture on negotiation behavior
The Pervasive Impact of Culture on Negotiation Behavior Regulators

  • Regional generalizations very often are not correct

  • Cultural differences cause four kinds of problems in international business negotiations:

    • Language

    • Nonverbal behaviors

    • Values

    • Thinking and decision-making processes

Differences in language and nonverbal behaviors
Differences in Language and Nonverbal Behaviors Regulators

  • Americans are near the bottom of the languages skills list

  • Americans don’t like side conversations by foreigners in their native language

  • The variation across cultures is greater when comparing linguistic aspects of language and nonverbal behaviors than when the verbal content of negotiations is considered

Differences in language and nonverbal behaviors1
Differences in Language and Nonverbal Behaviors Regulators

Japanese Negotiators Exchange Business Cards – Important Ritual

Differences in language and nonverbal behaviors2
Differences in Language and Nonverbal Behaviors Regulators

Verbal Negotiations Tactics – The What of Communic-ations

Differences in language and nonverbal behaviors3
Differences in Language and Nonverbal Behaviors Regulators

Linguistic Aspects of Language and Nonverbal Behaviors (How Things Are Said)

Differences in language and nonverbal behaviors continued
Differences in Language and Nonverbal Behaviors (continued) Regulators

  • Japan

  • Korea

  • China (northern)

  • Taiwan

  • Russia

  • Germany

  • United Kingdom

  • Spain

  • France

  • Brazil

  • Mexico

  • French-speaking Canada

  • English-speaking Canada

  • United States

Differences in values
Differences in Values Regulators

  • Objectivity

    • “separating people from the problem”

  • Competitiveness and equality

    • Japanese appear to be the best negotiators with the highest profits

    • Japanese appear to be more equitable with buyers

  • Time

    • The passage of time is viewed differently across cultures

    • These difference most often hurt Americans

Differences in thinking and decision making processes
Differences in Thinking and Decision-Making Processes Regulators

  • Western approach: sequential

  • Eastern approach: holistic

  • Americans: business negotiation is a problem-solving activity

  • Japanese: a business negotiation is a time to develop a business relationship with the goal of long-term mutual benefit

Implications for managers and negotiators
Implications for Managers and Negotiators Regulators

Four steps for more efficient and effective international business negotiations:

  • Selection of the appropriate negotiation team

  • Management of preliminaries, including training, preparations, and manipulation of negotiation settings

  • Management of the process of negotiations

  • Appropriate follow-up procedures and practices

Negotiation teams
Negotiation Teams Regulators

  • Willingness to use team assistance

  • Listening skills

  • Influence at headquarters (senior executive)

  • Gender should not be used as a selection criterion for international negotiation teams

Negotiation teams1
Negotiation Teams Regulators

Women Get the Job Done – Chile’s Foreign Minister Maria Soledad Alvear

Negotiation preliminaries
Negotiation Preliminaries Regulators

Through His Books and Seminars, Chester Karrass Has Taught More People Negotiating Skills Than Anyone Else on Earth

Negotiation preliminaries1
Negotiation Preliminaries Regulators

Checklist for planning international negotiations:

  • Assessment of the situation and the people

  • Facts to confirm during the negotiation

  • Agenda

  • Best alternative to a negotiated agreement (BATNA)

  • Concession strategies

  • Team assignments

Negotiation preliminaries2
Negotiation Preliminaries Regulators

Different Negotiations Settings Have Different Advantages

Negotiation preliminaries continued
Negotiation Preliminaries (continued) Regulators

Aspects of the negotiation setting that should be pre-manipulated:

  • Location

  • Physical arrangements

  • Number of parties

  • Number of participants

  • Audiences (news media, competitors, fellow vendors, etc.)

  • Communications channels

  • Time limits

At the negotiation table
At the Negotiation Table Regulators

  • Nontask sounding

  • Task-related exchange of information

  • Persuasion

  • Concessions and agreement

At the negotiation table1
At the Negotiation Table Regulators

Japanese vs. American Negotiating Styles

Nontask sounding
Nontask Sounding Regulators

  • Learn the mood of the other side

  • Learn about the client’s background and interest for cues about appropriate communication styles

  • Judgments about the “kind” of person in the negotiation

Task related information exchange
Task-Related Information Exchange Regulators

  • Let the foreign counterparts bring up business

  • Expect a large number of questions but little feedback

  • Allow periods of silence

  • Use multiple communication channels

  • Understand the lack of, or the bluntness of negative feedback

  • Meet aggressive first offers with questions, not anger

Persuasion Regulators

You want him on your side – Banana Salesmen in Agra, India are world renowned

Persuasion Regulators

  • Task-related information exchange versus persuasion

  • Avoid threats, warnings, and other aggressive negotiation tactics

  • Avoid emotional outbursts

  • Ask more questions

  • Use third parties and information channels of communication

Concessions and agreement
Concessions and Agreement Regulators

  • Write down concession-making strategies

  • Understand differences in decision-making styles

  • In many cultures, no concessions are made until the end of the negotiations

After negotiations
After Negotiations Regulators

  • In most countries other than America, legal systems are not depended upon to settle disputes

  • Japan – contacts primarily contain comments on principles of the relationship

  • China – contracts are more a description of what business partners view their respective responsibilities to be

  • Many foreign CEOs expect a formal contract signing ceremony

  • Follow-up communications are very important

After negotiations1
After Negotiations Regulators

Tung Chee Hwa, Chief Executive of Hong Kong Administrative Region and Mickey Consummate Deal for Walt Disney World

Conclusions Regulators

  • Experience levels are going up worldwide

  • Culture still counts

  • Differences between countries and cultures, no matter how difficult, can be worked out when people talk to each other in face-to-face setting