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INTERNATIONAL NEGOTIATION

INTERNATIONAL NEGOTIATION. More complex than domestic negotiations Differences in national cultures and differences in political, legal, and economic systems often separate potential business partners . EXHIBIT 3-1: STEPS IN THE INTERNATIONAL NEGOTIATION PROCESS. STEP 1: PREPARATION.

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INTERNATIONAL NEGOTIATION

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  1. INTERNATIONAL NEGOTIATION • More complex than domestic negotiations • Differences in national cultures and differences in political, legal, and economic systems often separate potential business partners

  2. EXHIBIT 3-1: STEPS IN THE INTERNATIONAL NEGOTIATION PROCESS

  3. STEP 1: PREPARATION STEP 2: BUILDING THE RELATIONSHIP STEP 3: EXCHANGING INFORMATION/FIRST OFFER STEP 4: PERSUASION STEP 5: CONCESSIONS STEP 6: AGREEMENT

  4. STEP 1: PREPARATION • Is the negotiation possible? • Know what your company wants • Know the other side • Send the proper team • Agenda • Prepare for a long negotiation • Environment • Strategy

  5. DIFFERENCES IN CULTURES IN KEY NEGOTIATING PROCESSES • Communication styles—direct or indirect • Sensitivity to time—low or high • Forms of agreement—specific or general • Team organization—a team or one leader

  6. STEP 2: BUILDING THE RELATIONSHIP • No focus on business • Partners get to know each other • Social and interpersonal matters • Duration and importance vary by culture

  7. STEP 3: EXCHANGING INFORMATION AND THE FIRST OFFER • Task-related information is exchanged • First offer

  8. STEP 4: PERSUASION • Heart of the negotiation process • Attempting to get other side to agree to a position • Numerous tactics can be used

  9. VERBAL AND NONVERBAL NEGOTIATION TACTICS • Promise • Threat • Recommendation • Warning • Reward • Punishment • Normative appeal

  10. OTHER NEGOTIATION TACTICS • Commitment • Self disclosure • Question • Command • No • Interrupting

  11. EXHIBIT 3-4: FREQUENCIES OF VERBAL NEGOTIATION BEHAVIORS

  12. “DIRTY TRICKS” IN INTERNATIONAL NEGOTIATIONS Dirty tricks are negotiation tactics that pressure opponents to accept unfair or undesirable agreements or concessions

  13. PLOYS/DIRTY TRICKS - POSSIBLE RESPONSES • Deliberate deception - point out what is happening • Stalling - do not reveal when you plan to leave • Escalating authority - clarify decision making authority

  14. Good guy, bad buy routine - do not make any concessions • You are wealthy and we are poor - ignore the ploy • Old friends - keep a psychological distance

  15. STEPS 5 AND 6: CONCESSIONS AND AGREEMENT • Final agreement: The signed contract, agreeable to all sides • Concession making requires that each side relax some of its demands

  16. STYLES OF CONCESSION • Sequential approach - consider each issue as a separate point • Each side reciprocates concessions • Holistic approach - more common in Asia • Concession making begins after all issues are discussed

  17. BASIC NEGOTIATION STRATEGIES • Competitive • The negotiation as a win-lose game • Problem solving • Search for possible win-win situations

  18. COMPETITIVE OR PROBLEM SOLVING INTERNATIONAL NEGOTIATION • Cultural norms and values may predispose some negotiators to one approach • Most experts recommend a problem solving negotiation strategy

  19. THE SUCCESSFUL INTERNATIONAL NEGOTIATOR: PERSONAL CHARACTERISTICS • Tolerance of ambiguous situations • Flexibility and creativity • Humor • Stamina • Empathy

  20. Curiosity • Bilingual

  21. BASICS OF CROSS-CULTURAL COMMUNICATION

  22. LANGUAGE AND CULTURE • The Whorf hypothesis

  23. LOW CONTEXT • The words provide most of the meaning • Most northern European languages including German, English, and the Scandinavian languages are low context

  24. HIGH CONTEXT • Communications have multiple meanings interpreted by reading the situation • Asian and Arabic languages are among the most high context in the world

  25. PRACTICAL ISSUES IN CROSS-CULTURAL VERBAL COMMUNICATION

  26. INTERPRETERS • Provide simultaneous translation of a foreign language • Requires greater linguistic skills than speaking a language or translating written documents • Insure the accuracy and common understanding of agreements

  27. 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

  28. Avoid “sports” words or words borrowed from literature • Avoid slang/words that represent pictures • Mimic the cultural flavor nonnative speaker’s language • Summarize • Test your communication success

  29. NONVERBAL COMMUNICATION - COMMUNICATING WITHOUT WORDS

  30. KINESICS • Communicating through body movements • Facial expressions • Body posture

  31. PROXEMICS • The use space to communicate • The personal bubble of space - nine inches to over twenty inches • North Americans prefer more distance than from Latin and Arab cultures

  32. TOUCH • A basic form of human interaction • In greeting - shake hands, embrace, or kiss • Latin European and Latin American cultures-more touching than Germanic, Anglo, or Scandinavian cultures

  33. AVOIDING ATTRIBUTION ERRORS • Attribution - process by which we interpret the meaning and intent of spoken words or nonverbal exchanges • Attribution errors

  34. CONCLUSIONS • Successful negotiators • Understand the negotiation steps • Build cross-cultural communication skills • Understand nonverbal communication • Avoid attribution errors

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