International Negotiation and Cross-Cultural Communication

1. 12 International Negotiation and Cross-Cultural Communication

2. Learning Objectives • Understand the basics of spoken and nonverbal communication • Understand the basic international negotiation processes • Understand the basic tactics of international negotiations • Recognize and respond to the “dirty tricks”

3. Learning Objectives • Know the difference between the problem-solving and competitive approaches • Identify the personal characteristics of the successful international negotiator

4. International Negotiation • Process of making business deals across cultures • Precedes any multinational project • Successful negotiation requires successful communication • Negotiators must understand all components of culturally different communication styles

5. 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

6. 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

7. Exhibit 12.1: Country Differences in High-Context and Low-Context Communication

8. 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

9. Exhibit 12.2: Cultural Differences in Communication Styles

10. Nonverbal Communication • Communication without words • Includes array of behaviors that enhance/supplement spoken communication • Include • Kinesics, proxemics, haptics, oculesics, and olfactics

11. 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

12. 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

13. Seating in a Typical Japanese Office

14. Haptics or Touching • 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

15. 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

16. The Basics of Cross-Cultural Communication • Olfactics: use of smells as a means of nonverbal communication • U.S.: find body odor offensive • Arab: consider body odors natural

17. 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

18. 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

19. 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

20. 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

21. Communication with Nonnative Speakers (cont.) • Avoid words or expressions that are pictures • Avoid slang • Mimic the cultural flavor of the nonnative speaker’s language • Test your communication success • Repeat basic ideas using different words when your counterpart does not understand • Confirm important aspects in writing

22. Avoiding Attribution Errors • Attribution: process by which we interpret the meaning of spoken words or nonverbal exchanges • Attribute meaning based on our taken-for-granted cultural expectations • Easy to make mistakes of attribution • Need to observe carefully • Avoid subtleties of a foreign language • Avoid complex nonverbal behaviors

23. 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

24. Exhibit 12.3: Steps in International Negotiations

25. Step 1: Preparation • Determine if the negotiation is possible • Know what your company wants • Know the other side • Send the proper team • What is the agenda? • Prepare for long negotiation • What is the environment like? • Plan a strategy

26. 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

27. Exhibit 12.4: Cultural Differences in Preference for Broad Agreements

28. Exhibit 12.5: Understanding Negotiators from Other Countries

29. 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

30. 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

31. Exhibit 12.6: Information Exchange and First-Offer Strategies

32. Exhibit 12.6: Information Exchange and First-Offer Strategies

33. Exhibit 12.6: Information Exchange and First-Offer Strategies

34. 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

35. Verbal Negotiation Tactics • Promise • Threat • Recommendation • Warning • Reward • Punishment

36. Verbal Negotiation Tactics • Normative appeal • Commitment • Question • Command • Refusal • Interruption

37. Exhibit 12.7: Comparison of Brazilian, U.S., and Japanese Negotiators (in half-hour bargaining session)

38. Dirty Tricks • Negotiation tactics that pressure opponents to accept unfair or undesirable agreements or concessions

39. 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

40. Ploys/Dirty tricks and Responses • You are wealthy and we are poor—ignore the ploy • Old friends—keep a psychological distance

41. 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

42. Styles of Concession • Sequential approach: each side reciprocates concessions • Holistic approach: each side makes very few concessions until the end of the negotiation

43. 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

44. Exhibit 12.8: Competitive and Problem-Solving Negotiation in the Negotiating Steps

45. Exhibit 12.9: Cultural Differences in Preference for a Problem-Solving Negotiation Strategy

46. 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

47. The Successful International Negotiator: Personal Characteristics • Tolerance of ambiguity • Flexibility and creativity • Humor • Stamina • Empathy • Curiosity • Bilingualism

48. 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.

49. Major Points Regarding Successful International Negotiation • Many tactics are used in persuasion. • Know how counterpart views the concession-making process. • Culture and legal traditions influence the content and force of law regarding business contracts. • Competitive negotiation seldom leads to long-term relationships.

50. Major Points Regarding Successful International Negotiation • Problem-solving negotiation is more flexible and probably more successful strategy. • Must be flexible, empathic, and physically tough.