Chapter 5 Negotiation and Conflict Resolution

1. Chapter 5Negotiation and Conflict Resolution © 2005 Prentice-Hall, Inc.

2. Learning Objectives • Define negotiation and understand the basic negotiation process. • Explain how culture influences the negotiation process • Consider the impact of situational factors and negotiating tactics on negotiation outcomes • Analyze the differences between intra-cultural and cross-cultural negotiations • Discuss the role of culture in the conflict resolution process • Appreciate how approaches to conflict influence negotiation • Identify ways to become a more effective cross-cultural negotiator © 2005 Prentice-Hall, Inc.

3. Negotiation The process of bargaining between two or more parties to reach a solution that is mutually acceptable © 2005 Prentice-Hall, Inc.

4. The Negotiation Process • The Goal • Arrive at a solution acceptable to all parties • Distributive outcome - Amount of resources available for negotiators to divide is fixed • Integrative agreement - Transform fixed resources into something valued differently by each party, and then distribute the resources to the party that values them most © 2005 Prentice-Hall, Inc.

5. The 5 Stages of Negotiation • Preparation Plan how to approach the actual negotiation and try to learn as much as possible about negotiating partners • Relationship-Building Parties get to know one another • Information Exchange Each party states initial position, followed by questions, answers, and discussion • Persuasion Parties try to convince their counterparts to accept their proposals • Agreement Parties come to a mutually acceptable solution © 2005 Prentice-Hall, Inc.

6. Interests, Priorities, and Strategies • Interests Reflect the underlying need or reason for a negotiator's position • Priorities Indicate the importance of different alternatives • Strategy Overall approach to negotiation that establishes the set of behaviors that the negotiator believes will lead to goal accomplishment © 2005 Prentice-Hall, Inc.

7. Cultural Influences • Often explain differences in interests and priorities • Create differences in negotiator behavior © 2005 Prentice-Hall, Inc.

8. Situational Factors • Geographical Location • Advantageous to conduct the negotiations in your home office • Room Arrangements • Shape of the table and where the negotiators sit can create greater competition or cooperation © 2005 Prentice-Hall, Inc.

9. Situational Factors (cont.) • Selection of Negotiators • Number of people and which ones will represent a team often reflect culture • Time Limits • Real or presumed deadlines © 2005 Prentice-Hall, Inc.

10. Verbal Tactics • Spoken negotiating behaviors • Negotiators can increase their profits by • Asking more questions • Making fewer commitments before the final agreement stage • Increasing the amount of the initial request, that is, seller asking for more and buyer offering less © 2005 Prentice-Hall, Inc.

11. Nonverbal Tactics • Negotiating behaviors other than the words used • Often send a “louder” message than verbal behaviors © 2005 Prentice-Hall, Inc.

12. Intra-Cultural Vs. Cross-Cultural Negotiations • Different dynamics • Cross-cultural negotiations are more challenging and more satisfying than intra-cultural negotiations © 2005 Prentice-Hall, Inc.

13. Conflict Characteristics of Low and High-Context Cultures Key Questions Low-Context Conflict High-Context Conflict Why When analytic, linear logic; instrumental oriented; dichotomy between conflict and conflict parties individualistic oriented; low collective normative expectations; violations of individual expectations create conflict potentials synthetic, spiral logic; expressive oriented; integration of conflict and conflict parties group oriented; high collective normative expectations; violations of collective expectations create conflict potentials © 2005 Prentice-Hall, Inc.

14. Conflict Characteristics of Low and High-Context Cultures(cont.) Key Questions Low-Context Conflict High-Context Conflict What How revealment; direct, confrontational attitude; action and solution-oriented explicit communication codes; line-logic style: rational-factual rhetoric; open, direct strategies concealment; indirect, nonconfrontational attitude; “face” and relationship-oriented implicit communication codes; point-logic style: intuitive-affective rhetoric; ambiguous, indirect strategies © 2005 Prentice-Hall, Inc.

15. Becoming a Better Cross-Cultural Negotiator • Understand your negotiating partner • Consider situational specifics • Decide how to handle actual negotiation © 2005 Prentice-Hall, Inc.

16. Greater knowledge and understanding of culture If moderate adaptation proves effective Ingrained cultural patterns of behavior Perception that own culture negotiates effectively Convergence or Divergence? © 2005 Prentice-Hall, Inc.

17. Implications for Managers • Cross-cultural negotiations important part of international manager’s job • Improve negotiating outcomes by understanding dynamics of negotiation process and influence of culture • Moderate adaptation may be most effective © 2005 Prentice-Hall, Inc.