International Negotiation and Cross-Cultural Communication

1. 13 International Negotiation and Cross-Cultural Communication

2. Learning Objectives (1 of 2) • Understand the basics of verbal and nonverbal communication that may influence cross-cultural management and negotiation. • Describe the basic international negotiation processes from preparation to closing the deal. • Explain the basic tactics of international negotiations. • Recognize and respond to “dirty tricks” in international negotiations.

3. Learning Objectives (2 of 2) • Know the differences between the problem-solving and competitive approaches to international negotiation. • Identify the personal characteristics of the successful international negotiator.

4. International Negotiation • International Negotiation: the process of making business deals across cultures; it precedes any multinational project • Without successful negotiation and the accompanying cross-cultural communication, there are seldom successful business transactions. • As the world becomes increasingly global, companies will need to become adept at such negotiations.

5. The Basics of Cross-Cultural Communication (1 of 2) • Successful international negotiation requires successful cross-cultural communication. • Negotiators must understand all components of culturally different communication styles, both verbal and nonverbal, including: • Subtle gestures of hand and face • The use of silence • What is said or not said

6. The Basics of Cross-Cultural Communication (2 of 2) • Mistakes often go unnoticed by the communicator, but they can do damage to international relationships and negotiations. • Avoid attribution errors • Attribution: the process by which we interpret the meaning of spoken words or nonverbal exchanges

7. Language and Culture • Language is so essential to culture that many consider linguistic groups synonymous with cultural groups. • Whorf hypothesis: the theory that a society’s language determines the nature of its culture • Words provide the concepts of understanding the world; language structures the way we think about it. • All languages have limited sets of words. • Restricted word sets constrain the ability to conceptualize the world.

8. High- and Low-Context Languages • Low-context Language: people state things directly and explicitly, and you need not understand the context. • Examples: Most northern European languages including German, English, and the Scandinavian languages • High-context Language: people state things indirectly and implicitly. • Asian and Arabic languages • Communications may have multiple meanings depending on the context

9. Exhibit 13.1: Country Differences in High-Context and Low-Context Communication

10. Basic Communication Styles (1 of 2) • Other cultural differences in communication can influence cross-cultural interactions & negotiations. • Direct Communication: communication that asks questions, states opinions, comes to the point and lacks ambiguity • Indirect Communication: people attempt to state their opinions or ask questions by implied meaning, believing direct communication is impolite

11. Basic Communication Styles (2 of 2) • Formal Communication: communication that acknowledges rank, titles, and ceremony in prescribed social interaction • People in the U.S. are among the least formal in communication, casually using first names, and dispensing with titles. • Most other cultures communicate with more formality, especially in business settings, taking care to acknowledge rank and titles when addressing others.

12. Exhibit 13.2: Cultural Differences in Communication Styles

13. Nonverbal Communication • Nonverbal Communication means communicating without words. • One may communicate without speaking; people gesture, smile, hug, and engage in other behaviors that supplement or enhance spoken communication. • Such nonverbal communication includes: • Kinesics, proxemics, haptics, oculesics, and olfactics

14. Kinesics • Kinesics means communication through body movements. • Every culture uses posture, facial expressions, hand gestures and movement to communicate non-verbally. • Most Asian cultures use bowing to show respect. • It’s easy to misinterpret the meaning of body movements in another culture. • The safest strategy is to minimize their use.

15. Proxemics • Proxemics focuses on how people use space to communicate. • Each culture has an appropriate distance for various levels of communication; violations of space may be uncomfortable or even offensive. • The personal bubble of space may range from 9 inches to over 20 inches. • North Americans prefer 20 inches, while Latin and Middle East cultures prefer less.

16. Haptics or Touching • Haptics or touching is communication through body contact, and is related to proxemics. • The type of touching deemed appropriate is deeply rooted in cultural values. Generally: • No touching cultures are Japan, U.S., England, and many Northern European countries; • Moderate touching cultures are Australia, China, Ireland, and India. • Touching cultures are Latin American countries, Italy and Greece.

17. Oculesics • Oculesics refers to communication through eye contact or gazing; the degree of comfort with eye contact varies widely: • U.S. and Canada: People are very comfortable and expect eye contact to be maintained for a short moment during conversations. • China and Japan: Eye contact is considered very rude and disrespectful; respect is shown by avoiding eye contact.

18. Olfactics • Olfactics is the use of smells as means of nonverbal communication. • U.S. and U.K: These cultures are uncomfortable with body odors, and may find it offensive. • Arabs are much more accepting of body odors, and consider them natural. • Negotiators must be aware of these perspectives and accept and adapt to them.

19. Using Interpreters • The role of an Interpreter is to provide a simultaneous translation of a foreign language. • This requires greater linguistic skills than speaking a language or translating written documents. • The Interpreter must have the technical knowledge and vocabulary to deal with technical details common in business transactions. • Even if a negotiator understands both languages, its best to have an interpreter to ensure the accuracy and common understanding of agreements.

20. Tips for the Successful Use of Interpreters (1 of 2) • Spend time with the interpreter, so s/he gets to know your accent and general approach to conversation. • Go over technical and other issues with the interpreter to make sure they are properly understood. • Insist on frequent interruptions for translations rather than translations at the end of statements. • Learn about appropriate communication styles and etiquette from the interpreter.

21. Tips for the Successful Use of Interpreters (2 of 2) • Look for feedback and comprehension by watching the listener’s eyes. • Discuss the message beforehand with the interpreter if it is complex. • Request that your interpreter apologize for your inability to speak in the local language. • Confirm through a concluding session with the interpreter that all key components of the message have been properly comprehended.

22. Communication with Nonnative Speakers (1 of 2) • Use the most common words with their most common meanings. • Select words with few alternative meanings. • Strictly follow the rules of grammar. • Speak with clear breaks between words. • Avoid sports words or words borrowed from literature. • Avoid words or expressions that are pictures. • Avoid slang.

23. Communication with Nonnative Speakers (1 of 2) • Mimic the cultural flavor of the nonnative speaker’s language. • Summarize. • Test your communication success. • Repeat basic ideas using different words when your counterpart does not understand. • Confirm important aspects in writing.

24. International Negotiation • International Negotiation is more complex than domestic negotiation. • Differences in national cultures, & political, legal, and economic systems can separate business partners. • Steps in international negotiation: • Preparation, building the relationship, exchanging information, first offer, persuasion, concessions, agreement, and post agreement.

25. Exhibit 13.3: Steps in International Negotiations

26. Step 1: Preparation • Determine if the negotiation is possible. • Know exactly what your company wants. • Be aware of what can be compromised. • Know the other side. • Send the proper team. • Understand the agenda. • Prepare for a long negotiation.

27. Cultural Differences in Negotiating Processes (1 of 2) • What is the Negotiation goal - signing the contract or forming a relationship? • Should you use a formal or informal personal communication style? • Should you use a direct or indirect communication style? • Is sensitivity to time low or high? • What form of agreement - specific or general?

28. Cultural Differences in Negotiating Processes (2 of 2) • What is the team organization - a team or one leader? • What is the attitude towards negotiation - win-lose or win-win? • What is the appropriate emotional display - high or low emotions? • Latin Americans and the Spanish show their emotions through negotiations. • Japanese and Germans tend to be more reserved.

29. Exhibit 13.4: Cultural Differences in Preference for Broad Agreements

30. Exhibit 13.5: Understanding Negotiators from Other Countries

31. Step 2: Building the Relationship • At this stage, negotiators do not focus on the business issues, but on social and interpersonal matters. • Negotiation partners get to know one another. • They develop opinions regarding the personalities of the negotiators, including whether they can be trusted. • The duration, importance of this stage vary by culture. • U.S. negotiators are notorious in their attempts to get down to business after brief socializing.

32. Step 3: Exchanging Information and the First Offer • Parties exchange task-related information on their needs for the agreement, which pertains to the actual details of the proposed agreement. • Typically, both sides make a formal presentation of what they desire out of the relationship. • Then, both sides usually present their first offer, which is their first proposal of what they expect from the agreement.

33. Exhibit 13.6: Information Exchange and First-Offer Strategies

34. Step 4: Persuasion • In the persuasion stage, each side in the negotiation attempts to get the other side to agree to its position. • This is the heart of the negotiation process. • Numerous tactics are used, but two general types: • Standard verbal and nonverbal negotiation tactics, and • Some dirty tricks

35. Verbal and Nonverbal Negotiation Tactics (1 of 2) • Promise • Threat • Recommendation • Warning • Reward • Punishment

36. Verbal and Nonverbal Negotiation Tactics (2 of 2) • Normative appeal • Commitment • Self disclosure • Question • Command • Refusal • Interruption

37. Exhibit 13.7: Comparison of Brazilian, U.S., and Japanese Negotiators

38. Dirty Tricks • All negotiators want to get the best deal for their company, and they use a range of tactics to do that. • However, people from different cultures consider some negotiating tactics dirty tricks: negotiation tactics that pressure opponents to accept unfair or undesirable agreements or concessions. • Cultures differ on the norms and values that determine acceptable strategies for negotiation; some examples follow.

39. Dirty Tricks and Possible Responses • Deliberate deception or bluffing - Point out what you believe is happening. • Stalling – Don’t reveal when you plan to leave. • Escalating authority - Clarify decision making authority. • Good-guy, bad-guy routine – Don’t make any concessions. • You are wealthy, we are poor – Ignore the ploy and focus on the mutual benefits of potential agreement. • Old friends – Keep a psychological distance.

40. Step 5Concessions • Concession Making requires that each side relax some of its demands to meet the other party’s needs. • Styles of concession making differ among cultures: • Sequential approach: Each side reciprocates concessions made by the other side. • Common in North America • Holistic approach: Each side makes very few, if any, concessions until the end of the negotiation • Common in Asia

41. Step 6:Agreement • Successful negotiations result in the Final agreement: the signed contract, agreeable to all sides. • The agreement must be consistent with the chosen legal system or systems. • The safest contracts are legally binding in the legal systems of all the signers. • Most important, people from different national and business cultures must understand the contract in principle, and have a true commitment beyond legal.

42. Basic Negotiating Strategies • There are two basic negotiating strategies: • Competitive Negotiation: Each side tries to give as little as possible and win the maximum for its side. • Seeks win-lose resolution; uses dirty tricks. • Seldom leads to long-term relationships or trust. • Problem solving: Negotiators seek mutually satisfactory ground beneficial to both parties. • Search for possible win-win situations; no dirty tricks. • Builds long term relationships; more successful strategy.

43. Exhibit 13.8: Competitive and Problem-Solving Negotiation

44. Exhibit 13.9: Cultural Differences in Preference for a Problem-Solving Negotiation Strategy

45. Step 7: Post Agreement • A commonly ignored step by U.S. negotiators is the postagreement phase, which consists of an evaluation of the success of a completed negotiation. • Postagreement analysis can be beneficial because it allows the garnering of insights into the strengths and weaknesses of the approach used during negotiation. • Postagreement analysis can also enable members of the negotiating team to develop a closer relationship with their counterparts.

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

47. Summary • Chapter 13 examined the negotiating process and other elements of cross-cultural communication. • International negotiation involves several steps, including preparation, building the relationship, persuasion, making concessions and reaching agreement. • Successful negotiators prepare and understand these steps and adapt them to local host countries.