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

2. © 2005 Prentice-Hall, Inc. 5-2 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

3. © 2005 Prentice-Hall, Inc. 5-3 Negotiation The process of bargaining between two or more parties to reach a solution that is mutually acceptable

4. © 2005 Prentice-Hall, Inc. 5-4 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

5. © 2005 Prentice-Hall, Inc. 5-5 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

6. © 2005 Prentice-Hall, Inc. 5-6 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

7. © 2005 Prentice-Hall, Inc. 5-7 Cultural Influences Often explain differences in interests and priorities Create differences in negotiator behavior

8. © 2005 Prentice-Hall, Inc. 5-8 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

9. © 2005 Prentice-Hall, Inc. 5-9 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

10. © 2005 Prentice-Hall, Inc. 5-10 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

11. © 2005 Prentice-Hall, Inc. 5-11 Nonverbal Tactics Negotiating behaviors other than the words used Often send a “louder” message than verbal behaviors

12. © 2005 Prentice-Hall, Inc. 5-12 Intra-Cultural Vs. Cross- Cultural Negotiations Different dynamics Cross-cultural negotiations are more challenging and more satisfying than intra-cultural negotiations

13. © 2005 Prentice-Hall, Inc. 5-13 Conflict Characteristics of Low and High-Context Cultures Key Questions Low-Context Conflict High-Context Conflict WhyWhen 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

14. © 2005 Prentice-Hall, Inc. 5-14 Conflict Characteristics of Low and High-Context Cultures (cont.) Key Questions Low-Context Conflict High-Context Conflict WhatHow 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

15. © 2005 Prentice-Hall, Inc. 5-15 Becoming a Better Cross- Cultural Negotiator Understand your negotiating partner Consider situational specifics Decide how to handle actual negotiation

16. © 2005 Prentice-Hall, Inc. 5-16 Convergence or Divergence? Greater knowledge and understanding of culture If moderate adaptation proves effective Ingrained cultural patterns of behavior Perception that own culture negotiates effectively

17. © 2005 Prentice-Hall, Inc. 5-17 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