1. Chapter Copyright© 2007 Thomson Learning All rights reserved 13 International Negotiation and Cross- Cultural Communication

2. Copyright© 2007 South-Western/Thomson Learning All rights reserved Learning Objectives Understand the basics of verbal and nonverbal communication Understand the basic international negotiation processes Understand the basic tactics of international negotiations Recognize and respond to the “dirty tricks” Understand the basics of verbal and nonverbal communication Understand the basic international negotiation processes Understand the basic tactics of international negotiations Recognize and respond to the “dirty tricks”

3. Copyright© 2007 South-Western/Thomson Learning All rights reserved Learning Objectives Know the difference between the problem-solving and competitive approaches Identify the personal characteristics of the successful international negotiator Know the difference between the problem-solving and competitive approaches Identify the personal characteristics of the successful international negotiator

4. Copyright© 2007 South-Western/Thomson Learning All rights reserved International Negotiation Process of making business deals across cultures Precedes any multinational project Without successful negotiation and the accompanying cross-cultural communication, there are seldom successful business transactions Process of making business deals across cultures Precedes any multinational project Without successful negotiation and the accompanying cross-cultural communication, there are seldom successful business transactions

5. Copyright© 2007 South-Western/Thomson Learning All rights reserved The Basic of Cross-Cultural Communication Successful negotiation requires successful communication Negotiators must understand all components of culturally different communication styles (both verbal and nonverbal) Successful negotiation requires successful communication Negotiators must understand all components of culturally different communication styles (both verbal and nonverbal)

6. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

7. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

8. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 13.1: Country Differences in High-Context and Low-Context Communication

9. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 Direct communication: communication that comes to the point and lacks ambiguity Formal communication: communication that acknowledges rank, titles, and ceremony in prescribed social interaction

10. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 13.2: Cultural Differences in Communication Styles

11. Copyright© 2007 South-Western/Thomson Learning All rights reserved Nonverbal Communication Communication without words Includes array of behaviors that enhance/supplement spoken communication Include - Kinesics, proxemics, haptics, oculesics, and olfactics Communication without words Includes array of behaviors that enhance/supplement spoken communication Include - Kinesics, proxemics, haptics, oculesics, and olfactics

12. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

13. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

14. Copyright© 2007 South-Western/Thomson Learning All rights reserved Seating in a Typical Japanese Office

15. Copyright© 2007 South-Western/Thomson Learning All rights reserved Haptics or Touching Communication through body contact 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 Communication through body contact 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

16. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

17. Copyright© 2007 South-Western/Thomson Learning All rights reserved Olfactics The use of smells as means of nonverbal communication - U.S. and U.K: find body odor offensive - Arab: consider body odors natural The use of smells as means of nonverbal communication - U.S. and U.K: find body odor offensive - Arab: consider body odors natural

18. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

19. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

20. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

21. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

22. Copyright© 2007 South-Western/Thomson Learning All rights reserved Communication with Nonnative Speakers (cont.) Avoid words or expressions that are pictures Avoid slang 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 Avoid words or expressions that are pictures Avoid slang 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

23. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

24. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

25. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 13.3: Steps in International Negotiations

26. Copyright© 2007 South-Western/Thomson Learning All rights reserved Step 1: Preparation Determine if the negotiation is possible Know what your company wants Be aware of what can be compromised Know the other side Send the proper team What is the agenda? Prepare for long negotiation What is the environment like? Plan a strategy Determine if the negotiation is possible Know what your company wants Be aware of what can be compromised Know the other side Send the proper team What is the agenda? Prepare for long negotiation What is the environment like? Plan a strategy

27. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

28. Copyright© 2007 South-Western/Thomson Learning All rights reserved Cultural Differences in Key Negotiating Processes Attitude towards negotiation – win-lose or win-win High or low emotions Latin Americans and the Spanish: show their emotions through negotiations Japanese and Germans: tend to be more reserved Attitude towards negotiation – win-lose or win-win High or low emotions Latin Americans and the Spanish: show their emotions through negotiations Japanese and Germans: tend to be more reserved

29. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 13.4: Cultural Differences in Preference for Broad Agreements

30. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 13.5: Understanding Negotiators from Other Countries

31. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

32. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

33. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 13.6: Information Exchange and First-Offer Strategies

34. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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. Copyright© 2007 South-Western/Thomson Learning All rights reserved Verbal Negotiation Tactics Promise Threat Recommendation Warning Reward Punishment Promise Threat Recommendation Warning Reward Punishment

36. Copyright© 2007 South-Western/Thomson Learning All rights reserved Verbal Negotiation Tactics Normative appeal Commitment Question Command Refusal Interruption Normative appeal Commitment Question Command Refusal Interruption

37. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 13.7: Comparison of Brazilian, U.S., and Japanese Negotiators (in half-hour bargaining session)

38. Copyright© 2007 South-Western/Thomson Learning All rights reserved Nonverbal Communication Body posture, facial expression, hand gestures, and the use of personal space are a natural part of any international negotiation

39. Copyright© 2007 South-Western/Thomson Learning All rights reserved Dirty Tricks Negotiation tactics that pressure opponents to accept unfair or undesirable agreements or concessions

40. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

41. Copyright© 2007 South-Western/Thomson Learning All rights reserved Ploys/Dirty tricks and Responses You are wealthy and we are poor—ignore the ploy Old friends—keep a psychological distance You are wealthy and we are poor—ignore the ploy Old friends—keep a psychological distance

42. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 Final agreement: signed contract, agreeable to all sides Concession making: requires that each side relax some of its demands

43. Copyright© 2007 South-Western/Thomson Learning All rights reserved Styles of Concession Sequential approach: each side reciprocates concessions Holistic approach: each side makes very few concessions until the end of the negotiation Sequential approach: each side reciprocates concessions Holistic approach: each side makes very few concessions until the end of the negotiation

44. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

45. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 13.8: Competitive and Problem- Solving Negotiation in the Negotiating Steps

46. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 13.9: Cultural Differences in Preference for a Problem-Solving Negotiation Strategy

47. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

48. Copyright© 2007 South-Western/Thomson Learning All rights reserved The Successful International Negotiator: Personal Characteristics Tolerance of ambiguity Flexibility and creativity Humor Stamina Empathy Curiosity Bilingualism Tolerance of ambiguity Flexibility and creativity Humor Stamina Empathy Curiosity Bilingualism

49. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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. 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.

50. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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. 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.

51. Copyright© 2007 South-Western/Thomson Learning All rights reserved Major Points Regarding Successful International Negotiation Problem-solving negotiation is more flexible and probably more successful strategy. Must be flexible, empathic, and physically tough. Problem-solving negotiation is more flexible and probably more successful strategy. Must be flexible, empathic, and physically tough.

52. Copyright© 2007 South-Western/Thomson Learning All rights reserved Conclusion Chapter examined the negotiating process and other elements of cross-cultural communication International negotiations involves several steps including: preparation, building the relationship, persuasion, making concessions and reaching agreement Successful negotiators prepare and understand these steps well Chapter examined the negotiating process and other elements of cross-cultural communication International negotiations involves several steps including: preparation, building the relationship, persuasion, making concessions and reaching agreement Successful negotiators prepare and understand these steps well