1. Chapter © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13 International Negotiation and Cross-Cultural Communication

2. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 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

3. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 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. 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.

4. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Basics of Cross-Cultural Communication 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 Avoid attribution errors Attribution : the process by which we interpret the meaning of spoken words or nonverbal exchanges 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 Avoid attribution errors Attribution : the process by which we interpret the meaning of spoken words or nonverbal exchanges

5. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 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. 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.

6. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. High- and Low-Context Languages Low-context Language : people state things directly and explicitly, and you need not understand the context. 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 Low-context Language : people state things directly and explicitly, and you need not understand the context. 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

7. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Basic Communication Styles 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 Formal Communication : communication that acknowledges rank, titles, and ceremony in prescribed social interaction 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 Formal Communication : communication that acknowledges rank, titles, and ceremony in prescribed social interaction

8. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 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 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

9. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Kinesics Kinesics means communication through body movements. Every culture uses posture, facial expressions, hand gestures and movement to communicate non-verbally. It’s easy to misinterpret the meaning of body movements in another culture. The safest strategy is to minimize their use. Kinesics means communication through body movements. Every culture uses posture, facial expressions, hand gestures and movement to communicate non-verbally. It’s easy to misinterpret the meaning of body movements in another culture. The safest strategy is to minimize their use.

10. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Proxemics and Haptics 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. 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. 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. 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.

11. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Oculesics and Olfactics Oculesics refers to communication through eye contact or gazing; the degree of comfort with eye contact varies widely. Olfactics is the use of smells as means of nonverbal communication. Oculesics refers to communication through eye contact or gazing; the degree of comfort with eye contact varies widely. Olfactics is the use of smells as means of nonverbal communication.

12. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 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. 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.

13. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Communication with Nonnative Speakers 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. 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.

14. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 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. 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.

15. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 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. 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.

16. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Cultural Differences in Negotiating Processes 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? 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? 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? 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?

17. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 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. 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.

18. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 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. 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.

19. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Step 4: Persuasion In the persuasion stage, each side in the negotiation attempts to get the other side to agree to its position. Standard verbal and nonverbal negotiation tactics: Promise, Threat, Recommendation, Warning, Reward, Punishment, Normative appeal, Commitment, Self disclosure, Question, Command, Refusal, Interruption Some dirty tricks: Deliberate deception or bluffing, Stalling, Escalating authority, Good-guy, bad-guy routine, “You are wealthy, we are poor”, Old friends In the persuasion stage, each side in the negotiation attempts to get the other side to agree to its position. Standard verbal and nonverbal negotiation tactics: Promise, Threat, Recommendation, Warning, Reward, Punishment, Normative appeal, Commitment, Self disclosure, Question, Command, Refusal, Interruption Some dirty tricks: Deliberate deception or bluffing, Stalling, Escalating authority, Good-guy, bad-guy routine, “You are wealthy, we are poor”, Old friends

20. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Step 5 Concessions 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. Holistic approach : Each side makes very few, if any, concessions until the end of the negotiation. 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. Holistic approach : Each side makes very few, if any, concessions until the end of the negotiation.

21. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 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. 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.

22. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 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. 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.

23. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 13.8: Competitive and Problem-Solving Negotiation

24. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Step 7: Post Agreement Postagreement phase 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. Postagreement phase 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.