CHAPTER 3 INTERNATIONAL NEGOTIATION AND CROSS- CULTURAL COMMUNICATION

BASICS OF CROSS-CULTURAL COMMUNICATION

LANGUAGE AND CULTURE The Whorf hypothesis

HIGH CONTEXT Communications have multiple meanings interpreted by reading the situation Asian and Arabic languages are among the most high context in the world

LOW CONTEXT The words provide most of the meaning Most northern European languages including German, English, and the Scandinavian languages are low context

Exhibit 3.2 Cultural Differences in Communication Styles

NONVERBAL COMMUNICATION - COMMUNICATING WITHOUT WORDS

KINESICS Communicating through body movements Facial expressions Body posture

PROXEMICS The use space to communicate The personal bubble of space - nine inches to over twenty inches North Americans prefer more distance than from Latin and Arab cultures

TOUCH Basic human interaction In greeting - shake hands, embrace, or kiss Latin European and Latin American cultures-more touching than Germanic, Anglo, or Scandinavian cultures

PRACTICAL ISSUES IN CROSS- CULTURAL VERBAL COMMUNICATION

INTERPRETERS Provide simultaneous translation of a foreign language Require greater linguistic skills than speaking a language or translating written documents Insure the accuracy and common understanding of agreements

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

Communication with nonnative speakers, continued Avoid “sports” words or words borrowed from literature Avoid words that represent pictures Mimic the cultural flavor of nonnative speaker’s language Summarize Test your communication success

AVOIDING ATTRIBUTION ERRORS Attribution - process by which we interpret the meaning and intent of spoken words or nonverbal exchanges Attribution errors

INTERNATIONAL NEGOTIATION More complex than domestic negotiations Differences in national cultures and differences in political, legal, and economic systems often separate potential business partners

EXHIBIT 3.4: STEPS IN THE INTERNATIONAL NEGOTIATION PROCESS

STEP 1: PREPARATION STEP 2: BUILDING THE RELATIONSHIP STEP 3: EXCHANGING INFORMATION/FIRST OFFER STEP 5: CONCESSIONS STEP 6: AGREEMENT STEP 4: PERSUASION

STEP 1: PREPARATION Is the negotiation possible? Know what your company wants Know the other side Send the proper team Agenda Prepare for a long negotiation Environment Strategy

DIFFERENCES IN CULTURES IN KEY NEGOTIATING PROCESSES (EXAMPLES) Communication styles—direct or indirect Sensitivity to time—low or high

Cultural Differences in Key Negotiating Processes, Continued Forms of agreement—specific or broad (EX 3.5) Team organization—a team or one leader

Exhibit 3.5 Preferences for Broad Agreements

STEP 2: BUILDING THE RELATIONSHIP No focus on business Partners get to know each other Social and interpersonal exchange Duration and importance vary by culture

STEP 3: EXCHANGING INFORMATION AND THE FIRST OFFER Task-related information is exchanged First offer

STEP 4: PERSUASION Heart of the negotiation process Attempting to get other side to agree to a position Numerous tactics used

VERBAL AND NONVERBAL NEGOTIATION TACTICS Promise Threat Recommendation Warning Reward Punishment Normative appeal

Negotiation Tactics, Continued Commitment Self disclosure Question Command No Interrupting

“DIRTY TRICKS” IN INTERNATIONAL NEGOTIATIONS Dirty tricks are negotiation tactics that pressure opponents to accept unfair or undesirable agreements or concessions

PLOYS/DIRTY TRICKS - POSSIBLE RESPONSES Deliberate deception - point out what is happening Stalling - do not reveal when you plan to leave Escalating authority - clarify decision making authority

Good guy, bad buy routine - do not make any concessions You are wealthy and we are poor - ignore the ploy Old friends - keep a psychological distance Ploys/Dirty Tricks, Continued

STEPS 5 AND 6: CONCESSIONS AND AGREEMENT Final agreement: The signed contract, agreeable to all sides Concession making: requires that each side relax some of its demands

STYLES OF CONCESSION Sequential approach –Each side reciprocates concessions Holistic approach –Concession making begins after all issues are discussed

BASIC NEGOTIATION STRATEGIES Competitive –The negotiation as a win-lose game Problem solving –Search for possible win-win situations

COMPETITIVE OR PROBLEM SOLVING INTERNATIONAL NEGOTIATION Cultural norms and values may predispose some negotiators to one approach (EX 3.10) Most experts recommend a problem solving negotiation strategy

EX 3.10 Preferences for Problem-Solving Negotiation

THE SUCCESSFUL INTERNATIONAL NEGOTIATOR: PERSONAL CHARACTERISTICS Tolerance of ambiguous situations Flexibility and creativity Humor Stamina Empathy

Curiosity Bilingual Personal Characteristics, Continued

CONCLUSIONS Successful negotiators: –Understand the negotiation steps –Build cross-cultural communication skills –Understand nonverbal communication –Avoid attribution errors