Chapter 11,Different Business Cultures and Negotiations,Introduction,International business negotiations take place across national boundaries. They cover various levels of negotiators from multinations and multinationalities. Due to different history, politics, economics, cultural traditions and customs of different parts of the world, there exist evident differences of values and negotiating styles among people all over the world.,Therefore a business negotiator should have some understanding of different cultures, customs and business conventions of different countries. Then one can get better negotiating results by creating a friendly negotiating atmosphere, having a more definite negotiating object in view, adopting appropriate negotiating strategies and using flexible negotiating tactics.,But be careful not to assume that everyone from any different cultural milieu is totally predictable. When meet other cultures, respect and promote, but not be subservient to the negotiating customs of that culture. This chapter introduces differences of business cultures, global business protocol and etiquette and different negotiating styles of different cultures.,In this chapter you will learn:differences of business cultures; global business protocol and etiquette; different negotiating styles of different cultures.,11.1 Differences of business cultures,There are two iron rules of international business: In international business, the seller is expected to adapt to the buyer. In international business, the visitor is expected to observe local customs.,If one is the buyer in an international transaction, cultural differences are less important, unless one wants to negotiate the best of all. lts because of Iron Rule No.1. What if one is not involved in a buysell transaction? Suppose one is just traveling abroad to negotiate a jointventure agreement, an acquisition or a strategic alliance, then he is expected to observe local customs.,Thats where Iron Rule No.2 comes int o play. To observe local customs doesnt meanto mimic or copy local behavior, just be yourself. But of course, “being yours el f” should include being aware of local sensitivities and generally honoring loc al customs, habits and traditions.,The skilled negotiator, regularly meeting many other parties, recognizes that each has its own distinct way of negotiation. He attunes to the differences and adjusts his preparation and his conduct. We shall examine differences of style which reflect the ways in which different organizations work.,11.1.1 Taskcentered vs peoplecentered,One classification of organizational style distinguishes between people who are taskoriented and people who are peopleoriented. People who are purely taskoriented are concerned entirely with achieving a business goal. They are not at all concerned about the effect which their determination will have on the people with whom they come into contact.,They will pursue their business objectives relentlessly; they will go to the limits of morality; as negotiators, they will be very tough, very fighting, very aware of tactical ploys and anxious to make maximum use of them.,Classically American business culture is very task or achievement oriented. People dont want to waste time with the social niceties; they want to get down to business. Another way of classifying this type of approach is to say that it is very specific.,People who adopt this approach tend to focus hard on specific issuesthis should mean that time is saved and objectives reached most effectively. However, there is always a danger that the larger picture may be missed and that personal issues can be ignored. These personal issues may be the ones which make or break the deal!,People oriented managers, on the other hand, are highly concerned about the well being of those who work for them, or alongside them or above them. This concern about people dominates their activity, says the theory, and it can lead to an almost total neglect of the business goals.,In this respect, they give time to some small talk before the meeting starts because they believes this will improve communication and lay the basis for possible future relationships. Another way of looking at this is to call it diffuse.,A diffuse approach to business will place great importance on all the events which surround the actual discussion of the deal, for example, lunch together, social conversation on the way to the airport, or a chance to meet your partners family.,There are intermediate points between total taskorientation and total people orientation. It splits this central area into three parts. (1) loworientation both to task and to people But of course such low achievers would hardly be expected to reach the status of negotiators.,(2) mediumorientation both to task and to people This center group is characterized by the continual search for compromise. (3) highorientation both to task and to people This style is characterized by tremendous openness, trust in forms of relationship, great forethought, sound creative decisions.,