5-1,Chapter 5Cross-Cultural Negotiation and Decision Making,International Management: Managing Across Borders and Cultures,1-2,Objectives,To learn how to prepare for cross-cultural business negotiation. To recognize the need to build trusting relationships as a prerequisite for successful negotiations and long-term commitments. To be aware of the role of culturally-based behavioral differences, values and agendas of the negotiating parties. To learn the complexities of negotiating with the Chinese. To appreciate the variables in the decision-making process and understand the influence of culture on decision making. To become familiar with the Japanese decision-making process and how it is influenced by their cultural norms.,5-3,Negotiation,The word negotiation describes the process of discussion between two or more parties aimed at reaching a mutually acceptable agreement.,5-4,Stakeholders in Cross-Cultural Negotiations,Firm negotiators,Host country,Home (HQ) country,All citizens Special interest groups,Home consumers,Host local employees Host consumers,Host government Distributors Expatriate employees,Investors Alliance partners Contractors,Headquarters (HQ) employees Suppliers Home government,5-5,Five Stages of the Negotiation Process,Preparation Relationship building Exchanging task-related information Persuasion Concessions and agreement,5-6,Preparation,Basic conception of negotiation process: Is it a competitive process or a problem-solving approach? Negotiator selection criteria: Is selection based on experience, status, expertise, personal attributes, or some other characteristic? Significance of type of issues: Is it specific, such as price, or is the focus on relationships or the format of talks? Concern with protocol: What is the importance of procedures, social behaviors, and so forth in the negotiation process? Complexity of communicative context: What degree of reliance is placed on nonverbal cues to interpret information? Nature of persuasive arguments: How do the parties attempt to influence each other? Do they rely on rational arguments, on accepted tradition or on emotion?,Variables to consider in the negotiation process:,5-7,Preparation,Variables to consider in the negotiation process:,Role of individuals aspirations: Are motivations based on individual, company, or community goals? Bases of trust: Is trust based on past experience, intuition, or rules? Risk-taking propensity: How much do the parties try to avoid uncertainty in trading information or making a contract? Value of time: What is each partys attitude toward time? How fast should negotiations proceed, and what degree of flexibility is there? Decision-making system: How does each team reach decisions by individual determination, by majority opinion, or by group consensus? Form of satisfactory agreement: Is agreement based on trust (perhaps jus a handshake), the credibility of the parties, commitment, or a legally binding contract?,5-8,Relationship Building,The process of relationship building is regarded with much more significance in most parts of the world than it is in America. In many countries, such as Mexico and China, personal commitments to individuals, rather than the legal system, form the basis for the enforcement of contracts. It is usually recommended that managers new to these type of scenarios use someone who already has the trust and respect of the foreign managers and who therefore acts as a “relationship bridge.”,5-9,Exchanging Task-related Information,In this stage, each side typically makes a presentation and states its position; a question-and-answer session usually ensues, and alternatives are discussed. Adler suggests that negotiators should focus not only on presenting their situation and needs, but also on showing and understanding their opponents viewpoint.,5-10,Persuasion,In this stage, each party tries to persuade the other to accept more of its position and give up some of its own. In the Far East, details are likely to be worked out ahead of time through the backdoor approach (houmani). International managers usually find that this process of bargaining and making concessions is fraught with difficulties because of the different uses and interpretations of verbal and nonverbal behaviors.,5-11,Difference Among Japanese, American, and Brazilian Verbal Negotiations Behavior,Promise Threat Recommendation Warning Reward Punishment Positive normative appeal Negative normative appeal Commitment Self-disclosure Question Command,Bargaining Behaviors,Frequency per half-hour Bargaining Session,Japanese,American,Brazilian,7 4 7 2 1 1 1 3 15 34 20 8,8 4 4 1 2 3 1 1 13 36 20 6,3 2 5 1 2 3 0 1 8 39 22 14,5-12,Concessions and Agreement,Research in the United States indicates that better end results are attained by starting with extreme positions. The American process of addressing issues one at a time, in a linear fashion, is not common in other countries or cultures. Cultural values will even determine how agreements will be honored.,