Intercultural Negotiation Process: Chapter10

1. Chapter 10
Intercultural
Negotiation Process
International Business Communication, 4th ed., Chaney & Martin

2. Topics
• Steps in the Negotiation
Process
• Mistakes Commonly Made
During Negotiations
• Intercultural Negotiation
Models
• Negotiation Strategies
• Trade Agreements
International Business Communication, 4th ed., Chaney & Martin

3. Definition
Intercultural negotiation involves
discussions of common and conflicting
interests between persons of different
cultural backgrounds who work to reach
an agreement of mutual benefit.
International Business Communication, 4th ed., Chaney & Martin

4. “In business, you don't get what you
deserve, you get what you negotiate.”
Why take “no” for an answer?
Successful people don't. They get what
they want by negotiating better deals for
both parties.
Dr. Chester L. Karrass, Leader in Negotiating

5. Steps in the Negotiation
Process
• Preparation and Site Selection
• Team Selection
• Relationship Building
• Opening Talks
• Discussions
• Agreement
International Business Communication, 4th ed., Chaney & Martin

6. Preparation and Site Selection
• Hire a consultant in the country.
• Consult resource videos and
written materials on negotiation.
• Choose a site—here or there can
be important.
International Business Communication, 4th ed., Chaney & Martin

7. Team Selection
• Consider number, age, gender,
and rank of team members.
• Consider background of players.
• Evaluate other negotiators - their
political affiliation, social class,
age, and risk-taking propensity.
International Business Communication, 4th ed., Chaney & Martin

8. Relationship Building
• Time required
• Intermediaries or agents
• Friendship versus business
relationship
International Business Communication, 4th ed., Chaney & Martin

9. Opening Talks and
Discussions
• Observe opening rituals - small talk,
humor, etc.
• Consider the appropriateness of an
agenda.
• Expect a variety of behaviors.
• Plan ahead for concessions.
• Move to an informal location when
appropriate.
International Business Communication, 4th ed., Chaney & Martin

10. Agreement
• Close negotiations properly.
• Expect delays .
• Get tax and legal advice.
• Anticipate a long wait until final
approval.
• Remember that contracts are not
always considered final.
International Business Communication, 4th ed., Chaney & Martin

11. Common Negotiation Mistakes
• Making negative initial impression
• Failing to listen and talking too much
• Assuming understanding by the other culture
• Failing to ask important questions
• Showing discomfort with silence
• Using unfamiliar and slang words
• Interrupting the speaker
• Failing to read the nonverbal cues
International Business Communication, 4th ed., Chaney & Martin

12. • Failing to note key points
• Making statements that are irritating or
contradictory
• Failing to prepare a list of questions for
discussion
• Being easily distracted
• Failing to start with conditional offers
• Failing to summarize and restate to ensure
understanding
• Hearing only what you want to hear
• Failing to use first-class supporting materials
International Business Communication, 4th ed., Chaney & Martin

13. Intercultural Negotiation Models
• Problem-solving approach — considers
national and organizational cultural
differences
• Competitive approach — individualistic
and persuasive orientation
• Compromising — seeks a middle ground
• Forcing — makes the other party comply
• Legalism — uses legal documentation to
force the partner to comply
International Business Communication, 4th ed., Chaney & Martin

14. Four - Stage Negotiation Mode
• Investigative
• Presentation
• Bargaining
• Agreement
Kozicki, Creative Negotiating

15. Negotiation Strategies
• People act on the basis of their own best
interests.
• Truth in negotiations:
– Faith
– Fact
– Feeling
• U.S. negotiators make fewer adjustments to
their opponents.
• Strategies include: preparation; tactics;
conflict resolution and mediation; and
observation, analysis, and evaluation.
International Business Communication, 4th ed., Chaney & Martin

16. Trade
Agreements
• General license – never actually issued
• Validated license — allows specific
exporter to export specific products to
specific places
• Free trade zones or trade blocs —
products enter without customs duties
International Business Communication, 4th ed., Chaney & Martin

17. NAFTA Benefits
• To eliminate barriers to trade and facilitate
cross-border movement of goods and
services
• To promote fair competition
• To increase investment opportunities
• To provide adequate and effective
protection for intellectual property
• To develop effective procedures to handle
disputes
• To expand cooperation and increase
benefits to the three countries
International Business Communication, 4th ed., Chaney & Martin

18. The U.S. Negotiator’s Global Report Card
Competency Grade
• Preparation B-
• Synergistic approach (win-win) D
• Cultural I.Q. D
• Adapting the negotiating process
to the host country environment D
• Patience D
• Listening D
• Linguistic abilities F
• Using language that is simple
and accessible C
• High aspirations B+
• Personal integrity A-
• Building solid relationships D
International Business Communication, 4th ed., Chaney & Martin

19. Statements Characteristic of
U.S. Negotiating Style
• "I can handle this myself" (to express
individualism).
• "Please call me Steve" (to make people feel
relaxed by being informal).
• "Pardon my French" (to excuse profanity).
• "Let's get to the point" (to speed up decisions).
• "Speak up; what do you think?" (to avoid silence).
• "A deal is a deal" (to indicate an expectation that
the agreement will be honored).
International Business Communication, 4th ed., Chaney & Martin

20. China
• Reserved; known for hospitality and good
manners
• Give small, inexpensive presents
• Do not like to be touched
• Consider mutual relationships and trust very
important
• Technical competence of negotiators necessary
• Prefer to use an intermediary
• Rarely use lawyers
• Ample room for compromise
International Business Communication, 4th ed., Chaney & Martin

21. France
• Have a sense of pride sometimes interpreted as
supremacy
• French logic ("Cartesian" logic) proceeds from
what is known in a point-by-point fashion until
agreement is reached
• Protocol, manners, status, education, family, and
individual accomplishments are keys to success
with the French
International Business Communication, 4th ed., Chaney & Martin

22. Germany
• Protocol is important
• Dress is conservative; correct posture and manners
are required
• Use titles when addressing members of the
negotiating team
• Prefer keeping a distance between themselves and
the other team
• Have technical people as part of the negotiation
team as Germans are detail oriented
• Punctuality is expected
• Contracts are firm guidelines to be followed exactly
International Business Communication, 4th ed., Chaney & Martin

23. India
• Bribery is common; having connections is
important
• Avoid using the left hand in greetings and eating
• Request permission before smoking, entering, or
sitting
• Building relationships is important; an introduction
is necessary
• Intermediaries are common
• Use titles to convey respect
• Knowledge of local affairs is important
• Negotiation process can be long
International Business Communication, 4th ed., Chaney & Martin

24. Japan
• Business etiquette is very important, including
business card exchange
• Meeting should be arranged by an intermediary
• Subtle and complex verbal and nonverbal cues
are used to avoid having someone lose face or
lose the group harmony
• The Japanese use more silence and less eye
contact than U.S. persons
• Consider contracts as flexible instruments
• Are suspicious of a negotiating team that
includes lawyers
International Business Communication, 4th ed., Chaney & Martin

25. Latin America
• Relationships are important
• Bribery is common
• Government is very involved in business
• Negotiators chosen based on family
connections, political influence, education, and
gender (females should be in the background)
• Social competence is important
• Most agreements are consummated over lunch
• Numerous meetings is the norm; time is not
seen as important
• Avoid gestures
International Business Communication, 4th ed., Chaney & Martin

26. Nigeria
• Nigerians are skillful negotiators; they view negotiation as a
competitive process
• When selecting negotiators, consider age (equated with
wisdom), gender, cultural background, and educational
credentials
• Developing a personal relationship is important
• Time is not particularly important so negotiations may be
lengthy
• Use titles and last names
• Use an intermediary to make initial introductions
• Being well dressed is important; courtesy and consideration
are also expected
• Contracts (oral or written) are flexible
International Business Communication, 4th ed., Chaney & Martin

27. Russian States
• In the past, negotiation sessions have been long,
with Russians controlling the agenda
• Are concerned with age, rank, and protocol
• Tend to be formal
• Friendships are not crucial to business
• Contracts interpreted rigidly
• Concerned with maximizing their profits
International Business Communication, 4th ed., Chaney & Martin

28. Negotiating globally can present many
opportunities. Corporations can expand
their markets, increase their markets,
increase their profits and productivity,
and lower their costs by negotiating
globally.
International Business Communication, 4th ed., Chaney & Martin