Cross Cultural Management and Negotiation Cross Cultural Management and Negotiation IBC201 Cross Cultural Management and Negotiation REPORT ACTIVITY 1 Introduction In this report, we focus on two main.
Cross Cultural Management and Negotiation IBC201: Cross Cultural Management and Negotiation REPORT ACTIVITY Introduction: In this report, we focus on two main parts The first one is Framing, which refers to the way in which a negotiator presents information and shapes the context of the negotiation in order to influence the other party's perceptions and decisions The second one is twelve errors or cognitive biases that tend to impede negotiator performance Body: I/ Framing in Negotiation II/ Cognitive Biases in Negotiation Irrational escalation of commitment Group – IB17B02 Cross Cultural Management and Negotiation - Even though sticking to a course of action is irrational, negotiators maintain their commitment to it Individual's proclivity to make decisions that lead to the continuation of a failed course of action For example, consider someone who is gambling and decides to bet everything they have on one more hand in a card game This type of move can mean the difference between making a fortune and losing everything Mythical fixed-pie beliefs - All negotiations, not just some, are thought to involve a fixed pie by negotiators The tendency to view negotiation as a zero-sum or win-lose situation in which the interests of the parties are diametrically opposed For example, imagine that two friends are haggling over who will get the largest portion of a gourmet pizza As much pizza as possible is desired by each side That is where they stand The mythical and actual fixed pie is the pizza Anchoring and adjustment - The impact of the reference point (anchor) used to compare subsequent adjustments (gains or losses) The anchor may be deceptive because it is based on inaccurate or incomplete information Being unduly swayed by a standard or reference point (an anchor) and Failing to make adjustments from it EX: When a seller sells a used phone, the first price they offer must be higher than the price they want to sell, and the two parties begin negotiating to offer a reasonable price for both parties purchase and sale agreement Issue framing and risk - In decision making and negotiation, frames can lead people to seek, avoid, or be neutral about risk - The proclivity to be unduly influenced by the positive or negative frame in which risks are perceived EX: An example of issue framing and risk can be seen in the debate over vaccination Some people may frame the issue as one of public health and the need to protect individuals and communities from the risks associated with infectious diseases Availability of information Group – IB17B02 Cross Cultural Management and Negotiation - - People tend to be focused, and attracted to information that is concisely described and presented vividly Ex: In the negotiation between the owner of a coffee shop and an investor, the owner of the cafe needs to present information about the plan to develop the cafe and the benefits that the investor can recover in a short time tight, logically Doing so can make it easier for investors to keep track of what the owner says, as well as remember them You can use tools to enhance the vibrancy such as PowerPoint, and mind map, The available information can become an important center in the evaluation of facts and choices Ex: In the negotiation between a coffee shop owner and an investor, assuming the coffee shop is in a state of loss, there is no possibility of recovery, the investor has the right to think and evaluate the profitability and decide whether to invest or not The winner’s curse - - A winner's curse is a situation in which an auction winner suffers damage from overestimating the value of an item and overpaying for it The winner's curse is often used in auctions. Due to the lack of information about the products and materials being auctioned, participants overestimated the value of the product Negotiators who were dissatisfied after having their first offer accepted reported that they would be less likely to make the first offer in future negotiations (Galinsky, Seiden, Kim, and Medvec, 2002). Ex: In the antique auction, there was an antique vase with a value of $ 1M, but the auctioneer had no knowledge of this antique vase, just because he was so interested, he made the initial bid The first is $4M And as a result, he won the first time And when he learns the true value of the vase, he finds it difficult because of his stupid decision Overconfidence Negotiators tend to believe that their opinion or judgment is more accurate than its actual accuracy is called overconfidence And overconfidence has two effects: - - Negotiators will always advocate views or options that are not really right It means that for people who not have an overconfident attitude, they will have a normal, fact-based opinion to make an assessment As for overconfident negotiators, they tend to have absolute confidence in their point of view, even if it's not true Negotiators with an overconfident attitude tend to ignore, dismiss, or reduce confidence in the other person's point of view For example, In the discussion about the research and development of new products of company A, the employees said that it is necessary to research and launch new products to meet the needs and attract consumers Their old product has been around for more than 20 Group – IB17B02 Cross Cultural Management and Negotiation years and there has never been a single innovation In the present time, there are many new competitive companies appearing, with more trending quality and designs However, the director did not agree to the new product launch because he thought that the company's products were still meeting the needs of customers He still believes that the product is still good and still profitable If the director still has an overconfident attitude in his product and ignores the input of employees, there is a risk that Company A will be overtaken by competitors The law of small numbers - The law of small numbers is a cognitive bias that occurs when people assume that small samples will be representative of the larger population from which they are drawn Example is when a company assumes that the feedback from a small group of customers will be indicative of the opinions of all their customers This assumption may not be accurate if the small group of customers happens to have different characteristics or preferences from the larger population To avoid this bias, it is important to collect and analyze data from a sufficiently large and diverse sample size to draw more accurate conclusions Self-serving biases - Self-serving bias is a cognition bias in which individuals often interpret another person's behavior by making attributions It is to both the person and the situation To the person, it means the behaviors were caused by internal factors such as ability, mood, or effort, etc And to the situation, the behaviors were caused by external factors such as the task, fate, other people have actions that affect, etc There is a tendency known as fundamental attribution error, it overestimates the role of personal or internal factors and underestimates the role of situational or external factors Example: Consider the athlete who fails in a competition Perhaps he is lazy (he doesn't try to practice to achieve the best result possible), or perhaps he is allergic to the weather of this day, to the food that the organizing committee prepares, and he can not show his best performance According to the Self-serving biases, the most reason for the failure of the athlete is himself, he does not try to practice, and he is lazy 10 Endowment Effect - The endowment effect is a cognitive bias that describes the tendency of people to value an object or item more highly once they own it, simply because they possess it In other words, people tend to place a higher value on something they own, even if it has no inherent value or the same value as before they owned it Even when its true value is recognized, the sheer act of Group – IB17B02 Cross Cultural Management and Negotiation holding something tends to lead individuals to enhance its perceived value Example: Imagine that you own a vintage guitar that you have been wanting to sell for some time You ask your friends about the price they would like to buy it They just want to pay about $300 and you are not satisfied with that price, so you keep it for yourself One day, a friend asks to borrow the guitar for a performance, and you agree After they possess it, they feel very interested in its special sound and they willing to pay for $400, a higher price 11 Ignoring Others’ Cognitions - Ignoring others' cognitions refers to a cognitive bias where individuals tend to disregard or discount the thoughts, beliefs, and opinions of others Ignoring others' cognitions can lead to misunderstandings, lack of empathy, and missed opportunities for collaboration and compromise; they will work with incomplete information, and thus produces faulty results For example, a manager in a company is responsible for leading a team of employees One of the employees, Sarah, approaches the manager to discuss a project they're working on together Sarah shares some concerns about the project and suggests some changes that she thinks would improve its outcome The manager, however, is not interested in hearing Sarah's perspective They dismiss her concerns and ideas without really listening to her, and instead, they impose their own ideas on the project The manager believes that their way is the only way to complete the project successfully In this situation, the manager ignores Sahara's cognition As a result, Sarah feels undervalued and disrespected She may become less motivated to work on the project, and her trust in the manager may decrease The project itself may also suffer as a result of the manager's unwillingness to consider alternative perspectives and ideas 12 Reactive Devaluation - Reactive devaluation is a cognitive bias where people devalue proposals or offers made by someone who they perceive as an adversary, simply because the proposals or offers are made by that person, and not because of the merits of the proposal or offer itself Essentially, it is the tendency to reject an idea or proposal simply because of the source it came from, rather than its own inherent worth Example: If an employee who is disliked by their colleagues suggests a solution or idea, the other employees may be more likely to reject it simply because it came from that particular employee, rather than evaluating the idea on its own merits Group – IB17B02 Cross Cultural Management and Negotiation Group – IB17B02