Slide international business ch05

Cross-Cultural Negotiation and Decision Making Chapter Prentice Chapter Chapter - Overview      Negotiation The negotiation process Understanding negotiation styles Managing negotiation Decision making Prentice Chapter Important Differences in the Negotiation Process  The amount and type of preparation for a negotiation  The relative emphasis on tasks versus interpersonal relationships  The reliance on general principles rather than specific issues  The number of people present and the extent of their influence Prentice Chapter What is Negotiation?  Negotiation describes the process of discussion between two or more parties aimed at reaching a mutually acceptable agreement Prentice Chapter The Negotiation Process Preparation Relationship building Exchange of task-related information Persuasion Concessions and agreement Prentice Chapter 5 Stakeholders in Cross-Cultural Negotiations HQ employees Suppliers Home government Home (HQ) Country Home consumers Prentice Investors Alliance partners Contractors Firm Negotiators Host government Distributors Expatriate employees Host country All citizens Special interest groups Chapter Host local employees Host consumers Variables in the Negotiation Process (Exhibit 5-3)  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 the parties attempt to influence each other? Do they rely on rational arguments, or accepted tradition, or on emotion? Prentice Chapter Variables in the Negotiation Process (contd.)  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 the parties try to avoid uncertainty in trading information or making a contract?  Value of time: What is each party’s 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 just a handshake), the credibility of parties, commitment, or a legally binding contract? Prentice Chapter Negotiation Styles  For North Americans, negotiations are businesslike; their factual appeals are based on what they believe is objective information, presented with the assumption that it is understood by the other side on a logical basis  Arabs use affective appeals based on emotions and subjective feelings  Russians employ axiomatic appeals – that is, their appeals are based on the ideals generally accepted in their society Prentice Chapter Profile of a Successful American Negotiator      Knows when to compromise Takes a firm stand at the beginning of the negotiation Refuses to make concessions beforehand Keeps his or her cards close to his or her chest Accepts compromises only when the negotiation is deadlocked  Sets up the general principles and delegates the detail work to associates  Keeps a maximum of options open before negotiation  Operates in good faith Prentice Chapter 10 Profile of a Successful Indian Negotiator        Looks for and says the truth Is not afraid of speaking up and has no fears Exercises self-control Seeks solutions that will please all the parties involved Respects the other party Neither uses violence nor insults Is ready to change his or her mind and differ with himself or herself at the risk of being seen as inconsistent and unpredictable Prentice Chapter 12 Profile of a Successful Indian Negotiator (contd.)  Puts things into perspective and switches easily from the small picture to the big one  Is humble and trusts the opponent  Is able to withdraw, use silence, and learn from within  Relies on himself or herself, his or her own resources and strengths  Appeals to the other party’s spiritual identity  Is tenacious, patient, and persistent  Learns from the opponent and avoids the use of secrets  Goes beyond logical reasoning and trusts his or her instinct as well as faith Prentice Chapter 13 Profile of a Successful Arab Negotiator     Protects all the parties’ honor, self-respect, and dignity Avoids direct confrontation between opponents Is respected and trusted by all Does not put the parties involved in a situation where they have to show weakness or admit defeat  Has the necessary prestige to be listened to  Is creative enough to come up with honorable solutions for all parties  Is impartial and can understand the positions of the various parties without leaning toward one or the other Prentice Chapter 14 Profile of a Successful Arab Negotiator (contd.)  Is able to resist any kind of pressure that the opponents could try to exercise on him  Uses references to people who are highly respected by the opponents to persuade them to change their minds on some issues  Can keep secrets and in so doing gains the confidence of the negotiating parties  Controls his temper and emotions  Can use conference as mediating devices  Knows that the opponent will have problems in carrying out the decisions made during the negotiation  Is able to cope with the Arab disregard for time Prentice Chapter 15 Profile of a Successful Swedish Negotiator          Very quiet and thoughtful Punctual (concerned with time) Extremely polite Straightforward (they get straight down to business) Eager to be productive and efficient Heavy-going Down-to-earth and overcautious Rather flexible Able to and quite good at holding emotions and feelings Prentice Chapter 16 Profile of a Successful Swedish Negotiator (contd.)       Slow at reacting to new (unexpected) proposals Informal and familiar Conceited Perfectionist Afraid of confrontations Very private Prentice Chapter 17 Profile of a Successful Italian Negotiator  Has a sense of drama (acting is a main part of the culture)  Does not hide his or her emotions (which are partly sincere and partly feigned)  Reads facial expressions and gestures very well  Has a feeling for history  Does not trust anybody  Is concerned about the bella figura, or the “good impression,” he or she can create among those who watch his or her behavior  Believes in the individual’s initiatives, not so much in teamwork  Is good at being obliging and simpatico at all times Prentice Chapter 18 Profile of a Successful Italian Negotiator (contd.)  Is always on the qui vive, the “lookout”  Never embraces definite opinions  Is able to come up with new ways to immobilize and eventually destroy his or her opponents  Handles confrontation of power with subtlety and tact  Has a flair for intrigue  Knows how to use flattery  Can involve other negotiators in complex combinations Prentice Chapter 19 Managing Negotiation  “The software of negotiation – that is, the nature and the appearance of the relationship between the people pursuing common goals – need to be carefully addressed in the negotiation process.” Tse, Francis, and Walls Prentice Chapter 20 Cross-Cultural Negotiation Variables (Exhibit 5-8) Culture Goals National/corporate Principles versus specific details Task versus interpersonal relationships Negotiating styles objective/subjective/axiomatic Negotiating behavior defense/attack/trust deception/pressure/concessions Verbal and nonverbal behavior Attitudes toward time/scheduling Trust level and duration relations Composition of teams Level of preparation Culture Prentice Chapter 21 Negotiation Support Systems  Negotiation Support Systems (NSS) can provide support for the negotiation process by:  Increasing the likelihood that an agreement is reached when a zone of agreement exists (solutions that both parties would accept)  Decreasing the direct and indirect costs of negotiations, such as costs caused by time delays (strikes, violence), and attorneys’ fees, among others  Maximizing the chances for optimal outcomes Prentice Chapter 22 Influences on Western-Chinese Business Negotiations (Exhibit 5-9) Antecedent Factors Negotiator’s Profile Etiquette Harmony Face Economic conditions Politics pervasiveness Constituent shadow Cognition Personality Team commitment Open-mindedness Adaptive orientation Prentice Chapter International Business Negotiations Behavior Process Outcomes 23 Stages in the Rational Decision-Making Process      Defining the problem Gathering and analyzing relevant data Considering alternative solutions Deciding on the best solution Implementing the decision Prentice Chapter 24 Cultural Variables Affecting DecisionMaking  Objective (basing decisions on rationality) versus subjective (basing decisions on emotions) approach  Risk tolerance  Locus of control – internal (managers in control of events), or external (managers have little control over events) Prentice Chapter 25 Cultural Variables in the Decision-Making Process (Exhibit 5-11) Culture Individualism/collectivism Locus of decision making Risk tolerance Problem Data Consideration of Definition gathering alternative solutions Objective/subjective perspective Prentice Utilitarianism/moral ideals Past/future orientation Decision Implementation Internal/external locus of control Chapter 26 ... Cognition Personality Team commitment Open-mindedness Adaptive orientation Prentice Chapter International Business Negotiations Behavior Process Outcomes 23 Stages in the Rational Decision-Making... thoughtful Punctual (concerned with time) Extremely polite Straightforward (they get straight down to business) Eager to be productive and efficient Heavy-going Down-to-earth and overcautious Rather...  Maximizing the chances for optimal outcomes Prentice Chapter 22 Influences on Western-Chinese Business Negotiations (Exhibit 5-9) Antecedent Factors Negotiator’s Profile Etiquette Harmony Face