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Chapter 19 - Negotiating with international customers, partners, and regulators. After studying this chapter you will be able to understand: The problems associated with cultural stereotypes, how culture influences behaviors at the negotiation table, common kinds of problems that crop up during international business negotiations, the similarities and differences in communication behaviors in several countries,...
International Marketi ng 14th Edition P h i l i p R C a t e o r a M a r y C G i l l y John L Graham Negotiating with International Customers, Partners, and Regulators Chapter 19 McGrawưHill/Irwin InternationalMarketing14/e Copyrightâ2009byTheMcGrawưHillCompanies,Inc.Allrightsreserved What Should You Learn? The problems associated with cultural stereotypes • How culture influences behaviors at the negotiation table • Common kinds of problems that crop up during international business negotiations • The similarities and differences in communication behaviors in several countries 19-2 What Should You Learn? • How differences in values and thinking processes affect international negotiations • The important factors in selecting a negotiation team • How to prepare for international negotiations • Managing all aspects of the negotiation process • The important of follow-up communications and procedures 19-3 Global Perspective A Japanese Aisatsu • Face-to-face negotiations – An omnipresent activity in international commerce • Executives – Must also negotiate with representatives of foreign governments • Negotiation of the original agreement – A crucial aspect of all international commercial relationships • Taking cultural differences into account – Enhances business agreements – Leads to long-term, profitable relationships across borders 19-4 The Dangers of Stereotypes • The aggressive American, the quite Japanese, the pushy Brazilian • Negotiations – Are conducted between people, not national stereotypes • Cultural factors often make huge differences • Negotiation behaviors are different – Across regions, genders, and type of industry • Age and experience also make important differences • Consider the culture of customers and business partners, but treat them as individuals 19-5 The Pervasive Impact of Culture on Negotiation Behavior • Cultural differences cause four kinds of problems in international business negotiations – Language – Nonverbal behaviors ► Facial Expression, Silent, Side talk – Values: ► Objectivity and Time – Thinking and decision-making processes Order is important ► Western style (Sequential) vs Eastern Style (holistic) ► 19-6 Implications for Managers and Negotiators • Four steps for more efficient and effective international business negotiations Selection of the appropriate negotiation team Management of preliminaries, including training, preparations, and manipulation of negotiation settings Management of the process of negotiations Appropriate follow-up procedures and practices 19-7 Negotiation Teams • Willingness to use team assistance • Listening skills • Influence at headquarters (senior executive) • Gender should not be used as a selection criterion for international negotiation teams 19-8 Negotiation Preliminaries • Checklist for planning international negotiations Assessment of the situation and the people Facts to confirm during the negotiation Agenda Best alternative to a negotiated agreement (BATNA) Concession strategies Team assignments 19-9 Negotiation Preliminaries • Aspects of the negotiation setting that should be pre-manipulated Location Physical arrangements Number of parties Number of participants Audiences (news media, competitors, fellow vendors, etc.) Communications channels Time limits 19-10 Differences in Thinking and Decision-Making Processes • Western approach – sequential • Eastern approach – holistic • Americans – business negotiation is a problem-solving activity • Japanese – a business negotiation is a time to develop a business relationship with the goal of long-term mutual benefit 19-15 Task-Related Information Exchange • Let the foreign counterparts bring up business • Expect a large number of questions but little feedback • Allow periods of silence • Use multiple communication channels • Understand the lack of, or the bluntness of negative feedback • Meet aggressive first offers with questions, not anger 19-16 Persuasion • Task-related information exchange versus persuasion • Avoid threats, warnings, and other aggressive negotiation tactics • Avoid emotional outbursts • Ask more questions • Use third parties and information channels of communication 19-17 Concessions and Agreement • Write down concession-making strategies • Understand differences in decision-making styles • In many cultures, no concessions are made until the end of the negotiations 19-18 After Negotiations • In most countries other than America – Legal systems are not depended upon to settle disputes • Japan – Contacts primarily contain comments on principles of the relationship • China – Contracts are more a description of what business partners view their respective responsibilities to be • Many foreign CEOs expect a formal contract signing ceremony • Follow-up communications are very important 19-19 Conclusions • Experience levels are going up worldwide • Culture still counts • Differences between countries and cultures, no matter how difficult, can be worked out when people talk to each other in face-to-face setting 19-20 Verbal Negotiation Tactics (The “What” of Communications) 19-21 Linguistic Aspect of Language and Nonverbal Behavior (“How” Things are Said) 19-22 Differences in Language and Nonverbal Behaviors • Japan • Korea • China (northern) • Taiwan • Russia • Israel • Germany • United Kingdom 19-23 Differences in Language and Nonverbal Behaviors • Spain • France • Brazil • Mexico • French-speaking Canada • English-speaking Canada • United States 19-24 Cultural Differences in Competitiveness and Equality 19-25 Summary of Japanese and American Negotiation Styles 19-26 Summary • It is important to take cultural differences into account when meeting clients, customers, and business partners across the international negotiation table • Negotiators’ personalities and backgrounds influence their behavior – Making it important to get to know the individuals who represent client and customer companies 19-27 Summary • Four kinds of problems frequently arise during international business negotiations Level of language Nonverbal behaviors Values Thinking and decision-making processes • Much care must be taken in selecting negotiating teams • Situational factors such as the location for meetings and the time allowed must be carefully considered and managed 19-28 Summary • Business negotiations involve four steps Nontask sounding Task-related information exchange Persuasion Concessions and agreement • The time spent on each step can vary considerably from country to country • Americans tend to be deal oriented – More care should be taken in follow-up communications with foreign clients and partners who put more emphasis on longterm business relationships 19-29 ... other in face-to-face setting 1 9-2 0 Verbal Negotiation Tactics (The “What” of Communications) 1 9-2 1 Linguistic Aspect of Language and Nonverbal Behavior (“How” Things are Said) 1 9-2 2 Differences... process • The important of follow-up communications and procedures 1 9-3 Global Perspective A Japanese Aisatsu • Face-to-face negotiations – An omnipresent activity in international commerce • Executives... • United Kingdom 1 9-2 3 Differences in Language and Nonverbal Behaviors • Spain • France • Brazil • Mexico • French-speaking Canada • English-speaking Canada • United States 1 9-2 4 Cultural Differences