INTERNATIONAL NEGOTIATIONINTERNATIONAL NEGOTIATION

More complex than domestic More complex than domestic negotiations negotiations

Differences in national cultures and Differences in national cultures and differences in political, legal, and differences in political, legal, and economic systems often separate economic systems often separate potential business partners potential business partners

EXHIBIT 3-1: STEPS IN THE EXHIBIT 3-1: STEPS IN THE INTERNATIONAL NEGOTIATION INTERNATIONAL NEGOTIATION

PROCESSPROCESS

STEP 1: PREPARATION

STEP 2: BUILDING THERELATIONSHIP

STEP 3: EXCHANGINGINFORMATION/FIRST OFFER

STEP 5: CONCESSIONS

STEP 6: AGREEMENT

STEP 4: PERSUASION

STEP 1: PREPARATIONSTEP 1: PREPARATION

Is the negotiation possible?Is the negotiation possible?Know what your company wants Know what your company wants Know the other side Know the other side Send the proper teamSend the proper teamAgendaAgendaPrepare for a long negotiation Prepare for a long negotiation EnvironmentEnvironmentStrategyStrategy

DIFFERENCES IN CULTURES IN DIFFERENCES IN CULTURES IN KEY NEGOTIATING PROCESSESKEY NEGOTIATING PROCESSESCommunication styles—direct or Communication styles—direct or

indirect indirect Sensitivity to time—low or highSensitivity to time—low or highForms of agreement—specific or Forms of agreement—specific or

generalgeneralTeam organization—a team or one Team organization—a team or one

leaderleader

STEP 2: BUILDING THE STEP 2: BUILDING THE RELATIONSHIPRELATIONSHIP

No focus on businessNo focus on businessPartners get to know each otherPartners get to know each otherSocial and interpersonal mattersSocial and interpersonal mattersDuration and importance vary by cultureDuration and importance vary by culture

STEP 3: EXCHANGING STEP 3: EXCHANGING INFORMATION AND THE FIRST INFORMATION AND THE FIRST

OFFEROFFER

Task-related information is Task-related information is exchanged exchanged

First offerFirst offer

STEP 4: PERSUASIONSTEP 4: PERSUASION

Heart of the negotiation processHeart of the negotiation processAttempting to get other side to Attempting to get other side to

agree to a positionagree to a positionNumerous tactics can be usedNumerous tactics can be used

VERBAL AND NONVERBAL VERBAL AND NONVERBAL NEGOTIATION TACTICSNEGOTIATION TACTICSPromisePromiseThreatThreatRecommendationRecommendationWarningWarningRewardRewardPunishmentPunishmentNormative appealNormative appeal

OTHER NEGOTIATION TACTICSOTHER NEGOTIATION TACTICS

CommitmentCommitmentSelf disclosureSelf disclosureQuestionQuestionCommandCommandNoNoInterruptingInterrupting

EXHIBIT 3-4: FREQUENCIES OF VERBAL NEGOTIATION EXHIBIT 3-4: FREQUENCIES OF VERBAL NEGOTIATION BEHAVIORSBEHAVIORS

0 20 40 60 80 100

Interrupt

NO

Promise

Recommend

Command

CommitmentBrazilian

U.S.

Japanese

““DIRTY TRICKS” IN DIRTY TRICKS” IN INTERNATIONAL INTERNATIONAL NEGOTIATIONSNEGOTIATIONS

Dirty tricks are negotiation tactics Dirty tricks are negotiation tactics that pressure opponents to accept that pressure opponents to accept unfair or undesirable agreements or unfair or undesirable agreements or concessionsconcessions

PLOYS/DIRTY TRICKS - PLOYS/DIRTY TRICKS - POSSIBLE RESPONSESPOSSIBLE RESPONSES

Deliberate deception - point out what is Deliberate deception - point out what is happening happening

Stalling - do not reveal when you plan Stalling - do not reveal when you plan to leave to leave

Escalating authority - clarify decision Escalating authority - clarify decision making authoritymaking authority

Good guy, bad buy routine - do not Good guy, bad buy routine - do not make any concessionsmake any concessions

You are wealthy and we are poor - You are wealthy and we are poor - ignore the ploy ignore the ploy

Old friends - keep a psychological Old friends - keep a psychological distancedistance

STEPS 5 AND 6: STEPS 5 AND 6: CONCESSIONS AND CONCESSIONS AND

AGREEMENTAGREEMENTFinal agreement: The signed Final agreement: The signed

contract, agreeable to all sides contract, agreeable to all sides Concession making requires that Concession making requires that

each side relax some of its each side relax some of its demandsdemands

STYLES OF CONCESSIONSTYLES OF CONCESSIONSequential approach - consider each Sequential approach - consider each

issue as a separate point issue as a separate point Each side reciprocates concessionsEach side reciprocates concessionsHolistic approach - more common in Holistic approach - more common in

Asia Asia Concession making begins after all Concession making begins after all

issues are discussedissues are discussed

BASIC NEGOTIATION BASIC NEGOTIATION STRATEGIESSTRATEGIES

CompetitiveCompetitive

–The negotiation as a win-lose gameThe negotiation as a win-lose gameProblem solvingProblem solving

–Search for possible win-win situationsSearch for possible win-win situations

COMPETITIVE OR PROBLEM SOLVING COMPETITIVE OR PROBLEM SOLVING INTERNATIONAL NEGOTIATIONINTERNATIONAL NEGOTIATION

Cultural norms and values may Cultural norms and values may predispose some negotiators to predispose some negotiators to one approach one approach

Most experts recommend a Most experts recommend a problem solving negotiation problem solving negotiation strategystrategy

THE SUCCESSFUL INTERNATIONAL THE SUCCESSFUL INTERNATIONAL NEGOTIATOR: PERSONAL NEGOTIATOR: PERSONAL

CHARACTERISTICSCHARACTERISTICSTolerance of ambiguous Tolerance of ambiguous

situations situations Flexibility and creativity Flexibility and creativity HumorHumorStamina Stamina EmpathyEmpathy

Curiosity Curiosity BilingualBilingual

BASICS OF CROSS-CULTURAL BASICS OF CROSS-CULTURAL COMMUNICATIONCOMMUNICATION

LANGUAGE AND CULTURELANGUAGE AND CULTURE

The Whorf hypothesisThe Whorf hypothesis

LOW CONTEXTLOW CONTEXT

The words provide most of the The words provide most of the meaningmeaning

Most northern European languages Most northern European languages including German, English, and the including German, English, and the Scandinavian languages are low Scandinavian languages are low contextcontext

HIGH CONTEXTHIGH CONTEXT

Communications have multiple Communications have multiple meanings interpreted by reading meanings interpreted by reading the situationthe situation

Asian and Arabic languages are Asian and Arabic languages are among the most high context in the among the most high context in the worldworld

PRACTICAL ISSUES IN CROSS-PRACTICAL ISSUES IN CROSS-CULTURAL VERBAL CULTURAL VERBAL COMMUNICATIONCOMMUNICATION

INTERPRETERSINTERPRETERSProvide simultaneous translation Provide simultaneous translation

of a foreign languageof a foreign languageRequires greater linguistic skills Requires greater linguistic skills

than speaking a language or than speaking a language or translating written documentstranslating written documents

Insure the accuracy and common Insure the accuracy and common understanding of agreementsunderstanding of agreements

COMMUNICATION WITH NONNATIVE COMMUNICATION WITH NONNATIVE SPEAKERSSPEAKERS

Use the most common words with most Use the most common words with most common meaningscommon meanings

Select words with few alternative Select words with few alternative meaningsmeanings

Follow rules of grammar strictlyFollow rules of grammar strictlySpeak with clear breaks between wordsSpeak with clear breaks between words

Avoid “sports” words or words Avoid “sports” words or words borrowed from literatureborrowed from literature

Avoid slang/words that represent Avoid slang/words that represent pictures pictures

Mimic the cultural flavor nonnative Mimic the cultural flavor nonnative speaker’s languagespeaker’s language

SummarizeSummarizeTest your communication successTest your communication success

NONVERBAL COMMUNICATION -NONVERBAL COMMUNICATION - COMMUNICATING WITHOUT WORDSCOMMUNICATING WITHOUT WORDS

KINESICSKINESICS

Communicating through body Communicating through body movementsmovements

Facial expressionsFacial expressionsBody postureBody posture

PROXEMICSPROXEMICS

The use space to communicateThe use space to communicateThe personal bubble of space - nine The personal bubble of space - nine

inches to over twenty inches inches to over twenty inches North Americans prefer more North Americans prefer more

distance than from Latin and Arab distance than from Latin and Arab culturescultures

TOUCHTOUCHA basic form of human interaction A basic form of human interaction In greeting - shake hands, embrace, In greeting - shake hands, embrace,

or kiss or kiss Latin European and Latin American Latin European and Latin American

cultures-more touching than cultures-more touching than Germanic, Anglo, or Scandinavian Germanic, Anglo, or Scandinavian culturescultures

AVOIDING ATTRIBUTION ERRORSAVOIDING ATTRIBUTION ERRORSAttribution - process by which we Attribution - process by which we

interpret the meaning and intent of interpret the meaning and intent of spoken words or nonverbal exchanges spoken words or nonverbal exchanges

Attribution errors Attribution errors

CONCLUSIONSCONCLUSIONS

Successful negotiators Successful negotiators

–Understand the negotiation stepsUnderstand the negotiation steps

–Build cross-cultural communication Build cross-cultural communication skillsskills

–Understand nonverbal communicationUnderstand nonverbal communication

–Avoid attribution errorsAvoid attribution errors