international culture negotiation

47
Culture’s impac t on business n egotiation 欧欧欧欧 Mr.Phongwarin Buranasat hitwong

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Page 1: International culture negotiation

Culture’ s impact on business neg

otiation

欧阳思思 Mr.Phongwarin Buranasathit

wong

Page 2: International culture negotiation

• In business,you don’ t get what you deserve ;you get what you negotiate.Why take ‘no’ f

or an answer? Successful people don’ t .The y get what they want by negotiating better

deals for both parties. ---- Dr.Chester L.Karrass

Page 3: International culture negotiation

• Negotiation is two-----CIs

They are common i nterests and

conflicting issues

Intercultral negotiat -----ion is four Cs

They are common i nterest,conflicting i

nterest ,compromis e and criteria.

Page 4: International culture negotiation
Page 5: International culture negotiation

Process in a negotiation

• Preparation before (before it)

• Negotiate (in it)

• After the process (a fter it)

Page 6: International culture negotiation

Before IT

• Define our own interest• Investigate your counterpart and its cultural background• Decide who, where, how

Page 7: International culture negotiation

IN IT

• Bring out your business interest• Arguing and persuasion, adaption• Outcome:Negotiation breaking down or rea

ching an agreement

Page 8: International culture negotiation

AFTER IT

• Establishing a coop eration relationship

• No following things

Page 9: International culture negotiation

Culture and Negotiations

As intercultural negotiations occur where neg otiating parties have different cultures and

do not share the same ways of thinking, fee ling, and behavior .The process is generally more complex . Culture has impact on every step in a negotia

tion, from negotiator’ s styles to ways of co mmunication, pursuation and making decis

ions, even after a whole process,it also mak es effect, especially in countries where peo - ple emphasize on long term relationship..

Page 10: International culture negotiation

Cultural contrasts in negotiation

• Preparations and business introductions

• Presentations and information exchanges

• Argumentation and persuasion• Agreement and conflict resolution

Page 11: International culture negotiation

Preparations and business introductions

Page 12: International culture negotiation

Presentations and informationexchanges

Page 13: International culture negotiation

Argumentation and persuation

Page 14: International culture negotiation

Agreement and conflict resolution

Page 15: International culture negotiation

How to achieve success

• Awarenes of cultural differences• Learn more about cultures• Choose proper negotiation style• Understanding deeds of people from

different cultural background• “ When in Rome,do as romans do” is no

t enough• To seek “ -win win” result

Page 16: International culture negotiation

Awarenes of cultural differences

• Different groups ha ve their own particu lar etiquette associa ted with the negotia tion process and the

ir adherence to prot ocol varies accordin

g to its perceived importantance.

Page 17: International culture negotiation

• bribery: what is a bribe in the US? In Afghanistan? In France? In China (贿

赂,行贿,开后门,塞红包) ? Be carefu l and be aware of Foreign Corrupt Pra

ctices Act, but be aware of local cultur e. Americans don’ t 塞红包 but Chines

e don’ t tip. Think about it.

Page 18: International culture negotiation

Learn more about cultures

•知己知彼,百战百胜。• The more you know

about your enemy or your counterpart ,th

e more likely you willwin.

Page 19: International culture negotiation

Choose proper negotiatio n style

• To be intuitive ,norm ative,ananalytic or fac

ual?• To send whom to wher

e ,how to communicat e and compromise?

• 1 or 2?

Page 20: International culture negotiation

try to take advantege

• Your place or mine?• Home court advantage

=More comfortable and more familiar =more confident.

Page 21: International culture negotiation

“ When in Rome,do as Roma ns do”?

• Not exactly!• Under different conditions one should d

o or shouldn’ t do as Romans do when in Rome do.

Based on different levels of familiarity wit h counterpart’ s culture, cases are difffe

rent. & Imagine what will happen when an Am

erican talk with an Arabian? ----- different results!

Page 22: International culture negotiation

-How to win win?

• ---A new concept coopetition!• Five methods of reaching integrative

agreements. 1. Expanding the pie 2. Nonspecific compensation 3. logrolling 4. cost cutting 5 . bridging

Page 23: International culture negotiation

-How to win win?

• 1. expanding resoures• 2. repaying parties who do not get what the

y yyyy yy yy yyyyyyyyy yyy yy yyyyy yy yyyyyyy yyyy yyy yyyy yyyy yyyyy

• 3. , .2,variant of nonspecific different from No i t i nvol ves bot h par t s

• 4. reduction of one person’ s cost s whi l e t heyyyyy yyyy yyyy yy yyyyy

• 5. devising a new option for situations in whic h nei t her per son get s hi s i ni t i al demands

Page 24: International culture negotiation

Something you should kn ow

• yy yyyyy yyy yy yyyy y yyy

Page 25: International culture negotiation

Negotiation StylesNegotiation Styles

Page 26: International culture negotiation

• 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.

Negotiation Styles

Page 27: International culture negotiation

Profile of an American Negotiator

• Knows when to compromiseKnows when to compromise• Takes a firm stand at the beginning of the Takes a firm stand at the beginning of the

negotiationnegotiation• Refuses to make concessions before handRefuses to make concessions before hand• Keeps his or her cards close to his or her Keeps his or her cards close to his or her

chestchest• Accepts compromises only when the Accepts compromises only when the

negotiation is deadlockednegotiation is deadlocked• Sets up the general principles and Sets up the general principles and

delegates the detail work to associatesdelegates the detail work to associates• Keeps a maximum of options open before Keeps a maximum of options open before

negotiationnegotiation• Operates in good faithOperates in good faith

Page 28: International culture negotiation

• Respects the “opponents”• States his or her position as clearly as possible• Knows when he or she wishes a negotiation to

move on• Is fully briefed about the negotiated issues• Has a good sense of timing and is consistent• Makes the other party reveal his or her

position while keeping his or her own position hidden as long as possible

• Lets the other negotiator come forward first and looks for the best deal

Profile of an American Negotiator

Page 29: International culture negotiation

Profile of an 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

Page 30: International culture negotiation

Profile of an Indian Negotiator

• 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

Page 31: International culture negotiation

Profile of an 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

Page 32: International culture negotiation

Profile of an Arab Negotiator• Is able to resist any kind of pressure that the

opponents could try to exercise on him• Use 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

Page 33: International culture negotiation

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

Page 34: International culture negotiation

Profile of a Successful Swedish Negotiator

(contd.)• Slow at reacting to new (unexpected)

proposals• Informal and familiar• Conceited• Perfectionist• Afraid of confrontations• Very private

Page 35: International culture negotiation

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

Page 36: International culture negotiation

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

Page 37: International culture negotiation

Comparative Management in Focus: Comparative Management in Focus: Negotiating with the ChineseNegotiating with the Chinese

• Business people have two major areas of Business people have two major areas of conflict when negotiating with the Chineseconflict when negotiating with the Chinese– Amount of detail about product Amount of detail about product

characteristicscharacteristics– Apparent insincerity about reaching an Apparent insincerity about reaching an

agreementagreement• Chinese negotiation process is affected by Chinese negotiation process is affected by

three cultural normsthree cultural norms– Politeness and emotional restraintPoliteness and emotional restraint– Emphasis on social obligationsEmphasis on social obligations– Belief in the interconnection of work, Belief in the interconnection of work,

family, and friendshipfamily, and friendship

Page 38: International culture negotiation

Comparative Management in Focus: Comparative Management in Focus: Negotiating with the ChineseNegotiating with the Chinese

• Tips to foreigners conducting business in China– Practice patience– Accept prolonged periods of stalemate– Refrain from exaggerated expectations– Discount Chinese rhetoric about future prospects– Expect the Chinese to try to manipulate by

shaming– Resist the temptation to believe that difficulties

are your fault– Try to understand Chinese cultural traits

Page 39: International culture negotiation

Comparative Management in Focus: Negotiating with the

Chinese

The Chinese think in terms of process that has no culmination.

Americans think in terms of concrete solutions to specific problems. . . .

The Chinese approach is impersonal, patient and aloof . . .

To Americans, Chinese leaders seem polite but aloof and condescending.

To the Chinese, Americans appear erratic and somewhat frivolous.

—Henry Kissinger,Newsweek, May, 2001

Page 40: International culture negotiation

Differences Between American and Chinese Culture and Approach to

the Negotiation Process

Contrast of Basic Cultural ValuesAmerican

Task and information orientedEgalitarianAnalyticalSequential, monochronicSeeks the complete truthIndividualistConfrontative, argumentative

Chinese

Relationship orientedHierarchical

HolisticCircular, polychronic

Seeks the harmonious way

CollectivistHaggling, bargaining

Page 41: International culture negotiation

Differences Between American and Chinese Culture and

Approach to the Negotiation Process(cont.)

Approach to the Negotiation ProcessAmeric

anQuick meetingsInformalMake cold callsFull authorityDirectProposals firstAggressiveImpatientA “good deal”

ChineseLong courting

processFormal

Draw on intermediaries

Limited authority

IndirectExplanations

firstQuestioning

PatientA long-term relationship

nontask sounding

information exchange

means of persuasion

terms of agreement

Page 42: International culture negotiation

Comparison of Cultural Approaches to Negotiation

American NegotiatorAmerican Negotiator Indian NegotiatorIndian Negotiator Arab NegotiatorArab Negotiator

Accepts compromise when deadlock occurs

Has firm initial and final stands

Sets up principles but lets subordinates do detail work

Has a maximum of options

Respects other parties

Is fully briefed

Keeps position hidden as long as possible

Relies on truth

Trusts instincts

Seeks compromises

Is ready to alter position at any point

Trusts opponent

Respects other parties

Learns from opponent

Avoids use of secrets

Protects “face” of other parties

Avoids confrontation

Uses a referent person to try to change others, e.g. “Do it for your father”

Seeks creative alternatives to satisfy all parties

Mediates through conferences

Can keep secrets

Page 43: International culture negotiation

Comparison of Cultural Approaches to Negotiation

Swedish Negotiator Italian Negotiator

Gets straight to the point of the discussion

Avoids confrontation

Time conscious

Overly cautious

Informal

Flexible

Reacts slowly to new propositions

Quiet and thoughtful

Dramatic

Emotional

Able to read context well

Suspicious

Intrigues

Uses flattery

Concerned about creating a good impression

Indefinite

Page 44: International culture negotiation

Nature of Conflict Between Members of Low and High

Context CultureKey Key QuestionsQuestions

Low-Context ConflictLow-Context Conflict High-Context ConflictHigh-Context Conflict

Why Analytic, linear logic; instrumental oriented; dichotomy between conflict and conflict parties

Synthetic, spiral logic; expressive oriented; integration of conflict and conflict parties

When Individualistic oriented; low collective normative expectations; violations of individual expectations create conflict potentials

Group oriented; high collective normative expectations; violations of collective expectations create conflict potentials

What Revealment; direct, confrontational attitude; action and solution oriented

Concealment; indirect, nonconfrontational attitude; “face” and relationship oriented

How Explicit communication codes; line-logic style: rational-factual rhetoric; open, direct strategies

Implicit communication codes; point-logic style: intuitive-effective rhetoric; ambiguous, indirect strategies

Page 45: International culture negotiation

Guidelines on Negotiation across Guidelines on Negotiation across CulturesCultures

• Check whether they think like you• Spend time on non-task sounding matters to establish

personal relationships• Know the differences between your opponent’s social,

political and economic systems and yours• Know how the above differences affect his thinking,

authority and negotiating methods• Know your opponent’s legal, technical and financial

systems• Know how the above will affect our choice of tactics• Know the effects of ethical standards (right, wrong,

reasonable)• Know the importance of face saving

Page 46: International culture negotiation

• Recognize the role of status

• Understand the role of government in the affairs of your opponent

• Identify the levels of approval

• Ask questions, but don’t put pressure

• Ensure there is a suitable communication system with Head Office

• Identify the right leader for the situation

• Make sure when using an interpreter he is skilled in both languages and negotiation.

• Have a dummy run with him. Get him to translate gestures etc

• Avoid using jargon

• Confirm in writing and use words carefully to avoid ambiguity

• Use team approach by using experts

• Recognize differences in perceiving contractual differences and agreements

• Make concessions only after issues are discussed.

Guidelines on Negotiation across Cultures

Page 47: International culture negotiation

Thank You!