Chap019 - International Negotiating

(1)

I n t e r n a t i o n a l M a r k e t i n g

Negotiating

with International

Customers, Partners,

and Regulators

(2)

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

(3)

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

(4)

Global Perspective

A Japanese Aisatsu

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

(5)

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

(6)

The Pervasive Impact of Culture

on Negotiation Behavior

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

(7)

Implications for Managers

and Negotiators

Implications for Managers

and Negotiators

•

Four steps for more efficient and effective

international business negotiations

1. Selection of the appropriate negotiation team

2. Management of preliminaries, including training, preparations, and manipulation of negotiation settings

3. Management of the process of negotiations

(8)

Negotiation Teams

• _{Willingness to use team assistance} • Listening skills

• Influence at headquarters (senior executive)

(9)

Negotiation Preliminaries

•

Checklist for planning international

negotiations

1. Assessment of the situation and the people

2. Facts to confirm during the negotiation

3. Agenda

4. Best alternative to a negotiated agreement (BATNA)

5. Concession strategies

(10)

Negotiation Preliminaries

• _{Aspects of the negotiation setting that should be}

pre-manipulated

1. Location

2. Physical arrangements

3. Number of parties

4. Number of participants

5. Audiences (news media, competitors, fellow vendors, etc.)

6. Communications channels

(11)

At the Negotiation Table

• _{Business negotiations proceed through four}

stages

1. Nontask sounding

2. Task-related exchange of information

3. Persuasion

(12)

Nontask Sounding

• _{Learn the mood of the other side}

• Learn about the client’s background and interest for cues about appropriate communication styles

(13)

Differences in Language

and Nonverbal Behaviors

• _{Americans are near the bottom of the languages}

skills list

• Americans don’t like side conversations by foreigners in their native language

• The variation across cultures is greater when comparing linguistic aspects of language and nonverbal behaviors than when the verbal

(14)

Differences in Values

• _Objectivity

– “Separating people from the problem”

• Competitiveness and equality

– Japanese appear to be the best negotiators with the highest profits

– Japanese appear to be more equitable with buyers

• _Time

(15)

Differences in Thinking

and Decision-Making Processes

Differences in Thinking

and Decision-Making Processes

• _{Western approach – sequential} • Eastern approach – holistic

• Americans – business negotiation is a problem-solving activity

(16)

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}

(17)

Persuasion

• _{Task-related information exchange versus}

persuasion

• Avoid threats, warnings, and other aggressive negotiation tactics

• Avoid emotional outbursts

• _{Ask more questions}

(18)

Concessions and Agreement

• _{Write down concession-making strategies} • Understand differences in decision-making

styles

(19)

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

(20)

Conclusions

• _{Experience levels are going up worldwide} • Culture still counts

(21)

Verbal Negotiation Tactics

(The “What” of Communications)

(22)

Linguistic Aspect of Language and

Nonverbal Behavior

(“How” Things are Said)

(23)

• _Japan • _Korea

• _{China (northern)} • _Taiwan

• _Russia • _Israel

• _Germany

(24)

• _Spain • France

• Brazil

• Mexico

• French-speaking Canada

• _{English-speaking Canada}

Differences in Language

(25)

Cultural Differences

in Competitiveness and Equality

Cultural Differences

(26)

Summary of Japanese

and American Negotiation Styles

Summary of Japanese

(27)

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

(28)

Summary

• _{Four kinds of problems frequently arise during}

international business negotiations

1. Level of language

2. Nonverbal behaviors

3. Values

4. Thinking and decision-making processes

• _{Much care must be taken in selecting negotiating}

teams

(29)

Summary

• Business negotiations involve four steps

1. Nontask sounding

2. Task-related information exchange

3. Persuasion

4. Concessions and agreement.

• The time spent on each step can vary considerably from country to country

• Americans tend to be deal oriented