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Chapter 10

Intercultural
Negotiation
Process
International Business Communication, 4th ed., Chaney & Martin

Topics
Steps in the Negotiation
Process
Mistakes Commonly Made
During Negotiations
Intercultural Negotiation
Models
Negotiation Strategies
Trade Agreements
International Business Communication, 4th ed., Chaney & Martin

Definition
Intercultural negotiation involves
discussions of common and conflicting
interests between persons of different
cultural backgrounds who work to reach
an agreement of mutual benefit.

International Business Communication, 4th ed., Chaney & Martin

In business, you don't get what you


deserve, you get what you negotiate.
Why take no for an answer?
Successful people don't. They get what
they want by negotiating better deals for
both parties.

Dr. Chester L. Karrass, Leader in Negotiating

Steps in the Negotiation


Process

Preparation and Site Selection


Team Selection
Relationship Building
Opening Talks
Discussions
Agreement
International Business Communication, 4th ed., Chaney & Martin

Preparation and Site Selection


Hire a consultant in the country.
Consult resource videos and
written materials on negotiation.
Choose a sitehere or there can
be important.

International Business Communication, 4th ed., Chaney & Martin

Team Selection
Consider number, age, gender,
and rank of team members.
Consider background of players.
Evaluate other negotiators - their
political affiliation, social class,
age, and risk-taking propensity.

International Business Communication, 4th ed., Chaney & Martin

Relationship Building
Time required
Intermediaries or agents
Friendship versus business
relationship

International Business Communication, 4th ed., Chaney & Martin

Opening Talks and


Discussions
Observe opening rituals - small talk,
humor, etc.
Consider the appropriateness of an
agenda.
Expect a variety of behaviors.
Plan ahead for concessions.
Move to an informal location when
appropriate.

International Business Communication, 4th ed., Chaney & Martin

Agreement

Close negotiations properly.


Expect delays .
Get tax and legal advice.
Anticipate a long wait until final
approval.
Remember that contracts are not
always considered final.
International Business Communication, 4th ed., Chaney & Martin

Common Negotiation Mistakes

Making negative initial impression


Failing to listen and talking too much
Assuming understanding by the other culture
Failing to ask important questions
Showing discomfort with silence
Using unfamiliar and slang words
Interrupting the speaker
Failing to read the nonverbal cues
International Business Communication, 4th ed., Chaney & Martin

Failing to note key points


Making statements that are irritating or
contradictory
Failing to prepare a list of questions for
discussion
Being easily distracted
Failing to start with conditional offers
Failing to summarize and restate to ensure
understanding
Hearing only what you want to hear
Failing to use first-class supporting materials
International Business Communication, 4th ed., Chaney & Martin

Intercultural Negotiation Models


Problem-solving approach considers
national and organizational cultural differences
Competitive approach individualistic and
persuasive orientation
Compromising seeks a middle ground
Forcing makes the other party comply
Legalism uses legal documentation to
force the partner to comply

International Business Communication, 4th ed., Chaney & Martin

Four - Stage Negotiation Mode

Investigative
Presentation
Bargaining
Agreement

Kozicki, Creative Negotiating

Negotiation Strategies
People act on the basis of their own best interests.
Truth in negotiations:
Faith
Fact
Feeling
U.S. negotiators make fewer adjustments to their
opponents.
Strategies include: preparation; tactics; conflict
resolution and mediation; and observation,
analysis, and evaluation.

International Business Communication, 4th ed., Chaney & Martin

Trade
Agreements
General license never actually issued
Validated license allows specific
exporter to export specific products to
specific places
Free trade zones or trade blocs
products enter without customs duties

International Business Communication, 4th ed., Chaney & Martin

NAFTA Benefits
To eliminate barriers to trade and facilitate
cross-border movement of goods and
services
To promote fair competition
To increase investment opportunities
To provide adequate and effective
protection for intellectual property
To develop effective procedures to handle
disputes
To expand cooperation and increase
benefits to the three countries
International Business Communication, 4th ed., Chaney & Martin

The U.S. Negotiators Global Report Card


Competency

Grade

Preparation BSynergistic approach (win-win) D


Cultural I.Q.
D
Adapting the negotiating process
to the host country environment D
Patience D
Listening D
Linguistic abilities F
Using language that is simple
and accessible
C
High aspirations B+
Personal integrity ABuilding solid relationshipsD

International Business Communication, 4th ed., Chaney & Martin

Statements Characteristic of
U.S. Negotiating Style
"I can handle this myself" (to express
individualism).

"Please call me Steve" (to make people feel

relaxed by being informal).


"Pardon my French" (to excuse profanity).
"Let's get to the point" (to speed up decisions).
"Speak up; what do you think?" (to avoid silence).
"A deal is a deal" (to indicate an expectation that
the agreement will be honored).
International Business Communication, 4th ed., Chaney & Martin

China
Reserved; known for hospitality and good
manners
Give small, inexpensive presents
Do not like to be touched
Consider mutual relationships and trust very
important
Technical competence of negotiators necessary
Prefer to use an intermediary
Rarely use lawyers
Ample room for compromise
International Business Communication, 4th ed., Chaney & Martin

France
Have a sense of pride sometimes interpreted as
supremacy
French logic ("Cartesian" logic) proceeds from
what is known in a point-by-point fashion until
agreement is reached
Protocol, manners, status, education, family, and
individual accomplishments are keys to success
with the French

International Business Communication, 4th ed., Chaney & Martin

Germany

Protocol is important
Dress is conservative; correct posture and manners are
required
Use titles when addressing members of the negotiating team
Prefer keeping a distance between themselves and the other
team
Have technical people as part of the negotiation team as
Germans are detail oriented
Punctuality is expected
Contracts are firm guidelines to be followed exactly

International Business Communication, 4th ed., Chaney & Martin

India
Bribery is common; having connections is
important
Avoid using the left hand in greetings and eating
Request permission before smoking, entering, or
sitting
Building relationships is important; an introduction
is necessary
Intermediaries are common
Use titles to convey respect
Knowledge of local affairs is important
Negotiation process can be long
International Business Communication, 4th ed., Chaney & Martin

Japan
Business etiquette is very important, including
business card exchange
Meeting should be arranged by an intermediary
Subtle and complex verbal and nonverbal cues
are used to avoid having someone lose face or
lose the group harmony
The Japanese use more silence and less eye
contact than U.S. persons
Consider contracts as flexible instruments
Are suspicious of a negotiating team that
includes lawyers
International Business Communication, 4th ed., Chaney & Martin

Latin America

Relationships are important


Bribery is common
Government is very involved in business
Negotiators chosen based on family
connections, political influence, education, and
gender (females should be in the background)
Social competence is important
Most agreements are consummated over lunch
Numerous meetings is the norm; time is not
seen as important
Avoid gestures
International Business Communication, 4th ed., Chaney & Martin

Nigeria
Nigerians are skillful negotiators; they view negotiation as a competitive
process
When selecting negotiators, consider age (equated with wisdom), gender,
cultural background, and educational credentials
Developing a personal relationship is important
Time is not particularly important so negotiations may be lengthy
Use titles and last names
Use an intermediary to make initial introductions
Being well dressed is important; courtesy and consideration are also
expected
Contracts (oral or written) are flexible
A bribe may be needed to expedite business

International Business Communication, 4th ed., Chaney & Martin

Russian States
In the past, negotiation sessions have been long,
with Russians controlling the agenda
Are concerned with age, rank, and protocol
Tend to be formal
Friendships are not crucial to business
Contracts interpreted rigidly
Concerned with maximizing their profits

International Business Communication, 4th ed., Chaney & Martin

Negotiating globally can present many


opportunities. Corporations can expand
their markets, increase their markets,
increase their profits and productivity,
and lower their costs by negotiating
globally.

International Business Communication, 4th ed., Chaney & Martin