Cultural differences cause 4 kinds of problems in international business negotiations at the levels of...
1. Language
2. Nonverbal Behaviors
3. Values (american: objectivity; competitiveness; equality; time)
4. Thinking and decision-making processes.
Thinking process
- westerners divide complex tasks into a series of smaller tasks
- Asians discuss all, in no particular order, with concessions on all at the end.
The International Negotiations Framework
1. Bargainer Characteristics
2. Situational Factors
3. Negotiation Processes
4. Negotiation Outcomes
Sources of Individual Power
1. Legitimate Power
2. Reward/Coercive Power
3. Expert Power
4. Referent Power
5. Personal Power
Legitimate Power
Holds a position of power; Authority or "badge". Earned it Legitimately
Reward/coercive power
punishment & rewards; scarce resources. The ability of a person to influence the allocation of incentives in an organization. Can influence the action of other employees (can be greatly motivating if used well). If applied through favoritism, it will dimi
expert power
information & knowledge; skill, experience. Possessing knowledge or expertise in a particular area.
Referent power
_____" sent me; pattern of obligations; centrality of social network. People possess reference power when others respect and like them.
Personal Power
charisma, persistence, etc...
Key Bargainer Characteristics
1. LISTENING Ability
2. INTERPERSONAL orientation
3. Willingness to USE TEAM assistance
4. Self-CONFIDENCE
5. High ASPIRATIONS
6. Social ACCEPTANCE
7. INFLUENCE at headquarters
Negotiation Tactics
1. Maximize questions
2. Minimize commitments
3. Start High
4. Plan response to hardball tactics: "good cop/bad cop"; the bogey; chicken.
After Negotiations
1. Each side should be concerned abot mutual benefits of the relationships
2. Legal systems not relied upon to handle disputes
3. US based tight contracts lead to "divorce" (Japanese use short contracts, loosely written, that contain the "principles" of t
If negotiations in India get heated because of different objectives, avoid eye contact with your counterpart since it could be read as aggressive and disrespectful.
FALSE. Making eye contact conveys sincerity in India and might therefore help in this case
Oral commitments can represent legally binding contracts in Germany
TRUE. Proving oral statements in court can be difficult, though, so the legal risk may not be high. However most Germans will expect all commitments, whether oral or in writing, to be kept.
Venezuelans communicate quite directly . They will usually let you know right away if they don't like the terms and conditions of your proposal
TRUE. Venezuelans tend to be direct than other Latin Americans.
Decision making in Ireland is often very quick, assuming you are dealing with the right person
TRUE. Irish organizations are often very hierarchical, though, so verify that you are indeed dealing with the decision maker
The Chinese won't spend much time gathering and exchanging information since they are often eager to get started with the bargaining exchange
FALSE. Before the bargaining phase of a negotiation can begin, Chinese negotiators may spend considerable time finding out whatever they can about the other side.
When making decisions, Brazilians usually look at the specifics of a situation rather than following universal rules
TRUE. unlike people in so-called "universalist" cultures, for instance American or Germans, Brazilians tend to give more weight to situational circumstances
Your opening offer with a Sweden negotiator should leave at least 30-40% bargaining room, since your counterpart will expect you to stay flexible and allow them to obtain 'a good deal'.
FALSE. most swedes dislike bargaining and haggling. They expect you to open with an offer that is already in the ballpark of what you expect.
Negotiators in Israel often use silence as a pressure tactic to obtain further concessions
FALSE. Silence is rare in conversations among Israelis, and they usually don't use it as a tactic either.
In the Netherlands, a person sucking their thumb is signaling that he or she does not believe you
TRUE. almost everyone in the country will immediately understand this non-verbal message
If a negotiation in mexico gets stuck in a dispute over some detail, you may be able to resolve it quickly be appealing to the personal relationship you have with your counterpart.
TRUE. The strength of a personal relationship is key when negotiating in Mexico, and it will be very important should conflicts arise.
Contracts in Saudi Arabia are exported to include lots of details and therefore often take a long time to create and agree on
FALSE. Saudis usually prefer contracts to be simple and high-level, since they consider them a mere formality
In japan, prices rarely move by more than 10-15% from initial offer to final agreement
FALSE. Although concessions may not be easy to get, prices may move by up to 40% or so during negotiations in Japan
When visiting a potential business partner in France for the first time, do not bring a gift along as this could raise suspicion about your motives
TRUE. It is advisable to refrain from any gift-giving until an agreement has been reached
Aggressive or adversarial negotiation behavior in Russia indicates that your counterparts do not feel good about the relationship between you
FALSE. although the strength of your personal relationship will have an influence, Russians appear rather aggressive even when negotiating with something they like a respect.
In Taiwan, it is strongly advisable to negotiate in a team rather than as an individual
TRUE. individuals negotiating in Taiwan enjoy less respect, may not be taken seriously, and may become 'easy prey' for a skilled team of Taiwanese negotiators.
Using English - language presentation material is ok everywhere in Canada, though Franco-Canadians may prefer to see some of it in French
FALSE. many Canadian companies may require your material to be bilingual. In the Quebec province, this may even be required by law.
Bringing a legal counselor to business negotiations in Italy is a good idea because the country has a very complicated catalog of business laws. Your local counterparts will likely also include an attorney on their side
FALSE. Your italian counterparts likely interpret this step as a sign of mistrust on your side
In Malaysia, written contracts are almost always kept since personal honor is a strong value in the country
FALSE. Similar to Koreans and Chinese, Malaysians do not view contracts as continually binding documents. You as their contract partner will be expected to remain flexible if conditions change
If your negotiation in South Korea reaches a critical point, it can be most effective to have a one-on-one conversation with the most senior local manager in order to resolve disagreements
TRUE. Unlike most other Asian countries where this approach is not promising, individual discussions may help establish agreement in South Korea.
In the UK, final decisions usually require top management approval. That authority rarely gets delegated to others.
TRUE. While negotiating teams in the UK may appear consensus-oriented, they do not view decision-making a team sport.