Copyright 1998 Prentice-Hall Inc. adapted by Prof. Dr. vom Kolke1 Chapter 5 Negotiation and Conflict Resolution.

Copyright 1998 Prentice-Hall Inc. adapted by Prof. Dr. vom Kolke 1

Chapter 5

Negotiation and Conflict Resolution


Negotiation

The process of bargaining between two or more parties to reach a solution that is mutually acceptable


The Negotiation Process The Goal

– Acceptable solution to all (win-win)– In some cultures, goal of negotiation is win-

lose Preparation (understanding one‘s own interests

and anticipating the other party‘s interests: objectives, needs)

Relationship-Building (get to know each other)– Different cultures have different attitudes

toward how much time and effort to spend on relationship building (e.g. America vs. Mexico)


Information Exchange (stating an initial position followed by questions, answers, discussion)– Meaning of this stage depends on cultural

background American: beginning of „real“ negotiation Mexican: are suspicious, present little

substantive material Persuasion (try to convince their

counterparts to accept their proposals)

The Negotiation Process


Agreement (mutually acceptable solution by making concessions to the other side)– Cultural variation how to arrive at an

agreement Americans prefer to negotiate „linear“ (one issue

at a time, concluding with binding legal contract) Russians prefer to develop final agreement

based on all items (attach less meaning to contract, see concessions as sign of weakness)

The Negotiation Process


Negotiating Strategies

Two major types of negotiation/bargaining– Distributive negotiation (win-lose or zero-sum

negotiations)

– Integrative negotiation (win-win or positive sum negotiation)

„Technically“ every integrative negotiation is distributive as well (also the bigger pie has to be divided)


Distributive Bargaining

Party A‘s aspiration range

Party B‘s aspiration range

Settlement range

Party A‘s target point

Party B‘s resistance point

Party A‘s resistance point

Party B‘s target point


Strategies for distributive bargaining– Try to shift upward the other side‘s belief

(e.g. by persuasion) about one‘s own minimum (reservation value)

– Try to shift downwards the other side‘s belief of his own minimum

– Make a binding, credible, communicated commitment

– Negotiation are often settled at focal points



Strategies to facilitate integrative bargaining– Emphasizing superordinate goals (goals

both parties can agree on)

– Focusing on the problem, not people (not to personalize the conflict)

– Focusing on Interests, not Demands (demands are what a person wants, interests why the person wants them)



Strategies to facilitate integrative bargaining– Creating new options for joint gains

(expanding the resource pie) – Focusing on what is fair (helps to come to a

mutual agreement)

The tension between integrative and distributive bargaining can‘t be dissolved in the end



Negotiator‘s Dilemma Moves to claim value drive out moves

to create value (could prevent mutually beneficial agreement)

Tom’s Choice Create Claim

John’s Choice

Create

GOOD GOOD

TERRIBLE GREAT

Claim

GREAT TERRIBLE

MEDIOCRE MEDIOCRE


Ways out of the Dilemma Chance of cooperation through repetitive

negotiations– One time negotiation can be broken down

into many steps (e.g. separating issues, having several meetings)

– Managers as negotiators may have to deal on many company matters over a longer time (and therefore need each other‘s coop)

– Negotiators reputation (for further negotiations) may be present even in one time negotiations

Best strategy in repetitive negotiations: TIT-FOR-TAT


Situational Factors and Negotiating Tactics

Circumstances of negotiations– Geographical Location (Home office of

one party or Neutral equidistant location )

– Implications Less expenses, better access to

information for the „home“ party (cost) pressure to the other party to come

to an agreement Room Arrangements (rectangular/

square vs. round table, competition vs. cooperation)


Selection of Negotiators (no. of people, which ones)– Number of people reflects culture (small

american team vs. large japanese group)

– Can create advantage by overwhelming other side

– U.S. companies select negotiators on a basis of position and competence, Mexican firms on personal factors (age, gender, race) and social connections



Time Limits (are real of presumed deadlines in negotiations)– Cultural view of time affects negotiations

US, Swiss, Germany: time is a commodity, has to be used as efficiently as possible

Middle East, Asia: longer time perspective, extended negotiation time helps build relationship

– Time limits may be used to strenghten one‘s position (to get concessions granted)



Verbal tactics (to influence the outcome of a negotiation)– Asking more questions– Making fewer commitments before final

agreement stage– Increasing the amount of initial request

Initial Offer (tactic influenced by culture)– Extreme initial offers from Chinese/ Russian

negotiators– More „realistic“ offers from US or European

negotiators (closer to their bottomline)– Japanese don‘t like extreme offers (called

„banana sales approach“)




Other Verbal Negotiating Behaviors – Normative Appeals– Commitments– Self-Disclosure– Questions– Commands

– Promises– Threats– Recommendations– Warnings– Rewards– Punishments


Nonverbal Tactics (challenge to cross-cultural negotiations)– Silence

normal part of conversation for Japanese, uncomfortable situation for Americans (e.g. silence interpreted as rejection)

Can be used strategically (to get concessions)

Conversational Overlaps (more than one person speaks)– usual to Brasilians, inappropriate to

Americans/ Japanese



Facial Gazing (Americans love to have eye contact, Japanese don‘t)

Touching– Only handshake for Americans and

Japanese– Body touching for Brazilian or Mexican to

deepen relationship/confidence



How Culture Influences Conflict Resolution

Negotiation is a means to resolve conflict (begin with different positions, move to an agreement)

Low- and high-context cultures perceive conflicts different– Low-context (LC) cultures see conflict as

instrumental oriented (issues are separated from people)

– High-context (HC) cultures see conflicts expressive (issues are not separated from people)


Consequence – LC cultures: public disagreement is

acceptable (people have conflict and still friendly relationship)

– HC cultures: open disagreement/ public confrontation are highly insulting (parties „lose face“)

Why develop conflicts in the two cultures?– LC culture is individualistic with less specified

ways of appropriate behavior (conflict arises if one violates the other‘s expectations)



Why develop conflicts in the two cultures?– HC culture is group-oriented with more

specific rules of behavior (conflict arises if one violates cultural expectations)

Different attitudes toward conflict– In LC culture people are action-oriented

(direct, confrontational response to conflict, quick resolution)

– In HC culture people try to avoid confrontation (indirect, inactive approach avoiding/ ignoring conflict)



Styles to handle conflicts– LC cultures take an intellectual view to

conflict (use logic to make an argument, factual-inductive or axiomatic- deductive style)

– HC cultures take an emotional point of view (use flowery speech to make emotional appeal and diffuse conflict, affective-intuitive style)



View to conflict affects cultures approaches to negotiation– HC cultures

Negotiators try to behave harmonious on the surface

Differences in opinions are expressed less directly, real feelings through implicit language and nonverbal means

„Persona“ of the negotiator is integrated into how negotiations are handled (e.g. not to lose one‘s face)

How Approach to Conflict Influences Negotiation


View to conflict affects cultures approaches to negotiation– LC cultures

Negotiators are open and direct They are action oriented and see negotiations

as problem-solving process Clear difference between the negotiator as

„Persona“ and how well he/she performs in a negotiating situation (e.g. „to lose one‘s face“ plays far less a role)

How Approach to Conflict Influences Negotiation


Becoming a Better Cross-Cultural Negotiator

Understand your negotiating partner (basic understanding of values, attitudes and typical behaviors)

Consider situational specifics (e.g. what experience does your counterpart have with your culture?)

Decide how to handle actual negotiation (Studies show: moderate adaptation of native behavior produces better results than no adaptation or trying to behave as a native)


Convergence or Divergence?

Greater knowledge and understanding of culture

If moderate adaptation proves effective

Ingrained cultural patterns of behavior

Perception that own culture negotiates effectively


Implications for Managers

Cross-cultural negotiations important part of international manager’s job

Improve negotiating outcomes by understanding dynamics of negotiation process and influence of culture

Moderate adaptation may be most effective

Copyright 1998 Prentice-Hall Inc. adapted by Prof. Dr. vom Kolke1 Chapter 5 Negotiation and Conflict Resolution.

Documents

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