CROSS-CULTURAL NEGOTIATIONS Scott Bearder, Eric Bulthuis, Kathryn Davis, Eric Launer, Philip Lawson, Destinie Martinez, Raz Sanchez, William Turner, Chandra.

CROSS-CULTURAL NEGOTIATIONSScott Bearder, Eric Bulthuis, Kathryn Davis, Eric Launer, Philip Lawson, Destinie Martinez, Raz Sanchez, William Turner, Chandra York

Fundamentals & Best Practices• Two major types of bargaining:

• Distributive • Integrative

• It is preferable to make no assumptions whatsoever about what is in the mind of the other person and to probe gently, but constantly to find out.

You Can Negotiate Anything• Herb Cohen (1980)• Three key elements in any negotiation:

• Time: The negotiator must be willing to commit a good amount of time to the negotiation process if success is to be attained.• Ex: refrigerator

• Information: the more information the negotiator possesses, the more power he or she gains in the negotiation process.• Ex: open ticket

• Power: this is achieved in multiple ways. Having the upper hand time and information wise is the biggest way.

Ronald Burke (1979)• Asked manager about when they solved problems

satisfactorily and unsatisfactorily.• Satisfactorily= genuinely integrative style was employed by 58.5%

of the managers.• Needs, preferences, and desires of both the managers and employees

received full consideration and the pie was viewed as expansive.• Highest probability of success even over compromise.

• Unsatisfactory: 79.2% were classified as being forceful, tough, or hard style that totally disregarded the other party’s needs, preferences, and desires.• This is successful when the negotiator is tough and the person they are

negotiating with is soft. BUT, this is not desirable for business.

Fisher, Ury, & Patton (1991)• Four parts or principles to deal with all types of

bargainers:• Separate the people from the problem• Focus on interests of both parties, not their positions.• Invent options, or complex solutions, for mutual gains by means of

brainstorming, taking time out to analyze whether additional options exist, and so on.

• Use objective criteria

• Fisher et al also recommend that negotiations have a best alternative to a negotiated settlement (BATNA)

Key Rules for Negotiating • Listen more than you talk• Do not become emotional• Don’t agree to a settlement immediately• Be reasonable, but make initial high offers, or initial high counteroffers if an offer

has already been made.• If it is a difficult bargainer, openly bring up this issue and indicate that your

position is the desirability of satisfying both parties.• Do your homework, be prepared, and take noted periodically during the

negotiations.• Periodically summarize, identifying key points.• Focus on a settlement range and not a specific point within it, indicate you are

willing to bargain.• Be sensitive to cross-cultural issues (saving face)• Focus on getting to know the other party in the beginning, let the stages flow.• Don’t finalize a deal unless you are satisfied both logically and emotionally.• Use simple language to avoid misunderstandings.• Don’t overestimate your ability to “read” body language.

Japanese Negotiations• The Japanese are non-confrontational. • They have a difficult time saying 'no', so you must be vigilant at observing their non-

verbal communication.• It is best to phrase questions so that they can answer yes.

o For example, do you disagree with this? • Group decision-making and consensus are important.• Written contracts are required.• The Japanese often remain silent for long periods of time. Be patient and try to work

out if your Japanese colleagues have understood what was said.•  Japanese prefer broad agreements and mutual understanding so that when problems

arise they can be handled flexibly.• Never lose your temper or raise your voice during negotiations.• Some Japanese close their eyes when they want to listen intently. • The Japanese seldom grant concession. They expect both parties to come to the table

with their best offer.• The Japanese do not see contracts as final agreements so they can be renegotiated.

• http://www.kwintessential.co.uk/resources/global-etiquette/japan-country-profiles.html

Weiss (1994)• Low familiarity with counterpart’s culture:

• Employ an agent or advisor• Involve a mediator• Induce the counterpart to follow the script• Adapt to counterpart’s script

• Moderate familiarity with counterpart’s culture:• Try to coordinate the adjustment of both parties and embrace

counterpart’s script or ways of responding.

• High familiarity with counterpart’s culture:• Improvise an approach or creative “symphony”

Case Study: Entering the Chinese Market

• Sent top lawyer to settle agreement quickly• Lawyer was extroverted and eager to learn about culture• Trust developed quickly• Result: opening with a high, reasonable offer and gaining

trust between parties is best

Negotiating • Westerners are encouraged to establish trust before

making an offer• Terminating a negotiation early is not advised• U.S. companies have to be careful with bribery when

expanding internationally

Paradox 6.1• Is Chess more influential than the Chinese board game of

Go for strategy and negotiation?

Paradox 6.1• Chess- game of war (western game)• Object is to eliminate other opponent• And to “kill” the other opponent• Chris Nielson argues that chess metaphor is to blame for

losses for some American firms

Paradox 6.1• Go- the “competitive game” (eastern game)• Object is to occupy as much space on the board as

possible to render the opponent helpless • Example of this paradox is GM and Toyota

Paradox 6.2• Why do veteran international negotiators from one

national culture frequently complain that their counterparts from a dissimilar national culture are simultaneously very sincere and very deceptive?

Chinese Negotiation Tactics• Instability in China (going back 5,000 years)• Sun Tzu’s book, “The Art of War”• Turbulent history of China

Problems with Western Negotiators• No respect• Want to get down to business too quickly• Try to win the deal no matter what• Spanish negotiators making fun of there US counterparts.

Paradox 6.3• When negotiating, is it best to make the opening offer or

respond to it?

Best Practices• Best practice of negotiating is to open with a high offer

and make it high• If other party opens, respond with a high counteroffer as

long as trust is involved• Trust is rarely developed in enough time• High and low context cultures vary greatly in negotiating

techniques

Low Context: United States & Germany

• Don’t allow time to develop trust• Opens with high, but reasonable offer they’re willing to go

down on• Engage in less haggling

High Context: China & Thailand• Devote more time to gaining trust• Once they know other parties perspective they make an

opening offer• Chinese companies that want to be global offer have

introduced training to negotiate with Westerners

Paradox 6.4• How can time be considered as three circles(past,

present, and future) as well as only one circle?

Past Present Future

Paradox 6.4• Linear vs Nonlinear perspective of time and views on

negotiation

• Nonlinear orientations to time are dominant in Asia, Africa, and Latin America

• Linear orientations are common in the United States

Paradox 6.4• Different Cultures vary in their preferred orientation of time

• Focus on past, present, or future achievements

• Buddhism emphasizes one circle (past, present, and future)

Paradox 6.5• Is the Yin-Yang dynamic exclusively Asian?

Paradox 6.5• The underlying concept of the Yin-Yang Dynamic is

change and transformation• When Yin reaches its extreme it becomes Yang, and

when Yang reaches its extreme it becomes Yin. Therefore, Yin and Yang are dependent on each other.

Paradox 6.5• When a person understands the concept of the Yin-Yang

dynamic, they see the world in tones of gray.• Westerners may see the gray in situations, while Asians

possess a superior talent in doing so.• Basically, the Yin-Yang dynamic is not exclusively Asian;

however, it is much more prevalent there.

Paradox 6.6• Is there only one type of face?

Definition of Face• Face- unwritten set of rules by which negotiators

cooperate with one another to avoid damaging one another’s honor

Types of Faces• Saving face• Giving face• Respect person you are negotiating with• Never know when you will need them in the future• No set winner and loser

Types of Face in Asia• Self-face- personal or moral integrity• Other-face- face person shows in negotiation• Mutual-face- saving and giving face

• United States don’t like to tie• Asia a lot more comfortable with a tie