04 Deresky17 CH5 Negotiation - Slides

International Management: Managing
Across Borders and Cultures Learning Objectives

Ninth Edition
5.1 To become familiar with the role of negotiation in implementing a
firm’s strategy, and the various stakeholders who must be considered
5.2 To learn the stages of the negotiation process and how to prepare
Chapter 5 for cross-cultural business negotiations
Cross-Cultural Negotiation 5.3 To gain insight into the various types of negotiating styles around
and Decision Making the world
5.4 To recognize that managing negotiation requires learning about
the culturally based behavioral differences, values, and agendas of
the negotiating parties and how to build trust for successful negotiations
5.5 To appreciate the variables in the decision-making process and
understand the influence of culture on decision making
Copyright © 2017, 2014, 2011 Pearson Education, Inc. All Rights Reserved Copyright © 2017, 2014, 2011 Pearson Education, Inc. All Rights Reserved
Negotiation
• The process of discussion by which two or more parties
aim for mutually acceptable agreement
Negotiations subjects:
• Specific plans for strategies and for continuing operations
Learning Objective 5.1
• May also be faced with negotiating with government-
owned companies
To become familiar with the role of negotiation in
implementing a firm’s strategy, and the various • Managers must prepare; operational details must be
stakeholders who must be considered negotiated: marketing management, staffing, raw
materials, repatriating profits, etc
Decision-making processes are key
Important Differences Stakeholders in Cross-Cultural Negotiation
1. Amount and type of preparation

2. Tasks versus interpersonal relationships
3. General principles versus specific issues
4. Number of people present and their influence
The Negotiation Process
• Preparation
• Relationship building
• Exchange of task-related information
• Persuasion
To learn the stages of the negotiation process and how • Concessions and agreement
to prepare for cross-cultural business negotiations
Stage One: Preparation Stage Two: Relationship Building
• Develop profile of counterparts. • Getting to know one’s contacts and building mutual trust
• Find out likely demands, team composition, and • Non-task sounding
counterpart authority.
• Use an intermediary
• Choose a negotiation site.
• “I have come as a mediator…”
Stage Three: Exchanging Task-Related

Information Stage Four: Persuasion
• Cultural differences remain an issue. • Dirty tricks are in the eye of the beholder
• The French enjoy debate and conflict. • False information
• Mexicans can be suspicious and indirect. • Ambiguous authority
• The Chinese ask many questions, but provide • Non-verbal messages
ambiguous information in return
• Individualism versus Collectivism
• Show understanding of the other viewpoint
Stage Five: Concessions and Agreement
• Russians and Chinese start with extreme positions

• Swedes start with what they will accept
• Starting with extremes may be most effective
• Linear versus holistic
• Importance of contracts To gain insight into the various types of negotiating
styles around the world
Comparison of Negotiation Styles Successful Negotiators: Indians
• Look for and say the truth, not

Japanese North American Latin American
afraid to speak up
Hide emotions Deal impersonally Emotionally
passionate • Exercise self-control
Subtle power plays Litigation, not Great power plays
conciliation • Respect other party, look for
Step-by-step Methodological Impulsive, solutions acceptable to all parties
approach organization spontaneous
• Will change their minds, even at
Group good is the aim Profit is the aim Group/ risk of seeming inconsistent and
individual good is aim
unpredictable
• Humble and trusts the opponent
Successful Negotiators: Arabs Successful Negotiators: Swedes
• Protect honor, self-respect, dignity, • Quiet, thoughtful, polite, straightforward

and, thus, are trusted and respected
• Overcautious, but flexible
• Avoid direct confrontation
• Slow to react to new proposals, but eager to be
• Come up with creative, honorable productive and efficient
solutions.
• Able to hide emotions, afraid of confrontation
• Are impartial and can resist
pressure
• Can keep secrets
• Controls temper and emotions
Successful Negotiators: Italians Successful Negotiators: Americans
• Have a sense of drama, do not hide emotions • Knows when to compromise, but stands firm at the beginning.
Accept compromises only when there is a deadlock
• Good at reading facial expressions and gestures
• Refuses to make concessions beforehand and keeps his/hers
• Want to make a good impression and use flattery, but are cards close to chest
distrusting
• Keeps a maximum of options open before negotiation, operate
• Handle confrontation with subtlety and tact in good faith
• States his/her position as clearly as possible, respects the
“opponents”
• Is fully briefed about the negotiated issues, has a good sense
of timing and is consistent
Managing Negotiation Cross-Cultural Negotiation Variables
Successful Negotiators Using the Internet to Support Negotiations

• Consider a wider range of options and pay greater attention to areas Negotiation Support System Web Application
of common ground (NSS)
• Increase likelihood of • Provide support for phases and
• Tend to make twice as many comments regarding long-term issues agreement dimensions such as:
• More likely to set upper and lower limits regarding specific points • Decrease direct and indirect – Multiple-issue, multiple-party
costs business transactions of a buy-
• Make fewer irritating comments: “We’re making you a generous offer” sell nature
• Make counter proposals less frequently and use fewer reasons to • Maximize optimal outcomes – International dispute resolution
back up arguments – Internal company negotiations
• Actively listen and communications
E-Negotiations Managing the Conflict Resolution
Instrumental-Oriented Conflict
Advantages Disadvantages
• Speed • Not being able to build • To negotiate on the basis of factual information and
trust and interpersonal logical analysis
• Less travel
relationships Expressive-Oriented Conflict
• Laying out much objective
• Nonverbal nuances are • To handle a situation indirectly and implicitly, without
information over time
lost clear delineation of the situation by the person handling it
– Video conferencing
may be a good
compromise
Negotiation Conflicts Between Low The Influence of Culture on Decision

Context and High Context Cultures Making
• Individualism versus Collectivism

Low Context Conflict Area High Context Conflict Area
• Explicit and direct, linear • Implicit, circular logic • Objective versus Subjective
presentation of facts • Risk Tolerance versus Risk Avoidance
• Collective, decisions by
• Individualistic, short-term consensus; long-term • Uncertainty versus Familiarity
oriented oriented
• Task-oriented, up-front, • “Face” and relationship-
impatient oriented; non-
confrontational, patient
Approaches to Decision Making
• Utilitarianism versus Moral Idealism

• Autocratic versus Participative
• Slow Pace versus Fast Pace
To recognize that managing negotiation requires

learning about the culturally based behavioral
differences, values, and agendas of the negotiating
parties and how to build trust for successful negotiations
Cultural Variables in Decision-Making Under the Lens: Negotiations and

Process Decisions to Save the Eurozone System
• The negotiations in eurozone countries and the International Monetary Fund
centered on a rescue for Greece, which was threatened with default
• Austerity cuts were implemented in Greece in order to receive bailout money

to avert default
• Cultural, historical, and lifestyle differences brought out old prejudices that
nearly derailed negotiations
• The negotiations in eurozone countries and the International Monetary Fund

centered on a rescue for Greece, which was threatened with default
• Austerity cuts were implemented in Greece in order to receive bailout money

to avert default
• Cultural, historical, and lifestyle differences brought out old prejudices that
nearly derailed negotiations
Comparative Management in Focus: Decision
Making in Japanese Companies (1 of 2)
To appreciate the variables in the decision-making

process and understand the influence of culture on
decision making
Comparative Management in Focus: Decision

Making in Japanese Companies (2 of 2) Conclusion
• Managers need working knowledge of decision-making

processes and negotiating tactics used by managers in
different countries
• It is important to understand the cultural variables that
influence negotiations and decision making, and how
they influence these activities
• Managers should prepare for, and conduct negotiations
with cultural sensitivity
Management Focus: Negotiating with the
Chinese
To learn the complexities of negotiating with the

Chinese.
Comparative Management in Focus: Comparative Management in Focus:

Negotiating with Chinese (1 of 3) Negotiating with Chinese (2 of 3)
• Two problems: • Importance of harmony

– Chinese desire for details – Guanxi
– Apparent insincerity – Guanxihu networks
• Saving face: • Two stages of Chinese negotiation
– Lien – Technical
– Mien-tzu – Commercial
Comparative Management in Focus:
Negotiating with Chinese (3 of 3)
• Some recommendations:
– Practice patience
– Accept prolonged stalemate
– Refrain from exaggerated expectations
– Establish a contact in China
– Remember to save ‘face’ for everyone
Copyright © 2017, 2014, 2011 Pearson Education, Inc. All Rights Reserved

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International Management: Managing

Across Borders and Cultures Learning Objectives

1. Amount and type of preparation

The Negotiation Process

Stage Three: Exchanging Task-Related

• Russians and Chinese start with extreme positions

Comparison of Negotiation Styles Successful Negotiators: Indians

• Look for and say the truth, not

• Protect honor, self-respect, dignity, • Quiet, thoughtful, polite, straightforward

Successful Negotiators: Italians Successful Negotiators: Americans

Successful Negotiators Using the Internet to Support Negotiations

Negotiation Conflicts Between Low The Influence of Culture on Decision

• Individualism versus Collectivism

• Utilitarianism versus Moral Idealism

To recognize that managing negotiation requires

Cultural Variables in Decision-Making Under the Lens: Negotiations and

• Austerity cuts were implemented in Greece in order to receive bailout money

• The negotiations in eurozone countries and the International Monetary Fund

• Austerity cuts were implemented in Greece in order to receive bailout money

Learning Objective 5.6

To appreciate the variables in the decision-making

Comparative Management in Focus: Decision

• Managers need working knowledge of decision-making

Learning Objective 5.3

To learn the complexities of negotiating with the

Comparative Management in Focus: Comparative Management in Focus:

• Two problems: • Importance of harmony

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