Deresky Im9 Inppt 05

Chapter 5:
Cross-Cultural Negotiation
and Decision Making
Ninth Edition
Global Edition
5-1
Copyright © 2017 Pearson Education, Ltd.

Chapter Learning Goals
1. To become familiar with the role of

negotiation in implementing a firm’s
strategy, and the various stakeholders
who must be considered
2. To learn the stages of the negotiation
process and how to prepare for cross-
cultural business negotiations
3. To gain insight into the various types
of negotiating styles around the world
5-2 Copyright ©2017 Pearson Education, Ltd.

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. To learn the complexities of
negotiating with the Chinese
6. To appreciate the variables in the
decision-making process and
understand the influence of culture on
decision making
Opening Profile: Facebook’s
Continued Negotiations in China
• Facebook has more than 1.4 billion active
users as of 2015; if it were a country, it would
be the world’s third most populous country
• However, Facebook is banned in China for six
years as of 2015, although many go around
the restrictions
• China has substantial legal and regulatory
complexities that have prevented entry
• If Facebook fails to manage global operations
successfully, business may suffer
• Facebook is profiting by advertising for
Chinese businesses in spite of the blockage
of its primary activity

To become familiar with the

role of negotiation in
implementing a firm’s
strategy, and the various
stakeholders who must be
considered

Negotiations by Global Managers
⚫ Specific plans for strategies and for

continuing operations
⚫ May also be faced with negotiating
with government-owned companies
⚫ Managers must prepare; operational
details must be negotiated: staffing,
raw materials, repatriating profits,
etc
⚫ Decision-making processes are key

Negotiation
The process of discussion by

which two or more parties
aim for mutually acceptable
agreement

Important Differences
1. Amount and type of preparation

2. Tasks vs. interpersonal
relationships
3. General principles vs. specific
issues
4. Number of people present and their
influence

Stakeholders in
Cross-Cultural Negotiation

To learn the stages of the

negotiation process and how
to prepare for cross-cultural
business negotiations
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The Negotiation Process
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Stage One: Preparation
• Develop profile of
counterparts.
• Find out likely demands,

team composition, and
counterpart authority.
• Choose a negotiation
site.
• British/French
Chunnel
negotiations
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Stage Two: Relationship Building
• Getting to know one’s
contacts
and building mutual trust
• Non-task sounding
• Use an intermediary.
• “I have come as a
mediator…”
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Stage Three: Exchanging
Task-Related Information
• Cultural differences remain
an issue.
• The French enjoy debate and
conflict.
• Mexicans can be suspicious
and indirect.
• The Chinese ask many
questions, but provide
ambiguous information in
return
• Show understanding of the
other viewpoint
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Stage Four: Persuasion
• Dirty tricks are in the

eye of the beholder
• False information
• Ambiguous
authority
• Non-verbal
messages
• Individualism vs.
Collectivism
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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 vs. holistic
• Importance of contracts
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To learn the complexities of

negotiating with the Chinese.
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Management Focus: Negotiating with
the Chinese
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Comparative Management in Focus:
Negotiating with Chinese
⚫ Two problems: ⚫ Importance of
⚫ Chinese desire harmony
for details ⚫ Guanxi
⚫ Apparent ⚫ Guanxihu
insincerity networks
⚫ Saving face: ⚫ Two stages of

⚫ Lien Chinese negotiation
⚫ Mien-tzu ⚫ Technical
⚫ Commercial
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Negotiating with Chinese
⚫ Some recommendations:
⚫ Practice patience
⚫ Accept prolonged stalemate
⚫ Refrain from exaggerated expectations
⚫ Establish a contact in China
⚫ Remember to save ‘face’ for everyone
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To gain insight into the

various types of negotiating
styles around the world
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Comparison of Negotiation Styles
North
Japanese Latin American
American
Hide emotions Deal Emotionally
impersonally passionate
Subtle power Litigation, not Great power
plays conciliation plays
Step-by-step Methodologic Impulsive,

approach al spontaneous
organization
Group good is Profit is the Group/
5- the aim aim individual good
2 Copyright ©2017 Pearson Education, Ltd. is aim
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Successful Negotiators: Americans
❑ Knows when to compromise, but stands

firm at the beginning. Accept compromises
only when there is a deadlock
❑ Refuses to make concessions beforehand
and keeps his/hers cards close to chest
❑ Keeps a maximum of options open before
negotiation, operate 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
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Successful Negotiators: Indians
❑ Look for and say the truth, not afraid to

speak up
❑ Exercise self-control
❑ Respect other party, look for solutions
acceptable to all parties
❑ Will change their minds, even at risk of
seeming inconsistent and unpredictable
❑ Humble and trusts the opponent
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Successful Negotiators: Arabs
❑ Protect honor, self-respect, dignity, and,

thus, are trusted and respected
❑ Avoid direct confrontation
❑ Come up with creative, honorable solutions.
❑ Are impartial and can resist pressure
❑ Can keep secrets
❑ Controls temper and emotions
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Successful Negotiators: Swedes
❑ Quiet, thoughtful, polite, straightforward
❑ Overcautious, but flexible
❑ Slow to react to new proposals, but eager to

be productive and efficient
❑ Able to hide emotions, afraid of

confrontation
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Successful Negotiators: Italians
❑ Have a sense of drama, do not hide

emotions
❑ Good at reading facial expressions and
gestures
❑ Want to make a good impression and use
flattery, but are distrusting
❑ Handle confrontation with subtlety and tact
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Managing Negotiation
Avoid person-related
conflicts.
Examples
Low-context Americans must

Americans appear approach negotiations
impatient, cold, and with Mexicans with
blunt to Mexicans. patience; refrain from
attacking ideas.
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Cross-Cultural Negotiation Variables
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Successful Negotiators
⚫ Consider a wider range of options and pay

greater attention to areas of common ground
⚫ Tend to make twice as many comments
regarding long-term issues
⚫ More likely to set upper and lower limits
regarding specific points
⚫ Make fewer irritating comments: “We’re
making you a generous offer”
⚫ Make counter proposals less frequently and
use fewer reasons to back up arguments
⚫ Actively listen
5- Copyright ©2017 Pearson Education, Ltd.

30
Using the Internet to
Support Negotiations
Negotiation Support
Web Application
System (NSS)
⚫ Increase likelihood ⚫ Provide support for
phases and dimensions
of agreement such as:
⚫ Decrease direct and ⚫ Multiple-issue, multiple-
indirect costs party business
transactions of a buy-
⚫ Maximize optimal sell nature
outcomes ⚫ International dispute
resolution
⚫ Internal company
negotiations and
communications
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E-Negotiations
Advantages Disadvantages
⚫ Speed ⚫ Not being able to
⚫ Less travel build trust and
⚫ Laying out much interpersonal
relationships
objective
information over ⚫ Nonverbal nuances
time are lost

⚫ Video conferencing
may be a good
compromise
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Managing the Conflict Resolution
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Negotiation Conflicts Between Low
Context and High Context Cultures
Low Context High Context
Conflict Area Conflict Area
• Implicit, circular logic

• Explicit and direct,
linear presentation of
• Collective, decisions
facts
by consensus; long-
term oriented
• Individualistic, short-
term oriented
• “Face” and
relationship-oriented;
• Task-oriented, up-
non-confrontational,
front, impatient
patient
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The Influence of Culture on
Decision Making
Individualism VS Collectivism
Objective VS Subjective
Risk Tolerance VS Risk Avoidance
Uncertainty VS Familiarity
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Approaches to Decision Making
Utilitarianism VS Moral Idealism
Autocratic VS Participative
Slow Pace VS Fast Pace
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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
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Cultural Variables in
Decision-Making Process
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Under the Lens: Negotiations and 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
⚫ Negotiations were undermined by a lack of trust
⚫ The extent to which decision making is
influenced by culture varies among countries
⚫ One variable is whether a people assume an
objective or a subjective approach
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To appreciate the variables in

the decision-making process
and understand the influence
of culture on decision
making
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Decision Making in Japanese Companies
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Comparative Management in Focus: Decision
Making in Japanese Companies
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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
5- Copyright ©2017 Pearson Education, Ltd.

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Chapter 5:

Copyright © 2017 Pearson Education, Ltd.

1. To become familiar with the role of

5-2 Copyright ©2017 Pearson Education, Ltd.

4. To recognize that managing

5-4 Copyright ©2017 Pearson Education, Ltd.

To become familiar with the

5-5 Copyright ©2017 Pearson Education, Ltd.

⚫ Specific plans for strategies and for

5-6 Copyright ©2017 Pearson Education, Ltd.

The process of discussion by

5-7 Copyright ©2017 Pearson Education, Ltd.

1. Amount and type of preparation

5-8 Copyright ©2017 Pearson Education, Ltd.

5-9 Copyright ©2017 Pearson Education, Ltd.

To learn the stages of the

• Find out likely demands,

• Dirty tricks are in the

To learn the complexities of

⚫ Saving face: ⚫ Two stages of

To gain insight into the

Step-by-step Methodologic Impulsive,

❑ Knows when to compromise, but stands

❑ Look for and say the truth, not afraid to

❑ Protect honor, self-respect, dignity, and,

❑ Quiet, thoughtful, polite, straightforward

❑ Overcautious, but flexible

❑ Slow to react to new proposals, but eager to

❑ Able to hide emotions, afraid of

❑ Have a sense of drama, do not hide

Low-context Americans must

⚫ Consider a wider range of options and pay

5- Copyright ©2017 Pearson Education, Ltd.

time are lost

• Implicit, circular logic

Risk Tolerance VS Risk Avoidance

Utilitarianism VS Moral Idealism

Slow Pace VS Fast Pace

To recognize that managing

⚫ The negotiations in eurozone countries and the

To appreciate the variables in

⚫ Managers need working knowledge of

5- Copyright ©2017 Pearson Education, Ltd.

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