Chapter 10 International Negotiation

Managing Organizations in a Global Economy: An Intercultural Perspective

First Edition

John Saee

Copyright by South-Western, a division of Thomson Learning. All rights reserved.

Negotiation Defined Negotiation is the process in which at

least two partners with different needs and viewpoints need to reach an agreement on matters of mutual interest.

A negotiation becomes cross-cultural when the parties involved belong to different cultures and therefore do not share the same ways of thinking, feeling, and behaving.

International Negotiation All global negotiations are cross-

cultural. Global managers spend more than

50% of their time negotiating.

Negotiation is not always the best approach to doing business.

Managers should negotiate when the value of the exchange and of the relationship is important.

Consider negotiating when: Your power position is low relative to

your counterparts. The trust level is high. The available time is sufficient to

explore each party's multiple needs, resources, and options.

There is commitment to ensure that the agreement is carried out.

Research has shown that each of the three areas on which the success of a negotiation is based - individual characteristics, situational contingencies, and strategic and tactical processes - vary considerably across cultures.

What are the qualities of a good negotiator?

What role do individual qualities play?

The most important individual characteristics are:

Good listening skills. An orientation toward people. A willingness to use team assistance. High self-esteem. High aspirations. An attractive personality, along with

credibility and influence within the home organization.

Negotiation Contingencies: Characteristics of the Situation Situational contingencies influence

success just as individual characteristics do, but they are rarely as critical to success as the strategy and tactics used.

Negotiation Contingencies: Characteristics of the Situation

Location Physical Arrangements Participants Time Limits Status Differences

Negotiation Process Process is the single most important

factor predicting the success or failure of a negotiation.

An effective process includes managing the negotiation's overall strategy or approach, its stages, and the specific tactics used.

Negotiation Strategy Culturally synergistic approach

(Fisher & Ury):Separating the people from the problem.Focusing on interests, not on positions.Insisting on objective criteria (and never

yielding to pressure).Inventing options for mutual gain.

As with other aspects of negotiating, process varies markedly across cultures.

Negotiation Strategy

Stages of a Negotiation:Preparation and Planning

Analyze the situation in terms of your and the counterparts' needs, goals, and underlying cultural values.

Determine the limits to your authority, assess power positions and relationships.

Stages of a Negotiation:Preparation and Planning

Establish overall and alternative concession strategies.

Make team assignments. Determine the best alternative to the

negotiated solution.

Identify facts to be confirmed. Set an agenda.

Stages of a Negotiation:Preparation and Planning

What do skilled negotiators do? Explore options. Establish common ground. Focus on long-term issues. Set range objectives for more

bargaining flexibility. Use issue planning.

Interpersonal Relationship Building

During relationship building, parties develop respect and trust for members of the other team.

In every negotiation, there is the relationship (you and them) and the substance (what you and they want).

Many areas of the world have neither strong nor consistently dependable legal systems to

enforce contracts. Enforcement mechanisms are personal.

Exchanging Task–Related Information

The substance of a negotiation is interests.

Negotiators should therefore focus on presenting their situation and needs, and on understanding their counterparts' situation and needs.

In negotiating, cross–cultural miscommunication,

misperception, misinterpretation, and misevaluation cause

numerous problems.

Persuading Emphasize creating mutually beneficial

options. Recognize each party's interests and

needs and satisfy them and all parties win.

Identify interests more highly valued by one party than the other and use those differences as a resource.

Making Concessions and Reaching Agreement

Use objective criteria in deciding how to make concessions and to reach agreement.

Concessions, large or small, can be made at any time during a negotiation. It appears that negotiators who make early concessions disadvantage themselves.

Negotiation Tactics Negotiation includes both verbal and

nonverbal tactics. Both verbal and nonverbal behavior

can cause problems cross-culturally.

Verbal Tactics Initial offers, promises, threats,

recommendations, warnings, rewards, punishments, normative appeals, commitments, self-disclosure, questions, and commands.

The British Huthwaite study, documenting successful negotiators' behavior, analyzed the verbal behavior of skilled and average negotiators.

Nonverbal Tactics Nonverbal behavior includes tone of

voice, facial expressions, body distance, dress, gestures, timing, silences, and symbols.

Nonverbal behavior is complex and multifaceted--it sends multiple messages, many of which are responded to subconsciously.

Negotiators frequently respond more emotionally and powerfully to the nonverbal than the verbal message.

Silence

Conversational Overlaps

Facial Gazing

Touching

Nonverbal Tactics

SummaryNegotiating styles vary across cultures.

In preparing to negotiate globally, learn as much as possible about the other cultures and then approach the actual bargaining sessions with as wide a range of options and alternatives in behavior and substance as possible.

SummaryEffective negotiators have high

expectations and make high initial offers (or requests), proceed by asking a lot of questions, and refrain from making many commitments until the final stage of the negotiation.

The most effective negotiators approach bargaining sessions searching for synergistic solutions - solutions in which both sides win.

Summary