Class 10 Japanese Negotiation Styles and Decision …keio-ocw.sfc.keio.ac.jp/International_Center/09B-016_e...• Communication networks in a Japanese corporation are highly complex

Copyright © 2007 Keio University

Negotiation Styles

Class 10

Class 10Copyright © 2007 Keio University ｜ 2

Quotes of the Day

“Discussion is an exchange of knowledge; an argument an exchange of ignorance.“

Robert Quillen

“Stay committed to your decisions, but stay flexible in your approach.“

Tom Robbins


This Lecture

• Negotiation Styles– The Japanese perception of negotiations– Negotiation teams– Negotiation tactics

• Decision Making– What is a decision?– Decision making processes– Ringi-seido


Japanese Negotiations

• According to March (1990) Japanese are notvery much in favor of meetings in a Western sense

• …and prefer to work things out behind thescenes

• Somebody “selling“ something can beconsidered a bit superficial in Japanese eyes

• Vagueness in discussion is considered a virtue• Decisions are made by involving others,

listening to their views until a consensus isreached


Particularities of JapaneseNegotiations

• Japanese prefer arrangements based on sincerity and goodwill

• Longer negotiation processes than in theWest, with matters of continuing after theagreement seems final (contracts areviewed as more of a preliminary stage)

• Often after the contract is signed mattersthat require additional negotiation arebrought up again


Before the Negotiations Nemawashi

• Nemawashi was originally a gardeningterm translating as “to dig around the rootof a tree a year or two before transplantingit”, from 根 (ne, root) and 回す (mawasu, to go around [something]). However, is iswidely used in Japan today, especially in business circles, to mean „groundwork laidunobtrusively in advance“

Copyright © 2007 Keio University

Nemawashi

Example


A company in Japan held a meeting of section chiefs in order to make a decision on a change of models for their product. The chief of the planning section who was responsible for this plan was sure of the new model surpassing the old one, so he was full of confidence at the meeting. However, contrary to his expectations, the other chief reacted negatively to his plan. The chief of the designing section critized the new design severely because he and the chief of the planning section did not get along well. Then the chief of the finance section said it was too soon to change the model because of financial problems. Actually, there was no financial problem, but the chief of the finance section was against the plan. Two section heads supported the new model, but five others remained noncommittal. As a result, they had to turn down the plan because of the supposed financial problems. Although the chief of the planning section usually expressed his ideas clearly and strongly, he sensed that he should not insist on an agreement at this time, otherwise, he might lose a second chance to present it. So he decided to postpone the proposed model change (See Naotsuka 1980, p. 201-202 in Davis and Ikeno2002).



Influence Factors on Negotiations

• Conscience– Japanese are conscience-motivated people

(ryôshinteki na minzoku 良心的な民族)• Pre-giving

– Little gifts are exchanged to create a strongerrelationship

• Advice– Opinions of a number of people are considered

• Ostracism– There is a fear of being excluded from the group

(March 1990)


Naniwabushi Strategy

• Naniwabushi 浪花節 are popularJapanese ballads dating back to the Edoperiod (1600-1868)、 whose performerschant tales of chivalrous robbers and therise and fall of great families

• The ballads consists of three parts– kikkake 切掛け

– seme 責め

– urei 憂い


naniwabushi

• kikkake– Gives a general background to the story and

tells what people involved are thinking and feeling

• seme– A narrative of critical events

• urei– An expression of pathos and sorrow at what

has happened


• Persistence• Buyers outrank sellers• Building trust• The use of middlemen• Concealing the top man• The use of amae• The use of silence• Wait and see• Nonverbal expression

Japanese Negotiation Tactics


Japanese Meeting Culture

• Japanese companies usually have a large number of meetings

• Meetings are used to exchangeinformation and not necessarily to come to a solution or conclusion via discussion


KaigiArrangement


Assessment of the JapaneseNegotiator

•Strengths–Teamwork (Leader isrespected and noteverybody wants to be a negotiator)–Position–Bargaining(Concessions)–Lack of Hurry

•Weaknesses–Communication skills–Consensus can be a dead weight–Sensitivity


What is Decision Making?

• The process of decision making is a set of interactions through which demands areprocessed into outputs (Pettigrew 1972)

• Decision makers are expected to produceoutcomes that are consonant with theirown or their system`s goals

• Decisions are influenced by power in theorganization and by corporatecommunication processes


Decision Making in Organizations

• Decison makers strive for mutally acceptablesolutions

• Different values, personalities, backgrounds etc. can lead to conflicts

• The potential for conflict increases withorganizational size and diversity

• Probability of conflict differs according to culture• A decision should be acceptable for those

implementing and authorizing it• A decision needs to look reasonable, to have

face validity and needs to contain built-injustifications and excuses if it results in unexpected outcomes (Keeley 2001: p.154)


Decisions and Power

• In most cultures authority, responsibility and power areassociated with the types of decisions managersparticipate in making and approving

• In some cultures power of an individual is demonstratedby making decisions individually in other cultures thosein positions of authority are expected to delegatedecision making to a defined group or at least reach a consensus.

• However, final decisions that emerge reflect the different amounts of power mobilized by the parties in competition

• Decision making can therefore be seen as a politicalprocess in which outcomes are a function of thebalancing of various power vectors (Keeley 2001: p.154)


Decision Making in a Western Company

• Top-down decision making– Downward communication consists primarily of orders

for implementation, and upward communicationsconsist of reports on performance and accomplishment

• Top management needs to make decisionmaking a routine function (employees shouldfollow a course)

• Many decision need discretion and the powerlevel of the manager is often also connected to the degree of discretion


Decision Making in a Western Company

• Group decisions are made by members of thegroup presenting their ideas and defending thembefore the group. After this the group exploresthe alternatives until one is found that satisfiesthe majority of the group or the most powerfulmembers

• Groupthink (happens in a highly cohesive groupwhere members feel the need to conform to group pressure)

• Analytical approach (cost-benefit analysis)– Assessing each factor objectively– Calculating the advantages and disadvantages


Information in Japanese DecisionMaking

• The Japanese corporate communicationsystem is anchored in the socio-culturalvalues of the society as a whole

• The effective corporate communicationsystem is related to the high level of productivity and technological innovation(Erez 1992)


Communication Networks in a Japanese Corporation

• Communication networks in a Japanesecorporation are highly complex formal and informal systems with top-down, bottom-up, horizontal and diagonal channels (Erez 1992: 50)

• Ballon (1988) states that in contrast to the linear pattern with a definite point of origin for thecommunication flow and the decision makingprocess, in the Japanese case the pattern iscircular, whereby any single point in a circle canbecome the origin (in Keeley 2001, p. 149)


Decision Making in a JapaneseCompany

• Bottom-up style decision making (middlemanagement has the greatest influence on decision making)

• Information also flows from lower levels to higher ones (roles are not clear defined)

• nemawashi is used (pre-meetingdiscussion and informal informationexchanges)


Decision Making in a JapaneseCompany

• Decision are a unanimous agreement (a group decision is desired!!)

• Meetings are often followed by a party where people who dissent can express their opinions

• Very little personal responsibility• Japanese firms spend a lot of energy in

developing a consensus


Ringi-Sho

• A ringi-sho 稟議書 is a writtenrecommendation or proposal urging a specific course of action.

• Sho means document, while ringi is theact of obtaining approval on a proposedmatter through the vertical, and sometimeshorizontal circulation of documents to theconcerned members in the organization.


ringi-sho Process


Ringi-seido

•Advantages–Fewer aspects areoverlooked–Trauma that companieschange is reduced–Participants feel morecommitted–Bolder decisions canbe made

•Disadvantages–Who is responsible?–Extremely time consuming


Challenges for Japanese DecisionMaking Processes

• Rapid rate of technological growth and change

• The nature of markets, competition, and lead times is becoming shorter

• The need to protect all those involvedcreates a bias toward risk avoidance(Sethi et al. 1984)


Pros and Cons of Japanese DecisionMaking (Woronoff 1992)

•Democracy for lower levels•Greater participation(because combined withmeetings)•Decision are met withgeneral acceptance•Reinforces harmony withinthe company

•Very time consuming•An excessive number of people are involved•An excessive number of meetings must be held•Can lead to lost businessopportunities

Documents

Class 10 Japanese Negotiation Styles and Decision …keio-ocw.sfc.keio.ac.jp/International_Center/09B-016_e...• Communication networks in a Japanese corporation are highly complex