MODULE-II-A

INTERNATIONAL NEGOTIATION AND CROSSCULTURAL COMMUNICATION

BASICS OF CROSS CULTURAL COMMUNICATION

LANGUAGE AND CULTURE

The Whorf hypothesis:

The Whorf hypothesis is the view that language shapes cognition; that is, concepts and ways of thinking depend on language. People who speak significantly different languages, then, view the world differently. Also called the hypothesis of Linguistic relativity or the Sapir-Whorf hypothesis: the Whorf hypothesis was named after the early twentiethcentury linguist Benjamin Whorf. Related to linguistic relativity is linguistic determinism, the view that language necessitates how one thinks (thinking outside the bounds of one's language is impossible). Some psychologists believe the Whorf hypothesis helps explain cognition; like linguistic determinism, however, it is highly controversial.

HIGH CONTEXT
Communications have multiple meanings

interpreted by reading the situation Asian and Arabic languages are among the most high context in the world

LOW CONTEXT
The words provide most of the meaning

Most northern European languages

including German, French, English, and the Scandinavian languages are low context

Cultural Differences in Communication Styles

100 80 60 40 20 0
N SA U tian en rg A n ai Sp o ic ex M a i er ig G K U l zi ra B a di In ny a m er C n pa Ja ce an Fr na hi

% Direct

% Formal

NONVERBAL COMMUNICATION COMMUNICATING WITHOUT WORDS

KINESICS
Communicating through body movements
Facial expressions Body posture

PROXEMICS
The use space to communicate
The personal bubble of space - nine inches to over

twenty inches North Americans prefer more distance than from Latin and Arab cultures

TOUCH
Basic human interaction In greeting - shake hands, embrace, or kiss Latin European and Latin American cultures-

more touching than Germanic, Anglo, or Scandinavian cultures

PRACTICAL ISSUES IN CROSSCULTURAL VERBAL COMMUNICATION

INTERPRETERS
Provide simultaneous translation of a foreign

language Require greater linguistic skills than speaking a language or translating written documents Insure the accuracy and common understanding of agreements

COMMUNICATION WITH NONNATIVE SPEAKERS

Use the most common words with most common

meanings Select words with few alternative meanings Follow rules of grammar strictly Speak with clear breaks between words

Communication with Non-native speakers, continued

Avoid sports words or words borrowed from literature Avoid words that represent pictures Mimic the cultural flavor of nonnative speakers language Summarize Test your communication success

AVOIDING ATTRIBUTION ERRORS

Attribution - process by which we interpret the

meaning and intent of spoken words or nonverbal exchanges Attribution errors

INTERNATIONAL NEGOTIATION
More complex than domestic negotiations
Differences in national cultures and differences

in political, legal, and economic systems often separate potential business partners

STEPS IN THE INTERNATIONAL NEGOTIATION PROCESS

The Negotiation Process

STEP-I: Preferences for Broad Agreements

50 40 30 20 10 0
SA U l zi ra B tina en rg A na hi C ce an Fr a di In ny a m er G n pa Ja N K U n ai Sp o ic ex M a i er ig

% Preference for Broad Agreements

STEP 2: BUILDING THE RELATIONSHIP

No focus on business Partners get to know each other Social and interpersonal exchange Duration and importance vary by culture

STEP 3: EXCHANGING INFORMATION AND THE FIRST OFFER

Task-related information is exchanged First offer

STEP 4: PERSUASION

Heart of the negotiation process Attempting to get other side to agree to a position

Numerous tactics used

VERBAL AND NONVERBAL NEGOTIATION TACTICS

Promise
Threat Recommendation Warning Reward Punishment Normative appeal

Negotiation Tactics, Continued

Commitment
Self disclosure Question

Command
No Interrupting

DIRTY TRICKS IN INTERNATIONAL NEGOTIATIONS

Dirty tricks are negotiation tactics that pressure opponents to accept unfair or undesirable agreements or concessions

PLOYS/DIRTY TRICKS POSSIBLE RESPONSES

Deliberate deception - point out what is

happening Stalling - do not reveal when you plan to leave Escalating authority - clarify decision making authority

Ploys/Dirty Tricks, Continued

Good guy, bad buy routine - do not make

any concessions You are wealthy and we are poor - ignore the ploy Old friends - keep a psychological distance

STEPS 5 AND 6: CONCESSIONS AND AGREEMENT

Final agreement: The signed contract,

agreeable to all sides Concession making: requires that each side relax some of its demands

STYLES OF CONCESSION
Sequential approach

Each side reciprocates concessions Concession making begins after all issues are discussed

Holistic approach

BASIC NEGOTIATION STRATEGIES

Competitive The negotiation as a win-lose game Problem solving Search for possible win-win situations

COMPETITIVE OR PROBLEM SOLVING INTERNATIONAL NEGOTIATION

Cultural norms and values may predispose

some negotiators to one approach (EX 3.10) Most experts recommend a problem solving negotiation strategy

Preferences for Problem-Solving Negotiation

n ai Sp l zi ra B ia er ig y N an m er G M o ic ex

K U SA U a di In ce an Fr ina t en rg A na hi C n pa Ja

80

60

40

100

20

% Win-Win

SUCCESSFUL INTERNATIONAL NEGOTIATOR: PERSONAL CHARACTERISTICS

Tolerance of ambiguous situations Flexibility and creativity Humor Stamina

Empathy

Levels of cultural understanding

Observable behavior

Can learn a lot, but likely to focus on dos and donts Often leads to superficial understanding Requires inferences from observed behavior and learning about a culture More powerful, because values drive (partially) behavior

Shared values

Shared assumptions

Very abstract these drive our values but are very hard to determine Very powerful, helps truly understand a culture

Hofstedes Dimensions and Negotiation

Power Distance

extent to which power differentials are expected and honored Low : Anglo/Germanic/Scandinavian High: Developing Nations, particularly Pacific Rim Effect: As power distance increases, more approval from higher ups and less involvement from lower levels. Also, can expect more formality in Ns with people from high PD cultures, and they may be upset if you do not appear to be of sufficient status. Individualism/Collectivism extent to which society is organized by individuals vs. groups Ind.: Western European - based societies Coll.: Latin America, Pacific Rim Generally, wealthier societies tend to be more individualist Effect: Relationship stability over time emphases, individual negotiators vs. group of negotiators, importance of consensus, value placed on individual winner, emphasis on group vs. individual goals, rewards, communication in Ns, etc.

Hofstedes Dimensions and Negotiation 2

Masculinity/Feminity

extent to which values fit traditional gender-based stereotypes M: Japan, Anglo/Germanic F: Scandinavia. Effect: Masculinity associated with competitiveness vs. empathy & compromise should expect strong relationships with distributive vs. integrative styles. Uncertainty Avoidance degree of discomfort with unstructured situations High: no strong pattern, but many Hispanic nations Low: no strong pattern, but Anglo/Scandinavia Effect: High prefers stable rules and procedures, less adaptive. High also tends to be more risk-averse risk aversion has played into many N. dynamics. High tends to do business ritualistically & formally.

Other cultural variables

Time

present vs. future vs. past orientation Time as linear vs. time as circular Can affect timing/urgency of Ns, and also what sorts of time-related objectives (short-term vs. long-term) are valued more Americans often seen obsessed with time. Universalism vs. particularism Can ideas/practices be applied everywhere every time, or do circumstances dictate application? Use of precedent vs. adapting styles/processes/agreements to situations Emotionality Great potential for misunderstandings here!!! Achievement vs. ascription Is status conferred by what youve done or who you are? How will a person be viewed in a N situation?

Example of communication patterns

Behavior Japanese American Brazilian

Verbal Interruptions/10m
Silent periods >10s/30m Eye contact/10m

12.6

10.3

28.6

5.5

3.5

1.3

3.3

5.3

Touches/30m

4.7

Negotiation process/timing for Americans in domestic vs. international negotiations

Domestic 1

International 1

Key 1- orientation & factfinding 2- resistance 3- reformulation of strategies

4- hard bargaining & decision-making 5- agreement 6- follow-up

Negotiating Strategies in Other Countries

Opening offer

Close to final settlement where haggling is not customary (e.g. Australia, Sweden) Expect lots o haggling in some nations (e.g. Russia, Egypt, China) Rule of thumb (that wont always work, so apply with caution): if a culture has a long history of bartering & bargaining, expect to haggle. Detail vs. big-picture in presentation Detail where culture emphasizes formality, logic, data, organization (e.g. Germany, UK, Swiss, Japan) Broad concepts preferred in some other areas (e.g. Latin America, Middle East)

Cultural Differences affecting other Negotiation Processes

Relationships orientation

Lack of trust across cultural differences trust building essential Some cultures are standoffish (e.g. British, Germanic), so get down to business before too long Emotional Aspects Sensitivity is low for US, high for Latin America Loyalty to self in US, to organization in many other cultures Decision Making Frame In US change is acceptable, even encouraged, decisions made quickly In many other nations, status quo is the normal frame of reference US is relatively prone to using agendas, may be restrictive to some others

Negotiating in Specific Regions

The next 4 slides are FYI only and far from complete

There are important differences across nations within regions

(e.g., Israel vs. Iran in Middle East) Remember you are negotiating with an individual(s) who may or may not fit cultural norms to a T!!!

Source: How to Negotiate Anything with Anyone Anywhere in the World, Frank Acuff

Negotiating in the Middle East/North Africa

Bargaining is a way of life Youre supposed to haggle! Monty Python Time not punctual or planning-oriented (too much attempt to control the future

invites trouble). Ramadan is especially slow for business. Group oriented, and very deferential to those of status Much time upfront spent in developing relationships Masculine Arabs read poetry, use intuition, and are emotional. Feminine Arab qualities are coolness and pragmatism. Israelis are direct, Arabs indirect, vague & expressive, often to point of exaggeration & filled with fantastic metaphors No is uncommon; look for a hesitant yes instead white lies common form of courtesy Saying I dont know you are of little account Strong eye contact, close personal space, touchy High initial demands, slow concessions, issues sequential, extreme face orientation, truth is revealed very slowly because it is considered dangerous

Negotiating in Western Europe

Timing punctual, relatively fast-paced Individualistic, status-conscious, slow-developing friendships,

emphasis on initiative & achievement Loyalty & hard work are valued Greater hierarchy than in US Speakers s/b articulate & intellectual, formal, logical, and subtle Low emotionality, reserved Moderate initial demands, issues sequentially processed, slow concessions

Negotiating in the Pacific Rim

Old cultures, socially stratified, Confucian ethic

Courtesy rituals, formality, politeness, modesty, loyalty to group and deference to elderly, non-confrontational Negotiations slow, relationship orientation & group negotiation style with team consensus critical implementation usually quick, though Very collectivist Words mean little, conversation very indirect he who speaks doesnt know, he who knows doesnt speak No uncommon; might get a well study this further instead Reserved body language, average-to-close personal space, not touchy Sensitivity valued but not overstated Moderate-high initial offers, multiple issues presented at once, slow concessions, logical decisions Face is critical

Understanding Negotiation Styles

Understanding Negotiation Styles

For North Americans, negotiations are businesslike; their

factual appeals are based on what they believe is objective information, presented with the assumption that it is understood by the other side on a logical basis. Arabs use affective appeals based on emotions and subjective feelings. Russians employ axiomatic appeals that is, their appeals are based on the ideals generally accepted in their society.

Profile of an American Negotiator

Knows when to compromise Takes a firm stand at the beginning of the negotiation Refuses to make concessions beforehand Keeps his or her cards close to his or her chest Accepts compromises only when the negotiation is deadlocked Sets up the general principles and delegates the detail work to associates Keeps a maximum of options open before negotiation Operates in good faith

Profile of an American Negotiator

Respects the opponents States his or her position as clearly as possible Knows when he or she wishes a negotiation to move on Is fully briefed about the negotiated issues Has a good sense of timing and is consistent Makes the other party reveal his or her position while keeping his or her own position hidden as long as possible Lets the other negotiator come forward first and looks for the best deal

Profile of an Indian Negotiator

Looks for and says the truth Is not afraid of speaking up and has no fears Exercises self-control Seeks solutions that will please all the parties involved Respects the other party

Neither uses violence nor insults

Is ready to change his or her mind and differ with himself or herself at

the risk of being seen as inconsistent and unpredictable

Profile of an Indian Negotiator

Puts things into perspective and switches easily from the small picture

to the big one Is humble and trusts the opponent Is able to withdraw, use silence, and learn from within Relies on himself or herself, his or her own resources and strengths Appeals to the other partys spiritual identity Is tenacious, patient, and persistent Learns from the opponent and avoids the use of secrets Goes beyond logical reasoning and trusts his or her instinct as well as faith

Profile of an Arab Negotiator

Protects all the parties honor, self-respect, and dignity Avoids direct confrontation between opponents Is respected and trusted by all Does not put the parties involved in a situation where they have to show weakness or admit defeat Has the necessary prestige to be listened to Is creative enough to come up with honorable solutions for all parties Is impartial and can understand the positions of the various parties without leaning toward one or the other

Profile of an Arab Negotiator

Is able to resist any kind of pressure that the opponents could try to

exercise on him Uses references to people who are highly respected by the opponents to persuade them to change their minds on some issues Can keep secrets and in so doing gains the confidence of the negotiating parties Controls his temper and emotions Can use conference as mediating devices Knows that the opponent will have problems in carrying out the decisions made during the negotiation Is able to cope with the Arab disregard for time

Managing Negotiation

Managing Negotiation
Successful management of intercultural

negotiations requires the manager

To gain specific knowledge of the parties in the upcoming meeting To prepare accordingly to adjust to and control the situation To be innovative

Using the Web to Support Negotiations

Negotiation Support Systems (NSS) can provide support

for the negotiation process by: Increasing the likelihood that an agreement is reached when a zone of agreement exists (solutions that both parties would accept) Decreasing the direct and indirect costs of negotiations, such as costs caused by time delays (strikes, violence), and attorneys fees, among others Maximizing the chances for optimal outcomes

Comparative Management in Focus: Negotiating with the Chinese

The Chinese think in terms of process that has no culmination. Americans think in terms of concrete solutions to specific problems. . . . The Chinese approach is impersonal, patient and aloof . . .To Americans, Chinese leaders seem polite but aloof and condescending. To the Chinese, Americans appear erratic and somewhat frivolous.
Henry Kissinger,
Newsweek, May, 2001

Comparative Management in Focus: Negotiating with the Chinese

Business people have two major areas of conflict when

negotiating with the Chinese

Amount of detail about product characteristics Apparent insincerity about reaching an agreement

Chinese negotiation process is affected by three cultural

norms

Politeness and emotional restraint Emphasis on social obligations Belief in the interconnection of work, family, and friendship

Comparative Management in Focus: Negotiating with the Chinese

Tips to foreigners conducting business in China Practice patience Accept prolonged periods of stalemate Refrain from exaggerated expectations Discount Chinese rhetoric about future prospects Expect the Chinese to try to manipulate by shaming Resist the temptation to believe that difficulties are your fault Try to understand Chinese cultural traits

Managing Conflict

Decision Making
Stages in the Rational Decision Making Model Defining the problem Gathering and analyzing relevant data Considering alternative solutions Deciding on the best solution Implementing the decision

Cultural Variables Affecting Decision Making

Objective (basing decisions on rationality) versus

subjective (basing decisions on emotions) approach Risk tolerance Locus of control internal (managers in control of events), or external (managers have little control over events)

Cultural Variables Affecting Decision Making

Comparative Management in Focus: Decision Making in Japan

Stakeholders Involvement

Twelve Variables in the Negotiation Process

Persuasion Tactics

Return

CONCLUSIONS
Successful negotiators: Understand the negotiation steps Build cross-cultural communication skills Understand nonverbal communication Avoid attribution errors