Cross Cultural Negotiation

Introduction

Global managers negotiate with parties in other countries to make specific plans for strategies (exporting, joint ventures, and so forth) and for continuing operations. While the complexities of cross-cultural negotiations among firms around the world present challenge

enough, managers also sometimes are faced with negotiating with various governmental agencies.

Managers must prepare for strategic negotiations. Next the operational details must be

negotiatedthe staffing of key positions, the sourcing of raw materials or component parts, the

repatriating of profits, to name a few. As globalism burgeons, the ability to conduct successful cross-cultural negotiations cannot be overemphasized. Failure to negotiate productively will result in lost potential alliances and lost business at worst, confusion and delays at best.

Effecting strategy depends on management's ability to negotiate productivelya skill

widely considered one of the most important in international business. In the global arena, cultural differences produce great difficulties in the negotiation process. Ignorance of native bargaining rituals, more than any other single factor, accounts for unimpressive sales efforts.

Important differences in the negotiation process from country to country include the amount and type of preparation for a negotiation, the relative emphasis on tasks versus interpersonal relationships, the reliance on general principles rather than specific issues, and the number of people present and the extent of their influence. In every instance, managers must familiarize themselves with the cultural background and underlying motivations of the negotiatorsand the tactics and procedures they useto control the process, make progress, and therefore maximize company goals.

The term negotiation describes the process of discussion by which two or more parties aim to reach a mutually acceptable agreement. For long-term positive relations, the goal should be to set up a win-win situationthat is, to bring about a settlement beneficial to all parties concerned. This process, difficult enough when it takes place among people of similar backgrounds, is even more complex in international negotiations because of differences in cultural values, lifestyles, expectations, verbal and nonverbal language, approaches to formal procedures, and problem-solving techniques. The complexity is heightened when negotiating across borders because of the greater number of stakeholders involved. In preparing for negotiations, it is critical to avoid projective cognitive similaritythat is, the assumption that others perceive, judge, think, and reason in the same way when, in fact, they do not because of differential cultural and practical influences. Instead, astute negotiators empathetically enter into the private world or cultural space of their counterparts, while willingly sharing their own view of the situation.

The Negotiation Process

The negotiation process comprises five stages, the ordering of which may vary according to

the cultural norms; for most people, relationship building is part of a continuous process in any

event: (1) preparation, (2) relationship building, (3) the exchange of task-related information, (4)

persuasion, and (5) concessions and agreement. Of course, in reality these are seldom distinct

stages but rather tend to overlap; negotiators may also temporarily revert to an earlier stage. With

that in mind, it is useful to break down the negotiation process into stages to discuss the issues

relevant to each stage and what international managers might expect, so that they might more

successfully manage this process.

Stage One: Preparation

The importance of careful preparation for cross-cultural negotiations cannot be

overstated. To the extent that time permits, a distinct advantage can be gained if negotiators

familiarize themselves with the entire context and background of their counterparts (no matter

where the meetings will take place) in addition to the specific subjects to be negotiated. Because

most negotiation problems are caused by differences in culture, language, and environment, hours or days of tactical preparation for negotiation can be wasted if these factors are not carefully

considered.

To understand cultural differences in negotiating styles, managers first must understand

their own styles and then determine how they differ from the norm in other countries. They can do this by comparing profiles of those perceived to be successful negotiators in different countries.

Such profiles reflect the value system, attitudes, and expected behaviors inherent in a given society.

Other sections of this chapter describe and compare negotiating styles around the world.

Variables in the Negotiating Process

Adept negotiators do some research to develop a profile of their counterparts so that they

know, in most situations, what to expect, how to prepare, and how to react. These variables can, to a great degree, help managers understand the deep-rooted cultural and national motivations and traditional processes underlying negotiations with people from other countries.

After developing thoughtful profiles of the other party or parties, managers can plan for the

actual negotiation meetings. Prior to the meetings, they should find out as much as possible about

the kinds of demands that might be made, the composition of the "opposing" team, and the

relative authority that the members possess. After this, the managers can gear their negotiation

strategy specifically to the other side's firm, allocate roles to different team members, decide on

concessions, and prepare an alternative action plan in case a negotiated solution cannot be found.

The next stage of negotiationoften given short shrift by Westernersis that of relationship

building. In most parts of the world, this stage usually has either taken place already or

is concurrent with other preparations.