Chapter 6
Negotiating with International Customers,
Partners, and Regulators
McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Introduction
• Face-to-face negotiations are an omnipresent
activity in international commerce
• Once global marketing strategies have been
formulated, then the focus of managers turns
to implementation of the plans
• Plans are always implemented through faceto-face negotiations with business partners
and customers from foreign countries
• Some of these negotiations can become quite
complex, involving several governments,
companies, and cultures
The Danger of Stereotypes
The Pervasive Impact of Culture
on Negotiation Behavior
Companies and countries do not negotiate—people do
•
(1)
(2)
(3)
(4)
Cultural differences in negotiation
styles can cause problems in
international at the levels of:
Language
Nonverbal behaviors
Values
Thinking
and
decision-making
processes
Language and Non-Verbal Behavior
Bilingual’s Emergency
Japanese Negotiation
“The best negotiators are the
Japanese because they will spend
days trying to get to know their
opponents.
The
worst
are
Americans because they think
everything works in foreign
countries as it does in the USA
Language and Non-Verbal Behavior
Objectivity
Business is business (USA, UK, Germany) and decisions are based on bottom
line and on cold which separates people from business
In relationship oriented cultures (China, KSA, India, Spain) relationships work
more than business and business is not separated from person.
Competitiveness and Equality
USA, Japan
Time
USA, KSA, China, Asia
Difference in thinking and D/M process
Dismantling Tasks into narrow (America & Japan, Asia)
Much time consuming (USA), but not much (Japan)
Solving problem (USA), building relationships (Japan).
Implications for Managers and Negotiators
•
Four steps lead to more efficient and effective international
business negotiations, which include:
1.
2.
3.
4.
selection of the appropriate negotiation
team
management
of
preliminaries,
including training, preparations, and
manipulation of negotiation settings
management of the process of
negotiations, that is, what happens at
the negotiation table
appropriate follow-up procedures and
practices
Negotiation Teams
•
Criteria for selecting successful negotiators include:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Maturity
Emotional stability
Breadth of knowledge
Optimism
Flexibility
Empathy
Stamina
Willingness to use team assistance
Listening
Influence at headquarters
Negotiation Preliminaries
•
Many companies in the United States provide employees
with negotiations training on:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Language skills
Social and diplomatic skills
Knowledge specific to the diplomatic
profession
Including diplomatic history and
international relations
Law
Economic
Politics
International organizations
Foreign policies
Planning For International Negotiations
•
The following checklist ensures proper preparation and
planning for international negotiations:
1.
2.
3.
4.
5.
6.
Assessment of the
situation and the
people
Facts to confirm
during the negotiation
Agenda
Best alternative to a
negotiated agreement
Concession strategies
Team assignments
Negotiation Setting
•
There are at least seven aspects of the negotiation setting that
should be manipulated ahead of time if possible:
1.
2.
3.
4.
5.
Location
Physical arrangements
Number of parties
Number of participants
Audiences (news media,
competitors, fellow vendors,
etc.)
6. Communications channels
7. Time limits
At the Negotiation Table
•
Differences in the expectations held by parties from different
cultures are one of the major difficulties in any international
business negotiation
•
Everywhere around the world we have found that business
negotiations proceed through four stages:
• Nontask sounding
• Task-related exchange of
information
• Persuasion (Questions’ Handling)
• Concessions and agreement