Negotiating with
International Customers,
Partners, and Regulators
Global Perspective
A Japanese Aisatsu
• Face-to-face negotiations are an omnipresent activity in
international commerce.
• Executives must also negotiate with representatives of foreign
governments.
• A crucial aspect of all international commercial relationships is the
negotiation of the original agreement.
• If cultural differences are taken into account, business agreements
can be made that lead to long-term, profitable relationships across
borders.
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The Dangers of Stereotypes
Europeans Stereotype Themselves
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The Dangers of Stereotypes
• Negotiations are conducted between people, not national
stereotypes
• Cultural factors often make huge differences
• Negotiation behaviors are different across regions, genders, and
type of industry
• Age and experience also make important differences
• Consider the culture of customers and business partners, but treat
them as individuals
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The Pervasive Impact of Culture on Negotiation
Behavior
• Regional generalizations very often are not correct
• Cultural differences cause four kinds of problems in international
business negotiations:
-
Language
Nonverbal behaviors
Values
Thinking and decision-making processes
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Differences in Language and Nonverbal
Behaviors
• Americans are near the bottom of the languages skills list
• Americans don’t like side conversations by foreigners in their
native language
• The variation across cultures is greater when comparing linguistic
aspects of language and nonverbal behaviors than when the verbal
content of negotiations is considered
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Differences in Language and Nonverbal
Behaviors
Japanese Negotiators Exchange Business Cards –
Important Ritual
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Differences in Language and Nonverbal
Behaviors
Verbal
Negotiations
Tactics –
The What of
Communications
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Differences in Language and Nonverbal
Behaviors
Linguistic Aspects of Language and Nonverbal
Behaviors (How Things Are Said)
19 - 10
Differences in Language and Nonverbal
Behaviors (continued)
• Japan
• Korea
• China (northern)
• Taiwan
• Russia
• Germany
• United Kingdom
• Spain
• France
• Brazil
• Mexico
• French-speaking Canada
• English-speaking Canada
• United States
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Differences in Values
• Objectivity
- “separating people from the problem”
• Competitiveness and equality
- Japanese appear to be the best negotiators with the highest profits
- Japanese appear to be more equitable with buyers
• Time
- The passage of time is viewed differently across cultures
- These difference most often hurt Americans
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Cultural Differences in Competitiveness and
Equality
• Insert Exhibit 19.3
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Differences in Thinking and Decision-Making
Processes
•
•
•
•
Western approach: sequential
Eastern approach: holistic
Americans: business negotiation is a problem-solving activity
Japanese: a business negotiation is a time to develop a business
relationship with the goal of long-term mutual benefit
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Implications for Managers and Negotiators
1.
2.
3.
4.
Four steps for more efficient and effective international business
negotiations:
Selection of the appropriate negotiation team
Management of preliminaries, including training, preparations,
and manipulation of negotiation settings
Management of the process of negotiations
Appropriate follow-up procedures and practices
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Negotiation Teams
•
•
•
•
Willingness to use team assistance
Listening skills
Influence at headquarters (senior executive)
Gender should not be used as a selection criterion for international
negotiation teams
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Negotiation Teams
Women Get the Job Done –
Chile’s Foreign Minister Maria Soledad Alvear
19 - 17
Negotiation Preliminaries
Through His Books and
Seminars, Chester Karrass
Has Taught More People
Negotiating Skills Than
Anyone Else on Earth
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Negotiation Preliminaries
Checklist for planning international negotiations:
1. Assessment of the situation and the people
2. Facts to confirm during the negotiation
3. Agenda
4. Best alternative to a negotiated agreement (BATNA)
5. Concession strategies
6. Team assignments
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Negotiation Preliminaries
Different Negotiations Settings Have
Different Advantages
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Negotiation Preliminaries (continued)
Aspects of the negotiation setting that should be pre-manipulated:
1. Location
2. Physical arrangements
3. Number of parties
4. Number of participants
5. Audiences (news media, competitors, fellow vendors, etc.)
6. Communications channels
7. Time limits
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At the Negotiation Table
1.
2.
3.
4.
Nontask sounding
Task-related exchange of information
Persuasion
Concessions and agreement
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At the Negotiation Table
Japanese vs.
American
Negotiating
Styles
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Nontask Sounding
• Learn the mood of the other side
• Learn about the client’s background and interest for cues about
appropriate communication styles
• Judgments about the “kind” of person in the negotiation
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Task-Related Information Exchange
•
•
•
•
•
•
Let the foreign counterparts bring up business
Expect a large number of questions but little feedback
Allow periods of silence
Use multiple communication channels
Understand the lack of, or the bluntness of negative feedback
Meet aggressive first offers with questions, not anger
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Persuasion
You want him on your side – Banana Salesmen
in Agra, India are world renowned
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Persuasion
•
•
•
•
•
Task-related information exchange versus persuasion
Avoid threats, warnings, and other aggressive negotiation tactics
Avoid emotional outbursts
Ask more questions
Use third parties and information channels of communication
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Concessions and Agreement
• Write down concession-making strategies
• Understand differences in decision-making styles
• In many cultures, no concessions are made until the end of the
negotiations
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After Negotiations
• In most countries other than America, legal systems are not
depended upon to settle disputes
• Japan – contacts primarily contain comments on principles of the
relationship
• China – contracts are more a description of what business partners
view their respective responsibilities to be
• Many foreign CEOs expect a formal contract signing ceremony
• Follow-up communications are very important
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After Negotiations
Tung Chee Hwa,
Chief Executive
of Hong Kong
Administrative
Region and
Mickey
Consummate
Deal for Walt
Disney World
19 - 30
Conclusions
• Experience levels are going up worldwide
• Culture still counts
• Differences between countries and cultures, no matter how
difficult, can be worked out when people talk to each other in faceto-face setting
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