Chapter 10
When negotiating in Russia, the slower you
go, the further you’ll get.
Don’t hurry to reply, but hurry to listen.
-- Traditional Russian proverbs
(p. 318)
2
When Arabs give a “yes” answer to a request,
they are not necessarily certain that the action will
or can be carried out. Etiquette demands that
your request have a positive response. A positive
response to a request is a declaration of intention
and an expression of goodwill—not more than
that. . . . If an action does not follow, the other
person cannot be held responsible for failure.
-- Margaret Omar Nydell
University of Alexandria, Egypt
(p. 318)
3
Opening question:
If listening is more important than speaking,
and saying “yes” is often a meaningless
gesture, how can managers negotiate or build
global partnerships with any degree of
confidence?
4
Consider: GE and Mitsubishi
How could a formal meeting (aisatsu) between
two highly experienced CEOs go so wrong so
quickly? How common are such failures?
(p. 319)
5
Topic for today:
Negotiation and global partnerships
• Seeking common cause
• Culture and negotiation: A model
• The negotiation process
• Negotiation patterns across cultures
• Building global partnerships
• Managing global partnerships
6
Potential benefits of global partnerships
1. Promote growth and development.
2. Acquire new technologies for market applications.
3. Respond to government policies or restrictions.
4. Take advantage of exchange rates between countries.
5. Respond to changes in the economic environment.
6. Reduce operating costs and/or increase productivity.
7. Get closer to clients.
8. Diversify operations and markets.
9. Open opportunities for increased vertical integration.
(p. 324)
7
Consider: Hyundai and Samsung
1. What did Hyundai Motors seek in their global
strategic partnerships? Were their
endeavors successful?
2. How did Samsung Electronics build its own
network of strategic partners to achieve its
growth targets?
3. Today, do you consider either of both or
these companies to be world-class brands?
Why or why not?
(p. 324)
8
Potential drawbacks of global
partnerships
1. Long-term objectives and aspiration can sometimes
remain ill-defined, leading to an incompatibility of goals
as the partnership gets down to managing details.
2. Potential for lack of long-term commitment by one or
both partners.
3. Partners may be reluctant to share key information.
4. Disagreements over distribution of profits.
5. One partner may fear losing control to other partner.
6. Changing business conditions may lead to better
opportunities elsewhere outside the partnership.
(p. 328)
9
Consider: Secoinsa and Pharmacia
1. Was the Secoinsa partnership between Spain
and Japan doomed from the beginning, or
could managers from both sides have done
things differently at the beginning to build a
stronger alliance?
2. What was the nature of the conflicts that
eventually sank the Swedish-American
partnership Pharmacia? Could these conflicts
have been anticipated early enough to resolve
them before things got out of hand?
(p. 325)
10
Culture and negotiation: A model
Exhibit 10.1. Cultural influences on the negotiation process
Culture 1: Manager 1’s
normative beliefs about
uncertainty and social
control
(e.g., risk oriented; rule
oriented)
Culturally compatible
negotiation style
(e.g., win-lose approach
to bargaining; buffer risk
through legal contracts;
contracts before
relationships)
Other influences on the negotiation process
(e.g., previous experiences with prospective partners;
preparedness for negotiation and bargaining; degree mutual
trust and mutual benefit; degree of competition; control over
valued resources; personal and situational differences;
realities on the ground)
Culture 2: Manager 2’s
normative beliefs about
uncertainty and social
control
(e.g., risk averse;
relationship oriented
Culturally compatible
negotiation style
(e.g., win-win approach
to bargaining; buffer risk
through personal
networks; relationships
before contracts)
Manager 1’s
negotiation style
(e.g., competitive
negotiation; sequential
bargaining; seek written
contract; doctrine of
fixed circumstances)
Manager 2’s
negotiation style
(e.g., problem-solving
negotiation; holistic
bargaining; seek verbal
contract; doctrine of
changed circumstances)
(p. 330)
Competitive bargaining strategy/1
12
Problem-solving bargaining strategy/2
13
Sequential and holistic
bargaining strategies
(p. 335)
Contracts and the
doctrine of changed circumstances
Personal relationships
follow contract
Contract follows personal
relationships
Contract very specific an
inflexible, regardless of
changed circumstances
Contract general and
flexible based on
changed circumstances
Long, detailed, legalistic
Short, less detailed, less
legalistic
Contracts backed by legal
system
Contracts backed by
personal integrity and
relationships
15
(p. 337)
Negotiating in Japan and Brazil
(p. 339)
16
Criteria for selecting global partners
1. Solid compatibility of strategic goals and
tactics.
2. Complementary value-creating resources.
3. Complementary corporate cultures.
4. Strong commitment to partnership.
5. Strong philosophical and operational
compatibility.
(p. 343)
17
Preparing for global negotiations
1.
2.
3.
4.
5.
Start with the end result in mind.
Help the other side to prepare.
Treat alignment as a shared responsibility.
Send one clear signal.
Manage negotiations like a business
process.
(p. 345)
18
Managing the negotiation process
1. Concentrate on building long-term relationships
with partner.
2. Focus on understanding the organizational and
personal interests and goals behind stated
bargaining positions.
3. Avoid overreliance on cultural generalizations.
4. Be sensitive to timing.
5. Remain flexible throughout negotiation process.
6. Plan carefully.
7. Learn to listen.
(p. 347)
19
Management arrangements for global
partnerships
•
•
•
Shared arrangements
Assigned arrangements
Delegated arrangements
(p. 348)
20
MANAGER’S NOTEBOOK:
Can people be trusted?
(p. 353)
21
MANAGER’S NOTEBOOK:
Building mutual trust
(p. 354)
MANAGER’S NOTEBOOK:
Aligning corporate cultures
(p. 357)
MANAGER’S NOTEBOOK:
Conflict resolution strategies
(p. 359)
24
MANAGER’S NOTEBOOK:
Dealing with conflicts
• Prepare people
• Prepare processes
• Explore past and present
• Envision the future
• Create solutions
• Rejuvenate and reflect
• Don’t forget relationships
(p. 360)
25
Application:
Jeff Depew
Assume you are Jeff Depew and you could start over in
preparing for the meeting between the two CEOs of GE
and Mitsubishi. Mid-level negotiations are well underway,
and it is your job to prepare your boss (GE’s CEO) for the
upcoming formal meeting in Tokyo.
1. Outline a specific plan of action to lay the groundwork for
this meeting, doing everything in your power to make it
successful. What would you do?
2. What are the biggest hurdles that might lead to failure?
3. What would you do to try and overcome, of at least
minimize, these hurdles?
26
Think about it:
Negotiating skills
Think about times when you had to bargain with other
people (colleagues, supervisors, friends, parents, etc.).
With these experiences in mind:
1. Do you believe you won most of the negotiations? Why or
why not?
2. What are your strengths and weaknesses as a negotiator?
3. What specific skills do you wish to develop to enhance
your ability to negotiate successfully with others?
27