Chapter 5
Negotiation and Conflict
Resolution
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
1
Negotiation
The process of bargaining between
two or more parties to reach a
solution that is mutually
acceptable
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
4
The Negotiation Process

The Goal
– Acceptable solution to all (win-win)
– In some cultures, goal of negotiation is winlose
 Preparation (understanding one‘s own interests
and anticipating the other party‘s interests:
objectives, needs)
 Relationship-Building (get to know each other)
– Different cultures have different attitudes
toward how much time and effort to spend on
relationship building (e.g. America vs. Mexico)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
5
The Negotiation Process

Information Exchange (stating an initial
position followed by questions, answers,
discussion)
– Meaning of this stage depends on cultural
background
American: beginning of „real“ negotiation
 Mexican: are suspicious, present little
substantive material


Persuasion (try to convince their
counterparts to accept their proposals)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
6
The Negotiation Process

Agreement (mutually acceptable solution by
making concessions to the other side)
– Cultural variation how to arrive at an
agreement

Americans prefer to negotiate „linear“ (one issue
at a time, concluding with binding legal contract)

Russians prefer to develop final agreement
based on all items (attach less meaning to contract,
see concessions as sign of weakness)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
7
Negotiating Strategies

Two major types of negotiation/bargaining
– Distributive negotiation (win-lose or zero-sum
negotiations)
– Integrative negotiation (win-win or positive sum
negotiation)

„Technically“ every integrative negotiation
is distributive as well (also the bigger pie has
to be divided)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
8
Distributive Bargaining
Party A‘s aspiration range
Party B‘s aspiration range
Settlement
range
Party A‘s
target point
Party B‘s
resistance
point
Party A‘s
resistance
point
Copyright 1998 Prentice-Hall Inc.
Party B‘s
target point
adapted by Prof. Dr. vom Kolke
9
Negotiating Strategies

Strategies for distributive bargaining
– Try to shift upward the other side‘s belief
(e.g. by persuasion) about one‘s own
minimum (reservation value)
– Try to shift downwards the other side‘s
belief of his own minimum
– Make a binding, credible, communicated
commitment
– Negotiation are often settled at focal
points
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
10
Negotiating Strategies

Strategies to facilitate integrative
bargaining
– Emphasizing superordinate goals (goals
both parties can agree on)
– Focusing on the problem, not people (not to
personalize the conflict)
– Focusing on Interests, not Demands
(demands are what a person wants, interests why
the person wants them)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
11
Negotiating Strategies

Strategies to facilitate integrative
bargaining
– Creating new options for joint gains
(expanding the resource pie)
– Focusing on what is fair (helps to come to a
mutual agreement)

The tension between integrative and
distributive bargaining can‘t be
dissolved in the end
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
12
Negotiator‘s Dilemma

Moves to claim value drive out moves
to create value (could prevent mutually
beneficial agreement)
John’s
Choice
Create
Claim
Tom’s Choice
Claim
TERRIBLE
Create
GOOD
GOOD
GREAT
GREAT
MEDIOCRE
TERRIBLE
Copyright 1998 Prentice-Hall Inc.
MEDIOCRE
adapted by Prof. Dr. vom Kolke
13
Ways out of the Dilemma

Chance of cooperation through repetitive
negotiations
– One time negotiation can be broken down
into many steps (e.g. separating issues, having
several meetings)
– Managers as negotiators may have to deal
on many company matters over a longer time
(and therefore need each other‘s coop)
– Negotiators reputation (for further negotiations)
may be present even in one time negotiations

Best strategy in repetitive negotiations:
TIT-FOR-TAT
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
14
Situational Factors and
Negotiating Tactics

Circumstances of negotiations
– Geographical Location (Home office of
one party or Neutral equidistant location )
– Implications
Less expenses, better access to
information for the „home“ party
 (cost) pressure to the other party to come
to an agreement


Room Arrangements (rectangular/
square vs. round table, competition vs.
cooperation)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
15
Situational Factors and
Negotiating Tactics

Selection of Negotiators (no. of people,
which ones)
– Number of people reflects culture (small
american team vs. large japanese group)
– Can create advantage by overwhelming other
side
– U.S. companies select negotiators on a basis
of position and competence, Mexican firms
on personal factors (age, gender, race) and
social connections
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
16
Situational Factors and
Negotiating Tactics

Time Limits (are real of presumed deadlines
in negotiations)
– Cultural view of time affects negotiations
US, Swiss, Germany: time is a commodity, has
to be used as efficiently as possible
 Middle East, Asia: longer time perspective,
extended negotiation time helps build
relationship

– Time limits may be used to strenghten
one‘s position (to get concessions granted)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
17
Situational Factors and
Negotiating Tactics

Verbal tactics (to influence the outcome of a
negotiation)
– Asking more questions
– Making fewer commitments before final
agreement stage
– Increasing the amount of initial request
 Initial Offer (tactic influenced by culture)
– Extreme initial offers from Chinese/ Russian
negotiators
– More „realistic“ offers from US or European
negotiators (closer to their bottomline)
– Japanese don‘t like extreme offers (called
„banana sales approach“)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
18
Situational Factors and
Negotiating Tactics

Other Verbal Negotiating Behaviors
– Promises
– Threats
– Recommendations
– Warnings
– Rewards
– Punishments
– Normative Appeals
– Commitments
– Self-Disclosure
– Questions
– Commands
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
19
Situational Factors and
Negotiating Tactics

Nonverbal Tactics (challenge to crosscultural negotiations)
– Silence

normal part of conversation for Japanese,
uncomfortable situation for Americans (e.g.
silence interpreted as rejection)


Can be used strategically (to get concessions)
Conversational Overlaps (more than one
person speaks)
– usual to Brasilians, inappropriate to
Americans/ Japanese
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
20
Situational Factors and
Negotiating Tactics

Facial Gazing (Americans love to have eye
contact, Japanese don‘t)

Touching
– Only handshake for Americans and
Japanese
– Body touching for Brazilian or Mexican to
deepen relationship/confidence
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
21
How Culture Influences
Conflict Resolution

Negotiation is a means to resolve
conflict (begin with different positions, move
to an agreement)

Low- and high-context cultures perceive
conflicts different
– Low-context (LC) cultures see conflict as
instrumental oriented (issues are separated
from people)
– High-context (HC) cultures see conflicts
expressive (issues are not separated from
people)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
22
How Culture Influences
Conflict Resolution

Consequence
– LC cultures: public disagreement is
acceptable (people have conflict and still friendly
relationship)
– HC cultures: open disagreement/ public
confrontation are highly insulting (parties „lose
face“)

Why develop conflicts in the two cultures?
– LC culture is individualistic with less specified
ways of appropriate behavior (conflict arises if
one violates the other‘s expectations)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
23
How Culture Influences
Conflict Resolution

Why develop conflicts in the two cultures?
– HC culture is group-oriented with more
specific rules of behavior (conflict arises if one
violates cultural expectations)

Different attitudes toward conflict
– In LC culture people are action-oriented
(direct, confrontational response to conflict, quick
resolution)
– In HC culture people try to avoid
confrontation (indirect, inactive approach
avoiding/ ignoring conflict)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
24
How Culture Influences
Conflict Resolution

Styles to handle conflicts
– LC cultures take an intellectual view to
conflict (use logic to make an argument, factualinductive or axiomatic- deductive style)
– HC cultures take an emotional point of
view (use flowery speech to make emotional
appeal and diffuse conflict, affective-intuitive style)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
25
How Approach to Conflict
Influences Negotiation

View to conflict affects cultures
approaches to negotiation
– HC cultures
Negotiators try to behave harmonious on the
surface
 Differences in opinions are expressed less
directly, real feelings through implicit language
and nonverbal means
 „Persona“ of the negotiator is integrated into
how negotiations are handled (e.g. not to lose

one‘s face)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
26
How Approach to Conflict
Influences Negotiation

View to conflict affects cultures
approaches to negotiation
– LC cultures
Negotiators are open and direct
 They are action oriented and see negotiations
as problem-solving process
 Clear difference between the negotiator as
„Persona“ and how well he/she performs in a
negotiating situation (e.g. „to lose one‘s face“ plays

far less a role)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
27
Becoming a Better CrossCultural Negotiator

Understand your negotiating partner
(basic understanding of values, attitudes and
typical behaviors)
 Consider situational specifics (e.g. what
experience does your counterpart have with
your culture?)

Decide how to handle actual negotiation
(Studies show: moderate adaptation of native
behavior produces better results than no
adaptation or trying to behave as a native)
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
28
Convergence or Divergence?


Greater knowledge
and understanding
of culture
If moderate
adaptation proves
effective


Ingrained cultural
patterns of
behavior
Perception that
own culture
negotiates
effectively
Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
29
Implications for Managers
Cross-cultural negotiations important
part of international manager’s job
 Improve negotiating outcomes by
understanding dynamics of negotiation
process and influence of culture
 Moderate adaptation may be most
effective

Copyright 1998 Prentice-Hall Inc.
adapted by Prof. Dr. vom Kolke
30