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International andCross-Cultural Negotiation

Punctuality

Western Asian

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What Makes International Negotiations Different?

Two overall contexts have an influence on international negotiations:

• Environmental context– Includes environmental forces that neither negotiator

controls that influence the negotiation

• Immediate context– Includes factors over which negotiators appear to have

some control

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Environmental Context

Factors that make international negotiations more challenging than domestic negotiations include:

• Political and legal pluralism• International economics• Foreign governments and bureaucracies• Instability• Ideology• Culture• External stakeholders

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Immediate Context

“Factors over which the negotiators have influence and some measure of control”:

• Relative bargaining power• Levels of conflict• Relationship between negotiators• Desired outcomes• Immediate stakeholders

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The Contexts ofInternational Negotiations

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How Do We Explain International Negotiation Outcomes?

International negotiations can be much more complicated

• Simple arguments cannot explain conflicting international negotiation outcomes

• The challenge is to:– Understand the multiple influences of several factors

on the negotiation process – Update this understanding regularly as circumstances

change

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Conceptualizing Culture and Negotiation

1. Culture as learned behavior– A catalogue of behaviors the foreign negotiator should

expect

2. Culture as shared values– Understanding central values and norms

• Individualism/collectivism

• Power distance

• Career success/quality of life

• Uncertainty avoidance

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Hofstede’s Dimensionsof Culture

• Individualism/collectivism

• Power distance

• Masculinity/femininity

• Uncertainty avoidance

Way of Life

Individualism - Collectivism

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Individualism/Collectivism

Definition: the extent to which the society is organized around individuals or the group

• Individualism/collectivism orientation influences a broad range of negotiation processes, outcomes, and preferences– Individualistic societies may be more likely to swap

negotiators, using whatever short-term criteria seem appropriate

– Collectivistic societies focus on relationships and will stay with the same negotiator for years

The Boss at Work

Power Distance

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Power Distance

Definition: “The extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally”

• Cultures with stronger power distance will be more likely to have decision-making concentrated at the top of the culture.

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Masculinity/Femininity

Definition: the extent cultures hold values that are traditionally perceived as masculine or feminine

• Influences negotiation by increasing the competitiveness when negotiators from masculine cultures meet

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Uncertainty Avoidance

Definition: “Indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations”

• Negotiators from high uncertainty avoidance cultures are less comfortable with ambiguous situations--want more certainty on details, etc.

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Hofstede’s Cultures Ranking in the Top 10

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Conceptualizing Cultureand Negotiation

3. Culture as dialectic– All cultures contain dimensions or tensions that are

called dialectics• Example: Judeo-Christian parables “too many

cooks spoil the broth” and “two heads are better than one” offer conflicting guidance

• This can explain variations within cultures

4. Culture in context– No human behavior is determined by a single cause– All behavior may be understood at many different

levels simultaneously

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5. Culture as Values

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The Influence of Culture on Negotiation: Managerial Perspectives

• Definitions of negotiation• Negotiation opportunity• Selection of negotiators• Protocol ( modus operendi)• Communication• Time sensitivity• Risk propensity• Groups versus individuals emphasis• Nature of agreements• Emotionalism

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The Influence of Culture on Negotiation: Research Perspectives

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The Influence of Culture on Negotiation: Managerial Perspectives

• Definitions of negotiation• Negotiation opportunity• Selection of negotiators• Protocol• Communication• Time sensitivity• Risk propensity• Groups versus individuals emphasis• Nature of agreements• Emotionalism

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The Influence of Culture on Negotiation: Research Perspectives

• Negotiation process– Culture has been found to have significant effects on

the negotiation process, including:• How negotiators plan• The offers made during negotiation• The communication process• How information is shared during negotiation

• Effects of culture on negotiator cognition– Accountability to a constituent influenced

negotiators from individualistic and collectivistic cultures differently

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The Influence of Culture on Negotiation: Research Perspectives

• Effect of culture on negotiator ethics and tactics– Differences exist in the tolerance of different

negotiation tactics in different cultures – Negotiators who trusted the other party were less

likely to use questionable negotiation tactics• Effects of culture on conflict resolution

– Within collectivistic countries, disagreements are resolved based on rules, whereas in individualistic countries, conflicts tend to be resolved through personal experience and training

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Culturally Responsive Negotiation Strategies

When choosing a strategy, negotiators should:1. Be aware of their own and the other party’s culture

in general2. Understand the specific factors in the current

relationship3. Predict or try to influence the other party’s

approach

4. Strategies are arranged based on the level of familiarity (low, moderate, high) that a negotiator has with the other party’s culture

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Low Familiarity

• Employ agents or advisers (unilateral strategy)– Useful for negotiators who have little awareness of

the other party’s culture

• Bring in a mediator (joint strategy)– Encourages one side or the other to adopt one

culture’s approaches or mediator culture approach

• Induce the other party to use your approach (joint strategy)– The other party may become irritated or be insulted

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Moderate Familiarity

• Adapt to the other negotiator’s approach (unilateral strategy) – Involves making conscious changes to your approach

so it is more appealing to the other party

• Coordinate adjustment (joint strategy)– Involves both parties making mutual adjustments to

find a common process for negotiation

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High Familiarity

• Embrace the other negotiator’s approach (unilateral strategy) – Adopting completely the approach of the other negotiator

(negotiator needs to completely bilingual and bicultural)

• Improvise an approach (joint strategy)– Crafts an approach that is specifically tailored to the

negotiation situation, other party, and circumstances

• Effect symphony (joint strategy)– The parties create a new approach that may include aspects of

either home culture or adopt practices from a third culture

Planning For 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

5. Concession strategies

6. Team assignments

• The following checklist ensures proper preparation and planning for international negotiations:

• The following checklist ensures proper preparation and planning for international negotiations:

Implications for Managers and Negotiators

1. selection of the appropriate negotiation team;2. management of preliminaries, including training,

preparations, and manipulation of negotiation settings;3. management of the process of negotiations, that is,

what happens at the negotiation table;4. appropriate follow-up procedures and practices;

• Four steps lead to more efficient and effective international business negotiations, which include:

• Four steps lead to more efficient and effective international business negotiations, which include: