International MarketingNegotiating with International Customers, Partners, and Regulators

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What Should You Learn? The problems associated with cultural stereotypes How culture influences behaviors at the negotiation table

Common kinds of problems that crop up during international business negotiations The similarities and differences in communication behaviors in several countries

19-2

What Should You Learn? How differences in values and thinking processes affect international negotiations The important factors in selecting a negotiation team

How to prepare for international negotiations Managing all aspects of the negotiation process

The important of follow-up communications and procedures19-3

Global Perspective A Japanese Aisatsu Face-to-face negotiations An omnipresent activity in international commerce

Executives Must also negotiate with representatives of foreign governments

Negotiation of the original agreement A crucial aspect of all international commercial relationships

Taking cultural differences into account Enhances business agreements Leads to long-term, profitable relationships across borders

19-4

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 individuals19-5

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

Order is important

19-6

Differences in Language and Nonverbal Behaviors Americans are near the bottom of the languages skills list Americans dont 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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Verbal Negotiation Tactics(The What of Communications)Exhibit 19.1

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Linguistic Aspect of Language and Nonverbal Behavior (How Things are Said)Exhibit 19.2

19-9

Differences in Language and Nonverbal Behaviors Japan

Korea China (northern) Taiwan Russia Israel

Germany United Kingdom19-10

Differences in Language and Nonverbal Behaviors Spain France Brazil

Mexico French-speaking Canada English-speaking Canada United States19-11

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 differences most often hurt Americans

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Cultural Differences in Competitiveness and EqualityExhibit 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 Four steps for more efficient and effective international business negotiations1. 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 4. 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 Preliminaries Checklist for planning international negotiations1. 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 (BATNA) Concession strategies Team assignments

19-17

Negotiation Preliminaries Aspects of the negotiation setting that should be pre-manipulated1. 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 Business negotiations proceed through four stages1. 2. 3. 4. Nontask sounding Task-related exchange of information Persuasion Concessions and agreement

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Nontask Sounding Learn the mood of the other side Learn about the clients 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 anger19-21

Summary of Japanese and American Negotiation StylesExhibit 19.4

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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

19-24

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 important19-25

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 face-to-face setting

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Summary It is important to take cultural differences into account when meeting clients, customers, and business partners across the international negotiation table Negotiators personalities and backgrounds influence their behavior Making it important to get to know the individuals who represent client and customer companies

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Summary Four kinds of problems frequently arise during international business negotiations1. 2. 3. 4. Level of language Nonverbal behaviors Values Thinking and decision-making processes

Much care must be taken in selecting negotiating teams

Situational factors such as the location for meetings and the time allowed must be carefully considered and managed19-28

Summary Business negotiations involve four steps1. 2. 3. 4. Nontask sounding Task-related information exchange Persuasion Concessions and agreement.

The time spent on each step can vary considerably from country to countryAmericans tend to be deal oriented More care should be taken in follow-up communications with foreign clients and partners who put more emphasis on longterm business relationships19-29