...THE TOP TEN WAYS THAT CULTURE CAN AFFECT INTERNATIONAL NEGOTIATIONS by: Jeswald W. SalacuseIssues: March / April 2005. Categories: Global Business. * Share on LinkedIn * Share on googlePlus * Share on facebook * Share on twitter * Share by email When Enron was still – and only – a pipeline company, it lost a major contract in India because local authorities felt that it was pushing negotiations too fast. In fact, the loss of the contract underlines the important role that cultural differences play in international negotiation. For one country’s negotiators, time is money; for another’s, the slower the negotiations, the better and more trust in the other side. This author’s advice will help negotiators bridge the cultural differences in international negotiation. (This article first ran in the September/October 2004 issue of Ivey Business Journal). International business deals not only cross borders, they also cross cultures. Culture profoundly influences how people think, communicate, and behave. It also affects the kinds of transactions they make and the way they negotiate them. Differences in culture between business executives—for example, between a Chinese public sector plant manager in Shanghai and a Canadian division head of a family company in Toronto– can create barriers that impede or completely stymie the negotiating process. The great diversity of the world’s cultures makes it impossible for any negotiator, no matter how skilled and experienced...
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...In this paper, I will discuss about the negotiating styles and concepts in context of India and its culture. I will explain the cultural setting and factors influencing negotiating styles in India using the five factors from the framework provided in the article – “Culture and Negotiating Styles: Ten factors in Deal Making” from the book – Negotiations: Readings, Exercises and Cases (Lewincki, R, 2009, Page 344). 1. Negotiating Goal: The Goal of negotiating deal for Indians is to achieve maximum profit close to or beyond their target point through multiple rounds of Bargaining. The Indian lifestyle teaches bargaining techniques as they bargain in every day activities with different businesses ranging from local vegetable vendors to well built shopping outlets. In contrast, Americans are known to buy things at fixed price and rarely involve in bargaining in every day activities. Indians are hard working and good with research for data collection. They come well prepared for the negotiating deals and push the opponent till their target point. When dealing with US or European clients, the Indians tend to be extra careful as the dollar-to-rupee or euro-to-rupee value is too high and any small increase in dollar or euro would greatly increase the rupee revenues. Thus the chances for quickly making-or-breaking a deal is higher with Indian clients. In addition, Indian managers are also subjected to budgetary restrictions and have low-power in decision making to exceed the...
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...countries in a complex global economy, conducting international business in the twenty first century has brought many cultural difference issues to the forefront of today’s business strategies. Culture in international negotiations has frequently been compared to an iceberg, although there is an appearance of an obstacle above the surface, the depth of understanding required to conduct successful international negotiations goes far beyond what is immediately transparent. Since culture has a substantial influence on how people deliberate, converse and act, it has significant effect on many aspects of business negotiations, and therefore must be considered when conducting business internationally. All too often companies try to operate using the same business structure and strategies in multiple different countries and are unsuccessful or have extreme difficulty due to the differences in culture. This paper will discuss several cultural differences which consistently cause difficulties in international negotiations specifically during the conduct of business between America and China. These differences are broken up into several different categories including: purpose of negotiation, cultural compatibility, governmental compatibility, communication barriers, risk aversion, formalities and negotiating speed, emotional response, and successful negotiating tactics. Purpose Understanding why both business parties are negotiating as well as cultural negotiation processes are important...
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...HOW TO DEAL WITH CROSS CULTURAL PROBLEMS IN INTERNATIONAL BUSINESS NEGOTIATION. EMEM UDOBONG* ABSTRACT: Businesses all over the world today are extending their frontiers beyond domestic markets. In this global business environment, cross cultural negotiation becomes a common field of research. This is primarily due to the fact that the negotiating parties are often from different countries, with different cultural values and beliefs which they usually bring with them to the negotiating table. What is communicated, how it is communicated, how people think and behave during negotiations can differ across cultures. The purpose of this paper is to examine the effect of culture on negotiation and suggest ways to deal with cross cultural problems in international business negotiations. An analytical approach is applied in this research. The conclusion reached is that effective international negotiators need to know not only the fundamentals of negotiation, but also how culture can influence the negotiator’s behavior and the negotiation agreement. Understanding, accepting and respecting the cultural values of the other parties is very important as it will lead to a more successful outcome. * The Author is a legal practitioner and holds an LL.B (Hons) from the Igbinedion University, Okada. She is currently a postgraduate student of CEPMLP University of Dundee, Scotland, where she is pursuing an LL.M Degree in Energy Law and Policy. TABLE OF CONTENTS Page ABBREVIATIONS...
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...footprint in the right location and continue to keep their shareholders content with management’s decisions. While making these decisions, contract negotiations will have to be done with local and governmental officials and these negotiations can be somewhat disconcerting to management but they will be worthwhile when they protect all assets of the company. There are six elements that make international business contractual process different than the domestic process: 1. The parties must deals with the laws, policies and political authorities of more than one nation. 2. The presence of different currencies means that issues may arise due to that contractual payments may vary and many governments want to control the flow of domestic and foreign currencies across their national borders. 3. The participation of governmental authorities could pose problems because of the rigidity of caused by governmental bureaucracies and the sovereign immunity can create other legal complications into the contractual process. 4. Vulnerability to sudden and drastic changes to international circumstances for example; war, changes in government and devaluation of currency. 5. Different ideologies, countries will have a...
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...such as higher levels of sensitivity, being more detail oriented or simple differences like their patterns of behavior can make a huge difference in some other culture (Drew, 2013). If you want to succeed in the cross-cultural business world of negotiations you must completely understand others, and using that knowledge to your advantage to recognize the desires of all parties involved; and then develop a situation that becomes a win-win setting for everyone involved. It is wise to keep in mind, that when doing cross-cultural business, the methods or approaches of the domestic could be different and may not apply if they are not culturally accepted by the other party (Drew, 2013). Some of the most common things you should know before negotiating business with another culture are as follows:...
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...Negotiation Closing Deals, Settling Disputes, and Making Team Decisions David S. Hames University of Nevada, Las Vegas @>SAGE Los Angeles | London | New Delhi Singapore | Washington DC • •-*» •• • i ' w ' t * • * 5s" i- . •> - • • y . » " •• is • Acknowledgments Preface PART I: THE FUNDAMENTALS 1 The Nature of Negotiation: What It Is and Why It Matters Intended Benefits of This Chapter The Essence of Negotiation What Is Negotiation? 5 6 6 When Do People Negotiate? Technology 6 4 3 xvii xix 1 3 Why Has Negotiation Become a More Important Skill? The Workplace 7 8 9 10 11 How People Negotiate: The Dual Concerns Model The Pros and Cons of Negotiating The Shadow Negotiation 10 What Does a Negotiation Look Like? Conclusion and Implications for Practice READING 1.1 - ONLINE DISPUTE RESOLUTION: DO YOU KNOW WHERE YOUR CHILDREN ARE?, 8Y DAVID A . LARSON 1 3 19 READING 1.2 - BALANCING ACT: HOW TO MANAGE NEGOTIATION TENSIONS, BY SUSAN HACKLEY Preparation: Building the Foundation for Negotiating Intended Benefits of This Chapter The Essence of Preparation 23 23 23 The Preparation Process, or How to Make I t All Happen Strategic Planning: Establishing the Framework Defining the Situation Setting Goals 29 30 25 25 25 Determining Your Strategy Strategy Implementation: Operationalizing the Plan 30 The Component Parts of the Situation 30 Best Alternative to a Negotiated Agreement (BATNA) Reservation Prices or...
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...to the negotiations; 3. To undertake adequate preparation to realize these interests and resolve the problematic situation. Introduction: In simplest terms, negotiation is a discussion between two or more disputants who are trying to work out a solution to their problem. This interpersonal or inter-group process can occur at a personal level, as well as at a corporate or international (diplomatic) level. Negotiations typically take place because the parties wish to create something new that neither could do on his or her own, or to resolve a problem or dispute between them. The parties acknowledge that there is some conflict of interest between them and think they can use some form of influence to get a better deal, rather than simply taking what the other side will voluntarily give them. They prefer to search for agreement rather than fight openly, give in, or break off contact. Here I have drawn a negotiation module where I have discussed my performance and contributions and that of my negotiating team to the negotiation process. Negotiating role-plays of the different members of my negotiating team: Here I have described a lot about effective negotiation and problem solving. I am an Operating Officer of a cell phone case manufacturer. So I am intimately familiar with all the inn’s and out’s of factory operations. On this day, like usual, the factory was normal with the whirring of machinery. But when I walked in, I noticed that something was different. To my immediate...
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...does not in itself decide on outcomes. Nevertheless, the structure and operation of the WTO is not without impact. The ways by which decisions are prepared and made do affect outcomes and results. This is common to all law, domestic and international law. Process and substance are inextricably intertwined. We call this substance-structure pairing. Effective global governance requires open attitudes towards multilateralism, shared perceptions on objectives, but also clear structures on all layers of government, local, national, regional and global. It is equally true for the WTO. While international trade regulation is almost exclusively treaty-based, the process in the WTO often deviates from written rules and is mainly shaped by custom and diplomatic practices developed under GATT 1947. Except for dispute settlement, it is not clearly framed in institutional terms. Difficulties to achieve agreement and to make progress among the currently 149 Members of the WTO are partly due to these practices. Except for the General Council and the Ministerial Conference, no body is mandated and authorised to address procedural issues in a comprehensive manner, coming forward with new ideas and informed proposals. The WTO was established as an international organisation in 1995. An umbrella agreement was added and the role of the Director-General (DG) and Secretariat defined. The main structural change was undertaken in dispute settlement. The principle of consensus-minus-one (or reversed...
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...business negotiating style in Sino-Western business negotiations in business-to-business markets involving large industrial projects from a social cultural point of view. Design/methodology/approach – A conceptual approach developed from personal interviews. Findings – This study reveals that the Chinese negotiator does not possess an absolute negotiating style but rather embraces a mixture of different roles together: “Maoist bureaucrat in learning”, “Confucian gentleman”, and “Sun Tzu-like strategist”. The Chinese negotiating strategy is essentially a combination of cooperation and competition (termed as the “coop-comp” negotiation strategy in this study). Trust is the ultimate indicator of Chinese negotiating propensities and role choices. Research limitations/implications – The focus of this study is on Chinese negotiating style shown in large B2B negotiations with Chinese SOEs. Originality/value – Differing from most other studies on Chinese negotiating style which tend to depict the Chinese negotiator as either sincere or deceptive, this study points out that there exists an intrinsic paradox in Chinese negotiating style which reflects the Yin Yang thinking. The Chinese negotiator has a cultural capacity to negotiate both sincerely and deceptively and he/she changes coping strategies according to situation and context, all depending on the level of trust between negotiating partners. Keywords China, National cultures, Negotiating, Management skills, International business...
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...Introduction International business is not just about nationalities, it is also about cultures. Cultures influence negotiation styles, values and communications. Image a situation where a Japanese supermarket manager negotiating with an American salmon supplier with their own negotiation styles: the Japanese negotiator want to extent the length of negotiation in order to seek the best result of the deal, but the American negotiator treats time as money and he/she wants to quickly reach the agreement (Evans & Richardson, 2010). This essay will firstly discuss the definitions of culture and negotiation, and then it will discuss cultural influence on negotiation and its behaviour; finally it will suggest possible strategies in addressing difficulties caused by cultural differences. This essay will argue that cultural impacts increase the difficulties of cross-culture negotiation, but negotiators can successfully manage the difficulties by increasing their knowledge of different cultures and continuously practise relevant strategies. Culture Culture is a term that can be explained in many different ways. According to Alon and Brett (2007), culture is a process of socialisation that people learn a shared pattern of behaviour and affective understandings. These patterns distinguish one group of people from another. Carrell, Shank and Barbero (2009) also state that culture is not physical elements but the perceptions that members consider them. People from the same culture usually...
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...Lessons Learned: International Negotiating: Planning and Conducting International Commercial Negotiations In this paper I will cover three important points that go into international negotiations. Here I will cover the importance of who is on your negotiating team, the importance of hosting a negotiation and when to determine what is important to determining what is considered a successful negotiation. Selection of members of your negotiation team that will be the most effective is not always based on size. Choosing members of your negotiating team is the first step in leading a successful negotiation. Keeping the negotiation team small has many advantages. The costs of travel that include airfare, hotel stay and transportation should all be considered when you are selecting your negotiation team. Often times it easier to present a unified front with a smaller team, which should be of paramount importance with your team. The chief negotiator should be able to direct the team when new issues come to the table. With a smaller team reaching a consensus is more achievable for the chief negotiator; with a large negotiation team this can prove to be a cumbersome task. Members of a negotiation team have other duties that still require their attention; the smaller teams don’t have to deal with this roadblock as much as there are less of them that could get sidetracked with these distractions. Technical experts in these matters can be used as an asset, but sometimes having them...
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...Introduction One experiences the act of negotiating at least once in a lifetime. It happens even in the smallest form of determining what is for dinner and can be as large as buying a home. The importance of understanding negotiation strategies will affect ones competitiveness within the market. Negotiations are made anywhere at any time for the most minute reasons. A negotiation strategy evaluates and analyzes two articles dealing with negotiating. The negotiating strategy also compares and contrast the strategies utilized and how those strategies can be apply within a work environment and the levels of its effectiveness. Article One The title of the first article is “Selling Water for China.” This article documents the actions of Acqua International. Aqua International is a company that sells drinkable water and is seeking to gain higher investments in China and wants to be the leading drinkable water supply in the Chinese market. In preparations of becoming the leading drinkable water supplier, Acqua International has to resolve some standing issues and negotiations. These issues include establishing water rates, consumer demands, annual water prices in regard to foreign exchanges, and revising the structure of the company. Determining water charges are inclusive on the last stage of Acqua’s negotiation strategy. However, the Chinese disagreed with Acqua’s chronological steps. Several meetings occurred between the Chinese and Acqua International before an agreement on the remaining...
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...In an international business there has to be at least 2 parties, from different countries, negotiating a business deal. There are 2 factors in the international negotiation. The environmental context – this Includes environmental forces that neither negotiator controls that influence the negotiation The immediate context – this Includes factors over which negotiators appear to have some control The following diagram below shows the context of international negotiations. According to the above diagram, the 6 factors in the environmental context that makes international negotiation different from the national are: (1) Political and legal pluralism Firms from different countries work with different legal and political systems. There are large concerns about the political risks. (2) International economics The value of foreign currencies which fluctuates from time to time; this factor needs to be negotiated. (3) Foreign governments and bureaucracies The level of governmental meddling in business in many nations is wide-ranging. In countries firms are free from government regulations while in others they are not. Parties need to know whether the governments should be included in their negotiations or not. (4) Instability Instability can be caused due to lack of resources (electricity/computers), shortages of other goods and services (water, transportation and proper food) and political instability (government policies). (5) Ideology & Culture ...
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...RMIT International University Vietnam Bachelor of Commerce Program ASSIGNMENT COVER PAGE Your assessment will not be accepted unless all fields below are completed |Subject Code: |BUSM3311 | |Subject Name: |INTERNATIONAL MANAGEMENT | |Location where you study: |RMIT Vietnam – City Campus | |Title of Assignment: |Literature Review | |File(s) Submitted |BUSM3311_G2_s3245939_LiteratureReview_Negotiation.docx | |Student name: |Nguyen Van Thanh | |Student Number: |S3245939 | |Student Email Address: |s3245939@rmit.edu.vn | |Learning Facilitator in charge: |PETER TRAN | |Assignment due date: |16/5/2011 ...
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