Negotiation: International Cross Cultural [SAV lecture]

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Lecture slides to accompany Ch 16 and 5.2 from Negotiation Text and Readings

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  • Behavior is easy to identifyAttitudes take time to understand, long discussion reveals attitudes Mexicans arrive 15 minutes later; courtesy to host to get prepared. Brazilians sometimes an hour or more. Time is second to relationship.Norms: The rules to be followed in specific situations Never plan a dinner in Argentina before 9:00P. Cook wont arrive till 8.Values: What each side believes is important. Priority of values.Lewecki Case p.368
  • Consider community organizationBusiness venture, or joint 50-50 equity venture. Any differences in choice?Japanese: 84.4= B Singapore= 39.4=BUSA: 37.7=B Taiwanese = Consensual democracy versus adversarial democracy.
  • Imagine the differences in “opinion” in international JV’s. These are differences in values.LewickiCase p.368
  • Geert Hofstede analyzed a large data base of employee values scores collected by IBM between 1967 and 1973 covering more than 70 countries, from which he first used the 40 largest only and afterwards extended the analysis to 50 countries and 3 regions. In the editions of GH's work since 2001, scores are listed for 74 countries and regions, partly based on replications and extensions of the IBM study on different international populations.
  • Negotiation: International Cross Cultural [SAV lecture]

    1. 1. 16-1<br />International and<br />Cross-Cultural Negotiation<br />
    2. 2. What Makes International Negotiations Different?<br />Two overall contexts have an influence on international negotiations:<br />Environmental context<br />Includes environmental forces that neither negotiator controls that influence the negotiation<br />Immediate context<br />Includes factors over which negotiators appear to have some control<br />
    3. 3. Environmental Context<br />16-3<br />Factors that make international negotiations more challenging than domestic negotiations include:<br />Non Controllable<br />Political and legal<br />taxes, labor law<br />International economics<br />Currency<br />Foreign governments and bureaucracies<br />regulation<br />Instability<br />Power, supply, revolts<br />Ideology<br />Freedom, democracy<br />Culture<br />values<br />External stakeholders<br />Govt., community, assoc.<br />
    4. 4. 16-4<br />Immediate Context<br />“Factors over which the negotiators have influence and some measure of control”<br />Relative bargaining power (equity)<br />Relationship between negotiators<br />Desired outcomes (goals)<br />Immediate stakeholders (who)<br />More Controllable<br />
    5. 5. The Contexts ofInternational Negotiations<br />
    6. 6. How Do We Explain International Negotiation Outcomes?<br />International negotiations can be much more complicated<br />The challenge is to:<br />Understand the multiple influences of several factors that drive cultural behavior<br />Update this understanding regularly as circumstances change<br />We are going to look at these influences today...<br />
    7. 7. What is Culture?<br />Class Comments…<br />“Culture is a set of shared and enduring meanings, values, and beliefs that characterize national, ethnic, and other groups and orient their behavior”<br /> Faure & Sjostedt, p.366<br />“The way we do things around here”<br />Dr. Robert T. Moran, Thunderbird<br />
    8. 8. Elements of Culture<br />Behavior: <br />words and actions<br />Attitudes:<br />how we feel about our actions<br />Norms:<br />Rules to be followed in specific situations; Based on Values<br />Values:<br />Prioritized issues, beliefs. High to low value.<br />
    9. 9. Conceptualizing Culture and Negotiation<br />Culture as learned behavior<br />A set of behaviors the foreign negotiator should expect, understand.<br />Culture as shared values<br />Understanding central values and norms…<br />
    10. 10. Discussion Example:<br />What is the better way to choose a person to lead your new group?<br />The group members should meet, nominate persons, vote, and choose the person with the majority, even if several people are against the winner.<br />All members of the group should meet and discuss candidates until almost everybody agrees on the same person.<br />
    11. 11. Results: Hampden-Turner, 1993<br />What is the better way to choose a person to lead your new group?<br />The group members should meet, nominate persons, vote, and choose the person with the majority, even if several people are against the winner.<br />All members of the group should meet and discuss candidates until almost everybody agrees on the same person.<br />Japanese: 84.4= B Singapore= 39.4=B<br />USA: 37.7=B<br />
    12. 12. Questions?<br />
    13. 13. Theoretical Model: Hofstede<br />
    14. 14. Hofstede’s Dimensionsof Culture<br />Individualism/collectivism<br />Power distance<br />Masculinity/femininity<br />Uncertainty avoidance<br />Long Term Orientation<br />Original 1967-1973 IBM study of 40 countries, extended to 74.<br />Cultures Consequences, , 1980, 2001<br />Cultures and Organizations, 2004<br />http://www.geert-hofstede.com/<br />
    15. 15. 16-15<br />Individualism/Collectivism<br />Definition: the extent to which the society is concerned about individuals vs. the group<br />Individualistic societies may be more likely to swap negotiators, using whatever short-term criteria seem appropriate<br />Collectivistic societies focus on relationships and will stay with the same negotiator for years <br />
    16. 16. 16-16<br />Power Distance<br />Definition: “The extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally” (aka hierarchically)<br />Cultures with stronger power distance will be more likely to have decision-making concentrated at the top of the culture.<br />
    17. 17. 16-17<br />Masculinity/Femininity<br />Definition: “the extent cultures hold values that are traditionally perceived as masculine or feminine”<br />Influences negotiation by increasing the competitiveness when negotiators from masculine cultures meet<br />
    18. 18. 16-18<br />Uncertainty Avoidance<br />Definition: “Indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations” <br />Negotiators from high uncertainty avoidance cultures are less comfortable with ambiguous situations--want more certainty on details, etc.<br />
    19. 19. An Example of Taiwan and the US<br />PDI:Expect/Accept that power is unequally distributed<br />IDV: Self orientation versus Group (collective) orient.<br />MAS: Assertiveness (we are expected to act stronger)<br />UAI: Tolerance for Ambiguity, Unknown Future<br />LTO: Long Term Orientation (Patience, Wisdom)<br />
    20. 20. Hofstede’s Cultures Ranking in the Top 10<br />
    21. 21. Conceptualizing Cultureand Negotiation<br />Culture as dialectic: Not always True.<br />All cultures contain dimensions or tensions that are called dialectics<br />Example: Judeo-Christian parables “too many cooks spoil the broth” and “two heads are better than one” offer conflicting guidance<br />This can explain variations within cultures <br />Culture in context: A blend.<br />No human behavior is determined by a single cause<br />All behavior may be understood at many different levels simultaneously<br />
    22. 22. Questions?<br />
    23. 23. Research Implications<br />
    24. 24. The Influence of Culture on Negotiation: Research Perspectives<br />Negotiation process<br />Culture has been found to have significant effects on the negotiation process, including:<br />How negotiators plan<br />The offers made during negotiation<br />The communication process<br />How information is shared during negotiation<br />Effects of culture on negotiator cognition<br />Accountability to a constituency influenced negotiators from individualistic and collectivistic cultures differently<br />
    25. 25. The Influence of Culture on Negotiation: Research Perspectives<br />negotiator ethics <br />Differences exist in the tolerance of different negotiation tactics in different cultures <br />Negotiators who trusted the other party were less likely to use questionable negotiation tactics<br />conflict resolution<br />Within collectivistic countries, disagreements are resolved based on rules<br />In individualistic countries, conflicts tend to be resolved through personal experience and training<br />
    26. 26. Impact of Culture on Negotiation, P. 368<br />
    27. 27. Appendix 1: Tactics<br />
    28. 28. How Does It Impact Negotiation?<br />Culture is highly diverse, and present in every country or social grouping.<br />We cannot become expert in every culture, but we can understand common negotiating elements… Salacuse, 1991, p.371<br />How many countries do we work with regularly, how long does it take top become good at understanding those cultures?<br />
    29. 29. Culturally Responsive Negotiation Strategies<br />When choosing a strategy, negotiators should:<br />Be aware of their own and the other party’s culture in general<br />Understand the specific factors in the current relationship<br />Predict or try to influence the other party’s approach<br />Strategies are arranged based on the level of familiarity (low, moderate, high) that a negotiator has with the other party’s culture<br />
    30. 30. Culturally Responsive Negotiation Planning<br />When planning a cross cultural negotiation, managers should understand:<br />Their own biases, strengths, andweaknesses; <br />The other negotiator as an individual; <br />The other negotiator’s cultural context.<br />
    31. 31. Culturally Responsive Negotiation Strategies<br />When choosing a strategy, negotiators should:<br />Be aware of their own and the other party’s culture in general<br />Understand the specific factors in the current relationship<br />Predict or try to influence the other party’s approach<br /> Strategies are developed based on the level of familiarity (low, moderate, high) that a negotiator has with the other party’s culture.<br />
    32. 32. Stephen Weiss’ Cross Cultural Negotiation Tactics<br />Three Strategy Choices:<br />Based on your previous cultural knowledge:<br />Low familiarity<br />Medium Familiarity<br />High Familiarity<br /> 1) Low Familiarity Tactics<br />Employ agents or advisers(unilateral strategy)<br />Useful for negotiators who have little awareness of the other party’s culture<br />Bring in a mediator(joint strategy)<br />Encourages one side or the other to adopt one culture’s approaches or mediator’s culture approach<br />Induce the other party to use your approach(joint strategy)<br />The other party may become irritated or be insulted<br />
    33. 33. Moderate & High Familiarity<br />2) Medium Familiarity<br />Adapt to the other negotiator’s approach (unilateral strategy)<br />Involves making conscious changes to your approach so it is more appealing to the other party<br />Coordinate adjustment(joint strategy)<br />Involves both parties making mutual adjustments to find a common process for negotiation<br />3) High Familiarity<br />Embrace the other negotiator’s approach (uni.)<br />Adopting completely the approach of the other negotiator (negotiator needs to completely bilingual and bicultural)<br />Improvise an approach(joint)<br />Crafts an approach that is specifically tailored to the negotiation situation, other party, and circumstances<br />Effect symphony(joint)<br />The parties create a new approach that may include aspects of either<br />
    34. 34. Summary<br />
    35. 35. We should avoid over-simplification<br />Common advice: When in Rome, act as the Romans do”<br />In other words, be aware of the differences and consider them when they negotiate.<br />Many simplify the statement to mean:<br />“be sensitive to other cultures and modify one’s own strategy to be consistent with theirs”.<br />You cant’ learn and modify your approach in one week. month or year….<br />Acting like them does not guarantee a better result… (they may try the same)<br />People expect to negotiate differently with foreigners naturally. This may not help.<br />Best research shows us that “moderate adaption” is most effective strategy.<br />That’s Dangerous!<br />
    36. 36. Final Thoughts..<br />“too many cooks spoil the broth”<br />“two heads are better than one”<br />Negotiation results are based on many dimensions: environment, values, process… <br />We have to plan for each specific negotiation situation differently, there is no “one size fits all”.<br />

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