Negotiation Styles Hofstede and E&W Journal Marketing[sav lecture b]Presentation Transcript
Western Approaches East-West Negotiation Styles
East vs. West Styles: Hofstede 1991
Hofstede’s E-W Research Power Distance (respect for authority) Collectivist/Individualist (concern for group) Masculinity/Femininity (assertiveness/competitiveness) Uncertainty Avoidance (comfort in unstructured situations) Time Orientation (short versus long term outlook)
Notable Cultural Differences & Negotiation Process Expectations Individualism & Power Distance Eastern: Group based & clear hierarchical decision making structure. Western: More individualistic, non-structured decision making. Long-Term Orientation Eastern: Patient but persistent, willing to re-negotiate contracts to achieve long-term objectives. Western: Time is money and opportunity lost if not implemented according to plan. Success measured in quarters (earnings reports), not decades (5 yr planning cycles).
Western Approaches to Negotiation It is more common for a negotiation to be considered a contract versus an ongoing relationship “It’s only business” Assume that the deal will result in a contract that will be adhered to. Contract guides the relationship. Law enforces the contract (third party/entity)
Communication Styles High-Context Asian Cultures Information transmitted via multiple methods (words, symbols, rituals, practice) Unspoken, but clearly transmitted/understood. Low-Context Western Cultures More direct control of explicit information transmission and distribution (value). Individuals control information (value) and expect to use this for an advantage, to excerpt power, to be rewarded for their unique effort.
Western Focus of Negotiations Making a sale/deal– product, process, service Procedural Orientation: Sequential New sale, re-order, change order Sellers influence buyer based on current status of sale, features & benefits of the sale. ROI, savings, efficiency -- synergies, opportunity Outcome: Verbal agreement contract compliance.
Western Tools for Negotiating Large Sales: RFI, RFQ, RFP (Request for Information / Proposal) Size: 5-500 pages, 10-60 day response, legal binding Presentation, Modification, Negotiation, Contract phases Joint Ventures: Memorandum of Understanding (MOU) Memorandum of Intent (MOI) Shareholder Agreement
Western Process Typically the best prepared (advance) in negotiations (Marshall, Diplomat)
Template: Shareholder Agreement (ITC) 37 Pages - Outline to be completed Definitions of: Purpose Representatives Liability Investment/Profits Contingencies: Hardship Death of a party Relief from performance Liability for early withdrawal Resolution of disputes Applicable law Ancillary Agreements: IP / Know How /
Perceived advantage: He who has the pen, controls the negotiation outcome…. Use who’s draft copy? Establishes an anchor (ch. 2).
Group Discussion How many have negotiated with Westerner’s? What was it for? What was the experience like? What do you remember? What did you like / dislike? What did you learn?
Summary Western negotiation models are typically based more on transactions… Technical process (stages) Technical analysis (features, benefits) Predictable An objective Economic Exchange…(ROI)