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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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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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