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International Business Negotiations PowerPoint Presentation
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International Business Negotiations

International Business Negotiations

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International Business Negotiations

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    1. International Business Negotiations Conducting Negotiations and Managing Conflict

    2. Learning Objectives Appreciate that miscommunication can create conflict across cultures Diagnose and explain causes of cross-cultural conflict Understand the positive role of negotiations as well as ways to manage cross-cultural conflict and the Explain the main stages of international negotiations and the impact of cultural values on negotiations

    3. Overview Cultural causes of conflict Managing conflict Understanding international negotiations Process of international negotiations

    4. Conflict When disagreements and friction arise in the course of interaction because of opposing interests or cultural differences

    5. Conflict is Common Many chances for distorted, confused, or missed messages Negotiation and diplomatic skills increasingly important American managers spend 20% of time on conflict issues Higher for international environment

    6. Common Tasks That Produce Conflict Foreign labor strikes Negotiate with overseas vendors, clients, & partners Lobby governments Mediate relations with outside pressure groups Managing diverse employees

    7. Conflict and Business Not always bad Can be productive exchange Key is to understand role of culture

    8. Causes of Conflict Language Poor translation or limited skills Lack of understanding cultural norms Inappropriate behavior Decision-making Centralized or Decentralized Cultures propensity for conflict Avoid or accept

    9. Types of Conflict Resolution Avoidanceignore altogether Accommodation Compromise Collaboration Competitionface head-on

    10. A Typology of Conflict Styles

    11. Conflict Preferences Culture influences styles Collectivists & high uncertainty cultures prefer avoidance Individualistic culture prefers competitive Cultural tendencies vary with WHO Peers vs.. subordinates Individuals tend to stick with a style

    12. Conflict Preferences (Contd) Equity norm To each according to what they deserve Equality norm Each group member gets about the same share

    13. Response to Conflict After negative action or conflict occurs, generally there is a direct or indirect request for repair Account giving is an explanation for the conflict Consideration for saving face

    14. International Conflict Management: Linking Culture and Face to the Account-giving Process

    15. Account Giving Mitigatinglower tensions Concessionsacknowledge & take responsibility Justificationacknowledge but unavoidable Ideologicalacknowledge but necessary Refusalresist acknowledgment Aggravatingincrease tensions

    16. The Use of and Reactions to Accounts in International Conflict: The Impact of Culture and Face

    17. International Negotiation Process of communicating with another person or group to make a joint decision or reach an agreement

    18. Key Elements of Negotiations Multiple parties Mixed motives Disagreements & common interests Movement of parties Shifting of positions over time Reaching agreement as a goal

    19. Approaches to International Negotiation Macrostrategic Focus on relative bargaining power of parties Power can shift throughout process Comparative Focus on interactions during negotiations Consideration of cultural factors

    20. Setting Up Shop in Developing Countries: How Negotiating Strength May Shift over Time

    21. Preparing for Negotiations Never underestimate complexity Gain in-depth cultural understanding Seek outside help where needed Ensure inside negotiator(s) have language skills Consider team approach Spend time necessary to prepare

    22. Framework for International Negotiations Basic model used by negotiators Perspectives on individual negotiators Dispositions affecting interactions Views about the interaction process Outcomes

    23. I. Basic Model Used by Negotiators How the negotiation process might be conceived A bargaining effort Joint problem solving or exploration A debate

    24. II. Perspectives on Individual Negotiators How negotiators are chosen Knowledge/experience Personal characteristics/status Aspirations of individuals Individual vs. Community goals Group decision making Authoritarian vs. Consensual

    25. III. Dispositions Affecting Interactions Time orientation Monochronic vs. polychronic Risk-taking orientation High vs. low How trust is determined Intuition Common experience Reputation Threat of sanctions Basic model used by negotiators

    26. IV. Views About the Interaction Process Important of protocol Formal vs. informal Complexity of communication High vs. low Tactics for persuasion Logic/facts/experience Dogma/tradition Emotion/intuition

    27. V. Outcomes Agreement preferences Contractual vs. implicit

    28. Successful Negotiations Preparation does not ensure success Negotiation style still plays significant role Training and preparation still best method

    29. Stages in the International Negotiation Process

    30. International Negotiation Process Nontask soundingestablish rapport Task-related exchangeexchange of background, needs and preferences Persuasionnegotiation, attempts to modify positions Agreementconclusion and accord is reached

    31. Stage 1: Nontask Sounding Time needed to establish relationships Entertaining Establishing trust Status of negotiators Variations in importance across cultures

    32. Stage 2: Task-Related Exchange of Information Most important in some cultures Explanations of initial bargaining positions Differences in bargaining room across cultures

    33. Stage 3: Persuasion Attempts to modify other partys position Most important step for U.S. negotiators Tactics used to persuade Direct/honest Threats Bluffing Misrepresentations Timing of concessions Throughout or at end

    34. Stage 4: Agreement Concessions and persuasion culminating in agreement Importance of follow-through Final outcome Use of formal written Informal handshake Differences in notion of contracts

    35. Types of Behavior During Negotiation Process Substantive behaviorfacilitates the negotiation process such as initiation, acceptance, rejection, accommodation, and retraction. Strategic behaviorinfluences the expectation and the actions of the other side such as commitment, exchange, demands, treat, ingratiation. Persuasive behaviorsupports arguments and presents evidence in support of claims a negotiator makes such as the use of statistical information or expressive language.

    36. Types of Behavior During Negotiation Process Task behaviorpromotes focus on the issue such as providing and requesting information, or clarification. Affective behaviorshows expression of feelings such as humor, irritability, or social correctness. Procedural behaviormoves the discussion along such as references to procedure or time.

    37. Behavior in the Stages of Negotiation: Differences Across Low- and High-Context Cultures