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International Management

International Management. Phatak, Bhagat, and Kashlak. Chapter 13. Negotiations and Decision-Making Across Borders and Cultures. Learning Objectives. Understand the process of negotiation and decision-making and their significance for multinational and global corporations.

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International Management

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  1. International Management Phatak, Bhagat, and Kashlak

  2. Chapter 13 Negotiations and Decision-Making Across Borders and Cultures

  3. Learning Objectives • Understand the process of negotiation and decision-making and their significance for multinational and global corporations. • Understand the environmental context of international business negotiations and the concept of multinational negotiating strength. • Identify the various patterns of negotiation and conflict resolution in different national and cultural contexts. • Understand the influence of national and cultural variations in decision-making. • Discuss the importance of computer-mediated communication in negotiation and decision-making.

  4. Chapter Topics • What is Negotiation? • The Negotiation Process • Environmental Context of International Negotiations • Managing Negotiation and Conflict • Ethics in International Negotiations • What is Decision-Making? • The Decision-Making Process • Internal and External Factors • Implications for Managers

  5. Negotiation The process of verbal and non-verbal exchanges between two or more parties with the goal of reaching a mutually satisfactory agreement

  6. Bargaining The process of arguing and haggling over prices and other details involved in transactions of goods and services, common in flea markets, bazaars, and fairs all over the world

  7. Situational Characteristics Influencing Cross-Border Negotiations • Context of the negotiation • Physical arrangements • Time limits • Status differences

  8. Fundamental Elements of the Negotiation Process • Two or more parties involved in real or perceived conflict over important goals • Shared interest in reaching an agreeable solution • Background preparations leading to the process of negotiation • A goal, but not a certainty, of reaching mutual agreement

  9. Ex. 13-1: Stages of Negotiation in International Management

  10. Ex. 13-2: Differences in Negotiator Strategies and Tactics in Three Countries Individual Tactics as a Percentage of Total Tactics

  11. Ex. 13-2 (contd.) Occurrences in a 30-Minute Bargaining session

  12. Ex. 13-3: Comparison of Cultural Approaches to Negotiation

  13. Ex. 13-3 (contd.)

  14. Ex. 13-4: Differences Between American and Chinese Culture and Approach to the Negotiation Process Contrast of Basic Cultural Values American Task and information oriented Egalitarian Analytical Sequential, monochronic Seeks the complete truth Individualist Confrontative, argumentative Chinese Relationship oriented Hierarchical Holistic Circular, polychronic Seeks the harmonious way Collectivist Haggling, bargaining

  15. Ex. 13-4 (contd.) Approach to the Negotiation Process American Quick meetings Informal Make cold calls Full authority Direct Proposals first Aggressive Impatient A “good deal” Chinese Long courting process Formal Draw on intermediaries Limited authority Indirect Explanations first Questioning Patient A long-term relationship nontask sounding information exchange means of persuasion terms of agreement

  16. Support for the Negotiation Process by Decision Support Systems • Reducing the amount of time that is necessary for feedback from headquarters in order to carry out effective negotiations • Providing a large amount of data and information on alternative scenarios that may result from the negotiation process • Increasing the likelihood that important data and information are available when needed

  17. Conflict Conflict can be understood as a state of disagreement or opposition between two parties, where if party accomplishes their objectives, the other party is unable to achieve its desired outcomes

  18. Ex. 13-5: Nature of ConflictBetween Members of Low and High Context Culture

  19. Decision-Making The conscious process of moving toward objectives after considering various alternatives. It is concerned with making an appropriate choice among a multitude of possible scenarios.

  20. Ex. 13-6: Steps in the Decision-Making Process 1. DEFINE THE PROBLEM 2. ANALYZE THE PROBLEM 3. IDENTIFY DECISION CRITERIA AND THEIR IMPORTANCE 4. DEVELOP AND EVALUATE ALTERNATIVE SOLUTIONS 5. CHOOSE THE BEST SOLUTION 6. IMPLEMENT THE SOLUTION 7. EVALUATE THE OUTCOMES

  21. Ex. 13-7: Deductive Versus Inductive Style of Decision-Making DEDUCTIVE DECISION-MAKING INDUCTIVE DECISION-MAKING General facts and objective observations Specific information and details General facts and objective observations Specific information and details DECISION

  22. Key Terms and Concepts • Negotiation • International negotiation • Bargaining • Relationship building • Difference in ideology • Conflict • Decision-making • Programmed decisions • Non-programmed decisions • Deductive decision-making style • Inductive decision-making style

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