CROSS-CULTURAL ISSUES IN NEGOTIATIONS

JAPAN

Agenda

Introduction

The Culture

Implications for Negotiation

Post Negotiation

Agenda

Introduction

The Culture

Implications for Negotiation

Post Negotiation

RP

Introduction

Not sufficient to only know language; critical to Not sufficient to only know language; critical to understand crucial differences in cultural valuesunderstand crucial differences in cultural values

Agenda

Introduction

The Culture

Implications for Negotiation

Post Negotiation

Business organization

Hierarchical and Bureaucratic

High degree of harmony and cooperation

Key focus on quality

Information oriented

Focus on building long term relationships and emphasize Focus on building long term relationships and emphasize on long term benefitson long term benefits

Seniority system

Based on factors like age, sex, family name, occupation, physical features and birthplace

Titles are extremely important - signifies prestige and respect

Hierarchy legitimates the use of power

Japanese will always examine relative positioning in Japanese will always examine relative positioning in negotiationnegotiation

Decision making

Try to deal with higher ranks and in groups, factor in Try to deal with higher ranks and in groups, factor in delaysdelays

Centralized

‘Ringi’ system – all members involved in the process

Often slow – unwillingness to take risk and avoids on the spot decision making

Long term perspective

Other aspects

Avoid excessive assertiveness, may be viewed as Avoid excessive assertiveness, may be viewed as aggressiveaggressive

Punctuality- always be on time

Indirectness critical in communication and avoid conflicts

Private people and uncomfortable with physical contact

Japanese less pressured by deadlines, slowdown as complications develop – threatened by stressful situations

Agenda

Introduction

The Culture

Implications for negotiations

Post Negotiation

Pre-negotiation

Emphasize on building trust and long term relationshipEmphasize on building trust and long term relationship

Meet socially before beginning formal negotiation – avoiding social conversation may lead to bad impression

Establish and maintain harmony (Wa) – important aspect of Japanese social life

Exchange of business cards (Meishi) - use both hands, spend 20-30 seconds on examining their card RP

Information exchange

Be patient and persistent and ready with information!!Be patient and persistent and ready with information!!

Wait for counterpart’s signal before starting negotiation

Japanese are information oriented - offer detailed explanations before making actual proposal

Ensure to discuss long term generalized goals

Use informal channel of communication to get the true feeling of the Japanese

Persuasion

Maintain “Wa” at all timeMaintain “Wa” at all time

Patience and intelligence in collecting information without giving anything away is their style of negotiation

Avoidance strategies like non verbal expressions and silence used often – negotiator should not appear desperate

Avoid using aggressive tactics and threats. Negotiator asking for high price may destroy the trust built RP

Concession and agreement

Settle overall agreement first and then detailsSettle overall agreement first and then details

Make the first proposal and receive counter proposal – focus on reciprocity

Japanese examine all issues simultaneously in a more holistic approach

Concessions are made only near the end of the talks and usually all at once – basic goal of long term mutual benefit

Customary to give the buyer a discount (called sabitsu) when agreement is reached - to demonstrate friendship and sincerity

Agenda

Introduction

The Culture

Implications for negotiations

Post Negotiation

Post-negotiation

Emphasize win-win situation and help increase the size Emphasize win-win situation and help increase the size of the pieof the pie

Fundamental approach is to emphasize the relationship being created

Specific items of a contract always open to renegotiation if the circumstances change

Signing manifested by ceremonial meetings and exchange of gifts

Munches!!

Emphasize win-win situation and help increase the size

of the pie

Over 90% of the Japanese population buys a comic-magazine daily

Frogs are the symbol of good luck in Japan

Japanese drink tea with almost every meal

Heavy traffic – In Tokyo, a bicycle is usually faster than a car for most trips up to 50 minutes