IBUS 681, Dr. Yang1 Negotiation and Conflict Resolution Chapter 5.

IBUS 681, Dr. Yang 1

Negotiation and Conflict Resolution

Chapter 5


Learning Objectives

Define negotiation and understand the basic negotiation processExplain how culture influences the negotiation processConsider the impact of situational factors and negotiating tactics on negotiation outcomes


Learning Objectives (cont.)

Analyze the differences between intra-cultural and cross-cultural negotiationsDiscuss the role of culture in the conflict resolution processAppreciate how approaches to conflict influence negotiationIdentify ways to become a better cross-cultural negotiator


Negotiation

The process of bargaining between two or more parties to reach a solution that is mutually acceptable

Reggie’s Toy Store in South Africa vs. Toys “R” US in the U.S.


The Negotiation ProcessThe goal

Win-loseLose-loseWin-win solution

Distributive outcomeDetermining the settlement range

Integrative agreementA non-fixed piece of pie


Stages in the Negotiation Process

PreparationRelationship-BuildingInformation ExchangePersuasionAgreement


Culture and the Negotiation Process

Interests and prioritiesStrategies

Confrontational strategyMotivation strategyInfluence strategy: BATNA as a power base Information strategy


Culture and the Negotiation StrategyCultural

CharacteristicTypical Behaviors

Individualistic Sets high person goals Rejects acceptable but suboptimal agreements Has high self-interest, little concern for other parties' interests

Collectivistic Cooperative with in-group members, willing to search for

mutually satisfying agreement With out-group members, may be more competitive

Egalitarian

Refers to BATNA and other sources of power infrequently if negotiation is moving towards agreement

Prefers to focus on issues, sharing information on priorities and interests, noting similarities and differences

Hierarchical More likely to accept and use all types of power — status,

BATNA, persuasion

Low-context Prefers direct information sharing

High-context Prefers indirect information sharing


How Culture Influence the Negotiation Process?

Degree of ConsensusBargaining rangesConcept of winningPerception of the negotiation process


Japanese Style of Negotiation

High emphasis on consensusEqual representation from the firmTake time to learn about othersAgreement not a too restrictive contractLeave room for honorable breakoutHarmony and long-term relationship between parties


Situational Factors

Geographical LocationRoom ArrangementsSelection of NegotiatorsTime Limits


Verbal Tactics

PromisesThreatsRecommendationsWarningsRewards

PunishmentsNormative appealsCommitmentsSelf-disclosureQuestionsCommands

Initial Offer Verbal Negotiating Behaviors:


Cross-Cultural Negotiation at the Climate Change Conference of Industrial Countries, Kyoto, 1997

Issues of concern: Global warmingGoal: To reduce emission by assigned percentage points by 2012:

Japan - cut 6% below the 1996 levelU.S. - 7%EU - 8%

Japan’s limit: 5%

Issues of concern: Global warmingGoal: To reduce emission by assigned percentage points by 2012:

Japan - cut 6% below the 1996 levelU.S. - 7%EU - 8%

Japan’s limit: 5%

U.S. delegation called the White House to report the impasseU.S. Vice President Al Gore called Japan’s Prime Minister Ryutaro Al Gore’s cross-cultural communication worked!Hashimoto at 2 a.m.How?

U.S. delegation called the White House to report the impasseU.S. Vice President Al Gore called Japan’s Prime Minister Ryutaro Al Gore’s cross-cultural communication worked!Hashimoto at 2 a.m.How?


Al Gore’s Cross-Cultural Communication

First praised Hashimoto for Japan’s leadership in playing the host to the conference (hierarchical norms)

Then pointed out how bad it would look for the host country to derail the agreement over a measly percentage point (used collectivism, hierarchy and face concept)

That worked successfully!


Nonverbal TacticsSilenceConversational OverlapsFacial GazingTouching


Conflict Characteristics of Low- and High-Context CulturesKeyQuestions Low-Context Conflict High-Context Conflict

Why:Why:e.g., Why do we e.g., Why do we need a contract need a contract or need to reach or need to reach an agreement?an agreement?

When:When:e.g., When do e.g., When do conflicts occur?conflicts occur?

Analytic, linear logic; instrumental oriented;dichotomy between conflict and conflict parties

Individualistic oriented; low collective normativeexpectations; violations ofindividual expectations create conflict potentials

Synthetic, spiral logic; expressive oriented; integration of conflict and conflict parties

Group oriented; high collective normative expectations; violations of collective expectations create conflict potentials


Conflict Characteristics of Low- and High-Context Cultures

KeyQuestions Low-Context Conflict High-Context Conflict

What:What:e.g., What to say e.g., What to say or not to say?or not to say?

How:How:e.g., How to e.g., How to express yourself express yourself or make a or make a proposal?proposal?

Revealment; direct, confrontational attitude; action and solution oriented

Explicit communication codes; line-logic style; rational-factual rhetoric; open, direct strategies

Concealment; indirect, non-confrontational attitude; “face” and relationship oriented

Implicit communication codes, point-logic style: intuitive-affective rhetoric; ambiguous, indirect strategies


Becoming a Better Cross-Cultural Negotiator

Understand your negotiating partner

Consider situational specifics

Decide how to handle actual negotiations


Cross-Cultural Etiquette and Behavior: The BasicsGreetings How do people greet and address one another? What role

do business cards play?

Degree of formality

Will my counterparts expect me to dress up and interact formally or informally?

Gift giving Do business people exchange gifts? What gifts are appropriate? Are there taboos associated with gift giving?

Touching What are the attitudes toward body contact?

Eye contact Is direct eye contact polite? Is it expected?

Deportment How should I carry myself? Conservative or contemporary? Formal or casual?

Emotions Is it usual or unprofessional to express emotions?

Silence Is silence awkward? Expected? Insulting? Respective?

Eating What are the proper manners for dining? Are certain food taboo?

Body language Are certain gestures or forms of body language rude?

Punctuality Should I be punctual and expect my counterparts to be as well? Or are schedules and agendas fluid?


Variables in the Negotiation ProcessRelationships Do relationships grow out of deals or deals arise from

already developed relationships?

Communication patterns

Are communications direct and low-context or indirect and high-context? Do nonverbal cues play a significant role?

Decision-making process

Is it top-down or based on consensus? Are there any influential parties not appearing at the negotiation table?

Approach to building agreement

What level of detail is required? Is it appropriate to focus on specifics first, building up toward an overall deal or to seek agreement on general principles, later working through the details?

Forms of agreement Is the agreement based on trust, the credibility of the parties, moral commitment, or a legally binding contract?

Implementation of agreement

Is the agreement just a starting point in what is expected to be an evolving relationship? Will renegotiations occur as warranted under the assumption that all contingencies cannot possibly be foreseen?

Trust Is trust based on relationship, past experience, intuition, or detailed rules in which as many contingencies as possible are foreseen?


Convergence or Divergence?

Greater knowledge and understanding of cultureIf moderate adaptation proves effective

Greater knowledge and understanding of cultureIf moderate adaptation proves effective

Ingrained cultural patterns of behaviorPerception that own culture helps to negotiate effectively

Ingrained cultural patterns of behaviorPerception that own culture helps to negotiate effectively


Implications for ManagersCross-cultural negotiations constitute an important part of international manager’s jobUnderstanding dynamics of negotiation process and the influence of culture can help improve negotiating outcomesModerate adaptation may be most effective

IBUS 681, Dr. Yang1 Negotiation and Conflict Resolution Chapter 5.

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Transcript of IBUS 681, Dr. Yang1 Negotiation and Conflict Resolution Chapter 5.