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Cross-Cultural Negotiation:

Negotiation:

• Bargaining process between two or more parties (each with its own
aims, needs, and viewpoints) seeking to discover a common ground
and reach an agreement to settle a matter of mutual concern or resolve
a conflict.
Individual Negotiation Styles:

• Shell identified five styles/responses to negotiation.


• Individuals can often have strong dispositions towards numerous styles.The style
used during a negotiation depends on the context and the interests of the other
party, among other factors. In addition, styles can change over time:
1. Accommodating
2. Avoiding
3. Collaborating
4. Competing
5. Compromising
Continued…

1. Accommodating:
• Individuals who enjoy solving the other’s problems and preserving personal
relationships; sensitive to the emotional states, body language, and verbal signals
of the other parties. They can, however, feel taken advantage of in situations when
the other party places little emphasis on the relationship.
2. Avoiding:
• Individuals who do not like to negotiate and don’t do it unless they must; they tend
to defer and dodge confrontation; however, they may be perceived as tactful and
diplomatic.
Continued…

3. Collaborating:
• Individuals who enjoy negotiations that involve solving tough problems in
creative ways. Collaborators are good at using negotiations to understand the
concerns and interests of the other parties. They can, however, create problems by
transforming simple situations into more complex ones.
4. Competing:
• Individuals who enjoy negotiations because they present an opportunity to win
something. Competitive negotiators have strong instincts for all aspects of
negotiating and are often strategic. Because their style can dominate the
bargaining process, competitive negotiators often neglect the importance of
relationships.
Continued…

5. Compromising:
• Individuals who are eager to close the deal by doing what is fair and equal for all
parties involved in the negotiation. Compromisers can be useful when there is
limited time to complete the deal; however, compromisers often unnecessarily
rush the negotiation process and make concessions too quickly.
Hofstede Model:
The Hofstede culture matrix:

• Geert Hofstede, sociologist Framework for Assessing Culture:


1. Small vs. large power distance
2. Individualism vs. Collectivism
3. Masculinity vs. Femininity (Achievement vs. Quality of Life)
4. Weak vs. strong uncertainty avoidance
5. Long vs. short term orientation
Hofstede Culture Model:
1. Power Distance:

• The extent to which the less powerful members of organizations and institutions
(like the family) accept and expect that power is distributed unequally.
• Cultures with stronger power distance will be more likely to have decision-
making concentrated at the top of the culture. i.e. US
2. Individualism/Collectivism:

• The extent to which the society is organized around individuals or the group
• Individualism/collectivism orientation influences a broad range of negotiation
processes, outcomes, and preferences.
• Individualistic societies may be more likely to swap negotiators, using whatever
short-term criteria seem appropriate.
• Collectivistic societies focus on relationships and will stay with the same
negotiator for years.
3. Masculinity/Femininity:

• The extent cultures hold values that are traditionally perceived as masculine or
feminine.
• Masculine: Represents a preference in society for achievement, heroism,
assertiveness, and material rewards for success. Society at large is more
competitive.
• Femininity: stands for a preference for cooperation, modesty, caring for the weak
and quality of life. Society at large is more consensus-oriented.
4. Uncertainty Avoidance:

• Indicates to what extent a culture programs its members to feel either


uncomfortable or comfortable in unstructured situations.
• Negotiators from high uncertainty avoidance cultures are less comfortable with
ambiguous situations--want more certainty on details, etc.
5. Long vs. short term orientation:

• Short: Prefer to maintain time-honored traditions and norms while viewing


societal change with suspicion
• Long: Take a more pragmatic approach: they encourage thrift and efforts in
modern education as a way to prepare for the future.
The top ten ways that culture can affect your negotiation:
1. Negotiating goal:Contract or relationship

• Negotiators from different cultures may tend to view the purpose of a negotiation
differently.
• Relationship goal: requires investment in getting to know each other and
building trust.
• Contract goal: efforts are focus on developing the contract terms.
2. Negotiating attitude: Win-Lose or Win-Win

• Because of differences in culture, personality, or both, business persons appear to


approach deal making with one of two basic attitudes.
• Win-win negotiators see deal making as a collaborative, problem-solving process.
• Win-lose negotiators view it as confrontational.
• Zero-sum: Make benefit on behalf of other party.
3. Personal style: Informal or formal

• Personal style concerns the way a negotiator talks to others, uses titles, dresses,
speaks, and interacts with other persons. Culture strongly influences the personal
style of negotiators.
• Formal style insists on addressing counterparts by their titles, avoids personal
anecdotes, and refrains from questions touching on the private or family life of
members of the other negotiating team.
• Informal style tries to start the discussion on a first-name basis, quickly seeks to
develop a personal, friendly relationship with the other team, and may take off his
jacket and roll up his sleeves when deal making begins in earnest.
4. Communication: Direct or indirect

• Methods of communication vary among cultures. Some emphasize direct and


simple methods of communication; others rely heavily on indirect and complex
methods.
• Direct: Clear and definite response to your proposals and questions.
• Indirect: Comments, gestures, and other signs.
5. Sensitivity to time: High or low

• High: Try to reduce formalities to a minimum and get down to business quickly.
• Low: Need to invest time in the negotiating process so that the parties can get to
know one another well and determine whether they wish to embark on a long-term
relationship.
6. Emotionalism: High or low

• High:
• Show their emotions at the negotiating table. i.e.Latin American
• Low:
• Hide their feelings. i.e.japanese
7. Form of agreement: General or specific

• General: The essence of the deal is the relationship between the parties. If
unexpected circumstances arise, the parties should look primarily to their
relationship, not the contract, to solve the problem.
• Specific: Unequal bargaining. The stronger party always seeks a detailed
agreement to “lock up the deal” in all its possible dimensions.
8. Building an agreement: Bottom up or top down

• Start with general principals and move to the details?


• OR start with specifics and general principals emerge from details?
9. Team organization: One leader or group consensus

• One key decision maker: Complete authority to negotiate


• Group: representatives or specialists from various internal departments.
• One leader: may reach agreements faster
• Group: may anticipate and solve problems before they become emergencies
10. Risk taking: High or low

• Share information, try new methods, tolerate uncertainty. i.e. Japan


• Avoid moving too fast Focus on mechanisms to lessen risks Provide information
(on market, company, procedures, etc.) Build relationship and trust Move step-by-
step not all-at-once. i.e. US
Culturally Responsive Negotiation Strategies:

• When choosing a strategy, negotiators should:


i. Be aware of their own and the other party’s culture in general
ii. Understand the specific factors in the current relationship
iii. Predict or try to influence the other party’s approach
• Strategies are arranged based on the level of familiarity (low, moderate, high) that
a negotiator has with the other party’s culture.
Low Familiarity:

 Employ agents or advisers (unilateral strategy):


• Useful for negotiators who have little awareness of the other party’s culture.
 Bring in a mediator (joint strategy):
• Encourages one side or the other to adopt one culture’s approaches or mediator
culture approach.
Induce the other party to use your approach (joint strategy):
• The other party may become irritated or be insulted.
Moderate Familiarity:

Adapt to the other negotiator’s approach (unilateral strategy):


• Involves making conscious changes to your approach so it is more appealing to
the other party.
 Coordinate adjustment (joint strategy):
• Involves both parties making mutual adjustments to find a common process for
negotiation.
High Familiarity:

 Embrace the other negotiator’s approach (unilateral strategy):


• Adopting completely the approach of the other negotiator (negotiator needs to
completely bilingual and bicultural).
 Improvise an approach (joint strategy):
• Crafts an approach that is specifically tailored to the negotiation situation, other
party, and circumstances.
 Effect symphony (joint strategy):
• The parties create a new approach that may include aspects of either home culture
or adopt practices from a third culture.

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