Negotiating Across Cultures

MANAGING ACROSS CULTURES
NEGOTIATING
ACROSS CULTURES
Robert J. Greenleaf
Training Management Corporation

Princeton Training Press • Princeton, New Jersey
NEGOTIATING ACROSS CULTURES
Published by:
PRINCETON TRAINING PRESS
Princeton, New Jersey
a division of
TRAINING MANAGEMENT CORPORATION
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Fax: (609) 951-0395
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Email: info@tmcorp.com
Editor-in-Chief: Monique Rinere-Güven, Ph.D.

Series Manager: Talia Bloch
Writer: Robert J. Greenleaf
Cover Design: Donna Lukis
Interior Design: Bonnie Jacobs
© 2000 TRAINING MANAGEMENT CORPORATION.

Managing Across Cultures Series:
Negotiating Across Cultures
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system,
or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording
or otherwise, without the prior written permission of the publisher.
Printed in the United States of America
ISBN: 1-882390-911
The Cultural Orientations Indicator®, COI® and TMC’s graphical depiction of our Cultural
Orientations Model are registered trademarks of Training Management Corporation;
Registration: 2,329,085 and 2,361,803.
4 Training Management Corporation

TABLE
OF
CONTENTS
TABLE OF CONTENTS
Preface iii
Introduction 1
Negotiation Defined
Chapter One: The Impact of Culture on Negotiating Behavior 5

Case Scenario
The Ten Dimensions of Culture
Cultural Analysis of the Case Scenario
Generalizations and Stereotypes in Negotiations
Chapter Two: The Seven Phases of International Negotiation 29

An Overview of the Seven Phases
Showing a Commitment to Negotiating Internationally
Chapter Three: Negotiating Effectively Across Cultures 35

Phase 1: Strategic Planning and Analysis
Phase 2: Network Approach and Entry
Phase 3: Building Personal and Business Relationships
Phase 4: Orientation and Presentation
Phase 5: Bargaining and Persuading Others
Phase 6: Reaching Agreement
Phase 7: Follow-Up and Maintaining Relationships
Conclusion
Appendix A: Cultural Orientations Model™ Quick Reference 73
Resources 75
Index 77
Training Management Corporation: Information & Publications


PREFACE
PREFACE
It is no secret that we are in an era of global business, one in which the world is moving toward
a completely transnational market. The rapid growth of increasingly interconnected markets,
processes and operations is affecting virtually every industry, company and worker today.
Between the increase in strategic business alliances and the proliferation of global
organizations, the share of the market run by companies that span two or more business
cultures is growing constantly.
These trends have changed the criteria for competitive advantage. Past successes in the old
marketplace do not guarantee future success in the new. Speed, responsiveness, flexibility,
effectiveness and an ever-increasing rate of innovation have become the cornerstones of
success in today’s market. Organizations everywhere have been transforming themselves to
adapt to these new requirements. Most organizations now understand that competitive
advantage no longer rests on formal structures but on a dynamic organizational culture that
effectively encompasses the mindsets, competencies and practices of the individuals who
create, support and sustain the organization––individuals who often do not share the same
cultural background.
This new type of organization also calls for a different type of manager––one who can create
a dynamic, flexible environment and draw upon his employees’ varied mindsets and skills.
Given the varied cultural backgrounds of the employees in global organizations and strategic
business alliances, culture has become one of the key areas of managerial competence and one
of the most challenging aspects of working in the global marketplace.
It was once assumed that business and commerce were culturally neutral zones in which
business professionals from various nations came together to participate in transactions
according to universally recognized norms. But, this is simply not true. The ways in which we
manage and conduct business are extensions of our social and cultural environments. Thus,
how we conduct business is deeply influenced by the cultural values and associated behavior
patterns that operate in that environment. Working in the multicultural environment of the
global marketplace, today’s managers are confronted with this every day. The individuals with
whom they conduct business and whom they manage often represent a collection of different
cultures with different, sometimes conflicting, practices.
The main challenge for today’s global manager is to combine a repertoire of managerial and
leadership skills with a thorough understanding of and sensitivity to culture. The “hard skills”
Training Management Corporation iii

of business tasks and the “soft skills” of the ways we interact and communicate have thus
become intertwined and can no longer be easily distinguished. Today’s manager must be able
to successfully integrate cultural knowledge into her understanding of how to manage
business and daily work. The guides presented in the Managing Across Cultures series are
designed to help you develop the cross-cultural competencies that have become essential to
every manager’s basic skill set.
The series explores the interplay between culture and particular aspects of managerial
competence. The areas discussed are:
Influencing and Persuading Across Cultures

Management Across Cultures
Managing Global Projects
Marketing and Sales Across Cultures
Presenting Across Cultures
Transcendent Teams™
Each title assumes that the reader is familiar with the fundamentals of the management
function under consideration and has a working knowledge of Training Management
Corporation’s Cultural Orientations Model™. Building on this knowledge, the authors discuss
how each cultural orientation shapes business practices and business interactions within these
management functions differently. They then describe which types of practices, within the
particular area, are most appropriate for each cultural orientation. Examples are drawn from
specific cultural settings to demonstrate the direct applicability of this analysis to actual cross-
cultural interactions. In some cases, the author also outlines the best strategies for each
managerial function in today’s leading business centers.
Culture and Cross-Cultural Competence

Unless we have experienced an environment that has changed or is somehow different from
those in which we have been socialized, we can easily overlook the profound influence of
culture on our thoughts, emotions and behaviors. Usually we do not spend much time
considering the deep roots of our behavior or that of others. These roots remain below the
level of our daily awareness. When they do surface or when we take the time to consider
them, however, we quickly become aware that culture is a diffuse, complex phenomenon that
we tend to minimize or even deny the existence of altogether.
Yet, ignoring culture and the role it plays in shaping our business behaviors and preferences
is dangerous. Many business arrangements have failed due to an unrecognized and/or
unacknowledged clash of cultures.
iv Training Management Corporation

PREFACE
What Is Culture?
Culture is a complex pattern of ideas, emotions
and observable manifestations (behaviors and
symbols) that tend to be expected, reinforced
and rewarded by and within a particular group.
Culture manifests itself in tangible ways, such
as in language, food, dress, rituals, customs, art
and music. But culture also consists of
intangible components, such as values, beliefs,
assumptions and the emotions with which
these are invested.
Culture can be thought of as an iceberg. The

visible portion of the iceberg consists of the
tangible elements, and the invisible, larger part
consists of the intangible components. Thus,
the tip of the iceberg can be said to consist of observable manifestations of culture, whereas
the thick, much more powerful block of ice below the surface of the water consists of the
thoughts and feelings that are associated with and connected to these behaviors. If these
thoughts and feelings remain invisible to us, and we have no insights into them, if we see only
behaviors different from our own, then, like any unsuspecting ship, we may run into the
iceberg and founder. This series will help keep you afloat.
The Five Aspects of Cross-Cultural Competence

Cultural competence rests on a process of global learning, which each manager must engage
in to become effective in the global business arena. This process has five different aspects to
it, which can be cultivated simultaneously and continuously. The following offers a quick
overview of the five aspects as we define them.
1. Open attitude
2. Self-awareness
3. Awareness of others
4. Cultural knowledge
5. Cross-cultural skills
The first aspect of understanding people and

organizations from other cultures is developing
and maintaining an open attitude or mindset.
Such a mindset is non-judgmental toward
difference––toward different values, attitudes,
beliefs and behaviors. It ensures that you
interact with others from a broad perspective
on the world around you and enables you to
recognize the interrelated nature and
Training Management Corporation v

interdependence of all cultures. Each individual has a responsibility to continually maintain

this open attitude.
The second aspect is the development of self-awareness. To increase your effectiveness, it is

crucial to recognize your own cultural preferences. This involves identifying the values,
attitudes and beliefs you hold and becoming aware of the behaviors you engage in as a
member of your own culture. Articulating these on an ever-deeper level enables you to
understand how you must appear to others whose values, attitudes, beliefs and behaviors differ
from your own.
The third aspect of cross-cultural competence is forming an awareness of others. This entails
recognizing the cultural values, attitudes, beliefs and behaviors of those around you. You
might ask yourself these questions:
• What are the cultural preferences of my counterparts?

• What cultural differences may be affecting our interactions?
• What cultural common ground do we have?
The fourth aspect is obtaining cultural knowledge. Once you begin to take account of your
counterpart’s behavioral preferences and approaches to business, you can base your awareness
on a comprehensive understanding of your counterpart’s social and business culture. This means
learning about your counterpart’s cultural values, beliefs and attitudes, as well as about the socio-
economic, political, historical and philosophical roots of the cultures that underpin them.
The fifth and final aspect of cross-cultural competence is developing cross-cultural skills.
Once you begin to understand the culture in which you will be operating and/or of those with
whom you shall be conducting business, you can translate this understanding into effective
business interactions.
None of these aspects of cross-cultural competence is ever complete. The process of global
learning requires an ongoing commitment of time and energy, and, perhaps more
importantly, the ability to admit that you never know everything and that you are always
open to learning something new. While the development of these competencies may be a
strategic imperative for today’s industries and organizations, it can also be an enormous
source of personal and professional enrichment and pride for those who engage in this
process as a lifelong undertaking.
The Cultural Orientations Model™ (COM™)

The Cultural Orientations Model™ is a comprehensive tool that provides both a framework for
understanding culture and the ways in which it affects people’s attitudes and behaviors and a
vocabulary for discussing these attitudes and behaviors. It was developed by Training
Management Corporation and was first introduced in TMC’s publication Doing Business
Internationally: The Guide to Cross Cultural Sucess in 1995. Since then, it has become the cornerstone
of TMC’s cross-cultural consulting solutions and has achieved a worldwide reputation.
vi Training Management Corporation

PREFACE
The COM™ describes culture as consisting of ten basic dimensions: Environment, Time,
Action, Communication, Space, Power, Individualism, Competitiveness, Structure and
Thinking. Each dimension breaks down into one to four continua along which a person and
culture might find themselves. This placement defines their orientation within the dimension.
In all, there are 17 continua. The dimension of time, for example, refers to the ways in which
an individual or culture perceives the nature of time and its use. Within this dimension is a
continuum that goes from fluid to fixed. A culture may emphasize the importance of
managing time precisely, or it may reinforce the concept of time as loosely defined. A person
or culture may be described as tending toward one or two of those continua. While one
individual may have a very strong tendency toward the fixed orientation of the time
dimension, another may have a strong orientation toward the fluid orientation, and yet a third
may have a relatively mild inclination on the fixed-fluid time continuum.
The Cultural Orientations Model™

For your convenience, a brief reference guide to all the dimensions and orientations is included
in the appendix to this publication. For a full overview and review of the COM™, please
consult the Cultural Orientations Guide, the foundational publication for understanding the
Cultural Orientations Model™.
The guides in Managing Across Cultures are
intended for use in conjunction with TMC’s
series Doing Business in Regions and Countries Around
the World. Doing Business in Regions and Countries
Around the World explores a particular national or
regional business culture through the lens of
the COM™. Each guide contains an in-depth
cultural profile of a particular country or region
followed by a discussion of its business
communication style, management practices,
negotiating tactics and decision-making
processes, as well as brief historical, political
and economic overviews. Doing Business in
Regions and Countries Around the World also
explains the difference between stereotyping
and generalizing and outlines the role of trust
in cross-cultural business interactions.
You are invited to use the Managing Across Cultures guides and the Doing Business in Regions and
Countries Around the World guides together in whichever way best suits your needs and interests.
It is recommended that you start by reading the Cultural Orientations Guide and grounding
yourself in a thorough knowledge of the COM™ and your own cultural orientations. You may
then select a title from either the Managing Across Cultures series or the Doing Business in Regions
and Countries Around the World series. One will offer you a comprehensive overview of the
dominant business culture in the target country or region while the other will provide you with
the necessary management skills across cultures in your area of business expertise.
Training Management Corporation vii

Doing Business Globally

Doing Business in Regions and Countries
Around the World
Doing Business in Asia Doing Business in Ireland

Doing Business in the Middle East Doing Business in Italy
and North Africa Doing Business in Japan
Doing Business in Latin America Doing Business in Malaysia
Doing Business in North America Doing Business in Mexico
Doing Business in Eastern Europe Doing Business in the Netherlands
Doing Business in Western Europe Doing Business in Norway
Doing Business in Argentina Doing Business in the Philippines
Doing Business in Australia Doing Business in Saudi Arabia
Doing Business in Belgium Doing Business in Singapore
Doing Business in Brazil Doing Business in South Africa
Doing Business in Canada Doing Business in South Korea
Doing Business in Chile Doing Business in Spain
Doing Business in China Doing Business in Sweden
Doing Business in Colombia Doing Business in Switzerland
Doing Business in France Doing Business in Thailand
Doing Business in Germany Doing Business in the United Kingdom
Doing Business in Hong Kong Doing Business in the United States
Doing Business in India Doing Business in Venezuela
Managing Across Cultures
Influencing and Persuading Across Cultures

Management Across Cultures
Managing Global Projects
Marketing and Sales Across Cultures
Presenting Across Cultures
Transcendent Teams™
viii Training Management Corporation

INTRODUCTION
INTRODUCTION
Globalization is exposing more people to cross-border negotiations and bargaining—which,

in turn, requires individuals and organizations to effectively work across cultures and
languages. This book focuses on how to transcend cultural differences in global negotiations.
Negotiating across cultures requires that you have an open attitude and flexibility in your
approach. You must be receptive to cross-cultural learning and maintain an open and
productive attitude toward difference. Successful negotiators must continuously challenge
their assumptions about other cultures and avoid quick judgments. In cross-cultural situations,
you will need to tolerate ambiguity and prepare for the complexity of cross-border
negotiations. Patience is a virtue; this remains true for cross-cultural negotiations as well.
Negotiating across cultures will require that you continuously pursue learning about other
cultures and their approach to negotiations.
To understand another person’s culture, we must first understand our own culture. Self-
awareness and knowledge about one’s own cultural preferences is crucial to negotiating across
cultures. A successful negotiator is able to understand and articulate his own cultural values,
beliefs and attitudes, as well as how they are reflected in negotiating behavior. Being able to
identify differences between one’s own culture and another’s—and to realize that these
differences can lead to misunderstandings—is important when preparing to negotiate across
cultures. Identifying ways to adapt your approach to support cross-cultural negotiations is
critical for success.
A successful negotiator is not someone who has memorized a list of do’s and don’ts, but, rather,
one who has developed a global feel for negotiating across cultures. This means that there is
a need to recognize the cultural values, attitudes, beliefs and behaviors of others in order to
develop new cross-cultural negotiation skills. Those negotiators who are more experienced
can correctly identify the cultural orientations of their counterparts and how they are
expressed in the counterparts’ negotiating behavior. But, first and foremost, an international
negotiator needs to be a good observer, to be able to articulate areas of shared cultural
perspectives in finding common ground. Gauging the approach of one’s counterparts to
negotiating, and their cultural orientations, will lead to less misunderstanding and stronger
cross-cultural relationships.
The more you understand about the history, economy, politics and business practices of a
specific culture, the more likely you will be able to succeed in negotiating across cultures. A
Training Management Corporation 1

successful negotiator has acquired, or can acquire as necessary, a comprehensive knowledge of
other, specific social and business cultures. Beyond correctly identifying the general knowledge
needed about a culture, a good negotiator may require specific business or industry knowledge.
Being able to identify how conflict is resolved, decisions are made, problems are solved, people
are motivated, performance is rewarded, relationships are established and maintained,
negotiations are conducted, people are led—all these are crucial to success. Finally, knowing
how to enter a network, get the necessary information to negotiate, and build the personal and
business relationships required to do business across cultures is also crucial.
The larger question is, how can we develop the cross-cultural skills needed to negotiate
successfully across cultures? A successful negotiator has the necessary skills to work effectively
across cultures in many different business contexts. Experienced negotiators can translate
cultural awareness and knowledge into negotiation skills. There is no easy, quick way to
improve one’s own ability to negotiate in cross-cultural or cross-border situations. Only
through experience and trial and error can you continue to refine and improve your
negotiation skills in order to adapt them appropriately to particular cultures and situations.
Understanding the cultural orientations of those with whom you negotiate across cultures is
crucial. Knowing, for example, that the Japanese tend to be formal and indirect in their
communication is important, but knowing how this affects your ability to negotiate with the
Japanese is even more important. In short, there is a need to go beyond an intellectual
understanding of how another culture negotiates. Knowing that the Japanese place great
emphasis on protocol and seniority in negotiations should influence your behavior the next
time you are in Tokyo. Changing your behavior to adapt to the particular negotiation context
and situation is the hallmark of a good international negotiator. Acknowledging the other
culture’s approach to negotiation and responding accordingly is the ultimate goal. By better
understanding our own cultural preferences and those of our negotiating partners, we can
respond more constructively, thereby transcending cultural differences.
Negotiation Defined
What is negotiation? Is it the simple process of influencing others to achieve our own ends, or is
it a complex process in which teams meet to hammer out agreements that spell out the roles and
responsibilities of both parties as they engage in a business transaction? One dictionary definition
of negotiate reads, “to confer with another or others in order to come to terms or reach an
agreement; to arrange or settle by discussion and mutual agreement” (The American Heritage
Dictionary 1209). The historical root of the word negotiation comes from the Latin word
negotium, meaning “business,” neg meaning “not,” and otium meaning “easy time or leisure”—
implying that people who negotiate with each other are not going to have an easy time.

Does the negotiation process really differ from one culture to another? The simple answer is
“yes.” The Japanese approach to negotiation, for example, is first to look at the web of

INTRODUCTION
relationships and obligations owed and then to come to an agreement with the other party,
based on consultation and discussion. Emotional connectedness and social obligations play a
role in the process, as the Japanese negotiatior strives to understand his counterpart’s position
and come to an agreement without an excessive amount of bargaining.
The Russian approach to negotiation is to have an informal discussion with one or more
people and, over a period of time, come to an agreement. This often means that agreements
are reached in informal situations away from the negotiating table––on a break, or when
socializing. The Russian negotiator employs persuasion, reasoning and rhetoric to convince
the other party that his position is the correct one. The exchange of favors between parties
away from the table is, in many ways, the same as the Western concept of exchanging
concessions at the table.
The U.S. approach to negotiation is to have two or more people meet and discuss common
and conflicting interests in order to reach a mutually satisfying agreement. This requires a
more collaborative style of negotiating (called win-win) as opposed to the zero-sum (“win-
lose”) style of negotiating often found in Europe and Asia.
As Pierre Casse and Surinder Deal state, “Negotiation is the process by which at least two
parties with different cultural values, beliefs, needs and viewpoints try to reach agreement on
a matter of mutual interest” (Casse and Deal 2). The key word here is “cultural.” Understanding
cultural differences is essential to understanding how other cultures define, and go about, the
process of negotiation.
There is a need to learn and understand the business practices and communication styles of
the other party in a negotiation. It is important to understand how to establish relationships,
how to assess expectations, how to reduce conflict and how to develop effective bargaining
strategies. When we encounter behavior that is unfamiliar, we tend to view the other’s
behavior through the prism of our own culture. This often leads us to negatively evaluate
unfamiliar or different behavior, which undermines trust and prevents us from moving the
negotiation forward to a successful conclusion. Another response to the other party’s
unfamiliar behavior is to ignore it. Because we do not understand it, we may miss opportunities
at the negotiation table. People perceive the process of negotiation from their own cultural
perspective or context. How we relate to each other, how we interact in the process, the ways
in which we present information, use influence strategies and attempt to reach an agreement
are all “culturally bound.”
To be successful in international negotiations, we need to:
• Understand the fundamental cultural preferences of the other party.

• Understand how our own cultural biases limit our ability to negotiate
across cultures.
• Determine whether our approach to entering a new network or company
is appropriate or not.
• Devote adequate time to planning and analysis of the other party.
• Create a plan with a strategy appropriate to the other party’s situation.

• Develop both a personal and a business relationship with the other party.
• Learn what type of information to present, how and when to present it,
and what kind of strategies of influence persuade others.
• Be flexible in negotiating in new environments or cultures.
• Pay attention to protocol, ceremonies, follow-up visits, and socialization
with the other party.
• Spend time maintaining the relationship and follow-up on commitments.
This book explores the ramifications of culture for international negotiations by discussing how
cultural orientations manifest themselves during the negotiating process and exploring in detail
the seven phases of international negotiations. Chapter 1 analyzes a cultural case scenario and
describes negotiating behavior across the ten dimensions of culture. Chapter 2 reviews the
basic elements of the seven phases of international negotiation and Chapter 3 provides a
thorough going examination of how different cultures approach each of the seven phases. An
appendix concludes the book with a quick review of the Cultural Orientations Model™.

THE IMPACT
1
OF
Chapter
THE IMPACT OF CULTURE
CULTURE
ON NEGOTIATING BEHAVIOR
Case Scenario
ON
John Banner smiled at the headline in the Wall Street Journal announcing “CreditCorp
Negotiates New Joint Venture in Japan.” The article went on to say that the “hard-charging”
NEGOTIATING BEHAVIOR
John Banner had successfully negotiated a U.S. $1.2 billion investment for a 10 percent stake
in Nagano Securities with an option for an additional 5 percent in the next two years. The new
joint venture in Tokyo was named “Nagano CreditCorp Shoken-Gaisha,” or NCS. The new
company would begin wholesale investment banking operations and sell financial products
and services to both individual and institutional customers throughout Asia. There would be
five new divisions—commercial market services, retail market services, electronic products,
management services and personal financial management services—which would sell
CreditCorp’s products and services in Japan.
The article went on to report that Nagano Securities had 127 domestic branches and 29
overseas offices with a total market capitalization of U.S. $5 billion. The president of Nagano
Securities was Kenichi “Ken” Mogi, age 58, a 35-year veteran of Matsubashi Bank and Nagano
Securities. CreditCorp, Inc., with its 500 domestic branches and operations in 27 countries,
was capitalized at U.S. $100 billion and had U.S. $200 billion in assets as of 1998. The CEO,
John Banner, age 47, was a 15-year executive of CreditCorp and had been promoted to CEO
upon his successful stint as executive vice president of sales in Europe, where he doubled
CreditCorp’s base of business in less than three years.
Banner thought back to the meeting he had had with Ken Mogi in New York one year ago,
when Banner had proposed that the two companies enter into a joint venture in Japan. Banner
had thought that there was a huge opportunity in Japan with its U.S. $10 trillion in personal
savings. CreditCorp, Inc., in its pursuit of establishing a global network of customers, products
and services, saw the joint venture as the entry point for increasing its share of Japanese
corporate and individual accounts for banking, securities and credit card services.
Two years ago, Nagano Securities had been embroiled in a scandal in which they had tried to
cover the losses of their preferred customers (from bad real estate loans and stock deals) at the
expense of Nagano’s minor individual accounts. Matsubashi Bank, a major shareholder of
Nagano Securities, had appointed Mogi as the new president just before his meeting with
Banner in New York. Most Japanese banks and securities companies had had problems after
the financial bubble burst in Tokyo in 1997 and 1998. As a result, Mogi was looking for an

infusion of capital to keep the company afloat. The joint venture seemed to be the answer to
his capitalization problems and CreditCorp’s need to increase their penetration of Japan.
Mogi invited Banner and his senior staff to Tokyo in January 1999 to discuss the joint venture
idea. During the negotiation, there were three main sticking points in reaching the final
agreement between CreditCorp, Inc. and Nagano Securities.
First, there was the problem of ownership. CreditCorp senior executives wanted a 51/49 split
to retain control of the joint venture. They reasoned that a U.S. $1.2 billion investment in the
joint venture gave them the right to control the company and its assets. Because the joint
venture would be in Japan, however, Nagano Securities wanted a 51/49 split in its favor. They
reasoned that their large Japanese client base would be reluctant to deal with a foreign
company in Japan’s very conservative banking environment.
Second, CreditCorp insisted that it should run the new joint venture and appoint the top
officers for NCS from its own management. CreditCorp reasoned that wholesale banking was
not Nagano’s strong suit, and that they had proven their inability to be financially sound by
U.S. standards when they became embroiled in the securities scandal in Japan. Nagano
Securities wanted its own people to head the new joint venture. They were willing to allow
CreditCorp to fill the operations and technology management positions, since they were the
dominant leader in the banking industry, but insisted that the board majority of the staff and
new president be Japanese.
Third, Nagano Securities was adamant that NCS absorb some 500 of the 2,000 “relationship
managers” or sales employees who were responsible for handling their major individual and
corporate accounts. They reasoned that for NCS to have credibility in the marketplace, it
would need the continuity of the sales force which would, in turn, create new business
opportunities in Japan. CreditCorp was extremely reluctant to allow these 500 managers to
be transferred to the new joint venture. With the low return on assets that Nagano Securities
had experienced in the past three years, CreditCorp managers felt that Nagano Securities was
dumping their poor performers into the joint venture and saddling NCS with the high cost of
Japanese salaries and benefits. Besides, with the technology CreditCorp was bringing to the
joint venture, such overstaffing would be unnecessary.
Banner assigned Roger Greene, 38, a Harvard MBA graduate and former Citibank vice
president of acquisitions, to negotiate the joint venture with Nagano Securities. On his team
were two other CreditCorp senior executives: Mary Ross, 42, who was in charge of business
development in the wholesale banking division, and Steve Martinez, 35, a rising lawyer in
CreditCorp’s trust department, from Miami. In addition, there was Wayne Tanaka—a second
generation Japanese-American who had graduated from the University of California,
Berkeley—who was the general manager of CreditCorp’s Tokyo office, and his interpreter,
Mitsuko Ueda, a recent graduate of Waseda University.
Nagano Securities assigned Junichiro Ando, 65, a graduate from Tokyo University and a former
bureaucrat from the Ministry of Finance, as lead negotiator. Ando had recently retired from
public service and had been accepted on the board of directors for Matsubashi Bank five years

THE IMPACT
ago. He also had been appointed as an advisor to Nagano Securities’ former president, Tomihiro
Izumi, and was the lead person in discussions with the government body investigating the
securities scandal. In the late 1980s, Ando had spent five years in Washington, D.C., working
on behalf of his government. The Japanese team consisted of eight members, including Toshio
Saito, 54, a 20-year veteran of Matusbashi Bank and president of Nagano Research Center, Ltd;
Hiro Hirayama, 53, Director of Corporate Securities; Koji Kobayashi, 42, assistant director of
OF
personnel and a graduate of Keio University; Masaki “Mike” Akahane, 38, manager of business
CULTURE
development and an MBA graduate from Stanford; Ari Matsuda, 32, a female manager in charge
of administrative affairs; and Tomoaki Itah, 28, a section manager in human resources. Also
assisting the Japanese side was Shuichi Ikegami, a senior director for corporate securities and
funds from Matsubashi Bank.
ON
Banner walked down to Roger Greene’s office and gave him a copy of the newspaper with the
article. Once again, he congratulated Greene on his successful negotiation with Nagano
Securities. Greene smiled as he thought back to his trip to Tokyo nine months earlier. He and
his team had arrived at Narita Airport after a 12-hour flight from New York, to be met not only
by Wayne Tanaka of CreditCorp Japan, but also by Junichiro Ando, Toshio Saito and four
other Nagano Securities staffers. A number of limousines provided by Nagano Securities
carried members of the two teams to the Imperial Hotel in downtown Tokyo, where the
CreditCorp executives would be staying during the negotiations. Ando informed Greene that
they had arranged for a dinner party at a famous Ginza restaurant at 7:00 p.m., to welcome
them to Japan. Although they were tired and suffering from jet lag, Greene accepted the
invitation on behalf of his team. They were soon picked up at their hotel and taken by taxi to
a restaurant, where a sumptuous feast and drinks were served. After much toasting and non-
business conversation, Greene found himself asking Ando about the next day’s negotiation,
and whether Ando had received the latest proposal and related information sent by
CreditCorp the week before. Greene was surprised when Ando deferred talking about the
negotiation and began a long conversation about his own experiences living and working in
Washington, D.C. At around 11:00 p.m., the party finished and the U.S. Americans were
informed that they would be picked up at 9:00 a.m. the next day and transported to Nagano
Securities’ head office in the Marunouchi district, where the negotiation would take place.
The following morning, Greene and the CreditCorp were greeted at the front door of the
Nagano Securities’ headquarters building and ushered into a large boardroom. Having awoken
in the early morning hours, the CreditCorp team had already spoken with headquarters over
the phone and learned that Banner had given an interview in New York to CNN’s “Financial
News,” which would be aired in Tokyo that evening.
Banner’s style of business was based on the “profit or perish” model. In the CNN interview he
was quoted as saying, “In the banking industry, we have to keep developing new services and
products. We can never relax because the fellow next door can enter the business anytime. We
have to run fast to succeed.” When he was asked about the negotiation with Nagano Securities
in Tokyo, he said, “Competition in the wholesale banking business on a global basis is very
keen. So, in a sense, we need to diversify our business to sustain growth worldwide. That is why
we are investing in Japan. With our banking strengths in on-line products and services we
should have no trouble leaping to the top of the wholesale banking business in Japan.” He went

on to conclude the interview with the following statement. “We have consistently followed a
path of international diversification through joint ventures, wholly owned subsidiaries and
minority investments leading to participation in 27 countries. We network into different
countries step by step, and where the markets seem promising we establish a new business. We
trade our technology and knowledge of banking to a new partner who has the local contacts
and the financial clout to help us receive a good return on our investment. If it proves profitable,
then we move on to another country. We continue as long as opportunities for profit continue.
If not, then we pull out just as quickly as we went in. At any one time we have a priority list of
six or seven countries we are studying for opportunities in the banking sector. Japan is at the
head of that priority list, and that is why we are talking to Nagano Securities.”
After an exchange of business cards, Greene formally introduced his team to the eight members
of the Japanese team sitting across from them at the long, mahogany negotiation table. Ando
thanked Greene for the introductions, then asked the person sitting to his right, Akahane, to
introduce the Japanese team in English. After the introductions, Ando welcomed the U.S. team
in Japanese, with Akahane translating his remarks into English. He went on for some time
discussing Nagano Securities’ past successes in joint ventures in Japan. Then he said:
In the past five years, we have established five joint ventures in cooperation
with two life insurance companies, three regional banks and a mutual loan and
savings company to provide our Japanese customers with quality products and
services. We also negotiated with JCB, a bank-affiliated credit card company
in Japan, to furnish credit card services to our consumers in Japan and abroad.
We are proud of our 50 years of history and we have been successful with our
joint venture partners because we enter into these agreements as if they were
a corporate marriage. We believe in an arranged marriage in which there is
give-and-take on both sides, just as occurs in a marriage between a Japanese
man and woman. For this to happen, we need to have good channels of
communication and mutual respect between our two companies. We will run
the joint venture with trust and respect for each other. Courtesy and a
continued dialogue between the two partners will allow us to resolve all
issues, big and small, that will be encountered in the marriage. We hope that
your Mr. John Banner will understand our situation in Japan.
Upon completion of his remarks, Ando asked Greene to talk about CreditCorp. Greene
thanked Ando for his welcoming remarks and proceeded to lay out the major differences
between the proposals of the two sides. He went on to list the three biggest issues: ownership,
management control and staffing. Then he asked Ando which of these three issues he would
like to address first. Akahane translated Greene’s remarks to Ando, but to his surprise, there
was no visible reaction. Ando sat quietly and after a long silence said, “Yes, we understand your
proposal well.” He then went on to ask Greene how they found their accommodations at the
Imperial Hotel, and whether this was their first trip to Japan. This small talk continued for
about 30 minutes.
After the light discussions, Ando nodded to Akahane, who went on to lay out the Japanese
proposal, which he continued doing for some time. For Greene and his team, this was the same

THE IMPACT
information that had previously been presented to them in New York in writing. It seemed that
their latest proposal was not being addressed at all. At the end of Akahane’s remarks, Ando stood
up and announced that he had arranged for a tour of their offices before adjourning for lunch.
The negotiation resumed at mid-afternoon, when the Japanese began asking questions
previously asked by the Japanese in writing and which CreditCorp thought it had addressed
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in its most recent proposal. Greene fielded some of the questions, but his team answered most
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of the questions, as they fell in a team member’s functional area. The U.S. Americans answered
the questions in a direct, straightforward and concise manner. Throughout the afternoon,
additional data and details were provided, either verbally or in writing.
During the negotiation, the Nagano Securities team often broke into side discussions in
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Japanese that sometimes lasted 15 minutes or more. When Greene asked Akahane what the
Japanese were discussing, he was told that they were merely reconfirming their understanding
of what had been said and that he should not worry. The U.S. Americans, growing restless,
pressed the Japanese to address the three main issues as presented, but were unsuccessful in
getting the Japanese to do so by the end of the first day of negotiations. The U.S. Americans
even wondered about the role of the others on the Nagano side, since instead of participating
in the discussion, they had just sat quietly and nodded in unison whenever Ando spoke.
Twice, Greene had tried to redirect the negotiation back to the three main issues of
disagreement. He had even offered to meet Ando’s request that the Nagano name come first
in the new joint venture if they could resolve the issue of ownership. He proposed that the
new joint venture be named “Nagano CreditCorp Shoken-Gaisha.” Although the Japanese
were agreeable to his offer, they were reluctant to address the ownership issue at that time. In
fact, Akahane went on to reintroduce issues that the U.S. side thought had already been
successfully addressed in earlier correspondence. This repeated questioning was annoying to
the U.S. team. At one point, Kate Myers interrupted Akahane to say, “Why are you asking the
same questions all over again? Haven’t we answered them sufficiently? Can’t we move on to
the real issues at hand?” The Japanese then became very quiet until Greene suggested that
everyone take a break.
During the break, Ari Matsuda approached the interpreter, Mitsuko Ueda, to ask her if Greene
and his team would be interested in having dinner with Ando and Toshio Saito that evening.
Ando was looking forward to treating them all as his guests at his favorite member’s club near
the office. Ueda passed on the invitation to Greene and, much to her surprise, Greene thanked
Ando but politely declined. After consulting with his team he stated that the U.S. team
members were still jet-lagged and in need of rest. He stated that he and his team would like to
return to the hotel where they could review the day’s proceedings and prepare for the next day.
At dinner, Greene and his team reviewed the day’s events and concluded that they were no
closer to an agreement than they had been prior to their departure from New York. In fact,
since the Japanese had not responded to their proposal sent the week before, they felt that
they were back at square one. Greene knew, ultimately, that CreditCorp’s joint-venture
strategy was to concentrate on the direct distribution of products and services to various
market segments in Japan. Their hope was to develop a product mix that would provide their

global clients with the best services in Japan. Banner was less concerned with the name of the
company or management issues than he was with profits from the joint venture.
Before the negotiation session began the next day, Ando introduced Shuichi Ikegami, from
Matsubashi Bank, to Greene. During an informal discussion, Ikegami explained that a few
members of the bank’s board of directors were concerned about the joint venture. He said that
member companies of the Matsubashi Group, a horizontally integrated conglomerate of
companies affiliated with Matsubashi Bank, had expressed their reservations about the joint
venture and had threatened to discontinue using Nagano Securities as their preferred
underwriter in the future. This news alarmed Greene and his team. After a brief side
discussion, they asked Ando to explain Nagano Securities’ business relationship with the
Matsubashi Group in greater detail. Ando then outlined the structure of the Matsubashi
kieretsu, the interconnected structure of the member companies. He stated that Mogi, formerly
with Matsubashi Bank, would handle this small problem, since his network at Matsubashi was
extensive. Greene and his team expressed their concerns about Matsubashi Group’s
relationship with Nagano Securities. Ando responded that if Greene had the time, perhaps he
could visit some of Mogi’s contacts at Matsubashi and explain CreditCorp’s proposal to
establish the joint venture. Greene agreed to do so, but didn’t understand what this ultimately
had to do with their discussions today.
The Nagano Securities team continued the negotiation with another round of questions and
expression of concerns. Ando proposed that the two sides address the issue of relationship
managers and the need for Japanese clients to feel comfortable with the services and products
of the new joint venture. What better way to do this than to make use of the sales force
already in place? He went on to explain the concept of shukko, or assigning staff to a subsidiary
or joint venture as a way of gaining experienced staff and a fast start-up in the marketplace.
Ando emphasized that relationships came first in Japan and that profits would be realized
later. Greene doubted that Banner and CreditCorp’s stockholders would wait patiently for
profits. He knew from his research on Japanese business practices that shukko was a traditional
way for Japanese companies to reduce head count and costs in times of recession or declining
business. He wondered whether the expense of higher salaries and benefits was justified,
based on the performance of these managers over the past three years, and told Ando this.
Greene and his team were concerned that Nagano Securities was using the joint venture to
dump poorly performing managers at a substantial cost to CreditCorp.
Ando assured Green that, if he agreed to accept the 500 relationship managers, the company
union would support the move of the 500 managers and agree to a 15 percent reduction in
salaries and benefits for those transferred managers. Greene knew that Nagano Securities had
a company union, but he had assumed that the union would not be problematic. The
discussion went on for some time and was finally resolved when Wayne Tanaka took Koji
Kobayashi aside during a break and proposed that Nagano Securities cover 25 percent of the
cost of salaries and expenses over the first two years of the joint venture. Although Greene
felt that this was a good idea, Mary Ross disagreed, saying that it would be awkward to
manage, measure and reward performance under Nagano’s present relationship management
system. In addition, once these workers were transferred, it would be difficult to fire poor
performers. Ando assured Greene that if he accepted the relationship managers, he (Ando)

THE IMPACT
personally would work with Kobayashi to select only the best managers for the joint venture.
Greene took his team aside and conferred with them. Tanaka told Greene that he was sure that
they should trust Ando’s judgment on this point. Greene, wanting to move the negotiation
ahead, readily agreed despite protests from Ross.
After lunch on the second day, and having just agreed to meet Nagano Securities’ request on
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the relationship managers, Greene decided to address the ownership issue. He stated that
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CreditCorp was willing to invest another 5 percent in the joint venture over the next two
years, should Nagano Securities agree to a 51/49 split, which would leave control in U.S.
hands. He reminded Nagano Securities of their current financial situation––that their
stockholders would want CreditCorp to have control to ensure a healthy stream of profits
back to the United States. Ando reasoned that Japanese stockholders such as Matsubashi Bank
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would want just the opposite to reassure Japanese customers that they could trust the new joint
venture. The discussion went on all afternoon with only one decision being made. The joint
venture and new company would be named Nagano CreditCorp Shoken-Gaisha, and listed on
the Tokyo stock exchange as NCS. However, both sides agreed to revisit the issue of
ownership later in the negotiation.
At the conclusion of the second day’s negotiation, Ando once again offered his dinner
invitation to Greene and his team. This time, Greene was happy to accept, but suggested that
he meet with Ando separately from his team and allow his team to prepare for the following
day. Ando agreed and picked Greene up at his hotel for dinner at his private club. Toward the
end of dinner, Ando told Greene that the issue of ownership was important to the Japanese
and could be a deal-breaker. He explained how difficult it had been to reach consensus on
their position, both internally and with the Matsubashi Group. Reaching agreement had been
extremely difficult and time consuming. Any changes on this point would be challenging for
Ando and his team. Beyond the issue of consensus decision-making, he revealed that Mogi had
used favors and obligations to align the senior managers of Nagano Securities and Matsubashi
Bank and get them to agree on the joint venture with CreditCorp. He asked that Greene talk
directly with Banner to see if a compromise could be reached wherein the Japanese side could
retain a 51 percent share of ownership. Greene told Ando that he would talk with Banner and
give him an answer the next day.
In his discussion with Banner, Greene learned that Banner was willing to sacrifice some control
as long as profits were high. CreditCorp was confident that their technology leadership and
expertise in wholesale banking would give them an edge in the key decisions of the joint
venture. Banner told Greene that, if Greene could staff key positions in the joint venture with
CreditCorp executives, he would be willing to give in to the Japanese request for a 51/49 split.
CreditCorp, however, would invest additional money into the joint venture based only on
future performance measurements to be agreed upon by both parties.
On the third day of the negotiation, Greene opened with a counterproposal. If Nagano
Securities would agree to CreditCorp’s request to staff the top management positions of the
joint venture, CreditCorp would be willing to agree to Nagano Securities’ need for ownership
control. After translating the counterproposal, Ando thanked Greene for his new proposal and
told him that he would get back to him after conveying the information to Mogi and his senior

staff. But before doing so, he was interested in learning more about CreditCorp’s plans for
staffing top management positions. Greene explained the organizational structure of
CreditCorp and how NCS would be integrated into their global operations. In addition, he
stated that CreditCorp’s leadership development program and succession planning would be
integral to staffing at NCS.
At the end of the morning session, Ando asked Greene and his team if they had planned any
sightseeing in Tokyo. He suggested that Greene’s team stay as guests at the Nagano’s company
resort house, a local onsen––or hot springs bath––in Kamakura that afternoon, and that they
could resume the negotiation the next afternoon. Greene was surprised at the unannounced
break in their discussions and suggested that they continue their talks to ensure that they
could come to an agreement before their scheduled departure on Friday evening. Ando told
Greene that Nagano Securities needed the additional time to present CreditCorps’s
counterproposal to their management. Reluctantly, Greene and his team agreed to the trip to
Kamakura.
Masaki Akahane and Ari Matsuda accompanied the team on the train ride to Kamakura from
Tokyo. Knowledgeable about the Kamakura area, Akahane provided amusing anecdotes to
entertain his guests. After visiting the Great Buddha of Kamakura and bathing at the onsen, the
group retired to a large tatami room, where dinner and drinks were served. After dinner, the
U.S. team was invited to go singing at a nearby karaoke bar. On the train ride home, Akahane
asked Greene about a recent article he had read in the Asian Wall Street Journal about a new joint
venture between a U.S. and Chinese company, in which the top management positions were
held jointly by both sides for a one-year period. This allowed both sides to learn from each
other and to manage the new company jointly. Akahane wondered if CreditCorp had any
experience with this type of management structure. Greene said that he had not read the
article, but that it sounded like a good idea worth considering.
Ando led off the Thursday afternoon session with a review of the negotiation to date and
Nagano Securities’ response to CreditCorp’s counterproposal on Wednesday. Nagano
Securities would be willing to give CreditCorp broad discretion on staffing the top
management positions if they agreed to the 51/49 ownership issue in favor of Nagano. Ando
explained some of the difficulties of hiring, developing and firing Japanese employees in
Japan. With the acceptance of the relationship managers and other employees transferred
from Nagano Securities, Ando was concerned that CreditCorp would have difficulty
motivating and retaining staff. Ando then asked Akahane to present his own proposal for
staffing key top-management positions at NCS. Akahane drew up an organizational structure
that had parallel positions at all senior management levels (for example, two vice presidents
of finance, one Japanese and one U.S.-American), explaining that such a structure would
integrate the two cultures and provide a consensus-based decision-making process for
resolving conflict. The presentation went on for some time, with Greene and his team asking
questions to clarify their understanding of the proposed structure.
Greene understood that, ultimately, staffing the new joint venture was an issue of creation and
control. He understood that conflicting cultural assumptions can have disastrous
consequences for new organizations. He was also aware that numerous Japanese and U.S.

THE IMPACT
joint ventures had tried parallel organizational structures, with little success. Greene thanked
Akahane for his presentation and told him that he would consider his proposal. He then
suggested that they keep this issue on the table until the following morning, and asked Ando
for a short break so that he could discuss the proposal with his own team members.
Greene felt that CreditCorp should stand firm on their need to staff the joint venture. Tanaka
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pointed out that CreditCorp managers would have little credibility with Japanese customers,
CULTURE
government officials or employees. He suggested that all selected managers have a thorough
understanding of Japanese language, culture and management practices. To ensure success, a
training and orientation program would be designed and implemented on both sides of the
joint venture. Tanaka also suggested that CreditCorp seriously review key positions and
determine which ones required the most interaction with the Japanese business environment
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and should be staffed by Nagano Securities and which should be staffed by CreditCorp.
Everyone agreed that the president of the new joint venture, the vice president of information
technology and the vice president of banking operations should be selected by CreditCorp.
Greene suggested that the position of chairman and that of vice president of human resources
and sales should be selected and staffed by Nagano Securities.
The meeting resumed after a two-hour break, and Greene responded to Akahane’s proposal for
staffing by countering with his own proposal, including the suggestion that the chairman of
the organization be Japanese. After some discussion, Ando told Greene that he and his team
would respond to this proposal on Friday morning. Greene approached Ando and asked if it
would be possible to meet privately after the session. In a private meeting room, Greene told
Ando that he would have a problem going back to Banner with the present deal if Nagano
Securities did not agree with their need to staff these key positions. He reminded him that
CreditCorp had conceded on two of the three issues brought up at the beginning of the
negotiation, and that he needed to show a positive result to Banner before he and his team
returned to New York. Ando nodded, exhaled slowly, and said: “I will do my best to support
your proposal.”
The following morning, Greene’s team was anxious to wrap up the negotiation and fly back to
New York. Ando again addressed the U.S. side and expressed his gratitude for their time and
effort. He went on to inquire whether Greene and his team would be available for a meeting
in two weeks in New York at CreditCorps’ headquarters. Ando told Greene that he would call
Banner personally to set up the meeting and hoped that Banner would be able to attend the
meeting. Ando then rose from the negotiation table and bowed to the U.S. side. Greene and
his team looked at one another in some confusion, not knowing what to do next. It appeared
that the negotiation had ended without an agreement.
The Ten Dimensions of Culture

Culture affects the negotiation process through the cultural orientations and behaviors that
individuals and groups bring to the negotiating table. Although these cultural orientations are
unlikely to be addressed during the negotiation, they play a significant role in the proceedings
and the final outcome.

The process of negotiation requires individuals and groups to adopt a position based on their
interests and needs. Underlying cultural orientations and core values, which may be
nonnegotiable or, at best, marginally negotiable, influence these positions. To arrive at a
mutually beneficial agreement, both sides must conduct “cultural due diligence.” Cultural due
diligence is the process of clarifying the other side’s cultural orientations and the resultant
behavior before entering into the negotiation.
The following section considers each of the ten dimensions of TMC’s Cultural Orientations
Model™ and the ways in which each can manifest itself in the negotiating process.
Environment
All negotiators strive to control their immediate environment in a negotiation. The context of
the negotiation, the physical location, time, language and psychological space are
manipulated to each side’s advantage. There are basically three approaches to controlling the
immediate environment or the context of the negotiation: control, harmony and constraint.
A negotiator who prefers a control orientation drives all aspects of the negotiation, from
choosing the physical location to setting the agenda. As an individual negotiator, you expect
to influence and change the negotiation environment to fit your needs. Schedules,
responsibilities and performance standards are clearly communicated to both sides. You are
not shy in taking charge of any situation and are highly optimistic and self-confident in your
approach. Alternatives or options are selected to enhance problem-solving as issues are
outlined and discussed. Opportunities are seized and risks taken to deliver dynamic and
novel business propositions. A proactive approach to solving problems through persistence
and creativity is employed. You often assume that others should conform to your own
approach to negotiating. A highly control-oriented person displays impatience with
intangible and vague statements, assessments and evaluations of ongoing discussions by the
other side. Communications technology is used to bridge distance, time and cultural
differences. Conflict over positions, the process of give-and-take, and the need to bargain
are assumed and expected.
A person who has a harmony orientation to the environment seeks out members of his group or
the other side to arrive at a mutually beneficial solution. As an individual negotiator, you expect
to balance your own approach to negotiation with the needs of the other party or to meet
external constraints. Consultation before making any decision is assumed and expected. Issues
are reframed and alternatives selected to present a flexible position to all involved. Attempts are
made to adjust initial positions to those of the counterpart, and there is the expectation that they
will adjust to the other side’s needs or wants as well. Establishing and maintaining positive
relationships is of key importance to you and the members of your team. Compromise and
conciliation are used to avoid conflict and reduce the risk to all parties. You exhibit stress when
other negotiators display a win-lose or confrontational style of negotiation. Opportunities and
business propositions tend to be well thought out and take into consideration the needs of the
other side. The approach to risk is to look for precedent and maintain the status quo rather than
to seek novel approaches to problem-solving. When proposing a new idea or making plans, you
readily assume that a compromise will be required to reach agreement.

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A constraint orientation defines positions, needs and interests according to the outside forces
that limit or prevent action. As an individual negotiator, you expect that external forces and
conditions beyond your control will determine the outcome of the negotiation. Issues and
alternatives are restricted by strong religious beliefs, changing economic conditions or
governmental regulations. Forecasting future needs and planning for the future are limited.
Generally, you accept the status quo and adjust your position to the limits set by the other side
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or the external constraints you cannot control. You prefer to negotiate with clear guidelines
CULTURE
and parameters given by superiors or those in charge. You assume that you must act within the
given limits of a set of negotiation parameters. You have a tendency to frame issues and
alternatives according to the demands, actions and approaches of your counterpart.
Opportunities and business propositions are guided by considerations of security and of
minimizing risk at all stages of the negotiation. Consistency and predictability in business
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partners is sought from the other side. A reactive approach to problem-solving is employed.
The creation of elaborate and fixed contingency plans helps to mitigate risk or change.
Renegotiation after the signing of the agreement is assumed.
Time
Cultures with single-focused and fixed orientations to time are sometimes referred to as
monochronic cultures. They are called monochronic because they view time as being
composed of a series of single events with definite beginning and ending times. Individuals
from monochronic cultures break negotiating positions into manageable issues and focus on
one issue at a time in a step-by-step manner. As an individual negotiator, you prefer a simple,
straightforward situation that can be broken down into a series of tasks to be performed over
time. The approach to problem-solving is analytical. The most important issues are prioritized
and handled one at a time. Time is highly valued and should be defined and managed
precisely. It is a major consideration when planning and making commitments. Timelines are
rigidly defined and adhered to throughout the negotiation. Being punctual and keeping
precisely to a schedule are seen as indications of good planning and reliability. Progress can
be measured by how many issues have been resolved. You easily get frustrated when people
do not adhere to schedules or plans. Agreements are crafted to show immediate effects and to
have their effect in the short term. “Quick fixes” are acceptable, and change is expected, when
crafting acceptable solutions.
Cultures with multi-focused and fluid orientations to time, by contrast, are called polychronic.
Individuals in polychronic cultures do not view time as consisting of a series of discrete events
that occur in sequential order over time. Instead, they view events as well as relations over time
as interconnected in a myriad of ways. As negotiators, they prefer a dynamic environment and
welcome change. Therefore, they are able to pay attention to multiple tasks and relationships
simultaneously. When negotiating, they tend to focus on the entire negotiation, not just
individual issues. Issues can be discussed at any time during the negotiation and often are
reintroduced for further clarification toward the end of the negotiation. As an individual
negotiator, your approach to problem-solving is holistic, and various perspectives can be
discussed during the negotiation. Keeping to exact timelines and schedules is not essential. You
feel that time cannot be tightly defined or tracked for management purposes. You often display
frustration when you have to concentrate on one person, issue or question for an extended

period of time. Time is structured according to changing situational needs; therefore, schedules
and deadlines are seen only as guidelines or expressions of intent.
The present time orientation emphasizes bottom-line results, and progress will be measured
in quarters, months, weeks and days. Although concerns for a long-term future or relationship
are expressed in the negotiation, emphasis is on the immediate present and the short-term
future. As an individual negotiator, you are motivated by promises of quick results and
handling day-to-day problems or crises. This present orientation often excludes the need for
long-term planning or results. Those with a past time orientation expect longer-term planning
horizons in which precedent and past relationships are taken into consideration. Stability and
continuity with traditions are important to those with a past orientation, and plans are judged
by how well they adhere to traditions or past precedents. Precedents and past successes are
important in solving problems and making decisions. You display skepticism in the face of
novel ideas, concepts and proposed changes. Those with a future time orientation expect
agreements to be strategic in nature and to take effect over a longer period of time. Progress
is measured in fixed milestones over years, or even decades. Problem-solving focuses on
tangible improvements over time and the quick fix is ignored. As an individual negotiator,
you are motivated by profitable and beneficial results that occur in the future. You have a high
tolerance for setbacks, changes and counterproposals so long as they do not affect the long-
term outcome of the negotiation.
Action
Those with a being orientation value the process of building and maintaining both personal
and business relationships with others. The emphasis is on quality of life, affiliations and
personal relationships. Job satisfaction, quality of organizational life, harmonious
relationships with team members, and inclusion in challenging work are what motivate and
reward you. Considerable time is spent building rapport and trust before entering into a
negotiation. As an individual negotiator, you are motivated by building and maintaining good,
trusting personal relationships for the purpose of making negotiations easier to conduct.
Although you spend much time in developing relationships, you hesitate to disclose
information about yourself until trust has been built. It is important to ascertain the integrity
and compatibility of your counterpart before allowing him to enter into a “closed network.”
When meeting new people in business, you require a relatively long warm-up period. You are
careful not to extend trust too quickly at the negotiating table. This lengthens the planning
and orientation phases of negotiation. Small talk, social occasions and ceremonial events may
be utilized to overcome initial skepticism and suspicions of the other party. You tend to
scrutinize issues carefully. You do not jump to conclusions or take action quickly. Decisions
need to be well founded and well grounded before implementation can occur. Therefore, a
strong being orientation may impede flexibility and responsiveness due to your relatively slow
decision-making processes.
Those with a doing orientation value the process of resolving issues and accomplishing tasks
at the negotiation table. As an individual negotiator, you are motivated by a desire to get the
job done or to solve problems, rather than by building personal relationships. Relationships
are business-to-business, not personal. Personal relationships may develop, but they are not

THE IMPACT
essential to conducting the negotiation. You focus on accomplishing tasks quickly and tend to
emphasize reasonable achievements throughout the negotiation. Resources are focused on
planning a strategy and set of tactics to achieve agreed-upon goals. You tend to make plans
and decisions based on incomplete information and time constraints. It is important for the
negotiation to be expeditious, focused and outcome-oriented. If the other side is as pragmatic
as you are, issues can be resolved through open and direct communication. Although issues are
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considered, they may not be viewed in detail or at length before a decision is made. The
CULTURE
emphasis is on achieving external measurable accomplishments and goals. Reward and
recognition are measured against established standards of performance. An open-network
approach is followed, which allows both sides to focus on the tasks of negotiating and less on
building personal relationships up front. Business relationships are built on problem-solving,
task accomplishment and a commitment to agree upon deliverables. A strong doing
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orientation often leads negotiators to push the negotiation to closure in order to get a signed
contract in the shortest period of time.
Communication
Differences in communication can be subtle, and they often lead to problems in negotiations.
A negotiator’s approach to sharing and exchanging information can be classified as being
either high- or low-context.
Individuals from high-context cultures are relationship-centered and require voluminous

exchanges of background information before business can be transacted. There also tends to
be a stronger emphasis on social class and hierarchy and a respect for roles and procedures.
Communication tends to be indirect. Meaning is conveyed not just in words but in the
composition of the negotiation team, nonverbal behavior and the use of silence. As an
individual negotiator, you rely on implicit nonverbal, symbolic or situational cues more than
on explicit verbal or written cues to judge acceptance of your proposals. For example, who is
invited to a meeting or asked to be on the negotiating team may have greater significance than
what is discussed. Negotiation issues are addressed through the use of passive language, subtle
meanings and silence. You believe that it is important to minimize the surface appearance of
conflict and criticism during the negotiation. Open conflicts are not seen as beneficial to the
overall negotiating process. To avoid conflict in public, solutions are discussed behind the
scenes, and a third party may be introduced to mediate differences. Relationship-building,
proper positioning and timing of proposals are of critical importance.
To those with a formal orientation, the degree of formality and appropriateness of behavior in
any given situation is taken to indicate the sincerity, intentions and trustworthiness of the
other party. It is important to observe specific etiquette and forms of conduct when
negotiating. As an individual negotiator, you see the lack of formality in others as an indication
of their lack of professionalism, education and social graces. You have an aversion to informal
speech, clothing, manners and forms of address at the negotiating table. You believe that
prescribed norms are conducive to the overall process of putting the person at ease and
reaching agreement. Formal cultures place a high value on following business policies and
social customs. Saving and giving face in private interpersonal exchanges is as important as
how face is managed in more public formal negotiation sessions.

A high-context person provides sufficient background and context to the other party at all
stages of the negotiation. Conclusions, however, may not be explicitly stated, as the other side
divines the meaning from the context of what is and is not said. Silence plays an important
role in expressing meaning, saving face, and leaving options open for later discussion. Plans
in high-context cultures tend to be implicit and depend more on relationships for
implementation than they do upon a contract. Contracts are short and general in scope, if
they are used at all. High-context individuals place more faith in the spirit of the agreement
between both parties.
Low-context individuals are primarily task-centered in their approach to work, requiring

relatively little information about the other side before conducting any business.
Communication in a presentation tends to be direct and explicit. In a business setting,
meaning is expressed in verbal and written formats to exchange information, facts and
opinions. As an individual negotiator, you tend to value the process of choosing and
interpreting the words used in communicating proposals and issues. Negotiation issues are
addressed openly or head-on. Conflict is seen as constructive and is resolved through direct
dialogue in an open way. Trustworthiness and honesty are intricately tied to how you manage
conflict and resolve contentious issues. For example, waiting for an issue to disappear or
introducing a third party to mediate a conflict may be seen as a sign of untrustworthiness or
as promoting additional conflict. You are motivated by clear, concise communication followed
by detailed documentation and an action plan. Team roles, authority relationships, strategies
and tactics are communicated in detailed plans for individual negotiators.
In informal cultures, the use of informal language and behavior in all situations is seen as a
way to invite the fair and equal participation of all to focus on solving the issues at hand. As
an individual negotiator, you value the flexibility and spontaneity team members bring to the
negotiation. You support the appearance of basic equality between team members and treat
the other side as peers or colleagues during the negotiation. Therefore, it is important to
eliminate formality and prescribed forms of conduct in the negotiation. You are
uncomfortable in situations that require formal dress and forms of address. You believe that
formality obstructs the flow of communication, puts social distance between two parties, and
prevents both sides from reaching an agreement. You need little background information
about those with whom you negotiate or conduct business.
Relationships, trust and compatibility are not primary considerations when doing business in
low-context cultures. Observance of deadlines and schedules is more important than
maintaining image or status among individuals or groups. Therefore, negotiation and
bargaining should take place in a structured, public forum. Conclusions are explicit and are
captured in writing throughout the negotiation. Plans tend to be detailed and depend upon a
contractual relationship for implementation purposes. Contracts are long, detailed and
specific, placing faith in the spirit of the law to govern the behavior of both parties.
As an expressive communicator, you value emotional expressions and passionate responses in

negotiations. Expressiveness is seen as one way to influence and persuade others to agree with
your point of view. You tend to be animated in your use of words and body language. You may
even seek, and expect, close physical contact with others. Professional and personal

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competence is tied to communication style and the eloquence of language used in the
negotiation. Your favorable evaluation of other negotiators may be linked to their
expressiveness in communicating their issues.
As an instrumental communicator, you value factual, objective, pragmatic exchanges of

information. Communication is problem- or issue-centered, impersonal and goal-oriented.
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You prefer an emotionally detached way of presenting information in order to convince and
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persuade the other side. Emotional expressiveness in others may cause you to doubt their
professionalism, credibility and trustworthiness in negotiations. You tend to have limited
tolerance for overt displays of emotion at the negotiating table.
Space
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Negotiators can be categorized according to their distinctions between private and public
spaces. People in different cultures have contrasting personal space requirements as to such
things as the distance they place between individuals, the degree to which office space is
demarcated as public or private and the rules governing the use of each type of space.
In private-oriented cultures, negotiators generally prefer to put a greater distance between

themselves and others. Physical contact is limited. In public-oriented cultures, however,
negotiators generally prefer to put less distance between themselves and others and they may
engage in frequent physical contact among members.
Private cultures place an emphasis on closed-door meetings with minimal interruptions.

Negotiators tend to stand farther apart and tend not to touch during conversation. Negotiators
prefer a task-oriented style of negotiation and select locations that enhance the ability to
problem-solve and reach agreement. This “let’s-get-down-to-business” style of negotiation
may conflict with cultures that rely on extensive socializing. The use of technology for
communications may be expected and emphasized for negotiating across long distances.
Public cultures are accustomed to having open-door meetings with frequent interruptions.
Negotiators tend to stand closer together and tend to touch when communicating.
Negotiators prefer a relationship-oriented style of negotiation and select locations that
enhance the development of trust and rapport. This “let’s-get-to know-each-other-better” style
of negotiation may conflict with cultures that rely heavily on task accomplishment. While
technology may be extensively used for communications, it does not replace the need for face-
to-face meetings.
Site selection is an important aspect of protocol because it affects psychological space or the
climate of the participants. The location and conditions of the meeting facility can have a
direct bearing on the outcome of negotiations. There is a psychological advantage to those
negotiators who can select the location or leverage the culture gap created by differences in
space orientations. The conditions presented by public-oriented negotiators may seem overly
small, crowded and noisy to private-oriented negotiators. Private-oriented negotiators, on the
other hand, may make public-oriented negotiators uncomfortable in the distance they place
between negotiators through seating arrangements, the size of the table or room size. To be

successful, negotiators need to be prepared to adjust to the site selection and space orientation
of the other party.
Power
The degree of comfort with differences in power, authority and status between parties in a
negotiation can affect the outcome significantly as both sides jockey to influence and
persuade each other. Negotiators with a hierarchy orientation tend to see power and authority
as centralized and controlled. As an individual negotiator, you prefer to negotiate with a
person of equal rank. The negotiation team is carefully selected, with roles and responsibilities
in the organization clearly defined according to age, position, title and status. Although
technical and managerial skills are considered, final selection is based on hierarchy and power.
A show of public respect and deference is given to those in power by using appropriate forms
of address that reinforce hierarchical structures and social status. Individual negotiators expect
to negotiate with others of equal status or power. Managers higher up in the organization
make all of the decisions, concessions, offers and agreements. It is not appropriate to bypass
formal lines of authority in order to complete a task. Subordinates and individual team
members rely on their superiors or team spokesperson, and they rarely question decisions or
contradict those decisions in public. Changes in positions or responses to counterproposals
are problematic, since they require lengthy discussions and approval by managers not
immediately involved in the negotiation.
Negotiators with an equality orientation minimize hierarchy by decentralizing power and

authority to the lower levels of an organization. Individual negotiators are empowered to
make a broad range of concessions and to seal agreements at the negotiation table. The
negotiation team is selected on the basis of functional expertise or experience in negotiating
with the other side. Although roles and responsibilities may be defined, each team member
has the autonomy, flexibility and authority to contribute his or her technical, managerial or
interpersonal skills to the negotiation. Deference is given to those with expertise and
experience, rather than to those with a title or position. As an individual negotiator, you are
uncomfortable with the use of official titles and forms of address that reinforce hierarchical
structures or social status. Subordinates and individual team members rely less on their
supervisors or team leaders; they prefer consultation or confrontation to resolve issues, and
may openly contradict or challenge others in their own field of expertise. Changes in
positions or strategies are expected. Overall, time is less of a factor, since decisions can be
made at the table. Planning is delegated and distributed among team members requiring buy-
in by those who will implement agreements after a contract is signed by those in power.
Individualism
In most cultures of the world, individuals identify strongly with groups and expect to work
collectively to accomplish business goals. In these cultures, independent, individual attributes
are not very important in forming individual identity. Most cultures, therefore, are
collectivistic in their orientation to individualism. When negotiating, one must first
determine whether the other party is collectivistic or individualistic in its approach to
negotiation. Negotiation in individualistic cultures places a high value on independence, on

THE IMPACT
tasks over relationships, and on achievements and recognition based on individual
performance. As an individualistic negotiator, you focus on your own personal and
professional skills when preparing for a negotiation. In fact, your interest and contribution
decrease when the outcomes being negotiated do not benefit you personally. An
individualistic negotiating team consists of a collection of individuals, each motivated
primarily by his own personal success. Success is measured by the individual contributions of
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each team member and the overall outcome. As an individualistic negotiator, you value and
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admire self-driven, determined, self-motivated individuals. Accountability is allocated to
individuals on the negotiation team, but responsibility resides primarily in the team leader. In
individualistic cultures, there may be a preference for negotiating alone or in smaller teams,
to save time, money and personnel. Value is placed on individual decisions rather than on
those arrived at by consensus. Constructive confrontation is often employed to arrive at the
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best possible solution in the shortest period of time. Individuals are expected to make their
views known when plans and strategies are being discussed and developed.
Collectivistic cultures place a high value on subordinating individual interests to group
interests, on relationships over task accomplishments and achievement, and on recognition
based on group performance. Collectivistic negotiators focus on organizational skills,
knowledge and authority when preparing for a negotiation. Negotiation teams are well
coordinated, and roles are clearly defined. Conformity to group standards, policies and
procedures is expected. Your identity is defined as a member of the negotiation team. Your
loyalty is given to the group or company, not to the matter being negotiated. Contributions
are made as an extension of the larger organization or group. Success is measured by the larger
achievements of the organization, and accountability is diffused throughout the group. Value
is placed on reaching consensual decisions over individual ones. As a collectivistic negotiator,
you defend decisions made by the team, even if you disagree or have no role in their
finalization. Conflict or confrontation that causes another person in the group to lose face is
to be avoided if at all possible. Open conflict is seen as both negative and disruptive. Plans are
based on the shared values of the group and implemented through the strength of group
relationships, rather than through a simple assignment of tasks to individual team members.
When negotiating, you may rely on a universalistic orientation that places a high value on
standards, procedures, rules and law. If so, you treat others with fairness, openness and equality
and expect them to treat you in the same way. The negotiation process should be well defined
and standardized so as to meet your expectations of the “right way” of conducting business.
You have a strong sense of right and wrong when dealing with issues of ethics and behavior
during the negotiation. When presenting your position or determining your bargaining
approach, you apply the appropriate rules, standards and principles to persuade and influence
the other side.
Negotiators who emphasize their uniqueness or the particular circumstances of a given

situation in presenting their proposal are displaying a particularistic orientation. As an
individual negotiator, you value the uniqueness of the situation or group, and apply different
rules and procedures to help determine the outcome of the negotiation. Negotiation behaviors
are adapted to fit the situation and the person/group with whom you are negotiating. There is
no “right way” to negotiate or arrive at a decision, since there are multiple truths in each team’s

approach or business realities. Although you may respect formal rules and procedures, you do
not necessarily believe that they apply to you or to your unique situation. When presenting
your position or determining a bargaining approach, you trust in established relationships and
networks to influence the outcome.
Competitiveness
Competitive cultures stress win-lose outcomes, task achievement, and getting the best
possible deal at the end of the negotiation. Cooperative cultures stress win-win outcomes,
interdependent relationships, and understanding the needs and expectations of the other side
in order to arrive at a mutually beneficial agreement.
As a competitive negotiator, you are motivated by the need to outperform others. Material
success, achievement and performance are high motivators. The achievement of expected
outcomes and projected results are drivers in the negotiation. Efforts are made to influence
and persuade the other party to accept the superiority of your position, product and/or
solution. As an individual negotiator you expect others to articulate, assert and defend their
positions in the negotiation. Plans are developed and implemented quickly. Progress is
measured and evaluated through meeting deadlines, schedules and contractual obligations.
Proposals and issues are crafted for a specific detailed outcome, which is presented to the
other side for their buy-in.
As a cooperative negotiator, you are motivated by establishing mutually beneficial

relationships that allow you to achieve your goals. Quality of life, being a member of a group,
and job satisfaction all contribute to your motivation. Harmonious teamwork, consensus-
building and the development of mutually beneficial interdependencies drive the negotiation.
Efforts are made to influence and persuade by showing how your position, product and/or
solution meets the needs and expectations of the other party. You expect others to seek, build
and maintain supportive relationships that lead to consensus. Plans are developed and
implemented slowly. Progress is measured and evaluated through customer satisfaction,
commitment and fulfillment of obligations over time. Proposals and issues are crafted from
general principles that are presented to get buy-in from the other side.
Structure
The degree to which negotiators are comfortable with uncertainty, change and new ways of
doing business determines their approach to risk in a negotiation. People with a strong order
orientation tend to follow and expect a predictable course of action. Security and confidence
come from following tried-and-true methods. Efforts are made to reduce risk by instituting
policies and procedures (both written and unwritten) and applying them consistently across
all situations. As an individual negotiator, you are comfortable with clearly defined
parameters and guidelines for negotiating with others. When faced with an unknown
counterpart or a different approach to negotiating, high-order cultures display stress and
frustration with changes, and are less willing to take risks. Changes in positions, or too many
counterproposals, tend to lower trust and damage the relationship. A structured approach to
negotiation with clearly defined team roles, consensus decision-making and formality all

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help to reduce ambiguity and uncertainty. Decisions require a lot of information, data, and
time to evaluate, eliminate or moderate risk. Order-oriented negotiators see contracts as
vehicles for recording in writing areas of responsibility and steps for implementation to be
carried out by all involved. Organizations with an order orientation may find that they spend
more time negotiating internally to reach consensus than they do negotiating externally with
the other party.
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Flexibility-oriented cultures do not expect negotiations to follow a predetermined course of
action. People with a strong flexibility orientation tend to have a high level of tolerance for
change and deviation in plans. Success is based on how quickly the team can adapt to
changing demands, conditions and considerations. As an individual negotiator, you value
innovative and unconventional ways of doing things and are open to new ideas for solving
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problems in the negotiation. Your emphasis on newer, better and bigger benefits is used to
influence and persuade the other side to agree with your proposals. Lack of flexibility in your
counterpart results in a reduced level of trust and confidence. Positions and strategies are
planned to provide the widest degree of flexibility or number of alternatives. Doing whatever
it takes to achieve a good result is expected and rewarded. A less structured approach with
loosely defined team roles, individual decision-making, and informality all contribute to a
greater willingness to take risks. Contracts and agreements are seen as a necessary evil in
reaching an agreement. Flexibility-oriented negotiators are comfortable with verbal
agreements or broad contracts that allow details to be worked out later.
Thinking
As a deductive thinker, you are more comfortable with information presented in a format that
begins with a general introduction and ends with a specific conclusion. When evaluating a
proposal or position presented by the other side, your focus is on the overall guiding
principles. You base your own position on sound concepts or guidelines, then fit your data to
support that position. You need a great deal of background information before getting down
to the specific details of a negotiation proposal. As an individual negotiator, you prefer to
focus on the overall proposal rather than single issues. Influence and persuasion strategies are
based on how things should be, rather than on how things are.
As an inductive thinker, you are more comfortable with information presented in a format that
begins with a specific conclusion and then goes on to discuss information or data which
support that conclusion. Your focus is on the specific issues or evidence required to persuade
others that yours is the best proposal. You base your own position on expertise and experience.
Data and evidence are analyzed to reach a specific conclusion. As an individual negotiator, you
prefer to focus on specific contentious issues rather than on common ground or issues in
agreement. Influence and persuasion strategies are based on how things are and what has
worked previously––not how things should be.
As a linear thinker, you prefer to convert issues into causal chains of events, documenting
cause and effect to help you develop a negotiation strategy or set of tactics. Arguments and
counterproposals should be logical, supported by sufficient evidence or data that will persuade
the other side. As a negotiator, you prefer to look at discrete issues and how they affect you

personally. You use agendas and the completion of sequential discussion points to measure
progress. Checklists are helpful in keeping the negotiation on track.
As a systemic thinker, you prefer to discuss issues within the context of the whole negotiation,
and see all issues as being interdependent. Before developing a strategy, you need to get the
big picture. Your approach is to ask many questions to ensure that you have sufficient
background information from the other side before making any decisions. You prefer that
arguments and counterproposals be holistic, integrating solutions that take into consideration
how others will be affected. A negotiation planning sheet or checklist is considered helpful
when planning how to respond to the other side’s objectives and issues.
Cultural Analysis of the Case Scenario

We may now use our understanding of how negotiating behavior is shaped by different
cultural orientations to analyze the different expectations and negotiating behaviors of the
individuals presented in our case scenario.
The first contrast between the two negotiating sides is a fundamental difference in their
orientation to the action dimension. Whereas the U.S. Americans are strongly doing-oriented,
the Japanese display a being orientation with some leanings toward doing. This difference
makes itself felt almost immediately after the arrival of the U.S. team, when Greene and his
colleagues are treated to a lavish dinner at a well-known Japanese restaurant. For the doing-
oriented Greene, this dinner presents the first opportunity to begin preliminary discussions
concerning the deal. His being-oriented Japanese counterparts, however, intend the dinner as
an informal way of becoming personally acquainted with their counterparts and assessing
whether they are trustworthy partners for a negotiation. To the Japanese, it is inappropriate to
commence business in such a setting and so early on. Ando is therefore unwilling to respond
to Greene’s attempt to engage in a discussion about the next day’s negotiations.
Subsequent invitations over the course of the negotiation, on the part of the Japanese team and
its leader, to have drinks or to spend an afternoon and evening at a nearby spa, are all further
reflections of the Japanese being orientation. For the Japanese, such informal occasions are
integral to the negotiation, because they foster personal ties and help establish good will on
both sides. Although the doing-oriented U.S. Americans may enjoy these activities, they
generally view them as a digression from the negotiation and, as such, a waste of time. Since
their willingness to compromise does not derive from a sense of personal affinity or obligation,
the U.S. Americans cannot recognize the full import of spending extended periods of time with
their negotiating partners in social settings not discussing business.
Further significant differences between the U.S. and the Japanese approach to negotiating
derive from the combined effect of their opposite orientations to the environment, to
individualism and to competitiveness. The Japanese orientations to these dimensions are
harmony, collectivistic and cooperative, respectively, whereas the U.S.-American
orientations are control, individualistic and competitive, respectively. These important
differences find expression in a variety of ways.

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The Japanese desire to establish good will and a good rapport between the two sides, as
mentioned above, derives as much from their harmony orientation as it does from their being
orientation. Thus, the Japanese harmony orientation also plays a significant role in prompting
them to invest time in purely social engagements with their U.S. counterparts. The U.S.
negotiators, on the other hand, rely much more heavily on their ability to control the things
in their environment in order to achieve their business ends. This control orientation is partly
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revealed when Banner comments to CNN that CreditCorp seeks to reduce its risks by
CULTURE
diversifying globally. Banner’s elaboration on CreditCorp’s policy as being one of staying in a
particular country so long as the venture is profitable and then pulling out once profits drop,
reveals an approach that relies on controlling the surrounding business environment. Once
control can no longer be exercised to Credit Corp’s advantage, the company pulls out. There
is no effort made, however, to fit in with the surrounding environment in order to achieve
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results nor, alternately, is any great effort made to emphasize the human factor in business and
attempt to improve business through the exchange of favors and obligations. This contrasts
sharply with Ando’s revelations later on during the negotiation that Nagano’s relations with its
customers relies, in part, on an exchange of favors, and it also contrasts with Nagano’s
insistence that the joint venture retain 500 of Nagano’s current relationship managers. Both
points indicate the strong presence of a harmony orientation in Japanese business culture.
This harmony orientation is strengthened by and interacts with the Japanese cooperative
orientation, which encourages loyalties to others and to the business organization as a whole.
Thus, in his opening remarks, Ando describes the new joint venture with CreditCorp as a
marriage “in which there is give-and-take on both sides.” This cooperative view of negotiating
contrasts sharply with CreditCorp’s competitive orientation. Banner’s motto of “profit or
perish” succinctly sums up the competitive orientation. The U.S. team’s focus on maximizing
profits over considerations for the fate of the individuals involved in the two companies
derives both from its competitiveness and from its individualism.
The U.S.-American competitive orientation is furthered strengthened by its flexibility

orientation to structure. This flexibility orientation allows the leaders of CreditCorp to take
the risk of going into a country, testing the business environment and pulling out at the first
sign of trouble with little sense of disruption or anxiety. The Japanese, who have an order
orientation to structure, would feel much more uncomfortable with such an approach to
business. In general, they are much more cautious than are the U.S. Americans when entering
into new deals or ventures. This is one reason why the Japanese team raises the same questions
and asks for the same information several times before feeling satisfied with the answers.
Yet, although the Japanese exhibit an order orientation that contrasts with the U.S. flexibility
orientation, the Japanese also demonstrate a certain flexibility that is not shared by the U.S.-
American team. Both cultures have a fixed orientation to time and they therefore expect
meetings to begin on time and appointments to be made promptly. Yet, within the very set
structure that the Japanese establish (order and fixed-time orientations), they exhibit
flexibility in their willingness to manipulate the context of talks and the sequence of individual
events, for the sake of the negotiations. The U.S. team, on other hand, is negotiating toward
a schedule (the U.S. fixed-time orientation). They view the negotiating agenda as a carefully
scripted series of events, arranged so as to ensure that they leave Japan within the allotted

period of time with a signed agreement. The Japanese, by contrast, feel comfortable with a
certain amount of digression and come up with unannounced trips and dinners. To them,
these events are as much a part of moving the negotiations along as are the planned events.
This difference in the expression of the fixed-time orientation derives from differences in the
U.S. and Japanese orientations to thinking. Whereas the U.S. Americans have a linear
orientation, the Japanese have a systemic orientation. Thus, the U.S. team expects to follow
a pre-set plan in a clear, sequential order, while the Japanese view the events of the entire
negotiation period as integrated whole––parts of which may be changed or manipulated
without disrupting the overall aim––indeed, intended to further the overall aim. This
difference in orientations to thinking is also revealed in how the two teams approach the
negotiating issues themselves. The U.S. Americans expect to clear up one issue at a time and
then move on to the next one. The Japanese, however, wish to consider all issues together and
only arrive at a comprehensive agreement at the close of the negotiations.
The Japanese and U.S. teams are also quite different in their approach to communication. On
many occasions, the difference between the U.S. direct and the Japanese indirect orientations
emerges. The contrast between Banner’s blunt comments about how CreditCorp conducts
international business and Ando’s use of an analogy to express the Japanese approach to business
is one of the first occasions. The difference arises again when Ando gives Greene an evasive
response of “Yes, we understand your proposal well,” in answer to Greene’s question about which
of the three contentious issues Ando would like to discuss first—and Greene and his team are
baffled. Furthermore, since the issues are contentious and the Japanese would like to avoid
conflict, Greene finds it difficult to get the Japanese to address them directly during formal talks.
Instead, the Japanese wait to discuss these issues during private one-on-one conversations in
informal settings. The Japanese preference for more informal, social settings for interacting with
their negotiating counterparts also reflects their high-context style of communication
There are many differences that can occur when negotiating across cultures that can affect
your success. Anticipating these differences and understanding the expectations of the other
side is the first step toward effective cross-cultural negotiations.
Generalizations and Stereotypes in Negotiations

It is often assumed that a person who shares the same business or functional culture with
someone from overseas will behave more or less consistently in a given situation. For example,
engineers from Dhahran, Saudi Arabia may assume that their counterparts in San Jose,
California will approach solving an engineering problem in the same way that they do in
Saudi Arabia. Managers may also assume that ways of leading, motivating and managing
subordinates are the same throughout a global company—that what works in Saudi Arabia
will work in the U.S., and that what works in the U.S. will work in Mexico or France. This
sort of extrapolation from one culture onto another is dangerous.
How we think and process information are programmed by our culture. We rarely validate
this process or examine it closely. Our minds seek internal consistency among our beliefs,
attitudes, values and so on. This is how we learn, and how we interpret the world. To maintain

THE IMPACT
how we see the world around us, we form ideas and beliefs as to what is right or wrong, good
or bad. We seek explanations that meet our expectations. New information that does not meet
our beliefs, attitudes and values is ignored or rejected. The end result is often a reinforcement
of our beliefs or stereotypes of expected behavior.
Stereotypes help us maintain our image of the world. Behavior that is not understood or that
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does not meet our expectations in a given context is interpreted through the prism of our own
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values and cultural perspectives. Therefore, when negotiating across cultures, we must be
careful to properly observe and understand another person’s behavior.
For example, in the United States, negotiations are viewed as a problem-solving exercise, in
which efficiency is prized, persuasion used, tactics accepted, compromises expected and
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fallback positions probed. People from Latin America or Asia, however, may see negotiations
as a basis for entering into a long-term relationship in which connections are paramount,
obligations are sought and repaid, principles are accepted, concessions are made by the
stronger party and positions are presented expressively.
Culture affects negotiations greatly through the following areas: communication styles;
language; decision-making; the importance of form, protocol and status; the choice of team
members; and the methods of persuasion and influence.
To negotiate in good faith, both sides must speak a common language. They must also share
knowledge, assumptions and meanings that will be used and rules that will guide the
negotiation process. Without a frame of reference, it is difficult to negotiate across cultures.
Left alone, an individual will develop his own stereotypes and generalizations about the other
side’s particular interests, perceptions, attitudes and beliefs—all of which form a unique frame
of reference. Different cultural experiences produce different interpretations of the other
person’s frame of reference.


THE SEVEN PHASES
2
Chapter
THE SEVEN PHASES
OF INTERNATIONAL NEGOTIATION
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The following model of international negotiation is provided so that you can examine how
different cultural groups place emphasis differently during the negotiation process. A seven-
phase model is presented to show how the use of time, approach to task accomplishment, and
role of relationships in business and persuasion strategies are exhibited differently across cultures.
NEGOTIATION
Figure. 2.1 The Seven Phases of International Negotiation: As this figure illustrates, the seven phases
go in and out of being- and doing-oriented activities. Strategic Planning and Analysis (1) consists almost entirely
of doing activities. Network Entry and Approach (2) requires a mixture of doing and being activities. Building
Personal and Business Relationships (3) is almost entirely composed of being activities, whereas Orientation and
Presentation (4) once again requires both doing and being activities. Bargaining and Persuading Others (5) also
involves both the doing and being orientations. Reaching Agreement (6) returns to mainly being activities and in
Follow-up and Maintaining Relationships (7) being and doing activities both come into play, as the negotiator
seeks to maintain relationships while planning for further negotiations.

An Overview of the Seven Phases

This phase involves strategizing, preparing for and planning the international negotiation.
Cultural, financial, historical, economic and political due diligence are all used to strategize
an approach that will meet the needs of both sides.
Success in this phase requires:
• A clear understanding of expectations and interests.

• An awareness of the phases and principles of transcultural negotiations.
• A deep analysis of one’s own cultural orientations and those of the
organization one represents.
• A preliminary analysis of your counterpart’s cultural orientations and
those of the organization he represents.
• An assessment of each side’s objectives, needs and issues of negotiation.
• The creation of internal organizational alignment and support.
• The anticipation of the critical components in the negotiation phases.
• A personal skills gap analysis of each team member.
• The selection, formation, coordination and role definition of the
negotiation team.
• A clear determination of key objectives, processes, contingencies and
logistics for each negotiation phase.

This phase involves identifying, strategizing to enter and actually entering a group, network
or company. It is in this phase that the initial contact between you and your counterpart
occurs. The process can be straightforward, direct and quick, or it may take considerable time,
energy and formality. For individuals with a doing orientation, for whom building
relationships is not the primary focus, this phase requires careful attention.
• Planning an approach to entering a group, network or company.

• Understanding your counterpart’s network or system of relationships.
• Learning the cultural orientations of your counterpart in the negotiation.
• Skill in designing and implementing a strategy that is
culturally appropriate.
• The effective adaptation of one’s own behavior to meet the expectations
of the other culture.

THE SEVEN PHASES
This phase involves pursuing, building and developing personal and business relationships.
Building effective relationships across cultures and organizations is critical for success. But how
do we do this? In the United States, building the business relationship precedes building the
personal one. In other cultures, a trusting personal relationship precedes any business
relationship. How we establish our credibility at the individual and organizational level differs
by culture. The time taken for small talk and discussion, unrelated to business, that precedes
the actual formal and informal negotiation sessions can be brief, as found in the United States
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and Canada, or it can be lengthy, as in Japan and China.
• Understanding the cultural norms and expectations that regulate personal

and business relationships.
• Knowing culturally appropriate conversation styles and topics.
• Understanding the key communicative and relationship needs
of your counterparts.
• Adapting one’s approach to establishing credibility and building rapport.
NEGOTIATION
This phase involves gathering, assessing and presenting the information needed to outline
interests, issues and needs. When personal relationships are built and business networks
penetrated, each side undergoes a period of orientation to its counterpart’s way of doing
business, its organizational culture, the individuals involved and the specific circumstances of
the specific relationship. Each side and person involved engages in a reassessment of the other.
Each party seeks to understand the other’s goals, constraints, problem-solving approaches and
requirements. And, based on this assessment, each side defines the business interests that will
guide the future relationship. Based on this assessment and definition, all parties involved form
an alignment. This alignment critically determines the tone for Phase 5. Depending on the
cultural region, this phase requires varying amounts of attention, time and resources.
• Intercultural observation, listening and interpretation skills.

• Skills for giving, receiving and eliciting information in negotiations.
• Skills for presenting information, issues, positions and visuals
across cultures.
• Use of written correspondence to share information across cultures.
• A nonjudgemental approach, a tolerance for ambiguity, patience,
flexibility and openness.

This phase involves bargaining with and persuading others through the use of logic, evidence
and influence. It rests upon culturally dependent perspectives, values and attitudes toward
decision-making, and it is characterized by either a competitive and hard-bargaining approach
or a more cooperative and problem-solving approach. Understanding which persuasion and
influence strategies are preferred by your counterpart is critical to your success.
• Understanding what is important and convincing to your counterpart.

• Adapting influence and persuasion strategies to match the cultural
orientations of your counterpart.
• Selecting culturally appropriate key bargaining strategies and tactics.
• A clear vision of the goals and outcomes desired on both sides.

This phase involves reaching and implementing an agreement. The meaning, content and
context of an agreement differ greatly across cultures. Cultural orientations can affect how
binding an agreement is and what the roles and responsibilities of each party are after
agreement is reached. In the United States, the end goal of a negotiation is a signed contract;
in other cultures, a verbal agreement or handshake may be sufficient. The use of, and
acceptance of, concessions or compromise in reaching an agreement may also be affected by
the cultural orientations of your counterparts.
• A clear understanding of how the counterpart defines a contract

or agreement.
• Up-front clarification with all parties involved as to the expectations
about agreements and contracts.
• The adaptation of agreement formats to accommodate both the
negotiator’s own needs and those of the counterpart.
• The ability to translate the culture-based expectations of both sides into a
working agreement or contract.
Phase 7: Follow-up and Maintaining Relationships

This phase involves following up on obligations and maintaining established relationships in
a network or at the conclusion of a business deal. It is perhaps the most critical for long-term,
profitable relationships across cultural and national boundaries. In the United States,
contracts spell out the rights and responsibilities of each party, but they do little in terms of
explaining how to maintain relationships over time. Maintaining the relationship and
following up on agreements are of critical importance in most cultures outside of the United
States, and they require attention.

THE SEVEN PHASES
• The ability to educate all involved parties of the negotiator’s organization

about the relationship with a particular vendor or client.
• A clear understanding of your counterpart’s expectations of a business or a
personal relationship.
• An understanding of relationship obligations and duties.
• Skill in translating the expectations of both sides after an agreement
has been reached.
OF INTERNATIONAL
Showing a Commitment to Negotiating Internationally
The following enumerates the most important points for showing commitment when
negotiating across cultures, based on the seven phases described above.
■ Understand that persistence may be required to gain entry into the network and that, as an
outsider, you may be trying to penetrate a network that has existed for a long time.
NEGOTIATION
■ Use correspondence, telephone conversation, fax and e-mail to set the stage for the
initial meeting.
■ Spend sufficient time to identify the decision-maker and the limits of that
person’s authority.
■ Beformal in communicating initially; then match the other party’s expectations for
formality in a business relationship.
■ Acknowledge status and authority by showing deference to position and title.
■ Allow for business socializing to develop the more personal side of the relationship, and
allow this to become part of the negotiation process.
■ Spend time on structuring the negotiation process, and address procedural

issues (formalities).
■ Inthe presentation phase, place more emphasis on finding out the interests of the other
side as opposed to just gathering factual information.
■ Balance the other party’s presentation or persuasive arguments with your own
rational approach, accompanied by objective information, expert testimonials and
emotional appeals.

■ Know the expected concession pattern of the other party and what bargaining tactics they
might use during the negotiation.
■ Spend sufficient time to maintain the relationship after the contract is signed, in order to
ensure future success.

NEGOTIATING EFFECTIVELY ACROSS CULTURES
3
Chapter
NEGOTIATING EFFECTIVELY
ACROSS CULTURES
Each phase of the international negotiation process may be examined in detail to reveal what
role culture plays in the process. In this chapter, we examine how cultural orientations affect
the various aspects of each negotiation phase.

Strategic planning requires that you do research on the other company, select negotiators for
your team, identify the issues to be negotiated and choose a negotiation strategy and tactics.
How you see yourself and how you see the other side are important in positioning your points
in the negotiation.
People with different cultural backgrounds bring different expectations to the negotiation
table. The following should be considered:
• Learn about the other organization’s business, goods and services.

• Observe the styles of your counterparts at the table and away from it.
• Conduct fact-finding on how they make decisions and who has authority
in the organization.
• Discover what (and how) issues will be addressed in the negotiation.
• Understand the importance of contracts and what forms of agreements are
considered to be the norm.
Part of the strategic planning process is to get you to understand the negotiation both from
your own point of view and from that of your counterpart. You need to set objectives for the
negotiation; check your facts and assumptions about the other party, and their issues and
needs; brainstorm options and alternatives; plan strategies and tactics; and, finally, practice
your negotiating skills as a team.
Know the situation. Investigate the political, economic and historical background of the country
and company with which you will be negotiating. Consider the ramifications of politics,
economics, culture and social organization. Know yourself. Identify your team members.
You also need to determine individual skills, strengths and weaknesses; group skills and team
roles; and objectives, needs, issues, positions, alternatives and options.

Know others. Perform cultural due diligence on the cultural background and orientations of
your counterpart’s team members. In addition, investigate the foreign company’s business,
markets, financial status and reputation prior to the first meeting.
You must also identify who they are, past experiences with them, and their objectives, needs,
issues, positions, alternatives and options.
Another aspect of strategic planning is influencing the negotiation process by controlling the
agenda. Your strategy should be to get your agenda adopted and include those substantive
issues that you want to negotiate. Remember that the agenda and other procedural elements
of a negotiation are negotiable. A well-thought-out agenda will help you organize and
prioritize the issues to be discussed, as well as measure your progress and set a credible
deadline for success. Finally, circulate the agenda ahead of schedule to get agreement from
members of your team and identify those who will participate.
Team Selection
What size team should you send overseas to negotiate with the Japanese? With the Germans?
With the Brazilians? Can one person alone negotiate against a team of ten? It is not unusual
to hear about the lone U.S.-American negotiator being sent abroad to negotiate a complicated
deal. In fact, on the whole, U.S. and Canadian companies send smaller teams than do their
international counterparts.
Then what size team is right? The size of the team should reflect the number of tasks required
and the abilities of the individual negotiator(s). Team size should:
• Reflect the importance of the product or service being negotiated.

• Reflect the roles of the people seated across the table.
• Include extra members for establishing informal channels
of communication.
While there are no hard-and-fast rules for establishing team size, it is recommended that the
same team members remain throughout the negotiation process.
U.S.-American negotiators are often chosen for their technical competence, functional role
and past successes. Members from the other negotiating team may be chosen for their
professional competence as well; but social competence, age, seniority, education, social
background and personal connections will more than likely figure prominently in the process.
For example, in negotiations with the Japanese, the chief negotiator may hold his position
based on age, social prominence, personal connections and consensus-building ability.
When selecting team members, the leader should consider an individual’s position in the
company, his title and function, business and technical skills, and cross-cultural and
interpersonal skills. The larger the team you send abroad, the greater the status and power
that must be attributed to the chief negotiator. It is recommended that you remember the
“Equal Dignity Rule,” which states that the number, position and titles of team members
should match those of the other side.

Your team members should be as knowledgeable as possible about the culture with which you
are negotiating and about their negotiation styles and strategy. The Japanese negotiation team,
for example, may include three or more levels of management, with each person filling a
different role in the negotiation. Often the Japanese use multiple groups of people for both
formal and informal negotiations. This may also reflect the process of consensus-building or
the need to require wider participation of different departments and levels.
South Koreans sometimes have one team for negotiating and another for dinner and drinking
that evening, while a third team remains back at the office preparing for the next day. Chinese
teams often include representatives from the relevant bureaucracies or corporations, as well as
engineers and technicians who specialize in the good or service being negotiated. A Chinese
party official may also be included.
Based on your understanding of the strengths, weaknesses, experiences, objectives, needs and
issues of both parties, you may begin to identify the characteristics of those individuals who
should be members of your negotiating team. Your team should consist of individuals who are
recognized for their expertise, listening abilities, ability to be team players, and attitude for
getting things done at headquarters. Your team should establish a unified approach, and it
should be prepared to maintain an ongoing relationship with the other party.
You may wish to consider these elements in team selection: size, skill mix, status, chief
negotiator and note taker.
Size
Determine the size of your team carefully. You want to avoid being at a disadvantage by
having to face a larger team across from you at the negotiating table. Similarly, you do not
wish to overwhelm or alarm the other party with the sheer number of your negotiators.
Skill Mix
Depending on the content of negotiations, as well as the cultural orientations of the other
side, you may wish to identify and include any one or all of the following: seasoned
negotiators, younger negotiators who may more easily establish rapport with their
counterparts, technical experts, legal experts and highly interpersonal communicators. Teams
should have people with the right balance of functional skills, language skills, cultural
knowledge and negotiation experience.
Status
You may wish to consider adding a top-level executive to lend additional credibility to the
seriousness of the negotiation or for ceremonial purposes. In many countries, it is customary
for the senior executives to establish the general principles of an agreement and have the more
junior staff work on the details.
Chief Negotiator
One person on your team should be selected as the spokesperson for the team. This individual
should also be responsible for serving as the team leader and for facilitating a unified team

approach by determining when team members can and cannot participate freely in the
negotiation. Remember that team members should provide both verbal and nonverbal support
to the spokesperson. As the chief negotiator or spokesperson of the team, you should ensure
that the team has had sufficient time to devise a strategy, prepare a proposal and develop
suitable alternatives. When necessary, the team should take breaks or use side discussions to
ask questions and clarify understanding.
Note Taker
If desired, you may enlist the aid of an individual to take notes in order to free up others on
the team to concentrate on the negotiations. This person can also be the one to concentrate
especially on language, tone, nonverbals and process.
Why Team Negotiations Fail

Why do team negotiations fail? Very often, it is because team member roles and
responsibilities are not clearly defined. Another reason may be a weak leader or
spokesperson in charge of the negotiation. Team members may have poor communication
skills or language skills. They may be incapable of resolving conflicts in general, or lack
conflict resolution skills that work in the other culture. On occasion, team members may lack
the ability to make decisions or the authority to carry them out once they have been made.
The negotiation may also fail if it is poorly managed in terms of time or if there is a
difference in how time is used by both teams. Furthermore, teams from different cultures
often fail to sufficiently understand their counterparts, their culture, their decision-making
process and/or their communication styles. Even if your team members have a cognitive
understanding of the other side, they may be unable to translate their understanding into a
distinctive negotiation or communication style.
What Are the Characteristics of a Good International Negotiator?

The characteristics of a good international negotiator include having product knowledge and
good managerial and technical skills. Language skills, and the ability to listen and be open-
minded and patient, are also highly valued. Experienced international negotiators know that
being nonjudgmental and showing interest in the other team’s culture and customs are also
important. Self-confidence and the ability to deal with ambiguity or ambiguous information
are essential. Having high aspirations, setting goals and being persistent in the negotiation are
characteristics of successful negotiators. The ability to build personal relationships through
social competence (which includes effective interpersonal skills) is also a useful skill when
negotiating abroad. Having influence at headquarters and the power to influence others who
will have to implement the contract are critical for future success. Being able to think under
pressure and controlling your emotions are both signs of a good negotiator. Having the
physical energy and stamina to travel across various time zones, the openness to eat a variety
of different foods, and the ability to drink socially may also be required.

Negotiation Location
Deciding where to hold the negotiation is no easy task, as it encompasses numerous factors,
such as the size of the team to send, whether you will be traveling abroad, or whether you are
the buyer or seller. All of these can affect the location selected. You will have to chose between
their location and your location.
Choosing to negotiate at your location gives you the “home field advantage,” as they say in
sports. You are the host, it is cheaper for you, there is no jet lag, you control the negotiating
room, expertise is readily available, and you save time and resources.
Choosing to negotiate at their location has several disadvantages: you are under pressure to
return home and save costs in time and money, there may be jet lag or health problems, the
environment is unfamiliar, and you have no control over the facilities for the negotiations.
One solution is to alternate between their location and yours. This works especially well for
established partners who have a long history or relationship. The advantages are that each side
shares the costs, both learn from and about each other, and the foundation for a longer-term
relationship is more likely as you build on the relationship.
Another solution is to select a neutral location, somewhere between the two locations. The
advantages and disadvantages to this choice encompass all the issues just listed.
A more recent solution is to choose a “virtual location” at which to negotiate the deal. This
type of location incorporates the latest in communication technology, including e-mail, voice
mail, facsimile, video-teleconferencing, telephoning and groupware. Nevertheless, this may
not eliminate completely the need for face-to-face communication or the need to travel. The
major disadvantage to this arrangement is that the virtual location is characterized by low-
context communication styles that rely on words, facts and figures. Feelings, nonverbals and
other nuances of communication may be lost.

Networking in the U.S. and Canada can be a quick and easy process. Cold calling, using direct
mail lists, joining professional organizations and contacting established business acquaintances
can facilitate network entry. When we begin conducting business overseas, we need first to
understand that a critical step for success is to effectively enter established networks. Defining
a network, identifying the right one, learning how to enter the network, and understanding
what membership in the network means are all required when we negotiate across cultures.
How we establish a business relationship is important. In some cultures, cold calling is

acceptable, while in others a third party or a member of the targeted network is required. In
the former, direct mail, purchased name lists, trade shows and professional conferences
facilitate networking. In the latter, determining the introducing party’s status and sphere of
influence in a particular network, organization or company can make or break a budding
business relationship.

The purpose of entering a network in the United States is to identify potential customers or
clients. The result of networking is to qualify potential contacts as customers or suppliers who
can assist you in conducting your business. Initial credibility may be attached to you, your
product, your company or the profession to which you belong. Once the contact is made,
however, the burden is on the individual to generate further interest in the business relationship.
In the United States, the end goal is the final sale, contract or task completion. The final goal
is not becoming a member of the network. The U.S.-American approach to networking is
primarily informal, optimistic and relatively confident. The time taken to establish contact or
to initiate network entry is minimal in the United States, since these networks tend to be fairly
open to outsiders. Change, opportunities and risk-taking are an expected part of network entry.
In Europe, little time is spent in networking because of established networks or associations.

Individuals are either born into closed networks or they join them through membership in
professional associations or educational institutions. Outsiders may have considerable
difficulty penetrating closed networks. Network entry may also be difficult due to the
bureaucracy found in European governments and agencies. Identifying those individuals or
departments with decision-making authority can be difficult and may require insider
knowledge or assistance. These closed networks are suspicious of outsiders and reluctant to
be open about their business or to allow access to key decision-makers. Therefore, gaining
entry can be time-consuming as well as difficult. Using a well-respected third party known to
the decision-maker, or providing a letter of introduction, is essential for network entry in
Europe. Another factor in successful network entry in Europe is your social status or your title
and position in your company. Your education, degree attained, family background, dress and
appearance, and interpersonal skills all affect your ability to fit into a closed network.
In some Mediterranean cultures, such as Spain, Greece or Italy, hierarchy is a crucial element
in business. Authority may reside in top officials of business or government agencies;
therefore, major projects and business deals may require approval from these top officials.
Identifying the right entry point into such a network, and finding the person with the
authority to make decisions are required for success. Individual power may derive from such
traditional sources of power as wealth and class, educational and family background, or it
might derive from individual achievement and/or knowledge. Therefore, selecting the “right”
person to enter the network can significantly affect your success.
In China, being a member of a network provides information, opportunities and access to

decision-makers. Personal relationships and friendships are strong. Loyalty to individuals who
belong to the network or to whom you are obligated may take precedence in the business
context. Networks tend to be small. A person’s connections, or guanxi, are measured by his
access to and influence in established networks. These single points of contact are time-
consuming to establish and may require multiple sources for successful entry, especially when
dealing with the Chinese government.
Helping others within a network in China promotes goodwill and adds to your influence and
ability to develop future contacts. “Face,” or respect for a person, is directly related to this
ability. Using one’s connections to assist others does incur obligations that need to be repaid.

It is important to understand that repaying these obligations or providing opportunities to
third parties who have introduced you to the network is critical for continued success.
Most networks within China and between overseas Chinese are fluid, flexible and highly
responsive to business opportunities. Being included in business deals engenders loyalty to
individuals and solidifies the network of relationships. Finding someone with the appropriate level
of guanxi is critical for success. However, choosing someone to trust and have confidence in is
merely the first step in the network entry process. If you enter at the lower level of a network or
company, the quality of decision-making, or level of authority granted, may be limited. This can
also increase the time needed to gain access to the real decision-makers, as consensus is sought
within the hierarchy. Therefore, the higher the person sent to enter the network and the higher
the status of the person contacted in the network, the more entry into the network will be eased.
An example of the reach of these networks was relayed by a colleague who witnessed a British
medical manufacturer in Hanoi sell a piece of medical equipment for less than 40 percent of its
market price. The salesman reasoned that the exposition he was attending was over and that
the cost to ship the equipment back to England would be prohibitive; so, selling the equipment
was actually more cost-effective. He was approached by a Chinese businessman from Singapore
who was attending the exposition and wanted to buy the piece of equipment. Within a week of
returning back to London, the salesman received more than a dozen requests at the lower price
from a number of Chinese companies in the United States, Europe and Asia Pacific.
In Japan, entering and building networks takes time and requires a credible third party.
However, since Japanese networks work on the basis of favors and obligations, the first barrier
to network entry in Japan may result from a person’s inability to recognize and fulfill
obligations incurred. Both the third party and the targeted network contact must feel
comfortable with the person being introduced, or the business relationship will never be
implemented. A person who introduces another person to his network, or inner circle of
established relationships, is ultimately responsible for the future success of the introduction
and the resulting business relationship. Maintaining the harmony of the group, consensus
decision-making and the time required to develop a trusting relationship all slow down the
process of network entry in Japan. If the right person is not identified or the proper
introduction is not made, entry will be difficult. If a good personal relationship is not
established and favors or obligations not returned, access to the network will be denied. Once
network entry has been granted, however, the likelihood of expanding your base of contacts
within that company or industry is virtually assured.
An example of the difficulty of network entry in Japan was provided by a U.S. consultant in
New York. His company had been successful in providing training and consulting services in
the banking industry, and he had decided to target Japanese banks in Manhattan for his latest
on-line product. Through a Japanese colleague, he was introduced to one of the Japanese banks,
where he was granted a meeting to introduce himself and his company’s goods and services.
The bank representatives he met spent most of the meeting asking him about his background,
his experience and the trends he saw for training in the banking industry in the United States.
He offered his company’s brochure at the end of the meeting but failed to pitch the new on-
line product. After several follow-up telephone calls and some months later, he was asked back

to the Japanese bank, where he met several more members of the bank who were in charge of
training and development. The meeting went pretty much as the last one had. Again, several
months later, he was asked to return to the Japanese bank to conduct a pilot program for 20
bank employees. The success of this program led to more training programs. After conducting
more than ten of these programs, he was introduced to five other Japanese banks by the senior
Japanese manager in charge of training. This led to successful entry into these companies, and
now these banks represent over 50 percent of his on-line training programs.
In Latin America, a person’s power is directly connected to his social standing, personal
qualities, and personal connections in the business and government communities. Hierarchy
and formalization of decision-making processes may be time consuming and may limit
network entry efforts. Having the right friends allows you to open doors and get tasks
accomplished, regardless of rules, policies or procedures governing business and government.
Having a connection to a person of power and influence in a network in Latin America is
essential. However, the fluid, being and formal orientations may slow down initial entry by
outsiders, even if important contacts have been established.
A U.S. businessman opening his first office in Mexico City, told the following story. His
company produced video broadcasting services and required a T-1 line to stream video from
his U.S. offices to the office in Mexico City. In the United States, this would have been a
simple business request to the local telephone company, and it would have taken a few days
to a few weeks to install the necessary T-1 lines into an office. In Mexico, the businessman
applied to the local telephone company and was told that it would cost him four times what
it would have cost in the United States for the services requested, and that it would take at
least six months to have the lines installed. He mentioned this to his Mexican business
partner, who subsequently introduced him to the vice minister of telecommunications at his
villa over the weekend. Over a set of tennis and drinks, the U.S. businessman explained his
dilemma to the government official. By the following Monday, a telephone crew was in front
of his building digging the trench that would be required for the T-1 line, and the installation
work was finished by the end of the week.
In countries where the family, clan or tribe is the basic unit of society, network entry can be
challenging. In the Middle East and Africa, having a connection to a family member in the
targeted company or to someone in the ruling class is essential. Business opportunities are
provided first to family members. Outsiders need to establish personal relationships with
someone who has the influence and power within a family business or social group. Here,
status, position and title are important. Status may be achieved by age, experience, name or
standing in the community. Therefore, as compared to other countries, a more holistic
approach to network entry is required for penetrating the network. Following protocol,
customs and business norms helps ease the social exchanges and demonstrates respect to
network insiders. This emphasis on status has led to entrenched hierarchies and bureaucracies
that foster centralized decision-making and prolong the time required to get approval for
business opportunities. Business decisions are often made at the top of the company or
government agency, making the proper introduction essential. Both formal and informal
channels should be leveraged to check on the performance and success of individual contacts
and the organization with whom you want to do business.

In places such as Russia, China and the Middle East, people may not distinguish between social
and business events, requiring you to know the appropriate protocol for both social and
business functions. Impatience, rude behavior and poor interpersonal skills could prevent you
from making the right contacts and developing business opportunities. It is necessary to
identify the person with the pertinent power and influence and to establish a personal
relationship before continuing on to a business relationship. One note of caution: following
certain business practices or norms accepted in obtaining the influence or approval of these
decision-makers or government officials—for example, bribes, favors, or payments—may be
illegal in your own country and can be an impediment to successful network entry.
In conclusion, network entry is an essential part of any negotiation or business strategy when
conducting business overseas or across cultures. However, if your company has a product or
service that is unique or superior to that of the competition in a particular country, the issue
of network entry may be less important. In fact, the right network or company may come
looking for you.
Understanding the Negotiation Styles of Other Cultures
The United States and Canada
The primary focus in the U.S. and Canada is on getting the negotiation (task) completed in
the shortest period of time, with the least formalities. The relationship between those who
negotiate is on a company-to-company basis. Personal relationships are less important than
getting a signed contract. Non-business conversations and other forms of small talk are
generally seen as a waste of time. Nonessential formalities are also seen as an impediment to
getting the job done. Meeting times are fixed, and agendas are used to provide direction and
to measure progress. Individual contributions and efforts leading to real results are rewarded.
Northern Europe
Northern Europeans are concerned with formality and risk avoidance in negotiations.
Appointments should be made well in advance. Negotiators are well prepared and are armed
with detailed documentation. Proposals are combed through with great attention to detail.
Quality is a key motivator. Positions are taken relatively close to the time of the final
agreement. Discussions can be highly technical and require in-depth knowledge of the details
proposed. In both Germany and France, senior negotiators are seen as experts and are
therefore well prepared. The good negotiator is a technical expert who is also pragmatic and
skeptical. Negotiation teams are functionally separated, and members have clearly defined
roles and responsibilities.
Southern Europe
Southern Europeans have the ability to use the doing orientation of U.S. Americans with ease,
but their primary focus is on the family, clan, country or cultural group. The focus of
negotiations is on developing and maintaining a personal bond, or connection, between both
parties. This may require informal breaks, socializing and meetings aimed specifically at
establishing personal connections. Time is viewed more flexibly than in Northern Europe. It is

not uncommon for personal issues or other pressing business issues to interfere with a
negotiation schedule. This may mean that a meeting begins late, a delivery of a product is
delayed or the negotiation is postponed to accommodate the prevailing fluid orientation to
time. Nevertheless, task accomplishment is still seen as the primary measure of success.
Latin America
Identifying a personal link is important to doing business in Latin America. To be successful a

person must demonstrate trustworthiness, credibility and a basic understanding of how
business is conducted. Persuasion and influence are directly related to the quality of the
relationship of the two parties. Relationships are built over time, and extended meetings may
be required to build rapport and trust. Demonstrating commitment to the relationship and the
ability to meet obligations is important. Latin Americans feel a need to determine whether the
other side is trustworthy, honorable and compatible before doing business with them.
Demonstrating respect for the hierarchies present and adhering to proper formalities are not
only expected, they are required.
Asia
In Asian cultures, who you know is of primary importance, as there is a strong reliance on
networks and personal relationships in business. Entry into the group provides identity and
protection. Behavior is fixed, and the status quo is preferred over change. Having an
established relationship is the first requirement for doing business. Obligations exist between
two parties who negotiate. The central question for a person from Asia is whether you are
aware of these obligations as a “business friend.” Time is invested in developing relationships
with other parties. This may delay discussion of the tasks at hand, and some U.S Americans
and Canadians may regard this as a waste of time or as showing a lack of expertise. The time
needed to establish trust with your counterpart may be shortened if you have a unique good
or service to sell. However, this advantage will disappear if a competitor from the other
party’s country, with an established business relationship, has a similar product. Relationships
are more important than deals.
The Middle East
People in the Middle East put human relationships first. Blood relationships and extended
family are considered to be the most significant––more significant than relationships
developed with friends, colleagues or outsiders. Negotiation activities will be more successful
if conducted between family members and if a family member is part of your negotiation team.
Establishing a personal relationship is essential before turning to business. Fulfilling
obligations and helping friends take precedence over business demands. U.S. Americans,
Canadians and many Europeans may regard such behavior as unethical, citing conflicts of
interest. But, in the Middle East, using family ties is not seen as a conflict of interest. Time is
fluid and flexible at all stages of the negotiation process. Meetings may include other parties
and can be held in public areas. The top person or owner makes decisions. Formality is
expected in the first few meetings until a relationship has been established. Bargaining is
considered an art form, and efforts are made to get the best possible deal.

All the above regions encompass many countries and cultures that may deviate in or act in
another fashion from the broad generalizations given. One cannot assume that cultural norms
or business practices are generalizable across an entire region. A successful international
negotiator understands that every culture is different and that an understanding of the local
culture and customs is required before proceeding. Because each individual person is unique—
the result of family, social and corporate influences—it is important that you adjust your
approach accordingly. Only by taking all of this into consideration can you truly be prepared
for negotiating across cultures.

How you go about creating personal and business relationships will depend on the cultural
group with which you are doing business. In the United States, a few business cards might be
exchanged at professional associations or a list of contacts might be received from a supervisor
to develop a network at the company. Many times, this might require only a telephone call,
some follow-up e-mail messages, or a brief, initial face-to-face meeting to get started. In other
cultures, such as those of Asia or Latin America, this step may involve important strategic
decisions and the right introductions to the right people.
In Canada and the U.S., relatively little time is devoted to building business relationships.
Spending several minutes at the beginning of a meeting is considered sufficient time for
establishing rapport and developing common ground before turning to business. If two
individuals or companies have been doing business for a while, it is assumed that a business
relationship exists; but a personal relationship may or may not be involved. Many people have
commented that U.S. Americans, in particular, tend to form quick, informal, superficial
relationships rather than those that require a long time to solidify.
In the United States, friendships can be formed quickly with casual acquaintances, and
business can be conducted without the need for deep, long-lasting relationships. Often in
business, personal relationships are viewed suspiciously, since it is thought that such
relationships could lead to a conflict of interest or to unethical behavior.
In Europe, relationships tend to take a long time and much effort to develop. This is largely
the result of long-lasting, well-established networks of customers, colleagues, friends and
family. It may be difficult for U.S. Americans to break into these networks.
In the Middle East and other traditional cultures, building business relationships may require
much more investment of time and effort than expected. If two individuals or companies have
been doing business for a considerable period of time, it is likely that a personal or family
relationship preceded the business relationship.
In high-context cultures, participants not only want to spend time with the other person, to
develop rapport and trust; they also may require this association prior to initiating or
completing a business deal. Over time, and over several meetings in various locations and
settings, a decision will be made regarding the potential business partner. This decision will

involve an evaluation of the other person’s trustworthiness or ability to meet future obligations
required of a business relationship.
In Latin America, having a personal relationship is a prerequisite to establishing a business

relationship. The decision to engage in a business relationship is reached as a result of
repeated interactions on a personal level over time. In contrast, U.S. Americans do not
necessarily feel that they have to like someone or have a personal relationship in order for
someone to do business with them.
Here are some important questions to ask yourself before attempting to initiate a business
relationship across cultures:
• With which company should I do business?

• When should I pursue a business relationship? A personal one?
• What kinds of activities are involved in building a business relationship?
• How should one build rapport and trust in a personal or
business relationship?
• How should I pursue or maintain a personal or business relationship?
• How much time should I spend initiating a business relationship?
• How and when do I follow-up on existing relationships?
• Why should U.S. companies move toward building long-lasting, reliable
business relationships overseas?
• Do I need to develop personal relationships to generate business?
• How important is socializing to building a business relationship?
Determining when to enter into a business relationship or a personal relationship, how to

pursue the relationship, what activities to initiate and how much time to spend on this step
are all crucial considerations for the success of a negotiation. Different expectations as to how
networking is done provide an example of how culture can affect the building of personal and
business relationships. We see this in the following anecdote.
Uwe Schmidt, a German working in the U.S., was attending a local networking group of
professional quality managers. He was approached by Tom Miller, a U.S. American who
quickly introduced himself and told Schmidt his name, where he worked and what he did
for a living. Miller asked Schmidt what he was doing in the U.S. Schmidt began explaining
what he had been doing in Germany before his arrival in the U.S., his schooling, his
occupation, his reasons for coming to the U.S. and so on. However, after two minutes,
Miller, seeing a colleague in the crowded room, interrupted Schmidt by yelling across the
room, “Hey, Bob come over here and meet my friend Uwe!” Miller’s behavior and use of the
word “friend” offended Schmidt. In Germany, true personal relationships take time. In
Germany, a person builds trust by being reliable and predictable through task
accomplishment over extended periods of time, even years. Relationships are not made
based on a quick informal introduction.
To build and maintain a business relationship with someone of another culture with whom you
will be negotiating, you should:

• Know your customer’s situation, position, market and industry.
• Develop rapport through “small talk” and socializing.
• Develop trust by accomplishing tasks reliably and consistently over time.
• Check the other person’s assumptions, expectations, needs, interests
and objectives.
• Observe the hierarchy, status, roles and functions of the other
team’s members.
• Show an awareness of the time and effort needed to reach a consensus.
• Use informal channels to gather information and establish trust.
• Value the process of formality, ceremony and rituals over getting results or
“staying on track.”
• Create value by providing mutual benefits, dependencies and a shared
perception of the situation.
• Maintain the continuity of your team members over time.
• At the conclusion of a negotiation, follow-up with personal contact
and communication.
Whereas U.S. Americans focus on bargaining and getting a signed contract, individuals from
most other cultures focus on the relationship rather than the deal. For example,
communicating while drinking is an integral part of negotiating in Japan, Russia and China. In
Japan, informal settings in restaurants, bars and golf courses are not only used to conduct
business, but also to build personal relationships with colleagues, customers and suppliers. The
Japanese are willing to spend the extra time and money after working hours to meet customers
or subordinates in order to air issues or dissatisfactions, exchange information on competitors
or new company activities, and explore potential business partnerships. In addition, informal
discussions over drinks allow for a more relaxed atmosphere in which to learn more about the
other person. They also allow the Japanese to give feedback or to convey unpleasant news,
something usually not given in public.

The orientation phase consists of introductions, opening statements, an overview of the
situation, and the defining and prioritizing of issues at the table.
Once you have entered the network successfully and have started the process of building
personal and business relationships, each side undergoes a period of orientation to their
counterpart’s way of doing business, to their organizational culture, to the individuals involved
and to the specific circumstances of the relationship. Everyone involved engages in a
reassessment of the other. Each party understands the other’s goals, needs, constraints and
problem-solving approaches. With these in mind, each side defines the business interests and
objectives that will guide the future relationship. Based on this assessment and definition, all
parties involved move to create an alignment and a strategy for the negotiation, the success of
which determines the tone of the next phase.

How we orient ourselves to a specific company, the people representing the other side or
the specific business situation depends on our own culture and business practices. The time
and specificity devoted to a relationship at the start are critical to successfully doing
business across cultural groups. Depending on the cultural region, this phase requires
varying degrees of attention, time and resources. Before focusing on business specifics,
individuals from more traditional cultures want to understand the whole environment, the
background or history of a situation, the other people involved, any precedents or decisions
previously made, and the credibility of the company. This contrasts sharply with the
practice of U.S. Americans, who direct most of their effort and time to achieving the goal
of the negotiation, which is a signed contract or agreement. For them, time is money, and
should not be wasted. The result is that they spend as little time as possible on small talk,
focusing instead on the specifics of an issue or problem. The opportunity not to be missed,
or the deal to be closed, is uppermost in their thoughts.
Assessing the importance of this phase of orientation and presentation is most important in
cross-cultural negotiations. Orienting yourself to the other culture, and learning how to present
your proposal in the most effective way, is an important part of building a business relationship.
Orientation to the Other Party

What are the other party’s overall objectives in the negotiation? Their goals? How do their
objectives and goals compare with your own? The more information you have about the other
party’s objectives, goals, issues and needs, the more power you will have in the negotiation.
Your confidence will be directly tied to the power you have to influence the other party. Your
influence is a result of your own experience, the experiences and expertise of your team
members, and the resources that your organization can bring to bear in the negotiation.
What is the objective of the negotiation? What issues are being brought to the negotiating
table? Which are negotiable, and which are not? Once all of the issues have been identified,
on both sides, you can list each issue and an appropriate strategy for each. Issues should be
prioritized in order of importance. Upper and lower limits should be set for each issue, to
allow for flexibility in the negotiation. Issues should be linked or separated as needed.
Concessions for each issue should be identified for use in the negotiation. Once you have
completed this process for your side, you should do the same for the other party. What are
their issues? Is there common ground? What strategies will they use, and what limits will
they set for each issue? Based on this analysis, what issues will likely become sources of
conflict or areas of disagreement?
Which Negotiation Issues Are Important to You?

First, you should clearly outline for yourself what issues are most important to you. It could
be any one or more of the following:
• Backup service
• Compensation for failure
• Delivery
• Discounts

• Distributor/supplier agreements
• EDI: electronic data interchange
• Exclusive rights
• Inventory holding
• Intellectual property
• Method of payment
• Penalty clauses
• Price
• Proprietary information
• Quality
• Quantity
• Specifications
• Stock holding
• Technical support
• Technical training
• Technology transfer
• Warranty
Then you should develop a full analysis of the other party’s needs, interests, decision-making
processes, alternatives, options and time frame. One way to obtain this information is to do a
counterpart analysis.
Counterpart Analysis
Step One
In what business environment does the other party currently operate? Start by analyzing the
economic situation, industry, market, and goods or services offered. Describe your counterpart
and how you will encounter him or her. Will you be talking to an individual representative or to
a team? What assumptions can you make about their dominant cultural orientations or
preferences? What are the likely goals, expectations, interests, needs, etc., that your counterparts
bring to this situation? Determine what negotiation strategy your counterpart is likely to prefer.
What negotiation strategy would run counter to their expectations and/or preferences?
Step Two
What is the optimal outcome of the negotiation from your counterpart’s point of view? Given
your analysis in Step 1, how does your counterpart define the optimal outcome? What strategy
will they devise to meet their needs (situational, interpersonal, organizational) and
expectations? How will they structure the negotiation process?
Be sure to frame your assessment with a detailed analysis of needs and expectations on
three levels:
Situational: Does the situation in which your interactions occur dictate specific
behaviors/actions?

Interpersonal: What are the needs on an interpersonal level with regard to
relationship, communication and cognitive styles, problem-solving, affinity
and alignment, etc.?
Organizational: What are the counterpart’s organizational levels that affect

the process, decision-making, objectives, etc. and how do they contribute to
the situation?
Step Three
Examine the driving and restraining forces that will affect your counterpart’s overall strategy.
From the understanding generated in steps one and two, what forces from the business
environment and your counterpart’s cultural orientations will affect the negotiation? Since you
will have less information on your counterparts than on yourself, it is important to distinguish
between those forces that you are certain will affect the negotiation from those that may or may
not have an impact. Outline the information needed to increase the certainty of the situation.
What Is Negotiable?
When negotiating across cultures, you must be aware of which sorts of items are negotiable
and which are not. Overall, negotiators should look beyond present positions to the other
side’s underlying interests and needs. Cultural values, however, are usually not negotiable.
Position
People tend to adopt a single position where their interests and needs are concerned. These
positions are stated as demands or preferences. But positions can lock negotiators in a box.
Focus on the underlying interests and needs, not on the stated position.
Interests and Needs
Interests and needs can be both tangible (products) and intangible (emotions and ideas).
Although interests and needs can be expressed in the actual stated positions, more often, they
are beneath the surface of what is said and done. Identifying interests and needs is the
cornerstone of successful negotiations. Understanding your counterpart’s needs will allow you
to be more flexible and provide more alternatives during the negotiation.
Core Values
Although they often remain unarticulated, your counterpart’s cultural orientations play a
central role in influencing negotiations. Behavior, language and nonverbal cues are easily
observed by you or your counterpart in the negotiation. What are less likely to be observed
are the underlying customs, attitudes, beliefs and values that drive behavior at the negotiation
table. Deeply held values can affect the issues and needs that are presented on both sides.
Remember that core cultural values are not open to negotiation.

Contrasting Low-Context and High-Context Negotiation Approaches
The U.S. approach to negotiating is to view the process primarily as a problem-solving exercise
in which both sides define the problem, invent new solutions, choose among alternative ways
of handling the problem as defined, and set the terms and limits necessary to guide a solution.
This low-context approach to negotiating focuses primarily on achieving results above all else,
and ignores the larger issue of the human relationships involved. It also assumes that each side
will take a similar approach or bring to bear a set of negotiation tools and techniques that are
understood by both parties. U.S. negotiators expect to treat everyone at the table in an
egalitarian manner by focusing the process on issues, rather than on personalities. Each side
presents its proposal to the other, and a process of give-and-take ensues until a contract is
signed. Discussions are businesslike and to the point. Persuasion and influence tactics are used
with incremental concessions to reach what is seen as a reasonable compromise.
The U.S. approach may not work well in high-context cultures in which building personal and
business relationships between negotiating partners is the top priority. In high-context
cultures, the ultimate goal is to establish a personal relationship in which favors are given and
received. In China, for example, personal relationships and connections are used to influence
the outcome of negotiations. The Chinese pursue their negotiation objectives through a
variety of strategies or tactics that leverage feelings of friendship, obligation, guilt and
dependence between parties. Only by developing rapport and building trust can a high-
context person be assured that obligations will be met over time. By contrast, in a low-context
culture, the contract ensures that obligations are met, while relationships are secondary to
commitment and follow-through.
The low-context negotiator will present his position up front, while the high-context
negotiator will reveal his or her position gradually or not at all. This high-context approach
avoids potential conflict and reduces risk, but is likely to add to frustration on both sides,
especially when the low-context negotiator tries to move the negotiation forward by offering
a concession and the high-context negotiator responds with more questions or silence.
In high-context cultures, such as Mexico, standing, reputation and honor are paramount in the
negotiation. Loss of “face” is a deal-killer. Risk is reduced by following protocol and
communicating in a ceremonial, expressive way. The rule is: no surprises. In Japan, negotiators
reduce risk by establishing preconditions and assurances, asking for your position first, building
consensus through informal channels and using a non-threatening approach. In China, agreement
is also sought on pre-conditions or principles before entering into formal talks. By accepting these
principles, you have implicitly agreed to, or acceded to, the Chinese position at the outset.
The high-context negotiator tries to learn as much as possible about the low-context negotiator’s
position before presenting his own position. This can result in the low-context negotiator
making counterproposals and concessions before knowing the other’s position. By the time the
high-context negotiator presents his position, there is little room to maneuver.
For example, the Chinese usually present their position first only when they believe they have
the edge in expertise or power. If they are uncertain about their negotiating position, they will

ask the other side to go first. However, even when the Chinese state their position first, initial
positions are seen as guiding principles that may serve to conceal real objectives. By letting
the other side speak first, the Chinese can gather important data that are used to adjust their
position and strategy later on in the negotiation.
High-context negotiators may also differ from low-context negotiators in the values they seek
to promote or defend based on their interpretations of history or sovereignty. This, in turn,
will affect how they set their priorities and goals. National dignity is a sensitive issue when a
country has suffered occupation or loss of national territory or when an industry has suffered
exploitation by a stronger country. Past history, as well as real or imagined slights, may
influence a country’s position in a negotiation. Status-consciousness and historical grievances
have produced a collective sensitivity in both China and Mexico that is hard to ignore when
negotiating a new agreement between two companies. Because of their preoccupation with
status, negotiators from China and Mexico will try to establish their superiority at the earliest
stage of the negotiation.
The psychological issue of status consciousness or past history may result in a negotiation
strategy that appeals to positions of dependency or weakness when negotiating with the
United States. Japan, Egypt and Mexico are some of the countries that have used this strategy
successfully in various international negotiations. North Korea, India and China have, in their
drive for autonomy, used appeals for aid and special treatment when dealing with the United
States. China, for example, has often claimed that it is a poor country and that, therefore, rich
countries such as the United States should pay more for Chinese products or for doing
business in China. Although there are no easy answers, it is important to decide how to
respond to such strategies and tactics when they are used by the other party.
Presentation of Information
How information is presented, how people communicate with each other, when and what
type of information is shared can all be affected by cultural orientations. Knowing how and
when to ask questions is important to obtaining the information required to understand the
other party’s interests and needs. Knowing the other side’s interests and needs will determine
how you will present your proposal and information during the negotiation.
Some cultures may spend more time on procedural issues, structuring the negotiation process
using formalities and rules of procedure, identifying the issues that will be discussed, the order
of discussion, and the purpose of the discussion. U.S. Americans see formal communication
as a barrier to discovering the interests of the other side; they see informal communication
and the removal of protocol as the best way to develop a business relationship. The
assumption is that informality breaks down barriers and allows both parties to spend time
gathering the information needed for a successful negotiation.
What kind of information does the other party need to know about us? What kind of
information do we need to know about them? What specific information do we need on their
business, products and industry? How will we structure the presentation of information to the
other side? In a deductive or inductive way? In a linear or systemic manner? What is the

process for presenting or exchanging information? What is the use of questions to gather
information or confirm what has been revealed? How should we structure the agenda or
process of the negotiation? How do we decide what issues, objectives and needs should be
addressed first? How can we be sure that the information we get from the other side is
accurate? While this phase of the negotiation process is less important in the U.S., Canada and
some Northern European countries, knowing how your overseas counterpart approaches this
phase is likely to increase the chances for success.
Opening Presentation
Before making your opening presentation or stating your proposal at the negotiation table,
you should provide translated written materials, if possible. Briefly introduce your company,
your business and products, industry trends and any other relevant information that may be
important to the other party. Review the agenda and clarify the ground rules for the
negotiation. If this has not occurred earlier in the negotiation, introduce team members,
including names, titles and positions. Be sure to take the time to establish rapport through
small talk and a free exchange of information. Identify your position by clarifying the issues as
you see them. Provide a well-planned, detailed presentation supported by data and visuals.
Before presenting differences, identify common ground and mutual expectations based on
information gathered before the talks. Be aware of, and point to, earlier relationships. This
“working history” can help to create an environment for mutual agreement. Describe how your
position benefits the other side and fits their needs. Finally, give both sides the opportunity to
be heard and understood.
Communicating Across Cultures

A U.S.-American manager was heard saying, “If English is the international language of
business and technology, we should have no difficulty speaking to and negotiating with people
from other cultures, right?” The answer to this rhetorical question is that communication is one
of the most difficult problems in negotiating across cultures, regardless of what language is
being spoken.
Communication is the process by which people share information, import and emotion
through the exchange of verbal and nonverbal messages. The challenge in a multicultural
environment is to ensure that the message being sent is the one received by the other party.
In a negotiation, information is exchanged verbally and nonverbally. Information in all these

contexts must be interpreted as to its real meaning. If people share a common frame of
reference (system of meaning), understanding is not problematic. Without such a common
frame of reference, however, negotiations become more difficult.
Low-context cultures rely primarily on words, facts and data to convey meaning. Because
nonverbal cues and unstated contextual information play a minimal role in conveying
meaning, there is no overriding need for the prior existence of, or introduction to, a shared
frame of reference (system of meaning) to make effective communication possible. High-
context cultures, on the other hand, do not only rely on words but also on the depth and
breadth of a shared system of meaning and knowledge that derives from some shared cultural

context. High-context cultures, such as Japan or Mexico, thus believe that foreign negotiating
partners must first be inducted into their cultural and business-cultural context before business
can be properly addressed.
When communicating with individuals from a high-context culture, you should allocate more
time for small talk and the exchange of background information before turning to business.
When communicating with those from a low-context culture, the use of protocol, symbolism
and small talk should be reduced to a minimum to allow both parties to get to business matters
as soon as possible.
Nonverbal Behavior
Nonverbal communication includes facial expressions, gestures, body control, movement, use
of space, dress and ceremony. Low-context individuals fail to understand the emphasis put on
nonverbals, symbols and implied meaning. In Asia, the use of facial expressions and body
language may be too subtle for U.S. Americans to read successfully. Mexicans are not shy
about using emotions and extreme body language at the bargaining table. U.S. Americans may
interpret such behavior as unprofessional, whereas Mexicans may see the U.S. Americans’ lack
of response to such behavior as a sign of heartlessness.
Where people sit, and where meetings are held, are important as well. Ritual and choreographed
arrangements are meant to convey messages about rank and reputation in hierarchical societies
that can often be misunderstood. The manipulation of protocol and ceremony by other cultures
for their own purposes is not to be underestimated in international negotiations.
Clarifying and Confirming
Assumptions, perceptions and expectations should be clarified and confirmed, based on what
is said and done during a negotiation. If understanding is not frequently clarified and
confirmed with persons from another culture, miscommunications and misunderstandings are
likely to occur.
Here are some strategies for clarifying and confirming:
• Summarize what you hear and clarify what you do not understand.
• Examine areas where there are differences in values, perceptions or styles.
• Explain your own thinking, assumptions and perceptions during a meeting
or negotiation.
• Give relevant background information to the other person, including
historical, cultural and business reasoning.
• Listen carefully and clarify such value-laden terms as “fair,” “teamwork,”
“honesty,” “logical” and “working together.” Do not be judgmental.
• Use informal channels or third parties to get information or to
clarify misunderstandings.
• Describe what you observe. Give your interpretation of events and
ask a person from the other culture or country for theirs. Then share
your expectations.

• Observe nonverbals to understand your counterpart’s gestures, facial
expressions and verbal cues. Pay special attention to unarticulated
indications of some difficulty or an answer of “no.”
• Create a positive, relaxed atmosphere in which to discuss your
assumptions and promote cooperation.
• Provide opportunities for other people to be heard at breaks or other
informal moments.
• Acknowledge and validate the other person’s viewpoint, values and needs.
Modifying Your Language
Although English is becoming the international language of business, we must bear in mind that
many people speak English as a second language. To ensure that their message is understood,
English speakers should modify or internationalize their speech. The following tips are offered
for more effective communication with non-native English speakers during a negotiation:
• Err on the side of formality.

• Use simple vocabulary and common meanings of words.
• Speak slowly, using short sentences.
• Pronounce your words clearly.
• Avoid idioms, jargon, sports analogies and slang.
• Use specific action verbs.
• Avoid complex, or two-word, verbs.
• Summarize frequently and carefully.
• Use alternative meanings carefully.
• Listen actively and clarify misunderstandings.
• Use data, graphs and figures for easy understanding.
• Be aware that there are alternative spellings for some English words.
• Break often to allow for informal discussions and questions.
• Use reflective listening: restate what you have heard as an empathetic
response. Pause and let the speaker continue.
• Do not ask “why”; Instead, use “what” and “how” questions.
• Use silence and pauses to your advantage to get additional information.
• Allow sufficient time for the other party to process information.
• Confirm any discussions or arrangements in writing.
Using Interpreters
Interpreters are often used during negotiations to increase the effectiveness of communication
across cultures. An interpreter can assist with the accurate communication of ideas between
two parties, as well as advise the negotiation team of actual or potential
misunderstandings––cultural or otherwise. Having your own interpreter who is familiar with
your business and your terminology is critical. Interpreting is a skilled profession and requires
special abilities and training. Just because someone speaks another language does not make
that person a good interpreter.

The following points are provided to assist negotiators in using interpreters more effectively:
• Brief the interpreter in advance, and prepare written materials

ahead of time.
• Speak clearly and slowly, using simple vocabulary and short sentences.
• Speak only for short periods at a time (30 seconds maximum) and then
give the interpreter time to interpret.
• Do not interrupt the interpreter while he or she is speaking, as this may
cause misunderstandings.
• Do not be surprised if a speaker speaks at length and the interpretation
takes less time (the reverse may also happen). However, be suspicious if
this is a consistent pattern with the interpreter.
• Plan each statement carefully. Avoid idioms, jargon, sports analogies
and slang.
• Talk to, and look at, your host, not their interpreter, during
the negotiation.
• Allow the interpreter to take notes while you and your counterpart
are speaking.
• Maintain a pleasant manner, and keep your emotions in check
when speaking.
• Allow the interpreter adequate time to interpret what has been said and to
clarify those points not understood.
• Prepare an agenda, and write out all points to be discussed at the meeting.
• After the meeting, confirm all discussions/arrangements in writing.
• Take breaks often to allow the interpreter to rest and to check with you
informally on the progress of the meeting.
• Treat both your interpreter and their interpreter with respect.

The overall aim of your influence-and-persuasion strategy is to change the other party’s
perspective so that they agree to your demands. In international negotiations, you need to be
aware of cultural differences. Different cultural orientations to time, communication, power
and thinking may affect the influence strategy you should use.
A person’s ability to make promises or commitments is directly proportional to that person’s

level of trust in you and your company. Trust is higher when both sides have shared interests
or common ground. The other party’s openness and ability to exchange information is directly
proportional to the level of trust established before the negotiation begins. The first step in
establishing trust and rapport is learning how to communicate effectively across cultures. The
next step is understanding how cultures like to structure, share and process information to be
used in decision-making. The final step is devoting the time and resources needed to build and
maintain the relationship.

Persuading Others
In the United States, influence and persuasion strategies are considered the core of selling and
negotiating. Whether the approach is competitive (win-lose) or collaborative (win-win), what
is important to the U.S. negotiator is knowing which influence and persuasion strategies will be
used. The most typical persuasion strategy used in the United States is the rational or logical
approach supported with data and evidence. Data, facts, expert testimony and documented
results are likely to be successful in persuading U.S. Americans and Canadians. Presenting
information on pricing, specifications, features and benefits are typical influence strategies.
In Europe, persuasive arguments are rational, linear and supported by objective data. To be
successful, language and interpersonal skills, as well as exercising a formal orientation are
required. U.S. Americans may find that when dealing with negotiators from Spain, Greece or
Italy, information and interests may be revealed during the persuasion process rather than in
earlier phases of the negotiation process. This will require extra patience and time.
In Europe and other cultures, where the hierarchy and formal orientations are strong, it is
important to identify the decision-makers and the people in authority before entering into
either personal or business relationships. In Latin America, the presentation of persuasive
arguments within formal sessions is always part of the negotiation process, but informal
meetings and discussions to persuade others are crucial. The communication style is more
expressive and emotional than that found in the United States. Although disagreements will
be couched in polite language to avoid embarrassing others––especially those in
power––interruptions and fighting for “airtime” are not unusual.
In Asia, as in Latin America, the persuasion process can take place outside of formal
negotiation sessions. Informal face-to-face meetings and social activities are important in
getting to know your counterpart and developing the trust and rapport required for more
formal negotiations. Information that cannot be shared in a more public setting can be shared
privately, thereby saving face, and avoiding the sense that one or the other party has been
compromised.
Although culture plays a strong role in shaping persuasion strategies, almost all cultures use
one or more of the following approaches:
• Promise: If you comply with my request, I will reward you.

• Threat: If you do not comply with my request, I will punish you.
• Affinity: I like you, and you are my friend, so why won’t you comply with
my request?
• Pre-giving: I have helped you or given you something in the past, so why
won’t you comply with my request?
• Punishment: I will continually punish you or provide negative results until
you comply with my request.
• Debt: You owe me, based on past favors or obligations; so you should
comply with my request.

• Moral appeal: If you do not comply with my request, you are not a moral
person, for a moral person would agree with my request.
• Expertise: If you comply with my request, the outcome or results will
reward or benefit you.
• Esteem: If you comply with my request, those whom you value will think
better of you.
• Emotions: You will feel better if you comply with my request.
It is important to correctly interpret what you observe during the negotiation. Many
information and influence strategies may be conveyed nonverbally. It is most important that
nonverbal cues—from eye movements to facial expressions and from body language to hand
gestures—be recognized and understood.
Using Logic and Reasoning

The type of logic and reasoning used to persuade others is also shaped by culture. U.S. Americans
and Canadians generally have an inductive approach to presenting their proposals. Agendas are
linear in nature, and issues are followed in sequence over the course of the negotiation. U.S.
Americans and Canadians are persuaded by expert opinion and supporting factual information. In
Latin America, the approach follows a more deductive process, in which the focus is on general
issues that lead to specific guiding principles. Logic follows to support conclusions.
French managers use a deductive approach when presenting their proposals. The French
negotiator may start with a general opening statement of understanding and provide
subsequent details to support that position over the course of the negotiation. The overall
proposal may be systemic or holistic in nature. Once a position has been presented, it is
extremely difficult to introduce new information or to make changes to that position. In
contrast, U.S. managers present a single position or lay out arguments based on strategic
planning before the negotiation begins. Specific points or issues are presented within the logic
of a general conclusion. The overall approach is based on a negotiator’s own experience, the
issues to be negotiated and the tactics agreed upon prior to the negotiation.
In low-context cultures, such as the United States, the end objective of the negotiation is to
draw up a detailed, binding contract that represents the mutual interests of both parties. There
is an assumption that a persuasive argument or logical reasoning is the best way to avoid a
contest of power or a confrontation. Appeals to the other side are based on facts, data and
other evidence, not on feelings, emotions or personal relationships.
In high-context cultures, such as Mexico or Japan, negotiators may end up with a signed
contract, but the process of negotiating the agreement may be determined by how well
individual negotiators fulfill the obligations implicit in the relationships that exist between
both parties. When a high-context individual is confronted with a strong, well-reasoned
argument, he may employ, what by U.S. standards would be a weaker counter argument of
past problems or obligations. The use of a personal or emotional appeal based on current or
past relationships is less persuasive in the U.S. and Canada than it is in Latin America or Asia.

A strong verbal argument is seen as persuasive in the United States, and precise information is
transmitted in a concise, timely manner. When confronted with a strong argument or
presentation, a high-context person may use an indirect response to say “no.” These indirect
responses and understatements allow the person to save face. For U.S. negotiators, the
inability to understand or read between the lines of an indirect “no” often results in an
evaluation of the other person as insincere or evasive. To avoid open conflict, a high-context
person may agree to something, but then not follow through. Remember that for high-context
individuals, it is always easier to agree or to express words of goodwill and encouragement
than to disagree in public.
Bargaining
Approaches to bargaining when persuading and influencing others differ widely across cultures.
Learning which strategy of logic, evidence and influence is effective in a particular culture, and
how to use it at the negotiation table, is essential for success. In the United States, the emphasis
of sales and negotiation is on the bargaining and persuading phase of the process. One’s
behavior at the negotiating table can determine the success or failure of the negotiation.
Adapting and using effective communication skills is fundamental to presenting information

effectively. In low-context cultures, persuasion strategies are laid out in precise arguments with
sufficient supporting evidence to justify a conclusion. Much of a person’s success in the United
States is due to her ability to present empirical data as objective evidence for effective
arguments. In high-context cultures, success can be found in a person’s ability to make an
emotional appeal or in her ability to count on a personal relationship to persuade, the other
party. This does not mean that a person from a high-context culture may not prepare and
present a persuasive logical argument in a negotiation. Choosing the appropriate influence
strategy for a given situation and presenting it in a persuasive manner is the essence of a
successful negotiation.
Two types of bargaining are:
Win-lose: concerned with gain or competition.

Win-win: concerned with the exchange of information and collaboration.
The first type uses tactics that are aimed at gaining the upper hand, while the second uses a
problem-solving approach. Win-lose bargaining assumes that the negotiation is a competition
in which both sides attempt to align personal relationships and empirical data to obtain their
ultimate objectives. Win-win bargaining assumes that the negotiation is a mutual endeavor in
which both sides engage to arrive at a mutually satisfying arrangement.
The U.S. Approach to Win-Win Negotiations
The U.S. approach to win-win negotiations assumes a cooperative process aimed at creating
value by finding interests that both partners have in common. This entails separating
negotiation issues from the relationship and looking at positions to find common ground.
Areas of difference are identified and solutions sought. Bargaining ranges are identified and

both upper and lower limits are set. Fallback positions are established, and alternatives are
provided to create value. A focus on common ground and mutual interests is used to
strengthen the overall relationship.
Once differences in position and interests have been identified, it is good to remember that the
greater the number of options or alternatives you have, the greater the range of outcomes
possible. The overall goal of a win-win negotiation is to maximize the gains for both sides. The
best approach is to start with the least contentious issues and establish small wins for both sides.
This will leave more time for the most important issues in the negotiation. Remember that
bargaining is only one aspect of negotiating the deal and that it may occur throughout the
negotiation period. Also, bargaining involves more than dividing value between two parties.
A win-win approach to negotiating often assumes a level of trust that usually does not exist in
cross-cultural negotiations. A win-win scenario requires that there be reciprocity in
concessions and the desire to move the negotiation ahead quickly. In many situations,
however, politics or bureaucracy may reduce the level of trust required to reach an agreement.
Concessions may not be reciprocated, because hierarchy and high-context orientations
influence decision-making and slow the progress of the negotiation.
Setting a Realistic Bargaining Range
Negotiators in the United States and Canada often prepare for a negotiation by trying to
figure out what they would like to get and what is the least they would settle for, and then
finding some realistic point in between to settle upon. The realistic point in between requires
each party to decide on a fallback position and a walk-away point. This can lead to a win-lose
mentality or to adversarial, positional negotiations.
By focusing on what you want to get, without understanding the needs and wants of the other
party, you will be unprepared to respond to their ideas and concerns in the negotiation. This
will prevent you from engaging in real problem-solving. For example, you may approach the
negotiation in a linear fashion, identifying those issues or differences in which the gap is the
widest and trying to bargain your way to a realistic midpoint. Although reaching consensus is
important to the relationship between parties, it may lead to a less than satisfactory agreement.
If you value something highly and the other party values it equally, you may decide to split the
difference on price or compromise on some aspect of quality or specifications. The better
solution is to try and find ways of providing real value to the other party, at little or no cost to
you. Both sides are better off with such a solution and receive value in return.
A Clash of Cultural Orientations?
To illustrate how variously bargaining is regarded across different cultures we may examine
the contrast between Japanese and Saudi negotiating styles.
Bargaining in the Middle East is expected, and used, as a means of establishing a personal
relationship built on a mutual perception of value, honesty and trust. The process, or act, of
bargaining is therefore considered to be very important in and of itself. Thus, Saudis, for
example, will often open with a price much higher than the one that they would ultimately

be willing to settle for. Conflict is inherent to the process and differences of opinion regarding
value are expected. The Saudis expect to bargain their way to a final agreement, and this can
take a long period of time.
The Japanese, on the other hand, try to avoid conflict at all cost. All efforts are therefore made
to keep bargaining to an absolute minimum. In contrast to the Saudis, the Japanese present a
price that is very close to their actual asking price and that is the result of extensive
information-gathering and consensus-building within their team. They expect to share
information in the negotiation and persuade the other party that their position is reasonable.
If they are the buyer, they do not expect to bargain at all. Japanese buyers expect Japanese
sellers to understand their needs and propose a reasonable price. If they are the seller, they
expect to have the buyer accept their price with as little bargaining as possible.
Given the different expectations for bargaining between Saudi and Japanese negotiators,
substantial mistrust and misunderstandings may occur when negotiators from these two
cultures gather around the negotiating table. When the Saudis open with a high first offer, the
Japanese may feel that the Saudis are not serious in negotiating a deal. And when the Japanese
provide a price that is the industry standard and refuse to bargain, the Saudis may feel that the
Japanese are not serious. The differences in approach could lead to failure in the negotiation.
What is important to both parties? For the Saudis, it may be the need to develop a personal
and business relationship through the act of bargaining. The Saudis will spend a lot of time
bargaining, but this may be interspersed with small talk and rapport-building to establish the
credibility of both sides. For the Japanese, what is paramount is the need for both sides to
understand their respective roles and responsibilities in the bargaining process. Understanding
what influence strategies and bargaining tactics will work for both cultures improves the
likelihood of success.
Concessions and Compromise

Concessions and compromise do not come easily when negotiating internationally. Each
culture has different preferences for conceding, compromising and cooperating. Concessions
are often dependent on the influence and persuasion tactics used in the negotiation. If one
party explores issues in a linear fashion, they are likely to make concessions on a point-by-
point basis. If a more systemic approach is taken, all issues are considered at the same time and
may not be separated from one another. In this case, concessions may happen at the end of
the negotiation, or not at all. How we communicate, address issues, give concessions, pursue
compromise and make decisions at or away from the negotiating table form the core of the
negotiation process.
In the United States and Canada, the process of conceding generally proceeds in a sequential
manner in which both sides discuss each issue and propose concessions or compromises to
reach a mutual decision. All issues are discussed and resolved one at a time, with the
appropriate concessions and compromises. Concessions should be made at the table and
responded to by the other party with agreement or counteroffers. Not all concessions require
a quid pro quo, but a general sense of fairness is expected.

In Japan, both parties strive to understand each other’s position and to agree on how to best
meet the other party’s expectations. The goal is to continue discussing all ideas, proposals,
opportunities and concerns while working toward mutual agreement. Concessions, if any, are
made at the end of the negotiation. The Japanese consider all of the issues, proposals and
concessions the other party is likely to make before finalizing an agreement. In Japan, the
buyer is in the superior position and will structure the negotiation. The buyer should consider
the needs of the seller and try not to take advantage of the seller’s lower position. There is an
expectation that, at the end of the negotiation, the seller will give something of value to the
buyer. Both parties strive to create an environment in which they can concede on issues and
still maintain “face.”
U.S. Americans tend to see the formal agreement or contract as the end result of a negotiation,
whereas the Japanese or Chinese see it as the beginning of an adaptive process requiring
changes or adjustments as the environment or circumstances change. In some cases—in China,
for example—the formal agreement expresses an ideal situation, and it is expected that
deadlines and specifications will change with changing circumstances. U.S. Americans, and
others, who use concessions and compromise before the contract is signed, however, find it
extremely difficult to make concessions or change the contract after it is signed. In other
cultures, such as Russia and Mexico, compromise is taken as a loss of “face.” It is viewed as a
sign of failure and weakness or as evidence of faulty reasoning from your initial position.
When making concessions, do not make the first offer or accept the first offer made to you.
If the other side makes a high initial demand, do not make a counterproposal. Be willing to
let the demand await further discussion. Make concessions slowly, and start with small
concessions that cost you little but add value to the position of the other party. Tie
concessions together to get something in return. Defer concessions on important issues until
later in the negotiation. Do not feel the need to reciprocate all concessions given by the other
side. Also, do not follow a consistent pattern of concessions; this might allow your
counterpart to predict how and when you will make concessions. At the end of the
negotiation, the side that gave fewer concessions usually has the more advantageous
agreement. Waiting until the end of the negotiation to make concessions, however, may lead
to feelings of mistrust or lowered satisfaction from the other party.
Speeding Up the Negotiation Process

Although U.S. negotiators may use concessions and compromise to speed up the negotiation,
many cultures do not use this approach. Other ways of speeding up the negotiation process
are as follows:
• Send information, such as company brochures and product specifications,

before the meeting.
• Outline issues and concerns in advance.
• Allow time for small talk and rapport-building.
• Show interest in the other country, the other culture and the
other person.
• Anticipate repetitive questioning.

• If you have provided complete answers to questions, feel free to answer
with less detail when repeating responses.
• Use one team spokesperson and have her act as a facilitator or gatekeeper
for the team’s responses. Develop a process for determining who will
respond to which questions.
• Use breaks to check on progress and explore issues.
• Establish informal channels of communication at the operational level.
• Identify disagreements and sticking points between and after sessions.
• Accept all offers for after-hours entertainment and meetings.
• Attend all ceremonies and give appropriate gifts.
• Send correspondence to and visit partners regularly.
• Use recesses, informal talks, apologies or postponements to change the
general atmosphere or feelings of the other side.
• Change the location of the discussion to create a good atmosphere.
Identifying and Resolving Conflict

Before reaching agreement or getting a contract signed, you may find yourself in a situation in
which a conflict or disagreement must be resolved. When you negotiate across cultures,
conflicts are inevitable, and differences between two parties can be enormous. Resolving
conflicts—better yet, anticipating conflicts—is critical to success. Also important is
understanding how another culture recognizes conflict and the associated behaviors in
resolving that conflict.
For example, read the following dialogue between a Japanese and a U.S. American who are
negotiating a deal:
U.S.: What do you think of our proposal?

J: Your proposal is of interest to us.
U.S.: So what quantity of parts will you be buying in the first quarter of 2000?
J: Yes. We have every intention of ordering parts in 2000.
U.S.: Can I put you down for, let’s say, a 15 percent increase from last year?
J: Yes, 15 percent may be a little difficult for us.
In this exchange, the Japanese bowed his head, shifted in his seat when the U.S. American
asked him how much he would buy in the year 2000, and averted his eyes during subsequent
responses. For a fellow Japanese, these nonverbal behaviors would have indicated disagreement
or a negative response.
When you believe that there is a conflict in a negotiation, the best response is to provide an
overview of the current situation as you perceive it. Provide additional information for further

clarification, if necessary. Review the current business environment and the history of the
relationship. Outline areas of common ground, as well as what you hope to achieve in the
negotiation. Outline what you see the other side trying to achieve in the negotiation. Show
your sincerity in wanting to resolve the conflict by stating your intentions or desired outcome.
If the other side is reluctant to respond to your presentation of the conflict, ask them for their
understanding of the current situation. Be patient and persistent in trying to resolve the issue.
Use small, incremental steps. Do not hurry to resolve the conflict with quick concessions or
compromises. A better approach may be to manipulate the context or location of the
negotiation. Take a break and talk with your counterpart informally over coffee or at dinner.
In private, identify points of difference after again reviewing common ground or points of
agreement. If this is not possible, then try to introduce a third party who can mediate on your
behalf. Finally, if you are unable to resolve the conflict with the negotiation team, escalate the
conflict or issue to reach higher management.
Deadlocks
Conceptions of time are crucial during the agreement phase of the negotiation. More pressure
is felt as deadlines approach and decisions still have to be made about the form of the
agreement or contract. Issues of face loom large as needs are fulfilled. Deadlocks over major
areas of disagreement may either be resolved negatively (no agreement) or positively (major
impediments are removed). Success will ultimately depend on both sides focusing on and
addressing the needs of the other side.
Breaking deadlocks is a key skill in international negotiation. Deadlocks can be broken by

changing the framework of the talks, raising issues to upper management or developing
transitional agreements. The two most common tactics used to break a deadlock or stalemate
are compromise and coercion. Coercion may produce short-term benefits, but only at the
expense of longer-term resentment and damage to the overall relationship. To break the
deadlock, the pressure exerted by one side must be credible, appropriate, in proportion to
the issue being discussed and convincing to others and must lead to a mutually beneficial
outcome. However, deadlocks over principle beliefs, attitudes or values may prove difficult
to negotiate.
Getting a Signed Contract

An executive at a U.S.-American computer firm tells the following story about his experience
regarding a contract with a Japanese supplier:
I was working with one of our Japanese suppliers to purchase U.S. $3 million
worth of test equipment for our new manufacturing facility. We discussed the
matter together at great length in Tokyo and Dallas over a period of several
months. During our final meeting, we came up with what I thought was a
common understanding on pricing, delivery dates and specifications. We
submitted a lengthy contract in English outlining the rights and
responsibilities on both sides. For several weeks the Japanese sent numerous
faxes to Dallas asking many questions about certain standard clauses in the

contract. As the deadline for the project grew near, we still hadn’t received a
signed contract from the Japanese supplier. Two weeks before the first order
of equipment was supposed to arrive in Dallas, I called Tokyo to ask for a
signed agreement. My Japanese counterpart told me, “Smith-san, we
understand your situation and we agree to sign the contract. We will send it
in a couple of days.” We received the test equipment on schedule but I never
did receive a signed contract.
This executive’s experience is not uncommon. In many cultures around the world, the terms of
an agreement will be adhered to even if an official contract is never actually signed. When
negotiating across culture it is therefore important to understand the preferred way of reaching
agreement in the particular cultures in which one is working. Do both parties give a verbal
agreement and shake hands on the deal, or do they send a letter of understanding that broadly
outlines what was negotiated and understood by both parties? While contracts and agreements
are regulated by the laws and rules of both parties, cultural orientations can also affect how
agreements are expressed. There may be cultural preferences in deciding what form an
agreement should take, and how binding, specific or long it should be. In some cultures, the
contract may be a platform for developing further business relationships, or it may be the
starting point for an ongoing negotiation as circumstances change. In the following
paragraphs we outline how some other cultures approach contracts and agreements.
In the United States, the purpose of the negotiation is to work toward the goal of a signed
contract. This process is linear, and reaching agreement is expected to take a prescribed length
of time. The contract is expected to detail the terms of the agreement, spelling out product
specifications, as well as rewards and punishments for compliance and noncompliance. The
contract is viewed as providing security to all parties and is seen as a way of building trust.
Since the roles and responsibilities of all parties are spelled out in detail, there is little
ambiguity or change required after the contract is signed. In the United States, all parties are
expected to live up to the terms of the contract, and the agreement is not seen as a flexible
document that can easily be changed. Commitment is measured by the ability of the other
party to meet the terms of the contract. Living by the written terms of the agreement governs
post-negotiation behavior in the United States.
In Mexico, the other party will respond to a clear, rational argument, but the ultimate decision
will be based on whether they feel that you were simpatico (displaying a sense of honor or
dignity) in the negotiation. Formal agreements in Mexico are often elaborate works of
eloquence and may represent expressions of an ideal situation rather than actual terms and
conditions to be followed absolutely.
In Saudi Arabia, entry into the network of family and friends is the critical step in building
trust to reach a final agreement. A handshake will suffice, with a letter of agreement following.
Even a cup of coffee or tea can indicate that an agreement has been reached. Specific details
will follow the more general agreement of understanding.
In Japan, the development of a personal relationship may precede the formation of a business
relationship. This requires an investment of time and resources before an agreement can be

reached. International deals may result in a U.S.-type contract, whereas a domestic
negotiation may result in a letter of understanding. The Japanese word for contract, keiyaku,
connotes a set of promises by both sides to work together.
In China, memorandums of understanding or letters of agreement are preferred over

contracts. For many Chinese, reaching an agreement is the signal that the “real” negotiation
has just begun. Your Chinese counterparts will therefore adhere to a written contract as best
they can, but they may not feel bound by it.
In South Korea, contracts are adhered to as closely as possible, but Koreans may not feel
bound by what is written in the agreement, especially if circumstances change or if they later
feel cheated or legally trapped.
In Brazil, contracts are general in scope and terms are broad. This allows for flexibility in
continuing discussions on specific details, timing and legal responsibility. The contract, no
matter how detailed, is an expression of the principal guidelines for the business relationship.
Detailed and lengthy U.S. contracts may seem overwhelming and can be perceived as
displaying a lack of trust among the parties.
In Germany, contracts can be detailed, and they reflect the focus on technical expertise that
is present throughout the negotiation. Changes to a contract after signing are taken as an
indication of poor preparation or lack of expertise.
In Russia, contracts are not held in high regard, and personal relationships go a long way
toward ensuring that the terms of an agreement are carried out. The status of legal contracts
in Russia is questionable and should be thoroughly investigated.
As the preceding synopses demonstrate, different cultures may approach the agreement phase
of the negotiation process with different expectations. Understanding that contracts may not
signal the finality of a negotiation is a key step in securing the commitment you will need in
order to do business across cultures. Following is a series of questions every negotiator should
ask himself concerning his counterparts’ views of contracts and agreements:
• Is a contract or an agreement the end goal of your negotiation process?

• What is the meaning of a contract or agreement in the other culture?
• How are agreements reached?
• How binding are agreements over time?
• How specific or detailed should agreements be?
• Are agreements written or verbal?
• What penalties are incurred if the agreement is not honored?
• How do you work toward a mutually beneficial agreement?
• Have both parties clarified their expectations regarding the format
of the contract?
• How do parties follow up on or show commitment to an agreement?

Monitoring Agreements and Contracts
It is important to monitor agreements for compliance and to maintain the relationship that
was established during the negotiation process. The specific monitoring activities are
predicated upon the nature of the agreement, your relationship, the past performance of the
other party, the structure of your organization and the performance activities themselves.
Cultures that require both a personal and business relationship have high expectations that
negotiators and the personnel responsible for implementing the contract will maintain in
close communication.
Clerical personnel can, most likely, handle most routine communications. More complex
matters, however, will require input from lawyers, technical experts and top managers. The
following techniques may be helpful in monitoring compliance. Your specific application of
these techniques will vary from instance to instance, according to your relationship with
your counterpart.
Informal contacts: phone calls, letters and social contacts can serve to monitor
compliance; much like informal negotiating.
On-site reviews: while “inspection” may be a formidable term, an on-site “visit”

may be acceptable.
Third-party channels: mutual contacts may be able to provide you with

inside information.
Symbolic interactions: formal banquets and social events underscore sincerity and
demonstrate the importance of the relationship.
The Importance of Ceremonies and Gift-Giving

U. S. Americans may feel that ceremonies are time-consuming, expensive and unnecessary, but
in Japan and China, for example, negotiators and key personnel see ceremonies as a ritual
necessary to finalize an agreement or contract. Signing ceremonies and elaborate receptions
or banquets to celebrate the signing are seen as extensions of the contract. Ceremonies and
follow-up activities focus awareness on the relationship, and U.S. Americans should expect to
participate fully. If your CEO or top officers cannot attend the final ceremony, a letter of
appreciation should be sent and read during the ceremony. Group pictures should be taken to
commemorate the event.
Giving appropriate gifts to the other party, their top management and each member of the
team is also suggested. Gifts are taken as signs of gratitude and friendship, and are ritually
exchanged to bind relationships. Ideally, the gifts should be symbolic of the relationship, your
company or its products, or representative of your home country. While a single gift can be
given to a company, individual gifts can be given to each of the negotiation team members or
company representatives who were involved in the ongoing discussions. Individuals who have
been especially helpful, third parties and colleagues should be given a gift privately after the

contract has been signed. Gifts should be of quality and wrapped appropriately. Remember
that some cultures do not have the custom of opening presents in front of others; so do not
insist that the receiver open or unwrap your present when you give it. Conversely, you should
find out whether or not it is appropriate for you to open any present or gift offered to you
during the ceremony.
Ethics in Negotiation
How should you deal with the different ethical and legal requirements of foreign countries?
What if the business practices of the host country require payments to facilitate a deal or
payments to a government official to obtain a permit? In such cases, one must weigh the need
to do the “right thing” against the need to get the contract or to get the job done. You must
ask yourself whether the action you are about to take is legal. If you are a U.S. resident, this
means that you need to understand the Foreign Corrupt Practices Act (FCPA) enacted by
Congress in 1977. Put simply, a U.S. company employee may not offer a payment, promise
of money, or something of value to another foreign official for the purpose of influencing any
act or decision that would assist the U.S. company in obtaining or retaining business. In
addition, this offer to a government official cannot be used to direct business to any person
or to assist the company in obtaining special preferential treatment, with the expectation of
receiving a contract or other business operations in the foreign country.
Since the U.S.-American ethical standpoint often results in inappropriate business-cultural

behavior, and in many cases, lost business, we must analyze the situation on two levels. First,
if a transaction does not violate the laws and regulations of the country, and it was made for
reasonable expenses, such as travel related to the promotion of goods or services, then it does
not violate the FCPA. Once you have established that the transaction does not violate the
regulations of the FCPA, you must decide if the particular action is nevertheless morally
acceptable to you and your company.
When working in universalistic cultures, the choices are often easy, because transactions and
behaviors are clearly defined as being either right or wrong. When working in particularistic
cultures, however, right is right or wrong, depending on the business context or situation.
Issues are viewed as occurring in shades of gray, not in black and white. In these contexts, your
corporate culture must foster a climate of integrity, and the company’s bylaws must clearly
outline what does and does not constitute ethical behavior. Employees must exercise
judgment in determining how to employ their company’s ethical standards without being
judgmental of the other culture or its values.
Phase 7: Follow-up and Maintaining Relationships

In many cultures, a written contract is not the end of the negotiation, but the beginning of a
longer business relationship. Signing the contract does not necessarily conclude the sales or
negotiation transaction. Discussions may be reopened at any time and for any reason.
Business relationships in high-context cultures often involve a set of obligations and duties
that go beyond the business deal. Maintaining personal and business relationships is essential
for long-term success.

U.S. Americans see maintaining the business relationship as a cost-effective way to maintain a
competitive advantage or the security of goods or services. The assumption, however, is that
a business relationship does not require a personal relationship between two parties. The terms
of the contract are viewed as governing the form of business between two companies. The
agreement takes precedence over personal relationships. Although personal relationships may
occur as a result of long-term business interactions, very little effort may be devoted to
maintaining the relationship over time. U.S. companies find it difficult to maintain negotiation
teams, groups or individuals long after the contract is signed. Turnover, new assignments and
the next deal often preclude the time or resources to follow-up on previously established
relationships. Other cultures, however, will often maintain the same negotiating team or
personnel when negotiating future contracts or agreements. When negotiating with high-
context and being cultures, U.S. Americans should use the same team members for new
contracts, if possible, in order to take advantage of established relationships.
Maintaining the business relationship requires periodic face-to-face meetings, regular

telephone calls or written correspondence, including letters, faxes and e-mail messages. Both
formal and informal exchanges are recommended to maintain the network after the deal is
made. Socializing on a periodic basis will create opportunities to listen for relevant
information, to discover unmet expectations, or to identify future problems. Early detection of
potential problems allows your company or group to approach problem-solving in a culturally
appropriate manner. This may well increase the respect, status and power of the other party,
which comes with the requisite obligations. The process of maintaining the relationship can
have significant, long-term advantages to both parties over time.
Communicating Using Distance Technology

U.S. negotiators with limited budgets and little experience in traveling and negotiating abroad
may try to initiate, build and maintain relationships through electronic means. The ease that
technology brings to communication across geographic distances and time zones, however,
can actually become a source of frustration and difficulty. Using e-mail, voice mail and
teleconferencing increases the potential for misunderstanding by ignoring cultural preferences
for communication or by making the need for cultural adjustment less obvious. For example,
e-mail and groupware in the United States is seen as a way of lowering hierarchy and
organizational levels through access to information. This may not be true for cultures in which
hierarchy is still important, as in Germany or Mexico.
In low-context cultures, such as the United States and Canada, e-mail and videoconferencing
are frequently accepted as efficient substitutes for face-to-face meetings. In high-context
cultures, such as Japan and France, a higher value is placed on face-to-face interactions and
reading the nonverbals of the person with whom you are communicating during the
negotiation. Since 75 percent of all communication is nonverbal, meaning can certainly be lost
when using a lower-context form of communication technology, such e-mail.
As a rule, the better your rapport with a person or the longer the relationship has existed
between two parties, the more likely it will be that a lower context of communication can be
successful. When negotiating with an individual or party from a high-context culture, it is best

to arrange a face-to-face meeting early on and to establish sufficient rapport before moving to
a lower-context form of communication.
In general, a regular pattern of communication, making the most of multiple technologies

ranging from videoconferencing, to telephone, to faxes, to e-mail should be established
between the two parties negotiating. After a face-to-face meeting, a fax should be used to
summarize information shared or decisions made. A telephone call could follow the fax to
ensure receipt and to give the other party a chance to respond. Knowing the communication
preferences of the other party is crucial for successful negotiations. Remember that the
ultimate purpose of such communication is to build and enhance relationships, not to replace
them with electronic technology.
The following questions should be asked when considering a communications strategy for use
in an international negotiation:
• What technology can be used on a regular basis to maintain the

relationship before, during and after the negotiation?
• Do both parties have equal access to comparable
communication technology?
• How does each culture prefer to communicate, face-to-face or by
other means?
• How well do the people who are communicating know each other?
• Do the two parties have a rapport with each other?
• How will important information be communicated between parties?
• How can technology be used to build a stronger business relationship?
• What language will be used in both written and verbal messages?
• What are the most convenient times for all parties to communicate?
• Has a communication format or preference been identified for
everyone to use?
Conclusion
Together, the Cultural Orientations Model™ and the seven-phase model of negotiations
provide an comprehensive framework for analyzing and understanding how negotiations
occur across cultures.
All negotiators need to recognize the potential for dissonance and misunderstanding in
negotiations across cultures. There is a need to synchronize communication and negotiation
strategies within the negotiating team. Although one may argue that the negotiation process
is universal across all cultures, we must not dismiss or minimize the impact of cultural
differences or orientations.
Preparation is the key factor in preparing to negotiate successfully across cultures. Adapting
your own approach to a specific cultural style of negotiating–– and understanding how culture

affects the seven phases of the negotiation process and the specific strategies or tactics to be
employed––is crucial for success.
The ongoing study of international negotiations provides persuasive evidence of the

continued impact of cultural differences on negotiation, goals and behaviors. The challenge is
to keep open channels of communication to allow both sides to explore opportunities and
alternatives so that mutual agreements can be reached.
Following is a summary of critical questions to ask yourself before attempting to negotiate

across cultures:
• Does the way in which the other party communicates, makes decisions
and solves problems fundamentally differ from our way?
• What tactics, strategies and behaviors will the other party use in
the negotiation?
• What knowledge, experience and skills do I need to conduct business in
that culture?
• How do I build trust and rapport with the other party?
• What influence and persuasion strategies can I use to reach an agreement?
• How do we handle issues of culture, distance and time in the
negotiation process?
• How do we establish a business relationship? A personal relationship?
• How do we assess the other party’s expectations, needs, wants and issues?
• What is important to the other party in terms of their goals, constraints,
barriers and requirements?
• How should we present and ask for information at the negotiation table?
Away from the table?
• How important are hierarchy, power, position and authority to the
other party?
• How many team members should we have, and what qualities should each
team member possess?


CULTURAL ORIENTATIONS MODEL™ QUICK REFERENCE
A
Appendix CULTURAL ORIENTATIONS MODEL™
QUICK REFERENCE
1. Environment:
How individuals view and
relate to the people, objects
and issues in their sphere
of influence
2. Time:
How individuals perceive the
nature of time and its use
3. Action: 7. Individualism:
How individuals conceptualize actions How individuals define their identity
and interactions
8. Competitiveness:
4. Communication: How individuals are motivated
How individuals express themselves
9. Structure:
5. Space: How individuals approach change,
How individuals demarcate their risk, ambiguity and uncertainty
physical and psychological space
10. Thinking:
6. Power: How individuals conceptualize
How individuals view differential
power relationships

Cultural Orientations: Summary
ENVIRONMENT
TIME
ACTION
COMMUNICATION
SPACE
POWER
INDIVIDUALISM
COMPETITIVENESS
STRUCTURE
THINKING

RESOURCES
RESOURCES
The American Heritage Dictionary of the English Language. New York:

Houghton Mifflin Company, 1992.
Brake, Terence, Danielle Medina Walker, and Thomas Walker. Doing Business Internationally:
The Guide to Cross-Cultural Success. Princeton, NJ: Richard D. Irwin, 1995.
Casse, Pierre, and Surinder Deal. Managing Intercultural Negotiations. Yarmouth, ME:
Intercultural Press, 1985.
Copeland, Lennie, and Lewis Griggs. Going International: How to Make Friends and Deal Effectively
in the Global Marketplace. New York: Random House, 1985.
Fisher, Roger, and William Ury. Getting to Yes. Boston: Houghton Mifflin, 1983.
Foster, Dean Allen. Bargaining Across Borders: How to Negotiate Business Successfully Anywhere
in the World. New York: McGraw Hill, 1992.
Graham, John L., and Yoshihiro Sano. Smart Bargaining: Doing Business with the Japanese.
Cambridge, MA: Ballinger Publishing Company, 1984.
Griffin, Trenholme J., and Russell W. Daggatt. The Global Negotiator: Building Strong Business
Relationships Anywhere in the World. New York: Harper Business, 1990.
Hendon, Donald W., and Rebecca A. Hendon. World-Class Negotiating: Dealmaking in

the Global Marketplace. New York: John Wiley & Sons, Inc., 1990.
March, Robert M. Honoring the Customer: Marketing and Selling to the Japanese. New York:
John Wiley & Sons, Inc., 1991.
March, Robert M. The Japanese Negotiator: Subtlety and Strategy Beyond Western Logic. Tokyo:
Kodansha International, 1988.
Miyashita, Kenichi, and David Russell. Keiretsu: Inside the Hidden Japanese Conglomerates.
New York: McGraw Hill, 1994.

Moran, Robert T., and William G. Stripp. Dynamics of Successful International Business Negotiations.
Houston: Gulf Publishing Company, 1991.
Moran, Robert T. Getting Your Yen’s Worth. Houston: Gulf Publishing,1989.
Schuster, Camille, and Michael Copeland. Global Business: Planning for Sales and Negotiations.
Fort Worth, TX: Dryden Press, 1996.
Tung, Rosalie L. Business Negotiations with the Japanese. Lexington, MD: Lexington Books, 1984.

INDEX
INDEX
agreement, 2-3, 6, 9, 11-15, 18-19, 22-23, 26, 29, 32- public, 17, 19, 44, 47, 57, 59
33, 36-37, 43, 48, 51-53, 58, 60-67, 69, 71 structure, vii, 22, 25, 56, 67, 73
bargaining, 1, 3, 18, 21-22, 29, 32, 34, 47, 54, 56, 59- flexibility, 16, 18, 20, 23, 25
61, 75 order, 22-23, 25
Casse, Pierre, 3 thinking, vii, 23, 26, 54, 56, 73
compromise, 11, 14, 24, 32, 51, 60-62, 64 deductive, 23, 52, 58
concessions, 3, 20, 27, 32, 48, 51, 60-62, 64 inductive, 23, 52, 58
conflict, 2-3, 12, 14, 17-19, 21, 26, 38, 44-45, 48, 51, linear, 23, 26, 52, 57-58, 60-61, 65
59, 61, 63-64 systemic, 24, 26, 52, 58, 61
consensus, 11-12, 21-23, 36-37, 41, 47, 51, 61 time, vii, 2, 14-16, 25-26, 29, 42-45, 56, 73
continua/continuum, vii fixed, vii, 15, 25-26
cross-cultural competence, iv-vi fluid, vii, 15, 41-42, 44
cultural orientations, 1-2, 4, 13-14, 24, 30, 32, 35, 37, future, 16
49, 50, 52, 56, 60, 65, 74 past, 16
action, vii, 15-16, 18, 22-24, 55, 73 present, 16, 44
being, 16-17, 24-25, 29, 42 Cultural Orientations Model (COM), vi-vii, 2
doing, 16-17, 24, 29, 43 culture, iii-vii, 1-5, 13, 25-27, 30-31, 38, 45-48, 51, 54,
communication, vii, 2-3, 17-19, 26-27, 38-39, 53, 57-59, 61, 63, 65-66, 68-71
56-57, 59, 69-70, 73 Deal, Surinder, 3
direct, 17, 26 decision-making, vii, 11-12, 16, 22-23, 27, 32, 38, 40-
expressive, 18, 51, 57 42, 49-50, 56, 60
formal, 2, 17, 31, 42, 52, 57 e-mail, 33, 39, 45, 69-70
high-context, 17-18, 26, 45, 51-54, 58-60, 68-69 Equal Dignity Rule, 36
indirect, 2, 17, 26, 59 ethics, 21, 68
informal, 18, 24, 26, 31, 37, 42, 52, 67 fax, 33, 70
instrumental, 19 FCPA, 68
low-context, 17-18, 39, 51-54, 58-59, 69 fighting, 57
competitiveness, vii, 22, 24-25, 73 generalizations, 26-27, 45
competitive, iii, 22, 24-25, 32, 57 globalization, 1
cooperative, 22, 25, 32, 59 guanxi, 40-41
environment, vii, 14-15, 24-25, 39, 48-50, 53, 62, keiyaku, 66
64, 73 kieretsu, 10
constraint, 14-15 letters, 66-67, 69
control, 14-15, 24-25, 39, 54 management, iv, vii, 5-6, 8, 10-13, 15, 35, 37, 64, 67
harmony, 14, 24-25, 41 managers, iii, 6, 10-13, 20, 25-26, 46, 58, 67
individualism, vii, 20, 24-25, 73 monochronic, 15
collectivistic, 20-21, 24 multicultural, iii, 53
individualistic, 20-21, 24 neg, 2
particularistic, 21, 68 negotiation, 1-4, 6-39, 43-44, 47-48, 50-59, 61-63, 66-
universalistic, 21, 68 70
power, vii, 20, 36, 42, 48, 56-57, 69, 71, 73 across cultures, 1-3, 26-27, 33, 35, 39, 45, 50, 53,
equality, 20-21 63, 70-71
hierarchy, 17, 20, 40-42, 47, 60, 69, 71 behavior, 1-5, 14, 17-18, 21, 24, 27, 50, 54, 59, 65,
space, vii, 14, 19, 20, 73 68
private, 17, 19, 26, 64 defined, 2, 21-22, 38, 43

network, 2-3, 5, 8, 10, 16-17, 29-30, 32-33, 39-43, 45,
47, 65, 69
approach, 1, 30, 39
entry, 29-30, 39-44, 65
nonverbal communication, 54
onsen, 12
orientation, iv, vii
otium, 2
persuading, i, 29, 32, 56-57, 59
phone, 7, 67
polychronic, 15
presentation, 12-13, 18, 29, 31, 33, 47, 52-53, 57, 59,
64
problem-solving, 14-17, 27, 31-32, 47, 51, 59-60, 69
rapport, 16, 19, 25, 31, 37, 44-47, 51, 53, 56-57, 61-62,
69-71
relationships, 1-3, 10, 15-18, 21-22, 29-32, 38, 40-47,
51, 53, 57-59, 65-69
business relationships, 2, 29, 31, 45-47, 51, 57, 65,
68, 75
maintaining relationships, 29, 32, 68
personal relationships, 16-17, 31, 38, 40, 42-47, 51,
58-59, 66, 69
resolution, 38
saving face, 18, 57
shukko, 10
stereotypes, 26-27
tactics, vii, 17-18, 23, 27, 32, 34-35, 51-52, 58-59, 61,
64, 71
team, 6-14, 16-18, 20-27, 30, 35-39, 44, 47-49, 53, 55,
61, 63-64, 67, 69, 71
team selection, 36-37
teamwork, 22, 54

Negotiating Across Cultures

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MANAGING ACROSS CULTURES

Training Management Corporation

Editor-in-Chief: Monique Rinere-Güven, Ph.D.

© 2000 TRAINING MANAGEMENT CORPORATION.

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Chapter One: The Impact of Culture on Negotiating Behavior 5

Chapter Two: The Seven Phases of International Negotiation 29

Chapter Three: Negotiating Effectively Across Cultures 35

Appendix A: Cultural Orientations Model™ Quick Reference 73

Training Management Corporation: Information & Publications

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Influencing and Persuading Across Cultures

Culture and Cross-Cultural Competence

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Culture can be thought of as an iceberg. The

The Five Aspects of Cross-Cultural Competence

The first aspect of understanding people and

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interdependence of all cultures. Each individual has a responsibility to continually maintain

The second aspect is the development of self-awareness. To increase your effectiveness, it is

• What are the cultural preferences of my counterparts?

The Cultural Orientations Model™ (COM™)

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The Cultural Orientations Model™

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Doing Business Globally

Doing Business in Asia Doing Business in Ireland

Managing Across Cultures

Influencing and Persuading Across Cultures

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Globalization is exposing more people to cross-border negotiations and bargaining—which,

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Negotiating Across Cultures

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To be successful in international negotiations, we need to:

• Understand the fundamental cultural preferences of the other party.

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The Ten Dimensions of Culture

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Individuals from high-context cultures are relationship-centered and require voluminous

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Low-context individuals are primarily task-centered in their approach to work, requiring

As an expressive communicator, you value emotional expressions and passionate responses in

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As an instrumental communicator, you value factual, objective, pragmatic exchanges of

In private-oriented cultures, negotiators generally prefer to put a greater distance between

Private cultures place an emphasis on closed-door meetings with minimal interruptions.

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