International Negotiations 1

0
Negotiation and Dispute Resolution

Beverly J. DeMarr and Suzanne C. de Janasz

Class Name
Negotiation Process
BA 4222
Instructor Name
Date, Semester
Chapter Objectives

• Assess the challenges that may arise when engaging

in cross-cultural negotiations
• Describe the five dimensions of Hofstede’s cross-
cultural differences and how each one impacts the
process of negotiations
• Identify what research needs to be done to
effectively prepare for a cross-cultural negotiation,
as well as options for obtaining the needed
information
• Hypothesize the nondomestic negotiating partner’s
expectations for your culturally influenced behavior
in a cross-cultural negotiation
• Assess the importance of the relationship in cross-
cultural negotiation and how that varies among
cultures
Chapter Objectives, cont.

• Evaluate the communication style, practices, and

expectations for verbal and nonverbal behavior among
cultures and its impact on negotiation processes and
outcomes
• Examine customs, laws, protocol, and the importance
of understanding and demonstrating appreciation for
these differences
Cross-cultural Dimensions

Geert Hofstede’s model of culture identifies 5

differentiating dimensions:

1. Individualism/Collectivism
2. Power Distance
3. Masculinity/Femininity
4. Uncertainty Avoidance
5. Long-Term Orientation
Individualism/Collectivism
Definition: Degree to which members of a society act
as individuals or members of a group

Dimension Example of How it Manifests Example of

Societies
Individualis • Individual United States
m motivation/achievement is key United Kingdom
• Individual autonomy in Australia
making decisions Netherlands
• Focus on individual self-
improvement is favored
Dimension Example of How it Manifests Example of
Societies
Collectivism • Collaborative decision making Japan
• Focus on group harmony, Many Latin American
cohesion and consensus countries
• Protection in exchange for South Korea
loyalty to family/group etc.
Power Distance
Definition: Degree to which members view and
expect elders/seniority in hierarchy possess
significant amounts of power and authority
compared with younger/junior members
Dimension Example of How it Manifests Example of
Societies
High Power • Respect for age, titles and Latin America
Distance seniority Arab countries
• Management philosophy is France
paternalistic
• Adherence to procedures and
protocols
Dimension Example of How it Manifests Example of
Societies
Low Power • Members value competence United States
Distance over seniority Australia
• Democratic, participative style Nordic countries
of management Israel
Masculinity/Femininity
Definition: Degree to which a culture’s prevailing
behaviors are dominated by masculine or feminine
characteristics
Hofstede’s study showed that there was more
commonality among women’s values in all societies
However, men’ s values vary from one country to
the next
• In feminine countries (e.g. Sweden, Norway),
women tend to share modest, caring values with the
men
• In masculine countries (e.g. Japan, Italy) women
are somewhat more assertive and competitive
although not as much as men
Uncertainty Avoidance
Definition: Extent to which a culture programs
its members to feel either uncomfortable in or
threatened by unstructured situations

People have differing abilities to tolerate

uncertainty and ambiguity
• Uncertainty avoiding cultures (e.g. Greece,
Guatemala) pass strict laws to minimize a lack
of structure and the unknown
• Low needs for certainty culture (e.g.
Jamaica, Hong Kong) are characterized by
high levels of entrepreneurial and
intrapreneurial behavior
 Long-Term Orientation vs.
Short-Term Orientation
Definition: Approach to the relationship and
project, whether long term or short term
Dimension Example of How it Manifests Example of
Societies
Long Term • Values thrift and perseverance China
Orientation • Remains with employer for
many years
• Very long term business
planning (100+ years)
Dimension Example of How it Manifests Example of
Societies
Short Term • Values respect for tradition, United States
Orientation fulfilling social obligations,
saving face
• ‘Live for the day’ mentality
• Frequent job changing
• Short planning horizon (5
years max)
Impact on Negotiation
Dimension Impact
Individualism/C Individualists are empowered to accept or reject
ollectivism negotiation offers
Collectivists likely required to check back to ensure
consensus and group benefit
Power Distance Low-PD – tone and process of communication is
informal
High-PD – formal language and process is followed
Masculinity/Fem Masculinity – value status and focus on the task (i.e.
ininity the contract) than the process
Femininity – value building relationships (i.e. the
process) and focus on well-being and quality of life
Uncertainty High UA – prefer clear agendas and procedures
Avoidance Low UA – more adaptable ‘go with the flow’
Long-term LTO – negotiating process one of many within a long-
Orientation term relationship, reciprocity averaged over long-term
STO – more likely concerned about instant and equal
reciprocity
Preparing for International Negotiations

• Preparation is key for negotiating in another

country or across borders
• Be clear on desired outcomes, know your
BATNA
• Gather data that will assist in comparing
alternatives
• Spend time understanding the other party’s
position, interests and cultural drivers
• Additionally, invest in learning about the
organization’s culture and practices
Guidelines to Follow During
International Negotiations

Carefully prepare for conversations conducted

in English
The Use of Time

Understand how negotiations are viewed in terms

of time:
• Negotiators from the U.S. and Germany tend to
use a monochronic mode. The conversation is more
likely to be linear with one issue negotiated at a
time
• Negotiators in a polychronic mode approach issues
in more of a circular fashion – with several issues
open simultaneously (France, Mexico, Central and
South Asian countries)
Customs, Law, and Other Protocols

Gestures in one country don’t necessarily convey

the same meaning in another:

• Greetings: While a handshake may seem like a

standard greeting to a negotiator from the U.S.,
it may be entirely inappropriate in some cultures
• Gifts: In some countries one is expected to offer
the negotiator a gift. Take care in selecting a gift
that will not offend. Know when gifts are
altogether inappropriate
• Intermediary: Consider hiring an experienced
intermediary to facilitate negotiations abroad
Adapting Abroad

Key practices when communicating in another

country
When in Rome?

• Negotiators from other countries study our

culture, too
• Consider home court advantages
• Rule of thumb – Respect and display
sensitivity to differences but do not attempt
to take on the characteristics of the home
side
• The bottom line is this: Humans are full of
surprises, good negotiators adapt within the
conversation
The Relationship and the Negotiation

• No matter what the culture, the relationship is

most important factor in a negotiation
• Good negotiators focus on establishing a
collaborative climate:
– Make sure that people feel nurtured
– Allow both parties to emerge feeling as though they have “ wo
n”
• Be prepared to persuasively present your case
• Be prepared to take the time that people in
another culture might need to consider what
you have said