Chapter 5

I. Negotiation- process of discussion by which two or more parties aim to reach a mutually acceptable agreement

5 Stages:

1. Preparation:

· negotiators should familiarize themselves with the entire context and background of their counterparts

· must understand own and other parties' negotiation styles

· should know the value system, attitudes, and expected behaviors of the opposing team

· prior to the meeting find out what kinds of demands might be made, what the composition of the opposing team is and the level of authority that their members posses

2. Relationship building:

· Goal is to get to know one's contacts in the host country and to build mutual trust before beginning any business discussion

· Involves nontask sounding (nemawashi)- general, polite conversation, and informal communication before meetings

· Sometimes intermediaries are needed, these are people who already has the trust and respect of the foreign managers and can act as a "relationship bridge"

· Should also practice "posturing" which is the general discussion that sets the tone for the meeting and it should result in a feeling of cooperation

3. Exchanging task-related information:

· Consists of exchanging task-related info

· Each side typically makes a presentation and states its position, then Q&A

· Negotiators should focus both on presenting their own situation and in showing an understanding of their opponents' viewpoint

· Prepare for this stage by practicing role reversal

4. Persuasion

· Hard bargaining-parties try to persuade the other to accept more of their position and to give up some of their own

· Can face difficulties because of differences in the uses and interpretation of verbal and nonverbal behaviors

· Exhibit 5-4 shows list of recognizable bargaining tactics

· "dirty tricks" sometimes used- giving misleading or distorted factual info, using the excuse of ambiguous authority

· "Rough tactics" also used- designed to put opposing negotiators in a stressful situation physically or psychologically so that their giving in is more likely (uncomfortable room temp, too-bright lighting, take-it-or-leave-it attitude, etc.)

5. Concessions and Agreement

· Stage of concessions and agreement

· Decide ahead of time what your concession strategy will be

· Usually better end results are attained by starting with extreme positions

Managing negotiations

· must understand the position of the other parties in regard to their goals

· problem-solving approach is essential to successful cross-cultural negotiation

- requires that a negotiator treat everyone with respect

- avoid making anyone feel uncomfortable

- should not criticized or blame the other parties in a personal way that may make someone feel shame (lose face)

Successful negotiators

· consider a wider range of options

· pay greater attention to areas of common ground

· tend to make twice as many comments regarding long-term issues

· more likely to set upper and lower limits regarding specific points

· make fewer irritating comments ("We are making you a generous offer")

· use counterproposals less frequently

· use fewer reasons to back up arguments

· practice active listening

Using the Internet for Negotiations

· internet-based programs provide support for the negotiating process but can't take the place of face-to-face negotiations

· Negotiating Support Systems (NSS) program that provides support by finding zones of agreement, decreasing direct and indirect costs of negotiations, and maximizing the chances of optimal outcomes

· INSPIRE- web-based program that provides applications for preparing and conducting negotiations

Influence of culture in decision making:

· Culture affects decision making at the broader context of the nation's institutional culture- produces collective patterns of decision making

· Culture also affects decisions through culturally based value systems that affect an individual's perception of a situation

· 5 stages of rational decision-making process

1. Defining the problem

2. Gathering and analyzing relevant data

3. Considering alternatives

4. Deciding on best solution

5. Implementing decision
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Maggie Mariscal