Lecture International marketing (14/e) - Chapter 19

International Marketi
ng
14th Edition
P h i l i p R. C a t e o r a
M a r y C. G i l l y
John L. Graham

Negotiating
with International
Customers, Partners,
and Regulators
Chapter 19
McGraw­Hill/Irwin
International Marketing 14/e

Copyright © 2009 by The McGraw­Hill Companies, Inc. All rights reserved.


What Should You Learn?
• The problems associated with cultural
stereotypes
• How culture influences behaviors at the
negotiation table
• Common kinds of problems that crop up during
international business negotiations
• The similarities and differences in
communication behaviors in several countries

19-2

What Should You Learn?
• How differences in values and thinking
processes affect international negotiations
• The important factors in selecting a negotiation
team
• How to prepare for international negotiations
• Managing all aspects of the negotiation process
• The important of follow-up communications and
procedures
19-3


Global Perspective
A Japanese Aisatsu
• Face-to-face negotiations
– An omnipresent activity in international commerce

• Executives
– Must also negotiate with representatives of foreign governments

• Negotiation of the original agreement
– A crucial aspect of all international commercial relationships

• Taking cultural differences into account
– Enhances business agreements
– Leads to long-term, profitable relationships across borders
19-4


The Dangers of Stereotypes

• The aggressive American, the quite Japanese, the pushy
Brazilian
• Negotiations
– Are conducted between people, not national stereotypes

• Cultural factors often make huge differences
• Negotiation behaviors are different
– Across regions, genders, and type of industry

• Age and experience also make important differences
• Consider the culture of customers and business partners,
but treat them as individuals
19-5


The Pervasive Impact of Culture
on Negotiation Behavior
• Cultural differences cause four kinds of
problems in international business negotiations
– Language
– Nonverbal behaviors
►

Facial Expression, Silent, Side talk

– Values:
►

Objectivity and Time

– Thinking and decision-making processes
Order is important
► Western style (Sequential) vs. Eastern Style (holistic)
►

19-6


Implications for Managers
and Negotiators
• Four steps for more efficient and effective
international business negotiations
1. Selection of the appropriate negotiation team
2. Management of preliminaries, including training,
preparations, and manipulation of negotiation
settings
3. Management of the process of negotiations
4. Appropriate follow-up procedures and practices

19-7


Negotiation Teams
• Willingness to use team assistance
• Listening skills
• Influence at headquarters (senior executive)
• Gender should not be used as a selection
criterion for international negotiation teams

19-8

Negotiation Preliminaries
• Checklist for planning international
negotiations
1.
2.
3.
4.
5.
6.

Assessment of the situation and the people
Facts to confirm during the negotiation
Agenda
Best alternative to a negotiated agreement (BATNA)
Concession strategies
Team assignments

19-9


Negotiation Preliminaries
• Aspects of the negotiation setting that should be
pre-manipulated
1. Location
2. Physical arrangements
3. Number of parties
4. Number of participants
5. Audiences (news media, competitors, fellow vendors, etc.)

6. Communications channels
7. Time limits

19-10


At the Negotiation Table
• Business negotiations proceed through four
stages
1.
2.
3.
4.

Nontask sounding
Task-related exchange of information
Persuasion
Concessions and agreement

19-11


Nontask Sounding
• Learn the mood of the other side
• Learn about the client’s background and interest
for cues about appropriate communication styles
• Judgments about the “kind” of person in the
negotiation

19-12

Differences in Language
and Nonverbal Behaviors
• Americans are near the bottom of the languages
skills list
• Americans don’t like side conversations by
foreigners in their native language
• The variation across cultures is greater when
comparing linguistic aspects of language and
nonverbal behaviors than when the verbal
content of negotiations is considered

19-13


Differences in Values
• Objectivity
– “Separating people from the problem”

• Competitiveness and equality
– Japanese appear to be the best negotiators with the highest
profits
– Japanese appear to be more equitable with buyers

• Time
– The passage of time is viewed differently across cultures
– These differences most often hurt Americans

19-14

Differences in Thinking
and Decision-Making Processes
• Western approach – sequential
• Eastern approach – holistic
• Americans – business negotiation is a
problem-solving activity
• Japanese – a business negotiation is a time to
develop a business relationship with the goal of
long-term mutual benefit

19-15


Task-Related Information Exchange
• Let the foreign counterparts bring up business
• Expect a large number of questions but little
feedback
• Allow periods of silence
• Use multiple communication channels
• Understand the lack of, or the bluntness
of negative feedback
• Meet aggressive first offers with questions,
not anger
19-16


Persuasion
• Task-related information exchange versus

persuasion
• Avoid threats, warnings, and other aggressive
negotiation tactics
• Avoid emotional outbursts
• Ask more questions
• Use third parties and information channels of
communication
19-17


Concessions and Agreement
• Write down concession-making strategies
• Understand differences in decision-making
styles
• In many cultures, no concessions are made until
the end of the negotiations

19-18


After Negotiations
• In most countries other than America
– Legal systems are not depended upon to settle disputes

• Japan
– Contacts primarily contain comments on principles of the
relationship

• China
– Contracts are more a description of what business partners view

their respective responsibilities to be

• Many foreign CEOs expect a formal contract
signing ceremony
• Follow-up communications are very important
19-19


Conclusions
• Experience levels are going up worldwide
• Culture still counts
• Differences between countries and cultures, no
matter how difficult, can be worked out when
people talk to each other in face-to-face setting

19-20


Verbal Negotiation Tactics
(The “What” of Communications)

19-21


Linguistic Aspect of Language and
Nonverbal Behavior (“How” Things are Said)

19-22

Differences in Language
and Nonverbal Behaviors
• Japan
• Korea
• China (northern)
• Taiwan
• Russia
• Israel
• Germany
• United Kingdom
19-23


Differences in Language
and Nonverbal Behaviors
• Spain
• France
• Brazil
• Mexico
• French-speaking Canada
• English-speaking Canada
• United States
19-24


Cultural Differences
in Competitiveness and Equality

19-25