Negotiating with International Customers,

Partners, and Regulators

McGraw-Hill/Irwin
International Marketing 14/e Copyright © 2009 by The McGraw-Hill 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

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 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

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 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

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 The Dangers of Stereotypes
• 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
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The Pervasive(แพร่ หลาย) Impact of Culture
on Negotiation Behavior
• Regional generalizations very often are not
correct
• Cultural differences cause four kinds of
problems in international business negotiations
– Language
– Nonverbal behaviors
– Values
– Thinking and decision-making processes
► Order is important

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 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

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 Verbal Negotiation Tactics
(The “What” of Communications)
Exhibit 19.1

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 Linguistic Aspect of Language and
Nonverbal Behavior (“How” Things are Said)
Exhibit 19.2

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 Differences in Language
and Nonverbal Behaviors
• Japan
• Korea
• China (northern)
• Taiwan
• Russia
• Israel
• Germany
• United Kingdom
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 Differences in Language
and Nonverbal Behaviors
• Spain
• France
• Brazil
• Mexico
• French-speaking Canada
• English-speaking Canada
• United States

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 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

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 Cultural Differences
in Competitiveness and Equality
Exhibit 19.3

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 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

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 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

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 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

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 Negotiation Preliminaries
• Checklist for planning international negotiations
1. Assessment of the situation and the people
2. Facts to confirm during the negotiation
3. Agenda
4. Best alternative to a negotiated agreement (BATNA)
5. Concession strategies
6. Team assignments

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 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

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 At the Negotiation Table
• Business negotiations proceed through four
stages
1. Nontask sounding
2. Task-related exchange of information
3. Persuasion (ชักจูง, โน้มน้าว)
4. Concessions and agreement

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 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

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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

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 Summary of Japanese
and American Negotiation Styles
Exhibit 19.4

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 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

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 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

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 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
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 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

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 Summary
• It is important to take cultural differences into
account when meeting clients, customers, and
business partners across the international
negotiation table
• Negotiators’ personalities and backgrounds
influence their behavior
– Making it important to get to know the individuals who represent
client and customer companies

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 Summary
• Four kinds of problems frequently arise during
international business negotiations
1. Level of language
2. Nonverbal behaviors
3. Values
4. Thinking and decision-making processes
• Much care must be taken in selecting negotiating
teams
• Situational factors such as the location for
meetings and the time allowed must be carefully
considered and managed
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 Summary
• Business negotiations involve four steps
1. Nontask sounding
2. Task-related information exchange
3. Persuasion
4. Concessions and agreement.
• The time spent on each step can vary
considerably from country to country
• Americans tend to be deal oriented
– More care should be taken in follow-up communications with
foreign clients and partners who put more emphasis on long-
term business relationships

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