Chapter 13/ International Negotiation and Cross-Cultural Communication   103

CHAPTER 13

INTERNATIONAL NEGOTIATION AND CROSS-CULTURAL

COMMUNICATION

Learning Objectives
 Understand the basics of spoken and nonverbal communication that may influence cross-
cultural management and negotiation
 Understand the basic international negotiation processes from preparation to closing the deal
 Understand the basic tactics of international negotiation
 Be able to recognize and respond to “dirty tricks” in international negotiations
 Know the differences between the problems solving and competitive approaches to
international negotiation
 Identify the personal characteristics of the successful international negotiator

Introduction
 International negotiation is the process of making business deals across national and cultural
boundaries
 Without successful negotiation and the accompanying cross-cultural communication, there
are seldom successful business transactions
 Successful communication across cultures is a prerequisite for international negotiation

The Basics of Cross-Cultural Communication

 Successful communication across cultures is a prerequisite for international negotiation
 Mistakes in cross-cultural communication often go unnoticed by the communicator, but they
can still damage international relationships and negotiations

Language and Culture

 The interrelationship between language and culture is so strong that some suggest that
language determines the nature of culture - The Whorf hypothesis
 According to Whorf, all languages have limited sets of words
 These restricted word sets constrain the ability of users to understand or conceptualize the
world

High and Low Context Languages

 Low context - people state things directly and explicitly
 The words provide most of the meaning
 Many Northern European languages including German, English and Scandinavian
languages are low context
 High context - people state things indirectly
 Communications have multiple meanings that can only be interpreted by reading the
situation in which they occur
 Asian and Arabic cultures are the most high context in the world

Exhibit 13.1 Shows a Ranking of Languages by their Degrees of High

and Low Context
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 Communication between high and low context individuals is a challenge

 Differences in languages that have implications for international negotiations are not limited
to high- and low-context languages

Basic Communication Styles

 Communication styles can also affect cross-cultural interactions and negotiations
 Direct communication – people speak very directly, to the point
 Formal communication – degree of formality expected in interactions
 US Americans are among the least formal in communication
 Other cultures communicate, especially in business settings, with more formality

Exhibit 13.2 Shows Cultural Differences in Communication Styles

Nonverbal Communication
 Means communicating without words
 Body movements (called kinesics)
 The use of personal space (called proxemics)
 Touching
 Oculesics (eye contact) and olfactics (smell)

Kinesics
 Communicating through body movements
 Easy to misinterpret the meanings of body movements in another culture
 Facial expressions occur in every human interaction. People smile, frown, squint, sneer, and
engage in a range of facial movements
 Body posture relates to the way people stand, walk, and sit. Each culture encourages and
discourages different body postures in different situations
 All cultures use hand gestures to embellish and add emphasis to oral communication

Proxemics
 How people use space to communicate
 The personal bubble of space around each individual may range from nine inches to over
twenty inches
 Personal space may also affect the design of offices

Exhibit 13.3 Shows Seating in a Typical Japanese Office

Haptics or Touch, Oculesics and Olfactics

 Haptics or touching is communication through body contact
 Oculesics refers to communication through eye contact or gaze
 Olfactics is the use of smells as a means of nonverbal communication
 Haptics or toughing is related to proxemics and is a basic form of human interaction
 In greeting one another, people may shake hands, embrace, or kiss
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 Generally, Latin European and Latin American cultures accept more touching than do
Germanic, Anglo, or Scandinavian cultures
 The degree of comfort with gaze and eye contact or oculesics also shows significant
variations around the world
106    Section 1/Chapter Outlines

 U.S. and Canada, people are very comfortable and expect eye contact to be maintained
for a short moment during conversations
 In contrast, China and Japan, eye contact is considered very rude and disrespectful
 Different countries have different views of smell or olfactics
 U.S. and U.K. tend to be very uncomfortable with body odors
 In contrast, Arabs are much more accepting of body odors and consider them natural

Practical Issues in Cross-Cultural Verbal Communication

 Cross-cultural negotiations and communications nearly always face a language barrier
 An important preparation for any international assignment is gaining at least rudimentary
skills in the local language

Using Interpreters
 Provides a simultaneous translation of a foreign language while a person speaks
 Requires greater linguistic skills than speaking a language or translating written documents
 Use of interpreters may not always means that the intended message is always conveyed
efficiently
 Tips to help the U.S. negotiators using interpreters
 Spend time with the interpreter so that he/she gets to know your accent and general
approach to conversations
 Go over technical and other issues with the interpreter to make sure that they are
properly understood
 Insist on frequent interruptions for translations rather than waiting at the end of
statements
 Learn about appropriate communication styles and etiquette from your interpreter
 Look for feedback and comprehension by watching the eyes
 Discuss the message beforehand with the interpreter if it is complex
 Request that your interpreter apologizes for your inability to speak in the local language
 Confirm through a concluding session with the interpreter that all key components of
the message have been properly comprehended

Communication with Nonnative Speakers

 Techniques that make communication easier and more accurate
 Use the most common words with their most common meanings
 Select words with few alternative meanings
 Follow basic rules of grammar strictly
 Speak with clear breaks between words
 Avoid “sports” words or words borrowed from literature
 Avoid words or expressions that are pictures such as “knee deep in the big muddy” in
U.S. English,
 Avoid slang
 Mimic the cultural flavor of the nonnative speaker’s language
 Summarize: Paraphrase and repeat basic ideas
 Test your communication success
 When your partner doesn’t understand- Repeat the basic ideas using different words
 Confirm important aspects in writing

Avoiding Attribution Errors

 Attribution is the process by which we interpret the meaning and intent of spoken words or
nonverbal exchanges
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 The main danger in cross-cultural communication comes from the ease of making mistakes
of attribution
108    Section 1/Chapter Outlines

 The safest strategy in cross-cultural communication and negotiation begins with observation
and guarded interpretations

International Negotiation
 International negotiation is more complex than domestic negotiation
 Differences in national cultures, political, legal, and economic systems often make it
necessary to modify negotiation styles to fit the local country

Steps in International Negotiations

 The negotiation steps include preparation, building the relationship, exchanging information
and the first offer, persuasion, concessions, agreement, and post agreement.

Exhibit 13.3 Shows the Negotiation Steps

Step 1: Preparation
 Winning international negotiation include significant preparation
 Experts identify numerous essential questions and these include:
 Determine if the negotiation is possible:
 Know exactly what your company wants from the negotiation:
 Minimally acceptable conditions of an agreement?
 Know the other side:
 Can the other organization deliver what your company wants?
 What are the goals of the other side?
 Is the other side dealing with any competitors and do the competitors have any
advantages?
 Send the proper team:
 Do the negotiators have the appropriate knowledge of the technical details, sufficient
negotiation experience, language abilities, and knowledge of the country and its culture?
 Have they prepared as a team?
 What authority do they have?
 Agenda:
 Is there an agreed upon agenda?
 Can it lead somewhere the company does not want it to go?
 Prepare for a long negotiation:
 This avoids being rushed to accept a disadvantageous solution
 Know when you must leave but don’t tell the other side
 Environment:
 Is the team familiar with the physical environment where the negotiations with take
place? When will the team arrive? What support is necessary on site? What is the
language of negotiation? Are interpreters necessary?
 Strategy
 Plan a strategy but remain flexible. What are the principal issues? What are the
opening moves?
 Understand other negotiation cultural issues
 Negotiation goal -signing contract or forming the relationship
 Personal style - formal or informal
 Communication styles—direct or indirect
 Sensitivity to time—low or high
 Forms of agreement—specific or general
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Exhibit 13.4 Shows Cultural Differences in Preferences for General

Agreements

 Team organization - a team or one leader

 Attitude towards negotiation - win-lose or win-win
 High or low emotions - societies differ in terms of acceptability and appropriateness of
display of emotions

Exhibit 13.5 Contrasts Some Common U.S. Negotiation

Characteristics with Those from Other National Cultures

 Team organization—a team or one leader

Step 2: Building the Relationship

 Do not focus on business matters - but concentrate on social and interpersonal matters
 Develop social and interpersonal relationships
 Duration and importance vary by country
 Building a good relationship among negotiating parties provides foundation for working out
eventual deal

Step 3: Exchanging Information and the First Offer

 Parties exchange task-related information
 Pertains to actual detail of the proposed agreement
 Both sides usually present first offer – this is their first proposal and what they expect from
the agreement

Exhibit 13.6 Shows a Comparison Among Different Nations

Regarding Information Exchange and First-Offer Strategies

Step 4: Persuasion
 Persuasion - stage where each side attempts to get the other side to agree to their terms
 Verbal and Nonverbal Negotiation Tactics
 Promise: If you do something for me, I will do something for you
 Threat: If you do something I don’t like, I will do something you don’t like
 Recommendation: If you do something I desire, good things will happen to you (e.g.,
People will buy your product)
 Warning: If you do something I don’t like, bad things will happen for you (e.g., Other
companies will know you can not do business here)
 Reward: I am going to do something beneficial for you (without conditions)
 Punishment: I am going to do something you will dislike—without conditions (e.g., end
the negotiations immediately)
 Normative appeal: This is the way we do or do not do business here (e.g., “You must
learn the Japanese way”)
 Commitment: I agree to do something specific (e.g., Meet a delivery date)
 Self-disclosure: I will tell you something about myself or my company to show you why
we need to close the deal
 Question: I ask you something about your company or yourself
110    Section 1/Chapter Outlines

 Command: This is an order that you must follow

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 Refusal: Just saying no

 Interrupting: I talk when you talk

Exhibit 13.7 Shows Examples of Cultural Differences in these Verbal

Negotiating Tactics Among Japanese, U.S., and Brazilian
Negotiators

 Cultural differences in nonverbal communication styles also influences negotiations

 Nonverbal communication through such things as body posture, facial expression, hand
gestures, and the use of personal space are a natural part of any international negotiation

“Dirty Tricks” in International Negotiations

 “Dirty tricks” are negotiation tactics that pressure opponents to accept unfair or undesirable
agreements or concessions
 Some examples of common ploys in international negotiations (that some may consider dirty
tricks) follow, with possible response tactics
 Deliberate deception or bluffing: Negotiators present flagrant untruths either in the facts
they present or in their intentions for the negotiation
o Possible response: Point out directly what you believe is happening
 Stalling: Negotiators wait to the last minute before the international negotiation team
plans to go home. They then push for quick concessions to close the deal
o Possible responses: Do not reveal when you plan to leave. When asked, say “as long
as it takes.” Alternatively, state when you will leave with or without the deal
 Escalating authority: Negotiators make an agreement then reveal that it must be
approved by senior managers or the government. The objective is to put the other team
under psychological pressure to make more concessions
o Possible response: Clarify decision making authority early in the negotiation process
 Good-guy, bad-guy routine: One negotiator acts agreeable and friendly while his or her
partner makes outrageous or unreasonable demands. The “good guy” suggest that only a
small concession will appease the unreasonable “bad guy”
o Possible response: Do not make any concessions. Ignore the ploy and focus on
mutual benefits of the potential agreement
 You are wealthy and we are poor: Often used by negotiators from developing countries,
this tactic attempts to make concessions seem trivial. Smaller companies may also use
this tactic when dealing with larger companies
o Possible response: Ignore the ploy and focus on mutual benefits of potential
agreement
 Old friends: Negotiators act as if the companies and their negotiators have long
enduring friendships. They feign hurt feelings if their partners disagree or do not bow
to their requests
o Possible response: Keep a psychological distance that reflects the true nature of the
relationship

Steps 5 and 6: Concessions and Agreement

 Final agreement - is the signed contract, agreeable to all sides. It must be consistent with the
chosen legal system or systems
 Concession making requires that each side relax some of its demands to meet the partner’s
needs
 It usually means giving in on the points of lessor importance to you to achieve your major
objectives in negotiating the potential deal
 North American negotiators
112    Section 1/Chapter Outlines

 Take a sequential approach to concession making - consider each issue as a separate

point
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 Each side reciprocates concessions made by the other side - expect each side to give and
take on the individual issues in sequence
 Holistic approach
 More common in Asia
 Each side makes very few, if any, concession during discussions of each point in a
potential agreement
 After all participants discuss all issues can concession-making begin

Basic Negotiation Strategies

 Competitive negotiating – each side tries to give as little as possible
 The negotiation as a win-lose game
 Begin with high and often unreasonable demands
 Make concessions only grudgingly
 Use dirty tricks and any plot that leads to their advantage
 Problem solving negotiation
 Search for possible win-win situations
 Defending their company’s position not the major goal of the negotiation
 Seek out mutually satisfactory ground that is beneficial to both companies’ interests
 Avoid dirty tricks and use objective information whenever possible

Exhibit 13.8 Summarizes and Contrasts How the Competitive

Negotiator and the Problem-Solving Negotiator Differ in their
Approaches

Exhibit 13.9 Shows Some Recent Evidence from a Cross-National

Study on Cultural Differences in the Preference for a
Problem-Solving Negotiation Style

Step 7: Post Agreement

 The post agreement phase consists of an evaluation of the success of a completed negotiation
 The post agreement stage can be very beneficial as it allows garnering of valuable insights
into the strengths and weaknesses of the approach that was used during the negotiation
 By analyzing the various steps, the negotiators can determine where things went well
and where improvements are needed
 Beyond information critical to learning, post agreement can also allow a negotiating
team to further develop a closer relationship with their counterpart
 How can learning be enhanced during the post agreement stage?
 A formal training process: if companies are serious about learning from negotiations,
they should invest in training those involved in negotiations
 Analogical approaches: based on analysis of multiple cases and require participants to
compare several situations to find commonalities
 After negotiators have concluded a deal, they can compare their experiences with previous
negotiations to better grasp the lessons from their experiences

The Successful International Negotiator: Personal Characteristics

 Tolerance of ambiguity:
 Even if they are familiar with the culture of their counterpart, an international
negotiator is still a cultural bridge between national cultures and organizational cultures
 Flexibility and creativity:
 The international negotiator must expect that unexpected
114    Section 1/Chapter Outlines

 Explicit goals for the outcome may not work

 Humor:
 Situations arise in intercultural exchanges that are sometimes embarrassing or
humorous
 Stamina:
 Long travel, jet lag, different foods, different climates, hotel living, and culture shock
stress the physical stamina of even experienced international negotiators
 Empathy:
 Empathy means putting yourself in the place of your foreign colleagues—understanding
the world from their perspective
 Curiosity:
 Managers with a genuine curiosity and respect concerning other cultures often discover
subtitles that a more task oriented negotiator misses
 Bilingual:
 Knowing the partner’s language is an asset. However, sometimes language ability alone
is not enough

Steps in, and Styles of Negotiation, and the Successful Negotiator:

Summary Observations
(1) Few negotiations succeed without extensive preparation, both for the technical details of the
potential relationship and for dealing with people bringing different cultural backgrounds to
the negotiation process
(2) Building personal relationships is a key step in negotiation the world. U.S. Managers weak
on this step
(3) First offers may differ by cultural background and managers must be aware of how their
offers are viewed by people from other cultures
(4) There are many tactics in persuasion. Some of these may be considered dirty tricks
(5) The processes surrounding giving and receiving concessions may be viewed quite differently
by people from different nations
(6) Culture and legal traditions influence the content and force of law regarding business
contracts
(7) Competitive negotiation, with its use of dirty tricks and rigid positions, seldom leads to long
term relationships
(8) Problems solving negotiation is more flexible and probably a more successful strategy for the
international negotiator
(9) Individuals who engage in international negotiations must be flexible, empathetic and
physically tough

Summary and Conclusions

 The negotiating process involves preparation, building relationships with counterparts,
persuading others to accept your reasonable goals through verbal and nonverbal negotiating
tactics, making concessions, and finally, reaching an agreement
 Successful negotiators prepare well, understand the steps in the negotiation processes, and
avoid the use of dirty tricks and competitive negotiating strategies
 Successful negotiators are bilingual and have good cross-cultural communication skills
 Oral cross-cultural communication demands that one learn the language or use interpreters
 Nonverbal communications through body movements, proxemics, and touching vary widely
for different cultural groups
 Avoiding attribution errors is a key to cross-cultural communication