International Marketing

15th edition

McGraw-Hill/Irwin

Philip R. Cateora, Mary C. Gilly, and John L. Graham

Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction
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
Roy Philip

19-2

Overview
The Dangers of stereotypes
The Pervasive Impact of Culture on Negotiation
Behavior
Differences in Language, Nonverbal Behaviors,
Values, Thinking, and Decision-Making Processes

Implications for Managers and Negotiators

Negotiation teams, preliminaries, at the
negotiation table, and after negotiations

Creative International Negotiations

Roy Philip

19-3

Global Perspective
A Japanese Aisatsu
Aisatsu is a meeting or formal greeting for high-level
executives typical in Japan
The example involved the president of a large
Japanese industrial distributor and the marketing
vice-president of an American machinery
manufacturer
The Japanese president had the advantage as he
knew English: so when the interpreter spoke, the
Americans attention and gaze was given to the
interpreter. However the Japanese president could
carefully watch the Americans facial expression!
Roy Philip

19-4

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
Roy Philip

19-5

The Pervasive Impact of Culture

on Negotiation Behavior
Regional generalizations very often are not correct
Japanese and Korean negotiation styles are quite
similar in some ways, but in other ways, they could
not be more different

Cultural differences cause four kinds of problems

in international business negotiations

Language
Nonverbal behaviors
Values
Thinking and decision-making processes
Roy Philip

19-6

Differences in Language
and Nonverbal Behaviors
Americans are near the bottom of the languages
skills list
Americans dont 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
15 cultural groups were videotaped and their
cultural differences are explained in the next few
slides
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19-7

Verbal Negotiation Tactics

(The What of Communications)
Exhibit 19.1

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19-8

Linguistic Aspect of Language and

Nonverbal Behavior
(How Things are Said)
Exhibit 19.2

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19-9

Negotiation Styles of
15 Cultural Groups (1 of 2)

Japan (least aggressive, very polite)

Korea (more aggressive, very interrupting)
China (northern) (asking questions)
Taiwan (fewer questions, more information)
Russia (asking questions, silent periods)
Israel (few self disclosures, most promises and
recommendations, very interrupting)

Germany (fewer questions, more self disclosures)

United Kingdom (less interruptions)
Roy Philip

19-10

Negotiation Styles of
15 Cultural Groups (2 of 2)

Spain (more interruptions, few self disclosures)

France (more aggressive, very interrupting)
Brazil (more aggressive, physical touching)
Mexico (less interruptions)
French-Speaking Canada (more aggressive, more
interruptions)

English-Speaking Canada (less aggressive, more

interruptions)

United States (less interruptions)

Roy Philip

19-11

Roy Philip

12

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
Roy Philip

19-13

Cultural Differences
in Competitiveness and Equality
Exhibit 19.3

Roy Philip

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
American buyers should anticipate such a holistic
approach and be prepared to discuss all issues
simultaneously and in an apparently haphazard
order
Roy Philip

19-15

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

Roy Philip

19-16

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

Roy Philip

19-17

Negotiation Preliminaries
(1 of 2)

Checklist for planning international

negotiations
1.
2.
3.
4.

Assessment of the situation and the people

Facts to confirm during the negotiation
Agenda
Best alternative to a negotiated agreement
(BATNA)
5. Concession strategies
6. Team assignments

Roy Philip

19-18

Negotiation Preliminaries
(2 of 2)

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
Roy Philip

19-19

Summary of Japanese, American,

and Chinese Negotiation Styles
Exhibit 19.4

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19-20

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

Roy Philip

19-21

Nontask Sounding
Learn the mood of the other side
Learn about the clients background and interest
for cues about appropriate communication styles
Judgments about the kind of person in the
negotiation

Roy Philip

19-22

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
Roy Philip

19-23

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

Roy Philip

19-24

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

Roy Philip

19-25

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
Roy Philip

19-26

Creative
International Negotiations
Although the Japanese have their obstacles to
creativity such as, hierarchy and collectivism, they
have been able to build a successful society despite
their lack of natural resources and relative isolation
by developing negotiating styles that in many ways
overcome these obstacles
Only creative outcomes must be accepted
After negotiators have gotten to yes, a scheduled
review of the agreement may actually get your
business relationship past yes to truly creative
outcomes
Roy Philip

19-27

10 Ways to Generate More Ideas

Exhibit 19.5

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19-28

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

Roy Philip

19-29

Summary (1 of 3)
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

Roy Philip

19-30

Summary (2 of 3)

Four kinds of problems frequently arise during

international business negotiations
1.
2.
3.
4.

Level of language
Nonverbal behaviors
Values
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
Roy Philip

19-31

Summary (3 of 3)

Business negotiations involve four steps

1.
2.
3.
4.

Nontask sounding
Task-related information exchange
Persuasion
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
Roy Philip

19-32