Chapter 5: Cross-cultural Negotiation & Decision Making
The chapter starts with defining negotiation as the process of discussion by which two or more parties aim for mutually acceptable agreement. It also states that the art of negotiation is widely considered the most important skill in International Business. I find that very interesting and kind of a surprise to me, but when you think about it, all business interactions are based on some type of negotiations (even meaningless stuff like meeting times). Because of this, negotiations also affect the ability for a manager to implement strategy. Finally, just like the running theme of this book, ignorance and poor research of native bargaining rituals, can cause unimpressive result.
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This can include presentations and such but can be tricky when dealing with different cultures. As the book points out, researching how different cultures interact in this stage makes for a more productive negotiation. The fourth stage is persuasion. This stage can include a lot of dirty tricks and understanding who you are negotiating with (& how they might act), will help you stay calm and constructive. Finally, the last stage is the concessions and agreement. The research done prior to the negotiations will help you understand if the other side’s offer is their best or if there is some room for more concessions. Some cultures may offer ridiculous responses so they can negotiate down, while others may start with the best offer. Knowing this will not only help you save your company from paying too much but it could also prevent you from upsetting your counterparts.
As the text states, negotiation actually represents the outcome of a series of small and large decisions. These can include even the decisions made before the negotiation. It’s very important for management to understand the influences that culture has on decision making. Some of the influences that culture has on decision making derive from Individualism and/or Collectivism, objective vs. subjective approach, etc.
In a lot of cultures, the relative level of utilitarianism versus the moral idealism affects the overall approach to decision making. The text continues discussing different variables to decision making and another important variable falls under, who actually makes the decisions? Does the culture fall under an autocratic or participative leadership? Also, how does the culture refer to the speed of making a decision? Finding out the answers to these types of questions separate the top managers and negotiators.