CULTURAL ASPECTS OF INTERNATIONAL BUSINESS NEGOTIATIONS

Negotiations Workshop 2014.

CULTURAL ASPECTS

Main requirements to Negotiate Internationally:

Cultural Knowledge. Skills in Intercultural Communications Quality of Human and social relations, become

important in an intercultural encounter. Negotiation is not only based on legal and

business matters

CULTURAL ASPECTS

Distances:There are various kind of distances between the potential partners.

Physical Distance, economic, educational and cultural distance.

These distances tend to inflate the cost of Negotiating Internationally.

People with different cultural backgrounds often do not share the same basic assumption, and this has an influence at several levels of international business negotiations.

CULTURAL ASPECTS

Their concept of what is negotiation and what would be an appropiate negotiation strategy.

Their attitudes during the negotiation process may lead with cultural misunderstandings and undermine trust between parties.

Differences in outcome orientation. Significants components of Culture: Culture has a tremendous impact on

International Negotiations.

CULTURAL ASPECTS

Language and Communication: The way that we emit and receive messages, the

attitudes, the frame,the world views directly affects IBN.

Institutional and legal Systems. Differences in Legal Systems, contractual

formalism and litigation system, express contrasts in how societies are organizad.

CULTURAL ASPECTS

Value System: The Prevailing Values and the extent to which they are respected the everyday behavior of individuals, affect the willingness to take risks.

Time orientations: Attitudes toward time and how it shapes the way people structure their actions have a persuasive influence. (Punctuality).

CULTURAL ASPECTS

Mindsets: “Intelectual Styles” Rely on data, ideas or speech. How does this influence the way they relate word and actions? Mindsets, influence ways of collecting information, and the resulting decisions. This patterns affect IBN through the style of interaction between people, and their decision making process.

General Influence of Culture in Business Negotiation

This Influence works through two basic groups of mediating variables:

The Situational aspect: Time, and time pressure, power and exercise of power, number of participants,location etc.

Characteristics of the negotiation: Personality variables and cultural variables.

This two groups will determine the outcomes.

General Influence of Culture in Business Negotiation

Has culture influenced on the outcome orientation? ………..

Behavioral Predisposition of the Parties: Who is seen as a credible partie? 3 dimensions; that influenced in the proces of credibility: Self esteem: About ourselves good/not too good Perceived potency: powerful, able to accomplish any

task. Perceived activity: Person is sees him/herself as a

doer, active shaper of the world.

General Influence of Culture in Business Negotiation

Signs of credibility: Decoded by physical traits. Exp. Being tall, may be perceived as a sign of strength etc. The profile (early contacts).

Interpersonal orientation: For instance, the interpersonal sesitivity of Japanese for foreign cultures, may make them friendly hosts at business lunchs and dinners.

In-group Orientation; Cultures place a stronger or weaker enphasis on group membership ,as a prerequisite for being trustworthy partner.

General Influence of Culture in Business Negotiation

Power Orientation, Formal PO,=display of status, enhance credibility , Real PO;Status is not shown in the same way according to cultures, the decisión making differs.

Willingness to take risks; Bureaucratic dependency lower the risk to decisión-making.

Underlying Concepts of Negotiation and Negotiation Strategies.

Integrative orientation, its been termed Co-operative , Collaborative (maximize the joint outcome)

Distribution Orientation ,this orientation is termed Competitive negotiation or “zero zum game”.

Difficulties in being integrative in an intercultural negotiation situation are due to “Nationalistic Feelings.

National orientation favoring the integrative strategy.

Studies show that North American Business people show “trust” more willingly and spountaneously than other cultural groups, also show strong tendency towards a problem-solving and integrative orientation.