Differences between Chinese and American Negotiation

There is a vast chasm between the American and Chinese cultures regarding foundational philosophical assumptions, historical influences, economic systems, business strategies and tactics, and myriad business-related interpretations and understandings. These differences create a great challenge for achieving successful outcomes as a result of business negotiations.

 

Differences between Chinese and American Negotiation

 

1. Non-verbal communication
In non-verbal communication, Americans tend to make a lot of eye contact. This is considered to be a way of showing interest and good will. The Chinese like to show respect by doing exactly the opposite and avoiding eye contact.

2. Economic Systems
The Chinese have a socialist government with a socialist economic system, focused on promoting the wellbeing of all the people while Americans employ a capitalist economic system with numerous privately-owned companies competing for the same sales in the same businesses. In general, cultures found in socialist countries tend place a higher priority on cooperation both within and between business entities, while cultures found in highly capitalist countries place greater value on competition

3. Focus on Relationships
Americans believe that the relationship develops after a contract, while the Chinese believe that there needs to be a relationship before a contract gets signed. Building a relationship takes time and is a drawn out process and can cause negotiations to take longer than expected.

4. Preparation
The Chinese do a lot more research about the opposing company than Americans typically do when preparing for negotiations.

5. Cross-Questioning
Education in China incorporates direct instruction and students do not ask a lot of questions. This has lead Chinese people to accept things without asking too many questions. The Americans use a constructivist approach to education and questioning things is encouraged.

6. Cultural Dimensions
There is more focus on taking care of the group rather than individual interests.Friends are expected to help each other and there is a mistrust of authority. Americans have what is called a low context culture and see themselves as individuals. They use the legal system to enforce contracts in lieu of trust-based relationships.

7. Thinking Process
The Americans like to break things down into individual elements and look at them one at a time while the Chinese will jump from one subject to the other and talk about everything all at once. The jumping around seems to never settle anything from the American point of view.

8. Motivation
The Chinese businessperson is usually in it to advance their personal political career. They want to be compliant with the current policies and guidelines. They are more likely to avoid risky situations. The westerners are in it for personal gains, usually monetary. They seek to increase their own compensation.

 

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Ethics in Cross-Cultural Negotiation

Situations that test a negotiator’s ethics, such as corruption, bribery, human rights violations, and puffing, may frequently arise in cross-cultural settings.These situations may arise because different cultures have different ethical standards by which they make decisions and determine negotiating positions and solutions.

Legal and religious customs are the predominant customs affecting an individual’s ethics. The most effective method for the negotiator to ensure that he does not enter into an unethical situation is to prepare by establishing his own ethical bottom line, determining the negotiating counterpart’s ethical standards, and then being acutely aware of and responding to ethical differences throughout the negotiation.

 

Ethics in Cross-Cultural Negotiation

1. Evaluation of Counterpart’s Ethics, as affected by Legal Customs

• What legal structure is in place?
• What type of justice (distributive, retributive, restorative, procedural) does the culture value?
• How important are specificity and comprehensiveness in the culture, especially in terms of written laws and contracts?
• What is the country’s reputation regarding corruption?
• What are the country’s laws regarding corruption, human rights violations and good faith disclosures?

 

2. Evaluation of Counterpart’s Ethics, as affected by Religious Customs

• What is the predominant religion?
• What are other influential religions?
• What symbols are important to the religion(s)?
• What are the basic tenets of the religion(s)?
• How does the government interact with the religion(s)?

 

3. Self-Evaluation

• Understand what religious and legal customs shape your own ethics.
• Establish your own ethical bottom line.
• Ensure that bottom line is aligned with the organization’s goals, own country’s laws,and host country’s laws.
• Do not assume that all people of a country will practice the same religion and have the same ethical standards.

 

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Steps in International Negotiations

Following are crucial steps to be followed in international negotiations to reach the final outcome:

1. Preparation

Proper preparation for your international negotiation requires studying in-depth material about the target culture and/or engaging a coach who commands extensive knowledge of the country and its business practices. Successful international negotiators never engage without careful preparation.

2. Set Objectives

It is important not to assume that the objectives of the foreign side will be identical with those you would expect in a domestic negotiation. Spending the time and effort to learn about them prior to engaging will give you a strong advantage.

3. Maintaining Relationships

Successful negotiations abroad usually require a lot of up-front relationship building. To varying degrees, people will want to learn about your company background and capabilities, prior experiences, strategies and objectives, long-term plans, and so on. They also want to get to know you personally before they decide to trust you. In several cultures, people don’t want to conduct business with you unless you convinced them that you are seeking a long-term engagement rather than just ‘pursuing a deal.’

4. Decision making authority

Since group decisions require a series of interactions between all stakeholders to form opinions and establish consensus, they cannot be made right at the negotiation table. Sufficient time needs to be given between negotiation rounds for the group to go through iterations of the process and reach their conclusions. Gaining insight into this process is difficult, so it is pivotal to identify relevant members of the group making the decision in order to try to influence each of them in your favor.

5. Techniques

People around the world are very creative when it comes to negotiating, bargaining, and haggling. Numerous negotiation techniques are used across the world. Some of them includes:

  • Deception, False Demands, and False Concessions
  • Extreme Openings
  • Aggression and Strong Emotions
  • Silence
  • Best-Offer Pressure
  • Time Pressure

6. Closing the deal

When approaching the final stages of an international negotiation, you’ll need to carefully look for clues that the other side is ready to close. several cultures, ‘yes’ won’t mean ‘I agree’, but rather only signals ‘I hear what you’re saying.’ It does not convey consent.

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Effect of Culture in Negotiation

Negotiations are a frequent part of international business. Parties involved in a negotiation face different problems in reaching a successful outcome. When the parties have different cultural backgrounds the faced problems becomes more complex.

Intracultural Approach

1. Inputs – Critical psychological states (i.e., cognitions, goals, affect) and situational factors (i.e., negotiation structure) affect negotiation processes and outcomes in all cultures. Negotiators across cultures have different biases, goals, and levels of trust and respond differently to the same types of contextual influences (accountability, team configuration, power, communication media)

2. Process – Negotiators across cultures use two different goal-directed strategies: direct information exchange and persuasion/offers, with the former promoting value creation and the latter promoting value claiming. Culture influences the strategies that negotiators typically employ, with Western cultures relying on direct information exchange and East and South Asians relying on persuasion/offers, in part due to different levels of trust.

3. Outcomes – Negotiators across cultures seek to achieve economic outcomes as well relational outcomes. Culture affects the weight placed on economic versus relational outcomes. In structured negotiation simulations, some cultures (e.g., US, Germany) achieve more value creation and others (e.g., India, China) achieve more value claiming

Intercultural Approach

1. Inputs – Certain factors such as cultural intelligence, social goals for relationship building, concern for face, and communication quality encourage value creation in intercultural negotiations. Other factors, such as cultural distance and hierarchical concerns hinder value creation in intercultural negotiations.

2. Process – Negotiators use the strategy that is normative in their cultures but some also adapt to the counterpart’s strategy.

3. Outcomes – Value creation is usually more difficult in intercultural negotiations than in one or both intracultural comparison samples.

 

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Overview of International Negotiation

International negotiation can be very hard and complicated because it involves two countries that are guided by separate laws, rules and regulations, standards, business ethics and most importantly, differences in culture.

It is proven by the researchers that he differences in cultures are manifested in distinct differences between negotiating styles typical for these cultures. This does not mean that all members of a particular culture negotiate in the same way but rather that there are patterns of behavior which are typical for most of them.

To be successful in the international negotiation arena, negotiators need to develop high sensitivity to cultural factors, identify and pursue a culturally responsive strategy most appropriate in a given negotiation setting but at the same time acknowledge and consider also individual and structural aspects occurring in this setting.

 

 

Features of Successful International Business Negotiators

1. Effectiveness
Successful international negotiators appreciate and know how to effectively apply the decision-making techniques of the particular country they are dealing with.

2. Flexibility
Successful international negotiators are easily adaptable to even the most unusual situations, like bribery, and they handle the problems in the contexts of that country’s indigenous traditions.

3. Individual Stability
Successful international negotiators are usually very stable, feeling secured and confident that they can weather any storm that arises on the job.

4. Tolerance
Successful international negotiators are patient and accommodating even with ambiguous situations notwithstanding the immense pressure.

 

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Barriers to the Negotiation Process

1. Negative Outlook

Your attitude during the negotiation-hostile or cooperative-decides the tone for the negotiation. Negotiation need not be confrontational. In fact, effective negotiation is characterized by the parties working together to find a solution, rather than each party trying to defeat the other party.

2. Attitude of Winning

Negotiations should be about finding solutions and adding value for all parties, not about winning or losing. As soon as we view the customer as the opponent, we compromise our ability to identify mutually beneficial outcomes.

3. Emotional Control

Strong emotions make us blind towards reason during negotiation. Though it is normal to become emotional during negotiation but as we get more emotional, we are less able to channel our negotiating behavior in constructive ways. Therefore, it is important to maintain control.

4. Price

Sales professionals identify price as the number one objection in the sales process and the most significant barrier in negotiations. Don’t give price more weight than it deserves!

5. Lack of empathy

Since we are trying to find a solution that is acceptable to both parties, we need to understand the other person’s needs, and wants with respect to the issue of negotiation. If we do not know what the person needs or wants, we will be unable to negotiate properly. Often, when we take the time to find out about the other person, we discover that there is no significant disagreement.

6. Wrong focus

Negotiators have a tendency to focus on the individuals rather than the issues involved. This is particularly true with people we dislike. There is a tendency to get off track by focusing on how difficult the person is. Once this happens, effective negotiation is impossible. It is important to stick to the real issues and put aside our personal feelings about the individual.

7. Blame Game

Playing the blame game makes the negotiation situation difficult. In any conflict or negotiation, each party contributes, for better or worse. If you blame the other person for the difficulty, it will result in defiance. If you take responsibility for the problem, you will create a spirit of cooperation.

In order to have an effective discussion, the people party to the discussion have to be able to hear, be heard, and understand each other. If you sense the other person is distracted, make it your responsibility to expose the cause. If it is going to impede the other person from listening or focusing on what you are saying, you may want to suggest postponing the meeting. If you feel it will cause the other person to rush through the meeting and grant concessions to wrap things up, then it may be advantageous to proceed. Until you know the situation, you can’t judge what the impact will be on the negotiations.

 

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Feedback in the Negotiation Process

Feedback is a critical element of negotiation skill development. Without assessment and feedback on negotiation skills, employees may not accurately judge their negotiation skill level or recognize whether those skills are truly conducive to the type of negotiation in which they are engaged. When developing an employee’s negotiation skills, feedback should be given shortly after a negotiation and focused on the organization’s desired negotiation behaviors for that particular negotiation; however, the importance of feedback is equally important across all three negotiation skill sets :

1. Effective feedback on distributive skills

This will emphasize behaviors of anchoring early in the negotiation, substantiation, resistance to yielding, challenging counterpart’s substantiation, and emphasizing own advantages over counterpart.

2. Effective feedback on integrative skills

This will emphasize behaviors of problem-solving, asking questions of the other party to uncover interests and priorities, provide information regarding own interests and priorities, identify potential tradeoffs, make multi-issue offers, and build trust.

3. Effective feedback on adaptable skills

This will emphasize behaviors of integrative, distributive, or both skill sets as appropriate to the negotiation as well as the ability to orient the negotiation toward the most appropriate behaviors.

Creative Methods to solve Negotiation Problems

Creative people are able to keep their mind open long enough to make mental leaps, whereas less creative persons tend to prematurely leap to conclusions. Since negotiators’ ability to create alternatives is inherently linked to successful negotiations, we propose that negotiation outcomes will significantly relate to negotiators’ creativity.

Techniques and Strategies for facilitating Creative Performance

1. Brainstorming

This is one of the earliest techniques for a structured approach to the enhancement of creativity developed researchers. This technique, deigned specifically for use by groups, involves attempting to evoke ideas by providing a social context that gives free reign to imagination and reinforce the use of it. The rules encourage participants to express ideas, no matter how strange or wild they may seem and forbid criticism during the brainstorming session. It is assumed that people’s imagination will be stimulated by the ideas express by other and that they, in turn, will be able to express their own in relatively uninhibited fashion.

2. Brainwriting

This is another form of Brainstorming. Brainwriting works like this: at various key points in time during a brainstorming session, group members will cease all talking and write down their own ideas silently. Writing ideas instead of speaking them eliminates the problem of production blocking, since group members don’t have to wait their turn to generate ideas. It may also reduce conformity, since the written format eliminates the need for public speaking. Then the written ideas can be subsequently shared by the group in a round-robin fashion and summarized on a blackboard or flipchart.

3. Nominal Group Technique

In the nominal group technique, negotiators must start with the problem as defined; each one then individually prepares a written list of possible solutions. Participants are encouraged to list as many solutions as they can. Then they meet in small groups and read their solutions aloud while a recorder writes them on flip charts or a blackboard. Particularly in a large group, this approach can generate a great number of possible options in a short period of time. All those working on the problem later on can examine these solutions then.

4. The Delphi technique

In this technique, group members do not interact in a face-to-face fashion at any point. This technique requires a leader or facilitator. The entire process proceeds through questionnaires followed by feedback, which can be computerized. The leader distributes a topic or question to members and asks for responses from each team member. The leader then aggregates the responses, sends them back out to the team, and solicits feedback. This process is repeated until the issue in question is resolved.

5. Analogical reasoning

This is the act of applying a concept or idea from a particular domain to another domain. To the extent that teams can recognize when a particular known concept might be useful for solving a new problem, creativity can be enhanced. The problem is that it is not easy to transfer relevant information from one domain to another; people almost always tend to solve problems based on their surface-level similarity to other situations, rather than on their deep, or structural, similarity.

 

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Effective Negotiation Skills

Negotiation is the key to business success. Successful negotiation involves good interpersonal and communication skills, used together to bring a desired result. In fact, negotiation is one of the main qualities employers look for when recruiting staff nowadays. A person with expertise in negotiation can close the best deals and further help in successful negotiation advancement of an organization.

 

Effective negotiation skills

 

A successful negotiator must inculcate the following :

1. Clear and effective communication
2. Listening
3. Reducing misunderstandings
4. Rapport building
5. Problem solving
6. Decision making ability
7. Assertiveness
8. Analyzing BATNA
9. Cross Questioning
10. Ethics and reliability
11. Patience

 

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Emotions in the Negotiation Process

Negotiations create and are affected by positive and negative emotions. Individuals with a positive attitude tend to trust each other better. They take keen interest in the negotiation and actively participate in discussions. On the negative emotion like anger act as a hurdle to an effective negotiation. A person loses control on his mind and is not in a position to think constructively in a state of anger. One’s anger must be kept under control for an effective negotiation.

 

 

Emotions as Barrier in the Negotiation Process

There are a number of ways in which emotions can hinder the ability of negotiators to reach a wise agreement in a fair and amicable way.

1. Emotions may divert our attention from substantive matters
2. Evelation of emotions can open us up to being manipulated. A careful observer of our emotional reactions may learn which issues we value most and least, and could use that information to try to extract concessions from us.
3. Unless we are careful, emotions will take charge of us. They may cause us to lose our temper or to stumble anxiously over our words.

While it is true that emotions can be a barrier to a value-maximizing agreement, the common advice to “get rid of emotions” is infeasible and unwise. On the contrary it is suggested that negotiators can improve the efficiency and effectiveness of a negotiation by gaining an understanding of the information communicated by emotions, their own and those of others,and enlisting positive emotions into the negotiation.

 

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