Global Marketing Management Multinational Negotiations - PowerPoint by LoRnJMp


									                                 MKGT 3215-001
                                      Fall 2010
                                 Mrs. Tamara L. Cohen

               Global Marketing

Sept.2, 2010     Negotiations
            Progress anyone?
              Group Project
•   Project Proposal due on September 16
•   What do you need to do?
     1.   Choose your group
     2.   Choose your country
     3.   Choose your product / brand
     4.   Tell me
   Multinational Negotiations
Reading for this class:
  Cateora, Gilly & Graham:
• ch.19 pp 559-562; 574-579
• women’s issues p.571; pp 142-144

             • Summary of Introduction & chapters 1-3
               the art of woo
                by G. Richard Shell & Mario Moussa

• Non-task sounding = part of negotiation
  process in which conversation topics do not
  include business; typically a preliminary phase of
• Cultural stereotypes = commonly held
  public beliefs about specific social groups (cultures),
  based on simplified prior assumptions
• Non-verbal communication (NVC) =
  communicating without language, e.g. gestures,
  touch, body language, facial expression, voice,
  intonation, symbols, emotion, architecture, dance,
  handwriting style
•   Impact of cultural STEREOTYPES
•   “You get what you negotiate”
•   “Use what you have”
•   Single most important activity of
    negotiating is LISTENING

Dangers of Stereotypes
• Negotiations
  – conducted between people, not national stereotypes
• Cultural factors often make huge differences
• Negotiation behaviors are different
  – across regions, genders, types of industry
• Age & experience make important differences
• Consider culture of customers & business
  partners, but treat them as individuals

       Cultural differences [
       4 common problems:
1. Language
  - use interpreter
  - learn languages
2. Non Verbal Communication
  - almost always hidden / below radar
3. Values
  -   objectivity (“business is business”)
  -   competitiveness
  -   equality
  -   time
4. Thinking & Decision-making processes
  - Western sequential approach vs Eastern holistic
  approach                                            7
     Differences in Language
      & Nonverbal Behaviors
• Americans have poor languages skills
• Americans don’t like side conversations by
  foreigners in native language
• Variation across cultures increases when
  including linguistic aspects of language +
  nonverbal behaviors

     Differences in Thinking
  & Decision-Making Processes

• Western approach – sequential
• Eastern approach – holistic
• Americans – business negotiation is a
  problem-solving activity
• Japanese – business negotiation is time to
  develop business relationship with goal of
  long-term mutual benefit
     All business negotiations
          involve 4 steps:

1.   Non-task sounding
2.   Task-related information exchange
3.   Persuasion
4.   Concession & agreement
TIME spent on each step varies considerably.
                        the art of woo
                              Richard Shell & Mario Moussa

• WOO is Winning Others Over
  (Marcus Buckingham & Donald Clifton: Now, Discover Your Strengths)

• Relationship-based, emotionally intelligent
• Without coercion
  e.g. Nelson Mandela won over guards in prison and reinvented a nation

• “You can have brilliant ideas, but if you can’t get
  them across, your ideas won’t get you anywhere …”
  Lee Iacocca, former Chrysler Chairman & CEO

         Confront the 5 Barriers
                       as adapted from Richard Shell

1. What characterizes my relationship to the
   person/company I am trying to influence?
2. What is the basis for my/my company’s credibility
   with this person/company?
3. What channels of communication should I use
   (authority, rationality, vision, relationships, interest,
   politics)? Do I need to adjust my style?
4. What beliefs & values does this person/company
   hold that could block or support my case?
5. What are the other party’s interests and how can I
   address them?
           Cultural Orientation
= model for understanding & predicting results
  of intercultural encounters i.e. how people in different
    cultures will speak, act, negotiate & make decisions
Cognitive style:
• how we organize & process info.
• thought patterns
• people are open-minded or closed-minded
• how people process info (associative or abstractive) –
  influenced by education
• how thinking & behavior are focused (particular vs universal
    Negotiation Strategies
Value system             basis for behavior
1. Value of individualism vs collectivism
2. Source of Anxiety Reduction
     1.   Interpersonal relationships
     2.   Religion
     3.   Technology
     4.   Law
3. Equality / Inequality

         before you travel!
     = = =       =    Prepare
     = = =       =    Listen

• Columbus may have been
  the best-known traveler
  who didn’t know where he
  was going, but he wasn’t
  the last.

Do your homework before negotiations!
                        Australia                     Germany                         Indonesia
                        company policy followed
                        regardless of who's           analytic & conceptual info      independent thinking
cognitive style         negotiating                   processing                      encouraged in education

                        facts; personal emotions      objective facts; feelings not   subjective feelings,
acceptable evidence     untrustworthy                 acceptable in negotiations      modified by religious faith
                                                      faith in social-democratic      blend of Hinduism, Islam,
value system:           Judeo-Christian ethic         ideology                        Buddhism, Christianity
                                                      strongly individualistic;       deliberation by all
                        individualism subject to      decisions made slowly &         interested parties;
decision making         company policy                carefully; decisions final      consensus
                        nuclear family; family is     little emotion shown;           protection by super-natural
anxiety reduction       private                       personal life is private        beyond religion
                                                      foreign workers, refugees,      authoritarian hierarchical
                        egalitarianism (except        gypsies; hierarchical           structure demands
equality / inequality   Aborigines)                   society                         subordinate obedience
                        need top mgt approval
pace of negotiations    which slows things down       slow methodical planning        patience required!
                        take turn to pay for rounds                                   spouses invited to dinner
business entertaining   of drinks                     always eat with utensils        not lunch
      USA                            Japan
• Negotiators state          • Extensive warming
  what they want               up time and effort
• Lay cards on table         • Long explanations,
• Explanations if              foll. by request, foll.
                               by expressions of
  necessary                    sorrow/regret
• Questions should           • Consensus-based
  be asked once                decision-making
• Only ask questions         • Understand/expect
  that can be answered         that some questions
• Value directness and         can’t be answered
  efficiency of time in      • Use native language
  negotiation                  of bargaining
• Use of English preferred     partner

        Japanese question…
        question… question…
• Long explanations must be expected, so come with
  appropriate technical details/experts.
• Extensive questioning is normal and necessary
  (consensus). Several people may ask same question.
• Use patience and detailed preparation.
• Explanations under close scrutiny; consistency.
• Offer to write down required info.
• If question repeated 2nd time, answer < 3 min.
• If question repeated 3rd time, answer < 1 min.
• If question repeated 4th time, probably persuasive
  tactic, not info-gathering; response: silence / change
           “Tricks of the Trade”
             - Bargaining with
          Japanese companies
• Formal communication at negotiating table
• Informal communication after hours
• Include lower level management on team
• Behind scenes negotiations MUST remain
  behind scenes
• Take notes at / record meetings
• Keep tally of topics of questions a relative
  importance of topics
• Persuasive tactics - subtle bluff vs. direct threat
      Non-verbal communication (NVC)
• “… happens in the limbic system of the brain that predates
  human speech. Understanding these non-verbal clues can be
  crucial to international dealings” Paul Thorne
• Much NVC works across boundaries of language; some subject
  to culture
•   “Those who master NVC are likely to function more effectively in the
    cross-cultural arena, for NVC very quickly gives us what we need to
    establish--whether the other person likes us, trusts us, and whether
    we should feel optimistic about the outcome of the encounter. All this
    happens without a word being said.”
• NVC includes the way we use speech; facial & body
  expressions & hand gestures are major elements; 250,000
  facial expressions alone
• NVC covers all senses:
     1. Appearance (occulesics)               4. Smell (olfatics)
     2. Movement (kinesics)                   5. Space (proxemics) 20
     3. Touch (haptics)                       6. Time (chronemics)
  The Silent Language
of International Business
    • Edward T. Hall - anthropologist
    • Concepts of space & time are tools with which
      all humans may transmit messages
    • Space is outgrowth of animal's instinctive
      defense of his lair; reflected in human society
      by office worker's jealous defense of his desk,
      or guarded, walled patio of a Latin-American
    • Time varies from Western precision to
      Eastern vagueness; revealed by businessman
      who pointedly keeps client waiting, or South
      Pacific islander who murders his neighbor for
      injustice suffered 20 years ago
    • 60% communication is non-verbal
    • Daniel Goleman, (‘emotional intelligence’)
      90% communicable emotion is expressed
               Body Language

• Proximity       USA & N.Europe: 18in - 3ft
                  S.Europe, Latin America, Middle East: 0 - 18 in
                  most Asians: > 3ft
• Eye contact         USA & N.Europe: moderate
                      S.Europe, Latin America, Middle East: minimal
                      most Asians: very direct
• Touching    Some cultures comfortable with some touching for building rapport.

• Interpretation; lethal combinations; time to acclimate/learn

FOOD choices

  OR           ?

Eat, drink and be wary!
• Acceptance of what’s on your plate
  tantamount to acceptance of host,
  company & country
• Tastiness is in the eye of the beholder – squeamishness
  from unfamiliarity
• Slice thinly / swallow quickly / “tastes just like chicken”
• Find out local customs about refills
• Drinks customs

•   Egalitarian in USA
•   Viva la Difference
•   Southern Europe
•   Middle East
•   Japan
•   China
•   Africa
•   Latin America
•   After hours conduct
  Communication Breakdowns
• 80% of misinterpretations & breakdowns
  caused by inefficient communication;
• 20% of time or less it is likely that your
  counterpart is being difficult.

• Stephen Covey in ‘7 Habits of Highly
  Effective People’ - "Seek first to
  understand before being understood."

The single most useful universal form of
6easy 6transcends language 6unequivocal

             What do we know about
            Multinational Negotiations?
• Impact of culture on negotiating behaviors.
     Culture [ 4 common problems:
              1. Language
              2. NVC
              3. Values
              4. Thinking & decision-making
• Selection of negotiating team
• Follow-up after negotiation
Orange case simulation exercise
Next class: Culture & Management Style
Preparation: Read Poorly Made in China by Paul Midler
Homework: Read as much as you can of Poorly Made in China in 2
hours. Also: The Economist’s May 2009 article about Poorly Made in
China, and Digital Journal’s August 2009 article about author Paul
          Case #1: Starbucks September 21
    HARD COPY of write-up due at beginning of class (no folders please)

Requirements for each Individual Case Write-up:
•    4 - 6 pages, typed and double-spaced
•    Exhibits / Appendices / Resources in addition to 4-6 pages
•    Case discussion questions are provided in text book to help you identify
     key issues of the cases. You do not have to answer these questions

Your Case Write-up must include:
1.   Executive Summary (1 paragraph on 1st page)
2.   Background (brief summary of case as you see it)
3.   Problems (be incisive)
4.   Courses of action (look at several possibilities)
5.   Recommendations (which course of action?)
6.   Conclusions
7.   Exhibits / Appendices / Resources e.g. web sites,
     books, charts

Use headings.                                                              30

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