Behavioral Characteristics Affecting Outcome
Behavioral Characteristics Affecting Outcome
In negotiations involving people from different countries, there is a strong possibility of misunderstandings due to cross-country cultural variances as well as possible language differences. Since the individuals involved may react on the basis of how they think their own performances are being evaluated, the direction of negotiations involving company managers on one side and government officials on the other side may be uncertain from the start since the. background and expertise of governmental officials may be quite distinct from that of businesspeople. Finally, it is always possible that one side or the other wishes to terminate bargaining but is hesitant to do so for fear of alienating future relationships.
Cultural Factors Back in the 1930s Will Rogers quipped, "America has never lost a war and never won a conference." Many participants and observers agree with this assessment of Americans in business negotiations abroad. Much of the problem stems from cultural differences that lead to misunderstandings and mistrust across the conference table. Although we cannot delineate all the possible cultural differences, Table 13.1 illustrates some usual differences among negotiators from Japan, the United States, and Latin America. A few differences are sufficiently important to U.S. negotiators to warrant mention. U.S. negotiators are more apt to have the power to make decisions than their counterpart negotiators from some other countries; they lose confidence when other negotiators have to keep checking at the head office. U.S. negotiators want to get to the heart of the matter quickly, whereas some others feel they must spend more time to develop rapport and trust before addressing business details. Americans attempt to separate the issues into pragmatic categories (getting closure on items in a linear fashion), whereas some nationalities view the negotiations holistically.13 U.S. executives often find it very difficult to know how to establish rapport with foreign negotiators through culturally and legally acceptable gifts or through the flattery of asking their advice and opinion.
There may be a problem finding words to express the exact meaning in another language, requiring occasional pauses while translators resort to dictionaries. Furthermore, facial reactions differ by culture and, even if understood, are difficult to judge because of the time lag between the original spoken statement and receipt of the statement in a second language. Since English is so widely understood worldwide, people with a different native language may understand quite well most of the comments and discussions in English, giving them the opportunity to eavesdrop on confidential comments and to reflect on possible responses while remarks are being translated into their language. The degree of precision in language desired by both groups also may be complicated by cultural factors. Furthermore, evidence exists that cultural factors influence whether or not interpreters are acceptable. For example, Saudi managers generally prefer to negotiate in English, even if their English is not very good. When translators are used, it is usually preferable for each side to have its own. Good interpreters also help to brief their teams on cultural factors affecting the negotiation process.
The importance of these factors may change during renegotiations because the parties get to know each other. If the relationship has been amicable, this quality is apt to be carried over. However, if the past relationship has been hostile, the renegotiation may be surrounded by even more suspicion and obstruction than existed during the original process.14
Personal Conflict of Negotiators Governmental and business negotiators may start with mutual mistrust due to historic animosity or to the different status of their professional positions. The investors may come armed with business and economic data that are not well understood by governmental officials, who may counter with sovereignty considerations that are nearly incomprehensible to the businessperson. Thus it may take considerable time before each understands and empathizes with the other's point of view. Even then, there is a possibility that neither will attempt to develop a type of relationship designed to assure the achievement of long-run objectives: They may see their rewards as dependent on immediate results and perhaps not expect to be closely connected with longer-run problems.
The viewpoint discrepancy has been particularly noted as many LDCs have attempted to sell state-owned enterprises (SOEs) to foreign investors. The managers within the SOEs are suspicious of MNEs, fearful of foreign domination, and insecure about the maintenance of their own jobs if the SOE is privatized.15
Termination of Negotiations For a variety of reasons, one or both parties may wish to terminate serious consideration of proposals. The method of cessation may be extremely important as it may affect the negotiators' positions vis-a-vis their superiors and the future transactions between the given country and firm, the company in other parts of the world, and the country with other foreign firms. Since termination is an admission of failure to achieve the objectives originally set forth, negotiators of organizations are prone to place blame publicly on others in order to save face themselves.16 Statements by company officials may make it harder for the country to deal with other foreign firms. Statements by governmental officials might make it more difficult for the company to negotiate and operate in other countries. For fear of adverse consequences from terminations, negotiations sometimes drag out until a proposal eventually dies unnoticed. Although termination is stressful, the parties should attempt to find means whereby each can save face and to avoid publicity as much as possible when talks are terminating.
Preparation for Negotiations Role-playing is a valuable technique for training negotiators for projects requiring approval of a foreign government. By practicing their own roles and those of the government's negotiator and researching the culture and history of the country to determine its attitudes toward foreign companies, business executives may be much better able to anticipate responses and plan their own actions.
The use of simulation presupposes that an MNE knows who will be doing the negotiations. The choice of negotiators will depend in part on the importance of the project, the functional areas being considered, and the level of government involved. Commonly, MNEs use a team approach so that persons with legal, financial, and operations responsibility are involved in the decision making; one or more of these aspects might be altered as the need arises. Furthermore, it is also common to use people at different organizational levels at different negotiating points. One factor that is not easily simulated is the possible stress effect of being abroad and away from family and co-workers for an extended period. The location of negotiations may thus give one side or the other an advantage in reaching the final agreement.
In negotiations involving people from different countries, there is a strong possibility of misunderstandings due to cross-country cultural variances as well as possible language differences. Since the individuals involved may react on the basis of how they think their own performances are being evaluated, the direction of negotiations involving company managers on one side and government officials on the other side may be uncertain from the start since the. background and expertise of governmental officials may be quite distinct from that of businesspeople. Finally, it is always possible that one side or the other wishes to terminate bargaining but is hesitant to do so for fear of alienating future relationships.
Cultural Factors Back in the 1930s Will Rogers quipped, "America has never lost a war and never won a conference." Many participants and observers agree with this assessment of Americans in business negotiations abroad. Much of the problem stems from cultural differences that lead to misunderstandings and mistrust across the conference table. Although we cannot delineate all the possible cultural differences, Table 13.1 illustrates some usual differences among negotiators from Japan, the United States, and Latin America. A few differences are sufficiently important to U.S. negotiators to warrant mention. U.S. negotiators are more apt to have the power to make decisions than their counterpart negotiators from some other countries; they lose confidence when other negotiators have to keep checking at the head office. U.S. negotiators want to get to the heart of the matter quickly, whereas some others feel they must spend more time to develop rapport and trust before addressing business details. Americans attempt to separate the issues into pragmatic categories (getting closure on items in a linear fashion), whereas some nationalities view the negotiations holistically.13 U.S. executives often find it very difficult to know how to establish rapport with foreign negotiators through culturally and legally acceptable gifts or through the flattery of asking their advice and opinion.
There may be a problem finding words to express the exact meaning in another language, requiring occasional pauses while translators resort to dictionaries. Furthermore, facial reactions differ by culture and, even if understood, are difficult to judge because of the time lag between the original spoken statement and receipt of the statement in a second language. Since English is so widely understood worldwide, people with a different native language may understand quite well most of the comments and discussions in English, giving them the opportunity to eavesdrop on confidential comments and to reflect on possible responses while remarks are being translated into their language. The degree of precision in language desired by both groups also may be complicated by cultural factors. Furthermore, evidence exists that cultural factors influence whether or not interpreters are acceptable. For example, Saudi managers generally prefer to negotiate in English, even if their English is not very good. When translators are used, it is usually preferable for each side to have its own. Good interpreters also help to brief their teams on cultural factors affecting the negotiation process.
The importance of these factors may change during renegotiations because the parties get to know each other. If the relationship has been amicable, this quality is apt to be carried over. However, if the past relationship has been hostile, the renegotiation may be surrounded by even more suspicion and obstruction than existed during the original process.14
Personal Conflict of Negotiators Governmental and business negotiators may start with mutual mistrust due to historic animosity or to the different status of their professional positions. The investors may come armed with business and economic data that are not well understood by governmental officials, who may counter with sovereignty considerations that are nearly incomprehensible to the businessperson. Thus it may take considerable time before each understands and empathizes with the other's point of view. Even then, there is a possibility that neither will attempt to develop a type of relationship designed to assure the achievement of long-run objectives: They may see their rewards as dependent on immediate results and perhaps not expect to be closely connected with longer-run problems.
The viewpoint discrepancy has been particularly noted as many LDCs have attempted to sell state-owned enterprises (SOEs) to foreign investors. The managers within the SOEs are suspicious of MNEs, fearful of foreign domination, and insecure about the maintenance of their own jobs if the SOE is privatized.15
Termination of Negotiations For a variety of reasons, one or both parties may wish to terminate serious consideration of proposals. The method of cessation may be extremely important as it may affect the negotiators' positions vis-a-vis their superiors and the future transactions between the given country and firm, the company in other parts of the world, and the country with other foreign firms. Since termination is an admission of failure to achieve the objectives originally set forth, negotiators of organizations are prone to place blame publicly on others in order to save face themselves.16 Statements by company officials may make it harder for the country to deal with other foreign firms. Statements by governmental officials might make it more difficult for the company to negotiate and operate in other countries. For fear of adverse consequences from terminations, negotiations sometimes drag out until a proposal eventually dies unnoticed. Although termination is stressful, the parties should attempt to find means whereby each can save face and to avoid publicity as much as possible when talks are terminating.
Preparation for Negotiations Role-playing is a valuable technique for training negotiators for projects requiring approval of a foreign government. By practicing their own roles and those of the government's negotiator and researching the culture and history of the country to determine its attitudes toward foreign companies, business executives may be much better able to anticipate responses and plan their own actions.
The use of simulation presupposes that an MNE knows who will be doing the negotiations. The choice of negotiators will depend in part on the importance of the project, the functional areas being considered, and the level of government involved. Commonly, MNEs use a team approach so that persons with legal, financial, and operations responsibility are involved in the decision making; one or more of these aspects might be altered as the need arises. Furthermore, it is also common to use people at different organizational levels at different negotiating points. One factor that is not easily simulated is the possible stress effect of being abroad and away from family and co-workers for an extended period. The location of negotiations may thus give one side or the other an advantage in reaching the final agreement.
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