Cross-cultural Negotiation Tactics

Cross-cultural Negotiation, Steven Tolliver
Cross-cultural
Negotiation
Steven Tolliver

Outline:
• Components of negotiation
• Individual negotiation styles
• Negotiation tactics
• Cultural differences in negotiation

Negotiation:
= the use of dialogue to resolve disputes,
produce agreements or achieve goals.
• Make a sale of goods or services
• Open new market /create a partnership
• Secure supply
• Maintain / expand an existing business

Components of negotiation:
• Strategies > the goals
• Process > who, where, how
• Behavior > the tactics used
• Substance > the details

Prior to negotiation: making contact
How do parties (a buyer and a seller) discover each other?
Their companies have already been doing business before
current negotiators become involved.
Cold-calling
Advertising and web site
Mutual associations or intermediaries

Focus on interests not positions
Aspire to joint opportunity finding
Negotiation is primarily a process, not an event
Information is power
Framing is a strong determinant of a negotiation
outcome
Preparing for negotiation

1.Establish goals:
a.Aspirational base
b.Real base
Determine the other side’s goals:
a.What are their aspirations?
b.What is their real base?

2. Process:
a.Who will participate?
b.What will happen if the expected parties are
not there or new one are present?
c. Determine the setting
d.Means: in person, video-conference,
telephone, e-mail.

3. Tactics:
a.What stance will be taken?
b.How flexible is it?
c. What is the tone?
d.Specific ploys to be used?

4. Substance:
a.Prepare materials:
i. Draft documents
ii. Product and price details
iii. Terms
iv. Additional information

Individual negotiation styles:
Shell identified five styles/responses to negotiation.[11]
Individuals can often have strong dispositions towards
numerous styles; the style used during a negotiation
depends on the context and the interests of the other party,
among other factors. In addition, styles can change over
time:
•Accommodating
•Avoiding
•Collaborating
•Competing
•Compromising

Accommodating:
Individuals who enjoy solving the other’s problems and preserving
personal relationships; sensitive to the emotional states, body
language, and verbal signals of the other parties. They can, however,
feel taken advantage of in situations when the other party places little
emphasis on the relationship.
Avoiding:
Individuals who do not like to negotiate and don’t do it unless they
must; they tend to defer and dodge confrontation; however, they may
be perceived as tactful and diplomatic.

Collaborating:
Individuals who enjoy negotiations that involve solving tough problems
in creative ways. Collaborators are good at using negotiations to
understand the concerns and interests of the other parties. They can,
however, create problems by transforming simple situations into more
complex ones.

Competing:
Individuals who enjoy negotiations because they present an
opportunity to win something. Competitive negotiators have strong
instincts for all aspects of negotiating and are often strategic. Because
their style can dominate the bargaining process, competitive
negotiators often neglect the importance of relationships.

Compromising:
Individuals who are eager to close the deal by doing what is fair and
equal for all parties involved in the negotiation. Compromisers can be
useful when there is limited time to complete the deal; however,
compromisers often unnecessarily rush the negotiation process and
make concessions too quickly.

Negotiation Tips and Tricks
1. The Nibble Technique
Customer expresses surprise when price or terms are presented.
Salesman might then added extras to his offer. If the customer
does not flinch again, salesman can assume he has found the
customer’s real base.
Buyer can counteract this by referring to a competitor’s offer.
2. The Flinch
Salesman proposes adding additional cost items after initial deal
has been reached.
Buyer can preempt this tactic by clarifying all aspects of the
product, service, delivery and other terms before discussing the
price.

3. Deferring to Higher Authority
4. Good Guy, Bad Guy
Either side can respond to requests by saying that they must
consult with their team or their boss.
Cannot be used too much or the other side might wish to stop
present contact and negotiate with the real decision maker.
In a negotiating team, one person projects inflexibility and opposition
giving concessions while the other member of the team creates the
opposite impression and that they sympathize with the needs of the
other side. The goal is to have the other side give either concessions
or give up key information.

5. Set Aside
Buyer begins discussion with major demand that the seller must agree to
before further items are discussed. If successful, the salesman will
surrender key positions or drop prices to continue further negotiations,
which can then be pressed further.
Salesman’s response should be to suggest that the demand be set aside
in order to focus on the key features of their product or service.
6. Hot Potato Technique
Make one side’s limitation or problem the other side’s problem, too.
For example, “I have a budget of X amount”, “I need to get Y”
Response: present a solution that is comes closer to solving the
problem to test to see if the problem is real.

7. Splitting the Difference (Twice)
Establish a gap in positions and get the other party to suggest that you
split the difference and then do it again.
Buyer: Your price is 10,000, but my limit is 9,000. What can we do?
Seller: Well, we are 1,000 apart, so lets split the difference.
Buyer: So the price would be 9,500? I must check with my company.
Buyer consults and says he has tried but the company cannot accept it
adding its too bad because we are only 500 apart (Now 1,000 difference is
forgotten)
If seller needs to make the sale, he might offer to split the difference again,
making the final price only 250 above buyer’s original position.

8. The Trade Off Technique
When one side presents a problem or obstacle, for example “the order
will be ready one month later that expected” this presents the other side
with a chance to extract concessions. This could include extra goods, a
discount on future or past orders, etc. but it is important not to appear
willing to accept the problem as explained.
9. The Walk Away Technique
If one side decides that they must have something, they lose the a
great deal of power in a relationship. Try to preserve the ability to stop
the negotiation if the terms are not what is desired.
Announcing that negotiations are cancelled may cause the other side to
drop their position.

10. Attacking Techniques
The use of criticism (of the other side’s country, company or them
personally) may be a tactic to throw them off balance and lose
control emotionally.
The other side should try to not get upset and see it as a tactic.
Keep smiling and focus on the real issue

Cultural differences cause four kinds of problems in
international business negotiations. These differences
are manifested in:
•Language
•Nonverbal behaviors
•Values
•Thinking and decision-making processes
Cultural differences

Problems of comprehension / use of “false
friends” words, especial in high-context cultures
Language
Misuse of language or using commands

High-context vs. Low-context
Edward T. Hall, Beyond Culture, New York: Anchor
Books,1976.
High context: communication draws on shared
culture, fewer words need to suggest meaning.
Low-context: communication is more direct and
explicit

Translators:
Use to communicate with the other side
Use to gain time in making responses
Use to study the non-verbal communications of
the other side
Internal group conversations should be allowed
and followed.

Anthropologist Ray L. Birdwhistell: less than 35% of the
message in conversations is conveyed by the spoken
word while the other 65% is communicated nonverbally.
Albert Mehrabian: where meaning in face-to-face
interactions comes from.
• 7% from the words used
•38% from speaking style: tone of voice, loudness, etc.
•55% from facial expressions
Nonverbal behaviors

Facial expressions
Eye contact
Personal space
Physical contact
Silence
Sounds
Gestures
Nonverbal behaviors or body language

John L. Graham, Professor, Marketing and International Business, University of California, Irvine
The Paul Merage School of Business

The Hofstede culture matrix
Geert Hofstede, sociologist
Framework for Assessing Culture:
•Small vs. large power distance
•Individualism vs. Collectivism
•Masculinity vs. Femininity
(Achievement vs. Quality of Life)
•Weak vs. strong uncertainty avoidance
•Long vs. short term orientation

“Negotiating: The top ten ways that culture
can affect your negotiation”,
- Jeswald W. Salacuse

1.Negotiating goal: Contract or relationship?
74 percent of Spanish respondents claimed their
goal is a contract, vs. 33 percent of Indian
executives.
Relationship is goal: requires investment in getting
to know each other and building trust.
Contract is goal: efforts are focus on developing
the contract terms.

2. Win – Lose or Win – Win
Zero-sum: a winner and a loser vs.
Mutual gains bargaining
“100 percent of the Japanese respondents
claimed that they approached negotiations as
a win-win process, only 33% of the Spanish
executives took that view.”

3. Formality vs. informality
Perceived lack of proper repect
Appearance of coldness
Too close, too soon

4. Direct or indirect communication
Difficulty in saying “no”
Considered rude to argue
Or
Arguments are considered to be sign of
engagement

5. Time
Punctuality
Pacing and preliminaries
(understanding the other side and building
relationship or specifying contract terms and
details)
“Time is money”

6. Emotion
Appropriate display of emotion varies by culture
Spain & South America > England, Germany

7. Agreements: general or specific
U.S.: Specific agreements to cover all anticipated
cases and act as guide to behavior.
China: Agreement on general principals and use
the relationship to work out any difficulties.
Could also be reflective of power dynamic of the
companies, not just nationality

8. Top-down or bottom-up negotiation
Start with general principals and move to the
details?
OR start with specifics and general principals
emerge from details?
France: Basic principals guide later details
U.S.: Specific details form the basis of general
terms.

9. One leader vs. group consensus
One key decision maker:
Complete authority to negotiate
Group: representatives or specialists from various
internal departments.
One leader: may reach agreements faster
Group: may anticipate and solve problems before
they become emergencies

10. Dealing with risk
Share information, try new methods, tolerate
uncertainty.
Japan > United States
Avoid moving too fast
Focus on mechanisms to lessen risks
Provide information (on market, company,
proceedures, etc.)
Build relationship and trust
Move step-by-step not all-at-once

Seek out creative outcomes
Understand cultures, especially your own.
Don’t just adjust to cultural differences, exploit them.
Gather intelligence and know the terrain.
Design the information flow and process of meetings.
Invest in personal relationships.
Seek information and understanding.
Make no concessions until the end.
William Hernandez Requejo and John L. Graham,
Global Negotiation: The New Rules, New York: Palgrave Macmillan, 2008
Creative negotiation:

Steven Tolliver
steventolliver@manfatta.com

Cross-cultural Negotiation Tactics

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