negotiatingacrosscultures

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NEGOTIATING

ACROSS CULTURES

Training Management CorporationPrinceton Training Press • Princeton, New Jersey

Robert J. Greenleaf

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Published by:

PRINCETON TRAINING PRESSPrinceton, New Jersey

a division of

TRAINING MANAGEMENT CORPORATION600 Alexander RoadPrinceton, New Jersey 08540-6011 USA

Tel: (609) 951-0525Fax: (609) 951-0395Web: www.tmcorp.comEmail: [email protected]

Editor-in-Chief: Monique Rinere-Güven, Ph.D.Series Manager: Talia Bloch Writer: Robert J. GreenleafCover Design: Donna LukisInterior Design: Bonnie Jacobs

© 2000 TRAINING MANAGEMENT CORPORATION.Managing Across Cultures Series:Negotiating Across CulturesAll rights reserved. No part of this publication may be reproduced, stored in a retrieval system,or transmitted, in any form or by any means, electronic, mechanical, photocopying, recordingor otherwise, without the prior written permission of the publisher.Printed in the United States of America

ISBN: 1-882390-911

The Cultural Orientations Indicator®, COI® and TMC’s graphical depiction of our CulturalOrientations Model are registered trademarks of Training Management Corporation;Registration: 2,329,085 and 2,361,803.

Training Management Corporation

Preface iii

Introduction 1Negotiation DefinedNegotiating Across Cultures

Chapter One: The Impact of Culture on Negotiating Behavior 5Case ScenarioThe Ten Dimensions of CultureCultural Analysis of the Case ScenarioGeneralizations and Stereotypes in Negotiations

Chapter Two: The Seven Phases of International Negotiation 29An Overview of the Seven PhasesShowing a Commitment to Negotiating Internationally

Chapter Three: Negotiating Effectively Across Cultures 35Phase 1: Strategic Planning and AnalysisPhase 2: Network Approach and EntryPhase 3: Building Personal and Business RelationshipsPhase 4: Orientation and Presentation Phase 5: Bargaining and Persuading OthersPhase 6: Reaching AgreementPhase 7: Follow-Up and Maintaining RelationshipsConclusion

Appendix A: Cultural Orientations Model™ Quick Reference 73

Resources 75

Index 77

Training Management Corporation: Information & Publications

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iiiTraining Management Corporation

It is no secret that we are in an era of global business, one in which the world is moving towarda completely transnational market. The rapid growth of increasingly interconnected markets,processes and operations is affecting virtually every industry, company and worker today.Between the increase in strategic business alliances and the proliferation of globalorganizations, the share of the market run by companies that span two or more businesscultures is growing constantly.

These trends have changed the criteria for competitive advantage. Past successes in the oldmarketplace do not guarantee future success in the new. Speed, responsiveness, flexibility,effectiveness and an ever-increasing rate of innovation have become the cornerstones ofsuccess in today’s market. Organizations everywhere have been transforming themselves toadapt to these new requirements. Most organizations now understand that competitiveadvantage no longer rests on formal structures but on a dynamic organizational culture thateffectively encompasses the mindsets, competencies and practices of the individuals whocreate, support and sustain the organization––individuals who often do not share the samecultural background.

This new type of organization also calls for a different type of manager––one who can createa dynamic, flexible environment and draw upon his employees’ varied mindsets and skills.Given the varied cultural backgrounds of the employees in global organizations and strategicbusiness alliances, culture has become one of the key areas of managerial competence and oneof the most challenging aspects of working in the global marketplace.

It was once assumed that business and commerce were culturally neutral zones in whichbusiness professionals from various nations came together to participate in transactionsaccording to universally recognized norms. But, this is simply not true. The ways in which wemanage and conduct business are extensions of our social and cultural environments. Thus,how we conduct business is deeply influenced by the cultural values and associated behaviorpatterns that operate in that environment. Working in the multicultural environment of theglobal marketplace, today’s managers are confronted with this every day. The individuals withwhom they conduct business and whom they manage often represent a collection of differentcultures with different, sometimes conflicting, practices.

The main challenge for today’s global manager is to combine a repertoire of managerial andleadership skills with a thorough understanding of and sensitivity to culture. The “hard skills”

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of business tasks and the “soft skills” of the ways we interact and communicate have thusbecome intertwined and can no longer be easily distinguished. Today’s manager must be ableto successfully integrate cultural knowledge into her understanding of how to managebusiness and daily work. The guides presented in the Managing Across Cultures series aredesigned to help you develop the cross-cultural competencies that have become essential toevery manager’s basic skill set.

The series explores the interplay between culture and particular aspects of managerialcompetence. The areas discussed are:

Influencing and Persuading Across CulturesManagement Across CulturesManaging Global ProjectsMarketing and Sales Across CulturesNegotiating Across CulturesPresenting Across CulturesTranscendent Teams™

Each title assumes that the reader is familiar with the fundamentals of the managementfunction under consideration and has a working knowledge of Training ManagementCorporation’s Cultural Orientations Model™. Building on this knowledge, the authors discusshow each cultural orientation shapes business practices and business interactions within thesemanagement functions differently. They then describe which types of practices, within theparticular area, are most appropriate for each cultural orientation. Examples are drawn fromspecific cultural settings to demonstrate the direct applicability of this analysis to actual cross-cultural interactions. In some cases, the author also outlines the best strategies for eachmanagerial function in today’s leading business centers.

Culture and Cross-Cultural Competence

Unless we have experienced an environment that has changed or is somehow different fromthose in which we have been socialized, we can easily overlook the profound influence ofculture on our thoughts, emotions and behaviors. Usually we do not spend much timeconsidering the deep roots of our behavior or that of others. These roots remain below thelevel of our daily awareness. When they do surface or when we take the time to considerthem, however, we quickly become aware that culture is a diffuse, complex phenomenon thatwe tend to minimize or even deny the existence of altogether.

Yet, ignoring culture and the role it plays in shaping our business behaviors and preferencesis dangerous. Many business arrangements have failed due to an unrecognized and/orunacknowledged clash of cultures.

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vTraining Management Corporation

What Is Culture?

Culture is a complex pattern of ideas, emotionsand observable manifestations (behaviors andsymbols) that tend to be expected, reinforcedand rewarded by and within a particular group.Culture manifests itself in tangible ways, suchas in language, food, dress, rituals, customs, artand music. But culture also consists ofintangible components, such as values, beliefs,assumptions and the emotions with whichthese are invested.

Culture can be thought of as an iceberg. Thevisible portion of the iceberg consists of thetangible elements, and the invisible, larger partconsists of the intangible components. Thus,the tip of the iceberg can be said to consist of observable manifestations of culture, whereasthe thick, much more powerful block of ice below the surface of the water consists of thethoughts and feelings that are associated with and connected to these behaviors. If thesethoughts and feelings remain invisible to us, and we have no insights into them, if we see onlybehaviors different from our own, then, like any unsuspecting ship, we may run into theiceberg and founder. This series will help keep you afloat.

The Five Aspects of Cross-Cultural Competence

Cultural competence rests on a process of global learning, which each manager must engagein to become effective in the global business arena. This process has five different aspects toit, which can be cultivated simultaneously and continuously. The following offers a quickoverview of the five aspects as we define them.

1. Open attitude2. Self-awareness3. Awareness of others4. Cultural knowledge5. Cross-cultural skills

The first aspect of understanding people andorganizations from other cultures is developingand maintaining an open attitude or mindset.Such a mindset is non-judgmental towarddifference––toward different values, attitudes,beliefs and behaviors. It ensures that youinteract with others from a broad perspectiveon the world around you and enables you torecognize the interrelated nature and

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interdependence of all cultures. Each individual has a responsibility to continually maintainthis open attitude.

The second aspect is the development of self-awareness. To increase your effectiveness, it iscrucial to recognize your own cultural preferences. This involves identifying the values,attitudes and beliefs you hold and becoming aware of the behaviors you engage in as amember of your own culture. Articulating these on an ever-deeper level enables you tounderstand how you must appear to others whose values, attitudes, beliefs and behaviors differfrom your own.

The third aspect of cross-cultural competence is forming an awareness of others. This entailsrecognizing the cultural values, attitudes, beliefs and behaviors of those around you. Youmight ask yourself these questions:

• What are the cultural preferences of my counterparts?• What cultural differences may be affecting our interactions?• What cultural common ground do we have?

The fourth aspect is obtaining cultural knowledge. Once you begin to take account of yourcounterpart’s behavioral preferences and approaches to business, you can base your awarenesson a comprehensive understanding of your counterpart’s social and business culture. This meanslearning about your counterpart’s cultural values, beliefs and attitudes, as well as about the socio-economic, political, historical and philosophical roots of the cultures that underpin them.

The fifth and final aspect of cross-cultural competence is developing cross-cultural skills.Once you begin to understand the culture in which you will be operating and/or of those withwhom you shall be conducting business, you can translate this understanding into effectivebusiness interactions.

None of these aspects of cross-cultural competence is ever complete. The process of globallearning requires an ongoing commitment of time and energy, and, perhaps moreimportantly, the ability to admit that you never know everything and that you are alwaysopen to learning something new. While the development of these competencies may be astrategic imperative for today’s industries and organizations, it can also be an enormoussource of personal and professional enrichment and pride for those who engage in thisprocess as a lifelong undertaking.

The Cultural Orientations Model™ (COM™)

The Cultural Orientations Model™ is a comprehensive tool that provides both a framework forunderstanding culture and the ways in which it affects people’s attitudes and behaviors and avocabulary for discussing these attitudes and behaviors. It was developed by TrainingManagement Corporation and was first introduced in TMC’s publication Doing BusinessInternationally: The Guide to Cross Cultural Sucess in 1995. Since then, it has become the cornerstoneof TMC’s cross-cultural consulting solutions and has achieved a worldwide reputation.

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viiTraining Management Corporation

The COM™ describes culture as consisting of ten basic dimensions: Environment, Time,Action, Communication, Space, Power, Individualism, Competitiveness, Structure andThinking. Each dimension breaks down into one to four continua along which a person andculture might find themselves. This placement defines their orientation within the dimension.In all, there are 17 continua. The dimension of time, for example, refers to the ways in whichan individual or culture perceives the nature of time and its use. Within this dimension is acontinuum that goes from fluid to fixed. A culture may emphasize the importance ofmanaging time precisely, or it may reinforce the concept of time as loosely defined. A personor culture may be described as tending toward one or two of those continua. While oneindividual may have a very strong tendency toward the fixed orientation of the timedimension, another may have a strong orientation toward the fluid orientation, and yet a thirdmay have a relatively mild inclination on the fixed-fluid time continuum.

The Cultural Orientations Model™

For your convenience, a brief reference guide to all the dimensions and orientations is includedin the appendix to this publication. For a full overview and review of the COM™, pleaseconsult the Cultural Orientations Guide, the foundational publication for understanding theCultural Orientations Model™.

The guides in Managing Across Cultures areintended for use in conjunction with TMC’sseries Doing Business in Regions and Countries Aroundthe World. Doing Business in Regions and CountriesAround the World explores a particular national orregional business culture through the lens ofthe COM™. Each guide contains an in-depthcultural profile of a particular country or regionfollowed by a discussion of its businesscommunication style, management practices,negotiating tactics and decision-makingprocesses, as well as brief historical, politicaland economic overviews. Doing Business inRegions and Countries Around the World alsoexplains the difference between stereotypingand generalizing and outlines the role of trustin cross-cultural business interactions.

You are invited to use the Managing Across Cultures guides and the Doing Business in Regions andCountries Around the World guides together in whichever way best suits your needs and interests.It is recommended that you start by reading the Cultural Orientations Guide and groundingyourself in a thorough knowledge of the COM™ and your own cultural orientations. You maythen select a title from either the Managing Across Cultures series or the Doing Business in Regionsand Countries Around the World series. One will offer you a comprehensive overview of thedominant business culture in the target country or region while the other will provide you withthe necessary management skills across cultures in your area of business expertise.

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Influencing and Persuading Across CulturesManagement Across CulturesManaging Global ProjectsMarketing and Sales Across CulturesNegotiating Across CulturesPresenting Across CulturesTranscendent Teams™

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Doing Business Globally

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Doing Business in Regions and CountriesAround the World

Doing Business in Asia Doing Business in the Middle East

and North AfricaDoing Business in Latin AmericaDoing Business in North AmericaDoing Business in Eastern EuropeDoing Business in Western EuropeDoing Business in ArgentinaDoing Business in AustraliaDoing Business in BelgiumDoing Business in BrazilDoing Business in CanadaDoing Business in ChileDoing Business in ChinaDoing Business in ColombiaDoing Business in FranceDoing Business in GermanyDoing Business in Hong KongDoing Business in India

Doing Business in IrelandDoing Business in ItalyDoing Business in JapanDoing Business in MalaysiaDoing Business in MexicoDoing Business in the NetherlandsDoing Business in NorwayDoing Business in the PhilippinesDoing Business in Saudi ArabiaDoing Business in SingaporeDoing Business in South AfricaDoing Business in South KoreaDoing Business in SpainDoing Business in SwedenDoing Business in SwitzerlandDoing Business in ThailandDoing Business in the United KingdomDoing Business in the United StatesDoing Business in Venezuela

1Training Management Corporation

Globalization is exposing more people to cross-border negotiations and bargaining—which,in turn, requires individuals and organizations to effectively work across cultures andlanguages. This book focuses on how to transcend cultural differences in global negotiations.

Negotiating across cultures requires that you have an open attitude and flexibility in yourapproach. You must be receptive to cross-cultural learning and maintain an open andproductive attitude toward difference. Successful negotiators must continuously challengetheir assumptions about other cultures and avoid quick judgments. In cross-cultural situations,you will need to tolerate ambiguity and prepare for the complexity of cross-bordernegotiations. Patience is a virtue; this remains true for cross-cultural negotiations as well.Negotiating across cultures will require that you continuously pursue learning about othercultures and their approach to negotiations.

To understand another person’s culture, we must first understand our own culture. Self-awareness and knowledge about one’s own cultural preferences is crucial to negotiating acrosscultures. A successful negotiator is able to understand and articulate his own cultural values,beliefs and attitudes, as well as how they are reflected in negotiating behavior. Being able toidentify differences between one’s own culture and another’s—and to realize that thesedifferences can lead to misunderstandings—is important when preparing to negotiate acrosscultures. Identifying ways to adapt your approach to support cross-cultural negotiations iscritical for success.

A successful negotiator is not someone who has memorized a list of do’s and don’ts, but, rather,one who has developed a global feel for negotiating across cultures. This means that there isa need to recognize the cultural values, attitudes, beliefs and behaviors of others in order todevelop new cross-cultural negotiation skills. Those negotiators who are more experiencedcan correctly identify the cultural orientations of their counterparts and how they areexpressed in the counterparts’ negotiating behavior. But, first and foremost, an internationalnegotiator needs to be a good observer, to be able to articulate areas of shared culturalperspectives in finding common ground. Gauging the approach of one’s counterparts tonegotiating, and their cultural orientations, will lead to less misunderstanding and strongercross-cultural relationships.

The more you understand about the history, economy, politics and business practices of aspecific culture, the more likely you will be able to succeed in negotiating across cultures. A

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successful negotiator has acquired, or can acquire as necessary, a comprehensive knowledge ofother, specific social and business cultures. Beyond correctly identifying the general knowledgeneeded about a culture, a good negotiator may require specific business or industry knowledge.Being able to identify how conflict is resolved, decisions are made, problems are solved, peopleare motivated, performance is rewarded, relationships are established and maintained,negotiations are conducted, people are led—all these are crucial to success. Finally, knowinghow to enter a network, get the necessary information to negotiate, and build the personal andbusiness relationships required to do business across cultures is also crucial.

The larger question is, how can we develop the cross-cultural skills needed to negotiatesuccessfully across cultures? A successful negotiator has the necessary skills to work effectivelyacross cultures in many different business contexts. Experienced negotiators can translatecultural awareness and knowledge into negotiation skills. There is no easy, quick way toimprove one’s own ability to negotiate in cross-cultural or cross-border situations. Onlythrough experience and trial and error can you continue to refine and improve yournegotiation skills in order to adapt them appropriately to particular cultures and situations.

Understanding the cultural orientations of those with whom you negotiate across cultures iscrucial. Knowing, for example, that the Japanese tend to be formal and indirect in theircommunication is important, but knowing how this affects your ability to negotiate with theJapanese is even more important. In short, there is a need to go beyond an intellectualunderstanding of how another culture negotiates. Knowing that the Japanese place greatemphasis on protocol and seniority in negotiations should influence your behavior the nexttime you are in Tokyo. Changing your behavior to adapt to the particular negotiation contextand situation is the hallmark of a good international negotiator. Acknowledging the otherculture’s approach to negotiation and responding accordingly is the ultimate goal. By betterunderstanding our own cultural preferences and those of our negotiating partners, we canrespond more constructively, thereby transcending cultural differences.

Negotiation Defined

What is negotiation? Is it the simple process of influencing others to achieve our own ends, or isit a complex process in which teams meet to hammer out agreements that spell out the roles andresponsibilities of both parties as they engage in a business transaction? One dictionary definitionof negotiate reads, “to confer with another or others in order to come to terms or reach anagreement; to arrange or settle by discussion and mutual agreement” (The American HeritageDictionary 1209). The historical root of the word negotiation comes from the Latin wordnegotium, meaning “business,” neg meaning “not,” and otium meaning “easy time or leisure”—implying that people who negotiate with each other are not going to have an easy time.

Negotiating Across Cultures

Does the negotiation process really differ from one culture to another? The simple answer is“yes.” The Japanese approach to negotiation, for example, is first to look at the web of

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relationships and obligations owed and then to come to an agreement with the other party,based on consultation and discussion. Emotional connectedness and social obligations play arole in the process, as the Japanese negotiatior strives to understand his counterpart’s positionand come to an agreement without an excessive amount of bargaining.

The Russian approach to negotiation is to have an informal discussion with one or morepeople and, over a period of time, come to an agreement. This often means that agreementsare reached in informal situations away from the negotiating table––on a break, or whensocializing. The Russian negotiator employs persuasion, reasoning and rhetoric to convincethe other party that his position is the correct one. The exchange of favors between partiesaway from the table is, in many ways, the same as the Western concept of exchangingconcessions at the table.

The U.S. approach to negotiation is to have two or more people meet and discuss commonand conflicting interests in order to reach a mutually satisfying agreement. This requires amore collaborative style of negotiating (called win-win) as opposed to the zero-sum (“win-lose”) style of negotiating often found in Europe and Asia.

As Pierre Casse and Surinder Deal state, “Negotiation is the process by which at least twoparties with different cultural values, beliefs, needs and viewpoints try to reach agreement ona matter of mutual interest” (Casse and Deal 2). The key word here is “cultural.” Understandingcultural differences is essential to understanding how other cultures define, and go about, theprocess of negotiation.

There is a need to learn and understand the business practices and communication styles ofthe other party in a negotiation. It is important to understand how to establish relationships,how to assess expectations, how to reduce conflict and how to develop effective bargainingstrategies. When we encounter behavior that is unfamiliar, we tend to view the other’sbehavior through the prism of our own culture. This often leads us to negatively evaluateunfamiliar or different behavior, which undermines trust and prevents us from moving thenegotiation forward to a successful conclusion. Another response to the other party’sunfamiliar behavior is to ignore it. Because we do not understand it, we may miss opportunitiesat the negotiation table. People perceive the process of negotiation from their own culturalperspective or context. How we relate to each other, how we interact in the process, the waysin which we present information, use influence strategies and attempt to reach an agreementare all “culturally bound.”

To be successful in international negotiations, we need to:

• Understand the fundamental cultural preferences of the other party.• Understand how our own cultural biases limit our ability to negotiate

across cultures.• Determine whether our approach to entering a new network or company

is appropriate or not.• Devote adequate time to planning and analysis of the other party.• Create a plan with a strategy appropriate to the other party’s situation.

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• Develop both a personal and a business relationship with the other party.• Learn what type of information to present, how and when to present it,

and what kind of strategies of influence persuade others.• Be flexible in negotiating in new environments or cultures.• Pay attention to protocol, ceremonies, follow-up visits, and socialization

with the other party.• Spend time maintaining the relationship and follow-up on commitments.

This book explores the ramifications of culture for international negotiations by discussing howcultural orientations manifest themselves during the negotiating process and exploring in detailthe seven phases of international negotiations. Chapter 1 analyzes a cultural case scenario anddescribes negotiating behavior across the ten dimensions of culture. Chapter 2 reviews thebasic elements of the seven phases of international negotiation and Chapter 3 provides athorough going examination of how different cultures approach each of the seven phases. Anappendix concludes the book with a quick review of the Cultural Orientations Model™.

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Case Scenario

John Banner smiled at the headline in the Wall Street Journal announcing “CreditCorpNegotiates New Joint Venture in Japan.” The article went on to say that the “hard-charging”John Banner had successfully negotiated a U.S. $1.2 billion investment for a 10 percent stakein Nagano Securities with an option for an additional 5 percent in the next two years. The newjoint venture in Tokyo was named “Nagano CreditCorp Shoken-Gaisha,” or NCS. The newcompany would begin wholesale investment banking operations and sell financial productsand services to both individual and institutional customers throughout Asia. There would befive new divisions—commercial market services, retail market services, electronic products,management services and personal financial management services—which would sellCreditCorp’s products and services in Japan.

The article went on to report that Nagano Securities had 127 domestic branches and 29overseas offices with a total market capitalization of U.S. $5 billion. The president of NaganoSecurities was Kenichi “Ken” Mogi, age 58, a 35-year veteran of Matsubashi Bank and NaganoSecurities. CreditCorp, Inc., with its 500 domestic branches and operations in 27 countries,was capitalized at U.S. $100 billion and had U.S. $200 billion in assets as of 1998. The CEO,John Banner, age 47, was a 15-year executive of CreditCorp and had been promoted to CEOupon his successful stint as executive vice president of sales in Europe, where he doubledCreditCorp’s base of business in less than three years.

Banner thought back to the meeting he had had with Ken Mogi in New York one year ago,when Banner had proposed that the two companies enter into a joint venture in Japan. Bannerhad thought that there was a huge opportunity in Japan with its U.S. $10 trillion in personalsavings. CreditCorp, Inc., in its pursuit of establishing a global network of customers, productsand services, saw the joint venture as the entry point for increasing its share of Japanesecorporate and individual accounts for banking, securities and credit card services.

Two years ago, Nagano Securities had been embroiled in a scandal in which they had tried tocover the losses of their preferred customers (from bad real estate loans and stock deals) at theexpense of Nagano’s minor individual accounts. Matsubashi Bank, a major shareholder ofNagano Securities, had appointed Mogi as the new president just before his meeting withBanner in New York. Most Japanese banks and securities companies had had problems afterthe financial bubble burst in Tokyo in 1997 and 1998. As a result, Mogi was looking for an

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infusion of capital to keep the company afloat. The joint venture seemed to be the answer tohis capitalization problems and CreditCorp’s need to increase their penetration of Japan.

Mogi invited Banner and his senior staff to Tokyo in January 1999 to discuss the joint ventureidea. During the negotiation, there were three main sticking points in reaching the finalagreement between CreditCorp, Inc. and Nagano Securities.

First, there was the problem of ownership. CreditCorp senior executives wanted a 51/49 splitto retain control of the joint venture. They reasoned that a U.S. $1.2 billion investment in thejoint venture gave them the right to control the company and its assets. Because the jointventure would be in Japan, however, Nagano Securities wanted a 51/49 split in its favor. Theyreasoned that their large Japanese client base would be reluctant to deal with a foreigncompany in Japan’s very conservative banking environment.

Second, CreditCorp insisted that it should run the new joint venture and appoint the topofficers for NCS from its own management. CreditCorp reasoned that wholesale banking wasnot Nagano’s strong suit, and that they had proven their inability to be financially sound byU.S. standards when they became embroiled in the securities scandal in Japan. NaganoSecurities wanted its own people to head the new joint venture. They were willing to allowCreditCorp to fill the operations and technology management positions, since they were thedominant leader in the banking industry, but insisted that the board majority of the staff andnew president be Japanese.

Third, Nagano Securities was adamant that NCS absorb some 500 of the 2,000 “relationshipmanagers” or sales employees who were responsible for handling their major individual andcorporate accounts. They reasoned that for NCS to have credibility in the marketplace, itwould need the continuity of the sales force which would, in turn, create new businessopportunities in Japan. CreditCorp was extremely reluctant to allow these 500 managers tobe transferred to the new joint venture. With the low return on assets that Nagano Securitieshad experienced in the past three years, CreditCorp managers felt that Nagano Securities wasdumping their poor performers into the joint venture and saddling NCS with the high cost ofJapanese salaries and benefits. Besides, with the technology CreditCorp was bringing to thejoint venture, such overstaffing would be unnecessary.

Banner assigned Roger Greene, 38, a Harvard MBA graduate and former Citibank vicepresident of acquisitions, to negotiate the joint venture with Nagano Securities. On his teamwere two other CreditCorp senior executives: Mary Ross, 42, who was in charge of businessdevelopment in the wholesale banking division, and Steve Martinez, 35, a rising lawyer inCreditCorp’s trust department, from Miami. In addition, there was Wayne Tanaka—a secondgeneration Japanese-American who had graduated from the University of California,Berkeley—who was the general manager of CreditCorp’s Tokyo office, and his interpreter,Mitsuko Ueda, a recent graduate of Waseda University.

Nagano Securities assigned Junichiro Ando, 65, a graduate from Tokyo University and a formerbureaucrat from the Ministry of Finance, as lead negotiator. Ando had recently retired frompublic service and had been accepted on the board of directors for Matsubashi Bank five years

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ago. He also had been appointed as an advisor to Nagano Securities’ former president, TomihiroIzumi, and was the lead person in discussions with the government body investigating thesecurities scandal. In the late 1980s, Ando had spent five years in Washington, D.C., workingon behalf of his government. The Japanese team consisted of eight members, including ToshioSaito, 54, a 20-year veteran of Matusbashi Bank and president of Nagano Research Center, Ltd;Hiro Hirayama, 53, Director of Corporate Securities; Koji Kobayashi, 42, assistant director ofpersonnel and a graduate of Keio University; Masaki “Mike” Akahane, 38, manager of businessdevelopment and an MBA graduate from Stanford; Ari Matsuda, 32, a female manager in chargeof administrative affairs; and Tomoaki Itah, 28, a section manager in human resources. Alsoassisting the Japanese side was Shuichi Ikegami, a senior director for corporate securities andfunds from Matsubashi Bank.

Banner walked down to Roger Greene’s office and gave him a copy of the newspaper with thearticle. Once again, he congratulated Greene on his successful negotiation with NaganoSecurities. Greene smiled as he thought back to his trip to Tokyo nine months earlier. He andhis team had arrived at Narita Airport after a 12-hour flight from New York, to be met not onlyby Wayne Tanaka of CreditCorp Japan, but also by Junichiro Ando, Toshio Saito and fourother Nagano Securities staffers. A number of limousines provided by Nagano Securitiescarried members of the two teams to the Imperial Hotel in downtown Tokyo, where theCreditCorp executives would be staying during the negotiations. Ando informed Greene thatthey had arranged for a dinner party at a famous Ginza restaurant at 7:00 p.m., to welcomethem to Japan. Although they were tired and suffering from jet lag, Greene accepted theinvitation on behalf of his team. They were soon picked up at their hotel and taken by taxi toa restaurant, where a sumptuous feast and drinks were served. After much toasting and non-business conversation, Greene found himself asking Ando about the next day’s negotiation,and whether Ando had received the latest proposal and related information sent byCreditCorp the week before. Greene was surprised when Ando deferred talking about thenegotiation and began a long conversation about his own experiences living and working inWashington, D.C. At around 11:00 p.m., the party finished and the U.S. Americans wereinformed that they would be picked up at 9:00 a.m. the next day and transported to NaganoSecurities’ head office in the Marunouchi district, where the negotiation would take place.

The following morning, Greene and the CreditCorp were greeted at the front door of theNagano Securities’ headquarters building and ushered into a large boardroom. Having awokenin the early morning hours, the CreditCorp team had already spoken with headquarters overthe phone and learned that Banner had given an interview in New York to CNN’s “FinancialNews,” which would be aired in Tokyo that evening.

Banner’s style of business was based on the “profit or perish” model. In the CNN interview hewas quoted as saying, “In the banking industry, we have to keep developing new services andproducts. We can never relax because the fellow next door can enter the business anytime. Wehave to run fast to succeed.” When he was asked about the negotiation with Nagano Securitiesin Tokyo, he said, “Competition in the wholesale banking business on a global basis is verykeen. So, in a sense, we need to diversify our business to sustain growth worldwide. That is whywe are investing in Japan. With our banking strengths in on-line products and services weshould have no trouble leaping to the top of the wholesale banking business in Japan.” He went

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on to conclude the interview with the following statement. “We have consistently followed apath of international diversification through joint ventures, wholly owned subsidiaries andminority investments leading to participation in 27 countries. We network into differentcountries step by step, and where the markets seem promising we establish a new business. Wetrade our technology and knowledge of banking to a new partner who has the local contactsand the financial clout to help us receive a good return on our investment. If it proves profitable,then we move on to another country. We continue as long as opportunities for profit continue.If not, then we pull out just as quickly as we went in. At any one time we have a priority list ofsix or seven countries we are studying for opportunities in the banking sector. Japan is at thehead of that priority list, and that is why we are talking to Nagano Securities.”

After an exchange of business cards, Greene formally introduced his team to the eight membersof the Japanese team sitting across from them at the long, mahogany negotiation table. Andothanked Greene for the introductions, then asked the person sitting to his right, Akahane, tointroduce the Japanese team in English. After the introductions, Ando welcomed the U.S. teamin Japanese, with Akahane translating his remarks into English. He went on for some timediscussing Nagano Securities’ past successes in joint ventures in Japan. Then he said:

In the past five years, we have established five joint ventures in cooperationwith two life insurance companies, three regional banks and a mutual loan andsavings company to provide our Japanese customers with quality products andservices. We also negotiated with JCB, a bank-affiliated credit card companyin Japan, to furnish credit card services to our consumers in Japan and abroad.We are proud of our 50 years of history and we have been successful with ourjoint venture partners because we enter into these agreements as if they werea corporate marriage. We believe in an arranged marriage in which there isgive-and-take on both sides, just as occurs in a marriage between a Japaneseman and woman. For this to happen, we need to have good channels ofcommunication and mutual respect between our two companies. We will runthe joint venture with trust and respect for each other. Courtesy and acontinued dialogue between the two partners will allow us to resolve allissues, big and small, that will be encountered in the marriage. We hope thatyour Mr. John Banner will understand our situation in Japan.

Upon completion of his remarks, Ando asked Greene to talk about CreditCorp. Greenethanked Ando for his welcoming remarks and proceeded to lay out the major differencesbetween the proposals of the two sides. He went on to list the three biggest issues: ownership,management control and staffing. Then he asked Ando which of these three issues he wouldlike to address first. Akahane translated Greene’s remarks to Ando, but to his surprise, therewas no visible reaction. Ando sat quietly and after a long silence said, “Yes, we understand yourproposal well.” He then went on to ask Greene how they found their accommodations at theImperial Hotel, and whether this was their first trip to Japan. This small talk continued forabout 30 minutes.

After the light discussions, Ando nodded to Akahane, who went on to lay out the Japaneseproposal, which he continued doing for some time. For Greene and his team, this was the same

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information that had previously been presented to them in New York in writing. It seemed thattheir latest proposal was not being addressed at all. At the end of Akahane’s remarks, Ando stoodup and announced that he had arranged for a tour of their offices before adjourning for lunch.

The negotiation resumed at mid-afternoon, when the Japanese began asking questionspreviously asked by the Japanese in writing and which CreditCorp thought it had addressedin its most recent proposal. Greene fielded some of the questions, but his team answered mostof the questions, as they fell in a team member’s functional area. The U.S. Americans answeredthe questions in a direct, straightforward and concise manner. Throughout the afternoon,additional data and details were provided, either verbally or in writing.

During the negotiation, the Nagano Securities team often broke into side discussions inJapanese that sometimes lasted 15 minutes or more. When Greene asked Akahane what theJapanese were discussing, he was told that they were merely reconfirming their understandingof what had been said and that he should not worry. The U.S. Americans, growing restless,pressed the Japanese to address the three main issues as presented, but were unsuccessful ingetting the Japanese to do so by the end of the first day of negotiations. The U.S. Americanseven wondered about the role of the others on the Nagano side, since instead of participatingin the discussion, they had just sat quietly and nodded in unison whenever Ando spoke.

Twice, Greene had tried to redirect the negotiation back to the three main issues ofdisagreement. He had even offered to meet Ando’s request that the Nagano name come firstin the new joint venture if they could resolve the issue of ownership. He proposed that thenew joint venture be named “Nagano CreditCorp Shoken-Gaisha.” Although the Japanesewere agreeable to his offer, they were reluctant to address the ownership issue at that time. Infact, Akahane went on to reintroduce issues that the U.S. side thought had already beensuccessfully addressed in earlier correspondence. This repeated questioning was annoying tothe U.S. team. At one point, Kate Myers interrupted Akahane to say, “Why are you asking thesame questions all over again? Haven’t we answered them sufficiently? Can’t we move on tothe real issues at hand?” The Japanese then became very quiet until Greene suggested thateveryone take a break.

During the break, Ari Matsuda approached the interpreter, Mitsuko Ueda, to ask her if Greeneand his team would be interested in having dinner with Ando and Toshio Saito that evening.Ando was looking forward to treating them all as his guests at his favorite member’s club nearthe office. Ueda passed on the invitation to Greene and, much to her surprise, Greene thankedAndo but politely declined. After consulting with his team he stated that the U.S. teammembers were still jet-lagged and in need of rest. He stated that he and his team would like toreturn to the hotel where they could review the day’s proceedings and prepare for the next day.

At dinner, Greene and his team reviewed the day’s events and concluded that they were nocloser to an agreement than they had been prior to their departure from New York. In fact,since the Japanese had not responded to their proposal sent the week before, they felt thatthey were back at square one. Greene knew, ultimately, that CreditCorp’s joint-venturestrategy was to concentrate on the direct distribution of products and services to variousmarket segments in Japan. Their hope was to develop a product mix that would provide their

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global clients with the best services in Japan. Banner was less concerned with the name of thecompany or management issues than he was with profits from the joint venture.

Before the negotiation session began the next day, Ando introduced Shuichi Ikegami, fromMatsubashi Bank, to Greene. During an informal discussion, Ikegami explained that a fewmembers of the bank’s board of directors were concerned about the joint venture. He said thatmember companies of the Matsubashi Group, a horizontally integrated conglomerate ofcompanies affiliated with Matsubashi Bank, had expressed their reservations about the jointventure and had threatened to discontinue using Nagano Securities as their preferredunderwriter in the future. This news alarmed Greene and his team. After a brief sidediscussion, they asked Ando to explain Nagano Securities’ business relationship with theMatsubashi Group in greater detail. Ando then outlined the structure of the Matsubashikieretsu, the interconnected structure of the member companies. He stated that Mogi, formerlywith Matsubashi Bank, would handle this small problem, since his network at Matsubashi wasextensive. Greene and his team expressed their concerns about Matsubashi Group’srelationship with Nagano Securities. Ando responded that if Greene had the time, perhaps hecould visit some of Mogi’s contacts at Matsubashi and explain CreditCorp’s proposal toestablish the joint venture. Greene agreed to do so, but didn’t understand what this ultimatelyhad to do with their discussions today.

The Nagano Securities team continued the negotiation with another round of questions andexpression of concerns. Ando proposed that the two sides address the issue of relationshipmanagers and the need for Japanese clients to feel comfortable with the services and productsof the new joint venture. What better way to do this than to make use of the sales forcealready in place? He went on to explain the concept of shukko, or assigning staff to a subsidiaryor joint venture as a way of gaining experienced staff and a fast start-up in the marketplace.Ando emphasized that relationships came first in Japan and that profits would be realizedlater. Greene doubted that Banner and CreditCorp’s stockholders would wait patiently forprofits. He knew from his research on Japanese business practices that shukko was a traditionalway for Japanese companies to reduce head count and costs in times of recession or decliningbusiness. He wondered whether the expense of higher salaries and benefits was justified,based on the performance of these managers over the past three years, and told Ando this.Greene and his team were concerned that Nagano Securities was using the joint venture todump poorly performing managers at a substantial cost to CreditCorp.

Ando assured Green that, if he agreed to accept the 500 relationship managers, the companyunion would support the move of the 500 managers and agree to a 15 percent reduction insalaries and benefits for those transferred managers. Greene knew that Nagano Securities hada company union, but he had assumed that the union would not be problematic. Thediscussion went on for some time and was finally resolved when Wayne Tanaka took KojiKobayashi aside during a break and proposed that Nagano Securities cover 25 percent of thecost of salaries and expenses over the first two years of the joint venture. Although Greenefelt that this was a good idea, Mary Ross disagreed, saying that it would be awkward tomanage, measure and reward performance under Nagano’s present relationship managementsystem. In addition, once these workers were transferred, it would be difficult to fire poorperformers. Ando assured Greene that if he accepted the relationship managers, he (Ando)

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personally would work with Kobayashi to select only the best managers for the joint venture.Greene took his team aside and conferred with them. Tanaka told Greene that he was sure thatthey should trust Ando’s judgment on this point. Greene, wanting to move the negotiationahead, readily agreed despite protests from Ross.

After lunch on the second day, and having just agreed to meet Nagano Securities’ request onthe relationship managers, Greene decided to address the ownership issue. He stated thatCreditCorp was willing to invest another 5 percent in the joint venture over the next twoyears, should Nagano Securities agree to a 51/49 split, which would leave control in U.S.hands. He reminded Nagano Securities of their current financial situation––that theirstockholders would want CreditCorp to have control to ensure a healthy stream of profitsback to the United States. Ando reasoned that Japanese stockholders such as Matsubashi Bankwould want just the opposite to reassure Japanese customers that they could trust the new jointventure. The discussion went on all afternoon with only one decision being made. The jointventure and new company would be named Nagano CreditCorp Shoken-Gaisha, and listed onthe Tokyo stock exchange as NCS. However, both sides agreed to revisit the issue ofownership later in the negotiation.

At the conclusion of the second day’s negotiation, Ando once again offered his dinnerinvitation to Greene and his team. This time, Greene was happy to accept, but suggested thathe meet with Ando separately from his team and allow his team to prepare for the followingday. Ando agreed and picked Greene up at his hotel for dinner at his private club. Toward theend of dinner, Ando told Greene that the issue of ownership was important to the Japaneseand could be a deal-breaker. He explained how difficult it had been to reach consensus ontheir position, both internally and with the Matsubashi Group. Reaching agreement had beenextremely difficult and time consuming. Any changes on this point would be challenging forAndo and his team. Beyond the issue of consensus decision-making, he revealed that Mogi hadused favors and obligations to align the senior managers of Nagano Securities and MatsubashiBank and get them to agree on the joint venture with CreditCorp. He asked that Greene talkdirectly with Banner to see if a compromise could be reached wherein the Japanese side couldretain a 51 percent share of ownership. Greene told Ando that he would talk with Banner andgive him an answer the next day.

In his discussion with Banner, Greene learned that Banner was willing to sacrifice some controlas long as profits were high. CreditCorp was confident that their technology leadership andexpertise in wholesale banking would give them an edge in the key decisions of the jointventure. Banner told Greene that, if Greene could staff key positions in the joint venture withCreditCorp executives, he would be willing to give in to the Japanese request for a 51/49 split.CreditCorp, however, would invest additional money into the joint venture based only onfuture performance measurements to be agreed upon by both parties.

On the third day of the negotiation, Greene opened with a counterproposal. If NaganoSecurities would agree to CreditCorp’s request to staff the top management positions of thejoint venture, CreditCorp would be willing to agree to Nagano Securities’ need for ownershipcontrol. After translating the counterproposal, Ando thanked Greene for his new proposal andtold him that he would get back to him after conveying the information to Mogi and his senior

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staff. But before doing so, he was interested in learning more about CreditCorp’s plans forstaffing top management positions. Greene explained the organizational structure ofCreditCorp and how NCS would be integrated into their global operations. In addition, hestated that CreditCorp’s leadership development program and succession planning would beintegral to staffing at NCS.

At the end of the morning session, Ando asked Greene and his team if they had planned anysightseeing in Tokyo. He suggested that Greene’s team stay as guests at the Nagano’s companyresort house, a local onsen––or hot springs bath––in Kamakura that afternoon, and that theycould resume the negotiation the next afternoon. Greene was surprised at the unannouncedbreak in their discussions and suggested that they continue their talks to ensure that theycould come to an agreement before their scheduled departure on Friday evening. Ando toldGreene that Nagano Securities needed the additional time to present CreditCorps’scounterproposal to their management. Reluctantly, Greene and his team agreed to the trip toKamakura.

Masaki Akahane and Ari Matsuda accompanied the team on the train ride to Kamakura fromTokyo. Knowledgeable about the Kamakura area, Akahane provided amusing anecdotes toentertain his guests. After visiting the Great Buddha of Kamakura and bathing at the onsen, thegroup retired to a large tatami room, where dinner and drinks were served. After dinner, theU.S. team was invited to go singing at a nearby karaoke bar. On the train ride home, Akahaneasked Greene about a recent article he had read in the Asian Wall Street Journal about a new jointventure between a U.S. and Chinese company, in which the top management positions wereheld jointly by both sides for a one-year period. This allowed both sides to learn from eachother and to manage the new company jointly. Akahane wondered if CreditCorp had anyexperience with this type of management structure. Greene said that he had not read thearticle, but that it sounded like a good idea worth considering.

Ando led off the Thursday afternoon session with a review of the negotiation to date andNagano Securities’ response to CreditCorp’s counterproposal on Wednesday. NaganoSecurities would be willing to give CreditCorp broad discretion on staffing the topmanagement positions if they agreed to the 51/49 ownership issue in favor of Nagano. Andoexplained some of the difficulties of hiring, developing and firing Japanese employees inJapan. With the acceptance of the relationship managers and other employees transferredfrom Nagano Securities, Ando was concerned that CreditCorp would have difficultymotivating and retaining staff. Ando then asked Akahane to present his own proposal forstaffing key top-management positions at NCS. Akahane drew up an organizational structurethat had parallel positions at all senior management levels (for example, two vice presidentsof finance, one Japanese and one U.S.-American), explaining that such a structure wouldintegrate the two cultures and provide a consensus-based decision-making process forresolving conflict. The presentation went on for some time, with Greene and his team askingquestions to clarify their understanding of the proposed structure.

Greene understood that, ultimately, staffing the new joint venture was an issue of creation andcontrol. He understood that conflicting cultural assumptions can have disastrousconsequences for new organizations. He was also aware that numerous Japanese and U.S.

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joint ventures had tried parallel organizational structures, with little success. Greene thankedAkahane for his presentation and told him that he would consider his proposal. He thensuggested that they keep this issue on the table until the following morning, and asked Andofor a short break so that he could discuss the proposal with his own team members.

Greene felt that CreditCorp should stand firm on their need to staff the joint venture. Tanakapointed out that CreditCorp managers would have little credibility with Japanese customers,government officials or employees. He suggested that all selected managers have a thoroughunderstanding of Japanese language, culture and management practices. To ensure success, atraining and orientation program would be designed and implemented on both sides of thejoint venture. Tanaka also suggested that CreditCorp seriously review key positions anddetermine which ones required the most interaction with the Japanese business environmentand should be staffed by Nagano Securities and which should be staffed by CreditCorp.Everyone agreed that the president of the new joint venture, the vice president of informationtechnology and the vice president of banking operations should be selected by CreditCorp.Greene suggested that the position of chairman and that of vice president of human resourcesand sales should be selected and staffed by Nagano Securities.

The meeting resumed after a two-hour break, and Greene responded to Akahane’s proposal forstaffing by countering with his own proposal, including the suggestion that the chairman ofthe organization be Japanese. After some discussion, Ando told Greene that he and his teamwould respond to this proposal on Friday morning. Greene approached Ando and asked if itwould be possible to meet privately after the session. In a private meeting room, Greene toldAndo that he would have a problem going back to Banner with the present deal if NaganoSecurities did not agree with their need to staff these key positions. He reminded him thatCreditCorp had conceded on two of the three issues brought up at the beginning of thenegotiation, and that he needed to show a positive result to Banner before he and his teamreturned to New York. Ando nodded, exhaled slowly, and said: “I will do my best to supportyour proposal.”

The following morning, Greene’s team was anxious to wrap up the negotiation and fly back toNew York. Ando again addressed the U.S. side and expressed his gratitude for their time andeffort. He went on to inquire whether Greene and his team would be available for a meetingin two weeks in New York at CreditCorps’ headquarters. Ando told Greene that he would callBanner personally to set up the meeting and hoped that Banner would be able to attend themeeting. Ando then rose from the negotiation table and bowed to the U.S. side. Greene andhis team looked at one another in some confusion, not knowing what to do next. It appearedthat the negotiation had ended without an agreement.

The Ten Dimensions of Culture

Culture affects the negotiation process through the cultural orientations and behaviors thatindividuals and groups bring to the negotiating table. Although these cultural orientations areunlikely to be addressed during the negotiation, they play a significant role in the proceedingsand the final outcome.

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The process of negotiation requires individuals and groups to adopt a position based on theirinterests and needs. Underlying cultural orientations and core values, which may benonnegotiable or, at best, marginally negotiable, influence these positions. To arrive at amutually beneficial agreement, both sides must conduct “cultural due diligence.” Cultural duediligence is the process of clarifying the other side’s cultural orientations and the resultantbehavior before entering into the negotiation.

The following section considers each of the ten dimensions of TMC’s Cultural OrientationsModel™ and the ways in which each can manifest itself in the negotiating process.

Environment

All negotiators strive to control their immediate environment in a negotiation. The context ofthe negotiation, the physical location, time, language and psychological space aremanipulated to each side’s advantage. There are basically three approaches to controlling theimmediate environment or the context of the negotiation: control, harmony and constraint.

A negotiator who prefers a control orientation drives all aspects of the negotiation, fromchoosing the physical location to setting the agenda. As an individual negotiator, you expectto influence and change the negotiation environment to fit your needs. Schedules,responsibilities and performance standards are clearly communicated to both sides. You arenot shy in taking charge of any situation and are highly optimistic and self-confident in yourapproach. Alternatives or options are selected to enhance problem-solving as issues areoutlined and discussed. Opportunities are seized and risks taken to deliver dynamic andnovel business propositions. A proactive approach to solving problems through persistenceand creativity is employed. You often assume that others should conform to your ownapproach to negotiating. A highly control-oriented person displays impatience withintangible and vague statements, assessments and evaluations of ongoing discussions by theother side. Communications technology is used to bridge distance, time and culturaldifferences. Conflict over positions, the process of give-and-take, and the need to bargainare assumed and expected.

A person who has a harmony orientation to the environment seeks out members of his group orthe other side to arrive at a mutually beneficial solution. As an individual negotiator, you expectto balance your own approach to negotiation with the needs of the other party or to meetexternal constraints. Consultation before making any decision is assumed and expected. Issuesare reframed and alternatives selected to present a flexible position to all involved. Attempts aremade to adjust initial positions to those of the counterpart, and there is the expectation that theywill adjust to the other side’s needs or wants as well. Establishing and maintaining positiverelationships is of key importance to you and the members of your team. Compromise andconciliation are used to avoid conflict and reduce the risk to all parties. You exhibit stress whenother negotiators display a win-lose or confrontational style of negotiation. Opportunities andbusiness propositions tend to be well thought out and take into consideration the needs of theother side. The approach to risk is to look for precedent and maintain the status quo rather thanto seek novel approaches to problem-solving. When proposing a new idea or making plans, youreadily assume that a compromise will be required to reach agreement.

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A constraint orientation defines positions, needs and interests according to the outside forcesthat limit or prevent action. As an individual negotiator, you expect that external forces andconditions beyond your control will determine the outcome of the negotiation. Issues andalternatives are restricted by strong religious beliefs, changing economic conditions orgovernmental regulations. Forecasting future needs and planning for the future are limited.Generally, you accept the status quo and adjust your position to the limits set by the other sideor the external constraints you cannot control. You prefer to negotiate with clear guidelinesand parameters given by superiors or those in charge. You assume that you must act within thegiven limits of a set of negotiation parameters. You have a tendency to frame issues andalternatives according to the demands, actions and approaches of your counterpart.Opportunities and business propositions are guided by considerations of security and ofminimizing risk at all stages of the negotiation. Consistency and predictability in businesspartners is sought from the other side. A reactive approach to problem-solving is employed.The creation of elaborate and fixed contingency plans helps to mitigate risk or change.Renegotiation after the signing of the agreement is assumed.

Time

Cultures with single-focused and fixed orientations to time are sometimes referred to asmonochronic cultures. They are called monochronic because they view time as beingcomposed of a series of single events with definite beginning and ending times. Individualsfrom monochronic cultures break negotiating positions into manageable issues and focus onone issue at a time in a step-by-step manner. As an individual negotiator, you prefer a simple,straightforward situation that can be broken down into a series of tasks to be performed overtime. The approach to problem-solving is analytical. The most important issues are prioritizedand handled one at a time. Time is highly valued and should be defined and managedprecisely. It is a major consideration when planning and making commitments. Timelines arerigidly defined and adhered to throughout the negotiation. Being punctual and keepingprecisely to a schedule are seen as indications of good planning and reliability. Progress canbe measured by how many issues have been resolved. You easily get frustrated when peopledo not adhere to schedules or plans. Agreements are crafted to show immediate effects and tohave their effect in the short term. “Quick fixes” are acceptable, and change is expected, whencrafting acceptable solutions.

Cultures with multi-focused and fluid orientations to time, by contrast, are called polychronic.Individuals in polychronic cultures do not view time as consisting of a series of discrete eventsthat occur in sequential order over time. Instead, they view events as well as relations over timeas interconnected in a myriad of ways. As negotiators, they prefer a dynamic environment andwelcome change. Therefore, they are able to pay attention to multiple tasks and relationshipssimultaneously. When negotiating, they tend to focus on the entire negotiation, not justindividual issues. Issues can be discussed at any time during the negotiation and often arereintroduced for further clarification toward the end of the negotiation. As an individualnegotiator, your approach to problem-solving is holistic, and various perspectives can bediscussed during the negotiation. Keeping to exact timelines and schedules is not essential. Youfeel that time cannot be tightly defined or tracked for management purposes. You often displayfrustration when you have to concentrate on one person, issue or question for an extended

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period of time. Time is structured according to changing situational needs; therefore, schedulesand deadlines are seen only as guidelines or expressions of intent.

The present time orientation emphasizes bottom-line results, and progress will be measuredin quarters, months, weeks and days. Although concerns for a long-term future or relationshipare expressed in the negotiation, emphasis is on the immediate present and the short-termfuture. As an individual negotiator, you are motivated by promises of quick results andhandling day-to-day problems or crises. This present orientation often excludes the need forlong-term planning or results. Those with a past time orientation expect longer-term planninghorizons in which precedent and past relationships are taken into consideration. Stability andcontinuity with traditions are important to those with a past orientation, and plans are judgedby how well they adhere to traditions or past precedents. Precedents and past successes areimportant in solving problems and making decisions. You display skepticism in the face ofnovel ideas, concepts and proposed changes. Those with a future time orientation expectagreements to be strategic in nature and to take effect over a longer period of time. Progressis measured in fixed milestones over years, or even decades. Problem-solving focuses ontangible improvements over time and the quick fix is ignored. As an individual negotiator,you are motivated by profitable and beneficial results that occur in the future. You have a hightolerance for setbacks, changes and counterproposals so long as they do not affect the long-term outcome of the negotiation.

Action

Those with a being orientation value the process of building and maintaining both personaland business relationships with others. The emphasis is on quality of life, affiliations andpersonal relationships. Job satisfaction, quality of organizational life, harmoniousrelationships with team members, and inclusion in challenging work are what motivate andreward you. Considerable time is spent building rapport and trust before entering into anegotiation. As an individual negotiator, you are motivated by building and maintaining good,trusting personal relationships for the purpose of making negotiations easier to conduct.Although you spend much time in developing relationships, you hesitate to discloseinformation about yourself until trust has been built. It is important to ascertain the integrityand compatibility of your counterpart before allowing him to enter into a “closed network.”When meeting new people in business, you require a relatively long warm-up period. You arecareful not to extend trust too quickly at the negotiating table. This lengthens the planningand orientation phases of negotiation. Small talk, social occasions and ceremonial events maybe utilized to overcome initial skepticism and suspicions of the other party. You tend toscrutinize issues carefully. You do not jump to conclusions or take action quickly. Decisionsneed to be well founded and well grounded before implementation can occur. Therefore, astrong being orientation may impede flexibility and responsiveness due to your relatively slowdecision-making processes.

Those with a doing orientation value the process of resolving issues and accomplishing tasksat the negotiation table. As an individual negotiator, you are motivated by a desire to get thejob done or to solve problems, rather than by building personal relationships. Relationshipsare business-to-business, not personal. Personal relationships may develop, but they are not

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essential to conducting the negotiation. You focus on accomplishing tasks quickly and tend toemphasize reasonable achievements throughout the negotiation. Resources are focused onplanning a strategy and set of tactics to achieve agreed-upon goals. You tend to make plansand decisions based on incomplete information and time constraints. It is important for thenegotiation to be expeditious, focused and outcome-oriented. If the other side is as pragmaticas you are, issues can be resolved through open and direct communication. Although issues areconsidered, they may not be viewed in detail or at length before a decision is made. Theemphasis is on achieving external measurable accomplishments and goals. Reward andrecognition are measured against established standards of performance. An open-networkapproach is followed, which allows both sides to focus on the tasks of negotiating and less onbuilding personal relationships up front. Business relationships are built on problem-solving,task accomplishment and a commitment to agree upon deliverables. A strong doingorientation often leads negotiators to push the negotiation to closure in order to get a signedcontract in the shortest period of time.

Communication

Differences in communication can be subtle, and they often lead to problems in negotiations.A negotiator’s approach to sharing and exchanging information can be classified as beingeither high- or low-context.

Individuals from high-context cultures are relationship-centered and require voluminousexchanges of background information before business can be transacted. There also tends tobe a stronger emphasis on social class and hierarchy and a respect for roles and procedures.Communication tends to be indirect. Meaning is conveyed not just in words but in thecomposition of the negotiation team, nonverbal behavior and the use of silence. As anindividual negotiator, you rely on implicit nonverbal, symbolic or situational cues more thanon explicit verbal or written cues to judge acceptance of your proposals. For example, who isinvited to a meeting or asked to be on the negotiating team may have greater significance thanwhat is discussed. Negotiation issues are addressed through the use of passive language, subtlemeanings and silence. You believe that it is important to minimize the surface appearance ofconflict and criticism during the negotiation. Open conflicts are not seen as beneficial to theoverall negotiating process. To avoid conflict in public, solutions are discussed behind thescenes, and a third party may be introduced to mediate differences. Relationship-building,proper positioning and timing of proposals are of critical importance.

To those with a formal orientation, the degree of formality and appropriateness of behavior inany given situation is taken to indicate the sincerity, intentions and trustworthiness of theother party. It is important to observe specific etiquette and forms of conduct whennegotiating. As an individual negotiator, you see the lack of formality in others as an indicationof their lack of professionalism, education and social graces. You have an aversion to informalspeech, clothing, manners and forms of address at the negotiating table. You believe thatprescribed norms are conducive to the overall process of putting the person at ease andreaching agreement. Formal cultures place a high value on following business policies andsocial customs. Saving and giving face in private interpersonal exchanges is as important ashow face is managed in more public formal negotiation sessions.


A high-context person provides sufficient background and context to the other party at allstages of the negotiation. Conclusions, however, may not be explicitly stated, as the other sidedivines the meaning from the context of what is and is not said. Silence plays an importantrole in expressing meaning, saving face, and leaving options open for later discussion. Plansin high-context cultures tend to be implicit and depend more on relationships forimplementation than they do upon a contract. Contracts are short and general in scope, ifthey are used at all. High-context individuals place more faith in the spirit of the agreementbetween both parties.

Low-context individuals are primarily task-centered in their approach to work, requiringrelatively little information about the other side before conducting any business.Communication in a presentation tends to be direct and explicit. In a business setting,meaning is expressed in verbal and written formats to exchange information, facts andopinions. As an individual negotiator, you tend to value the process of choosing andinterpreting the words used in communicating proposals and issues. Negotiation issues areaddressed openly or head-on. Conflict is seen as constructive and is resolved through directdialogue in an open way. Trustworthiness and honesty are intricately tied to how you manageconflict and resolve contentious issues. For example, waiting for an issue to disappear orintroducing a third party to mediate a conflict may be seen as a sign of untrustworthiness oras promoting additional conflict. You are motivated by clear, concise communication followedby detailed documentation and an action plan. Team roles, authority relationships, strategiesand tactics are communicated in detailed plans for individual negotiators.

In informal cultures, the use of informal language and behavior in all situations is seen as away to invite the fair and equal participation of all to focus on solving the issues at hand. Asan individual negotiator, you value the flexibility and spontaneity team members bring to thenegotiation. You support the appearance of basic equality between team members and treatthe other side as peers or colleagues during the negotiation. Therefore, it is important toeliminate formality and prescribed forms of conduct in the negotiation. You areuncomfortable in situations that require formal dress and forms of address. You believe thatformality obstructs the flow of communication, puts social distance between two parties, andprevents both sides from reaching an agreement. You need little background informationabout those with whom you negotiate or conduct business.

Relationships, trust and compatibility are not primary considerations when doing business inlow-context cultures. Observance of deadlines and schedules is more important thanmaintaining image or status among individuals or groups. Therefore, negotiation andbargaining should take place in a structured, public forum. Conclusions are explicit and arecaptured in writing throughout the negotiation. Plans tend to be detailed and depend upon acontractual relationship for implementation purposes. Contracts are long, detailed andspecific, placing faith in the spirit of the law to govern the behavior of both parties.

As an expressive communicator, you value emotional expressions and passionate responses innegotiations. Expressiveness is seen as one way to influence and persuade others to agree withyour point of view. You tend to be animated in your use of words and body language. You mayeven seek, and expect, close physical contact with others. Professional and personal

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competence is tied to communication style and the eloquence of language used in thenegotiation. Your favorable evaluation of other negotiators may be linked to theirexpressiveness in communicating their issues.

As an instrumental communicator, you value factual, objective, pragmatic exchanges ofinformation. Communication is problem- or issue-centered, impersonal and goal-oriented.You prefer an emotionally detached way of presenting information in order to convince andpersuade the other side. Emotional expressiveness in others may cause you to doubt theirprofessionalism, credibility and trustworthiness in negotiations. You tend to have limitedtolerance for overt displays of emotion at the negotiating table.

Space

Negotiators can be categorized according to their distinctions between private and publicspaces. People in different cultures have contrasting personal space requirements as to suchthings as the distance they place between individuals, the degree to which office space isdemarcated as public or private and the rules governing the use of each type of space.

In private-oriented cultures, negotiators generally prefer to put a greater distance betweenthemselves and others. Physical contact is limited. In public-oriented cultures, however,negotiators generally prefer to put less distance between themselves and others and they mayengage in frequent physical contact among members.

Private cultures place an emphasis on closed-door meetings with minimal interruptions.Negotiators tend to stand farther apart and tend not to touch during conversation. Negotiatorsprefer a task-oriented style of negotiation and select locations that enhance the ability toproblem-solve and reach agreement. This “let’s-get-down-to-business” style of negotiationmay conflict with cultures that rely on extensive socializing. The use of technology forcommunications may be expected and emphasized for negotiating across long distances.

Public cultures are accustomed to having open-door meetings with frequent interruptions.Negotiators tend to stand closer together and tend to touch when communicating.Negotiators prefer a relationship-oriented style of negotiation and select locations thatenhance the development of trust and rapport. This “let’s-get-to know-each-other-better” styleof negotiation may conflict with cultures that rely heavily on task accomplishment. Whiletechnology may be extensively used for communications, it does not replace the need for face-to-face meetings.

Site selection is an important aspect of protocol because it affects psychological space or theclimate of the participants. The location and conditions of the meeting facility can have adirect bearing on the outcome of negotiations. There is a psychological advantage to thosenegotiators who can select the location or leverage the culture gap created by differences inspace orientations. The conditions presented by public-oriented negotiators may seem overlysmall, crowded and noisy to private-oriented negotiators. Private-oriented negotiators, on theother hand, may make public-oriented negotiators uncomfortable in the distance they placebetween negotiators through seating arrangements, the size of the table or room size. To be

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successful, negotiators need to be prepared to adjust to the site selection and space orientationof the other party.

Power

The degree of comfort with differences in power, authority and status between parties in anegotiation can affect the outcome significantly as both sides jockey to influence andpersuade each other. Negotiators with a hierarchy orientation tend to see power and authorityas centralized and controlled. As an individual negotiator, you prefer to negotiate with aperson of equal rank. The negotiation team is carefully selected, with roles and responsibilitiesin the organization clearly defined according to age, position, title and status. Althoughtechnical and managerial skills are considered, final selection is based on hierarchy and power.A show of public respect and deference is given to those in power by using appropriate formsof address that reinforce hierarchical structures and social status. Individual negotiators expectto negotiate with others of equal status or power. Managers higher up in the organizationmake all of the decisions, concessions, offers and agreements. It is not appropriate to bypassformal lines of authority in order to complete a task. Subordinates and individual teammembers rely on their superiors or team spokesperson, and they rarely question decisions orcontradict those decisions in public. Changes in positions or responses to counterproposalsare problematic, since they require lengthy discussions and approval by managers notimmediately involved in the negotiation.

Negotiators with an equality orientation minimize hierarchy by decentralizing power andauthority to the lower levels of an organization. Individual negotiators are empowered tomake a broad range of concessions and to seal agreements at the negotiation table. Thenegotiation team is selected on the basis of functional expertise or experience in negotiatingwith the other side. Although roles and responsibilities may be defined, each team memberhas the autonomy, flexibility and authority to contribute his or her technical, managerial orinterpersonal skills to the negotiation. Deference is given to those with expertise andexperience, rather than to those with a title or position. As an individual negotiator, you areuncomfortable with the use of official titles and forms of address that reinforce hierarchicalstructures or social status. Subordinates and individual team members rely less on theirsupervisors or team leaders; they prefer consultation or confrontation to resolve issues, andmay openly contradict or challenge others in their own field of expertise. Changes inpositions or strategies are expected. Overall, time is less of a factor, since decisions can bemade at the table. Planning is delegated and distributed among team members requiring buy-in by those who will implement agreements after a contract is signed by those in power.

Individualism

In most cultures of the world, individuals identify strongly with groups and expect to workcollectively to accomplish business goals. In these cultures, independent, individual attributesare not very important in forming individual identity. Most cultures, therefore, arecollectivistic in their orientation to individualism. When negotiating, one must firstdetermine whether the other party is collectivistic or individualistic in its approach tonegotiation. Negotiation in individualistic cultures places a high value on independence, on

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tasks over relationships, and on achievements and recognition based on individualperformance. As an individualistic negotiator, you focus on your own personal andprofessional skills when preparing for a negotiation. In fact, your interest and contributiondecrease when the outcomes being negotiated do not benefit you personally. Anindividualistic negotiating team consists of a collection of individuals, each motivatedprimarily by his own personal success. Success is measured by the individual contributions ofeach team member and the overall outcome. As an individualistic negotiator, you value andadmire self-driven, determined, self-motivated individuals. Accountability is allocated toindividuals on the negotiation team, but responsibility resides primarily in the team leader. Inindividualistic cultures, there may be a preference for negotiating alone or in smaller teams,to save time, money and personnel. Value is placed on individual decisions rather than onthose arrived at by consensus. Constructive confrontation is often employed to arrive at thebest possible solution in the shortest period of time. Individuals are expected to make theirviews known when plans and strategies are being discussed and developed.

Collectivistic cultures place a high value on subordinating individual interests to groupinterests, on relationships over task accomplishments and achievement, and on recognitionbased on group performance. Collectivistic negotiators focus on organizational skills,knowledge and authority when preparing for a negotiation. Negotiation teams are wellcoordinated, and roles are clearly defined. Conformity to group standards, policies andprocedures is expected. Your identity is defined as a member of the negotiation team. Yourloyalty is given to the group or company, not to the matter being negotiated. Contributionsare made as an extension of the larger organization or group. Success is measured by the largerachievements of the organization, and accountability is diffused throughout the group. Valueis placed on reaching consensual decisions over individual ones. As a collectivistic negotiator,you defend decisions made by the team, even if you disagree or have no role in theirfinalization. Conflict or confrontation that causes another person in the group to lose face isto be avoided if at all possible. Open conflict is seen as both negative and disruptive. Plans arebased on the shared values of the group and implemented through the strength of grouprelationships, rather than through a simple assignment of tasks to individual team members.

When negotiating, you may rely on a universalistic orientation that places a high value onstandards, procedures, rules and law. If so, you treat others with fairness, openness and equalityand expect them to treat you in the same way. The negotiation process should be well definedand standardized so as to meet your expectations of the “right way” of conducting business.You have a strong sense of right and wrong when dealing with issues of ethics and behaviorduring the negotiation. When presenting your position or determining your bargainingapproach, you apply the appropriate rules, standards and principles to persuade and influencethe other side.

Negotiators who emphasize their uniqueness or the particular circumstances of a givensituation in presenting their proposal are displaying a particularistic orientation. As anindividual negotiator, you value the uniqueness of the situation or group, and apply differentrules and procedures to help determine the outcome of the negotiation. Negotiation behaviorsare adapted to fit the situation and the person/group with whom you are negotiating. There isno “right way” to negotiate or arrive at a decision, since there are multiple truths in each team’s

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approach or business realities. Although you may respect formal rules and procedures, you donot necessarily believe that they apply to you or to your unique situation. When presentingyour position or determining a bargaining approach, you trust in established relationships andnetworks to influence the outcome.

Competitiveness

Competitive cultures stress win-lose outcomes, task achievement, and getting the bestpossible deal at the end of the negotiation. Cooperative cultures stress win-win outcomes,interdependent relationships, and understanding the needs and expectations of the other sidein order to arrive at a mutually beneficial agreement.

As a competitive negotiator, you are motivated by the need to outperform others. Materialsuccess, achievement and performance are high motivators. The achievement of expectedoutcomes and projected results are drivers in the negotiation. Efforts are made to influenceand persuade the other party to accept the superiority of your position, product and/orsolution. As an individual negotiator you expect others to articulate, assert and defend theirpositions in the negotiation. Plans are developed and implemented quickly. Progress ismeasured and evaluated through meeting deadlines, schedules and contractual obligations.Proposals and issues are crafted for a specific detailed outcome, which is presented to theother side for their buy-in.

As a cooperative negotiator, you are motivated by establishing mutually beneficialrelationships that allow you to achieve your goals. Quality of life, being a member of a group,and job satisfaction all contribute to your motivation. Harmonious teamwork, consensus-building and the development of mutually beneficial interdependencies drive the negotiation.Efforts are made to influence and persuade by showing how your position, product and/orsolution meets the needs and expectations of the other party. You expect others to seek, buildand maintain supportive relationships that lead to consensus. Plans are developed andimplemented slowly. Progress is measured and evaluated through customer satisfaction,commitment and fulfillment of obligations over time. Proposals and issues are crafted fromgeneral principles that are presented to get buy-in from the other side.

Structure

The degree to which negotiators are comfortable with uncertainty, change and new ways ofdoing business determines their approach to risk in a negotiation. People with a strong orderorientation tend to follow and expect a predictable course of action. Security and confidencecome from following tried-and-true methods. Efforts are made to reduce risk by institutingpolicies and procedures (both written and unwritten) and applying them consistently acrossall situations. As an individual negotiator, you are comfortable with clearly definedparameters and guidelines for negotiating with others. When faced with an unknowncounterpart or a different approach to negotiating, high-order cultures display stress andfrustration with changes, and are less willing to take risks. Changes in positions, or too manycounterproposals, tend to lower trust and damage the relationship. A structured approach tonegotiation with clearly defined team roles, consensus decision-making and formality all

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help to reduce ambiguity and uncertainty. Decisions require a lot of information, data, andtime to evaluate, eliminate or moderate risk. Order-oriented negotiators see contracts asvehicles for recording in writing areas of responsibility and steps for implementation to becarried out by all involved. Organizations with an order orientation may find that they spendmore time negotiating internally to reach consensus than they do negotiating externally withthe other party.

Flexibility-oriented cultures do not expect negotiations to follow a predetermined course ofaction. People with a strong flexibility orientation tend to have a high level of tolerance forchange and deviation in plans. Success is based on how quickly the team can adapt tochanging demands, conditions and considerations. As an individual negotiator, you valueinnovative and unconventional ways of doing things and are open to new ideas for solvingproblems in the negotiation. Your emphasis on newer, better and bigger benefits is used toinfluence and persuade the other side to agree with your proposals. Lack of flexibility in yourcounterpart results in a reduced level of trust and confidence. Positions and strategies areplanned to provide the widest degree of flexibility or number of alternatives. Doing whateverit takes to achieve a good result is expected and rewarded. A less structured approach withloosely defined team roles, individual decision-making, and informality all contribute to agreater willingness to take risks. Contracts and agreements are seen as a necessary evil inreaching an agreement. Flexibility-oriented negotiators are comfortable with verbalagreements or broad contracts that allow details to be worked out later.

Thinking

As a deductive thinker, you are more comfortable with information presented in a format thatbegins with a general introduction and ends with a specific conclusion. When evaluating aproposal or position presented by the other side, your focus is on the overall guidingprinciples. You base your own position on sound concepts or guidelines, then fit your data tosupport that position. You need a great deal of background information before getting downto the specific details of a negotiation proposal. As an individual negotiator, you prefer tofocus on the overall proposal rather than single issues. Influence and persuasion strategies arebased on how things should be, rather than on how things are.

As an inductive thinker, you are more comfortable with information presented in a format thatbegins with a specific conclusion and then goes on to discuss information or data whichsupport that conclusion. Your focus is on the specific issues or evidence required to persuadeothers that yours is the best proposal. You base your own position on expertise and experience.Data and evidence are analyzed to reach a specific conclusion. As an individual negotiator, youprefer to focus on specific contentious issues rather than on common ground or issues inagreement. Influence and persuasion strategies are based on how things are and what hasworked previously––not how things should be.

As a linear thinker, you prefer to convert issues into causal chains of events, documentingcause and effect to help you develop a negotiation strategy or set of tactics. Arguments andcounterproposals should be logical, supported by sufficient evidence or data that will persuadethe other side. As a negotiator, you prefer to look at discrete issues and how they affect you

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personally. You use agendas and the completion of sequential discussion points to measureprogress. Checklists are helpful in keeping the negotiation on track.

As a systemic thinker, you prefer to discuss issues within the context of the whole negotiation,and see all issues as being interdependent. Before developing a strategy, you need to get thebig picture. Your approach is to ask many questions to ensure that you have sufficientbackground information from the other side before making any decisions. You prefer thatarguments and counterproposals be holistic, integrating solutions that take into considerationhow others will be affected. A negotiation planning sheet or checklist is considered helpfulwhen planning how to respond to the other side’s objectives and issues.

Cultural Analysis of the Case Scenario

We may now use our understanding of how negotiating behavior is shaped by differentcultural orientations to analyze the different expectations and negotiating behaviors of theindividuals presented in our case scenario.

The first contrast between the two negotiating sides is a fundamental difference in theirorientation to the action dimension. Whereas the U.S. Americans are strongly doing-oriented,the Japanese display a being orientation with some leanings toward doing. This differencemakes itself felt almost immediately after the arrival of the U.S. team, when Greene and hiscolleagues are treated to a lavish dinner at a well-known Japanese restaurant. For the doing-oriented Greene, this dinner presents the first opportunity to begin preliminary discussionsconcerning the deal. His being-oriented Japanese counterparts, however, intend the dinner asan informal way of becoming personally acquainted with their counterparts and assessingwhether they are trustworthy partners for a negotiation. To the Japanese, it is inappropriate tocommence business in such a setting and so early on. Ando is therefore unwilling to respondto Greene’s attempt to engage in a discussion about the next day’s negotiations.

Subsequent invitations over the course of the negotiation, on the part of the Japanese team andits leader, to have drinks or to spend an afternoon and evening at a nearby spa, are all furtherreflections of the Japanese being orientation. For the Japanese, such informal occasions areintegral to the negotiation, because they foster personal ties and help establish good will onboth sides. Although the doing-oriented U.S. Americans may enjoy these activities, theygenerally view them as a digression from the negotiation and, as such, a waste of time. Sincetheir willingness to compromise does not derive from a sense of personal affinity or obligation,the U.S. Americans cannot recognize the full import of spending extended periods of time withtheir negotiating partners in social settings not discussing business.

Further significant differences between the U.S. and the Japanese approach to negotiatingderive from the combined effect of their opposite orientations to the environment, toindividualism and to competitiveness. The Japanese orientations to these dimensions areharmony, collectivistic and cooperative, respectively, whereas the U.S.-Americanorientations are control, individualistic and competitive, respectively. These importantdifferences find expression in a variety of ways.

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The Japanese desire to establish good will and a good rapport between the two sides, asmentioned above, derives as much from their harmony orientation as it does from their beingorientation. Thus, the Japanese harmony orientation also plays a significant role in promptingthem to invest time in purely social engagements with their U.S. counterparts. The U.S.negotiators, on the other hand, rely much more heavily on their ability to control the thingsin their environment in order to achieve their business ends. This control orientation is partlyrevealed when Banner comments to CNN that CreditCorp seeks to reduce its risks bydiversifying globally. Banner’s elaboration on CreditCorp’s policy as being one of staying in aparticular country so long as the venture is profitable and then pulling out once profits drop,reveals an approach that relies on controlling the surrounding business environment. Oncecontrol can no longer be exercised to Credit Corp’s advantage, the company pulls out. Thereis no effort made, however, to fit in with the surrounding environment in order to achieveresults nor, alternately, is any great effort made to emphasize the human factor in business andattempt to improve business through the exchange of favors and obligations. This contrastssharply with Ando’s revelations later on during the negotiation that Nagano’s relations with itscustomers relies, in part, on an exchange of favors, and it also contrasts with Nagano’sinsistence that the joint venture retain 500 of Nagano’s current relationship managers. Bothpoints indicate the strong presence of a harmony orientation in Japanese business culture.

This harmony orientation is strengthened by and interacts with the Japanese cooperativeorientation, which encourages loyalties to others and to the business organization as a whole.Thus, in his opening remarks, Ando describes the new joint venture with CreditCorp as amarriage “in which there is give-and-take on both sides.” This cooperative view of negotiatingcontrasts sharply with CreditCorp’s competitive orientation. Banner’s motto of “profit orperish” succinctly sums up the competitive orientation. The U.S. team’s focus on maximizingprofits over considerations for the fate of the individuals involved in the two companiesderives both from its competitiveness and from its individualism.

The U.S.-American competitive orientation is furthered strengthened by its flexibilityorientation to structure. This flexibility orientation allows the leaders of CreditCorp to takethe risk of going into a country, testing the business environment and pulling out at the firstsign of trouble with little sense of disruption or anxiety. The Japanese, who have an orderorientation to structure, would feel much more uncomfortable with such an approach tobusiness. In general, they are much more cautious than are the U.S. Americans when enteringinto new deals or ventures. This is one reason why the Japanese team raises the same questionsand asks for the same information several times before feeling satisfied with the answers.

Yet, although the Japanese exhibit an order orientation that contrasts with the U.S. flexibilityorientation, the Japanese also demonstrate a certain flexibility that is not shared by the U.S.-American team. Both cultures have a fixed orientation to time and they therefore expectmeetings to begin on time and appointments to be made promptly. Yet, within the very setstructure that the Japanese establish (order and fixed-time orientations), they exhibitflexibility in their willingness to manipulate the context of talks and the sequence of individualevents, for the sake of the negotiations. The U.S. team, on other hand, is negotiating towarda schedule (the U.S. fixed-time orientation). They view the negotiating agenda as a carefullyscripted series of events, arranged so as to ensure that they leave Japan within the allotted

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period of time with a signed agreement. The Japanese, by contrast, feel comfortable with acertain amount of digression and come up with unannounced trips and dinners. To them,these events are as much a part of moving the negotiations along as are the planned events.This difference in the expression of the fixed-time orientation derives from differences in theU.S. and Japanese orientations to thinking. Whereas the U.S. Americans have a linearorientation, the Japanese have a systemic orientation. Thus, the U.S. team expects to followa pre-set plan in a clear, sequential order, while the Japanese view the events of the entirenegotiation period as integrated whole––parts of which may be changed or manipulatedwithout disrupting the overall aim––indeed, intended to further the overall aim. Thisdifference in orientations to thinking is also revealed in how the two teams approach thenegotiating issues themselves. The U.S. Americans expect to clear up one issue at a time andthen move on to the next one. The Japanese, however, wish to consider all issues together andonly arrive at a comprehensive agreement at the close of the negotiations.

The Japanese and U.S. teams are also quite different in their approach to communication. Onmany occasions, the difference between the U.S. direct and the Japanese indirect orientationsemerges. The contrast between Banner’s blunt comments about how CreditCorp conductsinternational business and Ando’s use of an analogy to express the Japanese approach to businessis one of the first occasions. The difference arises again when Ando gives Greene an evasiveresponse of “Yes, we understand your proposal well,” in answer to Greene’s question about whichof the three contentious issues Ando would like to discuss first—and Greene and his team arebaffled. Furthermore, since the issues are contentious and the Japanese would like to avoidconflict, Greene finds it difficult to get the Japanese to address them directly during formal talks.Instead, the Japanese wait to discuss these issues during private one-on-one conversations ininformal settings. The Japanese preference for more informal, social settings for interacting withtheir negotiating counterparts also reflects their high-context style of communication

There are many differences that can occur when negotiating across cultures that can affectyour success. Anticipating these differences and understanding the expectations of the otherside is the first step toward effective cross-cultural negotiations.

Generalizations and Stereotypes in Negotiations

It is often assumed that a person who shares the same business or functional culture withsomeone from overseas will behave more or less consistently in a given situation. For example,engineers from Dhahran, Saudi Arabia may assume that their counterparts in San Jose,California will approach solving an engineering problem in the same way that they do inSaudi Arabia. Managers may also assume that ways of leading, motivating and managingsubordinates are the same throughout a global company—that what works in Saudi Arabiawill work in the U.S., and that what works in the U.S. will work in Mexico or France. Thissort of extrapolation from one culture onto another is dangerous.

How we think and process information are programmed by our culture. We rarely validatethis process or examine it closely. Our minds seek internal consistency among our beliefs,attitudes, values and so on. This is how we learn, and how we interpret the world. To maintain

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how we see the world around us, we form ideas and beliefs as to what is right or wrong, goodor bad. We seek explanations that meet our expectations. New information that does not meetour beliefs, attitudes and values is ignored or rejected. The end result is often a reinforcementof our beliefs or stereotypes of expected behavior.

Stereotypes help us maintain our image of the world. Behavior that is not understood or thatdoes not meet our expectations in a given context is interpreted through the prism of our ownvalues and cultural perspectives. Therefore, when negotiating across cultures, we must becareful to properly observe and understand another person’s behavior.

For example, in the United States, negotiations are viewed as a problem-solving exercise, inwhich efficiency is prized, persuasion used, tactics accepted, compromises expected andfallback positions probed. People from Latin America or Asia, however, may see negotiationsas a basis for entering into a long-term relationship in which connections are paramount,obligations are sought and repaid, principles are accepted, concessions are made by thestronger party and positions are presented expressively.

Culture affects negotiations greatly through the following areas: communication styles;language; decision-making; the importance of form, protocol and status; the choice of teammembers; and the methods of persuasion and influence.

To negotiate in good faith, both sides must speak a common language. They must also shareknowledge, assumptions and meanings that will be used and rules that will guide thenegotiation process. Without a frame of reference, it is difficult to negotiate across cultures.Left alone, an individual will develop his own stereotypes and generalizations about the otherside’s particular interests, perceptions, attitudes and beliefs—all of which form a unique frameof reference. Different cultural experiences produce different interpretations of the otherperson’s frame of reference.

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The following model of international negotiation is provided so that you can examine howdifferent cultural groups place emphasis differently during the negotiation process. A seven-phase model is presented to show how the use of time, approach to task accomplishment, androle of relationships in business and persuasion strategies are exhibited differently across cultures.

Figure. 2.1 The Seven Phases of International Negotiation: As this figure illustrates, the seven phasesgo in and out of being- and doing-oriented activities. Strategic Planning and Analysis (1) consists almost entirelyof doing activities. Network Entry and Approach (2) requires a mixture of doing and being activities. BuildingPersonal and Business Relationships (3) is almost entirely composed of being activities, whereas Orientation andPresentation (4) once again requires both doing and being activities. Bargaining and Persuading Others (5) alsoinvolves both the doing and being orientations. Reaching Agreement (6) returns to mainly being activities and inFollow-up and Maintaining Relationships (7) being and doing activities both come into play, as the negotiatorseeks to maintain relationships while planning for further negotiations.

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THE SEVEN PHASES

OF INTERNATIONAL NEGOTIATIONCha

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An Overview of the Seven Phases

Phase 1: Strategic Planning and Analysis

This phase involves strategizing, preparing for and planning the international negotiation.Cultural, financial, historical, economic and political due diligence are all used to strategizean approach that will meet the needs of both sides.

Success in this phase requires:

• A clear understanding of expectations and interests.• An awareness of the phases and principles of transcultural negotiations.• A deep analysis of one’s own cultural orientations and those of the

organization one represents.• A preliminary analysis of your counterpart’s cultural orientations and

those of the organization he represents. • An assessment of each side’s objectives, needs and issues of negotiation.• The creation of internal organizational alignment and support.• The anticipation of the critical components in the negotiation phases.• A personal skills gap analysis of each team member.• The selection, formation, coordination and role definition of the

negotiation team.• A clear determination of key objectives, processes, contingencies and

logistics for each negotiation phase.

Phase 2: Network Approach and Entry

This phase involves identifying, strategizing to enter and actually entering a group, networkor company. It is in this phase that the initial contact between you and your counterpartoccurs. The process can be straightforward, direct and quick, or it may take considerable time,energy and formality. For individuals with a doing orientation, for whom buildingrelationships is not the primary focus, this phase requires careful attention.


• Planning an approach to entering a group, network or company.• Understanding your counterpart’s network or system of relationships.• Learning the cultural orientations of your counterpart in the negotiation.• Skill in designing and implementing a strategy that is

culturally appropriate.• The effective adaptation of one’s own behavior to meet the expectations

of the other culture.

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Phase 3: Building Personal and Business Relationships

This phase involves pursuing, building and developing personal and business relationships.Building effective relationships across cultures and organizations is critical for success. But howdo we do this? In the United States, building the business relationship precedes building thepersonal one. In other cultures, a trusting personal relationship precedes any businessrelationship. How we establish our credibility at the individual and organizational level differsby culture. The time taken for small talk and discussion, unrelated to business, that precedesthe actual formal and informal negotiation sessions can be brief, as found in the United Statesand Canada, or it can be lengthy, as in Japan and China.


• Understanding the cultural norms and expectations that regulate personaland business relationships.

• Knowing culturally appropriate conversation styles and topics.• Understanding the key communicative and relationship needs

of your counterparts.• Adapting one’s approach to establishing credibility and building rapport.

Phase 4: Orientation and Presentation

This phase involves gathering, assessing and presenting the information needed to outlineinterests, issues and needs. When personal relationships are built and business networkspenetrated, each side undergoes a period of orientation to its counterpart’s way of doingbusiness, its organizational culture, the individuals involved and the specific circumstances ofthe specific relationship. Each side and person involved engages in a reassessment of the other.Each party seeks to understand the other’s goals, constraints, problem-solving approaches andrequirements. And, based on this assessment, each side defines the business interests that willguide the future relationship. Based on this assessment and definition, all parties involved forman alignment. This alignment critically determines the tone for Phase 5. Depending on thecultural region, this phase requires varying amounts of attention, time and resources.


• Intercultural observation, listening and interpretation skills.• Skills for giving, receiving and eliciting information in negotiations.• Skills for presenting information, issues, positions and visuals

across cultures.• Use of written correspondence to share information across cultures.• A nonjudgemental approach, a tolerance for ambiguity, patience,

flexibility and openness.

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Phase 5: Bargaining and Persuading Others

This phase involves bargaining with and persuading others through the use of logic, evidenceand influence. It rests upon culturally dependent perspectives, values and attitudes towarddecision-making, and it is characterized by either a competitive and hard-bargaining approachor a more cooperative and problem-solving approach. Understanding which persuasion andinfluence strategies are preferred by your counterpart is critical to your success.


• Understanding what is important and convincing to your counterpart.• Adapting influence and persuasion strategies to match the cultural

orientations of your counterpart.• Selecting culturally appropriate key bargaining strategies and tactics.• A clear vision of the goals and outcomes desired on both sides.

Phase 6: Reaching Agreement

This phase involves reaching and implementing an agreement. The meaning, content andcontext of an agreement differ greatly across cultures. Cultural orientations can affect howbinding an agreement is and what the roles and responsibilities of each party are afteragreement is reached. In the United States, the end goal of a negotiation is a signed contract;in other cultures, a verbal agreement or handshake may be sufficient. The use of, andacceptance of, concessions or compromise in reaching an agreement may also be affected bythe cultural orientations of your counterparts.


• A clear understanding of how the counterpart defines a contract or agreement.

• Up-front clarification with all parties involved as to the expectationsabout agreements and contracts.

• The adaptation of agreement formats to accommodate both thenegotiator’s own needs and those of the counterpart.

• The ability to translate the culture-based expectations of both sides into aworking agreement or contract.

Phase 7: Follow-up and Maintaining Relationships

This phase involves following up on obligations and maintaining established relationships ina network or at the conclusion of a business deal. It is perhaps the most critical for long-term,profitable relationships across cultural and national boundaries. In the United States,contracts spell out the rights and responsibilities of each party, but they do little in terms ofexplaining how to maintain relationships over time. Maintaining the relationship andfollowing up on agreements are of critical importance in most cultures outside of the UnitedStates, and they require attention.

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• The ability to educate all involved parties of the negotiator’s organizationabout the relationship with a particular vendor or client.

• A clear understanding of your counterpart’s expectations of a business or apersonal relationship.

• An understanding of relationship obligations and duties.• Skill in translating the expectations of both sides after an agreement

has been reached.

Showing a Commitment to Negotiating Internationally

The following enumerates the most important points for showing commitment whennegotiating across cultures, based on the seven phases described above.

� Understand that persistence may be required to gain entry into the network and that, as anoutsider, you may be trying to penetrate a network that has existed for a long time.

� Use correspondence, telephone conversation, fax and e-mail to set the stage for the initial meeting.

� Spend sufficient time to identify the decision-maker and the limits of that person’s authority.

� Be formal in communicating initially; then match the other party’s expectations forformality in a business relationship.

� Acknowledge status and authority by showing deference to position and title.

� Allow for business socializing to develop the more personal side of the relationship, andallow this to become part of the negotiation process.

� Spend time on structuring the negotiation process, and address procedural issues (formalities).

� In the presentation phase, place more emphasis on finding out the interests of the otherside as opposed to just gathering factual information.

� Balance the other party’s presentation or persuasive arguments with your own rational approach, accompanied by objective information, expert testimonials andemotional appeals.

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� Know the expected concession pattern of the other party and what bargaining tactics theymight use during the negotiation.

� Spend sufficient time to maintain the relationship after the contract is signed, in order toensure future success.

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Each phase of the international negotiation process may be examined in detail to reveal whatrole culture plays in the process. In this chapter, we examine how cultural orientations affectthe various aspects of each negotiation phase.

Phase 1: Strategic Planning and Analysis

Strategic planning requires that you do research on the other company, select negotiators foryour team, identify the issues to be negotiated and choose a negotiation strategy and tactics.How you see yourself and how you see the other side are important in positioning your pointsin the negotiation.

People with different cultural backgrounds bring different expectations to the negotiationtable. The following should be considered:

• Learn about the other organization’s business, goods and services.• Observe the styles of your counterparts at the table and away from it.• Conduct fact-finding on how they make decisions and who has authority

in the organization.• Discover what (and how) issues will be addressed in the negotiation.• Understand the importance of contracts and what forms of agreements are

considered to be the norm.

Part of the strategic planning process is to get you to understand the negotiation both fromyour own point of view and from that of your counterpart. You need to set objectives for thenegotiation; check your facts and assumptions about the other party, and their issues andneeds; brainstorm options and alternatives; plan strategies and tactics; and, finally, practiceyour negotiating skills as a team.

Know the situation. Investigate the political, economic and historical background of the countryand company with which you will be negotiating. Consider the ramifications of politics,economics, culture and social organization. Know yourself. Identify your team members.

You also need to determine individual skills, strengths and weaknesses; group skills and teamroles; and objectives, needs, issues, positions, alternatives and options.

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Know others. Perform cultural due diligence on the cultural background and orientations ofyour counterpart’s team members. In addition, investigate the foreign company’s business,markets, financial status and reputation prior to the first meeting.

You must also identify who they are, past experiences with them, and their objectives, needs,issues, positions, alternatives and options.

Another aspect of strategic planning is influencing the negotiation process by controlling theagenda. Your strategy should be to get your agenda adopted and include those substantiveissues that you want to negotiate. Remember that the agenda and other procedural elementsof a negotiation are negotiable. A well-thought-out agenda will help you organize andprioritize the issues to be discussed, as well as measure your progress and set a credibledeadline for success. Finally, circulate the agenda ahead of schedule to get agreement frommembers of your team and identify those who will participate.

Team Selection

What size team should you send overseas to negotiate with the Japanese? With the Germans?With the Brazilians? Can one person alone negotiate against a team of ten? It is not unusualto hear about the lone U.S.-American negotiator being sent abroad to negotiate a complicateddeal. In fact, on the whole, U.S. and Canadian companies send smaller teams than do theirinternational counterparts.

Then what size team is right? The size of the team should reflect the number of tasks requiredand the abilities of the individual negotiator(s). Team size should:

• Reflect the importance of the product or service being negotiated.• Reflect the roles of the people seated across the table.• Include extra members for establishing informal channels

of communication.

While there are no hard-and-fast rules for establishing team size, it is recommended that thesame team members remain throughout the negotiation process.

U.S.-American negotiators are often chosen for their technical competence, functional roleand past successes. Members from the other negotiating team may be chosen for theirprofessional competence as well; but social competence, age, seniority, education, socialbackground and personal connections will more than likely figure prominently in the process.For example, in negotiations with the Japanese, the chief negotiator may hold his positionbased on age, social prominence, personal connections and consensus-building ability.

When selecting team members, the leader should consider an individual’s position in thecompany, his title and function, business and technical skills, and cross-cultural andinterpersonal skills. The larger the team you send abroad, the greater the status and powerthat must be attributed to the chief negotiator. It is recommended that you remember the“Equal Dignity Rule,” which states that the number, position and titles of team membersshould match those of the other side.

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Your team members should be as knowledgeable as possible about the culture with which youare negotiating and about their negotiation styles and strategy. The Japanese negotiation team,for example, may include three or more levels of management, with each person filling adifferent role in the negotiation. Often the Japanese use multiple groups of people for bothformal and informal negotiations. This may also reflect the process of consensus-building orthe need to require wider participation of different departments and levels.

South Koreans sometimes have one team for negotiating and another for dinner and drinkingthat evening, while a third team remains back at the office preparing for the next day. Chineseteams often include representatives from the relevant bureaucracies or corporations, as well asengineers and technicians who specialize in the good or service being negotiated. A Chineseparty official may also be included.

Based on your understanding of the strengths, weaknesses, experiences, objectives, needs andissues of both parties, you may begin to identify the characteristics of those individuals whoshould be members of your negotiating team. Your team should consist of individuals who arerecognized for their expertise, listening abilities, ability to be team players, and attitude forgetting things done at headquarters. Your team should establish a unified approach, and itshould be prepared to maintain an ongoing relationship with the other party.

You may wish to consider these elements in team selection: size, skill mix, status, chiefnegotiator and note taker.

Size

Determine the size of your team carefully. You want to avoid being at a disadvantage byhaving to face a larger team across from you at the negotiating table. Similarly, you do notwish to overwhelm or alarm the other party with the sheer number of your negotiators.

Skill Mix

Depending on the content of negotiations, as well as the cultural orientations of the otherside, you may wish to identify and include any one or all of the following: seasonednegotiators, younger negotiators who may more easily establish rapport with theircounterparts, technical experts, legal experts and highly interpersonal communicators. Teamsshould have people with the right balance of functional skills, language skills, culturalknowledge and negotiation experience.

Status

You may wish to consider adding a top-level executive to lend additional credibility to theseriousness of the negotiation or for ceremonial purposes. In many countries, it is customaryfor the senior executives to establish the general principles of an agreement and have the morejunior staff work on the details.

Chief Negotiator

One person on your team should be selected as the spokesperson for the team. This individualshould also be responsible for serving as the team leader and for facilitating a unified team

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approach by determining when team members can and cannot participate freely in thenegotiation. Remember that team members should provide both verbal and nonverbal supportto the spokesperson. As the chief negotiator or spokesperson of the team, you should ensurethat the team has had sufficient time to devise a strategy, prepare a proposal and developsuitable alternatives. When necessary, the team should take breaks or use side discussions toask questions and clarify understanding.

Note Taker

If desired, you may enlist the aid of an individual to take notes in order to free up others onthe team to concentrate on the negotiations. This person can also be the one to concentrateespecially on language, tone, nonverbals and process.

Why Team Negotiations Fail

Why do team negotiations fail? Very often, it is because team member roles andresponsibilities are not clearly defined. Another reason may be a weak leader orspokesperson in charge of the negotiation. Team members may have poor communicationskills or language skills. They may be incapable of resolving conflicts in general, or lackconflict resolution skills that work in the other culture. On occasion, team members may lackthe ability to make decisions or the authority to carry them out once they have been made.The negotiation may also fail if it is poorly managed in terms of time or if there is adifference in how time is used by both teams. Furthermore, teams from different culturesoften fail to sufficiently understand their counterparts, their culture, their decision-makingprocess and/or their communication styles. Even if your team members have a cognitiveunderstanding of the other side, they may be unable to translate their understanding into adistinctive negotiation or communication style.

What Are the Characteristics of a Good International Negotiator?

The characteristics of a good international negotiator include having product knowledge andgood managerial and technical skills. Language skills, and the ability to listen and be open-minded and patient, are also highly valued. Experienced international negotiators know thatbeing nonjudgmental and showing interest in the other team’s culture and customs are alsoimportant. Self-confidence and the ability to deal with ambiguity or ambiguous informationare essential. Having high aspirations, setting goals and being persistent in the negotiation arecharacteristics of successful negotiators. The ability to build personal relationships throughsocial competence (which includes effective interpersonal skills) is also a useful skill whennegotiating abroad. Having influence at headquarters and the power to influence others whowill have to implement the contract are critical for future success. Being able to think underpressure and controlling your emotions are both signs of a good negotiator. Having thephysical energy and stamina to travel across various time zones, the openness to eat a varietyof different foods, and the ability to drink socially may also be required.

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Negotiation Location

Deciding where to hold the negotiation is no easy task, as it encompasses numerous factors,such as the size of the team to send, whether you will be traveling abroad, or whether you arethe buyer or seller. All of these can affect the location selected. You will have to chose betweentheir location and your location.

Choosing to negotiate at your location gives you the “home field advantage,” as they say insports. You are the host, it is cheaper for you, there is no jet lag, you control the negotiatingroom, expertise is readily available, and you save time and resources.

Choosing to negotiate at their location has several disadvantages: you are under pressure toreturn home and save costs in time and money, there may be jet lag or health problems, theenvironment is unfamiliar, and you have no control over the facilities for the negotiations.

One solution is to alternate between their location and yours. This works especially well forestablished partners who have a long history or relationship. The advantages are that each sideshares the costs, both learn from and about each other, and the foundation for a longer-termrelationship is more likely as you build on the relationship.

Another solution is to select a neutral location, somewhere between the two locations. Theadvantages and disadvantages to this choice encompass all the issues just listed.

A more recent solution is to choose a “virtual location” at which to negotiate the deal. Thistype of location incorporates the latest in communication technology, including e-mail, voicemail, facsimile, video-teleconferencing, telephoning and groupware. Nevertheless, this maynot eliminate completely the need for face-to-face communication or the need to travel. Themajor disadvantage to this arrangement is that the virtual location is characterized by low-context communication styles that rely on words, facts and figures. Feelings, nonverbals andother nuances of communication may be lost.

Phase 2: Network Approach and Entry

Networking in the U.S. and Canada can be a quick and easy process. Cold calling, using directmail lists, joining professional organizations and contacting established business acquaintancescan facilitate network entry. When we begin conducting business overseas, we need first tounderstand that a critical step for success is to effectively enter established networks. Defininga network, identifying the right one, learning how to enter the network, and understandingwhat membership in the network means are all required when we negotiate across cultures.

How we establish a business relationship is important. In some cultures, cold calling isacceptable, while in others a third party or a member of the targeted network is required. Inthe former, direct mail, purchased name lists, trade shows and professional conferencesfacilitate networking. In the latter, determining the introducing party’s status and sphere ofinfluence in a particular network, organization or company can make or break a buddingbusiness relationship.

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The purpose of entering a network in the United States is to identify potential customers orclients. The result of networking is to qualify potential contacts as customers or suppliers whocan assist you in conducting your business. Initial credibility may be attached to you, yourproduct, your company or the profession to which you belong. Once the contact is made,however, the burden is on the individual to generate further interest in the business relationship.

In the United States, the end goal is the final sale, contract or task completion. The final goalis not becoming a member of the network. The U.S.-American approach to networking isprimarily informal, optimistic and relatively confident. The time taken to establish contact orto initiate network entry is minimal in the United States, since these networks tend to be fairlyopen to outsiders. Change, opportunities and risk-taking are an expected part of network entry.

In Europe, little time is spent in networking because of established networks or associations.Individuals are either born into closed networks or they join them through membership inprofessional associations or educational institutions. Outsiders may have considerabledifficulty penetrating closed networks. Network entry may also be difficult due to thebureaucracy found in European governments and agencies. Identifying those individuals ordepartments with decision-making authority can be difficult and may require insiderknowledge or assistance. These closed networks are suspicious of outsiders and reluctant tobe open about their business or to allow access to key decision-makers. Therefore, gainingentry can be time-consuming as well as difficult. Using a well-respected third party known tothe decision-maker, or providing a letter of introduction, is essential for network entry inEurope. Another factor in successful network entry in Europe is your social status or your titleand position in your company. Your education, degree attained, family background, dress andappearance, and interpersonal skills all affect your ability to fit into a closed network.

In some Mediterranean cultures, such as Spain, Greece or Italy, hierarchy is a crucial elementin business. Authority may reside in top officials of business or government agencies;therefore, major projects and business deals may require approval from these top officials.Identifying the right entry point into such a network, and finding the person with theauthority to make decisions are required for success. Individual power may derive from suchtraditional sources of power as wealth and class, educational and family background, or itmight derive from individual achievement and/or knowledge. Therefore, selecting the “right”person to enter the network can significantly affect your success.

In China, being a member of a network provides information, opportunities and access todecision-makers. Personal relationships and friendships are strong. Loyalty to individuals whobelong to the network or to whom you are obligated may take precedence in the businesscontext. Networks tend to be small. A person’s connections, or guanxi, are measured by hisaccess to and influence in established networks. These single points of contact are time-consuming to establish and may require multiple sources for successful entry, especially whendealing with the Chinese government.

Helping others within a network in China promotes goodwill and adds to your influence andability to develop future contacts. “Face,” or respect for a person, is directly related to thisability. Using one’s connections to assist others does incur obligations that need to be repaid.

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It is important to understand that repaying these obligations or providing opportunities tothird parties who have introduced you to the network is critical for continued success.

Most networks within China and between overseas Chinese are fluid, flexible and highlyresponsive to business opportunities. Being included in business deals engenders loyalty toindividuals and solidifies the network of relationships. Finding someone with the appropriate levelof guanxi is critical for success. However, choosing someone to trust and have confidence in ismerely the first step in the network entry process. If you enter at the lower level of a network orcompany, the quality of decision-making, or level of authority granted, may be limited. This canalso increase the time needed to gain access to the real decision-makers, as consensus is soughtwithin the hierarchy. Therefore, the higher the person sent to enter the network and the higherthe status of the person contacted in the network, the more entry into the network will be eased.

An example of the reach of these networks was relayed by a colleague who witnessed a Britishmedical manufacturer in Hanoi sell a piece of medical equipment for less than 40 percent of itsmarket price. The salesman reasoned that the exposition he was attending was over and thatthe cost to ship the equipment back to England would be prohibitive; so, selling the equipmentwas actually more cost-effective. He was approached by a Chinese businessman from Singaporewho was attending the exposition and wanted to buy the piece of equipment. Within a week ofreturning back to London, the salesman received more than a dozen requests at the lower pricefrom a number of Chinese companies in the United States, Europe and Asia Pacific.

In Japan, entering and building networks takes time and requires a credible third party.However, since Japanese networks work on the basis of favors and obligations, the first barrierto network entry in Japan may result from a person’s inability to recognize and fulfillobligations incurred. Both the third party and the targeted network contact must feelcomfortable with the person being introduced, or the business relationship will never beimplemented. A person who introduces another person to his network, or inner circle ofestablished relationships, is ultimately responsible for the future success of the introductionand the resulting business relationship. Maintaining the harmony of the group, consensusdecision-making and the time required to develop a trusting relationship all slow down theprocess of network entry in Japan. If the right person is not identified or the properintroduction is not made, entry will be difficult. If a good personal relationship is notestablished and favors or obligations not returned, access to the network will be denied. Oncenetwork entry has been granted, however, the likelihood of expanding your base of contactswithin that company or industry is virtually assured.

An example of the difficulty of network entry in Japan was provided by a U.S. consultant inNew York. His company had been successful in providing training and consulting services inthe banking industry, and he had decided to target Japanese banks in Manhattan for his lateston-line product. Through a Japanese colleague, he was introduced to one of the Japanese banks,where he was granted a meeting to introduce himself and his company’s goods and services.The bank representatives he met spent most of the meeting asking him about his background,his experience and the trends he saw for training in the banking industry in the United States.He offered his company’s brochure at the end of the meeting but failed to pitch the new on-line product. After several follow-up telephone calls and some months later, he was asked back

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to the Japanese bank, where he met several more members of the bank who were in charge oftraining and development. The meeting went pretty much as the last one had. Again, severalmonths later, he was asked to return to the Japanese bank to conduct a pilot program for 20bank employees. The success of this program led to more training programs. After conductingmore than ten of these programs, he was introduced to five other Japanese banks by the seniorJapanese manager in charge of training. This led to successful entry into these companies, andnow these banks represent over 50 percent of his on-line training programs.

In Latin America, a person’s power is directly connected to his social standing, personalqualities, and personal connections in the business and government communities. Hierarchyand formalization of decision-making processes may be time consuming and may limitnetwork entry efforts. Having the right friends allows you to open doors and get tasksaccomplished, regardless of rules, policies or procedures governing business and government.Having a connection to a person of power and influence in a network in Latin America isessential. However, the fluid, being and formal orientations may slow down initial entry byoutsiders, even if important contacts have been established.

A U.S. businessman opening his first office in Mexico City, told the following story. Hiscompany produced video broadcasting services and required a T-1 line to stream video fromhis U.S. offices to the office in Mexico City. In the United States, this would have been asimple business request to the local telephone company, and it would have taken a few daysto a few weeks to install the necessary T-1 lines into an office. In Mexico, the businessmanapplied to the local telephone company and was told that it would cost him four times whatit would have cost in the United States for the services requested, and that it would take atleast six months to have the lines installed. He mentioned this to his Mexican businesspartner, who subsequently introduced him to the vice minister of telecommunications at hisvilla over the weekend. Over a set of tennis and drinks, the U.S. businessman explained hisdilemma to the government official. By the following Monday, a telephone crew was in frontof his building digging the trench that would be required for the T-1 line, and the installationwork was finished by the end of the week.

In countries where the family, clan or tribe is the basic unit of society, network entry can bechallenging. In the Middle East and Africa, having a connection to a family member in thetargeted company or to someone in the ruling class is essential. Business opportunities areprovided first to family members. Outsiders need to establish personal relationships withsomeone who has the influence and power within a family business or social group. Here,status, position and title are important. Status may be achieved by age, experience, name orstanding in the community. Therefore, as compared to other countries, a more holisticapproach to network entry is required for penetrating the network. Following protocol,customs and business norms helps ease the social exchanges and demonstrates respect tonetwork insiders. This emphasis on status has led to entrenched hierarchies and bureaucraciesthat foster centralized decision-making and prolong the time required to get approval forbusiness opportunities. Business decisions are often made at the top of the company orgovernment agency, making the proper introduction essential. Both formal and informalchannels should be leveraged to check on the performance and success of individual contactsand the organization with whom you want to do business.

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In places such as Russia, China and the Middle East, people may not distinguish between socialand business events, requiring you to know the appropriate protocol for both social andbusiness functions. Impatience, rude behavior and poor interpersonal skills could prevent youfrom making the right contacts and developing business opportunities. It is necessary toidentify the person with the pertinent power and influence and to establish a personalrelationship before continuing on to a business relationship. One note of caution: followingcertain business practices or norms accepted in obtaining the influence or approval of thesedecision-makers or government officials—for example, bribes, favors, or payments—may beillegal in your own country and can be an impediment to successful network entry.

In conclusion, network entry is an essential part of any negotiation or business strategy whenconducting business overseas or across cultures. However, if your company has a product orservice that is unique or superior to that of the competition in a particular country, the issueof network entry may be less important. In fact, the right network or company may comelooking for you.

Understanding the Negotiation Styles of Other Cultures

The United States and Canada

The primary focus in the U.S. and Canada is on getting the negotiation (task) completed inthe shortest period of time, with the least formalities. The relationship between those whonegotiate is on a company-to-company basis. Personal relationships are less important thangetting a signed contract. Non-business conversations and other forms of small talk aregenerally seen as a waste of time. Nonessential formalities are also seen as an impediment togetting the job done. Meeting times are fixed, and agendas are used to provide direction andto measure progress. Individual contributions and efforts leading to real results are rewarded.

Northern Europe

Northern Europeans are concerned with formality and risk avoidance in negotiations.Appointments should be made well in advance. Negotiators are well prepared and are armedwith detailed documentation. Proposals are combed through with great attention to detail.Quality is a key motivator. Positions are taken relatively close to the time of the finalagreement. Discussions can be highly technical and require in-depth knowledge of the detailsproposed. In both Germany and France, senior negotiators are seen as experts and aretherefore well prepared. The good negotiator is a technical expert who is also pragmatic andskeptical. Negotiation teams are functionally separated, and members have clearly definedroles and responsibilities.

Southern Europe

Southern Europeans have the ability to use the doing orientation of U.S. Americans with ease,but their primary focus is on the family, clan, country or cultural group. The focus ofnegotiations is on developing and maintaining a personal bond, or connection, between bothparties. This may require informal breaks, socializing and meetings aimed specifically atestablishing personal connections. Time is viewed more flexibly than in Northern Europe. It is

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not uncommon for personal issues or other pressing business issues to interfere with anegotiation schedule. This may mean that a meeting begins late, a delivery of a product isdelayed or the negotiation is postponed to accommodate the prevailing fluid orientation totime. Nevertheless, task accomplishment is still seen as the primary measure of success.

Latin America

Identifying a personal link is important to doing business in Latin America. To be successful aperson must demonstrate trustworthiness, credibility and a basic understanding of howbusiness is conducted. Persuasion and influence are directly related to the quality of therelationship of the two parties. Relationships are built over time, and extended meetings maybe required to build rapport and trust. Demonstrating commitment to the relationship and theability to meet obligations is important. Latin Americans feel a need to determine whether theother side is trustworthy, honorable and compatible before doing business with them.Demonstrating respect for the hierarchies present and adhering to proper formalities are notonly expected, they are required.

Asia

In Asian cultures, who you know is of primary importance, as there is a strong reliance onnetworks and personal relationships in business. Entry into the group provides identity andprotection. Behavior is fixed, and the status quo is preferred over change. Having anestablished relationship is the first requirement for doing business. Obligations exist betweentwo parties who negotiate. The central question for a person from Asia is whether you areaware of these obligations as a “business friend.” Time is invested in developing relationshipswith other parties. This may delay discussion of the tasks at hand, and some U.S Americansand Canadians may regard this as a waste of time or as showing a lack of expertise. The timeneeded to establish trust with your counterpart may be shortened if you have a unique goodor service to sell. However, this advantage will disappear if a competitor from the otherparty’s country, with an established business relationship, has a similar product. Relationshipsare more important than deals.

The Middle East

People in the Middle East put human relationships first. Blood relationships and extendedfamily are considered to be the most significant––more significant than relationshipsdeveloped with friends, colleagues or outsiders. Negotiation activities will be more successfulif conducted between family members and if a family member is part of your negotiation team.Establishing a personal relationship is essential before turning to business. Fulfillingobligations and helping friends take precedence over business demands. U.S. Americans,Canadians and many Europeans may regard such behavior as unethical, citing conflicts ofinterest. But, in the Middle East, using family ties is not seen as a conflict of interest. Time isfluid and flexible at all stages of the negotiation process. Meetings may include other partiesand can be held in public areas. The top person or owner makes decisions. Formality isexpected in the first few meetings until a relationship has been established. Bargaining isconsidered an art form, and efforts are made to get the best possible deal.

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All the above regions encompass many countries and cultures that may deviate in or act inanother fashion from the broad generalizations given. One cannot assume that cultural normsor business practices are generalizable across an entire region. A successful internationalnegotiator understands that every culture is different and that an understanding of the localculture and customs is required before proceeding. Because each individual person is unique—the result of family, social and corporate influences—it is important that you adjust yourapproach accordingly. Only by taking all of this into consideration can you truly be preparedfor negotiating across cultures.

Phase 3: Building Personal and Business Relationships

How you go about creating personal and business relationships will depend on the culturalgroup with which you are doing business. In the United States, a few business cards might beexchanged at professional associations or a list of contacts might be received from a supervisorto develop a network at the company. Many times, this might require only a telephone call,some follow-up e-mail messages, or a brief, initial face-to-face meeting to get started. In othercultures, such as those of Asia or Latin America, this step may involve important strategicdecisions and the right introductions to the right people.

In Canada and the U.S., relatively little time is devoted to building business relationships.Spending several minutes at the beginning of a meeting is considered sufficient time forestablishing rapport and developing common ground before turning to business. If twoindividuals or companies have been doing business for a while, it is assumed that a businessrelationship exists; but a personal relationship may or may not be involved. Many people havecommented that U.S. Americans, in particular, tend to form quick, informal, superficialrelationships rather than those that require a long time to solidify.

In the United States, friendships can be formed quickly with casual acquaintances, andbusiness can be conducted without the need for deep, long-lasting relationships. Often inbusiness, personal relationships are viewed suspiciously, since it is thought that suchrelationships could lead to a conflict of interest or to unethical behavior.

In Europe, relationships tend to take a long time and much effort to develop. This is largelythe result of long-lasting, well-established networks of customers, colleagues, friends andfamily. It may be difficult for U.S. Americans to break into these networks.

In the Middle East and other traditional cultures, building business relationships may requiremuch more investment of time and effort than expected. If two individuals or companies havebeen doing business for a considerable period of time, it is likely that a personal or familyrelationship preceded the business relationship.

In high-context cultures, participants not only want to spend time with the other person, todevelop rapport and trust; they also may require this association prior to initiating orcompleting a business deal. Over time, and over several meetings in various locations andsettings, a decision will be made regarding the potential business partner. This decision will

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involve an evaluation of the other person’s trustworthiness or ability to meet future obligationsrequired of a business relationship.

In Latin America, having a personal relationship is a prerequisite to establishing a businessrelationship. The decision to engage in a business relationship is reached as a result ofrepeated interactions on a personal level over time. In contrast, U.S. Americans do notnecessarily feel that they have to like someone or have a personal relationship in order forsomeone to do business with them.

Here are some important questions to ask yourself before attempting to initiate a businessrelationship across cultures:

• With which company should I do business?• When should I pursue a business relationship? A personal one?• What kinds of activities are involved in building a business relationship?• How should one build rapport and trust in a personal or

business relationship?• How should I pursue or maintain a personal or business relationship?• How much time should I spend initiating a business relationship?• How and when do I follow-up on existing relationships?• Why should U.S. companies move toward building long-lasting, reliable

business relationships overseas?• Do I need to develop personal relationships to generate business?• How important is socializing to building a business relationship?

Determining when to enter into a business relationship or a personal relationship, how topursue the relationship, what activities to initiate and how much time to spend on this stepare all crucial considerations for the success of a negotiation. Different expectations as to hownetworking is done provide an example of how culture can affect the building of personal andbusiness relationships. We see this in the following anecdote.

Uwe Schmidt, a German working in the U.S., was attending a local networking group ofprofessional quality managers. He was approached by Tom Miller, a U.S. American whoquickly introduced himself and told Schmidt his name, where he worked and what he didfor a living. Miller asked Schmidt what he was doing in the U.S. Schmidt began explainingwhat he had been doing in Germany before his arrival in the U.S., his schooling, hisoccupation, his reasons for coming to the U.S. and so on. However, after two minutes,Miller, seeing a colleague in the crowded room, interrupted Schmidt by yelling across theroom, “Hey, Bob come over here and meet my friend Uwe!” Miller’s behavior and use of theword “friend” offended Schmidt. In Germany, true personal relationships take time. InGermany, a person builds trust by being reliable and predictable through taskaccomplishment over extended periods of time, even years. Relationships are not madebased on a quick informal introduction.

To build and maintain a business relationship with someone of another culture with whom youwill be negotiating, you should:

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• Know your customer’s situation, position, market and industry.• Develop rapport through “small talk” and socializing.• Develop trust by accomplishing tasks reliably and consistently over time.• Check the other person’s assumptions, expectations, needs, interests

and objectives.• Observe the hierarchy, status, roles and functions of the other

team’s members.• Show an awareness of the time and effort needed to reach a consensus.• Use informal channels to gather information and establish trust.• Value the process of formality, ceremony and rituals over getting results or

“staying on track.”• Create value by providing mutual benefits, dependencies and a shared

perception of the situation.• Maintain the continuity of your team members over time.• At the conclusion of a negotiation, follow-up with personal contact

and communication.

Whereas U.S. Americans focus on bargaining and getting a signed contract, individuals frommost other cultures focus on the relationship rather than the deal. For example,communicating while drinking is an integral part of negotiating in Japan, Russia and China. InJapan, informal settings in restaurants, bars and golf courses are not only used to conductbusiness, but also to build personal relationships with colleagues, customers and suppliers. TheJapanese are willing to spend the extra time and money after working hours to meet customersor subordinates in order to air issues or dissatisfactions, exchange information on competitorsor new company activities, and explore potential business partnerships. In addition, informaldiscussions over drinks allow for a more relaxed atmosphere in which to learn more about theother person. They also allow the Japanese to give feedback or to convey unpleasant news,something usually not given in public.

Phase 4: Orientation and Presentation

The orientation phase consists of introductions, opening statements, an overview of thesituation, and the defining and prioritizing of issues at the table.

Once you have entered the network successfully and have started the process of buildingpersonal and business relationships, each side undergoes a period of orientation to theircounterpart’s way of doing business, to their organizational culture, to the individuals involvedand to the specific circumstances of the relationship. Everyone involved engages in areassessment of the other. Each party understands the other’s goals, needs, constraints andproblem-solving approaches. With these in mind, each side defines the business interests andobjectives that will guide the future relationship. Based on this assessment and definition, allparties involved move to create an alignment and a strategy for the negotiation, the success ofwhich determines the tone of the next phase.

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How we orient ourselves to a specific company, the people representing the other side orthe specific business situation depends on our own culture and business practices. The timeand specificity devoted to a relationship at the start are critical to successfully doingbusiness across cultural groups. Depending on the cultural region, this phase requiresvarying degrees of attention, time and resources. Before focusing on business specifics,individuals from more traditional cultures want to understand the whole environment, thebackground or history of a situation, the other people involved, any precedents or decisionspreviously made, and the credibility of the company. This contrasts sharply with thepractice of U.S. Americans, who direct most of their effort and time to achieving the goalof the negotiation, which is a signed contract or agreement. For them, time is money, andshould not be wasted. The result is that they spend as little time as possible on small talk,focusing instead on the specifics of an issue or problem. The opportunity not to be missed,or the deal to be closed, is uppermost in their thoughts.

Assessing the importance of this phase of orientation and presentation is most important incross-cultural negotiations. Orienting yourself to the other culture, and learning how to presentyour proposal in the most effective way, is an important part of building a business relationship.

Orientation to the Other Party

What are the other party’s overall objectives in the negotiation? Their goals? How do theirobjectives and goals compare with your own? The more information you have about the otherparty’s objectives, goals, issues and needs, the more power you will have in the negotiation.Your confidence will be directly tied to the power you have to influence the other party. Yourinfluence is a result of your own experience, the experiences and expertise of your teammembers, and the resources that your organization can bring to bear in the negotiation.

What is the objective of the negotiation? What issues are being brought to the negotiatingtable? Which are negotiable, and which are not? Once all of the issues have been identified,on both sides, you can list each issue and an appropriate strategy for each. Issues should beprioritized in order of importance. Upper and lower limits should be set for each issue, toallow for flexibility in the negotiation. Issues should be linked or separated as needed.Concessions for each issue should be identified for use in the negotiation. Once you havecompleted this process for your side, you should do the same for the other party. What aretheir issues? Is there common ground? What strategies will they use, and what limits willthey set for each issue? Based on this analysis, what issues will likely become sources ofconflict or areas of disagreement?

Which Negotiation Issues Are Important to You?

First, you should clearly outline for yourself what issues are most important to you. It couldbe any one or more of the following:

• Backup service • Compensation for failure• Delivery• Discounts

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• Distributor/supplier agreements• EDI: electronic data interchange• Exclusive rights• Inventory holding• Intellectual property• Method of payment• Penalty clauses• Price• Proprietary information• Quality• Quantity• Specifications• Stock holding• Technical support• Technical training• Technology transfer• Warranty

Then you should develop a full analysis of the other party’s needs, interests, decision-makingprocesses, alternatives, options and time frame. One way to obtain this information is to do acounterpart analysis.

Counterpart Analysis

Step One

In what business environment does the other party currently operate? Start by analyzing theeconomic situation, industry, market, and goods or services offered. Describe your counterpartand how you will encounter him or her. Will you be talking to an individual representative or toa team? What assumptions can you make about their dominant cultural orientations orpreferences? What are the likely goals, expectations, interests, needs, etc., that your counterpartsbring to this situation? Determine what negotiation strategy your counterpart is likely to prefer.What negotiation strategy would run counter to their expectations and/or preferences?

Step Two

What is the optimal outcome of the negotiation from your counterpart’s point of view? Givenyour analysis in Step 1, how does your counterpart define the optimal outcome? What strategywill they devise to meet their needs (situational, interpersonal, organizational) andexpectations? How will they structure the negotiation process?

Be sure to frame your assessment with a detailed analysis of needs and expectations on three levels:

Situational: Does the situation in which your interactions occur dictate specificbehaviors/actions?

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Interpersonal: What are the needs on an interpersonal level with regard torelationship, communication and cognitive styles, problem-solving, affinityand alignment, etc.?

Organizational: What are the counterpart’s organizational levels that affectthe process, decision-making, objectives, etc. and how do they contribute tothe situation?

Step Three

Examine the driving and restraining forces that will affect your counterpart’s overall strategy.From the understanding generated in steps one and two, what forces from the businessenvironment and your counterpart’s cultural orientations will affect the negotiation? Since youwill have less information on your counterparts than on yourself, it is important to distinguishbetween those forces that you are certain will affect the negotiation from those that may or maynot have an impact. Outline the information needed to increase the certainty of the situation.

What Is Negotiable?

When negotiating across cultures, you must be aware of which sorts of items are negotiableand which are not. Overall, negotiators should look beyond present positions to the otherside’s underlying interests and needs. Cultural values, however, are usually not negotiable.

Position

People tend to adopt a single position where their interests and needs are concerned. Thesepositions are stated as demands or preferences. But positions can lock negotiators in a box.Focus on the underlying interests and needs, not on the stated position.

Interests and Needs

Interests and needs can be both tangible (products) and intangible (emotions and ideas).Although interests and needs can be expressed in the actual stated positions, more often, theyare beneath the surface of what is said and done. Identifying interests and needs is thecornerstone of successful negotiations. Understanding your counterpart’s needs will allow youto be more flexible and provide more alternatives during the negotiation.

Core Values

Although they often remain unarticulated, your counterpart’s cultural orientations play acentral role in influencing negotiations. Behavior, language and nonverbal cues are easilyobserved by you or your counterpart in the negotiation. What are less likely to be observedare the underlying customs, attitudes, beliefs and values that drive behavior at the negotiationtable. Deeply held values can affect the issues and needs that are presented on both sides.Remember that core cultural values are not open to negotiation.

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Contrasting Low-Context and High-Context Negotiation Approaches

The U.S. approach to negotiating is to view the process primarily as a problem-solving exercisein which both sides define the problem, invent new solutions, choose among alternative waysof handling the problem as defined, and set the terms and limits necessary to guide a solution.This low-context approach to negotiating focuses primarily on achieving results above all else,and ignores the larger issue of the human relationships involved. It also assumes that each sidewill take a similar approach or bring to bear a set of negotiation tools and techniques that areunderstood by both parties. U.S. negotiators expect to treat everyone at the table in anegalitarian manner by focusing the process on issues, rather than on personalities. Each sidepresents its proposal to the other, and a process of give-and-take ensues until a contract issigned. Discussions are businesslike and to the point. Persuasion and influence tactics are usedwith incremental concessions to reach what is seen as a reasonable compromise.

The U.S. approach may not work well in high-context cultures in which building personal andbusiness relationships between negotiating partners is the top priority. In high-contextcultures, the ultimate goal is to establish a personal relationship in which favors are given andreceived. In China, for example, personal relationships and connections are used to influencethe outcome of negotiations. The Chinese pursue their negotiation objectives through avariety of strategies or tactics that leverage feelings of friendship, obligation, guilt anddependence between parties. Only by developing rapport and building trust can a high-context person be assured that obligations will be met over time. By contrast, in a low-contextculture, the contract ensures that obligations are met, while relationships are secondary tocommitment and follow-through.

The low-context negotiator will present his position up front, while the high-contextnegotiator will reveal his or her position gradually or not at all. This high-context approachavoids potential conflict and reduces risk, but is likely to add to frustration on both sides,especially when the low-context negotiator tries to move the negotiation forward by offeringa concession and the high-context negotiator responds with more questions or silence.

In high-context cultures, such as Mexico, standing, reputation and honor are paramount in thenegotiation. Loss of “face” is a deal-killer. Risk is reduced by following protocol andcommunicating in a ceremonial, expressive way. The rule is: no surprises. In Japan, negotiatorsreduce risk by establishing preconditions and assurances, asking for your position first, buildingconsensus through informal channels and using a non-threatening approach. In China, agreementis also sought on pre-conditions or principles before entering into formal talks. By accepting theseprinciples, you have implicitly agreed to, or acceded to, the Chinese position at the outset.

The high-context negotiator tries to learn as much as possible about the low-context negotiator’sposition before presenting his own position. This can result in the low-context negotiatormaking counterproposals and concessions before knowing the other’s position. By the time thehigh-context negotiator presents his position, there is little room to maneuver.

For example, the Chinese usually present their position first only when they believe they havethe edge in expertise or power. If they are uncertain about their negotiating position, they will

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ask the other side to go first. However, even when the Chinese state their position first, initialpositions are seen as guiding principles that may serve to conceal real objectives. By lettingthe other side speak first, the Chinese can gather important data that are used to adjust theirposition and strategy later on in the negotiation.

High-context negotiators may also differ from low-context negotiators in the values they seekto promote or defend based on their interpretations of history or sovereignty. This, in turn,will affect how they set their priorities and goals. National dignity is a sensitive issue when acountry has suffered occupation or loss of national territory or when an industry has sufferedexploitation by a stronger country. Past history, as well as real or imagined slights, mayinfluence a country’s position in a negotiation. Status-consciousness and historical grievanceshave produced a collective sensitivity in both China and Mexico that is hard to ignore whennegotiating a new agreement between two companies. Because of their preoccupation withstatus, negotiators from China and Mexico will try to establish their superiority at the earlieststage of the negotiation.

The psychological issue of status consciousness or past history may result in a negotiationstrategy that appeals to positions of dependency or weakness when negotiating with theUnited States. Japan, Egypt and Mexico are some of the countries that have used this strategysuccessfully in various international negotiations. North Korea, India and China have, in theirdrive for autonomy, used appeals for aid and special treatment when dealing with the UnitedStates. China, for example, has often claimed that it is a poor country and that, therefore, richcountries such as the United States should pay more for Chinese products or for doingbusiness in China. Although there are no easy answers, it is important to decide how torespond to such strategies and tactics when they are used by the other party.

Presentation of Information

How information is presented, how people communicate with each other, when and whattype of information is shared can all be affected by cultural orientations. Knowing how andwhen to ask questions is important to obtaining the information required to understand theother party’s interests and needs. Knowing the other side’s interests and needs will determinehow you will present your proposal and information during the negotiation.

Some cultures may spend more time on procedural issues, structuring the negotiation processusing formalities and rules of procedure, identifying the issues that will be discussed, the orderof discussion, and the purpose of the discussion. U.S. Americans see formal communicationas a barrier to discovering the interests of the other side; they see informal communicationand the removal of protocol as the best way to develop a business relationship. Theassumption is that informality breaks down barriers and allows both parties to spend timegathering the information needed for a successful negotiation.

What kind of information does the other party need to know about us? What kind ofinformation do we need to know about them? What specific information do we need on theirbusiness, products and industry? How will we structure the presentation of information to theother side? In a deductive or inductive way? In a linear or systemic manner? What is the

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process for presenting or exchanging information? What is the use of questions to gatherinformation or confirm what has been revealed? How should we structure the agenda orprocess of the negotiation? How do we decide what issues, objectives and needs should beaddressed first? How can we be sure that the information we get from the other side isaccurate? While this phase of the negotiation process is less important in the U.S., Canada andsome Northern European countries, knowing how your overseas counterpart approaches thisphase is likely to increase the chances for success.

Opening Presentation

Before making your opening presentation or stating your proposal at the negotiation table,you should provide translated written materials, if possible. Briefly introduce your company,your business and products, industry trends and any other relevant information that may beimportant to the other party. Review the agenda and clarify the ground rules for thenegotiation. If this has not occurred earlier in the negotiation, introduce team members,including names, titles and positions. Be sure to take the time to establish rapport throughsmall talk and a free exchange of information. Identify your position by clarifying the issues asyou see them. Provide a well-planned, detailed presentation supported by data and visuals.Before presenting differences, identify common ground and mutual expectations based oninformation gathered before the talks. Be aware of, and point to, earlier relationships. This“working history” can help to create an environment for mutual agreement. Describe how yourposition benefits the other side and fits their needs. Finally, give both sides the opportunity tobe heard and understood.

Communicating Across Cultures

A U.S.-American manager was heard saying, “If English is the international language ofbusiness and technology, we should have no difficulty speaking to and negotiating with peoplefrom other cultures, right?” The answer to this rhetorical question is that communication is oneof the most difficult problems in negotiating across cultures, regardless of what language isbeing spoken.

Communication is the process by which people share information, import and emotionthrough the exchange of verbal and nonverbal messages. The challenge in a multiculturalenvironment is to ensure that the message being sent is the one received by the other party.

In a negotiation, information is exchanged verbally and nonverbally. Information in all thesecontexts must be interpreted as to its real meaning. If people share a common frame ofreference (system of meaning), understanding is not problematic. Without such a commonframe of reference, however, negotiations become more difficult.

Low-context cultures rely primarily on words, facts and data to convey meaning. Becausenonverbal cues and unstated contextual information play a minimal role in conveyingmeaning, there is no overriding need for the prior existence of, or introduction to, a sharedframe of reference (system of meaning) to make effective communication possible. High-context cultures, on the other hand, do not only rely on words but also on the depth andbreadth of a shared system of meaning and knowledge that derives from some shared cultural

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context. High-context cultures, such as Japan or Mexico, thus believe that foreign negotiatingpartners must first be inducted into their cultural and business-cultural context before businesscan be properly addressed.

When communicating with individuals from a high-context culture, you should allocate moretime for small talk and the exchange of background information before turning to business.When communicating with those from a low-context culture, the use of protocol, symbolismand small talk should be reduced to a minimum to allow both parties to get to business mattersas soon as possible.

Nonverbal Behavior

Nonverbal communication includes facial expressions, gestures, body control, movement, useof space, dress and ceremony. Low-context individuals fail to understand the emphasis put onnonverbals, symbols and implied meaning. In Asia, the use of facial expressions and bodylanguage may be too subtle for U.S. Americans to read successfully. Mexicans are not shyabout using emotions and extreme body language at the bargaining table. U.S. Americans mayinterpret such behavior as unprofessional, whereas Mexicans may see the U.S. Americans’ lackof response to such behavior as a sign of heartlessness.

Where people sit, and where meetings are held, are important as well. Ritual and choreographedarrangements are meant to convey messages about rank and reputation in hierarchical societiesthat can often be misunderstood. The manipulation of protocol and ceremony by other culturesfor their own purposes is not to be underestimated in international negotiations.

Clarifying and Confirming

Assumptions, perceptions and expectations should be clarified and confirmed, based on whatis said and done during a negotiation. If understanding is not frequently clarified andconfirmed with persons from another culture, miscommunications and misunderstandings arelikely to occur.

Here are some strategies for clarifying and confirming:

• Summarize what you hear and clarify what you do not understand.• Examine areas where there are differences in values, perceptions or styles.• Explain your own thinking, assumptions and perceptions during a meeting

or negotiation.• Give relevant background information to the other person, including

historical, cultural and business reasoning. • Listen carefully and clarify such value-laden terms as “fair,” “teamwork,”

“honesty,” “logical” and “working together.” Do not be judgmental.• Use informal channels or third parties to get information or to

clarify misunderstandings. • Describe what you observe. Give your interpretation of events and

ask a person from the other culture or country for theirs. Then share your expectations.

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• Observe nonverbals to understand your counterpart’s gestures, facialexpressions and verbal cues. Pay special attention to unarticulatedindications of some difficulty or an answer of “no.”

• Create a positive, relaxed atmosphere in which to discuss yourassumptions and promote cooperation.

• Provide opportunities for other people to be heard at breaks or otherinformal moments.

• Acknowledge and validate the other person’s viewpoint, values and needs.

Modifying Your Language

Although English is becoming the international language of business, we must bear in mind thatmany people speak English as a second language. To ensure that their message is understood,English speakers should modify or internationalize their speech. The following tips are offeredfor more effective communication with non-native English speakers during a negotiation:

• Err on the side of formality.• Use simple vocabulary and common meanings of words.• Speak slowly, using short sentences.• Pronounce your words clearly.• Avoid idioms, jargon, sports analogies and slang.• Use specific action verbs.• Avoid complex, or two-word, verbs.• Summarize frequently and carefully.• Use alternative meanings carefully.• Listen actively and clarify misunderstandings.• Use data, graphs and figures for easy understanding.• Be aware that there are alternative spellings for some English words.• Break often to allow for informal discussions and questions.• Use reflective listening: restate what you have heard as an empathetic

response. Pause and let the speaker continue.• Do not ask “why”; Instead, use “what” and “how” questions.• Use silence and pauses to your advantage to get additional information.• Allow sufficient time for the other party to process information.• Confirm any discussions or arrangements in writing.

Using Interpreters

Interpreters are often used during negotiations to increase the effectiveness of communicationacross cultures. An interpreter can assist with the accurate communication of ideas betweentwo parties, as well as advise the negotiation team of actual or potentialmisunderstandings––cultural or otherwise. Having your own interpreter who is familiar withyour business and your terminology is critical. Interpreting is a skilled profession and requiresspecial abilities and training. Just because someone speaks another language does not makethat person a good interpreter.

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The following points are provided to assist negotiators in using interpreters more effectively:

• Brief the interpreter in advance, and prepare written materials ahead of time.

• Speak clearly and slowly, using simple vocabulary and short sentences.• Speak only for short periods at a time (30 seconds maximum) and then

give the interpreter time to interpret.• Do not interrupt the interpreter while he or she is speaking, as this may

cause misunderstandings.• Do not be surprised if a speaker speaks at length and the interpretation

takes less time (the reverse may also happen). However, be suspicious ifthis is a consistent pattern with the interpreter.

• Plan each statement carefully. Avoid idioms, jargon, sports analogies and slang.

• Talk to, and look at, your host, not their interpreter, during the negotiation.

• Allow the interpreter to take notes while you and your counterpart are speaking.

• Maintain a pleasant manner, and keep your emotions in check when speaking.

• Allow the interpreter adequate time to interpret what has been said and toclarify those points not understood.

• Prepare an agenda, and write out all points to be discussed at the meeting.• After the meeting, confirm all discussions/arrangements in writing.• Take breaks often to allow the interpreter to rest and to check with you

informally on the progress of the meeting.• Treat both your interpreter and their interpreter with respect.

Phase 5: Bargaining and Persuading Others

The overall aim of your influence-and-persuasion strategy is to change the other party’sperspective so that they agree to your demands. In international negotiations, you need to beaware of cultural differences. Different cultural orientations to time, communication, powerand thinking may affect the influence strategy you should use.

A person’s ability to make promises or commitments is directly proportional to that person’slevel of trust in you and your company. Trust is higher when both sides have shared interestsor common ground. The other party’s openness and ability to exchange information is directlyproportional to the level of trust established before the negotiation begins. The first step inestablishing trust and rapport is learning how to communicate effectively across cultures. Thenext step is understanding how cultures like to structure, share and process information to beused in decision-making. The final step is devoting the time and resources needed to build andmaintain the relationship.

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Persuading Others

In the United States, influence and persuasion strategies are considered the core of selling andnegotiating. Whether the approach is competitive (win-lose) or collaborative (win-win), whatis important to the U.S. negotiator is knowing which influence and persuasion strategies will beused. The most typical persuasion strategy used in the United States is the rational or logicalapproach supported with data and evidence. Data, facts, expert testimony and documentedresults are likely to be successful in persuading U.S. Americans and Canadians. Presentinginformation on pricing, specifications, features and benefits are typical influence strategies.

In Europe, persuasive arguments are rational, linear and supported by objective data. To besuccessful, language and interpersonal skills, as well as exercising a formal orientation arerequired. U.S. Americans may find that when dealing with negotiators from Spain, Greece orItaly, information and interests may be revealed during the persuasion process rather than inearlier phases of the negotiation process. This will require extra patience and time.

In Europe and other cultures, where the hierarchy and formal orientations are strong, it isimportant to identify the decision-makers and the people in authority before entering intoeither personal or business relationships. In Latin America, the presentation of persuasivearguments within formal sessions is always part of the negotiation process, but informalmeetings and discussions to persuade others are crucial. The communication style is moreexpressive and emotional than that found in the United States. Although disagreements willbe couched in polite language to avoid embarrassing others––especially those inpower––interruptions and fighting for “airtime” are not unusual.

In Asia, as in Latin America, the persuasion process can take place outside of formalnegotiation sessions. Informal face-to-face meetings and social activities are important ingetting to know your counterpart and developing the trust and rapport required for moreformal negotiations. Information that cannot be shared in a more public setting can be sharedprivately, thereby saving face, and avoiding the sense that one or the other party has beencompromised.

Although culture plays a strong role in shaping persuasion strategies, almost all cultures useone or more of the following approaches:

• Promise: If you comply with my request, I will reward you.• Threat: If you do not comply with my request, I will punish you.• Affinity: I like you, and you are my friend, so why won’t you comply with

my request?• Pre-giving: I have helped you or given you something in the past, so why

won’t you comply with my request?• Punishment: I will continually punish you or provide negative results until

you comply with my request.• Debt: You owe me, based on past favors or obligations; so you should

comply with my request.

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• Moral appeal: If you do not comply with my request, you are not a moralperson, for a moral person would agree with my request.

• Expertise: If you comply with my request, the outcome or results willreward or benefit you.

• Esteem: If you comply with my request, those whom you value will thinkbetter of you.

• Emotions: You will feel better if you comply with my request.

It is important to correctly interpret what you observe during the negotiation. Manyinformation and influence strategies may be conveyed nonverbally. It is most important thatnonverbal cues—from eye movements to facial expressions and from body language to handgestures—be recognized and understood.

Using Logic and Reasoning

The type of logic and reasoning used to persuade others is also shaped by culture. U.S. Americansand Canadians generally have an inductive approach to presenting their proposals. Agendas arelinear in nature, and issues are followed in sequence over the course of the negotiation. U.S.Americans and Canadians are persuaded by expert opinion and supporting factual information. InLatin America, the approach follows a more deductive process, in which the focus is on generalissues that lead to specific guiding principles. Logic follows to support conclusions.

French managers use a deductive approach when presenting their proposals. The Frenchnegotiator may start with a general opening statement of understanding and providesubsequent details to support that position over the course of the negotiation. The overallproposal may be systemic or holistic in nature. Once a position has been presented, it isextremely difficult to introduce new information or to make changes to that position. Incontrast, U.S. managers present a single position or lay out arguments based on strategicplanning before the negotiation begins. Specific points or issues are presented within the logicof a general conclusion. The overall approach is based on a negotiator’s own experience, theissues to be negotiated and the tactics agreed upon prior to the negotiation.

In low-context cultures, such as the United States, the end objective of the negotiation is todraw up a detailed, binding contract that represents the mutual interests of both parties. Thereis an assumption that a persuasive argument or logical reasoning is the best way to avoid acontest of power or a confrontation. Appeals to the other side are based on facts, data andother evidence, not on feelings, emotions or personal relationships.

In high-context cultures, such as Mexico or Japan, negotiators may end up with a signedcontract, but the process of negotiating the agreement may be determined by how wellindividual negotiators fulfill the obligations implicit in the relationships that exist betweenboth parties. When a high-context individual is confronted with a strong, well-reasonedargument, he may employ, what by U.S. standards would be a weaker counter argument ofpast problems or obligations. The use of a personal or emotional appeal based on current orpast relationships is less persuasive in the U.S. and Canada than it is in Latin America or Asia.

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A strong verbal argument is seen as persuasive in the United States, and precise information istransmitted in a concise, timely manner. When confronted with a strong argument orpresentation, a high-context person may use an indirect response to say “no.” These indirectresponses and understatements allow the person to save face. For U.S. negotiators, theinability to understand or read between the lines of an indirect “no” often results in anevaluation of the other person as insincere or evasive. To avoid open conflict, a high-contextperson may agree to something, but then not follow through. Remember that for high-contextindividuals, it is always easier to agree or to express words of goodwill and encouragementthan to disagree in public.

Bargaining

Approaches to bargaining when persuading and influencing others differ widely across cultures.Learning which strategy of logic, evidence and influence is effective in a particular culture, andhow to use it at the negotiation table, is essential for success. In the United States, the emphasisof sales and negotiation is on the bargaining and persuading phase of the process. One’sbehavior at the negotiating table can determine the success or failure of the negotiation.

Adapting and using effective communication skills is fundamental to presenting informationeffectively. In low-context cultures, persuasion strategies are laid out in precise arguments withsufficient supporting evidence to justify a conclusion. Much of a person’s success in the UnitedStates is due to her ability to present empirical data as objective evidence for effectivearguments. In high-context cultures, success can be found in a person’s ability to make anemotional appeal or in her ability to count on a personal relationship to persuade, the otherparty. This does not mean that a person from a high-context culture may not prepare andpresent a persuasive logical argument in a negotiation. Choosing the appropriate influencestrategy for a given situation and presenting it in a persuasive manner is the essence of asuccessful negotiation.

Two types of bargaining are:

Win-lose: concerned with gain or competition.Win-win: concerned with the exchange of information and collaboration.

The first type uses tactics that are aimed at gaining the upper hand, while the second uses aproblem-solving approach. Win-lose bargaining assumes that the negotiation is a competitionin which both sides attempt to align personal relationships and empirical data to obtain theirultimate objectives. Win-win bargaining assumes that the negotiation is a mutual endeavor inwhich both sides engage to arrive at a mutually satisfying arrangement.

The U.S. Approach to Win-Win Negotiations

The U.S. approach to win-win negotiations assumes a cooperative process aimed at creatingvalue by finding interests that both partners have in common. This entails separatingnegotiation issues from the relationship and looking at positions to find common ground.Areas of difference are identified and solutions sought. Bargaining ranges are identified and

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both upper and lower limits are set. Fallback positions are established, and alternatives areprovided to create value. A focus on common ground and mutual interests is used tostrengthen the overall relationship.

Once differences in position and interests have been identified, it is good to remember that thegreater the number of options or alternatives you have, the greater the range of outcomespossible. The overall goal of a win-win negotiation is to maximize the gains for both sides. Thebest approach is to start with the least contentious issues and establish small wins for both sides.This will leave more time for the most important issues in the negotiation. Remember thatbargaining is only one aspect of negotiating the deal and that it may occur throughout thenegotiation period. Also, bargaining involves more than dividing value between two parties.

A win-win approach to negotiating often assumes a level of trust that usually does not exist incross-cultural negotiations. A win-win scenario requires that there be reciprocity inconcessions and the desire to move the negotiation ahead quickly. In many situations,however, politics or bureaucracy may reduce the level of trust required to reach an agreement.Concessions may not be reciprocated, because hierarchy and high-context orientationsinfluence decision-making and slow the progress of the negotiation.

Setting a Realistic Bargaining Range

Negotiators in the United States and Canada often prepare for a negotiation by trying tofigure out what they would like to get and what is the least they would settle for, and thenfinding some realistic point in between to settle upon. The realistic point in between requireseach party to decide on a fallback position and a walk-away point. This can lead to a win-losementality or to adversarial, positional negotiations.

By focusing on what you want to get, without understanding the needs and wants of the otherparty, you will be unprepared to respond to their ideas and concerns in the negotiation. Thiswill prevent you from engaging in real problem-solving. For example, you may approach thenegotiation in a linear fashion, identifying those issues or differences in which the gap is thewidest and trying to bargain your way to a realistic midpoint. Although reaching consensus isimportant to the relationship between parties, it may lead to a less than satisfactory agreement.If you value something highly and the other party values it equally, you may decide to split thedifference on price or compromise on some aspect of quality or specifications. The bettersolution is to try and find ways of providing real value to the other party, at little or no cost toyou. Both sides are better off with such a solution and receive value in return.

A Clash of Cultural Orientations?

To illustrate how variously bargaining is regarded across different cultures we may examinethe contrast between Japanese and Saudi negotiating styles.

Bargaining in the Middle East is expected, and used, as a means of establishing a personalrelationship built on a mutual perception of value, honesty and trust. The process, or act, ofbargaining is therefore considered to be very important in and of itself. Thus, Saudis, forexample, will often open with a price much higher than the one that they would ultimately

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be willing to settle for. Conflict is inherent to the process and differences of opinion regardingvalue are expected. The Saudis expect to bargain their way to a final agreement, and this cantake a long period of time.

The Japanese, on the other hand, try to avoid conflict at all cost. All efforts are therefore madeto keep bargaining to an absolute minimum. In contrast to the Saudis, the Japanese present aprice that is very close to their actual asking price and that is the result of extensiveinformation-gathering and consensus-building within their team. They expect to shareinformation in the negotiation and persuade the other party that their position is reasonable.If they are the buyer, they do not expect to bargain at all. Japanese buyers expect Japanesesellers to understand their needs and propose a reasonable price. If they are the seller, theyexpect to have the buyer accept their price with as little bargaining as possible.

Given the different expectations for bargaining between Saudi and Japanese negotiators,substantial mistrust and misunderstandings may occur when negotiators from these twocultures gather around the negotiating table. When the Saudis open with a high first offer, theJapanese may feel that the Saudis are not serious in negotiating a deal. And when the Japaneseprovide a price that is the industry standard and refuse to bargain, the Saudis may feel that theJapanese are not serious. The differences in approach could lead to failure in the negotiation.

What is important to both parties? For the Saudis, it may be the need to develop a personaland business relationship through the act of bargaining. The Saudis will spend a lot of timebargaining, but this may be interspersed with small talk and rapport-building to establish thecredibility of both sides. For the Japanese, what is paramount is the need for both sides tounderstand their respective roles and responsibilities in the bargaining process. Understandingwhat influence strategies and bargaining tactics will work for both cultures improves thelikelihood of success.

Concessions and Compromise

Concessions and compromise do not come easily when negotiating internationally. Eachculture has different preferences for conceding, compromising and cooperating. Concessionsare often dependent on the influence and persuasion tactics used in the negotiation. If oneparty explores issues in a linear fashion, they are likely to make concessions on a point-by-point basis. If a more systemic approach is taken, all issues are considered at the same time andmay not be separated from one another. In this case, concessions may happen at the end ofthe negotiation, or not at all. How we communicate, address issues, give concessions, pursuecompromise and make decisions at or away from the negotiating table form the core of thenegotiation process.

In the United States and Canada, the process of conceding generally proceeds in a sequentialmanner in which both sides discuss each issue and propose concessions or compromises toreach a mutual decision. All issues are discussed and resolved one at a time, with theappropriate concessions and compromises. Concessions should be made at the table andresponded to by the other party with agreement or counteroffers. Not all concessions requirea quid pro quo, but a general sense of fairness is expected.

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In Japan, both parties strive to understand each other’s position and to agree on how to bestmeet the other party’s expectations. The goal is to continue discussing all ideas, proposals,opportunities and concerns while working toward mutual agreement. Concessions, if any, aremade at the end of the negotiation. The Japanese consider all of the issues, proposals andconcessions the other party is likely to make before finalizing an agreement. In Japan, thebuyer is in the superior position and will structure the negotiation. The buyer should considerthe needs of the seller and try not to take advantage of the seller’s lower position. There is anexpectation that, at the end of the negotiation, the seller will give something of value to thebuyer. Both parties strive to create an environment in which they can concede on issues andstill maintain “face.”

U.S. Americans tend to see the formal agreement or contract as the end result of a negotiation,whereas the Japanese or Chinese see it as the beginning of an adaptive process requiringchanges or adjustments as the environment or circumstances change. In some cases—in China,for example—the formal agreement expresses an ideal situation, and it is expected thatdeadlines and specifications will change with changing circumstances. U.S. Americans, andothers, who use concessions and compromise before the contract is signed, however, find itextremely difficult to make concessions or change the contract after it is signed. In othercultures, such as Russia and Mexico, compromise is taken as a loss of “face.” It is viewed as asign of failure and weakness or as evidence of faulty reasoning from your initial position.

When making concessions, do not make the first offer or accept the first offer made to you.If the other side makes a high initial demand, do not make a counterproposal. Be willing tolet the demand await further discussion. Make concessions slowly, and start with smallconcessions that cost you little but add value to the position of the other party. Tieconcessions together to get something in return. Defer concessions on important issues untillater in the negotiation. Do not feel the need to reciprocate all concessions given by the otherside. Also, do not follow a consistent pattern of concessions; this might allow yourcounterpart to predict how and when you will make concessions. At the end of thenegotiation, the side that gave fewer concessions usually has the more advantageousagreement. Waiting until the end of the negotiation to make concessions, however, may leadto feelings of mistrust or lowered satisfaction from the other party.

Speeding Up the Negotiation Process

Although U.S. negotiators may use concessions and compromise to speed up the negotiation,many cultures do not use this approach. Other ways of speeding up the negotiation processare as follows:

• Send information, such as company brochures and product specifications,before the meeting.

• Outline issues and concerns in advance.• Allow time for small talk and rapport-building.• Show interest in the other country, the other culture and the

other person.• Anticipate repetitive questioning.

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• If you have provided complete answers to questions, feel free to answerwith less detail when repeating responses.

• Use one team spokesperson and have her act as a facilitator or gatekeeperfor the team’s responses. Develop a process for determining who willrespond to which questions.

• Use breaks to check on progress and explore issues.• Establish informal channels of communication at the operational level.• Identify disagreements and sticking points between and after sessions.• Accept all offers for after-hours entertainment and meetings.• Attend all ceremonies and give appropriate gifts.• Send correspondence to and visit partners regularly.• Use recesses, informal talks, apologies or postponements to change the

general atmosphere or feelings of the other side.• Change the location of the discussion to create a good atmosphere.

Phase 6: Reaching Agreement

Identifying and Resolving Conflict

Before reaching agreement or getting a contract signed, you may find yourself in a situation inwhich a conflict or disagreement must be resolved. When you negotiate across cultures,conflicts are inevitable, and differences between two parties can be enormous. Resolvingconflicts—better yet, anticipating conflicts—is critical to success. Also important isunderstanding how another culture recognizes conflict and the associated behaviors inresolving that conflict.

For example, read the following dialogue between a Japanese and a U.S. American who arenegotiating a deal:

U.S.: What do you think of our proposal?J: Your proposal is of interest to us.U.S.: So what quantity of parts will you be buying in the first quarter of 2000?J: Yes. We have every intention of ordering parts in 2000.U.S.: Can I put you down for, let’s say, a 15 percent increase from last year?J: Yes, 15 percent may be a little difficult for us.

In this exchange, the Japanese bowed his head, shifted in his seat when the U.S. Americanasked him how much he would buy in the year 2000, and averted his eyes during subsequentresponses. For a fellow Japanese, these nonverbal behaviors would have indicated disagreementor a negative response.

When you believe that there is a conflict in a negotiation, the best response is to provide anoverview of the current situation as you perceive it. Provide additional information for further

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clarification, if necessary. Review the current business environment and the history of therelationship. Outline areas of common ground, as well as what you hope to achieve in thenegotiation. Outline what you see the other side trying to achieve in the negotiation. Showyour sincerity in wanting to resolve the conflict by stating your intentions or desired outcome.If the other side is reluctant to respond to your presentation of the conflict, ask them for theirunderstanding of the current situation. Be patient and persistent in trying to resolve the issue.Use small, incremental steps. Do not hurry to resolve the conflict with quick concessions orcompromises. A better approach may be to manipulate the context or location of thenegotiation. Take a break and talk with your counterpart informally over coffee or at dinner.In private, identify points of difference after again reviewing common ground or points ofagreement. If this is not possible, then try to introduce a third party who can mediate on yourbehalf. Finally, if you are unable to resolve the conflict with the negotiation team, escalate theconflict or issue to reach higher management.

Deadlocks

Conceptions of time are crucial during the agreement phase of the negotiation. More pressureis felt as deadlines approach and decisions still have to be made about the form of theagreement or contract. Issues of face loom large as needs are fulfilled. Deadlocks over majorareas of disagreement may either be resolved negatively (no agreement) or positively (majorimpediments are removed). Success will ultimately depend on both sides focusing on andaddressing the needs of the other side.

Breaking deadlocks is a key skill in international negotiation. Deadlocks can be broken bychanging the framework of the talks, raising issues to upper management or developingtransitional agreements. The two most common tactics used to break a deadlock or stalemateare compromise and coercion. Coercion may produce short-term benefits, but only at theexpense of longer-term resentment and damage to the overall relationship. To break thedeadlock, the pressure exerted by one side must be credible, appropriate, in proportion tothe issue being discussed and convincing to others and must lead to a mutually beneficialoutcome. However, deadlocks over principle beliefs, attitudes or values may prove difficultto negotiate.

Getting a Signed Contract

An executive at a U.S.-American computer firm tells the following story about his experienceregarding a contract with a Japanese supplier:

I was working with one of our Japanese suppliers to purchase U.S. $3 millionworth of test equipment for our new manufacturing facility. We discussed thematter together at great length in Tokyo and Dallas over a period of severalmonths. During our final meeting, we came up with what I thought was acommon understanding on pricing, delivery dates and specifications. Wesubmitted a lengthy contract in English outlining the rights andresponsibilities on both sides. For several weeks the Japanese sent numerousfaxes to Dallas asking many questions about certain standard clauses in the

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contract. As the deadline for the project grew near, we still hadn’t received asigned contract from the Japanese supplier. Two weeks before the first orderof equipment was supposed to arrive in Dallas, I called Tokyo to ask for asigned agreement. My Japanese counterpart told me, “Smith-san, weunderstand your situation and we agree to sign the contract. We will send itin a couple of days.” We received the test equipment on schedule but I neverdid receive a signed contract.

This executive’s experience is not uncommon. In many cultures around the world, the terms ofan agreement will be adhered to even if an official contract is never actually signed. Whennegotiating across culture it is therefore important to understand the preferred way of reachingagreement in the particular cultures in which one is working. Do both parties give a verbalagreement and shake hands on the deal, or do they send a letter of understanding that broadlyoutlines what was negotiated and understood by both parties? While contracts and agreementsare regulated by the laws and rules of both parties, cultural orientations can also affect howagreements are expressed. There may be cultural preferences in deciding what form anagreement should take, and how binding, specific or long it should be. In some cultures, thecontract may be a platform for developing further business relationships, or it may be thestarting point for an ongoing negotiation as circumstances change. In the followingparagraphs we outline how some other cultures approach contracts and agreements.

In the United States, the purpose of the negotiation is to work toward the goal of a signedcontract. This process is linear, and reaching agreement is expected to take a prescribed lengthof time. The contract is expected to detail the terms of the agreement, spelling out productspecifications, as well as rewards and punishments for compliance and noncompliance. Thecontract is viewed as providing security to all parties and is seen as a way of building trust.Since the roles and responsibilities of all parties are spelled out in detail, there is littleambiguity or change required after the contract is signed. In the United States, all parties areexpected to live up to the terms of the contract, and the agreement is not seen as a flexibledocument that can easily be changed. Commitment is measured by the ability of the otherparty to meet the terms of the contract. Living by the written terms of the agreement governspost-negotiation behavior in the United States.

In Mexico, the other party will respond to a clear, rational argument, but the ultimate decisionwill be based on whether they feel that you were simpatico (displaying a sense of honor ordignity) in the negotiation. Formal agreements in Mexico are often elaborate works ofeloquence and may represent expressions of an ideal situation rather than actual terms andconditions to be followed absolutely.

In Saudi Arabia, entry into the network of family and friends is the critical step in buildingtrust to reach a final agreement. A handshake will suffice, with a letter of agreement following.Even a cup of coffee or tea can indicate that an agreement has been reached. Specific detailswill follow the more general agreement of understanding.

In Japan, the development of a personal relationship may precede the formation of a businessrelationship. This requires an investment of time and resources before an agreement can be

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reached. International deals may result in a U.S.-type contract, whereas a domesticnegotiation may result in a letter of understanding. The Japanese word for contract, keiyaku,connotes a set of promises by both sides to work together.

In China, memorandums of understanding or letters of agreement are preferred overcontracts. For many Chinese, reaching an agreement is the signal that the “real” negotiationhas just begun. Your Chinese counterparts will therefore adhere to a written contract as bestthey can, but they may not feel bound by it.

In South Korea, contracts are adhered to as closely as possible, but Koreans may not feelbound by what is written in the agreement, especially if circumstances change or if they laterfeel cheated or legally trapped.

In Brazil, contracts are general in scope and terms are broad. This allows for flexibility incontinuing discussions on specific details, timing and legal responsibility. The contract, nomatter how detailed, is an expression of the principal guidelines for the business relationship.Detailed and lengthy U.S. contracts may seem overwhelming and can be perceived asdisplaying a lack of trust among the parties.

In Germany, contracts can be detailed, and they reflect the focus on technical expertise thatis present throughout the negotiation. Changes to a contract after signing are taken as anindication of poor preparation or lack of expertise.

In Russia, contracts are not held in high regard, and personal relationships go a long waytoward ensuring that the terms of an agreement are carried out. The status of legal contractsin Russia is questionable and should be thoroughly investigated.

As the preceding synopses demonstrate, different cultures may approach the agreement phaseof the negotiation process with different expectations. Understanding that contracts may notsignal the finality of a negotiation is a key step in securing the commitment you will need inorder to do business across cultures. Following is a series of questions every negotiator shouldask himself concerning his counterparts’ views of contracts and agreements:

• Is a contract or an agreement the end goal of your negotiation process?• What is the meaning of a contract or agreement in the other culture?• How are agreements reached?• How binding are agreements over time?• How specific or detailed should agreements be?• Are agreements written or verbal?• What penalties are incurred if the agreement is not honored?• How do you work toward a mutually beneficial agreement?• Have both parties clarified their expectations regarding the format

of the contract?• How do parties follow up on or show commitment to an agreement?

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Monitoring Agreements and Contracts

It is important to monitor agreements for compliance and to maintain the relationship thatwas established during the negotiation process. The specific monitoring activities arepredicated upon the nature of the agreement, your relationship, the past performance of theother party, the structure of your organization and the performance activities themselves.Cultures that require both a personal and business relationship have high expectations thatnegotiators and the personnel responsible for implementing the contract will maintain inclose communication.

Clerical personnel can, most likely, handle most routine communications. More complexmatters, however, will require input from lawyers, technical experts and top managers. Thefollowing techniques may be helpful in monitoring compliance. Your specific application ofthese techniques will vary from instance to instance, according to your relationship withyour counterpart.

Informal contacts: phone calls, letters and social contacts can serve to monitorcompliance; much like informal negotiating.

On-site reviews: while “inspection” may be a formidable term, an on-site “visit”may be acceptable.

Third-party channels: mutual contacts may be able to provide you with inside information.

Symbolic interactions: formal banquets and social events underscore sincerity anddemonstrate the importance of the relationship.

The Importance of Ceremonies and Gift-Giving

U. S. Americans may feel that ceremonies are time-consuming, expensive and unnecessary, butin Japan and China, for example, negotiators and key personnel see ceremonies as a ritualnecessary to finalize an agreement or contract. Signing ceremonies and elaborate receptionsor banquets to celebrate the signing are seen as extensions of the contract. Ceremonies andfollow-up activities focus awareness on the relationship, and U.S. Americans should expect toparticipate fully. If your CEO or top officers cannot attend the final ceremony, a letter ofappreciation should be sent and read during the ceremony. Group pictures should be taken tocommemorate the event.

Giving appropriate gifts to the other party, their top management and each member of theteam is also suggested. Gifts are taken as signs of gratitude and friendship, and are rituallyexchanged to bind relationships. Ideally, the gifts should be symbolic of the relationship, yourcompany or its products, or representative of your home country. While a single gift can begiven to a company, individual gifts can be given to each of the negotiation team members orcompany representatives who were involved in the ongoing discussions. Individuals who havebeen especially helpful, third parties and colleagues should be given a gift privately after the

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contract has been signed. Gifts should be of quality and wrapped appropriately. Rememberthat some cultures do not have the custom of opening presents in front of others; so do notinsist that the receiver open or unwrap your present when you give it. Conversely, you shouldfind out whether or not it is appropriate for you to open any present or gift offered to youduring the ceremony.

Ethics in Negotiation

How should you deal with the different ethical and legal requirements of foreign countries?What if the business practices of the host country require payments to facilitate a deal orpayments to a government official to obtain a permit? In such cases, one must weigh the needto do the “right thing” against the need to get the contract or to get the job done. You mustask yourself whether the action you are about to take is legal. If you are a U.S. resident, thismeans that you need to understand the Foreign Corrupt Practices Act (FCPA) enacted byCongress in 1977. Put simply, a U.S. company employee may not offer a payment, promiseof money, or something of value to another foreign official for the purpose of influencing anyact or decision that would assist the U.S. company in obtaining or retaining business. Inaddition, this offer to a government official cannot be used to direct business to any personor to assist the company in obtaining special preferential treatment, with the expectation ofreceiving a contract or other business operations in the foreign country.

Since the U.S.-American ethical standpoint often results in inappropriate business-culturalbehavior, and in many cases, lost business, we must analyze the situation on two levels. First,if a transaction does not violate the laws and regulations of the country, and it was made forreasonable expenses, such as travel related to the promotion of goods or services, then it doesnot violate the FCPA. Once you have established that the transaction does not violate theregulations of the FCPA, you must decide if the particular action is nevertheless morallyacceptable to you and your company.

When working in universalistic cultures, the choices are often easy, because transactions andbehaviors are clearly defined as being either right or wrong. When working in particularisticcultures, however, right is right or wrong, depending on the business context or situation.Issues are viewed as occurring in shades of gray, not in black and white. In these contexts, yourcorporate culture must foster a climate of integrity, and the company’s bylaws must clearlyoutline what does and does not constitute ethical behavior. Employees must exercisejudgment in determining how to employ their company’s ethical standards without beingjudgmental of the other culture or its values.

Phase 7: Follow-up and Maintaining Relationships

In many cultures, a written contract is not the end of the negotiation, but the beginning of alonger business relationship. Signing the contract does not necessarily conclude the sales ornegotiation transaction. Discussions may be reopened at any time and for any reason.Business relationships in high-context cultures often involve a set of obligations and dutiesthat go beyond the business deal. Maintaining personal and business relationships is essentialfor long-term success.

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U.S. Americans see maintaining the business relationship as a cost-effective way to maintain acompetitive advantage or the security of goods or services. The assumption, however, is thata business relationship does not require a personal relationship between two parties. The termsof the contract are viewed as governing the form of business between two companies. Theagreement takes precedence over personal relationships. Although personal relationships mayoccur as a result of long-term business interactions, very little effort may be devoted tomaintaining the relationship over time. U.S. companies find it difficult to maintain negotiationteams, groups or individuals long after the contract is signed. Turnover, new assignments andthe next deal often preclude the time or resources to follow-up on previously establishedrelationships. Other cultures, however, will often maintain the same negotiating team orpersonnel when negotiating future contracts or agreements. When negotiating with high-context and being cultures, U.S. Americans should use the same team members for newcontracts, if possible, in order to take advantage of established relationships.

Maintaining the business relationship requires periodic face-to-face meetings, regulartelephone calls or written correspondence, including letters, faxes and e-mail messages. Bothformal and informal exchanges are recommended to maintain the network after the deal ismade. Socializing on a periodic basis will create opportunities to listen for relevantinformation, to discover unmet expectations, or to identify future problems. Early detection ofpotential problems allows your company or group to approach problem-solving in a culturallyappropriate manner. This may well increase the respect, status and power of the other party,which comes with the requisite obligations. The process of maintaining the relationship canhave significant, long-term advantages to both parties over time.

Communicating Using Distance Technology

U.S. negotiators with limited budgets and little experience in traveling and negotiating abroadmay try to initiate, build and maintain relationships through electronic means. The ease thattechnology brings to communication across geographic distances and time zones, however,can actually become a source of frustration and difficulty. Using e-mail, voice mail andteleconferencing increases the potential for misunderstanding by ignoring cultural preferencesfor communication or by making the need for cultural adjustment less obvious. For example,e-mail and groupware in the United States is seen as a way of lowering hierarchy andorganizational levels through access to information. This may not be true for cultures in whichhierarchy is still important, as in Germany or Mexico.

In low-context cultures, such as the United States and Canada, e-mail and videoconferencingare frequently accepted as efficient substitutes for face-to-face meetings. In high-contextcultures, such as Japan and France, a higher value is placed on face-to-face interactions andreading the nonverbals of the person with whom you are communicating during thenegotiation. Since 75 percent of all communication is nonverbal, meaning can certainly be lostwhen using a lower-context form of communication technology, such e-mail.

As a rule, the better your rapport with a person or the longer the relationship has existedbetween two parties, the more likely it will be that a lower context of communication can besuccessful. When negotiating with an individual or party from a high-context culture, it is best

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to arrange a face-to-face meeting early on and to establish sufficient rapport before moving toa lower-context form of communication.

In general, a regular pattern of communication, making the most of multiple technologiesranging from videoconferencing, to telephone, to faxes, to e-mail should be establishedbetween the two parties negotiating. After a face-to-face meeting, a fax should be used tosummarize information shared or decisions made. A telephone call could follow the fax toensure receipt and to give the other party a chance to respond. Knowing the communicationpreferences of the other party is crucial for successful negotiations. Remember that theultimate purpose of such communication is to build and enhance relationships, not to replacethem with electronic technology.

The following questions should be asked when considering a communications strategy for usein an international negotiation:

• What technology can be used on a regular basis to maintain therelationship before, during and after the negotiation?

• Do both parties have equal access to comparable communication technology?

• How does each culture prefer to communicate, face-to-face or by other means?

• How well do the people who are communicating know each other?• Do the two parties have a rapport with each other?• How will important information be communicated between parties?• How can technology be used to build a stronger business relationship?• What language will be used in both written and verbal messages?• What are the most convenient times for all parties to communicate?• Has a communication format or preference been identified for

everyone to use?

Conclusion

Together, the Cultural Orientations Model™ and the seven-phase model of negotiationsprovide an comprehensive framework for analyzing and understanding how negotiationsoccur across cultures.

All negotiators need to recognize the potential for dissonance and misunderstanding innegotiations across cultures. There is a need to synchronize communication and negotiationstrategies within the negotiating team. Although one may argue that the negotiation processis universal across all cultures, we must not dismiss or minimize the impact of culturaldifferences or orientations.

Preparation is the key factor in preparing to negotiate successfully across cultures. Adaptingyour own approach to a specific cultural style of negotiating–– and understanding how culture

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affects the seven phases of the negotiation process and the specific strategies or tactics to beemployed––is crucial for success.

The ongoing study of international negotiations provides persuasive evidence of thecontinued impact of cultural differences on negotiation, goals and behaviors. The challenge isto keep open channels of communication to allow both sides to explore opportunities andalternatives so that mutual agreements can be reached.

Following is a summary of critical questions to ask yourself before attempting to negotiateacross cultures:

• Does the way in which the other party communicates, makes decisionsand solves problems fundamentally differ from our way?

• What tactics, strategies and behaviors will the other party use in the negotiation?

• What knowledge, experience and skills do I need to conduct business inthat culture?

• How do I build trust and rapport with the other party?• What influence and persuasion strategies can I use to reach an agreement?• How do we handle issues of culture, distance and time in the

negotiation process?• How do we establish a business relationship? A personal relationship?• How do we assess the other party’s expectations, needs, wants and issues?• What is important to the other party in terms of their goals, constraints,

barriers and requirements?• How should we present and ask for information at the negotiation table?

Away from the table?• How important are hierarchy, power, position and authority to the

other party?• How many team members should we have, and what qualities should each

team member possess?

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1. Environment:How individuals view andrelate to the people, objectsand issues in their sphere of influence

2. Time: How individuals perceive thenature of time and its use

3. Action:How individuals conceptualize actionsand interactions

4. Communication: How individuals express themselves

5. Space:How individuals demarcate theirphysical and psychological space

6. Power:How individuals view differential power relationships

7. Individualism:How individuals define their identity

8. Competitiveness:How individuals are motivated

9. Structure:How individuals approach change, risk, ambiguity and uncertainty

10. Thinking:How individuals conceptualize

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COMMUNICATION

SPACE

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Cultural Orientations: Summary


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Brake, Terence, Danielle Medina Walker, and Thomas Walker. Doing Business Internationally:The Guide to Cross-Cultural Success. Princeton, NJ: Richard D. Irwin, 1995.

Casse, Pierre, and Surinder Deal. Managing Intercultural Negotiations. Yarmouth, ME: Intercultural Press, 1985.

Copeland, Lennie, and Lewis Griggs. Going International: How to Make Friends and Deal Effectivelyin the Global Marketplace. New York: Random House, 1985.

Fisher, Roger, and William Ury. Getting to Yes. Boston: Houghton Mifflin, 1983.

Foster, Dean Allen. Bargaining Across Borders: How to Negotiate Business Successfully Anywherein the World. New York: McGraw Hill, 1992.

Graham, John L., and Yoshihiro Sano. Smart Bargaining: Doing Business with the Japanese.Cambridge, MA: Ballinger Publishing Company, 1984.

Griffin, Trenholme J., and Russell W. Daggatt. The Global Negotiator: Building Strong BusinessRelationships Anywhere in the World. New York: Harper Business, 1990.

Hendon, Donald W., and Rebecca A. Hendon. World-Class Negotiating: Dealmaking in the Global Marketplace. New York: John Wiley & Sons, Inc., 1990.

March, Robert M. Honoring the Customer: Marketing and Selling to the Japanese. New York: John Wiley & Sons, Inc., 1991.

March, Robert M. The Japanese Negotiator: Subtlety and Strategy Beyond Western Logic. Tokyo:Kodansha International, 1988.

Miyashita, Kenichi, and David Russell. Keiretsu: Inside the Hidden Japanese Conglomerates. New York: McGraw Hill, 1994.


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Moran, Robert T., and William G. Stripp. Dynamics of Successful International Business Negotiations.Houston: Gulf Publishing Company, 1991.

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Schuster, Camille, and Michael Copeland. Global Business: Planning for Sales and Negotiations.Fort Worth, TX: Dryden Press, 1996.

Tung, Rosalie L. Business Negotiations with the Japanese. Lexington, MD: Lexington Books, 1984.


agreement, 2-3, 6, 9, 11-15, 18-19, 22-23, 26, 29, 32-33, 36-37, 43, 48, 51-53, 58, 60-67, 69, 71

bargaining, 1, 3, 18, 21-22, 29, 32, 34, 47, 54, 56, 59-61, 75

Casse, Pierre, 3compromise, 11, 14, 24, 32, 51, 60-62, 64concessions, 3, 20, 27, 32, 48, 51, 60-62, 64conflict, 2-3, 12, 14, 17-19, 21, 26, 38, 44-45, 48, 51,

59, 61, 63-64consensus, 11-12, 21-23, 36-37, 41, 47, 51, 61continua/continuum, viicross-cultural competence, iv-vicultural orientations, 1-2, 4, 13-14, 24, 30, 32, 35, 37,

49, 50, 52, 56, 60, 65, 74action, vii, 15-16, 18, 22-24, 55, 73

being, 16-17, 24-25, 29, 42doing, 16-17, 24, 29, 43

communication, vii, 2-3, 17-19, 26-27, 38-39, 53, 56-57, 59, 69-70, 73

direct, 17, 26expressive, 18, 51, 57formal, 2, 17, 31, 42, 52, 57high-context, 17-18, 26, 45, 51-54, 58-60, 68-69indirect, 2, 17, 26, 59informal, 18, 24, 26, 31, 37, 42, 52, 67instrumental, 19low-context, 17-18, 39, 51-54, 58-59, 69

competitiveness, vii, 22, 24-25, 73competitive, iii, 22, 24-25, 32, 57cooperative, 22, 25, 32, 59

environment, vii, 14-15, 24-25, 39, 48-50, 53, 62, 64, 73

constraint, 14-15control, 14-15, 24-25, 39, 54harmony, 14, 24-25, 41

individualism, vii, 20, 24-25, 73collectivistic, 20-21, 24individualistic, 20-21, 24particularistic, 21, 68universalistic, 21, 68

power, vii, 20, 36, 42, 48, 56-57, 69, 71, 73equality, 20-21hierarchy, 17, 20, 40-42, 47, 60, 69, 71

space, vii, 14, 19, 20, 73private, 17, 19, 26, 64

public, 17, 19, 44, 47, 57, 59structure, vii, 22, 25, 56, 67, 73

flexibility, 16, 18, 20, 23, 25order, 22-23, 25

thinking, vii, 23, 26, 54, 56, 73deductive, 23, 52, 58inductive, 23, 52, 58linear, 23, 26, 52, 57-58, 60-61, 65systemic, 24, 26, 52, 58, 61

time, vii, 2, 14-16, 25-26, 29, 42-45, 56, 73fixed, vii, 15, 25-26fluid, vii, 15, 41-42, 44future, 16past, 16present, 16, 44

Cultural Orientations Model (COM), vi-vii, 2culture, iii-vii, 1-5, 13, 25-27, 30-31, 38, 45-48, 51, 54,

57-59, 61, 63, 65-66, 68-71Deal, Surinder, 3decision-making, vii, 11-12, 16, 22-23, 27, 32, 38, 40-

42, 49-50, 56, 60e-mail, 33, 39, 45, 69-70Equal Dignity Rule, 36ethics, 21, 68fax, 33, 70FCPA, 68fighting, 57generalizations, 26-27, 45globalization, 1guanxi, 40-41keiyaku, 66kieretsu, 10letters, 66-67, 69management, iv, vii, 5-6, 8, 10-13, 15, 35, 37, 64, 67managers, iii, 6, 10-13, 20, 25-26, 46, 58, 67monochronic, 15multicultural, iii, 53neg, 2negotiation, 1-4, 6-39, 43-44, 47-48, 50-59, 61-63, 66-

70across cultures, 1-3, 26-27, 33, 35, 39, 45, 50, 53,

63, 70-71behavior, 1-5, 14, 17-18, 21, 24, 27, 50, 54, 59, 65, 68defined, 2, 21-22, 38, 43

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network, 2-3, 5, 8, 10, 16-17, 29-30, 32-33, 39-43, 45,47, 65, 69

approach, 1, 30, 39entry, 29-30, 39-44, 65

nonverbal communication, 54onsen, 12orientation, iv, viiotium, 2persuading, i, 29, 32, 56-57, 59phone, 7, 67polychronic, 15presentation, 12-13, 18, 29, 31, 33, 47, 52-53, 57, 59,

64problem-solving, 14-17, 27, 31-32, 47, 51, 59-60, 69rapport, 16, 19, 25, 31, 37, 44-47, 51, 53, 56-57, 61-62,

69-71relationships, 1-3, 10, 15-18, 21-22, 29-32, 38, 40-47,

51, 53, 57-59, 65-69business relationships, 2, 29, 31, 45-47, 51, 57, 65,

68, 75maintaining relationships, 29, 32, 68personal relationships, 16-17, 31, 38, 40, 42-47, 51,

58-59, 66, 69resolution, 38saving face, 18, 57shukko, 10stereotypes, 26-27tactics, vii, 17-18, 23, 27, 32, 34-35, 51-52, 58-59, 61,

64, 71team, 6-14, 16-18, 20-27, 30, 35-39, 44, 47-49, 53, 55,

61, 63-64, 67, 69, 71team selection, 36-37

teamwork, 22, 54

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