negotiation styles hofstede and e&w journal marketing[sav lecture b]
TRANSCRIPT
TUNGHAI UNIVERSITYDepartment of International Business - Taichung
Western Approaches
East-West Negotiation Styles
East vs. West Styles: Hofstede 1991
Hofstede’s E-W Research
• Power Distance (respect for authority)
• Collectivist/Individualist (concern for group)
• Masculinity/Femininity (assertiveness/competitiveness)
• Uncertainty Avoidance (comfort in unstructured situations)
• Time Orientation (short versus long term outlook)
Notable Cultural Differences & Negotiation Process
Expectations• Individualism & Power Distance
– Eastern: Group based & clear hierarchical decision making structure.
– Western: More individualistic, non-structured decision making.
• Long-Term Orientation– Eastern: Patient but persistent, willing to re-negotiate
contracts to achieve long-term objectives.– Western: Time is money and opportunity lost if not
implemented according to plan. Success measured in quarters (earnings reports), not decades (5 yr planning cycles).
Western Approaches to Negotiation
• It is more common for a negotiation to be considered a contract versus an ongoing relationship– “It’s only business”
• Assume that the deal will result in a contract that will be adhered to.– Contract guides the relationship.– Law enforces the contract (third party/entity)
Communication Styles
• High-Context Asian Cultures– Information transmitted via multiple methods
(words, symbols, rituals, practice)
– Unspoken, but clearly transmitted/understood.
• Low-Context Western Cultures– More direct control of explicit information
transmission and distribution (value).– Individuals control information (value) and
expect to use this for an advantage, to excerpt power, to be rewarded for their unique effort.
Western Focus of Negotiations
1. Making a sale/deal – product, process, service
2. Procedural Orientation: Sequential– New sale, re-order, change order– Sellers influence buyer based on current status of
sale, features & benefits of the sale.– ROI, savings, efficiency -- synergies, opportunity
3. Outcome:– Verbal agreement
contract
compliance.
Western Tools for Negotiating
• Large Sales:– RFI, RFQ, RFP (Request for Information /
Proposal)– Size: 5-500 pages, 10-60 day response, legal
binding– Presentation, Modification, Negotiation, Contract
phases
• Joint Ventures:– Memorandum of Understanding (MOU)– Memorandum of Intent (MOI)– Shareholder Agreement
Template: Shareholder Agreement (ITC)
37 Pages - Outline to be completed
Definitions of:
Purpose
Representatives
Liability
Investment/Profits
Contingencies:
Hardship
Death of a party
Relief from performance
Liability for early withdrawal
Resolution of disputes
Applicable law
Ancillary Agreements: IP / Know How /
Perceived advantage:
• He who has the pen, controls the negotiation outcome….
– Use who’s draft copy?– Establishes an anchor (ch. 2).
Questions?
Group Discussion
• How many have negotiated with Westerner’s? What was it for?
• What was the experience like?– What do you remember?– What did you like / dislike?– What did you learn?
Summary
• Western negotiation models are typically based more on transactions…– Technical process (stages)– Technical analysis (features, benefits)– Predictable
• An objective Economic Exchange…(ROI)