Problems that come up during international business negotiations

Cross cultural negotiation example

Also, the importance of involving bicultural locals can't be overstated. The partnership intensified after the government sold Rover to British Aerospace BAe , but as Rover continued to lose money, BAe decided to discard the relationship, abruptly selling Rover to BMW through a secretive deal that caught Honda completely unawares. Also, Americans can't measure progress in the talks and tend to give things away when the other side is actually about ready to settle. Does it impact profits? For example, Americans can't keep their mouths shut during Japanese silent periods. The two ordered their subordinates to reach an agreement, and the Oxy—CNCDC project became a highly visible test case. Americans get angry when a Chinese partner brings up price for the third time. Outsiders need to understand these webs and factor them into their negotiating approach. Speaking the languages of your customers is key, yet Americans are lousy at languages. They will usually welcome your interest, and help the research process. Be aware of how others may perceive your culture. A final note on identifying decision rights: Even the experts may stumble over their assumptions. Negotiation Strategy 3.

Even seasoned executives often fail to adapt their approaches to those different processes, with costly consequences. Each time, however, the Japanese company resumed negotiations with a stronger consensus on the central role of the deal to its long-term global strategy.

In short, successful cross-border negotiators begin by discarding home-market presumptions and developing a clear map of the players who are likely to influence the formal and informal decision process.

cross cultural negotiations in international business

Try to see how your behavior, attitudes, norms, and values appear to your foreign supplier. For instance, are cultural differences with potential Cuban partners likely to be a more important issue soon?

Problems that come up during international business negotiations

But along with assessing the person across the table is figuring out the intricacies of the larger organization behind her. The partnership intensified after the government sold Rover to British Aerospace BAe , but as Rover continued to lose money, BAe decided to discard the relationship, abruptly selling Rover to BMW through a secretive deal that caught Honda completely unawares. For example, when Honda invested heavily in an extensive relationship with British automaker Rover, workers and managers at the two companies developed very positive working relationships for more than a decade. The bottom line: Understanding both formal decision rights and cultural assumptions in less familiar settings can be vital. Brett, Negotiating Globally Jossey-Bass, While national culture can tell you a lot about the person sitting across the table from you, every individual represents a number of cultures, each of which can affect negotiation style. Constantly search for ways to bridge that culture gap. A version of this article appeared in the March issue of Harvard Business Review.

Deng, for his part, was anxious to show the world that his market reforms were transforming China into an economy ripe for investment. While many Americans may view the hiring of relatives as dubious nepotism, Lebanese counterparts may consider the practice to be necessary to securing trustworthy, loyal, and long-term employees.

international negotiation

In one case, a U.

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