The most difficult aspect of international business negotiation is the actual conduct of the face to face meeting. Assuming that the best representatives have been chosen and assuming those representatives are well prepared and that situational factors have been manipulated in one’s favour, things can still go sour at the negotiation table. Obviously if these other preliminaries have not been managed properly things will go wrong during the meeting. Even with great care and attention to preliminary details. Managing the dynamics of the negotiation process is almost always the greatest challenge facing Americans seeking to do businesses in other countries.
Going into a business negotiation most people have expectations about the proper or normal process of such meetings. Based on these expectations, progress is measured and appropriate bargaining strategies are selected. That is, things may be done differently in the latter stages of a negotiation than they were in the earlier. Higher risk strategies may be employed to conclude talks — as in the final two minutes of a close soccer match. But all such decisions about strategy are made relative to perceptions of progress through an expected course of events.
Differences in the expectations held by parties from different cultures are one of the major difficulties in any international business negotiation. Before these differences are discussed however, it is important to point out similarities. Every where around the world we have found that business negotiations proceeds through four stages:
1) Non task sounding
2) Task related exchange of information
4) Concession and agreement.
The first stage, non-task sounding, includes all those activities that might be described as establishing a rapport or getting to know one another but it does not include information related to the business of the meeting. The information exchanged in the second stage of business negotiations regards the parties’ needs and preferences. The third stage persuasion, involves the parties, attempts to modify one another‘s needs and preferences through the use of various persuasive tactics. The final stage of business negotiations involves the consummation of an agreement which is often the summation of a series of concessions or smaller agreements.
Despite the consistency of this process across diverse cultures, the content and duration of the four stages differs substantially. For example exhibit details procedural differences in Japan and the United States as well as differences in language, nonverbal behaviour and values.
Summary of Japanese and American Business negotiators styles
Most Japanese executives understand English, although interpreters are often used.
Americans have less time to formulate answers and observe Japanese nonverbal responses because of a lack of knowledge of Japanese.
The Japanese interpersonal communication style includes: less eye contact, fewer negative facial expressions and more periods of silence
American business people tend to fill silent periods with arguments or concessions.
Indirectness and face saving are important. Vertical buyer / seller relationships with sellers depending on goodwill of buyers is typical.
Speaking one’s mind is important Buyer/ seller relationships are horizontal;
Four stages of Business negotiations:
Non-task sounding: Considerable time and expense devoted to such efforts is the practice in Japan.
Task related exchange of information: This is the most important step- high first offers with long explanations and in depth clarifications.
Persuasion: Persuasion is accomplished primarily behind the scenes. Vertical status relations dictate bargaining outcomes
Concession and agreement: Concessions are made only towards the end of negotiators holistic approach to decision making. Progress is difficult to measure for Americans.
Non-task sounding: Very short periods are typical.
Task related exchange of information: Information is given briefly and directly, fair first offers are more typical.
Persuasion: The most important step: Minds are changed at the negotiation table and aggressive persuasive tactics are often used.
Concession and agreement: concessions and communication are made throughout a sequential approach to decision making.
Source: International Marketing