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Cross-Cultural Business Negotiations

Essay by   •  August 20, 2011  •  Essay  •  1,084 Words (5 Pages)  •  2,974 Views

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A company wants to buy $30 million in materials and services from suppliers in China, Japan, and South Korea. It has been suggested that the company use an approach to the business negotiations that provides a win-win for both parties. Management was also told it may be beneficial to know the background of the Asian negotiator and that they should use a "middleman" to help them.

There are many issues that must be considered before entering into business negotiations with a company that hails from a different culture. In addition to the price and terms of the contract, the etiquette and social customs of the country in question, must be considered. Such variables as language and beliefs can also play into the successful completion of negotiations. Because individual differences exist in all cultures, it is wise to research the negotiating styles of countries in which you plan to conduct business (Chaney & Martin, 2011 pg. 206).

The differences in negotiation styles between the countries in question are subtle, as Eastern customs are less direct and to the point. The Chinese view business relations as long term. They will smile and entertain when they agree with the progress and they will show no emotion or stall negotiations when they disagree. The Japanese use subtle ways to communicate. You need to read between the lines and you may have to ask a lot of questions to be sure you are aware of the true intention of the communication. Silence is an important aspect of Japanese nonverbal communication and should not be interrupted (Chaney & Martin, 2011 pg. 223). Conversely, the South Koreans use silence as a means to communicate they do not understand what is being said and it may be best to ask if additional information is needed or to simply rephrase the statement. The Koreans usually start from an extreme position, but are willing to negotiate to ensure both parties save face, so be sure and leave room for these compromises.

Each country has its own view of what entering into a contract means. In his video titled, "Chinese Glasses: Chinese Ideas of Contract," Chinese business trainer/consultant Greg Bissky believes the Chinese view a contract as 'a place to start.' He goes onto say, "when you think of Chinese business relationships, do not think contract....think marriage." (projectpandaexpress.blogspot.com). As for them, the relationship is long term and mutually beneficial. The Japanese perform the negotiating long before they sit down at the bargaining table with you. They reach an agreement amongst themselves through persuasive appeals with members from both sides at the golf course, during dinner at the restaurant or over drinks at the bar. They view the negotiating table as mere ritual, rather than a place to swap offers or change one another's mind. The South Korean society places emphasis on harmony and are rank and status conscious, you should try and have members of your negotiating team mirror the other side in terms of rank. Their logical orientation is more cyclical in nature, allowing them to discuss items out of sequence. Negotiations will stress logic and the profit structure of the deal (Chaney & Martin, 2011 pg. 250).

In some countries, the place where the negotiations are held is very important. To begin negotiations with an Asian counterpart, plan the initial meeting on their turf to insure their comfort. Be sure and include the top executives in this meet-and-greet, which will convey the importance of the relationship.

The steps involved with the negotiating process, as they pertain to these three countries, begin with the preparation and site selection. When possible, you should try consulting with someone who has lived or worked in the target country. Next, select a team that includes someone that has spent time in, or is familiar with the target culture. If you have do not have someone on the team that is fluent in the language, an interpreter will be necessary.

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