Cross-Cultural Negotiation

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Course: Negotiation & Diplomacy in International Business

Minhaz Ahmed
MBA in International Business
University of Dhaka

November 2010

Table of Content

Title | Page No.|
Introduction| 1|
Definition: Negotiation & Business Negotiation| 2|
Concept of Cross-cultural Negotiation| 3-4|
Influence of Culture on Cross-cultural Negotiation | 5|
1. Cultural Influence on Negotiation Outcome| 6|
2. Cultural Influence on the Behavior of Negotiator| 7| 3. Cultural Influence on Negotiation Strategy| 7-8|
Why Culture affects Negotiation: Cultural Dimensions | 9-11| Cross-cultural Negotiation Process | 12|
Problems in Cross-cultural Negotiation | 13|
Managing Cross-cultural Negotiation successfully | 14-15| Cross-cultural Negotiation Styles: Comparative Analysis| 15-16| Recommendations & Conclusion| 17|
Bibliography| 18|

* Introduction
Home (HQ)

Host Country
Firm Negotiations
Stakeholders in Cross Cultural Negotiations

HQ EmployeesInvestors Host Govt.
SuppliersAlliance Partners Distributors
Home Govt.Contractors Expatriate Employee

Home ConsumersAll Citizens Host Local Employee Special Interest Groups Host Consumers

Today, stakeholders of any organization in any country of the world could be from another culture. Stakeholders include customers, competitors, shareholders and employees. If a company understands its stakeholders, it is easier to server them and to make the organization more successful. Cross-cultural encounters have become more frequent where both people and governments are being pushed to confront and accommodate cultural & ethnic diversity. In other words, countries can no longer maintain independence from an ever growing economy. Francesco & Gold (1998) say that due to improved communication technology, people and organizations are more easily accessible and the implication for business is that managers understand the culture. This means that managers from one country will often be conducting business or sitting at negotiating tables with managers from other nations and countries. According to Czinkota and Ronkainen (1998), culture is one of the most challenging & complex elements of the international business negotiations. In fact, in today’s global business environment negotiation across country & culture has become a popular area of study. Conducting business and negotiating in one’s own country can be complicated tasks but these tasks are far more complex when they are conducted across cultures (Rodriguez, 2001). This is because cultural values can influence international business negotiations in significant and unexpected ways from the first to the last stage of a negotiation. This report focuses on the impact of culture and various factors that influence international negotiation. Besides, different stages and the process of international negotiation along with different negotiation styles that vary across culture and how to avoid pitfalls in cross-cultural negotiation have been discussed.
* Definition: Negotiation & Business negotiation
Simply, negotiation is the process by which at least two parties try to reach an agreement on matters of mutual interest. Strauss (1978) defines negotiation as a possible means of getting things accomplished when parties need to deal with each other to get those things done. The social psychologists consider negotiation as a preparation process, through which two or more parties, consisting of individuals, groups or other social entities, together prepares potential future agreements. It is the process by which two parties are trying to get the best deal possible from one another. Whether the negotiation is carried out in a friendly or confrontational atmosphere, each party is always trying to take advantage...
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