Five

What are the five stages in the negotiation process? Explain each of them. Your response should be at least 200 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.

Herdesky, H. (2011). International management: Managing across the borders and cultures. (7 ed., pp. 152-157). Upper Saddle River: The Pearson Education Company.

(Herdesky, 2011)

l30Put2.TheCulturalContextofClobalManagement

managelshavelearnedthatcultuleandcommunicationareinextricablylinkedandthatthey
shouid prepare themselves u””orolngtf.

Most wiltr also suggest that you
carefully watch

and

Iisten to irow your hosts are to**unf,oting
and to follow their lead’

e.ults{rai Veriahles in the Coxmrnunieation
Frelcess

on a different level, it is also useful to be aware
of cultural variables that can affect the cotn-

rnunication pfocess uy innu”n”ing a person’s fer”eptions;
r:T: of these variables have been

identified by Samovar una
porr”. ind hi.cu…d’U’ fil*it and Moran’,and others’I7 These vari-

ables are as follows: utiiioO”r, social organi
zatioi,thought patterns, roles, language

(spoken or

written), nonverbal communication
(including kinesic behavior’ proxemics’ paralanguage’

and

object language), and time. Although these
variables are discussed separately in this text’

their

effects are interdep”nJ*n, and iiseparable-or,
as Hecht, Andersen’ and Ribeau put 1t’

..Encoders and decoders process nonverbal “u”,
u,”u.onceptual, multichanneled gestalt.”18

AttitutlesWeallknowthatourattitudesunderliethewaywebehaveandcommunicate
and the way we int”rpret messages from others’

Ethnocentric attitudes are a particular source

noise in cross-culturai-“o**rlni”ution. In the
incident described in Exhibit 4-2′ both

the

American ancl the creek-are clearly attempting
to interpret anci convey meaning based

on their

own experien””, or *ruf lind of transaction. rnl e*”rican
is probably guilty of stereotyping the

Greek employee by quickly jumping to the “on”futlon
that he is unwilling to take responsibility

for the task and the scheduling’

Thisproblem,stereotyping’occurswhenapersonassulnesthateverymemberofasociety
or subculture has the ,u*” “-hiuru”teristics

or traits’ Stereotyping is a common cause
of misunder-

standing in interculturui .o*runiration. It i, * uruirrury ,’hz{,
andoften destructive way to find

out about people. Astute managers * u*ur” oi tir” oung”tr
of cultural stereotyping and deal

with each person as an individuut *;tt’ whom they
may form a unique relationship’

Sacialorganizationourperceptionscanbeinfluencedbydifferencesinvalues,approach.
or priorities relative to the kind of social

organi’ution* to which we belong’ These
organizations

maybebasedon”””‘,”””,l””,tribe,orrelgiousSect,ortheymayconsistofthemembersof

certain profession. g-“rpi”r ql such organlutio* i””ruoe

the Academy of Management or the

United Auto Workers (UAW)””

ThoughtPatternsThelogicalprogressionofreasoningvarieswidelyaroundtheworld
andgreatlyaffectsthecomrnunicationprocess.Managerscannotassumethatothersusethe
same riasoning processes, as illustrated

uy trre e”p*ri”nie of a canadian expatriate
in Thailand

White in Ttmiland ct Cailadian expatriate’s
car wos hit by a Thai ntototist who had

crossed ou”, tnr’-aouite titrc whii porrir[ orrotlrer vehicle’.Afier failing
to establish

that the fautt toy *iri rn, Tttai clrivet: thevanadianflctgged
dou,n a policetnan’ Afier

several ndttates of seentittgly futite cliscussion,
the caiadian pointed out the double

lire in the *iaaii “i
rn” riart”ancl asked the policennrt directll’, .”what

do these lines

sigttify? ” fn, p”oti”o*rt replierl’ “They iniicate
the center of the road and ctrc therc

solcattestablislljttsthowfarthea’ccidentisfromthatpoint.,,TheCana.dianwgs
silent. It lrud never occurred to him that the

doible line might not t?Lean “no passing

allowecl’2s

IntheExhibit4-2scenario,perhapstheAmericandidnotreal\zethattheGreekemployee
had a different rationale for his time estimate

for the job- Because the Greek was not
used

havingtoestimateschedules,hejusttookagu”s,,wtrlctrtrefelthehadbeenforcedtodo.

Roles Societies differ considerably in their
perceptions of

1
manager’s role’ Much

of the

difference is artribu;i; ro their p”r””piion, oi wtro
strouto make the decisions and who

responsibility ro, *trui. In the Exhibit 4-2 example,
the American.assumes that his role as

man-

ager is to delegate resfonsibility, to foster
autonomy, ancl to practice participative

management’

He prescribe* ,t,” ,oi”‘or the employee *ith;;;;t”;onsideration
of whether the empioyee wi

unclerstand that role. The Greek’s fi’ame
of .”ftt”nt” leads him to think that the manager is

the

boss and should give the order about when
to have the job completed’ He interprets the

t
i
f
:
$

i
,i

i
I

:
‘.:

i
i
r1i

:1:

:.t

Chapter 4 ‘ Communicating Across Cultures 131

American,sbehaviorasbreakingthatframeofreference,andthereforehefeelsthattheb”::^i
,.stupid and incompe,”nr io. gi;ing t im rhe wrong

order and lor 1ot
recognizing and apprect-

ating his accomplishm”n,. ittJ*u,iug”r si,outO ftui”
considered what behaviors Greek

workers

would expect of him unJ in”n either should have
played that role or discussed the situation

care-

fully, in a training mode’

Langr”iageSpokenorwrittenlanguage,ofcourse,isafrequentcauseofmiscommunl-
cation, stemming tiom a person,s inabiiity to speak

the locai language, a poor ot too-literal trans-

lation, a speaker,s failure’to explain idioms, o,
u f”rron missing the.meaning conveyed

through

body language or cel.tain symbois. Even among “ount
i”‘ that share the same language’ problems

can arise from the souttetie, and nuances inherent
in the use ofthe language’ as noted by George

Bernard Shaw: “Britain and America are two nations
separated by a common language'” This

problem can exist even within the same country among
sutcultures or subgroups’21

Many international executives tell *ori”, uuorr”tost business
deals or lost sales beca

use of

communication blundem:

WhenPepsiCola,sslogatt,,ConteAlit,ewithPepsi,,wcsintrodttcedinGermany,the
co’?lparlyleartleeltltat”tlteliterclGernwtttrunslationaf.comealiye’,is’,coneout
of the grave.”

AU.s.clirlittefotlttdalackofdemandftlrits,,renclezl,ouslounges,,ottits
BoeingT4Ts’Theylaterlearnedthat,,rcndezvotls,,ittPortuguesereferstoa’looftL
that is retfietl t’bt Prcstiuttion’22

Morethanjustconveyingobjectiveinformation,ianguagealsoconveysculturalandsocial
understandings fi’om one generation to the

n””i’ n”u*pi”‘-of tto* language reflects what is

impoftant in a society ln”t.rt” the 6,000 different Arabic
words used to describe camels and their

parts and the 50 or more ciassifications of rnn* u*J by the
inuit’ the Eskimo people of Canada’

Inasmuchaslanguageconveysculture,technology,andpriorities,italsoServestoseparatg
and perpetuat” ,ub”,rlt.,.”L r. rrraiu, 14 official una mu:”y unoffrcial

languages ate used’ and over

aOOiungoug.s are spoken on the African continent’

Because of increasing workforce diversiiy around
the wo1d, the international business

rnanager will have to deal iittr a medley of tanguages’ For elamPle’,
assembly-lin€ workers at

the Ford plant in Cologne, Germany, ,p”* 1’u*i”rtt a”nd Spanish
as-well as German’ In Malaysia’

Indonesia, and Thailand, many of the buyer’t una
,tualtt are Chinese’ Not all Arabs speak

Arabic; in Tunisia and Lebanon, for example, French
is the language of commerce.

In North Africa-Morocco, Tunisia’ Algeria’ Libya’
Egypt-people are used to’doing

business with tsurope and the United States.
p”Jpi” in rU*o””o, elgeria’ and Tunisia’ with their

history of French ,ut”, u* familiar with the uuti*tt practices
in Europe-they speak French and

use the metric system, for example. Egypt has
a simitr history with the British and so its citizens

comrnonly speak English as th;ir ,””onA^tunguug”.
gg’pt also has a close political relationship

and business ties with the United States’z3

International managefs need either a good command
of the local language or competent

interpreters. The task of Jccurate translation to
bridge cultural gaps is fiaught with difficulties’

Joe Ronano, a pal-t’ner of High Ground, u,, u*.rgin.g
technologY-marketing company in Boston,

ibund out on * ourine.. irip io Tai*an, how “lorl”
a on”-ryllable slip. of the tongue can come

toryedoing a deal. He noted that one is supposerl
to say ‘au-tan,’ meaning ‘Hello, N.’ 1′ Boss” But

instead he said ‘Lau-ban ya,” which means
‘Hello, wife of the boss'” Essentially Mr’ Romano

called him a woman in front of twenty senior Taiwanese
executives’ who all taughed; but the boss

was very embarrassed, t””ou'” “‘”n
in Asia f’aue a very macho attitude’2

Even the direct translation of specilic words does not
guarantee the congruence of their

meaning,aswiththeword..yes,’usedbyAsians,whichusuallymeansonlythattheyhave
heard you, an<1, olten, ,t uirrr"v are too prrir" ir airugree. The chinese,

for example, tfuough

years of polrtical “on’*t,
f’uve Uuitt into their ::”ti’i1″.1t1″:::ti*”

a cautionary stance to

avoidper.secution.byprofessingagre€nentwithwhateveropinionwasheldbytheperson
questioning them’l: i . : , ..,^-^+^A i-.roo,-l o. *. indirecf exDres-

sometimes even a direct statement can be misinterpreted
instead as an indirect expr

sion, as when a German businessman said
to his Algerian counterpart’ “My wife would love

something like that beautiful necklace your wif’e
was**earing last night’ It was beautit’ul'” The

132 Part2 ‘ The Cultural Context of Global Management

next day the Algerian gave him a box with the necklace
in it as a gift to his wife’ The Algerian

had interpreted the compliment as an indirect way of expressing
a wish to possess a similar

necklace. The Getman was €rnbaffassed, but had io accept
the neckiace’ He realize he needed

to be careful trow he expressed such things in the future-such
as asking where that kind of

jewelry is sold’26
^r,. .-.L^l +r.^ rlotanar rrrar ‘n the com-

Politeness and a desire to say only what the listener wants
to hear creates nolse I

munication plocess in much of rhe woild. often, even a clear
translation does not help a person

to understand what is meant because the encoding process
has obscured the true message’ With

the poetic Arab language-replete with exaggeration, elaboration,
and repetition-meaning is

attributed more to how iomething is said rather than what is said.

Businesspeople need to consider another dimension of communication
style that can cause

noisewhetherinverbalornon.verballanguage-thatofinstrunlentalversLlsexpressivecomlnu-
nicators. Expressive communicatorr-_ruih is those from Russia, Hungary,

Poland*are those

who make their communications personal by showing their emotions
openly or using emotional

appeals to persuade others. This compare, tltr, intttu*ental communicators-whom
we find as

one moves west and north, such as in tte Czech Bepublic’ Slovenia;
ernphasis is on the content

of the communication, not personal expressions’2?

For the American supervisor and Gr”ek employee cited in
Exhibit 4-2, it is highly likely

that the American could have picked up some cues from the
employee’s body language’ which

probably implied problems with the inierpretation of meaning.
How might body language have

created noise in this case?

Nonverbal comraunication Behavior that communicates
without words (although it often

isaccompaniedbywords)iscallednonverbalcommunication.Peoplewillusuallybelieve
what they see ovef what they hear-hence tbe expression,’A

picture is wo(h a thousand words”‘

Studies show that these subtle messages account
for between 65 and 93 percent of interpreted

communication.28 Euen minor variations in body language,
speech rhythms’ and punctual’\y:!’:t

example, often cause mistrust and misperception of the
situation among cross.natlonal paflles._.

The media for such nonverbal communi”uiion can be categorized
into four types: (1) kinesic

behavior, (2) proxemics, (3) paralanguage’ and
(4) object language’

The term kinesic behavior ,.”i”.Jo communication through body
movements- posture’

gestures, lacial expressions, and eye contact. Although such actions
may be universal’ often their

meaning is not. Because kinesic systems of meaning are
culturally specific and learned’ they

cannotbegeneralizedacrosscultures.MostpeopleintheWestwouldnotcorrectlyinterplet
many Chinese tacial expressions; sticking ouittt” ten’!= expresses

surprise’ a widening of the

eyes shows anger, and scratching the earsLd cheeks indicates
happiness’3O Research has shown

for some time, however, that most people worldwide can recognize
displays of the basic

emotionsofanger,disgust,fear,happiness,sadness’surprise,andcontempt.-.
visitors to other countries must be careful about their

gestures and how_they might be

interpreted. In the united States, for example, a common
gesture is that for’ “o’K.”-making a

circlewiththeindexfingerandthethumb’Thatisanobscenegestul.etotheBrazilians,Greeks
and Turks. on the other hand people in Japan may

point with their middle finger’ considered an

obscene gesture to others. To Arabs, showing ii,e ,otes
of one’s feet is an insult; recall the

reporrer who threw his shoe at President Bushln late 2008 during
his visit to lraq’ This was’ to

Arabs, the ultimate insult’
Manybusinesspeopleandvisitorsreactnegativelytowhattheyfeelareinappropriatefacial

expressions, withoui uniersianding the culturai meaning
behind them’ In his studies of cross-

cultural negotiations, Graham observed that the Japanese
leel uncomforlable when faced with the

Amedcans’ eye-to-eye posture. Tlt”y a.” taught since childhood
to bow their heads out of humility’

whereas the automatic response of Americais is
“look at me when I’m talking to you!”32

subtle differences in eye behavior (called oculesics)can
throw off a communication badly

iftheyarenotunderstood,E-yebehaviorincludesdifferencesnotonlyineyecontactbutalso

theuseofeyestoconveyothermessages,whetherornotthatinvolvesmutualgaze’EdrvardT’
Hall, author of the classic The Silent t nguogu,explains the differences in eye

contact

between

the British and the Americans. During lp”i”h, Americans will look
straight at you’ but the

British t *”f fou. atrenrion by lookin”g away. The British will look
at you when they have

finished speaking, which signals tt ui it i, youi tu* to talk’ The implicit rationale
for this is that

you can’t interrupt people when they ut” not looking at
you’33

Chapter 4 ‘ Communicating Across Cultures 133

It is helpful for u.S. managers to be aware of the many cultural
expectations regarding

posture and how they may be intelrpreted. In Europe or Asia,
a relaxe4 posture in business meet-

ings may be taken us uui **nrr”r* o, the resutt o? poo. upbringing-
In Korea, you are expected

to sit upright, with f-eet squarely on the floor, und io ,p.*k slowly,
showing a blending of body

and spirit.
Managers can also familiarize themselves with the many different

intefpretations-of hand

and finger signals arounrl the world, some of which may represent
obscene gestures’ of course’

v,,e cannot expect to change all of our ingrained, natural tnesic behavior,
but we can be aware ol’

x,hat it means to others. We also can learn to understand the kinesic
behavior of others and the

role it plays in their society, as well as how it can affect business
transactions’ Misunderstanding

rhe meanings of boriy movements-or an ethnocentric attitude
toward the “proper” behavior-

,’an have negative repercussions’

Proxemics deals with the influence of proximity and space
on communication-both

personal space and office space or layout. Americans “*p””t
office layout to provide private

ipace for each person, and usually a larger and more private
space as one goes up the hierarchy’

in much of Asia, the custom is open office space, with people
it ali le’vels working and talking in

;lose proximity to one another. space communicates’power
in both Germany and the united

States, evidenced by the desire t* u .orn*l. office or on” on the top floor’ The importance
of

French officials, however, is made clear by a position in the
middle of subordinates’ communi-

Jating that they have u
“entral

position in an information network, where they can stay informed

ind in control.34
Doyoueverfeelvaguelyuncomfortableandstartmovingbackwardslowlywhensomeone

:s speaking to you? This ii because that person is invading your “bubble”-your
personal space’

personal space is ,rttu.ony fatt”rned, and foreign spatial cues are
a common source of misinter-

pretation. When someon”i*”.* aloof or pushy] it otten means that she or
he is operating under

subtly different sPatial rules.
HallandHallsuggestthatculturaldifferencesaffecttheprogramming”flth”.t:i:”:^11d

:hat space, perceived by all the senses, is regarded as a form
of tenitory to be protected'” Sou{‘h

“\mericans, southern und Eurr.rn Europeans,
Indonesians, and Arabs are high’contact culturesr

rreferring to stand close, touch a great deal, and experience
a “close” Sensory involvement’ Latin

Americans,forexample,havea-highlyphysicalgreetingsuchasputtingtheirarmsarounda
;olleague,s back and grabbing him by the arm. Onlne other

hand, North Americans’ Asians’ and

\orthern Europeans are lorv-contact cultures and prei’er much
less-sensory involvement’ stand-

:ng farther apart and touching far less. They have ai’distanf’style
ofbody language’ In France’ a

:elationship-oriented culturJ, gooO friends greet members of
the opposite sex with a peck on

:ach cheek; a handshake is a way to make a personal connection’

Interestingly, high-contact cultures are mostly located in warmer
climates’ and low-contact

:ultures in cooler climates. Americans are relativlly nontouching,
automatically standing at a

listance so that an outstretched arm wiil touch the other person’s ear’
Standing any closer

than

;hat is regarded as invading intimate space. However, Americans
and Canadians cefiainly expect

i wafrn handshake ancl ma’ybe a pat on the back fi’om closer friends, though not the
very warm

Jouble handshake of the (paniards (clasping the forearm with the
leit hand)’ The

Japanese’

;onsiderably less haptic (touching), do not shake hands; an initial
greefing between a Japanese

and a spanish businessperson would be uncomfortable fbr both
parties if they were untrained. in

iultural haptics. The Japanese bow to one another-the depth of the
bow revealing their relative

social standing.
When considering high- and low-contact cultures, we can $ace a correlation

between

Hofstede,s cultural varia*ntes of individualism and collectivism and
the types ofkinesic and prox-

emic behaviors people display. Generally, people fiom individualistic
cultures are more remote

and distant, whereas those from collectivist “uitor=,
a1e interdependent: They tend to work’ play’

live, and sleep in close proximity.3

The term paratanguagu r.f”.* to how something is said rather than the content-{he
rate

of speech, the tone and inflection of voice, other noises, laughing,
or yawning’ The culturally

awal.e manager learns how to interpret subtle differences in paralanguage,
including s-ilence’

Silence is a powerfui communicator. It may be a way of saying no, of being
offended, or of

ivaiting for more information to make a decision. There is considerable variation
in the use of

silense in meetings. While Americans get uncomfbrtable after 10 or 15 seconds
of silence’

Chinese prefer to think the situation over for 30 seconds belore
speaking’ The typical scenario

134 Part 2 ‘ The Cultural Context ol Clobal l\’lanagernent

between Americans and chinese, then,
is that the American gets impatient’ says’sornething

ro break rl.re silence, and off’ends il;;i;;;tf int”..upting
f,i’ ot’ her chain of thought and

comforr level with the subject.3l Graham, a researcher
on iiternational negotiations’ taped a

bargainirrg session l.rel

macle a proposal to open u ne* produ”tion facilii,v in
Brazil and was waiting 1or a response from

the three Japanese executives, rvho sat wilh lowered
eyes and hands tblcled on the table’ Afier

about 30 Seconds-an eternity to Americans, accustomed
to a convelsational response time of a

few tenths of a second-the American bluited out that
they^were getting nowhere-and the

meetingende

further response through another polite

question.3S
^- –+^-ior n,rrrrrro rel,e

‘ :ate through
Theterrnotrjectlanguage,ormaterialculture’rel.erstohowwecommunlc

materiaiartifacts,whetherafchitecture,officedesignandfurniture’clothing’cars’01’cosmet-
ics. Material culture comrnunicate, .’rru, people nlta ur impofianl.

In the united States’

for

example, sotneone wishing to convey his important
status and wealth would show guests his

penthouse oJii”” o,
“”p”nJiu”

car. In Japan, u busin”srman presents his business
card to a new

contact and expects the receiver ro *,uiy ii and appreciate his
position’ In Mexico’ a visiting

international executive or salesperson is advised
to^take time out, Lrelbre negotiating business’

to show appreciation for the surrounding architectur,e,
which is prized by Mexicans’ The

importance of family to peclple in Spain und *u”t, of Latin
America, woulrl be conveyed by

family photographs around the oflice and therefore an
expectation that the visitor

would

ennuire about the familv.

Tin-ie Another variable that cotnmttnicates culture is the way people
regard and use time

(see also Chapter 3). To Brazilians, relative punctuality communicates
the level of importance of

those involved. To Midcile Easterners, time is something controlled
by the will of Allah’

To initiate eft’ective cross-cultural business interactions, managers
should know the differ-

ence betwee n nronocluottic tinte systems and pob’chronic tinte systerls
and how they affect

communications. Hall and Hall explain that in monochronic cultures
(Switzerland’ Germany’

and the united states), time is experienced in a linear way, with a
past, a ptesent, and a future’

and time is treated as something to be spent, saved, made up,
or wasted. classified and compart-

mentalized, time serves to ordei life. This attitude is a learned
part of western culture, probably

starting with the Industrial Revolution. Monochronic people, found
in individualistic cultures’

generally concentrate on one thing at a time, adherc to time commitments,
and are accustomed to

shon-tenn relationshiPs.
In contrast, polychronic cultures tolerate many things occurring

sitnultaneously and

emphasize involvement with people. Two Latin friends, for example,
will put an important con-

versation ahead of being onii,nl rut a business meeting, thus communicating
the priority of

relationships over mateiial systetns. Polychronic people-Latin Americans,
Arabs’ and those

from other collectivist cultures-may focus on seuerallhings at once,
be highly distractible, and

change plans olten.39

The relationship between time and space also affects communication’
Polychronic

people,forexample,arelikelytoholdopenmeetings,movingaroundandconductingtrans-
actions with one party anil then another, rather than compartmentalizing

meeting topics’ as do

monochronic PeoPle.
Thenuancesanddistinctiohsregardingculturaldil’ferencesinnonverbalcotnmunication

ar-e endless. The various forms are iisted in Exhibit 4-31 wise
intercultural managers will take

careful account of the role that such differences might play’

What aspects of nonverbal communication .igt’t have created noise in the interactions

between the American supervisor and the Greek employee
in Exhibit 4-27 Undoubtedly’ some

cues could ha’e been picked up fi’om the kinesic b”haulot of sach
person’ It was the responsi-

bility of the rnanager, in particular, to notice any indications from
the Greek that could have

prornpted him to
“1,ung”

ii,
“oro-unication

pattern or assumptions’ Face-to-face communica-

don permits the sender of the message to get immediate feedback,
verbal and nonverbal’ and thus

to have some itlea as to how that message is being received and
whether additronal informatiott

is needed. what aspects of the Greek employee’s kinesic behavior or
paralanguage might have

been evident to a more culturally sensitive manager? Dicl both
parlies’ sense o1’time aff’ect the

communication Process?

iXHlslT 4-3 Forms of Nonverbal Communication

Chapter 4 ‘ Communicating Across Cultures 135

Facial expressions
Body posture
Gestures with hands, arms, head, etc’

Interpersonal distance (proxemics)

Touching, bodY contact

Eye contact
Ciothing, cosmetics, hairstyles, jewelry

p”t^f”-!””g” (voice pitch and inflections, rate of speech’ and silence)

Color symbolism
Attitudetowardtimeandtheuseoftimeinbusinessandsocialinteractions

I Food symbolism and social use of meals

{ontext
East Asicrns live itt rclatively cottplex social networks tvith

prescribed role relations

;

attertioil to cotftext is, the’r.efore, important fot’ their e.ffective functioning’
In con-

trust, tr)estet-trcrs liye in less ionst,ainirtg social woryls that strcss
independence and

allow them to pay less attentiotl to context’
RICHARD E’ NlseErr’

September 200540

Amajorcliff.erentiatingfactorthatisaprimarycauseof.noiseinthecommunication
:rosess is that of conr””t-*iti”h actually in”orpo.ut”. many of the

variables discussed earlier’

il;;;;;;;iin *rrt.r, rhe communication takes place aff’ecti the meaning and
interpretation of

:he interaction. cultures are known to be high- or low-context
cultu[es, with a relative range in

r.r*.””i1f” high-context cultures (Asia, the Middle East, Africa, and the
Mediterranean)’

ielings and thoughts are not explicitly expressed; instead, one
has to read between the lines

;nd interpret meaning fro.n on”i, ggneral understanding. Two
such high-context cultures are

:hose of South Korea and Arab cultures. In such culturei,
key information is embedded in the

;ontext rather than made explicit’ People make assumptions
about what the *:t*i”–T:,1i-

lhrough their knowledge of the person or the sulaoundings..In
these cultures’ most communrca-

:ion takes place within a context of extensive information
networks resulting from close

:ersonal reiationships. See the following Management
Focus for further explanation of ihe

.1sian communication stYle’

In low-context cultures (Germany, Switzerland, Scandinavia,
and North America)’

;.here personal and business relationships afe more compartmentalized,
communication

:$edia have to be more explicit. Feelings and thoughts
are expressed in words’ and infor-

nation is more readily avaijable. Westerners focus niore on
the individual, and therefore tend

to view events as the result of specific agents, while easterners
view events in a broader and

Jnger-term context.4l , -.^..r -^^-r^ ^ l.^t ,rf,,nder-
In cross-cultural communication between high- and low-context

people, a lack of.undel

standing may preclude reaching a solution, and coirflict
may arise’ Germans, for example’ will

expect considerable detailed iiformation before making a
business clecision’ whereas Arabs

rvill base their decisions more on knowiedge of the people
involved-the information is

present, but it is implicit. People in_low-context cultures, such as those
in Germany’

Switzerland Austria, and the United states, convey their
thoughts and pians in a direct’

straightforward communication styie, saying something
like “we have to make a decision on

this today.,, People in high-context cultures, such as in
Asia, and, to a lesser extent’ in England’

convey their thoughts i”n a more indirect, irnplicit mannel;
this.means that someone from

Germany needs to have more patience and taci and be willing
to listen tbr clues-verbal and

nonverbal-as to their coiieagues’ wishes’
People in high-context cultures expect others to understand unarticulated

moods’ subtle

gestures, and enuiionmentai clues that people from low-context cultures
simply do not process’

Misinterpretation and misunderstanding often result’43 People
from high-context cultures

lSZ Part2 ‘ ‘I’he Cultural Context ol Global Management

As illustrated in the opening profile, global managers
negotiate with parties in other countries to

make specitic plans for strategies (exporting, ioint ventures,
acquisitions’ etc’) and tbr continuing

operations. lviit” ttt” complJxities of “ro,l-“,ttora1
negotiations among firms atounrl the world

present challenge enough, managers such as those tbr
BP may also be tacecl with negotiating

with government-or.vned companies. Google’s negotiations-with
the Chinese government’ as

anothel.example, encled in a compromise irat to enter the Chinese
market the cornpany had to

obey china’s censorship laws and agfee to purge its search
results of any websites disapproved

of bY the Chinese government’z

Managers must prepare for strategic negotiations. Next the
operational details must be

negotiatecl-the staffing of key positionJ tn” ,Jut”ing of
raw materials or component pal’ts’ and

the repatriating of profits, to name a few’ As globalism
butgeons’ the ability to conduct suc-

cessful cross-cultural negotiations cannot be overemphasized.
Failure to negotiate productively

willresultinlostpotentialalliancesandlostbusinessatworst,andcont’usionanddelaysatbest.
nuring il pro.”r, of negotiation*whether before, during, or after negotiating

sessions-.

allkindsofdecisionsaretnacle,bothexplicitlyandimplicitly.Aconsiderationofcross.cultural
negotialions must therefore include ttre various decision-making

processes that occur around the

world’Negotiationscannotbeconducterlwithoutdecisionsbeingnrade.
This chapter examines the processes of negotiation and decision

making as they apply to

international and dornestic cross-cultural conteits, The objective
is a better understanding of

successful management’

filffiffi*TFATI&ru

Implementing strategy depends on managementt ability
to negotiate productively*a skill widely

considered one of the most important in international
business’ In the global arena’ cultural differ-

ences pr.oduce gfeat ditticulties in the negotiation
process’ Ignorance of.native bargaining rituals’

more than any other single factor, accounts
for unimpressive sales effolts’3 Important differences

the negotiation ptocess from country to country include
(1 ) the amount and type of preparation

for

a negotiation, (2) the relaiive emphasis on tasks versus
interpersonal relationships, (3) the reliance

on general principles rather than specitic issues,
and (4) the number of people present and the

extent of their influence.4 In every instance, lnanagers
must familiarize themselves with the cultural

background and unOertying motivations of the. riegotiators-and
the tactics and procedures the’v

use-to control ttre processl make progress, and therefore
maximize company goult:

– —“:^^ ^!tr
The term negotiation describes the process of discussion

by which two or more partles alm

to reach a mutually “.r”pi”ui”
agl€ement. For long-term positive relations’ the

goal should be to

set up a win-win situatlon-thatls, to bring about i settlement beneficial
to all parties concerned’

This process, difficult *o,rgt”, when it takes place among
people of similar backgrounds’ is even

more complex in internaaio*nal negotiations because
of Oitt’erentes in cultural values’ lifestyles’

expectations, verba] and nonverbal language’ approaches
to formal procedures, and probiem.

solving techniques. The complexlty is heighten”i *h”n negotiating
across borders because of the

greater number of stak”hold*rs involved. These stakehold*t*
ut” illustrated in Exhibit 5-1′ In

preparing for negotiations, it is critical to avoid projective cognitive
similarity*that

is’ the

EXI’il8lT 5-1 Stakeholders in Cross-cultural Negotiations

Heodquorters iHQI emPloYees
Suppliers
Home government

;r’

‘ HomeiHQ)
counirv ‘

“‘”
1

Home consumers

lnvestors
Aliionce portners
Conirocbrs

Firm
negoliolors

All citizens
Speciol interest grouPs

Host governmenl
Distributors
Expotriote emPloYees

: Host
i county

Host locol emPloYees
Host consumers

Chapter 5 ” Cross-culturai Negotiation
arid Decisiou Making 153

assumptionthatotherspefceive,judge,think,andreasoninthesamewavwhen,inl.act,theydo
nor because of ctilerentlit .iiriii””o practical

*tiu”n”.” Instead’ astute negotiators
empatheti-

cally enter into the prluur”-*o.fa
or cuitural ‘put”

of their countelparts’ while willingly
shaltng

;;il’ ;;” view o[ tlrc situation’s

TF*E NEGSTIATIOIT PR*CES5

-rhe negotiation process comprises
f’::’Tq:l *:,:’Ytl-,*,-l;”Jff1ff:l

uurru,rts’ \Jd
;;;;;;, in r-eality these are seldom

dis-

i+i p”tt””t*n, and (5) concessions
t”l::::::.”

-o.r rrqn temoorarily revert
to an earliel’stage

ill”iH:::tl; tri”i1*le;:;l;’
“ruill;::{**:

:T#:T:’;::”1#.:i:Tl:::::^n:tinct stages but rather tend to overtap; Irsgulr4rwrr
ru”l*irrt””

,.o””r. inro stages to discuss the
with that in mind’ it is useful to bieak.dow” :T l:Tl:i:::”t:::T”*ect. so that they misht
fJ*Ji:l#il’*iii’,ll-l:’i:ffi :i;i.]’.;;f ::iTTd*:Xmml;””$”:lL?,:f il
;’J:”1*;l*lir?*;-:-;lT,HtlH:::’J;’;;; ‘?-*”

i” s-niti, s-z and

discussed in

the following sections’

Stage Sne: Fr*Paratlon

Theimportanceofcarefulpreparationforcross-culturalnegotiations.cannotbeoverstated’Tothe
extenr that time pennits, a distinct

advantage .”” u” g”i””i if negotiators familiarize
themselves

rvith rhe entire conrex, il;;;i;;;nd ofiheir “ou,r”*.pun,
(no m.attlr where the meetings wiil

rake place) in addition ioit” Jp”.ifi” ,uUl”riJi”
tJn”gotiut”O’.Because most negoliation

probrems are caused rrv”iiii”r”*es in culiurs”;;;;;nd
environment’ hours or days of

ractical preparation fbr negotiation
can be yr:T; ii tfrese-tactors are not

carefully considered”

Tounderstandculturaldifferencesinnegotiatingstyles’manlgersfirstrrustunderstand
rheir own styles and rt”n J”r”r*ine

how thelidifferlrom the norm
in other countries’ They

can do this by comparing profiies
of rhose p”;;;; io u. ,u”””ttfui negotiators

in different

countries. Such profiles-r”fl”r, the
value *yt’**,’uttitoO”” and-expected behaviors

inherent

in a given sosiery. o,r*r-rr”iirns of this
.;;r ;;;;;io” una .otput” negotiating

styles

around the world’

vAR€AELESlsTl-lEruE&sTlAYlFlGpfis{€ssAdeptnegotiatorsconductresearchtodevelop
a profile of their.”””;;;;; so rhar they know,

in *or, ,]tuu,ions, what to expect’ how to
pre-

sare, and how ro ,.u”r.-s’;;iuit
5-3 shows 12 ;;i;;o “onrioe.

when preparing to negotiate’

These variables can, to a grear degree,
h”lp ;;;;;;, *o”tuuna the delp-rooted cultural

and

narionai morivations ancl iraclitionut
pro.*rr”r-.uniJ’ing negotiations wit’ people

from other

:ountries’

f,X*’ltSlT 5-2 The Negotiation Ptocess

PrePorotion

RelationshiP building

Exchonqe ol tosk-relqted
iiformotion

Persussion

Concessions ond
ogreement

EKHlBll $-3 Variables in the Negotiation Processs
154 Part 2 ‘ The Cultural Context of Global Management

l,Basiccorrceptionofnegotiationp’ocess:Isitacompetitiveprocessoraproblem-
solving approach?

2, Negotiator Selectiotl critefia: Is selection based on experience’
Status, expefiise,

personal attributes, or some other characteristic?

3. Significance of rype of issttes: Is it speciflc’ such as
price’ or is the focus on

reldionshiPs or the fomat of talks?

4.ConcentwithprotacohWhatistheimportanceofprocedures,socialbehaviors,
and so forth in the negotiation process?

5, Complerity of communicative context: What degree of reliance is
placed on

nonverbal cues to interpret information?

6,Natureofpersuasivearguments:Howdothepartiesattempttoinfluenceeachother?
no tney rety on rational arguments, on accepted tradition’

or on emotion?

T.Roleofifidividuats’aspiratiotts,’Aremotivationsbasedonindividual,company’or
communitY goals?

8, Bases of trust: Is trust based on past experience’ intuition’ or rules?
g. Riskaaking propensity: How much do the parlies try to avoid

uncertainty in trading

information or making a contract?

ilt,Yalueoftime:Whatiseachparty’sattitudgtowartltime?Howfastshould
negotiations proceed, and what degree offlexibility is there?

lL.Decision-ntakingsystem:Howdoeseachteamreachdecisions-byindividual
determination, by majority opinion, or by group

consensus?

12. Fotvt of satisfactory agreeme’fi: Is agreement
based on trust (perhaps just a

handshake), the credib”ility of the pu’ti”‘ commitment’ or a
legaily binding contract?

After developing thoughtful profiles of the other
party or parties, rnanagers can plan for the

actual negotiation meetings, at the same time.re*aining
op”tt to realizing that specific people

may not fit the assum”o-.-Jturut prototype. Prior to
the Leetings, they should find out as mucl:

as possible about (1) the kinds tf OemanO, that might be made,
(2) the composition of the

,,opposing,’ team, and (:) tr,” relative authority that the members
possess’ Atier this’ the man-

agers can gear rheir “”glri”ii””
tirategy specifically to the other side’s lirm’ allocate

roles tc

diiferent team members, decide on concesslons, and
prepare an alternative action plan in case a

ncgoliated solution cannot be lound’v

Followingthepreparationandplanningstage,whichisusuallydoneatthehomeoffice.
thecoreoftheactualnegotiationtakesplaceon-*i”‘”‘i”thetbreignlocation(ofatthemanager’i
home office if the other tcam has decided to travcl

there)’ In some cases’ a compromise on the

location fbr negotiations can signal a cooperative
strat€gy, whi{rh weiss calls “Improvise an

Approach: Eff’ect Symphony”-a strategy availabie to
r’-elotiators familiar with each other’s

culture and willing to put negotiation on an equal fboting.
weiss gives the following example o:

this negotiation strategy:

For their ilegotiatio,ls ot)er constrltction of the tuwrcl
unclet the English chanrrcl’

British and Frettch rcprcSelttuti|,,, o|,”,d to panitiott talks clnd
alternate the sile

lsettveett paris anrt Lindon. At each site, the
negotiatars were to use established,

local rtals, irtcluding tlte langtrage ‘ ‘ ‘ thus puictuatittg
approaches by time and

,pnrr,l0

Inthisway,eachsidewasputintothecontextandthescriptoftheothercultureabouthali
the time.

The next stage of negotiation-often given short shrift by
Westerners*is that of relation-

ship building. ln most p*l “f
the world, this srage usually has alrearly taken

place o’ is concur-

renl. with other Pleparations’

Chapter 5 ‘ Cross-cultural Negotiarion and Decision
Making 155

Stage Trruo: RelationshiP Building

Relationshipbuildingistheprocessofgettingtoknowone,scontactsin-ahost:*”:ly^i,1
iuilding mutual oor, U”for” “-turt

ing on buriri”r, discussions and transactions’
This process ls

iegarded with much more significonr” in most farts
of the world.than

jt is in the United States’

r*.s. negotiarors are, g”;;;l-t i”aking, objectir” uuo* rhe specific
matter at hand and usually

:l.anttowastenotimeingettingdowntobusinessandmakingprogrcss.Thisapproach,well
understood in the United States, can be Oirurt

ou,li the foreign negotiators want to take enough

iime to build trust and respect as a basis ro,
n”gotixing contr;b’ i1,t_u”n cases’ American effi-

:iency interferes with the patient development of
a mutually trusting relationship*the very

;ornerstone ofan Asian business agreement” ents to individuals, rather
In many countries, such as Mexico and C^hina’

personal commltmr

:han the legal system, t’o.* ,fr” basis for the enforcement
of contracts’ Effective negotiators allow

rlenty of rime in rheir schedules for such
t”rJ””Jip U”‘lUlT^::t: bargaining partners’ This

lrocess usually takes the form of social €vents’ Jgur:,
and.ceremonies’ along with much nontask

rounding-general.politeconversationandinformalcommunicationbeforemeetlngs-l
r..hile all parties get to know one another’ In such cultures,

one patiently waits for the other

rartv to start actual business negotiations, u*r” ttrutrelationshipbuilding
is, in fact’ the first

il’J”;;;;;;;;r.ii i, i, ur.i1y recommended that managers
new to such scenarios use an

i*termediary-ro*”on” *ho alreaiy has the trust ana
,”rp””iof the foreign managers an-d who

ireretore acts as a
..relationship bridge.” Middle Easterners, in particular, prefer

to negotlate

*rough a trusted int”r*”aiur.y, and foi them as
well, initial meetings are only for the purpose

:ettingacquainted.a,uu,aouu,inesswiththeperson,notthecompany’andthereforemutual
:rust must be established.

In their best seller on negotiatio n, Getting ro Yes,
Fisher and Ury point out the dangers

rot preparing well for negotiations:

Irt persian, tlte wotd
,,compromise” does not have the English meaning of a midwal’

solutiotr whictr both sides can accept, but only
the negative meaning of surrcnderirtg

one’s principles. Also, “ntecliator” nrcans
“meddle|” soweone who is barg’irtg itt

uninvitecl’In]gS0,tJnitedNatiottsSecretary.GenetulKuftWatdheim.flewfulranto
deal with *, noriioir”rituotiou. National liartian radio and television

hoadcast itt

persicut a comnlent he wqs said to have made upon his
arrival in Tehran: ” l have

conte as a rtecliator to trork oLrt a comproruise”‘ Less
thaft an lwur later’ his car was

being stoned b)’angtj lranians’|3

As a br.idge to the more formal stages of negotiations,
such relalionship building is followed

11 posturing*that is, general discussion that ses
tfr” tone for the meetings’ This phase should

result

,:r a spirit of cooperation- ro n”tp ensure this result, negotiators
must use words like ‘tespecf’ and

‘rnurual beneht,,rather;ha; unguage that would suggest affogance,
superiority, or ufgency’

Stage Tt:ree: Exchanging Task-Related lnformation

in the next stage-exchanging task-related information-each
side typically makes a presentation

:nd states its position; a question-and-answer session
usually ensues’ and alternatives are

jiscussecl. From an American perspective, this represents a
straightforward’ objective’ efftcient’

:nd understandable stage. However, negotiators
from other countries continue to 1nke a more

indi-

:ect approach at this stage. Mexican negotiators
are usually suspicious and indirect’ presenting

iittie substantive materiaiand more lengthy,
evasive conversation’ Ftench negotiators enjoy

debate

.:nd conflict and will often interrupt presentations to argue
about an issue even if it has little

:elevancetothetopicu”i”gp’*'”*”o.rn”Chinesealsoaskmanyquestionsoftheir*””:::i:”
and delve specifically unJr”p”ur”afy into the details

at hand; conversely’ Chinese presentatlons

;ontain only vague and ambiguous material.
po, inrtun””, after about 20 Boei’g officials spent six

rveeks presenting masses ofliterature and technical demonstmtions
to the Chinese’ the Chinese

said, “ihank you for your introduction'”la
The Russians also enter negotiations well prepared and

rvell versed in the specific details

of the matter being presented. TJ answer their
(or any othet side’s) questions’ it is generally a

good idea to bring along someone with expertise to answer
any grueling technical inquiries’

Russians also put a lot of emphasis on protocol and
expect to deal only with top executives’

156 Parl2′ The Cultural Contextof Global
Management

Adlersuggeststhatnggotiatolsshouldfocusnotonlyonpresentingtheirsituationand
needs but aiso-o-n showing un

una”*tunoing of their opponents”
viewpoint’ Focusing on the

enrire situation confronring each
p”;;;;;r;”rages the negotialors to assess a

wider range of

alternatives lbr resolution, rather
ttrui fi.iti”glh”mselues to their pt’econceived’

static

posi-

tions. She suggests that to beI11″r, “tr*i”.,
n”g”o,lu,o,, should prepare fbr meetings

by practicing

role reversal’1s

$tage Four: Persuaston r .r- -^*r^-
In the next phase of negotiations-persuasion*the

hard bargaining StafiS’ Typically, both
parties

try to persuade tt e otk er iJu”r”p, *or. of ttreir._position
andlo give up some of their own’ Often’

some persuasion has J;; ,k.n.g11″” b”f;;rh;
in soclal seitings and through mutual

contacts.IntheFarEast,detailsarelikely.on”*o’i.*aoutaheadoftimethroughthebackdoor
approach(houmani).’rorthemostpafi,however’themajorityofthepersuasiontakesplaceover
one or more negorlarrng sessions.

Internarion;i;;;”t; usually find that this
process ol

;

bargaining and making .’orr.”r*ion*
is fraught with difficulties because of

the different uses and t’

interpretation, oi u”ruuilnJnono”.uut
u”rr*iorr. ‘q.ithough

variations in such behaviors influ- I

ence every srage of ,h”;;;;;;l”n process, ;;;;p1;;
a particularlv powertul roie in

per-
,

,,”,i””,”‘p.”i,tty;t,r,”yi,”noranticipated.-^1^l.1.^’,oo^fr.ertnintactics’whichski11ed
Studiesofnegotiatingbehaviorhave.revealedtheuseofcertaintactics,-l’:1:l*j

negotiators recognize a;;, such as promise_s,
threats, and so on’ other’ less savory

tactlcs al.e :

someti,nes used in intemational negotiations.’.$1;;t”d 1:lf”:'”‘,:i:i’.tlXj”liJi;tii,i'”-‘*?i ,
ilffiHffi-,lri ilST;; .non, 6 mi siead “opp””” “,'”

del iberateiv’16 s ome nesotiators.
mav

give wrong or distorted factual intbrmation
o, ui” th” excuse of ambiguous authority-gtvtng

conflictingimpressionsaboutwhointheirp.tvr,u’tr’*powertoT1|”ucommitment.Inthe
rnidsr of hard bargaining, the

prudent lnr”rnuri’onJ-“n”g”t will follow
up on possibly mis-

ilil;;r””””‘t*”::l’J:,T:’J,1;’iftT:ffi:18 nesotiarors in a srressrur situation phvsi-

cany or psychologically ;’;;i;;:ir eiinS .n
lt’*”tJf

‘r.”i’.
These include uncomfortable

room

temperarures, too-trrigtrt iighting,
.ud”n”rr, t;;;;;;;il and other irritations’ Internationai

negotiators must keep i;;il’ 6*:”-:’ thil)l;;;;;il;;”;
like dirtv tricks to Americans is

simply the way other cultures
conduct

“”g”ri”ii””.r.-In
,otnt South American countries’

fot’

example, it is common;’;;il;”””t,:]f misleading
or false intbrmation’

The most subtle behaviors in the n”gotluiion
pl;;”:;’

in-1-o:.’:1tn”
most difncult to deal

with, are usually
‘t'”

non”*Jof ****ug”‘-th” ot” of voice intonation’
facial and body expres-

sions, eye contacr, d;;,’;;;;tirni-ng ^or
trr”Jir.urrionr’ Nonu”rbal behaviors’

discussed in

previous chapters, ^*
,;;*iJ aspectrif “ultur”

ur”a by people in their daily lives;
they are not

spccifically changed ,..in” O”-*”r”, ol n.gotiuri*.
e*l”g thosc behaviors impacting negotra-

tions is the direct.o**unirurion
style’ such as with Germans’ compa|ed

with the indirect styie’

such as wirh Japanes.;i;;;;,;1ro,
ir.,. inai”iJooiltt-collectivism cultural

dimension is one

which greatly guides ;;;ffi”:*:: or tr,. .Jatiue
motivation of personal self-intcrest

individualistl. ,o”;rtiJi,’r-; ;, the united
states; this compares with the

g.oup-interest

inAsiancuitwes,sothatnegotiatorswilllikelygivemoreimportancetotheirsocialobligations;;;
” “”d’ ;t;*:;m J” s be e n d i s c us.'” d “”‘.,”. IT”^:::’ ii’jfi : :ilffi JHiJl l,’

i’

primary pulpose -“d”;1y*;;11 stages of
the regotiation process’ In particular’

persuaslon 1s an

integraiparlofttteprocess-ofrnakingconcessionsandarrivingatanagreement’

Stage Five: eencessions and
Agreefllent

Inthelaststageolnegotiation-ctlncessionsandagreement-tacticsvarygreallyacross
cultures. well-prepared iegotiators

ar. o*ure.oll various”concessitln stratesies
and have decided

ahead of time what their o-wn concession
,*or.gy **iiilt’ putitiut wirh tie typical initial

posi-

tions that various paries ir” iit”ty to take,
,t.y?n”* ,t at Russians and chinese

generally open

rireir bargaining wirh *;;;;;;lions, asking to1.
*or. than rhey hope to gain’ whereas

srvedes

“*rir “”n H1[T#lin:;[,fl’Jil’:[l?,i’,’nT,to”u”r end resurrs are
auained bv starting.

with

exu€mepositions’Withtlrisapproach’theprocessofrcachinganagreemenlinvolvescarefultim.
ing of rhe disclosure information and

of concesrl;;. M”t;piopt” i”tto have studied
negotiations

Chapter 5 ‘ Cross-cultural Negotiation and Decision
Making 157

believe that negotiators should disclose only tl’re
intbrmation that is necessary at a given

point and

that they should ny to oltain intbrmation piece uy
piece to g’adually

.get
the whole picture with-

out giving away their goals or concession strategy’
These guildelines will not always work in inter-

cultural negotiations because the American
pro”.,, of adiressing issues one at a time’ in a linear

fashion, is not common in other countries o, culturer.
Negotiatirs in-the Far East’ for example’

approach issues in a hollstic manner, deciding on the
whie deal at the end’ rather than making

i ncremental concessions’

Again,atthefinalstageofagregment.andcontract,localpracticesdeterminehowthese
agreements will be tonor”a]WnerJas Arnericans mke

contracts very seriously’ Russians olten

renege on their ronrru.ir. ite Japanese, on the other hand, consider
a formal contract to be

somewhat of an insult una u *urt. of time and money in legal
costs, since they prefer to operate

on the basis of understanding and social trust’18 Uore
attJntion to this and all the negotiation

phases might have led to befter results in the French-Chinese
joint venture discussed in the

rnanagemeni focus.

MANAGEMENT FOCUS

Cultural Misunderstanding-The Danone-Wahaha Joint
Venture in Chinale

SiiTJ!lJ?.?i;#,Hil;’rnJ ,o .ontinue to tester durins the oferations
phase one such rV

is the Sino-Frencn collaOoiaiion that *u, for*”Jty Croupe Danone
(hereafter Danone)’ and

Hangzhou wahaha crouJJo. tp’,.ieaiter wnn). Danone
is one of the largest food conglomerates

from France. wahaha is china,s largest beverage company
that was started ln 1987 and was

controlled by the goverr*.ni of H’angzhou’s S6tngit-tunq
District’ From its inception’ Zong

einghou ran the operations oi WHU.
riihen the com”pany ionverted itself into a private entity’

din6nou took the role of a minority
shareholder’.

The Danone-wnu bini u”nirr” was established in March
1996 and took the trademark

name of Wahaha n..url”u”o+’n; t;;;il;;;J visibilitv in the Chinese market
ln emersing

markers, Danone gr.* l;.i.ui*g u niultitude of proiitable JVs. in lndia,
Pakistan, Vietnam’

Columbia, and other.o*iri.r. Onihe other hand, WHH achieved
its market expansion and cor-

porate growth in Cfrina by iurning itself into a, nutlonal brand
and highly successful food and

beverage company. ff.l” O#”n*-Wihaha JV dealt with
the areas of food and beverages and grew

at a respectable rate. For Danone, this was a
good strategy to enter into china For wHH’ the JV

heloed the company to make a linkaqe with a well known
global brand’

‘ “” r.r.oj”tilns iesulted in the foilowing salient features of the JV:

Many cross-border joint ventures encounter
problems because the partners’ differences ln man-

asement styles, corport,- .ittt”rltrlJt*ttltu tutJ i”i:: 1″”J::::::::”.t:l* T:J:::il:$

1. ownership of the JV included foreign partners (51 percent), wHH
(39 percent), and

emPloYees (1 0 Percent).
2. The JV encomprrr”J riu. entities: Hangzhou wahaha Baili Foods, Hangzhou

wahaha Health

Foods, Hangzhou Wahaha Foods Co- Hangzhou Wahaha Beverages
Co” and Hangzhou

wahaha Quict rrozen iooor. ounon. uno i*tufine collectively
invested $70 million in the

five entities of the JV

3. As agreed by Danone. the day-to-day operations of the JV resided with Qinghou’

As the JV’s business operations expanded in china, activities
of Danone and wHH also

became intertwined uno.onipl.”-ieaOing’to differences in opinion,
corporate control’ and man-

agement styles. Betwee” 1gt6 and 2006, the following chanqes
took place in the structure and

operations of the Danone-WHH JV:

1, Because of consumer demand and market growth, the JV’soperations in china
witnessed

the emergence of 37 business entities. Oa-none attempted
to buy out Qinghou but the

negotiations were unsuccessf ul’

2, public rows erupted between the two companies when they kept on blaming
each other

for breach of contract. Danone blamed
qin;nou for going outside of the contract and

profiting from 80 unauthorized businesses. fiis inctuaJd misusing the Danone brand
and

its distribution sYstem in China’

158 Part 2 . The Cultural Context of Global
Management

3’ThedrsputebetweenDanoneandQlnghoubecameevenmorepersonaIwhenDanonefiled
a law suit against qin”ghor;, *iie and iaughter

in a Lo, Angeles court regarding tlreir
busi-

ne:s interests uno unu’utilu'”J lv-‘elated
dea{ings outside <>f !l:i”

4. Danone filed {or uroii*iion p’oceedings in Stockholm
in May 2007′

5. During the dispute, ;;;;;J.i; {iledlegal .iui*t
.gtintt ien business entities that were

beiieved to be contrJleO n1l wHn in Samoa
and the British Virgin lsland’

6. The Danone-wHH .;;;l;:.me so much .ru,oiLo
that Chinese and French governments

asked the .o*puniui to negotiate an
“amicable” resolution.

FromthishighlypublicizeddisputebetweenDanoneandWHH,welearnthefollowinglessons:

1. Cross-cultural misunderstandings and unfamiliarity
with the JV partner were at the heart

of this disput”‘ ai;;;;;; Inti*p|,*t’t”iur tt/e ana
wHH s consistent qrowth in China

could have uu.n on.lt”ti.. irrr.r of this dispute since
Danone management was alienated

2. #[t ffi::; used media and pubric rerations campaigns in China
and western markets to

justify their urgrttnt’, instead of having open neQotiations’

3. ln any JV retationsrrif-uuilding and “*.r,ung”‘ot
pill”a-t”rtt”d information is critical in the

pori-it”gotiaion pi’Jt” tr’tt ii based on concessions
and agreement’

4, lt seemsthat oanon!anJwun tactea open communication
in their day-to-day manage-

ment of the JV Also important was the u*r of ,trti
that happened to be missing in the

partners’ dealings ‘- -L’.^^-^-^*^rnia< n{ton hecome an enension of their 5. According 1a China Economic Review' Chinese

companies often becom

founders, personal o”rirl”grCIi.g day-to-oa-y
Lrrin.tt operations. Most chinese businesses

do nor see u *uio,1;fi!,*,:”;;;,,;;; ;1/^sj;;;;;i[
and en{orcement of rishts roreisn

partners must makJsuie that their oesignatea”m.””g.it
;”0 staff.members are included in

the day-to-day management o{ the
ry rn intJrnationii tnutrett. JV-related contracts

can be

abused and could r”ul io cross-cultural misunderstands
and operational disruptions’

6. Finally, in lvr, ‘”ut6’i’r’tip-uuirUing
takes trmJ an;;;# #”unt of interaction is needed

between ,r,” pu|,ii”ri. in ii,. c-ase of
panone-wHH JV. partner conflict, face-saving

problems, nlu*”-gu;., and accusation, .outd
have been avoided had the two companles

communicated openly during
the n.go,,rion Jr,ase and a{terwards

Also it seems that

Danone ,”0 wHH lii ioi’r”no.,u.”o ,n.it’i”i”-.;;^l
and high-context cultures and

management stytes that eventually
led to this conflict’

UniversitY CoPYright @- Wtttt.” .*l”t”.ly for this book by Syed Tario Anwe
2009 by Syed Tariq Anwar’ Used

with permisslon

U NPERSYANAIruG fttEGSTIATISru
sT’VLES

clobalmanagerscanbenefitfromstudyingclifferencesinnegotiatingbehaviors(andtheunder-
lying reasons ror tt,pm),’*ti”t, “un

t”ip*,”,n,”1;;;tr; *iat ls happening in the
negotiating

process. Exhibit 5-4 ,h;;;1;*” “”u*pt.,
or-JltrJrrnr”s among North American’

Japanese’

and Latin American styles. Brazilians,
for

“^u*’i”,
generally have a spontaneous’ passionate’

and dynamic style. Thcy are, very
talkativc, unJ’purtluturly use the

word “no” extenslvely-

more rhan 40 times per half,-hour
compared *ilrr”+.iii.”s fbr Americans’ and

only 1’9 times

f.r the Japanese. Th”y ;i;” aiii”‘*url”ary rro*
Am”.itans and the Japanese by their

use of

**i*tlu” pitysical contact’20 .,–^-^ T,.ar, r”q’e qnen
TheJapanesearetypicailyskillfuinegotiators.Theyhavespentagfeatdealmofettme

and effort studying u.s.’Jutture and
business;;;;”;t ;’h”n Americans have spent

studying

Japanese pracrices. ; ;il;i “”u*pt”
ot itris conlmst was apparent when

Charlene

Barshefsky-a rough A.;;;; internaiional iu*f”.
who had never visited Japan before-was

sent there as a lrade “”;;;;;;””d
had littte knowledge of its counterparts’

But Mr’ okamatsu’

like most Japanese,”ril##,;;’;; ;;iii”t *irr’
n*”rica’ He ha

New york fbr three years and had spent
*onyl.u.r handling bilateral trade disputes

between

the two countries. rr,e Oilf”r”nt styles
of the twt negotiators were apparent in the

negotiations’

Ms.Barshefskywantedspecificimportgoals.Mr.Okamatsuwantedtotalkmoreabout
thecausesoftradeproblemslatherthansetspecilictargets,whichhecalledthe..cooperatrve

-:-t’

‘ti
i:l

‘.p.i

.s!
./1:

+
i1:

North American

Chapter 5 , Cross-cultural Negotiation and Decision Making 159

Latin American
Japanese

gxHiBtT 5-4 comparison of Negotlation styles-Japanese, Notth American’ and
Latin American22

Emotional sensitivitY highlY

valued

Hiding of emotions

, Subtle Power PlaYs;
i conciliation
, Loyalty to emPloYer;
, employer takes care
I of employees
i Face-saving crucial; decisions
‘ often on basis of saving some-
I one frorn embanassment
I Decision makers openly

influenced bY sPecial
, interests
, Not *gu.n”ntative; quiet
, when Right

‘ What is down in writing
rnust be accurate, valid

Step-by-steP aPProach to

decision making

Good of grouP is the
ultimate aim

Cultivate a good emotional

social setting for decision
making; get to know
decision makers

Emotional sensitivitY not

highly valued

Dealing straightforwardlY
or ImpersonallY

Litigation not so much
as conciliation

Lack of commitment to
employer; breaking of ties

by either if necessarY
Decisions made on a cost-

benefit basis; face-saving
does not alwaYs matter

Decision makers influenced
by special interests but
often not considered ethical

Argumentative when right
or wrong, but imPersonal

Great imPortance given to
documentation as evidential

proof

Methodically organized
decision making

Profit motive or good of
individual is the ultimate aim

Decision making imPersonal;

avoid involvements, confl ict
of interest

Emotional sensitivitY
Valued

Emotionally Passionate

Great power plaYs;

use of weakness

Loyalty to employer
(who is often f’amilY)

Face-saving crucial in

decision making to
presewe honor, dignitY

Execution of sPecial
interests ofdecision
expected, condoned

Argumentative when right
or wrong; passionate

lmpatient with
documentation as

obstacle to understanding
general princiPles

Impulsive, spontaneous
decision making

What is good for grouP
is good for the individual

Personalism necessary for
good decision making

.”:proach.” Ms. Barshef’sky snapped that the approach was nonsense and
“wouid analyze the

:r:t to death, rvith no link to future change “”
‘-.* :;;il1frur”n.*, in philosophy ani style between the two countries reflect ten years of
.lser and feelings of betrayal in traie negotiations. John Graham, a California

prof’essor who

r-ts studied international negotiating styles, says that the differences between
United States

:rd Japanese styles are *eli illurt.ateJ Uy ttreir respective proverbs: the Americans believe
::at “The squeaking wheel-gets the grease,” and the Japanese say that “The pheasant

would

:,,.t be shot but for its cry.”23-The Japanese are calm, quiet, patient negotiators;
Ihey are accus-

:.-med to long, detaileO negotiating sessions. Whereai Americans often
plunge straight to the

-iarter at hand, the Japanese instead pref’er to develop iong-term, personal relationships’
The

-,rpanese want to get to know those on the other side and will spend some time
in nontask

r.unding.
In negotiations, the Japanese culture of politeness and hiding of emotions can be

dis-

:nncerting to Americans when they are unable to make straightforward
eye contact or when the

,::paneseiraintain srniling faces in serious situations. It is irrportant that Americans
understand

;rat is polite and what is offensive to the Japanese-and vice versa’ Amelicans must
avoid

,ir-\ thing that resembles boasting because the Japanese value humility,
and physical contact or

:.,uching of any sort must be oolid.d.2n Consistent with the culture-based value
of maintaining

-:rmony, the Japanese are likely to be evasive or even leave
the rootn rather than give a direct

.-g”i””‘unr*.r.t’Fundamentai to Japanese culture is a concern fbr the weltare of the group;

.:,:ithing that affects one member or part of society affects the others’ Thus, the Japanese
view

160 Part 2 ‘ The Cultural Context ol Global Management

decisions carefully in light of iong.tern.consequences;
they use objective, analytic thought

patterns; and they tate tiire for reflection’26
Further insighr into negotiatine’,tyt”, around the

world can be gained by comparing the

North American, Arab, and Russian styles. Basic
cultural values often shed iight on the way

information i;;;;;;”;, *netner ano ho* .on.t”ions will be made’ and
the general nature and

duration of fhe relationship.For North Americans, negotiations
ale businesslike; tbeir t’actual

appeals are based on what ii,ey Ueti”ue is obiective inflrmation,
presented with the assumption

that it is ,nderstood by the otirer side on a iogical basis’ Arabs
use affective appeals based on

emotions and subjective feelings. Russians “nt-ptoy
axiomatic appeals-that is’ their appeals ae

basedontheidealsgenerallyacceptedintheirsociety,TheRussiansaretoughnegotiators;they
stall tbr time until ih.y unn”.u” western negotiators by continuousiy

delaying and haggling’

Much of this approach 1s based on the Russian-s’ different attitude
towarcl tiure’ Because Russians

trarlitionally oo^not subscribe to the western belief that
“time is money,” they are tnore patient’

more determined, and more dogged negotiators’ They
try to keep smiles and other expressions of

emotion to a minimum to present a calm exterior’27

ln contrast to the Russians, Arabs are more interested in long-term
relationships and are’

therefbre, more likely to make concessions. Compared with
Westerners’ Arabs have a casuai

approach to deadlines, and fiequently the negotiatois lack
the authority to finalize a deal’28

Suceessful Negotiators Arsund the Wclnld

Followingareselectedprofilesofwhatittakestobeasuccesst.ulnegotiator,asperceivedi’-.
people in their home countries. These are profiles of American,

Indian, Arab, Swedish, al:

Italian negotiators, accotding to Pierre casse, and give
some insight into what to expect frc

difl’erent negotiators and what they expect from others’29

AnnERICAN hiEGOTlATofig According to Casse, a successt’ul
American negotiator BCts !:

tbllows:

1. Knows when to comPromise

2. Takes a firm stand at the beginning of the negotiation

3. Refuses to make concessions beforehand

4. Keeps his or her catds close to his or her chest

5. Accepts compromises oniy when the negotiation is
deadlocked

6. Sets uf,t-,” g”n”.ul princiiles and delegates the detail
work to associates

?. Keeps a *u”i*u* of options open before negotiation
8. OPerates in good faith

9. ResPects the “oPPonents”

10′ States his or her position as clearly as possible

11. Knows when he or she wishes a negotiation to move
on

12. Is fully briefed about the negotiated issues

1.3. Has a goo<1 sense of timing and is consistent

14. Makes the orher party reveal his or her position while
keeping his or her own position

hidden as long as Possible
15. Lets the other negotiator come forward first and looks

for the best deal

:NDtAru NE6oT;AToRs Indians, says Casse, often follow candhi’s
approach to negotiation,

which Gandhi called saryagruha,
i.fir.n”r, in a good cause.” This approach combines strength

with the love of truth. The iuccessful Indian negotiator thus
acts as tbllows:

1. Looks for and saYs the truth

2. Is not afraid of speaking up and has no fears

3. Exercises self-control 1;Tl’* *eapons of the satyagraha
are within him”‘)

4. Seeks solutions that will pleasl all the parties involved
(“satyagraha aims to exalt

both sides,”)

5. Respects the other party (“The opponent must be
weaned from error by patience and

sympathy’ Weaned, not crushed; convefted’ not annihilated'”)

6. Neither uses violence nor insults

lt.
r.

i!
,r!
i:r

l:,.
nr:
.*”
:el
‘{i

“8,:iFl
Iiil

Chapter5.Cross.culturalNegotiationanclDecisionivlaking16l

?. Is ready to change his or her mind and dii’fer
with himself or herself at the risk of being

seen as inconsistent and unpledictable
g. puts things into psl.spectiv; and switches easily from the

small picture to the big one

9. Is humbie and trusts the opponent

10. Is abie to withdraw, use silence, and leant from within

11. Relies on himself or herself, his or her own resources
and strengths

12. Appeals to the other party’s spiritual identity
(“To communicate, the west moves or talks’

The East sits, contemplates, suffers'”)

13. Is tenacious, patient, and persistent

14. Learns from the opponent and avoids the use of secrets

15.Goesbeyondtogicalreasoningandtrustshisorherinstinctaswellaslaith

ARAB NEGOTIATOnS Many Arab negotiators, following Islamic
tradition’ use mediators to

settle disputes. A successful Arab mediator acts in the following
way:

1. Protects all the parties’ honor, self-respect’ and dignity

2. Avoids direct confrontations between

opponents

3. Is respected and trusted by all r ,, –. .-,^^L-aoc nr
4. Does not put tne farties”involved in a situation where

they have to show weakness or

admit defeat
5. Has the necessary prestige to be listened to

6. Is creative enoughio .ot” up with honorable solutions for all parties
7. Is impartial and can undersrand the positions of the

various parlies without leaning toward

one or the other

S.Isabletoresistanykindofpressurethattheopponentscoulduytoexerciseonhim
g.Usesref.erencestopeoplewhoarehighlyrespectedbytheopponentstopersuadethemto

change their minds on io*” issues (,,Do it for the sake of your father.”)
l0.CankeepSecretsandinsodoinggainstheconfidenceofthenegotiatingpar-ties
11. Controls his temper and emotions (or’loses it when and

where necessary)

12. Canuse conferences as rnediating devices

13. Knows that the oppon”nr, will hlave problems in canying
out the decisions made during

the negotiation
14. Is able to cope with the Arab disregard fbr time

15. Understands the impact of Islam on th” opponents who
believe that they possess the truth’

foilow the Right paih, and are going to “win” because their cause
is just

SWEDISH r$EGCTIAT$RS Sweclish negotiators, according to
Casse’ are:

1. Very quiet and thoughtful

2. Punctual (concerned with time)

3. ExtremelY Polite
4, Straightibrward (they get stlaight down to business)

5. Eager to be productive and efficient

6. HeavY going
7. Down to earth and overcautious
8. Ratirer flexible
9. Able to and quite goocl at holding emotions and feelings

10. Slow at reacting to new (unexpected) proposals

11. Informal and familiar
12. Conceited
13. Perfectionist
14. Afraid of confrontations
15. VerY Private

IT/\LIAN niE6OTU\TtlR5 ltalians, says casse, value a negotiator
who acts as follows:

1. Has a sense of drama (acting is a main part ol the cuiture)

2. Does not hide his or her emotions (which are paltly sincere and partly feigned)

162 Part 2 ‘ The Cultural Context of Global Management

3. Reads facial expressions and
gestures very well

4. Has a l’eeling for history

5. Does not trust anYbodY

6.lsconcernedaLroutthebellctftgur6-the,.goodimpression”-heorshecancl€ateamong
those who watch his or her behavior

7. Believes in the individual’s initiatives’ not
so much in teamwork

8. Is good at being obliging and simpatico
at all times

9. Is always onthe quivive-the “lookout”

10. Never embraces definite opinions

11. Is abie to come up with new ways to
immobilize and eventually destroy his or her

opponents

12. Handles confroniations of power with subtlety
and tact

L3. Has a tlair lbr intrigue
14. Knows how to use flatterY

15. Can involve other negotiators in complex
combinations

esMpARlrcrc pRoFrLEs Comparing such profiles
is useful. lndian negotil”:::t example’

are humble, patient, respecttbl of thJother iarties’
and very willing to cornpromise’ compared

with Arnericans, who are firmer “l””ii”ti”g
stands. An important difference between Arab

negotiators and those iiorn most other countles
is that the negotiators are mediatofs’ not the

partiesthemselves]hence,directconfrontationismadeimpossitrle’successfulswedislrnego-
tiators are conservative and careful,

dealing with factual and detailed infotmation’
This profiie

contrasts with Italian negotiators, *fro *” “ipt”‘siu”
and exuberant but less straightforward

than

their Swedish counterparts’

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r$AFid\G l t\i6 ru gGsTlATlsN

skillful global managers must assess many factors
when managing negotiations’ They must

understandthepositiorroftheotherpartiesinregardt:tle”1rc:11]h*hernationalorcor-
porate*and whether these goals are representediy

principles or speciflc details’ They should

have the ability to recognizeihe relative
i*pono*” utiachei to completing the task versus devel-

opinginterpersonalrelationships.Managersalsomustknowthecompositionoftheteams
involved, the power allotted to the members,

and the extent of the teams’ preparation’
in addi-

tion, they must grasp the significanc” of
p”.ronJ irurt in the relationship’ As stated earlier’

the

culrure of the parties lnvolv’ed affects their neg;aiing
,tyt”, and behavior and thus the overall

pfocess of negotiation. However, whatever tt” “ritrrJ,
r**”ur”h by Tse, Francis, and walls has

fbund person-related conflicts to “invite negativ;,
more relation-oriented (versus information-

oriented) responses,” ieatling them to
.on.tuO” it1ui “rrt” software of negotiation-that

is’ the

nature and tle appearanc” Jr rrr” relationship between
the people pursuing comnlon goals*

needs to be carefully “iit”tt”a
in the negotiaiion protest’3o .. . ‘

This is particularly true when representatives
of individual-focused cultures (such as

the Americans) and group-fbcused cultures
(such as the chinese) are on opposite sides

of the

table. Many of these culture-uased differences
in negotiations came to light in Husted’s

study

onMexicannegotiatofs,pelceptionsofthereasons-forthefailureoftheirnegotiationswith
u.S. teams.3l The tr,le”icunrnonug”rr’ interpretations

were aff’ected by their high-context

culture, with the “i,u*rt”rlrti”,
oi un inoireii approach, patience in discussing

ideas’ and

maintenance of dignity. Instead, the low-conte*i-Americans
conveyed an impatient’ cold’

blunt communicative style. To maintain the.
outward dignity of the.ir Mexican counterparts’

Americans musr approach negotiation,
*iil-tt.*i”un’r with patience and tolerancs and

refrain fiom attacking ideas because these attacks
may be taken personally’ The relationships

among the factors ot.rorr-“urturul n”gotiotion
oir”urr”a in trris chapter are illustrated

Exhibit 5-5.
The successful management of intercultural

negotiations requil’es that a manager
go

beyond a generalized uno”rriunaing of
the lrru., uno vaiiables involved’ she or he

must ( I ) gain

specific knowledge ot: the parties in rhe
upcomllg meeting, (2) prepare accordingly

to adjust to

and control the situation, unO (:) be innovative’3z
Resear’chhasshownthataproblem.solvingapproachisessentialtosuccessfulcross-

cultural negotiations, whether abroad or in
the f,ome offlce’ although the approach works

Chapter 5 . Cross-cultural Negotiation and Decision
Making 163

LXHltsiT 5-s Cross-cultural NegotiationVariables

Culture

.:.::. .:.
I osK versus

interpersonol
relotionshiPs

\..

Negofioting sfles:

obiective/subiective/oxiomotic
Neootioting behovior:
delense/ottqck’/trust

deception/pressu re/concessions

Verbql ond nonverbol behovior

Atiitudes toword time/scheduling

Goolr
Notionol/corporote

Principles versus specific detoils

Composilion o{ teoms

Level oi PrePorolion

\
Trust level

ond durstion
relolions

{
4
Culture

:ift?rently in various countries.33 This
problem-solving apploach^ requires that

a negotiator

:re at everyone with 1.espect, avoid making “”v.””
rJ”l uncomfortable’ and not criticize

.,,rblametheotherpartiesinapersonal*ayttratmaymakesom€onefeelshame-thatis’

””t
tfrlrr*.h

by the Huthwaits Research Group reveals
how successful negotiators’ compared

:i average negodarors, *unug” the planning process antl
their face-to-face behavior’ The

group

:,”.und rhat during the planning pr.ocess,
,u.r”rrruin”goii*or,

“onsider.a
wider range of options

_urd pay greater attentiol.t to ar.eas ol common
gr”-io. Skillful negotiators also tend to make

;*.ice as many comments regarding long-term
isiues and are more likely to set upper and

lower

rlmits regarding.peclnc fointr. tn’tt”ir.fu””-to-f*'”
b”huuior’ skillful negotiators make fewer

:iritating comments–*.,”h u,
..We,re nraking v.’ u *”‘*ous offer,” make counterproposals

less

::equently, and use f’ewer reasons to back
up u.gur.,]”*n”‘ In addition’ skilled negotiators

pfactlce

:;tive lisrening-“rki”;;;;;ions, clarlying th*eir
understanding of the issues, and summa.tztng

le issues.-‘

Using the lntep”n*t to Suppcnt Negctiaticns

\{o.erntechnologycanprovidesuppol’tforthenegotiatingprocess,thougtritcan::-1!e.::e
place of the essential iui.-ro-ru.” ing.eclient

in m-any insianoes’ A growing component
lor

eiectronic cornmerce t, it. A”u”fopment of applications
to- support the negotiation of contracts

and resolution of oisputes. a, w.u appiications
develop, they may provide support

for various

phases and dimensio;:; as
*Muiriple- t;;; *”iiipr.- pariy-business transactions of a

buy-sell nature; int”.nutionut dispute
r”rolu,ion fiu’in”” Oi’po”t’ political disputes);

and inter-

nal company negotiations antt “t’mmunitations’
atnong others.”r)

ri:

164Part2,TheCulturalContextofG]oballvlanagement
NegotiafionsLlpportsystelns(NSS)canprovideSuppoilfbrthenegotiationprocessinthe

following waYs:

.lncreasingthelikelihoodthatanagreementisreachedwhenazoneofagreementexists

. S:*::*fil:XT:”1′:::T””Jl,*'””JJl or negotiarions,
such as costs caused bv tirne

O”r”v- itoit”t’ “i”i*”t”1′
*d afi orneys’ fees’among others

‘ Maximizing the chances for
optimat outcolnes

oneWeb-basedsupportSystem,deveiopedatCarletonUniversityinottawa,Canada-
cailect lNSplRE-provide’ uppti.ationslo,

prrpting an

gotiatins opdons afler a sertlemtl’i:t:t^:*::tt{rt n;;t”;n'”‘
unl asiess offers; the site also

[as graphiial displays ofthe negottatlon
process’

E-NEG0TlATloNsTheadvantagesofelectroniccommunicationsarewellknown:speed,less
rravel, rhe abilty to lay out *r”h;;j;n”

into’*utlon to be considered by
the other party

over rime. The disadvanrog”r,
t’,o*JJi;, ;;il; kill a. deal before it gets off

the ground by not

being able to build trust and int”.prrronut
rJlationships ou”t tit” bJfore getting down

to busi-

ness. In addition, non-verbal “”J;;;’;;;
ior,, ut,t’ough videocont’erencing

is a compt’omise

t’or that PurPose’
Rosetteetal.notedthat’.openingoffersmaybeesPeciatlYaggressiveine.mailaScom.

pared to tace-to-face negotiations.i””^i,–.”*puter-medlateo “orniitnic*tions’
such as e-mail’

loosen inhibitions and cause negotiators
to become *o'” “o*f”titive

and more risk seeking’ The

increase in competitive and risky
behavior occufs because e-mail

do”ls- not communicate sociai

conrexr cues in ih” ,urn” way as d;;;;;e
of another person.”38

Managing eonflict Resolutian

Muchofthenegotiationprocessisfraughtrruithconflict-explicitorimplicit-andsuchcon-
lict can often lead ro u’ri*Ooff, or a lose*1o'”-‘ituutlon’

1.nis is regrettable’ not only because

of the situation at hano, b|t’;1r”;;.;”r” lt
p*U”OfV *itt ‘t’u’

off fuiure opportunities for deals

;; ;; ;” the parti e s M *1′ ;r t” ::T : :i’,T *ffi[il,| :::’;1,fft:”T’ii ii”fi1T:
between the parties-in their expectatlons’

ln
fo””r, Negotiating with

munication styles-as iilustrated
in the Comparative Management

the Chinese.

COMPARATIVE MANAGEMENT
IN FOCUS

Negotiating with the Chinese

TheChinesewayoJ.makiltgdecisionsbegins’lvitltsocializationandinitiatiotlofpersonal
guanxi rather ,,*r’iii*rzr” tlisc,ssioi. The focus

is ttot nnrket r.eseatch’ statistical

atnlysis, facts, Pow;;Point
presetttatiou” o’ *-‘i”-point business discussiott’

My focus

must be onfosteing gttanxi’ SuxNv Zgou’
GenetwtMarwg-::f;’#;:1t;::ry::i

WhenWesternersinitiatebusinessnegotiationswithrepresentatives’:”i:1″‘-T’e,sRepublicofChina.
cuttural barrier, .onr.ont nJ*, ,j0″..

H”**”r, *” .t o,iro r”cognize ttrat tt’ere are
regional cuitural differ-

ences which may aft-ecr “”r”ri-ir*r, “s
detailed t” i;;;’; well as regional economic

differences’

In addition, as concluded ;i #ffi;; ir”e “, “1.,
di” are considerable generational diiferences’

panicular wirh rhose ,”””** O”.Oi” *r,o. t iu”,U”J;;’.;i;ii”
the west and ure more familiar

with

westcrn ways and lan-guales.
whereas the older generation holds

to more traditional culture and

negotiafi on strategies’ru

.::1’l”tf ili

.Hfi?HHJ?::”trifi JG,”f i’;.;,9y,,’ilii””i::::i.-“?”;:ili:,T,ff ff:#,ffi
*Ti”l ;T:i;ili,illiiiil’xii;’ilil’ ];; il 1r;,x ff “*:”ff ;”1f’::i:iJ:3;tr”J;levent: (1) preparation, (2) retatronsnrp
uurru,rts’ \Jd
;;;;;;, in r-eality these are seldom dis-
i+i p”tt””t*n, and (5) concessions
t”l::::::.”
-o.r rrqn temoorarily revert
to an earliel’stage
ill”iH:::tl; tri”i1*le;:;l;’
“ruill;::{**:
:T#:T:’;::”1#.:i:Tl:::::^n:tinct stages but rather tend to overtap; Irsgulr4rwrr
ru”l*irrt””
,.o””r. inro stages to discuss the
with that in mind’ it is useful to bieak.dow” :T l:Tl:i:::”t:::T”*ect. so that they misht
fJ*Ji:l#il’*iii’,ll-l:’i:ffi :i;i.]’.;;f ::iTTd*:Xmml;””$”:lL?,:f il
;’J:”1*;l*lir?*;-:-;lT,HtlH:::’J;’;;; ‘?-*”
i” s-niti, s-z and discussed in
the following sections’
Stage Sne: Fr*Paratlon
Theimportanceofcarefulpreparationforcross-culturalnegotiations.cannotbeoverstated’Tothe
extenr that time pennits, a distinct
advantage .”” u” g”i””i if negotiators familiarize
themselves
rvith rhe entire conrex, il;;;i;;;nd ofiheir “ou,r”*.pun,
(no m.attlr where the meetings wiil
rake place) in addition ioit” Jp”.ifi” ,uUl”riJi”
tJn”gotiut”O’.Because most negoliation
probrems are caused rrv”iiii”r”*es in culiurs”;;;;;nd
environment’ hours or days of
ractical preparation fbr negotiation
can be yr:T; ii tfrese-tactors are not
carefully considered”
Tounderstandculturaldifferencesinnegotiatingstyles’manlgersfirstrrustunderstand
rheir own styles and rt”n J”r”r*ine
how thelidifferlrom the norm
in other countries’ They
can do this by comparing profiies
of rhose p”;;;; io u. ,u”””ttfui negotiators
in different
countries. Such profiles-r”fl”r, the
value *yt’**,’uttitoO”” and-expected behaviors
inherent
in a given sosiery. o,r*r-rr”iirns of this
.;;r ;;;;;io” una .otput” negotiating
styles
around the world’
vAR€AELESlsTl-lEruE&sTlAYlFlGpfis{€ssAdeptnegotiatorsconductresearchtodevelop
a profile of their.”””;;;;; so rhar they know,
in *or, ,]tuu,ions, what to expect’ how to
pre-
sare, and how ro ,.u”r.-s’;;iuit
5-3 shows 12 ;;i;;o “onrioe.
when preparing to negotiate’
These variables can, to a grear degree,
h”lp ;;;;;;, *o”tuuna the delp-rooted cultural
and
narionai morivations ancl iraclitionut
pro.*rr”r-.uniJ’ing negotiations wit’ people
from other
:ountries’
f,X*’ltSlT 5-2 The Negotiation Ptocess
PrePorotion
RelationshiP building
Exchonqe ol tosk-relqted
iiformotion
Persussion
Concessions ond
ogreement

EKHlBll $-3 Variables in the Negotiation Processs
154 Part 2 ‘ The Cultural Context of Global Management
l,Basiccorrceptionofnegotiationp’ocess:Isitacompetitiveprocessoraproblem-
solving approach?
2, Negotiator Selectiotl critefia: Is selection based on experience’
Status, expefiise,
personal attributes, or some other characteristic?
3. Significance of rype of issttes: Is it speciflc’ such as
price’ or is the focus on
reldionshiPs or the fomat of talks?
4.ConcentwithprotacohWhatistheimportanceofprocedures,socialbehaviors,
and so forth in the negotiation process?
5, Complerity of communicative context: What degree of reliance is
placed on
nonverbal cues to interpret information?
6,Natureofpersuasivearguments:Howdothepartiesattempttoinfluenceeachother?
no tney rety on rational arguments, on accepted tradition’
or on emotion?
T.Roleofifidividuats’aspiratiotts,’Aremotivationsbasedonindividual,company’or
communitY goals?
8, Bases of trust: Is trust based on past experience’ intuition’ or rules?
g. Riskaaking propensity: How much do the parlies try to avoid
uncertainty in trading
information or making a contract?
ilt,Yalueoftime:Whatiseachparty’sattitudgtowartltime?Howfastshould
negotiations proceed, and what degree offlexibility is there?
lL.Decision-ntakingsystem:Howdoeseachteamreachdecisions-byindividual
determination, by majority opinion, or by group
consensus?
12. Fotvt of satisfactory agreeme’fi: Is agreement
based on trust (perhaps just a
handshake), the credib”ility of the pu’ti”‘ commitment’ or a
legaily binding contract?
After developing thoughtful profiles of the other
party or parties, rnanagers can plan for the
actual negotiation meetings, at the same time.re*aining
op”tt to realizing that specific people
may not fit the assum”o-.-Jturut prototype. Prior to
the Leetings, they should find out as mucl:
as possible about (1) the kinds tf OemanO, that might be made,
(2) the composition of the
,,opposing,’ team, and (:) tr,” relative authority that the members
possess’ Atier this’ the man-
agers can gear rheir “”glri”ii””
tirategy specifically to the other side’s lirm’ allocate
roles tc
diiferent team members, decide on concesslons, and
prepare an alternative action plan in case a
ncgoliated solution cannot be lound’v
Followingthepreparationandplanningstage,whichisusuallydoneatthehomeoffice.
thecoreoftheactualnegotiationtakesplaceon-*i”‘”‘i”thetbreignlocation(ofatthemanager’i
home office if the other tcam has decided to travcl
there)’ In some cases’ a compromise on the
location fbr negotiations can signal a cooperative
strat€gy, whi{rh weiss calls “Improvise an
Approach: Eff’ect Symphony”-a strategy availabie to
r’-elotiators familiar with each other’s
culture and willing to put negotiation on an equal fboting.
weiss gives the following example o:
this negotiation strategy:
For their ilegotiatio,ls ot)er constrltction of the tuwrcl
unclet the English chanrrcl’
British and Frettch rcprcSelttuti|,,, o|,”,d to panitiott talks clnd
alternate the sile
lsettveett paris anrt Lindon. At each site, the
negotiatars were to use established,
local rtals, irtcluding tlte langtrage ‘ ‘ ‘ thus puictuatittg
approaches by time and
,pnrr,l0
Inthisway,eachsidewasputintothecontextandthescriptoftheothercultureabouthali
the time.
The next stage of negotiation-often given short shrift by
Westerners*is that of relation-
ship building. ln most p*l “f
the world, this srage usually has alrearly taken
place o’ is concur-
renl. with other Pleparations’

Chapter 5 ‘ Cross-cultural Negotiarion and Decision
Making 155
Stage Trruo: RelationshiP Building
Relationshipbuildingistheprocessofgettingtoknowone,scontactsin-ahost:*”:ly^i,1
iuilding mutual oor, U”for” “-turt
ing on buriri”r, discussions and transactions’
This process ls
iegarded with much more significonr” in most farts
of the world.than
jt is in the United States’
r*.s. negotiarors are, g”;;;l-t i”aking, objectir” uuo* rhe specific
matter at hand and usually
:l.anttowastenotimeingettingdowntobusinessandmakingprogrcss.Thisapproach,well
understood in the United States, can be Oirurt
ou,li the foreign negotiators want to take enough
iime to build trust and respect as a basis ro,
n”gotixing contr;b’ i1,t_u”n cases’ American effi-
:iency interferes with the patient development of
a mutually trusting relationship*the very
;ornerstone ofan Asian business agreement” ents to individuals, rather
In many countries, such as Mexico and C^hina’
personal commltmr
:han the legal system, t’o.* ,fr” basis for the enforcement
of contracts’ Effective negotiators allow
rlenty of rime in rheir schedules for such
t”rJ””Jip U”‘lUlT^::t: bargaining partners’ This
lrocess usually takes the form of social €vents’ Jgur:,
and.ceremonies’ along with much nontask
rounding-general.politeconversationandinformalcommunicationbeforemeetlngs-l
r..hile all parties get to know one another’ In such cultures,
one patiently waits for the other
rartv to start actual business negotiations, u*r” ttrutrelationshipbuilding
is, in fact’ the first
il’J”;;;;;;;;r.ii i, i, ur.i1y recommended that managers
new to such scenarios use an
i*termediary-ro*”on” *ho alreaiy has the trust ana
,”rp””iof the foreign managers an-d who
ireretore acts as a
..relationship bridge.” Middle Easterners, in particular, prefer
to negotlate
*rough a trusted int”r*”aiur.y, and foi them as
well, initial meetings are only for the purpose
of
:ettingacquainted.a,uu,aouu,inesswiththeperson,notthecompany’andthereforemutual
:rust must be established.
In their best seller on negotiatio n, Getting ro Yes,
Fisher and Ury point out the dangers
of
rot preparing well for negotiations:
Irt persian, tlte wotd
,,compromise” does not have the English meaning of a midwal’
solutiotr whictr both sides can accept, but only
the negative meaning of surrcnderirtg
one’s principles. Also, “ntecliator” nrcans
“meddle|” soweone who is barg’irtg itt
uninvitecl’In]gS0,tJnitedNatiottsSecretary.GenetulKuftWatdheim.flewfulranto
deal with *, noriioir”rituotiou. National liartian radio and television
hoadcast itt
persicut a comnlent he wqs said to have made upon his
arrival in Tehran: ” l have
conte as a rtecliator to trork oLrt a comproruise”‘ Less
thaft an lwur later’ his car was
being stoned b)’angtj lranians’|3
As a br.idge to the more formal stages of negotiations,
such relalionship building is followed
11 posturing*that is, general discussion that ses
tfr” tone for the meetings’ This phase should
result
,:r a spirit of cooperation- ro n”tp ensure this result, negotiators
must use words like ‘tespecf’ and
‘rnurual beneht,,rather;ha; unguage that would suggest affogance,
superiority, or ufgency’
Stage Tt:ree: Exchanging Task-Related lnformation
in the next stage-exchanging task-related information-each
side typically makes a presentation
:nd states its position; a question-and-answer session
usually ensues’ and alternatives are
jiscussecl. From an American perspective, this represents a
straightforward’ objective’ efftcient’
:nd understandable stage. However, negotiators
from other countries continue to 1nke a more
indi-
:ect approach at this stage. Mexican negotiators
are usually suspicious and indirect’ presenting
iittie substantive materiaiand more lengthy,
evasive conversation’ Ftench negotiators enjoy
debate
.:nd conflict and will often interrupt presentations to argue
about an issue even if it has little
:elevancetothetopicu”i”gp’*'”*”o.rn”Chinesealsoaskmanyquestionsoftheir*””:::i:”
and delve specifically unJr”p”ur”afy into the details
at hand; conversely’ Chinese presentatlons
;ontain only vague and ambiguous material.
po, inrtun””, after about 20 Boei’g officials spent six
rveeks presenting masses ofliterature and technical demonstmtions
to the Chinese’ the Chinese
said, “ihank you for your introduction'”la
The Russians also enter negotiations well prepared and
rvell versed in the specific details
of the matter being presented. TJ answer their
(or any othet side’s) questions’ it is generally a
good idea to bring along someone with expertise to answer
any grueling technical inquiries’
Russians also put a lot of emphasis on protocol and
expect to deal only with top executives’

<- 156 Parl2' The Cultural Contextof Global Management Adlersuggeststhatnggotiatolsshouldfocusnotonlyonpresentingtheirsituationand needs but aiso-o-n showing un una"*tunoing of their opponents" viewpoint' Focusing on the enrire situation confronring each p";;;;;r;"rages the negotialors to assess a wider range of alternatives lbr resolution, rather ttrui fi.iti"glh"mselues to their pt'econceived' static posi- tions. She suggests that to beI11"r, "tr*i"., n"g"o,lu,o,, should prepare fbr meetings by practicing role reversal'1s $tage Four: Persuaston r .r- -^*r^- In the next phase of negotiations-persuasion*the hard bargaining StafiS' Typically, both parties : try to persuade tt e otk er iJu"r"p, *or. of ttreir._position andlo give up some of their own' Often' some persuasion has J;; ,k.n.g11"" b"f;;rh; in soclal seitings and through mutual contacts.IntheFarEast,detailsarelikely.on"*o'i.*aoutaheadoftimethroughthebackdoor approach(houmani).'rorthemostpafi,however'themajorityofthepersuasiontakesplaceover one or more negorlarrng sessions. Internarion;i;;;"t; usually find that this process ol ; bargaining and making .'orr."r*ion* is fraught with difficulties because of the different uses and t' interpretation, oi u"ruuilnJnono".uut u"rr*iorr. 'q.ithough variations in such behaviors influ- I ence every srage of ,h";;;;;;l"n process, ;;;;p1;; a particularlv powertul roie in per- , ,,",i"","'p."i,tty;t,r,"yi,"noranticipated.-^1^l.1.^',oo^fr.ertnintactics'whichski11ed Studiesofnegotiatingbehaviorhave.revealedtheuseofcertaintactics,-l':1:l*j negotiators recognize a;;, such as promise_s, threats, and so on' other' less savory tactlcs al.e : someti,nes used in intemational negotiations.'.$1;;t"d 1:lf":'"',:i:i'.tlXj"liJi;tii,i'"-'*?i , ilffiHffi-,lri ilST;; .non, 6 mi siead "opp""" ",'" del iberateiv'16 s ome nesotiators. mav give wrong or distorted factual intbrmation o, ui" th" excuse of ambiguous authority-gtvtng conflictingimpressionsaboutwhointheirp.tvr,u'tr'*powertoT1|"ucommitment.Inthe rnidsr of hard bargaining, the prudent lnr"rnuri'onJ-"n"g"t will follow up on possibly mis- ilil;;r""""'t*"::l'J:,T:'J,1;'iftT:ffi:18 nesotiarors in a srressrur situation phvsi- cany or psychologically ;';;i;;:ir eiinS .n lt'*"tJf 'r."i'. These include uncomfortable room temperarures, too-trrigtrt iighting, .ud"n"rr, t;;;;;;;il and other irritations' Internationai negotiators must keep i;;il' 6*:"-:' thil)l;;;;;il;;"; like dirtv tricks to Americans is simply the way other cultures conduct ""g"ri"ii"".r.-In ,otnt South American countries' fot' example, it is common;';;il;"""t,:]f misleading or false intbrmation' The most subtle behaviors in the n"gotluiion pl;;":;' in-1-o:.':1tn" most difncult to deal with, are usually 't'" non"*Jof ****ug"'-th" ot" of voice intonation' facial and body expres- sions, eye contacr, d;;,';;;;tirni-ng ^or trr"Jir.urrionr' Nonu"rbal behaviors' discussed in previous chapters, ^* ,;;*iJ aspectrif "ultur" ur"a by people in their daily lives; they are not spccifically changed ,..in" O"-*"r", ol n.gotiuri*. e*l"g thosc behaviors impacting negotra- tions is the direct.o**unirurion style' such as with Germans' compa|ed with the indirect styie' such as wirh Japanes.;i;;;;,;1ro, ir.,. inai"iJooiltt-collectivism cultural dimension is one which greatly guides ;;;ffi":*:: or tr,. .Jatiue motivation of personal self-intcrest 1n individualistl. ,o";rtiJi,'r-; ;, the united states; this compares with the g.oup-interest inAsiancuitwes,sothatnegotiatorswilllikelygivemoreimportancetotheirsocialobligations;;; " ""d' ;t;*:;m J" s be e n d i s c us.'" d ""'.,". IT"^:::' ii'jfi : :ilffi JHiJl l,'i' primary pulpose -"d";1y*;;11 stages of the regotiation process' In particular' persuaslon 1s an integraiparlofttteprocess-ofrnakingconcessionsandarrivingatanagreement' Stage Five: eencessions and Agreefllent Inthelaststageolnegotiation-ctlncessionsandagreement-tacticsvarygreallyacross cultures. well-prepared iegotiators ar. o*ure.oll various"concessitln stratesies and have decided ahead of time what their o-wn concession ,*or.gy **iiilt' putitiut wirh tie typical initial posi- tions that various paries ir" iit"ty to take, ,t.y?n"* ,t at Russians and chinese generally open rireir bargaining wirh *;;;;;;lions, asking to1. *or. than rhey hope to gain' whereas srvedes "*rir ""n H1[T#lin:;[,fl'Jil':[l?,i','nT,to"u"r end resurrs are auained bv starting. with exu€mepositions'Withtlrisapproach'theprocessofrcachinganagreemenlinvolvescarefultim. ing of rhe disclosure information and of concesrl;;. M"t;piopt" i"tto have studied negotiations Chapter 5 ' Cross-cultural Negotiation and Decision Making 157 believe that negotiators should disclose only tl're intbrmation that is necessary at a given point and that they should ny to oltain intbrmation piece uy piece to g'adually .get the whole picture with- out giving away their goals or concession strategy' These guildelines will not always work in inter- cultural negotiations because the American pro".,, of adiressing issues one at a time' in a linear fashion, is not common in other countries o, culturer. Negotiatirs in-the Far East' for example' approach issues in a hollstic manner, deciding on the whie deal at the end' rather than making i ncremental concessions' Again,atthefinalstageofagregment.andcontract,localpracticesdeterminehowthese agreements will be tonor"a]WnerJas Arnericans mke contracts very seriously' Russians olten renege on their ronrru.ir. ite Japanese, on the other hand, consider a formal contract to be somewhat of an insult una u *urt. of time and money in legal costs, since they prefer to operate on the basis of understanding and social trust'18 Uore attJntion to this and all the negotiation phases might have led to befter results in the French-Chinese joint venture discussed in the rnanagemeni focus. MANAGEMENT FOCUS Cultural Misunderstanding-The Danone-Wahaha Joint Venture in Chinale SiiTJ!lJ?.?i;#,Hil;'rnJ ,o .ontinue to tester durins the oferations phase one such rV is the Sino-Frencn collaOoiaiion that *u, for*"Jty Croupe Danone (hereafter Danone)' and Hangzhou wahaha crouJJo. tp',.ieaiter wnn). Danone is one of the largest food conglomerates from France. wahaha is china,s largest beverage company that was started ln 1987 and was controlled by the goverr*.ni of H'angzhou's S6tngit-tunq District' From its inception' Zong einghou ran the operations oi WHU. riihen the com"pany ionverted itself into a private entity' din6nou took the role of a minority shareholder'. The Danone-wnu bini u"nirr" was established in March 1996 and took the trademark name of Wahaha n..url"u"o+'n; t;;;il;;;J visibilitv in the Chinese market ln emersing markers, Danone gr.* l;.i.ui*g u niultitude of proiitable JVs. in lndia, Pakistan, Vietnam' Columbia, and other.o*iri.r. Onihe other hand, WHH achieved its market expansion and cor- porate growth in Cfrina by iurning itself into a, nutlonal brand and highly successful food and beverage company. ff.l" O#"n*-Wihaha JV dealt with the areas of food and beverages and grew at a respectable rate. For Danone, this was a good strategy to enter into china For wHH' the JV heloed the company to make a linkaqe with a well known global brand' ' "" r.r.oj"tilns iesulted in the foilowing salient features of the JV: Many cross-border joint ventures encounter problems because the partners' differences ln man- asement styles, corport,- .ittt"rltrlJt*ttltu tutJ i"i:: 1""J::::::::".t:l* T:J:::il:$ 1. ownership of the JV included foreign partners (51 percent), wHH (39 percent), and emPloYees (1 0 Percent). 2. The JV encomprrr"J riu. entities: Hangzhou wahaha Baili Foods, Hangzhou wahaha Health Foods, Hangzhou Wahaha Foods Co- Hangzhou Wahaha Beverages Co'' and Hangzhou wahaha Quict rrozen iooor. ounon. uno i*tufine collectively invested $70 million in the five entities of the JV 3. As agreed by Danone. the day-to-day operations of the JV resided with Qinghou' As the JV's business operations expanded in china, activities of Danone and wHH also became intertwined uno.onipl."-ieaOing'to differences in opinion, corporate control' and man- agement styles. Betwee" 1gt6 and 2006, the following chanqes took place in the structure and operations of the Danone-WHH JV: 1, Because of consumer demand and market growth, the JV'soperations in china witnessed the emergence of 37 business entities. Oa-none attempted to buy out Qinghou but the negotiations were unsuccessf ul' 2, public rows erupted between the two companies when they kept on blaming each other for breach of contract. Danone blamed qin;nou for going outside of the contract and profiting from 80 unauthorized businesses. fiis inctuaJd misusing the Danone brand and its distribution sYstem in China' 158 Part 2 . The Cultural Context of Global Management 3'ThedrsputebetweenDanoneandQlnghoubecameevenmorepersonaIwhenDanonefiled a law suit against qin"ghor;, *iie and iaughter in a Lo, Angeles court regarding tlreir busi- ne:s interests uno unu'utilu'"J lv-'elated dea{ings outside <>f !l:i”
4. Danone filed {or uroii*iion p’oceedings in Stockholm
in May 2007′
5. During the dispute, ;;;;;J.i; {iledlegal .iui*t
.gtintt ien business entities that were
beiieved to be contrJleO n1l wHn in Samoa
and the British Virgin lsland’
6. The Danone-wHH .;;;l;:.me so much .ru,oiLo
that Chinese and French governments
asked the .o*puniui to negotiate an
“amicable” resolution.
FromthishighlypublicizeddisputebetweenDanoneandWHH,welearnthefollowinglessons:
1. Cross-cultural misunderstandings and unfamiliarity
with the JV partner were at the heart
of this disput”‘ ai;;;;;; Inti*p|,*t’t”iur tt/e ana
wHH s consistent qrowth in China
could have uu.n on.lt”ti.. irrr.r of this dispute since
Danone management was alienated
2. #[t ffi::; used media and pubric rerations campaigns in China
and western markets to
justify their urgrttnt’, instead of having open neQotiations’
3. ln any JV retationsrrif-uuilding and “*.r,ung”‘ot
pill”a-t”rtt”d information is critical in the
pori-it”gotiaion pi’Jt” tr’tt ii based on concessions
and agreement’
4, lt seemsthat oanon!anJwun tactea open communication
in their day-to-day manage-
ment of the JV Also important was the u*r of ,trti
that happened to be missing in the
partners’ dealings ‘- -L’.^^-^-^*^rnia< n{ton hecome an enension of their 5. According 1a China Economic Review' Chinese companies often becom founders, personal o"rirl"grCIi.g day-to-oa-y Lrrin.tt operations. Most chinese businesses do nor see u *uio,1;fi!,*,:";;;,,;;; ;1/^sj;;;;;i[ and en{orcement of rishts roreisn partners must makJsuie that their oesignatea"m.""g.it ;"0 staff.members are included in the day-to-day management o{ the ry rn intJrnationii tnutrett. JV-related contracts can be abused and could r"ul io cross-cultural misunderstands and operational disruptions' 6. Finally, in lvr, '"ut6'i'r'tip-uuirUing takes trmJ an;;;# #"unt of interaction is needed between ,r," pu|,ii"ri. in ii,. c-ase of panone-wHH JV. partner conflict, face-saving problems, nlu*"-gu;., and accusation, .outd have been avoided had the two companles communicated openly during the n.go,,rion Jr,ase and a{terwards Also it seems that Danone ,"0 wHH lii ioi'r"no.,u."o ,n.it'i"i"-.;;^l and high-context cultures and management stytes that eventually led to this conflict' UniversitY CoPYright @- Wtttt." .*l"t".ly for this book by Syed Tario Anwe 2009 by Syed Tariq Anwar' Used with permisslon U NPERSYANAIruG fttEGSTIATISru sT'VLES clobalmanagerscanbenefitfromstudyingclifferencesinnegotiatingbehaviors(andtheunder- lying reasons ror tt,pm),'*ti"t, "un t"ip*,",n,"1;;;tr; *iat ls happening in the negotiating process. Exhibit 5-4 ,h;;;1;*" ""u*pt., or-JltrJrrnr"s among North American' Japanese' and Latin American styles. Brazilians, for "^u*'i", generally have a spontaneous' passionate' and dynamic style. Thcy are, very talkativc, unJ'purtluturly use the word "no" extenslvely- more rhan 40 times per half,-hour compared *ilrr"+.iii."s fbr Americans' and only 1'9 times f.r the Japanese. Th"y ;i;" aiii"'*url"ary rro* Am".itans and the Japanese by their use of **i*tlu" pitysical contact'20 .,--^-^ T,.ar, r"q'e qnen TheJapanesearetypicailyskillfuinegotiators.Theyhavespentagfeatdealmofettme and effort studying u.s.'Jutture and business;;;;";t ;'h"n Americans have spent studying Japanese pracrices. ; ;il;i ""u*pt" ot itris conlmst was apparent when Charlene Barshefsky-a rough A.;;;; internaiional iu*f". who had never visited Japan before-was sent there as a lrade "";;;;;;""d had littte knowledge of its counterparts' But Mr' okamatsu' like most Japanese,"ril##,;;';; ;;iii"t *irr' n*"rica' He ha

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