Page 249 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes Objectivity: “Americans make decisions based upon the bottom line and on cold, hard facts.”
“Americans don’t play favourites.” “Economics and performance count, not people.” “Business
is business.” Such statements well reflect American notions of the importance of objectivity.
The single most important book on the topic of negotiation, Getting to Yes, is highly recommended
for both American and foreign readers. The latter will learn not only about negotiations but,
perhaps more important, about how Americans think about negotiations. The authors are quite
emphatic about “separating the people from the problem,” and they state, “Every negotiator
has two kinds of interests: in the substance and in the relationship” This advice is probably quite
worthwhile in the United States or perhaps in Germany, but in most places in the world such
advice is nonsense. In most places in the world, particularly in relationship-oriented cultures,
personalities and substance are not separate issues and cannot be made so.

Example: Consider how important nepotism is in Chinese or Hispanic cultures. Experts
tell us that businesses don’t grow beyond the bounds and bonds of tight family control in the
burgeoning “Chinese Commonwealth.” Things work the same way in Spain, Mexico, and the
Philippines by nature. And, just as naturally, negotiators from such countries not only will take
things personally but will be personally affected by negotiation outcomes: What happens to
them at the negotiation table will affect the business relationship regardless of the economics
involved.
Competitiveness and Equality: Simulated negotiations can be viewed as a kind of experimental
economics wherein the values of each participating cultural group are roughly reflected in the
economic outcomes. The simple simulation used in our studies represented the essence of
commercial negotiations—it had both competitive and cooperative aspects. At least
40 businesspeople from each culture played the same buyer-seller game, negotiating over the
prices of three products. Depending on the agreement reached, the “negotiation pie” could be
made larger through cooperation (as high as $10,400 in joint profits) before it was divided
between the buyer and seller.

14.3.3 Differences in Thinking and Decision Making Process

When faced with a complex negotiation task, most Westerners (notice the generalization here)
divide the large task up into a series of smaller tasks. Issues such as prices, deliv-ery, warranty,
and service contracts may be settled one issue at a time, with the final agreement being the sum
of the sequence of smaller agreements. In Asia, however, a dif-ferent approach is more often
taken wherein all the issues are discussed at once, in no apparent order, and concessions are
made on all issues at the end of the discussion. The Western sequential approach and the Eastern
holistic approach do not mix well.
That is, American managers often report great difficulties in measuring progress in Japan. After
all, in America, you are half done when half the issues are settled. But in Japan, nothing seems to
get settled. Then, surprise, you are done. Often, Americans make unnecessary concessions right
before agreements are announced by the Japanese. For example, one American department
store buyer traveling to Japan to buy six different consumer products for his chain lamented that
negotiations for his first purchase took an entire week. In the United States, such a purchase
would be consummated in an after-noon. So, by his calculations, he expected to have to spend six
weeks in Japan to com-plete his purchases. He considered raising his purchase prices to try to
move things along faster. But before he was able to make such a concession, the Japanese quickly
agreed on the other five products in just three days. This particular businessman was, by his own
admission, lucky in his first encounter with Japanese bargainers.

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