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2.4 Comparison in Negotiation
Every step in the negotiation process includes the possibility of blowing up a future deal. When dealing with unfamiliar cultures, this is extra sensitive. Unintentionally, you could blow up a deal by doing something which might be considered normal in your culture. Jeswald W. Salacuse (2006) has suggested 10 ways in which culture can affect international negotiations.
1. Negotiation Goals: Relationship or Contract
In America, most often a contract is persued. Where both parties write out strict rules and guidelines that must be followed. In Asian countries, like in Taiwan, more often a relationship is pursued, and a contract is more often regarded as a guideline. The main purpose is often to get a strategic and positive relationship on the long term.(Hofstede, 2010; Katz, 2006b)
2. Attitude: Win-Lose or Win-Win
In approaching a negotiation situation, your attitude should match your opponent. You have different ways that you can approach a negotiation meeting. Asian countries have displayed to favor a Win-Win situation, in which a negotiation is viewed as a collaborative, problem-solving process (Drake, 1995). While western countries have more Win-lose negotiators, where one side wins and one side(Chang, 2006a) loses. I think that the majority in Win-win negotiators in Asia relates to that they like to have
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long term commitments and connections. With a win-lose attitude, these connections wouldn't stay very long.
3. Personal Style: Informal or Formal
Personal style refers to the way you talk to others, dress, speaks, uses titles, interact and communicate with other persons. Personal style often has a strong connection to culture. Which personal style you will use in a negotiation is usually derivative of where you grew up. Salacuse (2006) talks about two clear differences in personal style, either formal or Informal. When you approach a negotiation informally, you might call the other party by its first name, roll up your sleeves, sit on the desk, or just treat the other party as a good friend instead of a business partner. For Formal behavior, you would speak to the other party using both title and last name to address him/her. It’s an unspoken rule that it’s best to go start with a formal style, and then go to an informal stance if the situation allows it.
4. Communication: Direct or Indirect
The methods of communication amongst diverse cultures can be very different. In Western communities, it’s often encouraged to be a little bit more direct. While in Asian countries, like in Taiwan, it is better to be a bit indirect. If you are coming from a western point of view however, it is easier to be confused when Taiwanese business people won’t give you a direct answer. Sometimes you might think that the negotiation might still be going on, or even that they agreed, when the opposite party had already
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rejected the proposal. When picking to be direct or indirect, it is important to know that indirectness can make the opposite party impatient and can come over as insincere.
While directness can also be perceived as insulting and aggressive.
5. Sensitivity to Time: High or Low
For most Asians, the goal is to create a longstanding relationship, so there is little sensitivity to time, which could get western negotiators very impatient. Also, when negotiations seem hasty, it could be that the opposite party tries to close a deal fast to cover up or hide something. For Americans, time is money, so they will try to get as fast as possible to a signed contract in their hands.
6. Emotionalism: High or Low
In Taiwan, when negotiating business, even when the business offer is amazing for the opposite side. They would not want to make a deal, because they don’t have good kimochi with the opposite party. kimochi is a Japanese term used in Taiwanese Mandarin, meaning feeling, mood. This is directly correlated with their need to save face or mianzi And just to point out how often this term has been used points to how much importance Taiwanese businesses place on emotions they have towards businesses.
In America however, even if feelings are important, it usually doesn’t stop them from making a deal with someone they don’t like, as long as they can get an advantage from it. Although even if they don’t have good kimochi, they will rarely show their emotions
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at the negotiating table. For some cultures, being emotional is a strategy that is used in negotiations.
7. Form of Agreement: General or Specific?
Here the writer distinguishes two approaches. In the Building down approach, the negotiator starts with stating his maximum offer if all his demands are met. While in the Building-up approach, the negotiator begins with a minimum offer that can be broadened if the opposite party accepts different deals. The building down approach is preferred by Americans, whereas the building up is preferred by Taiwanese, this goes together with the fact that they love bargaining, so they would like to get more for less, which could be achieved easier in the building up approach.
Americans usually prefer agreements that are very specific and straightforward, mostly in the form of an elaborate contract, in which both sides hold themselves to all of the rules agreed upon in the negotiation. While in Taiwan, negotiations tend to be set more in a general direction, as their goal is more likely to be a long-term relationship, the contract cannot be too detailed as they would like to have some leeway in the middle. A small general contract can be made up to proof that a deal is done, but the rules in the contract would more often than not be vague and not so specific. Should the rules be more specific, they might feel more tied down and could come over as a lack of confidence in the other party, which could lead them to back out of the deal.
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However, if you have a more general contract, they could still add their own details during the negotiation stage.
8. Building an Agreement: Bottom-up or Top-down?
With bottom up, they mean to start negotiating the details to get to an agreement. With top down negotiations starts with discussing the general framework or main ideas upon which the contract is built. In here , again Taiwanese generally prefer to come from top-down, where American negotiations are a series of discussing particulars.(Chang, 2006a)
9. Team Organization: One Leader or Group Consensus?
It is obvious that in American culture, the individual is central and often decisions in negotiations are made by an individual, while in Taiwanese culture, there is a collective team that decides on the negotiation, which makes it hard to know who is the one making the actual decisions. The first would be faster to make any decisions, as for the latter might take a while to decide, as it needs the time to discuss in group. Risk Taking:
High or Low?
In negotiations, it is often a part of the culture that makes them want to take risks in negotiations or play it safe. Americans are known as “risk takers” whereas Taiwanese are not that outspokenly taken many risks, which might be due to the fact that the country has been overshadowed by China politically
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When facing counterparties who generally are averse to taking risks, you can help them make decisions by making sure that the counterparty has enough information about you, don’t move too fast in trying to close the deal, make sure that all the deciding rules are clear, build up a relationship with your counterparty to establish trust and maybe try to take the negotiation step by step instead of trying to negotiate everything at once. All of these steps would make it easier for someone to close a deal.(Gelfand et al., 2013)
Table 1: Culture Comparison
Western countries Taiwan
Negotiation goals Contract Relationship
Attitute Win-lose Win win
Personal style Informal Formal
Communication Direct Indirect
Sensitivity to time High Low
Emotionalism Low High
Form of agreement Specific General
Building an agreement Bottom- up Top-down
Team organization One leader Group consensus
Risk taking High Low