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Introducing our Final Task: Reading and Negotiation Strategy

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Introducing our Final Task: Reading and Negotiation Strategy

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CHINA: Florian/Anita/Stephanie
Austria 1: Stratzi/ Bea/Roland

Russia: Leisa/Gianina/Laura
Austria 2: Dory/Andreas/Bojana

Fritz and Christoph aren't on teams, but will read the comments/strategies of the other teams and comment whether they think the teams could improve their strategy. Fritz (will read TEAMS 1), Christoph (TEAMS 2).

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 Directions:                                1) 30 minutes reading on your own and taking notes - you will need the information later for your negotiation strategy as a team. (you can optionally listen to the Reading Concentration music while you read).

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 Directions:                                1) 30 minutes reading on your own and taking notes - you will need the information later for your negotiation strategy as a team. (you can optionally listen to the Reading Concentration music while you read).

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2) All students complete Reading Task 1 - make sure to take notes because you will need this information later.

3) Reading Task 2 I am assigning different students (one from each team) to read different sections and report back to the rest of the class on what you've read. Outline the most important information you find. Find your name under the Section Title in the columns on the right) to know which section to read. And write down the most important points from your section under your column.

4) When you are done reading and sharing the information.  You can call your negotiation team for a private call on Whatsapp (see above who is on your team and which country you are from). And scroll right to the NEGOTIATION TASK on this padlet in order to find out the situation and make a negotiation strategy before you negotiate.

If you have any questions, call or text me on our Whatsapp group.

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1 Hour With The Best Baroque Guitar Classical Music Ever - Focus Meditation Reading Concentration

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New Age Spritual Outer space, Study Alpha Waves

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New Age Spritual Outer space, Study Alpha Waves

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Study Music Alpha Waves: Relaxing Studying Music, Brain Power, Focus Concentration Music, ☯161

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Relaxing Tongue Drum Music with Binaural Beats for Focus and Concentration

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The Austrian teams are a company that produces face masks. They sell packages of 50 face masks for 45 Euro.

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The Austrian teams are a company that produces face masks. They sell packages of 50 face masks for 45 Euro.

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The Chinese and Russian teams represent govt organizations that need 10,000 masks immediately, and plan to order more for the future. They already ordered and paid for 10,000 masks.
5,000 masks have already arrived, the fit the specifications of the order, but they are faulty.

The Austrian company is a small startup and if they give away too many masks, they will have to lay off half their employees.  They need all the income they can get right now.

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How to Overcome Cultural Barriers in Negotiation

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How to Overcome Cultural Barriers in Negotiation

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Harvard Law School, 2020

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PON - Program on Negotiation at Harvard Law School

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Imagine that you're the CEO of a sports clothing manufacturer based in Chicago. You recently traveled to Amsterdam, the Netherlands, to meet with a distributor who has a rich and diverse network in the European sports market. Are you confident that you know how to overcome cultural barriers?

Negotiating Abroad - How to Keep the Negotiations on Track

During the business trip, you both express enthusiasm about the possibility of a joint venture and agree to give the potential alliance more thought.

Back home, you learn that one of your competitors has discussed similar plans with the same distributor.

Though you don't want to lose a potential alliance, you're reluctant to fly back to Amsterdam to take immediate action.

You could pick up the phone, but given time and scheduling differences, it could be days before you reach the distributor.

You're not sure whether sending an email or leaving a voice-mail message is the right option, either.

The Resolution

It's a dilemma that negotiators face with increasing frequency: growing economic globalization offers a multitude of new opportunities yet often necessitates alternatives to face-to-face meetings, such as phone calls, email messages, video-conferencing, or instant messaging.

Newly available technologies can be powerful negotiating tools that save time and money, but if not managed properly, they also come with some predictable pitfalls, such as misunderstandings and mutual distrust. What's more, your choice of communication medium is likely to affect the quality of the relationship, the amount of information shared, and the efficiency of the negotiated agreement.

In this article, we present a range of negotiation strategies about how to overcome cultural barriers and to help you navigate various types of communication mediation in long-distance negotiations. Specifically, our "MEDIA approach" advises negotiators to:

1. Manage effects of communication characteristics

2. Enrich technology and relations

3. DIAgnose the other party's comfort zone in relation to your goals

1. How to Overcome Cultural Barriers - Manage the Effects of Communication Characteristics

Media richness and synchronicity have a strong impact on negotiation strategies.

In a recent research review, Roderick I. Swaab (one of the authors) and Victoria Medvec and Daniel Diermeier of Northwestern University discovered that vocal cues, visual cues, and synchronicity all promote more efficient outcomes by facilitating information sharing and the use of complex negotiation techniques such as making multiple equivalent simultaneous offers (MESOs).

Negotiators leave less money on the table when they are able to pick up clear social cues. Furthermore, Swaab and colleagues found that vocal cues most effectively improve relations between negotiators and thus reduce the likelihood of impasse. By contrast, visual cues available in videoconferencing and the synchronicity of instant messaging did not contribute to the development of positive relationships.

Clearly, when preparing to negotiate, you should choose a medium that suits your purposes; above all, strive to enhance the negotiation with appropriate communication cues.

Different communication media vary in terms of richness, or their potential to convey the sensation of social presence, which can be so important in business negotiation:

A phone conversation may allow you to feel psychologically close to a foreign partner despite the fact that the two of you are speaking across the globe

Videoconferencing, which adds visual cues to the exchange, may contribute even more of a social presence

The impersonal nature of an email exchange, on the other hand, may leave parties feeling distant

A second dimension underlying media is their level of synchronicity, or the extent to which individuals work together on the same activity at the same time.

Phone calls, video conferencing, and computerized chats allow negotiators to respond immediately to each other's actions and words, whereas asynchronous media such as email, voicemail, and fax messages delay the communication process, with potentially disastrous consequences.

According to insiders, the extensive use of asynchronous media (voicemail and email) by Federal Emergency Management Agency (FEMA) employees in the aftermath of Hurricane Katrina was partially responsible for the significant delays in emergency assistance - and the desperation and death that followed.

2. How to Overcome Cultural Barriers - Enrich Technology and Relations

It may seem an obvious step, but professionals often overlook the importance of familiarizing themselves with a particular technology before they start to negotiate.

You don't need to master every available communication media, but we do encourage you to improve your ability to deal with - and without - various characteristics, such as the presence or absence of audio and visual cues.

And, of course, you'll want to avoid embarrassing situations, such as being unable to place a conference call.

Compared with email communication, instant messaging enables negotiators to take advantage of intricate arguments and thus claim more value, researchers Jeffrey Loewenstein of the University of Texas at Austin, Michael Morris of the Columbia School of Business, Agnish Chakravati of Microsoft, Leigh Thompson of Northwestern University's Kellogg School of Management, and Shirli Kopelman of the University of Michigan School of Business have found.

For this reason, something as simple as increasing your typing speed can be a decisive factor in synchronous online negotiations. After all, when you type faster than your opponent, you gain more airtime and opportunities to exert influence.

You should consider introducing rules of engagement when beginning a negotiation in a particular medium.

In an email negotiation, you might suggest a 48-hour response rule for any proposals made. Agreeing in advance to take turns "speaking" can also avoid miscommunication in a synchronous negotiation.

It also makes sense to devote time to enriching your relationship with the other party, both before and during the negotiation. Researchers Don Moore of Carnegie Mellon University, Janice Nadler of Northwestern University, and Leigh Thompson have found that parties can overcome the diminished rapport inherent in an email negotiation by engaging in a short get-acquainted phone conversation beforehand.

Similarly, Swaab's research shows that negotiators who communicate using collective pronouns promote a common bond (such as we, us, and our) in their online text-based negotiations are perceived as more friendly, obtain higher profits, and are more likely to be included in final deals than negotiators who use non-collective pronouns.

In addition, and most successfully among younger negotiators, a simple emoticon can overcome misunderstandings by conveying a friendly tone.

3. How to Overcome Cultural Barriers - Diagnose the Other Party's Comfort zone and Your Goals

Now that you understand the effects of various media characteristics and how to enrich them, it's almost time to negotiate - but not until you've diagnosed the other side's comfort zone as it relates to your own negotiation goals. You need to make sure you have the tools to know how to overcome cultural barriers.

First, consider how much your counterparts might value certain communication characteristics

When it comes to establishing rapport, for example, some people rely on visual cues, particularly eye contact, more than others. Neuropsychological research shows that women value gazing more than men do; as a result, eye contact helps build relationships among women but could signal attempts to dominate among men.

In a similar vein, professor Susan Fusell of Carnegie Mellon University has found that people from collective cultures (such as India, China, and Singapore) prefer visual cues to build relationships, and, as a result, gain more from a videoconference than do those from individualistic cultures such as the United States.

Now match your knowledge of peoples' preferences for certain cues with your negotiation goals.

If you're striving to create maximum value for both sides (as we encourage you to do), try to negotiate in the other party's preferred communication environment. Suppose that you know that your Dutch counterpart is uncomfortable speaking English; if so, an email negotiation may suit him best.

Comfort with the chosen medium will increase the likelihood that the other party will share his priorities and preferences.

In addition, when you let your counterpart choose the format, he's more likely to appreciate - and reciprocate - the favor. By contrast, when you're focused on claiming value in a short-term distributive negotiation, choose a medium that gives you an edge. If you know that someone lacks quickness under pressure, you might prefer instant messaging to prolonged email correspondence.
What advice would you give someone on how to overcome cultural barriers? Share your tips in the comments. Originally published in Negotiation Briefings 2013.

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How to Overcome Cultural Barriers When Negotiating Abroad

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Imagine that you're the CEO of a sports clothing manufacturer based in Chicago. You recently traveled to Amsterdam, the Netherlands, to meet with a distributor who has a rich and diverse network in the European sports market. Are you confident that you know how to overcome cultural barriers?

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Florian/Anita/Stephanie (Chinese)      Statzi/Bea/Roland (Austrian)        

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Florian/Anita/Stephanie (Chinese)      Statzi/Bea/Roland (Austrian)        

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Fritz will be monitoring and giving feedback to these teams.

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Read the "Situation" on the right column. Each team create a strategy how you will deal with negotiating with the other team. What do you want? How can you give/get it? What form of communication will you use(email/personal visit/video conferencing/ phone calls)? What do you need to be aware about the culture of the other team. Below each team write down 5 strategies/approaches/or points that you need to be aware of when negotiating with your team.

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Read the "Situation" on the right column. Each team create a strategy how you will deal with negotiating with the other team. What do you want? How can you give/get it? What form of communication will you use(email/personal visit/video conferencing/ phone calls)? What do you need to be aware about the culture of the other team. Below each team write down 5 strategies/approaches/or points that you need to be aware of when negotiating with your team.

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Read the "Situation" on the right column. Each team create a strategy how you will deal with negotiating with the other team. What do you want? How can you give/get it? What form of communication will you use(email/personal visit/video conferencing/ phone calls)? What do you need to be aware about the culture of the other team. Below each team write down 5 strategies/approaches/or points that you need to be aware of when negotiating with your team.

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Read the "Situation" on the right column. Each team create a strategy how you will deal with negotiating with the other team. What do you want? How can you give/get it? What form of communication will you use(email/personal visit/video conferencing/ phone calls)? What do you need to be aware about the culture of the other team. Below each team write down 5 strategies/approaches/or points that you need to be aware of when negotiating with your team.

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I love that simple rules given in the article. I guess that is a common sense if you want to work with business partners in other countries.
1. Do your homework -- prepare yourself and
2. Respect all other cultures
With this small rules you will be successful in working with foreign partners.

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This shows that the lack of intercultural competence, especially in politics, can cost the lives of thousands of people.

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Interesting how differently some nations act and also why. Dealing with trust is also a big issue. This is not mentioned in the article but I once read that Austrians trust very quickly and Russians are rather sceptical.

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The most crucial aspect of successful negotiations is careful preparation and research about your business partner's culture and culture related behavioural differences.
You also have to accept that values that have been deeply ingrained in you through your uppringing and surrounding may not be shared accross the globe.
Be openminded about your partners customs and try to see them from a different angle.

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.."Cultural differences were not the main reason the Daimler-Chrysler merger proved disastrous. Differing goals and reputations, decisions Chrysler made that predated the merger, and cost savings that failed to materialize played a larger role."

"..But the culture clash unquestionably got the partnership off to a rocky start. Different norms and styles made the transition difficult.."

- From the examples above you can clearly see that there are cultural differences. The different stereotypes.
When two business partners from different countries are discussing, it is always important to adapt to the culture in advance or to take a closer look at its culture. You have to think about it beforehand, can we become a business partner? How do we split the tour? How do we run? How formal or how relaxed do we see our company?

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"An overreliance on stereotypes will keep you from noticing important nuances in the other side’s negotiating strategy."
I think that this is a very important point. It is very important to have an open mind when approaching people from different cultures. This will help you to avoid unwelcome surprises.
" Though some people are more naturally culturally intelligent than others, you can develop your cultural intelligence quotient". This part is also very true. To some degree, everybody should be able to develope their skills and improve their negotiation skills that way.
But in my opinion, the last part of this chapter is the most important one. Building a long-term relationship and negotiating in a way that is focused on achieving this goal is the best way to build a healthy and long lasting cooperation.

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I found this example interesting: if one of your Japanese supplier answers of your proposal, “That’s difficult,” you might assume that the door is still open to renegotiate. In fact, they can also mean no second chance, because Japanese people come from a culture that avoids confrontation.

This simple rules for coping with different cultures could be helpful:

-Inform yourself about the culture of the other person before you deal with them

-Show respect for cultural differences

-Find ways to bridge the culture gap

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Dear Gabi, as you wrote your comment, I added something else. :) Thank you so much :D

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“It’s great because it’s mine”:
The endowment effect across cultures
Simply owning an object causes us to value it more than if we did not own it. This phenomenon, know as the endowment effect, can create trouble for sellers in negotiations.

The endowment effect is so robust it has even been found in young children and chimpanzees.

in France and his colleagues discovered that the endowment effect was stronger among self-described white and European Americans than among Asians and East Asians.

Western cultures tend to value independence and the self more highly than Eastern cultures do. By contrast, Eastern cultures tend to place more value on interdependence and to be associated with self-criticism.

Maddux and his team theorize that a lower susceptibility to the endowment effect could explain why East Asian consumers tend to be faster to adopt new technologies (and abandon old ones) than Western consumers. Overall, the study provides evidence that cultural differences affect the strength of the biases we bring to our negotiations, including the endowment effect.

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Team 2 - Austria (Andreas, Dory, Bojana)

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Team 2 - Austria (Andreas, Dory, Bojana)

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In a first step, we would like to prepare essential aspects depending on the Russian company e.g. environment, location and region in Russia. Moreover, we would collect specification of their culture and negotiation style.

Communication:
Due to the fact, that the Austrian partner is a start up the best solution for negotiations is personally with the Russian business partners, also because of our weaker negotiating position.

As we already know, the Russian business clerks have got a different power distance as in Austria. They would see the Austrian partner as a stable partner but will feel superior during the negotiation. We would like to present our company in a professional way but have to get used to the circumstances in negotiation with our counterpart.

Cultural aspects:

The Austrian partner has to behave professionally and take short talks before the meetings is going to be started. Another aspect to mention is that we should keep eye contact during the negation process and try to respond to questions or arguments with self-confidence. It is essential that the Austrian company travels to the co-operation partner to show interest in their culture and build up relationships. We would like to win their trust by participating in afterwork meals. One of our advantages is that Russian people prefer Austrian products due to the high quality.

Current situation and wishes for the future:

The Austrian company could grant the Russian business partners two possible options. The 5000 faulty face masks can be kept on their own with a discount of 20 per cent or we reproduce them again for the original price.
Due to our fault, the Russian business partner will receive 20 per cent for the outstanding 5000 face masks.

We apologize for the inconvenience and hope that you are satisfied with our fair offer and look forward to new orders.

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Hey teams, whats happen?

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It is very interesting that a simple apology can be seen differently in various countries (I didn't knew about this in Detail). In the article Japan and USA are considered and it is shown that both countries have other expectations when apologising.
In the United States, apologies generally encompass an Admission of personal responsibility and an Expression of regret.
In Japan an apology simply involves recognition of a burden suffered by someone else. They see an apology as a General Expression of remorse rather than as a means of assigning blame. When you apologize in an individualistic Country like Japan, you must balance the legal and reputational risks.

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Anita

The endowment effect across cultures is,simply owning an object causes us to value it more than if we did not own it.
This phenomenon, know as the endowment effect, can create trouble for sellers
in negotiations.
The endowment effect is so robust it has even been found in young children
and chimpanzees.
In a 2010 study, William W. Maddux of the INSEAD business school
in France and his colleagues discovered that the endowment effect was stronger
among self-described white and European Americans than among Asians and
East Asians. Specifically, the Westerners set significantly higher selling prices for
the mug or box of chocolates they had just been given than the Easterners did.

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I really think it's Putin's perspective on the West. The man won't let the West dictate anything.As a world power, they play in the league of the top.In particular, Putin will not be influenced by America. The past naturally plays a role here. Nowadays the Russians have created their position and often feel superior.In the past, under Jelzin, Russia almost went bankrupt despite the fact that it has many raw material deposits. They have reformed everything again and  now you can not easily change their plans.That is exactly what needs to be considered.

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We have to be aware of that cultural differences affect the strength of the biases we bring to our negotiations, including the endowment effect – that we always value something that we own much more than something that we don’t own (and in case of the culture, maybe don’t understand).

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I read the pages with great interest, because we mentioned some points in our presentation too. Escpecially if we take a look on the phrases like "that's difficult" - some cultures think in a circular way and other's want to finish the co-operation with a contract. Moreover, special behavioral rules for every culture should be followed by negotiators. In my opinion, the rules could help a lot to establish fair and long-term partnerships with business partners in other countries. I would like to outline that detailed preparation is everything in cross-cultural context.

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Excellent explanations Bea and Anita and Dory!

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Excellent explanations Bea and Anita and Dory!

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In China it is important to build a longterm relationship: We sincerely apologize for not being able to deliver in the proper quality but we cannot afford to refund all 5000 masks. We would like to establish a longterm relationship and offer a discount for future deliveries.
We would negotiate through the means of telecommunication because it is more personal than conversing through email.

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First of all as Chinese company we would do a detailed research on the Austrian culture. We would collect our information based on the Hofstede model. Due to the fact that chinese companies are normally long term oriented and have high power distance we would adjust our strategy to the Austrian culture. In Austria there is low power distance and they are intermediate when it comes to long term orientation. Therefore we would try to work out contracts for 3-5 years to offer the Austrian company a good midterm contract that will satisfy them. For the first delivery we would have video chats with the austrian company because the distance is very large and direct contact won´t pay off due to the high costs. For future business we would like to meet our Austrian counterparts directly to negotiate further business.

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The russian representatives would targeting a personal meeting with all parties, maybe invite them to Russia or if there is no possibility for a personal meeting, a video conference (face-to-face) woul be desirable.

Tools:   Before we start negotiations, we should choose the communication tool well. We should be very familiar with the program so that we are not considered unprofessional.

Strategy:
We will try to cooperate properly so that both sides are satisfied.

Solution:
We would like to accept the offer with 15% discount and will send the remaining order as soon as possible and looking forward for future business, because we accept apologizes and mistakes without breaking relationship.

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In addition to my comments  to the groups.
The Austrians should stay cool (When engaging in business negotiations with the Chinese, it is always important to control your emotions.).
But it is important to explain the situation that we get in troubles.                                          To say the truth is helpful in working with chinese partners.
Consider the guanxi principle: Build relationships with your counterparts in a respectful way. this helps to solve the problems.