A REPORT FILE

ON

NEGOTIATION SKILL & TECHNIQUES LAB

Submitted in partial fulfillment for the award of the degree

Master of Business Administration

Chhattisgarh Swami Vivekananda Technical University, Bhilai

Submitted by,

VIVEK DAHIRE

MBA – Semester III

(Session 2017-18)

Approved By, Guided By,

Mr. Himanshu Vaishnaw Miss. Sanjana Kar
Head of the Department Asst. Professor

Lakhmi Chand Institute of Technology

Bilaspur (C.G.)
Table of contents
 Declaration
 Certificate by the Examiner
 Meaning & Introduction of negotiation
 Stages of Negotiation
 Types of Negotiation
 Barriers to Negotiation
 Negotiation Process
 Introduction to International Negotiation
 Benefit of International Negotiation
 Challenges of International Negotiation
 Tips for International Negotiation
 Declaration by the Candidate

This is to declare that this report has been written by me. No part of the report is plagiarized from other
sources. I aver that if any part of the report is found to be plagiarized, I shall take full responsibility for it.

VIVEK DAHIRE

MBA – Semester – III

Enrolment No. – BB6331

 Certificate by the Examiner

This is to certify that the report submitted by VIVEK DAHIRE, Enrolment No. – BB6331 has been examined
by the undersigned as a part of the examination for the award of Master of Business Administration degree
of Chhattisgarh Swami Vivekanad Technical University, Bhilai (C.G.).

Name of the Examiner Signature of the Examiner

Date:
WHAT IS NEGOTIATION?

Negotiation is a method by which people settle differences. It is a process by which

compromise or agreement is reached while avoiding argument and dispute.

In any disagreement, individuals understandably aim to achieve the best possible outcome
for their position (or perhaps an organization they represent). However, the principles of
fairness, seeking mutual benefit and maintaining a relationship are the keys to a successful
outcome.

Specific forms of negotiation are used in many situations: international affairs, the legal
system, government, industrial disputes or domestic relationships as examples. However,
general negotiation skills can be learned and applied in a wide range of activities.
Negotiation skills can be of great benefit in resolving any differences that arise between you
and others.

Negotiation is a process of bargaining between two or more people or parties, who intend
to reach a common understanding, resolve points of differences or to avoid conflicts and
aim to have mutual benefits for both parties.

People negotiate daily, often without considering it a negotiation. Negotiation occurs in

organizations, including businesses, non-profits, and within and between governments as
well as in sales and legal proceedings, and in personal situations such as marriage, divorce,
parenting, etc. Professional negotiators are often specialized, such as union negotiators,
leverage buyout negotiators, peace negotiator, or hostage negotiators. They may also work
under other titles, such as diplomats, legislators, or broker.
Stages of Negotiation

In order to achieve a desirable outcome, it may be useful to follow a structured approach to

negotiation. For example, in a work situation a meeting may need to be arranged in which
all parties involved can come together.

The process of negotiation includes the following stages:

1. Preparation
2. Discussion
3. Clarification of goals
4. Negotiate towards a Win-Win outcome
5. Agreement
6. Implementation of a course of action

Types of Negotiation

Negotiation can take a wide variety of forms, from trained negotiator acting on behalf of a
particular organization or position in a formal setting to an informal negotiation between
friends. Negotiation can be contrasted with mediation, where a neutral third party listens
to each side's arguments and attempts to help craft an agreement between the parties. It
can also be compared with arbitration, which resembles a legal proceeding. In arbitration,
both sides make an argument as to the merits of their case and the arbitrator decides the
outcome. This negotiation is also sometimes called positional or hard-
bargaining negotiation.
Negotiation theorists generally distinguish between two types of negotiation. Different
theorists use different labels for the two general types and distinguish them in different
ways.
Distributive negotiation
Distributive negotiation is also sometimes called positional or hard-bargaining negotiation
and attempts to distribute a "fixed pie" of benefits. Distributive negotiation operates under
zero sum conditions and implies that any gain one party makes is at the expense of the
other and vice versa. For this reason, distributive negotiation is also sometimes called win-
lose because of the assumption that one person's gain results in another person's loss.
Distributive negotiation examples include haggling prices on an open market, including the
negotiation of the price of a car or a home.
In a distributive negotiation, each side often adopts an extreme position, knowing it will not
be accepted—and then uses a combination of guile, bluffing, and brinkmanship to cede as
little as possible before reaching a deal. Distributive bargainers conceive of negotiation as a
process of distributing a fixed amount of value. A distributive negotiation often involves
people who have never had a previous interactive relationship, nor are they likely to do so
again in the near future.
In the distributive approach each negotiator fights for the largest possible piece of the pie,
so it may be quite appropriate—within certain limits—to regard the other side more as an
adversary than a partner and to take a somewhat harder line.

Integrative negotiation
Integrative negotiation is also called interest-based, merit-based, or principled negotiation.
It is a set of techniques that attempts to improve the quality and likelihood of negotiated
agreement by taking advantage of the fact that different parties value various outcomes
differently. While distributive negotiation assumes there is a fixed amount of value (a "fixed
pie") to be divided

Between the parties, integrative negotiation often attempts to create value in the course of
the negotiation ("expand the pie").
Integrative negotiation often involves a higher degree of trust and the forming of a
relationship. It can also involve creative problem-solving that aims to achieve mutual gains.
It is also sometimes called win-win negotiation.
In the integrative approach, unlike the distributive approach, parties seek to find an
arrangement that is in the best interest of both sides. A good agreement is not one with
maximum gain, but optimum gain. Gains in this scenario are not at the expense of the
other, but with him.
A common negotiation technique in integrative negotiations involves trading one favor for
another, commonly referred to as logrolling. It focuses on the underlying interests of the
parties rather than their arbitrary starting positions, approaches negotiation as a shared
problem rather than a personalized battle, and insists upon adherence to objective,
principled criteria as the basis for agreement.
Perspective taking in integrative negotiation can be helpful for a few reasons, including that
it can help self-advocating negotiators to seek mutually beneficial solutions, and it increases
the likelihood of logrolling (when a favor is traded for another i.e. quid pro quo). Social
motivation can increase the chances of a party conceding to a negotiation. While
concession is mandatory for negotiations, research shows that people, who concede more
quickly, are less likely to explore all integrative and mutually beneficial solutions. Therefore,
conceding reduces the chance of an integrative negotiation.
However, negotiators need not sacrifice effective negotiation in favor of a positive
relationship between parties. Rather than conceding, each side can appreciate that the
other has emotions and motivations of their own and use this to their advantage in
discussing the issue. In fact, perspective-taking can help move parties toward a more
integrative solution. Fisher et al illustrate a few techniques that effectively improve
perspective-taking in their book Getting to Yes, and through the following, negotiators can
separate people from the problem itself.
 Put yourself in their shoes – People tend to search for information that confirms his or
her own beliefs and often ignore information that contradicts prior beliefs. In order to
negotiate effectively, it is important to empathize with the other party's point of view.
One should be open to other views and attempt to approach an issue from the
perspective of the other.
 Discuss each other's perceptions – A more direct approach to understanding the other
party is to explicitly discuss each other's perceptions. Each individual should openly and
honestly share his or her perceptions without assigning blame or judgment to the other.
 Find opportunities to act inconsistently with his or her views – It is possible that the
other party has prior perceptions and expectations about the other side. The other side
can act in a way that directly contradicts those preconceptions, which can effectively
send a message that the party is interested in an integrative negotiation.
 Face-saving – This approach refers to justifying a stance based on one's previously
expressed principles and values in a negotiation. This approach to an issue is less
arbitrary, and thus, it is more understandable from the opposing party's perspective.
Additionally, negotiators can use certain communication techniques to build a stronger
relationship and develop more meaningful negotiation solution.
 Active listening – Listening is more than just hearing what the other side is saying.
Active listening involves paying close attention to what is being said verbally and
 nonverbally. It involves periodically seeking further clarification from the person. By
asking the person exactly what they mean, they may realize you are not simply walking
through a routine, but rather take them seriously.
 Speak for a purpose – Too much information can be as harmful as too little. Before
stating an important point, determine exactly what you wish you communicate to the
other party. Determine the exact purpose that this shared information will serve.

Types of negotiators
Three basic kinds of negotiators have been identified by researchers involved in The
Harvard Negotiation Project. These types of negotiators are: soft bargainers, hard
bargainers, and principled bargainers.
Soft
These people see negotiation as too close to competition, so they choose a gentle
style of bargaining. The offers they make are not in their best interests, they yield to
others' demands, avoid confrontation, and they maintain good relations with fellow
negotiators. Their perception of others is one of friendship, and their goal is
agreement. They do not separate the people from the problem, but are soft on both.
They avoid contests of wills and insist on agreement, offering solutions and easily
trusting others and changing their opinions.
Hard
These people use contentious strategies to influence, utilizing phrases such as "this is
my final offer" and "take it or leave it." They make threats, are distrustful of others,
insist on their position, and apply pressure to negotiate. They see others as
adversaries and their ultimate goal is victory. Additionally, they search for one single
answer, and insist you agree on it. They do not separate the people from the
problem (as with soft bargainers), but they are hard on both the people involved and
the problem.
Principled
Individuals who bargain this way seek integrative solutions, and do so by
sidestepping commitment to specific positions. They focus on the problem rather
than the intentions, motives, and needs of the people involved. They separate the
people from the problem, explore interests, avoid bottom lines, and reach results
based on standards independent of personal will. They base their choices on
objective criteria rather than power, pressure, self-interest, or an arbitrary decisional
procedure. These criteria may be drawn from moral standards, principles of fairness,
professional standards, and tradition.
3 Barriers to Successful Negotiations:

Negotiating is among the most feared and stress-inducing functions for a sales professional,
and also among the most important. If you struggle with negotiations, there may be bad
habits undermining your success in this role:
Viewing negotiations as a battle – Negotiations should be about finding solutions and
adding value for all parties, not about winning or losing. As soon as we view the customer
as the opponent, we compromise our ability to empathize and get into their “Odds Are” to
identify mutually beneficial outcomes.
Not asking enough questions – Nowhere is the power of the Exploratory Process more
evident than when negotiating! Your responsibility is to ask the right questions to find out
what your customer really values. Skilled use of the Exploratory Process will help you guide
the discussion and potentially uncover value considerations that the customer was not
even aware of.
Focusing on price – Sales professionals identify price as the number one objection in the
sales process and the most significant barrier in negotiations. Don’t give price more weight
than it deserves! Be sure your Exploratory Process and discussion encompass all value
considerations, including consultation, quality, service, delivery, customization, response
time and payment terms. This practice not only prevents unnecessary price concessions, it
actually improves the overall satisfaction of customers via a comprehensive value solution.
It is impossible to overstate the importance of your relationship with customers during
negotiations. A high level of trust will eliminate emotional barriers, facilitate openness and
idea sharing, and pave the way for a productive discussion centered on mutually beneficial
outcomes.

5 Steps of Negotiation Process

Negotiation process permeates the interactions of almost everyone in groups and
organizations.
In today’s loosely structured organizations, in which members work with colleagues over
whom they have no direct authority and with whom they may not even share a common
boss, negotiation skills become critical.

1. Preparation and Planning

 Before the start of negations, one must be aware of the conflict, the history leading to
the negotiation the people involved and their perception of the conflict expectations
from the negotiations etc.

2. Definition of Ground Rules

Once the planning and strategy are developed, one has to begin defining the ground
rules and procedures with the other party over the negotiation itself that will do the
negotiation. Where will it take place?
What time constraints, if any will apply? To what issues will negotiations be limited? Will
there be a specific procedure to follow in an impasse is reached? During this phase, the
parties will also exchange their initial proposals or demands.

3. Clarification and Justification

When initial positions have been exchanged both the parties will explain amplify, clarify,
bolster and justify their original demands. This need not be confrontational.
Rather it is an opportunity for educating and informing each other on the issues why
they are important and how each arrived at their initial demands.
This is the point where one party might want to provide the other party with any
documentation that helps support its position.

4. Bargaining and Problem Solving

The essence of the negotiation process is the actual give and take in trying to hash out an
agreement, a proper bargain. It is here where concessions will undoubtedly need to be
made by both parties.

5. Closure and Implementation

The final step in the negotiation process is formalization the agreement that has been
worked out and developing and procedures that are necessary for implementation and
monitoring.
For major negotiations – this will require hammering out the specifics in a formal
contract.
Negotiation Process has five stages. In all steps of a negotiation process, the involved
parties bargain at a systematic way to decide how to allocate scarce resources and maintain
each other’s interest.
Introduction to International Negotiations
International negotiations engage stakeholders and representatives from different
countries. The issues involved in conflict resolution of international negotiations directly
affect multiple countries and are generally not between individuals, but rather between
larger delegations. For the purposes of this website, we will focus on international
diplomatic negotiations.

Benefits of International Negotiations

International negotiations can allow for communication between differing delegations.

Worldwide communication has become extremely advanced, and diplomats from countries
around the world have the ability to make deals and create multi-country solutions. 1 Multi-
party agreements are the touchstone of international negotiations. These multi-party
agreements can allow large-scale approaches to world problems. Environmental problems
such as air quality, water quality, and climate change include a larger scope and need
conflict resolution agreements between governments of countries all over the world.
Countries that engage in international negotiations can positively influence public
perception and opinion. When governments enter into conflict resolution with other
countries, they can be seen as working towards larger solutions that will help the
international community1. Environmental conflict resolution in particular can create
positive relationships between citizens and diplomats.

Challenges of International Negotiations

Language and culture are two of the biggest challenges in international negotiations. Most
international diplomacy and business is conducted in English, which is helpful for English
speakers, but can be difficult for non-native English speakers. If English is not the first
language for international parties, spoken English in international negotiations can be at
different levels, use different vocabulary and phrases, and include various dialects, accents,
syntax, and cadences, which can add complications to negotiations when representatives
do not understand each other or do not have efficient translations. 2 Moreover, phrases and
vocabulary cannot always be translated from language to language.
Different countries have different cultures, and these cultures may come into conflict in
international negotiations. If delegates do not complete background research on the other
parties, cultural differences can become apparent and harm resolution agreements. 3
Cultural differences can also influence concepts of time between diplomats.
Distance between negotiation parties can cause difficulties determining a venue for the
discussion. Where should countries from opposite sides of the world hold their
negotiations? Should they be in person or should they interact virtually?

The large scope of environmental issues can be both a positive and a negative. The wide
nature of solving environmental problems can seem daunting and may lead to challenges in
international parties coming to an agreement.

In negotiations that involve multiple countries, pre-existing power relationships need to be

considered. Certain countries have more power when they come to a multi-country
negotiation. These pre-existing power relationships can influence negotiation outcomes.
Delegates from countries with more power in an international negotiation might wield their
power over other delegates.

Tips for International Negotiations

1. Hire a good translator

If a negotiation involves parties from countries with different native languages, the most
important element for representatives to secure is a good translator. 4 International
delegations should make sure to hire their own translator(s) and to not solely rely on the
other parties’ translator. The translator should be briefed about the negotiation and have
background context about what their party is trying to achieve as well as know if they
should be completing word-for-word translation or summarizing. A delegation should
ensure that their translator(s) does not have underlying interests or reasons to influence
the negotiations.
2. Have a representative
International negotiation situations can be long and ongoing. Larger environmental
negotiations between various countries are generally long-term. If negotiations will be
continuous over a long period of time, a country should appoint a permanent
representative. This helps to establish trust and familiarity between the negotiating
parties.

3. Do your homework
As differences between cultures can be one of the challenges of international negotiations,
representatives from different countries engaged in a negotiation should do their
homework on the other parties. Background research on the other countries’ concerns and
interests can go a long way in helping negotiations. Delegates entering into international
negotiations should learn about the parties from other countries by trying to understand
the other negotiating parties’ organizations, cultures, country background, politics, etc.
According to Jeswald Salacuse of Harvard’s Program on Negotiation, “even when their
positions seem irreconcilable, warring nations and squabbling companies can succeed in
negotiations by harmonizing their interests. Trying to understand the other parties in the
negotiation will hopefully lead to respect between the parties that are coming to the table.

Cross Culture Negotiation

Definition

“Intercultural negotiation involves discussions of common and conflicting interests between

persons of different cultural backgrounds who work to reach an agreement of mutual
benefit.” {Chapter 10, Intercultural negotiation}

Introduction

In a globalized world where many companies are multi-national enterprises an increased

amount of negotiations need to take place on a cross-cultural basis.

This text describes on which things negotiators will need to put their attention in order to
ensure that no misunderstandings reduce the outcome of a deal with an inter-cultural
partner. This is valid for the sales perspective and the purchasing perspective.

Based on the Lewis model examples of typical misunderstandings will be provided as well
as solution possibilities. In addition a guideline for a preparation of how to avoid
intercultural misbehavior will be provided.

Negotiation

Negotiation is a process of bargaining between two or more people or parties who intend
to reach a common understanding, resolve points of differences or to avoid conflicts and
aim to have mutual benefits for both parties.

With increased globalization, where a growing number of business transactions involve

foreign customers, suppliers or joint ventures, cross cultural negotiations take place on a
daily base. To avoid misunderstandings during international negotiation it is important to
have good communication styles, economic background of the other party and knowledge
of cultural differences. Intercultural negotiation is about respecting other parties’ cultural
norms and establishing a long term cordial relationship for business.

Concept of culture

Culture in general is a set of attitudes, beliefs, languages, behaviours and rituals shared by
its members that set it apart from other social groups. In a society cultural values and
norms are passed on by previous generation to the next. These cultural values and norms
influence how situations are perceived and how people react to the behavior of others. This
affects the way members of different cultures think about business and also leads to
different negotiation strategies.

There are two types of cultural contexts ‘high context’ and ‘low context’. High context
refers to societies who value close connection and long term relationship. Since they rely on
strong personal relationships to support mutual understandings, they prefer indirect
communication. They have strong boundaries to decide who is accepted and who is an
outsider. For them building close trusting relationship with the other party in a negotiation
is more important than task itself. They are more formal and judge aggression and
confrontation as uncomfortable. High context includes for example countries like China,
Japan, Korea, India, Pakistan, Arab, Greek, and France.

Low context refers to societies which have more short term relationships rather than long-
term relationships. They are more focused on tasks than on building relationships. They find
facts and reasoned arguments to be more persuasive and hence prefer a direct style of
communication. In a negotiation silence of the other party makes them uncomfortable. Low
context countries are for example: United States, United Kingdom, Canada, Germany and
Switzerland.

Nevertheless, the approach of high and low context is only a starting point to show that
there is a difference between cultures. In order to be more specific in how different
cultures are structured the Richard D. Lewis model will be used in the following to explain
major differences in intercultural communications.

Richard D. Lewis Model

Communication across cultures is challenging. The model developed by Richard D. Lewis

illustrates how each culture perceives a situation and communicates. This approach is very
useful for leaders who have to manage a company/industry across countries with different
cultural backgrounds. The Richard D. Lewis model can serve as a guideline to help them
understanding the situation and use a suitable leadership style. It is also used to improve
performance and efficiency in a multinational team. The cultures are divided into three
main categories:

Linear Active – refers to societies where people focus on jobs. They separate their social
and professional life. They work on one task at a time but have a detailed plan. They prefer
polite and direct conversation with limited body language.

Multi Active - refers to societies where people focus on building relationships. Their
decisions are based on emotions. They work multi-task and plan their work life only
partially. They prefer to communicate emotionally and talk most of the time with unlimited
body language.

Reactive – refers to societies where people listen most of the time and react to others’

action. They prefer being polite and to communicate indirectly. They never interrupt a
conversation and take decisions as they are. They focus mainly on building close trusting
relationships.
All these categories will be explained in the chapter: Typical mistakes in intercultural
negotiation / real life approach.

Factors influencing intercultural negotiation

In the last decades trading with other countries became more and more important. Due to
the fact that goods and people where able to be transported in a more efficient way the
barriers for companies to trade internationally where going down. One of the side effects of
the globalization is that companies are facing problems with intercultural negotiations.

One of the most obvious challenging factors in cross-cultural negotiation is the language
barrier. Many people are not as confident in negotiating in another languages as in there
native language. As a result the atmosphere in the first minutes is usually stressed. To
brighten the atmosphere it is useful to welcome the other party with some word in their
home language. In negotiations with one native speaking party it is also important to know
that native speakers often use phrases that are not listed in a dictionary. Therefore it can be
really difficult to understand the other party.

The next important factor is the high or low level of context people are talking to each
other. As described in the introduction cultures differ in the level of context. Some cultures
are not able to say “no” and therefore they say it in an indirect way which has to be
decoded by the other party.

In order to adapt specific cultural behaviors it is also important to beware of words with
sexual relations. Many words have different meanings and a slightly different pronunciation
which can lead to an unpleasant communication. The better the skills in the national
language the better the understanding of the culture.

In a cross-cultural negotiation the language with the highest prestige is the one that is the
most likely one to use. Nevertheless non-verbal communication is also very important. Part
of our nature is to observe people and to interpret gestures. In a cross-cultural negotiation
these observations will still take place but the gestures might be interpreted differently by
different cultures. Eye-contact is not always a way to show the other part respect. This
behavior can indicate disrespect in some cultures (e.g. Turkey).

Other factors which influence an intercultural negotiation are religion, work behavior and
rituals. Many cultures like to start a negotiation with small-talk before getting down to
business. Additionally some cultures do not have the aim to reach a final result during the
first negotiation.

All these examples were based on a business perspective but intercultural-negotiations do

not only take place in business. Intercultural-negotiations can also take part in a normal
conversation with a friend from a different culture. These situations underlie the same
principles as intercultural-negotiations. A major difference though might be the pre-existing
relationship between the “friends”. An already existing level of trust might reduce possible
misunderstandings because the other party already considers your personal beliefs,
behaviors and rituals.

Typical mistakes in intercultural negotiation / real life approach

The following text refers to the difficulties of intercultural management in terms of

negotiation concerns. Due to differing cultural attitudes and behaviors, negotiation
processes can be highly affected by the geographic surrounding one person finds himself.
The following part of our encyclopedia tries to highlight these typical situations, showing
real business life examples.

For further specification we deepen the before analyzed three cultural groups sticking to
the Lewis’ model. Hereby, we use the categories “linear-active”, “multi-active” and
“reactive”.

Analysis of negotiation surroundings

Linear – active countries

The linear-active countries in the Lewis model are mostly allocated in the German-speaking
western European business world. Inhabitants and businessmen from these countries are
considered direct and mainly straightforward in everything they do. So, the first point to be
aware of doing business in these areas is the fact that they tend to try to avoid small talk.
Especially Germans are known for their straight working attitude and their efficiency in
organization or work.

In regard to negotiations in the German-speaking, linear-active business world, it is

appreciable to come up with a clear mindset on goals and expectations. Avoid
unproductiveness. Be direct. Out clearly what is your goal or overall idea? Then act.

At first, linear-active businessmen are always punctual. If there is a meeting set at 2 pm,
they will usually appear around 1:45 pm in order to avoid unpunctuality. If there is one
thing a businessman tries to avoid, it is for sure unpunctuality. And people really hate to
wait for their counterparts. Please make sure to have a time schedule. Unpunctuality will be
taken as a serious issue and can also lead to a personal non-understanding in the upcoming
negotiations.

On the first contact, linear-active culture businessmen are rather rejecting. They are
friendly and will welcome you with a smile. But it is also totally normal that they tend to
behave a bit dismissive or even cold on the first contact in perspective of a non linear-active
person. Nevertheless, they will be really quick in terms on targeting goal and outcomes of
the given situation. It may take a time until a non-linear-active person reaches the same
level of understanding of the whole situation the linear-active thinking person already has
achieved.
Usually, on a meeting for negotiation business cards are distributed among the participants
of the round. It is necessary to shake hands on the first view. This is mainly the first step
towards an interpersonal business relationship. Especially in Germany, the hand shake is
also used as an indicator of motivation or willingness to succeed, measuring the strength of
the handshake applied by the hand of one of the persons. Be aware of touching the left
shoulder of the other person with your other hand while shaking. This can be often
observed as a measure to escape from the other’s tough handshake. Nevertheless it can be
interpreted as you are willing to put pressure on the other person by doing that. This is
often considered impolite or even arrogant.

Basically, on the first meeting with your possible business partners, you cannot do much
wrong, if you consider being direct and motivated. Be aware that open criticism is a totally
normal thing in German speaking countries. Sometimes your counterpart’s contra
arguments can appear more direct that they might let you feel uncomfortable. But, in this
special situation, do not worry too much. Do it better and argue back with good and
convincing arguments. Nothing else counts. If you are able to “deliver”. So you are able to
give proof and profound information, your counterparts will soon get closer to you and
once you have gained their attention and reward they will recognize you as a reliable and
confidential partner. You can take them always by word. Usually, everything they say is
what is really in their mind regarding a point.

Business meetings usually start with a round of self-presentation. Be short in that. Clearly
state what is your name and position? Then, in case of, mention your educational
background and what your focus is on work.

The end of any negotiation, if it was successful for both parties, is in a lot of cases
concluded by a dinner or having drinks at night. This invitation of your German friends
shows you that they liked your presentation and that they agree with the mutual outcome
of the negotiation. This is your chance to get closer to them. By having drinks, you might get
to know your new business partners from a relatively new perspective. Having drinks after –
only after – the work is successfully done, Germans tend to be open-minded, funny and
relaxed. This is a good point for small talk and further chat.
Multi-active countries

The multi-active countries in the Lewis model are mostly Spanish speaking countries of
Europe and Latin America (e.g. Spain, Mexico, and Colombia). When it comes to negotiation
processes with counterparts in one of these countries, several cultural specifications are to
be considered.

First, the meaning of a word that is spoken is by far not that important than for example in
the German-speaking countries. In fact, oral agreements on things or issues can have (not
always but often) a value close to zero. This implies, always make sure you are asking for a
clear confirmation of all given issues. If you are trying to set up a meeting with several
counterparts of multi-active countries, you should be aware of verbal confirmations
regarding time location and possible efforts invested by that specific person with regard to
the project or negotiation.

In fact, businessmen from Spanish-speaking countries are open and approach you with a
smile in their face. This is cultural related and should let you know that you are a welcome
guest and business partner. They also tend to confirm things verbally which they cannot
achieve. They do this to establish a conversational harmony within a negotiation
conversation. This is in fact a point to be aware of. Have always a clear mind. If you want to
succeed in these countries you must be able to scan your partner in regard to his outings.
Whether it is a clear confirmation, a “Yes”, or a confirmation, that later on is most likely to
be not achievable.

The people in the Spanish-speaking world tend to belong to one of the warmest cultures on
Earth. They are welcoming guests and they try to avoid uncomfortable and very direct
criticism of each other. Meanwhile in Western Europe (Germany, Netherlands) this is
common business, a direct criticism, even if it is hundred percent objectives, will be felt as
impolite and very offending by your business partner.

In order to criticize, it is important to have a feeling for the other person. It is important to
know when it is appropriate and when it is not. By criticizing in the wrong moment, you can
destroy the entire business relationship by provoking an uncomfortable feeling for the
other person (e.g. during a presentation). On the other hand, when it comes to bargaining,
this can be also used as your weapon. Be aware of this.

Reactive countries

The reactive countries are mostly countries in the Asian world (e.g. China, Japan, and
Vietnam).

When doing business in these countries and especially when it comes to negotiations, there
are a few things that should be considered.

Especially in terms of hierarchy and power distance, the reactive countries differ a lot from
the western business world.

The first thing that appears totally different from the most other cultures is the fact of
presenting business cards. Meanwhile in the western business culture world business cards
are handed out before, during or after the meeting as a simple mean of communication in
order to stay in contact. In Asia these business cards exchanges require a highly
sophisticated form of etiquette. First, give your card with both hands to the other person
and look her in the eyes. You will soon notice that the other person will also take it with
both hands and will at first have a look on it in order to accept your card. If you receive a
business card in this way make sure to accept it in the same way.

In western countries, business cards are just regarded as a paper for a simple reason, to
enable interpersonal contact from one to another person. In Asia, the business card
etiquette seems to underline that a having received a business card from your counterpart,
this person is letting you into his world. And the card is the first entrance. So, show respect.

Meanwhile this point applies for most of the Asian culture countries; it can also differ
among the several countries in that business area. So, this special etiquette is mainly
present in Japan and China.

The second point widely differing from western countries is the power distance or – shortly
– the interpretation and feeling of hierarchy in Asia.
Asian businessmen often tend to be really sticking to the role that they have been given by
the person in charge on a higher hierarchy level. This comes together with a different
understanding and feeling of discipline. Be aware that people in general tend to be more
ahead when it comes to discipline and persistence. Asians tend to be clearly structured and
efficiently organized. They need clear structures in order to achieve the most efficient work
capacity. This applies especially for Japan.

In countries in South East Asia, especially countries like Singapore, another business fact
becomes relevant. Be aware, that among these countries, there is a culture of “Non-
denying”. People and especially your possible employees will always try to stay in harmony
within a conversation with you. They will do everything to keep the structure of hierarchy
once applied as stable as possible. This is possible through a non-denial behavior. They will
never criticize or offend somebody directly. But, while never saying no, you must be aware
of how to manage these situations. You may come to a point after having gained several
experiences within these countries, when you get a feeling for these communicational
differences; therefore you need an intercultural antenna.

Be careful on the first meeting of partners in Asia. Try to never offend somebody by being
direct. Especially as a German or from a state of linear-reactive culture, you should be very
aware of not being as direct as when you are negotiating with a fellow citizen of Western
Europe. Be careful and a bit reserved and very respectful when meeting your fellows in
Asia. A too straight approach, direct statements or any kind of personal offending can lead
to a lot of misunderstanding and will destroy the business interaction, formally and
personally.

Intercultural Negotiations Preparation

Preparation is required for all kind of negotiations. Intercultural negotiations though

require a special and usually more intensive preparation. Even knowing the Richard D.
Lewis model might not be enough to engage in a successful intercultural negotiation. At this
point, be aware that an intercultural negotiation can already take place in your “home
country”!
As we have learned from previous chapters, cultures can differ a lot from each other. Big
differences paired with misunderstandings between two parties can lead to small or even
huge consequences:

While a friend from aboard might be insulted by a gesture or special local humor it is easily
possible to clarify the situation by explaining the background the gestures or humor. Still it
might take some time to make your friend overcoming the insult. But approaching a friend
is due to a given level of trust relatively easy.

If it comes to intercultural business negotiation which a potential strategic supplier who

believes you show arrogant behavior by nature, this can have a negative impact on for
example your company’s terms of payment – or even worse. Those terms of payment might
only be renegotiated earliest after one year and harm in this way the company’s’ overall
financial performance.

In both, the private and business related situations, the Richard D. Lewis model can be a
starting point to analyze and visualize general differences to values, believes and
assumption of the counter party – assuming you know the counterpart’s culture. Still only
applying the model might not be enough. It’s a big advantage to use empathy too.

A conclusion to the different possible consequences of a negotiation is the following:

Even if a small misunderstanding happens the effects from it can last long and therefore
have a high impact on a relationship – a friend or even a business partner. Here we can
conclude that in case the negotiated result has an important impact, the intensity of
preparation in advance increases to a high degree. Whereas the negotiated result has only
a low impact, the preparation effort usually decreases with a decreasing importance.

In order to avoid unnecessary intercultural mistakes a preparation could include the

following (excluding negotiations tactics training) sources:

Low / Medium impact of negotiated result:

  Ask people who already deal with the other culture (e.g. colleagues, supervisor)
 Read articles about the culture and/or geographical region (newspaper, internet)
 Read tourists guides which the most important symbols and gestures of a culture
(e.g. Lonely Planet, Dumont)

High impact of negotiated result:

 Do some research in online data-bases which provide business related information

 Ask people who already deal with the other culture (e.g. colleagues, supervisor)
 Read articles about the culture and/or geographical region (newspaper, internet)
 Read tourists guides which the most important symbols and gestures of a culture
(e.g. Lonely Planet, DuMont)
 Consolidate the chamber of commerce of the destination country
 Attend an intercultural awareness course (often offered from companies to their
employees)
 Hire consultants

It is highly recommended not just to rely on one of the preparation possibilities. Also be
aware that the facts you learned should be studied well. A good way of studying those facts
is practicing with a friend or business colleague. If you have colleagues from that particular
culture it might be best to practice with him/her

BIBLOGRAHY
1. www.wikkiepedia.com

2. www.worldbusinessculture.com

3. Trompenaars, F. & Hampden-Turner. (n.d.). The Seven Dimension of Culture. Retrieved

as on 24 June 2015 from Mind Tools: https://www.mindtools.com/pages/article/seven-
dimensions.htm

4. Faure, Guy-Olivier, and Gunnar Sjostedt. ”Culture and Negotiation: An Introduction.” In

Culture and Negotiation. Edited by Guy Oliver Faure and Jeffrey Z. Rubin. Newbury Park, CA:
SAGE Publications, Inc., 1993

5. I Win, You Win: The Essential Guide to Principled Negotiation, Carl Lyons. London: A &
C Black,2007.Read more: http://www.bridges-ec.com/services/vii-negotiation-strategy/5-
negotiation-bibliography/

6. BusinessDictionary.com

7. Investopedia