American And Japanese Negotiation Styles example essay topic

Negotiation In a Cross-Cultural Environment-American versus Japanese By Therese Perlmutter HR 595 Negotiation Skills Keller Graduate School of Management Dr. Larry Ray May 10, 2005 Table of contents. Introduction II.. IV.V. Conclusion VI. References I. Introduction Negotiations always occur between parties who believe that some benefit may come of purposeful discussion. The parties to a negotiation usually share an intention to reach an agreement. This is the touchstone to which any thinking of negotiations must refer.

While there may be some reason to view negotiations as attempts by each party to get the better of the other, this particular type of adversarial negotiation is really just one of the options available. Among the beginning principles of a negotiation must be an acknowledgment that the parties to a negotiation have both individual and group interests that are partially shared and partially in conflict, though the parameters and proportions of these agreements and disagreements will never be thoroughly known; this acknowledgment identifies both the reason and the essential subject matter for reflection on a wide range of issues relevant to a negotiation. (Gregory Trope a, November 1996) Any negotiation challenges the parties involved in a variety of ways, but parties with conflicting interests face important additional difficulties when attempting to negotiate an agreement across culture lines. Not only will the difficulties arising from the known similarities and differences of opinion be more pronounced, but also unsuspected factors could easily enter the picture and condition perceptions of the situation.

In cross-cultural negotiations, a reasonable second acknowledgment should be that the hidden factors that are always at work are more likely to interfere with reaching an agreement. It is especially important that this acknowledgment be understood to apply not only to the dynamics of interactions across the table, but those of individuals on the same side of the table. [At times, it may be tempting to attribute the outcomes of negotiations to a single variable (such as the culture or the relative power of a country).] The term culture has taken on many different meanings but basically it reflects the shared values. Culture affects negotiations in different ways. In this paper, we are going to discuss the American and Japanese negotiation styles and the different ways culture affects negotiation in each style.

(See Lewicki) II. The Problem How to overcome culture differences in cross-cultural negotiations? Problem Analysis To analyze the problem we have to study the American and Japanese negotiation styles and how culture in its different meanings affects negotiations. 1-Negotiation Styles a.

The American style (Doing Business with the New Japan, Hodgson, Sano, Graham, 2000) Probably no single statement better summarizes the American negotiation style than "Shoot first, ask questions later", Throughout the American educational system we are taught to compete, both academically and on the sporting field. Adversarial relationships and winning are essential themes of the American socialization process. But nowhere in the American educational system is competition and winning more important than in case discussions in our law and business school classrooms. Of course, such skills are important at the negotiation table, but the most important skills such as how to ask questions, how to get information, how to listen, or how to use questioning as a powerful persuasive strategy are not taught or, at best, are under emphasized. b.

The Japanese negotiation style The Japanese negotiation style is indeed unique. It is even different than that of its neighboring countries China and Korea. Contrary to their haggling styles, the Japanese style is more subtle and low-key. The Japanese style has far deeper roots than the American style. Another characteristic is that it could be suitably used internationally. Three environmental factors are most important on the business negotiation style: insular and mountainous geography, dense population, and the importance of rice as the basic food crop.

(Hodgson, Sano, and Graham, 2000) Japan is surrounded by seas which always made it difficult for foreigners to come in into the country as much as locals leaving the country. Moreover, the mountains made it difficult for groups to move within Japan itself. That meant that the people had to stick together. Japan is the most densely populated land in the entire world with respect to people per square mile of arable land. This crowding fosters obedience and cooperation among groups. Rice cultivation, which is a hard chore, is an important factor influencing the values and behavior of the Japanese.

About five sixth of Japan's population work in cultivating rice, which means that people have to learn to cooperate. The small group in the community is central to its culture. Individual needs are de-emphasized. Loyalty and consensus decision-making are key elements that bind such groups together.

As in America, classroom behavior is influenced by and tends to reinforce these cultural values and behavioral norms. Lively discussions are not part of the educational process, rather professors present lectures with no questions or feedback. Listening skills and obedience, rather than debating are rewarded. 2- How the variations of the term culture affect negotiations: -Definition of negotiation: Americans view negotiations as a competition while Japanese view it as an opportunity to exchange information. - Groups versus individuals: Americans don't mind sending one person to handle any situation by himself and it usually becomes hard when he cannot play the role of speaker, listener, and decision maker all at the same time. It could work fine with a fellow American but does not play well with Japanese or other nationality.

Japanese prefer groups of negotiation parties. - Protocol: Americans are the least formal when conducting negotiations. They decide to start their relationship on a first name basis only to find that in other cultures, there is always a vertical hierarchy that has to be respected and is quietly understood. 3- Language: Many Americans are not adept at speaking foreign languages. Often we are not even apologetic about it. When English is the only spoken language, it gives the opponent a powerful negotiation tool because of the use of interpreters, which can take time that is needed by the opponent.

It can give the opponent the option of using selective understanding. And the assumption that the person who speaks English is the most intelligent of the group, which more often is not true. 4- Americans go to the negotiation table with the decision maker on the negotiation team. This is not usually the case in other countries. Checking with the home office is a widely used and known tactic used by negotiation teams in other countries. Usually used to gain time on making the decision, this tactic make the Americans feel that he wasted time and did not accomplish what he came to do.

5- Nature of agreements: Americans prefer the finish the matter as quickly as possible. Negotiations in general proceed in four stages, and Americans get to the third stage as fast as they can. Introduction's take usually very little time. Contrary to the Japanese style which dictates that trust should be built between the parties of a negotiation before the issue in question is discussed. 6- Exchange of information: Americans expect the exchange of information at the negotiation table to be instant. In many different other cultures including the Japanese culture, reciprocity is recognized and done, but negotiators are willing to wait for the information because they take time to build relationships between parties.

(Phase 2 of the negotiation). 7- Silence during negotiations: Americans are uncomfortable with silence during negotiations, which more often than not happens at negotiation with other culture. The biggest mistake that is done during the silence is that concessions are made. 8- Persistence: Americans value persistence. We are always taught not to give up. So negotiations are supposed to be won.

9- Selection of negotiators: Americans choose the manager with knowledge and decision making power regardless of experience and age. Japanese choose the older and the more mature manager. 10- Time: Americans usually have little or limited time to offer due to other engagements and tight schedules. Time for Japanese does not mean much as long as the negotiation is on track. 11- Nature of agreements: Americans follow the logic way of negotiating, e. g., the most cost effective method. Japanese can go into an agreement to return a favor or to compromise.

12- Vertical society: Perhaps the most important difference between the Japanese negotiation style and others, particularly the American concerns status relationships. It is uncomfortable for a Japanese to have no status distinction, while in America people go out of their way to establish equality. Americans do expect to affect the business outcome of a negotiation, while Japanese actions are predetermined and pre specified by status relations. 13- Indulgent dependency: Buyers are to take care of sellers and not to take advantage of them.

For example, in a relationship between management and labor, Management has much more control over labor in Japan that in the United States. But with that control comes a large measure of responsibility for the welfare of the labor force, exceeding that in America. 14- Long-term relationships: No society values reliability and trust in relationships both socially and in business more than the Japanese. So trust cannot be sought but has to be won. This is why Japanese will invest money and time in negotiation preliminaries. Japanese bargainers will be looking for long-term commitments.

Short-term profits are welcome but secondary. 15- Gut feeling: As mentioned above, Japanese spend a lot of time on the initial stages of bargaining as an important investment. While this may look as waste of time to the Americans, it is of great importance to the Japanese, since through this ritual they establish harmonious relationships. This helps resolve conflicts without the expensive litigation systems. With all the differences mentioned above, the basic negotiation strategies, although in different ways and within different time frames, are practiced in both countries: Framing the problem The goals The Strategy Understanding the Flow of negotiation Getting ready to implement the strategy: the planning process Bargaining strategies The integrative and distributive strategies are equally practiced in both cultures. However, in Japan people negotiate for the benefit of all, so most negotiations are on an integrative Leverage Japanese believe that the most important source of power is to be prepared.

Having information available and ready to exchange is crucial. Persuasion has no role because... IV. Solution to the problem: How to overcome cultural differences The following offer some advice: 12- be aware of the effects of culture differences on negotiations 13- take these cultural differences into account when negotiating 14- be sensitive to the cultural norms of the person with whom you are negotiating 15- modify your strategy to be consistent with behaviors that occur in that culture 16- encourage communication be tween parties on and off the job. 17- encourage language study and get familiar with norms of the country. Lewicki recommend three major strategies that negotiators can follow: Negotiators may not be able to change their approach to have the right effect on negotiation.

It takes a long time to understand the culture. He suggests: If you don't want to spend your time on getting familiar with the culture norms or the language, use one of two approaches: 1- have an advisor-someone who is familiar with both cultures and knows the two languages, who will work on your behalf. 2- have a mediator-someone who is familiar with both cultures and knows the two languages who will go in between the two parties and tries to achieve an outcome that is satisfactory to both parties. If you have an idea about the culture and the language of the other party, you can do one of two choices: 1- try to adapt to the other party's approach.

That approach requires conscious efforts in making many changes to your strategy to meet the other party while maintaining oneself own strategy in perspective. 2- Coordinate adjustment-adjustment to strategies are done from both parties to the negotiation. It is believed that all adjustments are done implicitly but it is likely to occur explicitly also. If you are very familiar with the cultural norms and the language, there is more that can be done: 1- adapt to the party's approach-depending on the type of negotiation on hand, negotiator needs to act not like the other party but almost like one of them. Everything is done according to the other party's terms. There is a lot to loose in terms of concessions, but there is a lot to gain in terms of future business.

2- Improvise and approach tailored to the needs of the parties's strategies, negotiation situation, and circumstances. This is the most flexible approach to those negotiation situations, since it tends to bring the two sides together, while considering each other's terms. Some negotiators do find it hard to come to terms to a negotiation outcome using their culture norms or the other party's culture norms, so they have their negotiations take place in a third location, and they follow the norms of the new location. This approach is difficult but has been done. Conclusion As mentioned above, there is no particular 'solution' to any of the problems. The learning is in the experience of the problems and in the integration of that experience into one's inherent negotiating strengths and weaknesses.

To apply the above to the American-Japanese negotiations, Japanese are well aware of their variation from the norm. The outside world, on the other hand, must learn to accommodate itself to Japan's slow adjustment to an understanding of the world beyond its borders. Japan must step up its efforts to gain such comprehension. Having said that, it is expected that negotiations with Japan are going to improve.

Japanese are making an effort to understand the world outside their island. American are trying to know more about the differences between the two cultures, hence respect and accept some of its ambiguities. References Hodgson, James Day, Yoshihiro Sano and John L. Graham, Doing Business with the New Japan, 2000, Boston, Rowman & Littlefield Publishers, Inc. March, Robert M., Working For A Japanese Company, 1992, Otowa, Kodansha International, Ltd.

Lewicki, Roy J., David M. Saunders, and John W. Minton, Negotiation, 1999, 3rd edition, U.S. A, , McGraw-Hill Higher Education. Schmidt, Warren H. and Robert Tannenbaum, 2000, "Management of Differences", Harvard Business Review on Negotiation and Conflict Resolution, Boston, Harvard Business School Press, Harvard Business School Publishing Corporation, 1-26. G erick, Patricia, On Track with the Japanese, 1992, Otowa, Kodansha America. Kato, Hiromi and Joan Kato, Understanding and Working with the Japanese Business World, 1992, New Jersey, Prentice Hall, Business Information & Publishing Division. Cleary, Patrick J., The Negotiation Handbook, 2001, New York, M.E. Sharpe Inc. web phrase straight out of an old western. Throughout its history, America has been a nation influenced by its immigrants.

Immigrants came across the seas with a mix of ideas and perspectives. They had to work hard to succeed. But also they wanted to be independent, a quality that did not serve us well at the negotiation table. Strengths in the American style: (1) good preparation; (2) clear and plain speaking; (3) a focus on pragmatism over doctrine; (4) strong ability to recognize the other party's perspective, and to recognize that negotiations do not have to be win-lose (5) good understanding of the concession-making process that is fundamental to negotiation; and (6) candid and straightforward communications. Weaknesses in the American style: (1) serious intergovernmental agency conflicts that cause problems in reaching consensus within the American team; (2) the separation of political power between the presidency and Congress, which complicates the negotiation process; (3) the influence of interest groups on negotiations; (4) media interference, which makes it more difficult to negotiate sensitive parts of an agreement discreetly; (5) negotiator impatience; and (6) cultural insensitivity. This is a mistake.

Negotiations between the United States and Japan on five different subjects would have been expected to have the same outcomes but they had all different outcomes. No single variable could explain them. Negotiation strategies had effects depending on the situation and the subject. Culture affects negotiations in 8 different ways: Why is doing business in Japan difficult, and what can we do about it? You may often hear that doing business in Japan is very difficult - but you may have experienced that everybody was incredibly friendly when you visited... So what's going on?

Here a few facts: There is no other advanced industrial country with so little foreign investment. This is because for a long time foreign investors have been kept out. This policy has recently changed, and foreign investment is increasing rapidly. Increasing foreign investment [Stanford Slide No. 17] Very few Japanese people (less than 3% - 5%) speak good English and as a consequence there has been a certain amount of intellectual isolation from the rest of the world. Traditionally financial conglomerates (Zaibatsu) dominated the traditional large industry. It was difficult to do any commerce across the boundaries of these Zaibatsu, and these barriers were even stronger against foreign companies.

However, the old Zaibatsu structure is now gradually breaking down. It's a very bureaucratic country in many ways, with a dense network of regulations, permissions, certifications, procedures, offices and authorities with approval procedures for many things, which don't need approval in UK or US. Many of these restrictions are designed as entry barriers against newcomers to existing industries. Slowly these regulations are 'eased' and seldom eliminated. With professional help, for example by lawyers or experienced management consultants - depending on what needs to be done - you can often find ways to do work - particularly in new industries. However, internet, e-commerce, and the present 'opening' may bring many changes, and evaporate some of the traditional difficulties...

Etiquette There are many books claiming to prepare you for Japanese etiquette. Don't believe everything these books say, and don't make the mistake that you believe you are well prepared to do business in Japan after reading a book about 'Japanese etiquette'! Still, here are a few essential tips: Take enough ('enough' often means a couple of hundred) professionally prepared ' (' = business cards). For Japanese people (as else where in Asia-Pacific) exchanging ' are like shaking hands. It is very awkward not to exchange ' when you first meet - few people will think this is funny. So make sure you have enough.

Not to have ' has the meaning of being unemployed. Impress with facts and achievements, or the fame and power and size of your corporation. Bring documentation of your company in Japanese language. Be on time and well prepared for meetings.

There is a sophisticated protocol how seating is arranged at meetings, at dinners or in cars etc. The seating protocol depends on seniority, guest-host relationship, the position of the door, decorations in the room, etc. If you are arranging important meetings or dinners at high level, it will impress if you follow these seating customs. Most foreigners who have not worked a long time in Japan will need advice from Japanese professionals to select the correct seating order. At dinners there are also customs about filling glasses etc. There are a number of unwritten rules in daily life in Japan, which everybody observes, but nobody talks about, and which don't exist in Europe or USA.

For example: no eating and drinking and no baby's perambulators (except folded up) on short-distance commuter trains. It's your choice in a way, but you " ll make more friends if you observe these little rules. There are some things you should definitely not do: (1) Don't blow you nose in front of other people! (2) Don't kiss anybody as a greeting!

(You " ll thoroughly embarrass your 'victim'!) (3) Never throw objects at somebody asking them to catch! Books, papers, documents, , presents, and other important objects are given with both hands and a bow of the head. (4) There are a couple of other 'no-no's' (gestures, comments etc) which will provoke embarrassment, or even hostility in Japanese people, and you might be unaware of them. You better ask for them and avoid them. Be prepared for surprises!

Everything is changing rapidly recently! Relax! Don't overestimate etiquette! Although your Japanese business partners may look dead serious (and Japanese people usually take work dead-serious... ), they also are human and know to laugh...

Here is a famous story (not sure it's a true story though... ) demonstrating what can happen with exaggerated cultural adaptation: An important US-Japan negotiation is scheduled in Hawaii - midway between the american continent and Japan. The Japanese party and the US negotiation party both have done their preparations well: they studied the material, the facts, prepared strategies, fall-back positions, read up on how to negotiate with the Japanese (or the Americans) and read about cultural differences, and learnt a few polite word's in the other party's language. The doors open and in come the Japanese and the US negotiators. The Japanese negotiators - all experienced senior managers - trying their best to adapt to American culture and to create a good atmosphere, enter the conference room dressed in Aloha shirts, sandals, shorts while on the other side of the room the American delegation enters: dressed in stiff white starched shirts, dark tie, dark blue business suits, polished black shoes.