Intercultural Negotiation Example -- Haoran Tang (Nicolas)

A real example of business communication and negotiation
As we know communication and negotiation between businesses are very important to us. The skills of business communication and business negotiation are quite useful and helpful to us when we are doing a business with others, especially when we need to start a brand new international business or just think about how to establish an international business relationship. We need to be concerned about the foreign policies and the foreign investment environment. In addition, the most important point is how you take a look at the foreign culture. The culture influences the business directly as well as the material determines the quality. Looking around us, we see many instances of one displaying effects of their culture in their daily activities.

There is a good example that can explain why the business communication and negotiation is quite useful and important to our business that occurs in Nov 1988. This example is about two company’s negotiation, one is the American company called Buckeye Company and the other one is Chinese company. At that time, Chinese government just carried out the open door policy recently. Most of the foreigners were the first time to come to China. You can image that how a new born baby does knows about his brand new world. Obviously, they did not know anything about Chinese business situation even through the Chinese culture. The quite different culture is the main reason that why the Buckeye Glass team fails in china. In western countries, their business are more simple, efficient, and directly. But in china at that moment, the economics are controlled by government, the business is quite complex and Chinese people are looking up relationship and power. The awareness and understanding of each other’s culture become the most effective way to avoid misunderstanding and to achieve agreement.

According to these two kinds different culture between china and western country, I conclude some point below:

The importance of "guanxi"

Regardless of business experiences in ones home country, in China it is the right "guanxi" that makes all the difference in ensuring that business will be successful. (Definition - Le Figaro September 1997: "Guanxi: literally "locked system" or "relations". Personal and friendly relations, without it nothing is possible in China. Indispensable, either for the administration, customers or suppliers. They take time to build and require constant attention. They allow navigating the labyrinths of an extraordinary complex administration") By getting the right "guanxi", the organization minimizes the risks, frustrations, and disappointments when doing business in China. Often it is acquiring the right "guanxi" with the relevant authorities that will determine the competitive standing of an organization in the long run in China. And moreover, the inevitable risks, barriers, and set-ups you’ll encounter in China will be minimized when you have the right “guanxi” network working for you. That is why the correct "guanxi" is so vital to any successful business strategy in China.
Although developing and nurturing the "guanxi" in China is very demanding on time and resources, the time and money necessary to establish a strong network is well worth the investment. What your business could get in return from the favors for your partners are often more much more valuable, especially in the long run, and when you’re in need. Even domestic businesses in China establish wide networks with their suppliers, retailers, banks, and local government officials. It is very common for individuals of an organization to visit the residence of their acquaintances from other organizations, bringing gifts (such as wine, cigarettes, etc.). While this practice may seem intrusive, as you spend more time learning the Chinese culture, it will become easier to understand and take part in this practice that is so central to successful Chinese commercial activity. To start, pay close attention to your immediate Chinese network, and try to establish good "guanxi" with them. They can indirectly link you to new acquaintances and information resources, thus helping you to develop other right "guanxi" you need.

Build relationships (Intermediary agent)

Westerners normally build transactions and, if they are successful, a relationship will ensue. However, the Chinese believe that prospective business partners should build a relationship and, if successful, commercial transactions will follow. This difference underlies many misunderstandings arising from business negotiations. Virtually all successful transactions in China result from careful cultivation of the Chinese partner by the foreign one, until a relationship of trust evolves. In additional, the Westerners need to find some professional and smart people to be the intermediary agent, which represents the western’s company. These people used to know how to build relationship between Chinese and they know how to build the “guanxi” between the Chinese. This advantage can bring a huge potential benefit to their trade.

Respect face

Face is an essential component of the Chinese national psyche. Having face means having a high status in the eyes of one's peers, and is a mark of personal dignity. The Chinese are acutely sensitive to gaining and maintaining face in all aspects of social and business life. Face is a prized commodity which can be given, lost, taken away or earned. Causing someone to lose face could ruin business prospects or even invite recrimination. The easiest way to cause someone to lose face is to insult an individual in front of others. Some of Chinese people always think a lot of face. They consider face-save was important in negotiation sometimes. Actually, this habit becomes a huge disadvantage of negotiating right now.

Know the tricks of the trade

Chinese negotiators are shrewd and use a wide variety of bargaining tactics. The following are just a few of the more common strategems:
- Controlling the meeting place and schedule
The Chinese know that foreigners who have traveled all the way to China will be reluctant to travel home empty-handed. Putting pressure on foreigners just before their scheduled return can often bring useful benefits to the Chinese side.

- Threatening to do business elsewhere

Foreign negotiators may be pressured into making concessions when the Chinese side threatens to approach rival firms if their demands are not met.
- Using friendship to extract concessions
Once both sides have met, the Chinese side may remind the foreigners that true friends would reach an agreement of maximum mutual benefit. Make sure that the benefit is genuinely mutual and not just one-way.

- Showing anger

Despite the Confucian aversion to displays of anger, the Chinese side may put on a display of calculated anger to put pressure on the foreign party, who may be afraid of losing the contract.
- Attrition
Chinese negotiators are patient and can stretch out discussions in order to wear their interlocutors down. Excessive hospitality the evening before discussions can be another variation on this theme.

Conclusion:

Despite the negotiation between these two companies failed at that time. We can learn something in this case. In this case, we can find out the culture barrier is impossible to avoid, but the awareness of each other’s cultures would helpful in International Business. The westerns can know Chinese culture quite well according to contact with Chinese business man. In additional, the westerns need know how to build relationship between Chinese and set up an intermediary agent that represents their company. Beside, the westerns have to know that how to respect face and what the tricks involved in the trade. On the other hand, the Chinese need learn more from the western include the habit, manner and humor. The more knowing to each other can bring the better benefit to each other.

Summary NC8: Global Negotiation Kexin Zhang (Kevin)

Global Negotiation Kexin Zhang (kevin)

In this chapter we have discovered the strength and weakness of American negotiation per Tommy Koh, Samfrits Le Poole and McDonald. We also discuss the intercultural negotiation where negotiators from different countries were equally effective when they negotiate with other people from their own country versus cross-cultural negotiation where negotiators from different countries sometimes obtained different outcomes when negotiating with people from another country. Difference that makes cross boarder negotiation difference, two factors are environmental context and immediate context

We also learned how to explain global negotiation outcomes where simple arguments cannot explain conflicting global negotiation outcomes instead it is very important to understand the multiple influences of several factors on the negotiation process and update this understanding as circumstances change. In the end we discussed how cultural differences can influence negotiations. Culturally responsive negotiation strategies depends on the level of familiarity.

Summaries of Business Formats -- Emily

Evidence of knowledge of report structure, letter format, memo format, email

REPORT STRUCTURE

Reports, in an information age, are essential to business writing and written communications in general.

What makes business reports different from general academic reports is a real-world, practical, problem-centered orientation. The emphasis is placed on brevity, clarity, and functionality.

Reports are varied, each with some typical structural elements.

PROPOSAL REPORT

Includes the following: specification of the problem, the purpose, and the approach you will take in resolving an issue.

PROGRESS REPORT

Brings a project up to date, often includes the following headings highlighted from the body of the report: status, problems, changes, schedules, and costs.

PERIODIC REPORT

Is written on a recurring basis, and deals with an on-going situation. Computer printouts are sometimes used.

MEMO OR LETTER REPORT

Is a less formal report on a limited issue that uses the memo headings and subject declaration to present a specific issue.

The categories included in a report depend on the subject or situation. All reports need to be complete and accurate with informational headings to explain the subject and enable a reader to make a decision. In detailed, technical reports, for example, among the headings you should probably include are headings similar to the following:

1. Theory or background
2. Method(s) used
3. Results of research
4. Conclusions
5. Recommended action
6. Suggested follow-up

In reports where strictly controlled specific research is not required, the organization may resemble that of a memo, and may include the following headings: I Background, II Current situation, III Solution (if applicable) IV Recommendation.

Some informative reports, such as status reports, do not require a recommendation section. Quarterly or annual reports provide a sequential review of a specific time period, and although they may not include a recommendation, they may analyze the meaning of events in the time period covered and suggest future developments. As in any type of communication, format depends on purpose and on the needs of the audience.

Use of headings in long reports is essential. The headings act as an internal outline, showing the reader the importance of each section. Consistency of headings will guide the reader through the categories of your report. Depending upon the level of formality, reports, typically, include some or all of the following eleven parts:

1. Title
2. Abstract
3. Letter of Authorization
4. Letter of Transmittal
5. Table of Contents
6. Introduction
7. Body
8. Conclusion
9. Recommendations
10. References
11. Appendices

LETTER FORMAT

1. Heading

Letterhead and/or sender's information, including name, street address, city, state, zip

2. Date line

Date of composition

3. Inside address

Receiver's name, title, street address, city, state zip

4. Salutation

Dear Title Name

5. Body

Information paragraphs

6. Complimentary closing

For example: Best regards

7. Signature

Signed name

8. Typed name

Complete first, middle, last name. Often more formal than the signed name

9. Title

May be on the previous line, if short

10. Additional information

Composer and/or stenographer's initials, copy distribution list, postscripts, other items as relevant)

Here is an example of the parts in a typically formatted business letter:

[1 -- LETTERHEAD]

XYZ COMMCO INC
111 Any Street name --San Francisco, CA 94118 --(415) 221-1212

[6 lines of space ]

[2 -- DATELINE]
May 22, 2005

[2 lines of space]

[3 -- INSIDE ADDRESS]
Mr. John Smith
ABC Company
123 Anything Avenue
San Francisco, CA 94115

[2 lines of space]

[4 -- SALUTATION]
Dear Mr. Smith:

[2 lines of space]

[5 -- BODY OF LETTER]
Blah blah blah. With the blocked letter style each paragraph begins on the left margin.
Some more important information continues in the first paragraph for two to four sentences.

[2 lines of space between paragraphs]

Blah blah blah. Between paragraphs there is additional line space indicating a new paragraph. As before, this paragraph begins at the left margin, as do the date of composition, receiver’s address, complimentary close, sender’s name, title, and additional information.

[2 lines of space]

[6 -- COMPLIMENTARY CLOSE)
Sincerely yours,

[5 lines of space for signature area]
[7 -- SENDER'S SIGNATURE]

[8 -- SENDER'S NAME TYPED]
Terry D. Sender
[9 -- SENDER'S TITLE TYPED]
Project Manager

[2 lines of space]

[10 -- ADDITIONAL INFORMATION]*
TDS:YS
CC: Another receiver

*The additional information may be excluded if not relevant.

Full-Block Format

The identifying feature of a full-block letter style is the left justification of all ten structural parts of the letter: The items listed below are linked to their place in the letter illustrating the full-block format which follows,.

You may review the parts by going from list to the illustrated letter, using the numbers as the identification link. You may review the names by working from the letter to their identification in the list. The name in itself is not that important, but they help as a reminder to be aware of their consistent placement in letter composition.

Click on the numbered items to go to the corresponding part in the letter below

XYZ COMMCO INC.[1 Return]
111 Any Street -- San Francisco, CA 94118 -- (415) 221-1212

May 22, 2005 [2 Return]

Mr. John Smith [3 Return]
XYZ Company
123 Anything Avenue
San Francisco, CA 94115

Dear Mr. Smith: [4 Return]

Blah blah blah. With the full-block letter style each paragraph begins on the left margin. Some more important information continues in the first paragraph for two to four sentences. [5 Return]

Blah blah blah. Between paragraphs there is additional line space indicating a new paragraph. As before, this paragraph begins at the left margin, as do the date of composition, receiver’s address, complimentary close, sender’s name, title, and additional information. [5 Return]

Sincerely yours, [6 Return]

Terry or Terry D. Sender(signed) [7 Return]

Terry D. Sender [8 Return]

Project Manager [9 Return]

TDS:YS [10 Return]
CC: A. Receiver, B. Receiver

MEMO FORMAT

Memos use the following four items at the top of the page or below the letterhead

1. Date:
2. To:
3. From:
4. Subject::

The responses to the four items should line up with the use of tabs set for the longest item, the subject.

Date: ------- May 25, 2005

To:----------- Mr. A. Soandso

From:------- Ms. B. Correcto

Subject:---- Memo Format

There should be at least two spaces after the subject colon, so that each item will be aligned and clearly visible and the pattern of spacing will add further structure to the memo. Sometimes added to the items are the abbreviated forms: CC (for copies) and the substitute of Re: for Subject in the items.

To write effective memos you should

0. Be brief
1. Use clear headings
2. Use bulletted or numbered lists rather than text alone with a series of items
3. Include tables, if relevant
4. Use short paragraphs rather than long blocks of undifferentiated text

Parts of a Memo

Standard memos are divided into segments to organize the information and to help achieve the writer's purpose.

Heading Segment

The heading segment follows this general format:

TO: (readers' names and job titles)
FROM: (your name and job title)
DATE: (complete and current date)
SUBJECT: (what the memo is about, highlighted in some way)

Troubleshooting hints:

• Make sure you address the reader by his or her correct name and job title. You might call the company president "Maxi" on the golf course or in an informal note, but "Rita Maxwell, President" would be more appropriate for a formal memo.
• Be specific and concise in your subject line. For example, "Rats" as a subject line could mean anything from a production problem to a personal frustration. Instead use something like, "Curtailing Rat Extremity Parts in our Product."

Opening Segment

The purpose of a memo is usually found in the opening paragraphs and is presented in three parts: the context and problem, the specific assignment or task, and the purpose of the memo.

1. The context is the event, circumstance, or background of the problem you are solving. You may use a paragraph to establish the background and state the problem or simply the opening of a sentence, such as, "In our effort to reduce rat parts in our product...." Include only what your reader needs, but be sure it is clear.
2. In the task statement you should describe what you are doing to help solve the problem. If the action was requested, your task may be indicated by a sentence opening like, "You asked that I look at...." If you want to explain your intentions, you might say, "To determine the best method of controlling the percentage of rat extremities, I will...."
3. Finally, the purpose statement of a memo gives your reason for writing it and forecasts what is in the rest of the memo. This is not the time to be shy. You want to come right out and tell your reader the kind of information that's in store. For example, you might say: "This memo presents a description of the current situation, some proposed alternatives, and my recommendations." If you plan to use headings for your memo segments, you can refer to your major headings in this forecast statement to provide a better guide for your reader.

Troubleshooting hints:

• Include only as much information as is needed by the decision-makers in the context, but be convincing that a real problem exists. Do no ramble on with insignificant details.
• If you are having trouble putting the task into words, consider whether you have clarified the situation. You may need to do more planning before you're ready to write your memo.
• Make sure your purpose-statement forecast divides your subject into the most important topics that the decision-maker needs.

Summary Segment

If your memo is longer than a page, you may want to include a separate summary segment. This segment provides a brief statement of the key recommendations you have reached. These will help your reader understand the key points of the memo immediately. This segment may also include references to methods and sources you have used in your research, but remember to keep it brief.

You can help your reader understand your memo better by using headings for the summary and the discussion segments that follow it. Try to write headings that are short but that clarify the content of the segment. For example, instead of using "Summary" for your heading, try "New Rat-Part Elimination System," which is much more specific. The major headings you choose here are the ones that will appear in your purpose-statement forecast.

Troubleshooting hint:

You may want to wait until after the report is drafted and all conclusions and recommendations have been decided before writing the summary.

Discussion Segments

The discussion segments are the parts in which you get to include all the juicy details that support your ideas. Keep these two things in mind:

1. Begin with the information that is most important. This may mean that you will start with key findings or recommendations.
2. Here you want to think of an inverted pyramid. Start with your most general information and move to your specific or supporting facts. (Be sure to use the same format when including details: strongest--->weakest.)

Troubleshooting hints:

• For easy reading, put important points or details into lists rather than paragraphs when possible.
• Be careful to make lists parallel in grammatical form.

Closing Segment

Now you're almost done. After the reader has absorbed all of your information, you want to close with a courteous ending that states what action you want your reader to take. Make sure you consider how the reader will benefit from the desired actions and how you can make those actions easier. For example, you might say, "I will be glad to discuss this recommendation with you during our Tuesday trip to the spa and follow through on any decisions you make."

Necessary Attachments

Make sure you document your findings or provide detailed information whenever necessary. You can do this by attaching lists, graphs, tables, etc. at the end of your memo. Be sure to refer to your attachments in your memo and add a notation about what is attached below your closing.

E-MAIL

As we are no longer in the age of the tedious and time consuming "snail mail", the age of informal messaging has arrived via the power of the Internet. Don't be fooled; although the nature of e-mailing is quick and informal, there are a set of dos and don'ts to follow when sending electronic mail. Not to worry, here is a simple guide on how to properly send e-mails and a brief introduction to the wonderful world of Netiquette.

Double check
Pressing "Send" can be dangerous if you don't reread the message first. You know how spoken words can't be taken back? Well e-mail can cause the same potential damage.

Reread your e-mail before sending it to ensure that you don't sound sarcastic or rude. You may think you "sound" innocent, but remember the person reading the message can neither hear your voice nor see your friendly facial expressions.

Lighten up
When in doubt, try to lighten up the message by adding a smiley face, which can be made by using the colon, dash, and the right side of a parenthesis. Observe :-)

Another way to lighten up what may sound angry or sarcastic is to write the letters "LOL" (acronym for Laughing Out Loud) or something to indicate that you are joking, such as "Hehehe".

Other acronyms
BTW = By the Way
FYI = For Your Information
W/B = Write Back
RE's = Regards

Acronyms should be used in moderation. Be careful not to sound flirtatious either since e-mails that seem innocent can come across as flirting. Using the "wink face" ;-) can easily be taken in the wrong context.

Keep it short and sweet
Some people get bombarded with hundreds of e-mails a day and don't have time to read through every one. Keep your message brief. If you want to let someone know that you received their e-mail, a whole message is not necesary. Simply reply by saying something like "Got your e-mail, thanks".

Use the subject heading
Along the same lines, make your subject heading clear and descriptive; that's what they're there for. "Hello" or "Message from John" does not cut it and will not help the recipient sort out their e-mail by priority. Subject headings such as "Information About Meeting" and "Advice On Problem" are more clear and precise. Start every word of your subject with a capital; it makes the subject stand out more.

Avoid CAPS
It's hard to believe the amount of arguments I have gotten into by coming off mad or sarcastic in an e-mail. Writing whole words out in capital letters comes across as SHOUTING, as does using exclamation points!!! Use these sparingly and in the proper context.

Don't get personal
Assume that what you write may be read by others and can easily be forwarded to others, even accidentally. Be careful where you are writing the e-mail, since some employers have access to your e-mail.

Don't be the joker
Know whom you are forwarding your jokes to. Never send a joke to everyone on your address book, as some jokes will not be appreciated by some recipients and may seem inappropriate to others. Sending a dirty joke or a chain letter to your professor or boss is a no-no (unless of course they request them).

Be selective when forwarding e-mail; receiving tons of forwards per day can get downright annoying when one's inbox is always full, especially if the e-mail is not funny. Change the subject heading from "Fw:" to something more specific like "Forwarded Joke". Remember not to send dirty jokes or forwards to your friends at work; it can get them into a heap of trouble since some businesses screen and filter employee e-mails.

Negotiation – Chapter 8 (Cultural Differences) Summary - Zhanfeng Pan (Tim)

In this chapter, we have learned about how to manage cultural differences when negotiating across borders. At the beginning of this chapter we studied the American negotiating style and non-American. We knew that negotiators from different countries sometimes obtained different outcomes when negotiating with people from another country.

We also explored Hofsteader’s Dimensions of Culture. The four dimensions are:
(1) Individualism/Collectivism,
(2) Power Distance,
(3) Masculinity/Femininity,
(4) Uncertainty avoidance.

Finally, we learned how cultural differences can influence negotiations. Through we studied this chapter; we understand that the globe negotiation is so important for international business.