Conducting International Business Negotiations Across Cultures And Regions: An Essay.

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Conducting business internationally has become an absolute part of life that is inevitable. Businesspersons move from one country to another, travelling from one cultural context to another. This has made it very vital and important for the parties who carry out negotiations and business contracts to understand how to handle different clients and customers from varying cultural background and countries. Norms and customs are integral parts of behavior and perception and hence implying that individuals are directly anchored on such believes (Gunia, et al., 2011, p.774)

In this note, it is therefore important for any businessperson conducting business internationally and across cultures to have a direct understanding of the party (ies) that they are most likely to meet. The ability to establish a long-term relationship is based on the effectiveness of the communication and attitude developed among the dealing parties. Without effective understanding of between/ among the parties, a series of misunderstanding may arise. Such misunderstanding may be between the representatives of the different cultures, between or among the members of the same culture for example during the preparation process (Lowry et al., 2010, p.315).

Communication; the possibility of understanding and interpreting a particular symbol in different ways may cause the dealing/ negotiation parties to fail in reaching an understanding. For example, taking Indonesia as a case study, the type of tone used during the communication may substantially affect the way a message is conveyed to the other party during the communication phase. For this reason, any businessperson organizing to have any dealing from a country from Indonesia should have an extensive understanding of how the people’s culture, customs, and perceptions (Gelfand, et al., 2013, p.504).

Selection of Negotiators; according to research findings, it is argued that accountability, group memberships, and culture may not only affect the negotiation and after negotiation but also have an effect on the type of results/ contract that comes out of the negotiation. For instance, the understanding of accountability and group ownership may influence the outcome/ the decision reached by the parties. Besides, approach oriented relationship is another factor that when not understood, could cause negotiation failure (Fowler, 2009, p.341).

Taking a critical analysis of literature report findings indicate that differences in ideological diversity, monetary factors and legal pluralism also have consequences if they are not [perfectly understood by the negotiating parties. Furthermore, a deeper study of the type of hierarchy and flow of power also contributes to the effectiveness of any negotiation process. In Indonesia for instance, the chain of flow of power is imminent factor to consider when conducting any procedural of negotiation between or among parties of varying cultures (Curhan et al., 2008, p.192). In other words, some nations/ cultures are so bureaucratic in their operations and this requires a soul understanding of the system or context in which negotiation is carried out.

Understanding Different Cultures is Vital for International Business Negotiations

Time sensitivity; in a country like Indonesia, the people have a tendency of taking long to familiarize and develop trust for any unknown partner/ new partners. Face values are regarded of high relevance in any negotiation. The issue of changing/ alternating personalities from a partial company may hinder the future contracts held by the concerned parties. In other words, if the company has an agent who carries out negotiation with a partner company, it has not to be changed, otherwise, negative perceptions may be developed and this hinders any further dealings and contracts. In regard to the subsequent scenario, it is typically important to understand the operation of such a country or national setting before starting any business (Ren, H., & Gray, B. (2009, p.105).

Risk Propensity; in carrying out international negotiation, different nations, and cultures possess different legal and political pluralism. This obviously has causes a variance in taxation policies and percentage taxes paid by different parties in a dealing. Furthermore, the codes of labor and businesspersons that must be met, the standards of enforcement and the terms and conditions of the contract all have influences in the strategies taken while implementing a negotiation plan (Liu et al., 2012, p.234). A detraction of the business conduct in many countries are also affected by the political ideologies of different countries. The culture of impacted by the business platform are substantial contributors to the negation variances. These imply that that individuals should attain, retain and circum by the established rules of operation of a given country which calls for the ability to understand such a contexts for the benefit of any negotiation of contracts within such localities. It is also important to understand the cultural diversity to ascertain, understand, and reduce the instabilities that may come in form of inadequate resources and information regarding particular contracts (Gunia et al., 2016, p.78). These scenarios normally occur during the negotiations of the contract. Other shortages may be in form of food due to the diversity of food used/ preferred in different countries and multi-cultural contexts (Adam, 2010, 889) 

After looking into most of the variables, we gain a general understanding that, as any negotiation type is to take place, the reasons and terms of negotiation determine the kind of relationship built between or among the parties(Han rt al., 2010, p.423) The reasons are mainly anchored on the hinge, which is directly related to the goals to be achieved by the firm of the individual involved in the negotiation. As findings from most research studies, it is found that the reason for any firm, partner of individual to carry out a negotiation, they intend to achieve specific objectives which in most are affected by the cultural diversities and differences (Zhang et al., 2014, p.491)

Tips for Conducting Effective Business Negotiations Across Cultures

Basing on the fact there exists cultural differences that brings about divergences in perception, communication, symbolization, and chain of order/ management, it is typically important for the businesspersons/ negotiators to maintain certain degree of openness. This should strike a balance between/ among the negotiators.  It is therefore implied that negotiators may remain open while adjusting their views and understanding all the negotiation process while “not cutting the lines” of the other parties involved in the negotiation so as to ensure the affective and friendly interface between or among the negotiators. Due to the difference in culture, a negotiator should not take unclear concept from a personal perspective. However, they should seek clarity during the negotiation because a high degree of openness will definitely lead to

As a point of reference, Indonesia has few people who can speak fluent English who are mostly the youths. The members in the top management authorities are not very familiar with English, implying that communication may necessarily be effective except for the cases where an interpreter is availed. Therefore, to avoid circumstances that could lead to could lead to the termination of the contract of the contract due to misunderstandings, the negotiators should stay calm and seek for clarity and in this way, a more constructive, “win-win situation can be achieved”.

It therefore implies that negotiators should strike a balance in remaining open and adjusting views but with control to avoid crossing the lines of the other party which in most cases can result into failures.

Taking an example of Indonesians negotiator conducting a negotiation with a businessperson from an English speaking country. The English businessperson should ascertain the culture and customers of Indonesia for example, knowing how to build trust and good working relationship, respecting the religion and ideology of Indonesia, the communication chain and symbols. The partner company should also endeavor not to change the faces that involved in particular negotiation.

WHETHER THE INDONESIAN CULTURE IS LIKELY TO RESULT IN A DISTRIBUTIVE BARGAINING APPROACH OR AN INTEGRATIVE BARGAINING APPROACH

As a country, Indonesia consists of countless islands that are a strong reference to history and culture. The Indonesian culture has largely resulted into a distributive bargaining approach on the expense of an integrative bargaining approach. This is discussed in the following aspects;  

Majority of the business people in Indonesia are Chinese and they have a strong family connection back home in China, which is not an Islamic country like Indonesia. This culture of religious difference between businesspeople results into conflicts due to difference in goals for the negotiating parties hence a distributive bargaining approach in the process of carrying out business. More so, while negotiating business, Indonesia business people have limited exposure to other cultures apart from the neighbouring states which means that there is conflicts of interest while negotiating with people from other nations due to the cultural difference.

Importance of Effective Communication

Indonesian culture is much group oriented and individual preferences are not highly considered than being in a group, abiding to the group rules and norms and maintaining harmony amongst the group members. Therefore creating a strong relationship and trust is important among most Indonesians. They always do business with people whom they know and conducting a long term productive business relationship needs a high commitment and conformability with one’s counterpart. This brings about conflicts between negotiating parties who are not group oriented and committed because their business goals will be different from those Indonesians who are grouped and committed hence resulting into a distributive bargaining approach.

In Indonesia, relationship is based on trust, respect, and familiarity which may take a while to establish and this relationship exists not between the companies but between the people. This helps the company to keep their interface constant that even winning your local business partner’s friendship and trust they will not trust others from your company. This will create a difference and make the negotiating parties to compete for the limited resources where every party will have the interest of maximising his or her share hence the relationship culture resulting into a distributive bargaining approach.

Reputation is yet another important aspect in the Indonesian culture. Any kind of embarrassment lowers all negotiating parties’ face involved in the business. This social standing depends on one’s control of emotions and being friendly at all times, and should not bring an off topic with an Indonesian or convey any irrespective message in the public. Therefore this will bring in a cultural difference between negotiating parties where one is not an Indonesian because there will be a direct conflict with the goals of the other party who is not an Indonesian hence a distributive bargaining approach.

Indonesians are polite and friendly, they like doing business with others who treat them genuinely and accordingly. In this aspect, it is upon the business counterparts to adopt similar behaviours in order to do the same and achieve their objectives. This is likely to result into direct conflicts between business counterparts who are not polite with Indonesians where it will be upon them to copy and achieve their negotiation goals hence the culture likely to result into a distributive bargaining approach.

The respect a person enjoys in Indonesia business culture depends on the rank, status and age and it is hard to find an Indonesian having a conversation with a person whose status is not clear because it is hard to know whether someone is an inferior, superior or equal. Having a better status makes a person highly respected and taken seriously; he or she shall use services of others like porter and will avoid being low-ranked. Admired class of persons are patient, have good listening skills, are experienced and have a good wealth. Most of the prompt Indonesian businessmen are highly respected because they have a military background. This culture is likely to result into a distributive bargaining approach in the way that negotiating parties who are not highly ranked will have direct conflicts of goals with those highly ranked and will compete for the limited resources available.

Selection of Negotiators

Bahasa Indonesia is the official language of the country but young business people speaks English although high ranked managers rarely speak it very well. In a meeting if one is not perfect, in English, he or she speaks in short sentences. The culture of adopting English language is likely to result into a distributive bargaining approach in a way that it creates conflict between negotiating parties if one is a young business man and another one is an older person.

HOW TO ESTABLISH THE APPROPRIATE CONTEXT AND ENVIRONMENT FOR A SUCCESSFUL INTEGRATIVE NEGOTIATION TO TAKE PLACE, IF THE NEGOTIATION COUNTERPARTS ARE INDONESIANS

Integrative negotiation is where the goals of the negotiating parties are mutually exclusive. This means that if one party achieves its goals, it does not prevent another party from achieving its goals that is to say one party’s gain is not at the expense of another party. An Integrative negotiation situation therefore allows both parties to achieve their goals. For a negotiation to be specified as Integrative, it should focus on the similarities of the party not the difference, it should address the needs and interests of the parties but not the positions, and it should also meet the needs of all negotiating parties. To establish an appropriate context and environment for a successful Integrative negotiation to take place, if the negotiation counterparts are Indonesians, the following should be considered.

According to Liu, Friedman, & Hong (2012) Effective communication can promote a ground for Integrative negotiation solutions and if there is a failure to reach Integrative agreements will lead to failure to exchange enough information. Therefore for the negotiation to be successful, the negotiator must reveal their objectives willingly and able to listen to each other. Following the aspect of communication, if the business counterparts are Indonesians, a common language can be established to enable effective communication between negotiating parties to avoid distributive bargain approach. To establish a right common language, an action should be taken to learn that language and the best example of a common language that can be established is English because it is the commonest language used in the world.

• Attempting to Understand the Other Negotiator’s Real Needs and Objectives

Negotiators differ in their values and objectives but the best way of understanding each other is to know their needs and goals. Therefore if the business counterparts are Indonesians, it is a matter of understanding their needs to establish an Integrative negotiation. This can be done by understanding their business culture such as relationship, group orientation, status and others. This is because having a better status makes a person highly respected and taken seriously in Indonesian business culture (Chui & Kwok, 2008, p.88).

• Emphasizing the Commonalities between the Parties and Minimizing the Differences

Time Sensitivity

In order to sustain a free flow of information and to establish an Integrative negotiation, the similarities between negotiating parties’ goals should be considered most and differences should be minimized. Therefore, to establish an appropriate context and environment for a successful Integrative negotiation to take place, if the negotiation counterparts are Indonesians, commonalities between the parties should be emphasized. This can be done by negotiating on the same business and adopting similar cultures.

• Searching for Solutions That Meet the Needs and Objectives of Both Sides

To succeed in Integrative negotiation, it depends on the search for solutions that can meet the aims and objectives of both negotiating parties for example if parties are used to competitive orientations towards each other, they will be concerned with only their goals. Therefore, to establish an appropriate context and environment for a successful Integrative negotiation to take place, if the negotiation counterparts are Indonesians, equal and appropriate solutions should be taken for both negotiating parties. This should be done by ensuring that no negotiation party is doing more than the other.

In summary, Integrative negotiation will require a process which is different from distributive bargaining and this is because negotiation attempts to be below the surface of another negotiating party’s position to get the desirable goals (Bullock, 2011, p.83)

Negotiation tactics;

In reference to the Indonesian culture, the ethical dilemma that is likely to rise when negotiating with an Indonesian counterpart would be negotiation tactics. This is a situation of not being fair and open in the negotiation carried out. Due to the fact that Indonesians are so reserved in terms of culture, religion, communication and developing trust in strangers that they do not know (Lin, R. J. (2011, p.8088). From the case study provided, they prefer “face saving” of an individual. Therefore, in order to forge a relationship built on familiarity, personal trust, and respect. Basing on the fact the country’s nationals mainly maintain group based relationship and face saving, it can typically be hard to decide on whether to be more profit oriented by covering unpolished truth or polishing the truth and standing the chances to lose the customers/ clients. For the sake of establishing fast relationship to engage in business, the business person may be tempted to lie on the nationality, the religion, and forging communication cues to force into fitting the environment that was not meant to (Adam, & Shirako, 2013, p.785).

APPROACHES TO ETHICAL REASONING AND HOW THEY MAY BE USED TO EVALUATE THE ACTIONS TO BE TAKEN WHEN FACED WITH AN ETHICAL DILEMMA.

Risk Propensity

 There are different approaches to ethical reasoning where among others includes;

Personalistic ethics

In the business context, these ethics reflects an individual feeling about the decision being taken and they have the following characteristics;

They are driven by the sense of the individual of virtual and how the decision can reflect with the personal character and sense (Lindsay et al., 2011, p.529). Where the decision maker puts himself in the shoes of other person when deciding what to do, they may be based on empathy. Also they may be based on intention driven by conscience with the question of sleeping at night while making decision. With these ethics, board members must be comfortable with the decisions in which they are involved (McIntosh, 2009, p.80).

Duty ethics

This is concerned with the rightness of an action determined by someone’s duty to adhere to laws and principles that defines what is right or wrong(Ma, Z., & Jaeger, A. M. (2010, 369.

POSSIBLE CONSEQUENCES OF UNETHICAL TACTIC.

Any negotiator, who employs unethical conduct or tactic, will come across both negative and positive outcomes. This will depend on how the audiences evaluate the tactic, how the other person and constituencies also evaluate it, and whether it is effective (Anderson et al., 2008, p.702).

Reactions of self, this is one of and most set of consequence which results depending on how the negotiator evaluates his own use of the conduct whether it creates personal stress or whether the actor sees no problem in using it and he or she opt to use it more. For example in this matter, the tactic is harmless, unavoidable, help to avoid negative outcomes and produce good ones and will be fair or suitable for the situation (Ma et al.,2010, p.346).

References

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Chui, A. C., & Kwok, C. C. (2008). National culture and life insurance consumption. Journal of International Business Studies, 39(1), 88-101.

Openness to Achieve Long-term Relationship

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