[MUSIC] Welcome to our final module on intercultural business negotiations. My name is Robert Wilken, and I'm Professor of International Marketing at ESCP Europe Berlin. My objective will be to guide you through several challenges of and solutions to intercultural business negotiations. The objective of today's unit will be to provide you with a structured overview of these various challenges and how they may be addressed. Now, what exactly are intercultural business negotiations as opposed to domestic ones and why are they more challenging? Due to the increased global integration of markets, dealmaking between business partners increasingly crosses borders. For many companies, international business and as a consequence, intercultural negotiations have become the rule rather than the exception. When the terms of a potential deal are discussed, it is more and more common that the business partners will bring different nationalities and as such, also different cultural backgrounds to the bargaining table. In order to understand which specific challenges emerge, let's first have a look at a general model of bargaining. What happens at the bargaining table, in particular, how both negotiation partners behave, what they say, when, how, and why is the core of the model. This part is called negotiation process. Clearly, a negotiation is an interaction between at least two parties, for example, a seller and a buyer. How both partners behave depends on many factors. For example, whether the negotiators are male or female, so their gender, whether the business partners are meeting for the first time, so length of history, and how much they depend on each other, so the degree of interdependence. In general, there are several so-called context factors that shape the predispositions of both negotiating partners and their interaction. This is the first part of the model. The second specifies the consequences of the interaction between both negotiators. These are variables that describe the negotiation outcome. Generally, therefore, the behavior of both parties at the bargaining table will ultimately influence the outcome of their discussion. Is there an agreement at the end, which profits do both parties achieve? How satisfied is each party with the outcome? So satisfaction. Are both sides willing to meet again in the future? This would be willingness to interact in the future. The model tells us that domestic negotiations in which both sides share the same cultural background are already quite complex to analyze. In intercultural negotiations, the situation becomes even more complex. At the same time, we need specific insights into these more complex negotiations because they are increasingly relevant to business. Consequently, let's talk about how culture affects our model. The issues that we identify will at the same time make up the contents of this module. We can treat the cultural backgrounds of the negotiators as a context factor with a significant impact on negotiation processes and outcames. I will talk about a few important consequences. The culture that the negotiator brings to the bargaining table will first influence the general attitudes towards the negotiation. Is the main goal to conclude a deal, so that te focus is rather short-term and directed at a single contract? Or is the main goal to develop a business partnership with many interactions to come, so that the focus is rather long-term? Second related issue, what negotiation styles are preferred and how do the negotiators behave? Do they prefer to be more informal or more formal? Do they prefer a rather hard style, focusing on their own interest and mostly neglecting those of the partner? Or do they prefer a rather soft style, focusing on joint problem solving with a negotiating partner? Obviously, the preferred style reflects the negotiation goal, hard style for a contract goal, and soft style for a relationship goal. The third issue is so basic that is often forgotten or not considered appropriately, the use of language. Language is the perhaps most explicit component of any culture. When the negotiating parties bring in different cultural backgrounds, it is very likely that the negotiation will take place in a language that is foreign to at least one party, if not both parties. By far, the most employed widely employed language in international business context is English. It is clear that the use of a foreign language, in general, and of the English language, in particular, can very easily create misunderstandings and eventually hinder the negotiators from properly discussing the terms of the deal. Moreover, how do negotiators express themselves? Directly and explicitly or indirectly with much meaning included in-between the lines? A fourth issue relates to the number of people that the selling and buying companies sends to the negotiation. A single person, a team? Almost 75% of all negotiations employ teams instead of single negotiators. And how is the team composed? Is it perhaps beneficial for a German company that plans negotiations with a French business partner to equip its negotiation team with a French team member so that potential misunderstandings can be mitigated? Teams can be mono or multicultural. The list of challenges that the intercultural setting creates as compared to a domestic setting can be extended easily. However, we decided to focus on the issues mentioned previously as they are basic and were also the elements of our own research adventures. This brings me to the conclusion for today. The outline of what will follow in the next units of this module. The subsequent second unit, we'll consider the negotiation goals and approaches of different cultures, following which we shall also consider the cultural dimensions that were presented in the introduction to this MOOC. Goals and approaches can be considered as context factors that will shape the negotiation process. The third and fourth units will be devoted to the issue of language use, because this topic is rather vast. We will talk about foreign language use, related anxiety in using a foreign language and its ultimate implications for negotiation outcomes. We will also talk about the general language style, direct versus indirect, explicit versus implicit, verbal and nonverbal. Foreign language use and language styles are factors that describe the negotiation process. The fifth unit, we'll consider the employment of teams in intercultural business negotiations, as well as the benefits of teams, in which members of different cultures are represented. This, in turn, is another context factor. In all our units, we will be interested to consider the effects on negotiation outcomes. Stay tuned and follow us on our journey to meeting the challenges of intercultural business negotiations and
how these challenges can
be mastered appropriately. [MUSIC]
