Differences in thinking and decision-making processes
When faced with a complex negotiation task, most Westerners (notice the generalization here) divide the large task up into a series of smaller tasks.[16] Issues such as prices, delivery, warranty, and service contracts may be settled one issue at a time, with the final agreement being the sum of the sequence of smaller agreements. In Asia, however, a different approach is more often taken wherein all the issues are discussed at once, in no apparent order, and concessions are made on all issues at the end of the discussion. The Western sequential approach and the Eastern holistic approach do not mix well.
That is, American managers often report great difficulties in measuring progress in negotiations, particularly in Asian countries. After all, in America, you are half done when half the issues are settled. But in China, Japan, or Korea nothing seems to get settled. Then, surprise, you are done. Often, Americans make unnecessary concessions right before agreements are announced by the other side. For example, one American department store executive traveling to Japan to buy six different consumer products for her chain lamented that negotiations for the first product took an entire week. In the United States, such a purchase would be consummated in an afternoon. So, by her calculations, she expected to have to spend six weeks in Japan to complete her purchases. She considered raising her purchase prices to try to move things along faster. But before she was able to make such a concession, the Japanese quickly agreed on the other five products in just three days. This particular manager was, by her own admission, lucky in her first encounter with Japanese bargainers.[17]
This American executive’s near blunder reflects more than just a difference in decision-making style. To Americans, a business negotiation is a problem-solving activity, the best deal for both parties being the solution. To a Japanese businessperson, on the other hand, a business negotiation is a time to develop a business relationship with the goal of long-term mutual benefit. The economic issues are the context, not the content, of the talks. Thus, settling any one issue really is not that important. Such details will take care of themselves once a viable, harmonious business relationship is established. And, as happened in the case of the retail goods buyer above, once the relationship was established—signaled by the first agreement—the other “details” were settled quickly.
American bargainers should anticipate such a holistic approach to be common in Asian cultures and be prepared to discuss all issues simultaneously and in an apparently haphazard order. Progress in the talks should not be measured by how many issues have been settled. Rather, Americans must try to gauge the quality of the business relationship. Important signals of progress can be the following:
Higher-level executives from the other side being included in the discussions
Their questions beginning to focus on specific areas of the deal
A softening of their attitudes and position on some of the issues—“Let us take some time to study this issue”
At the negotiation table, increased talk among themselves in their own language, which may often mean they’re trying to decide something
Increased bargaining and use of the lower-level, informal, and other channels of communication
Implications for managers and negotiators
Considering all the potential problems in cross-cultural negotiations, particularly when you mix managers from relationship-oriented[18] cultures with those from information-oriented ones, it is a wonder that any international business gets done at all. Obviously, the economic imperatives of global trade make much of it happen despite the potential pitfalls. But an appreciation of cultural differences can lead to even better international commercial transactions—it is not just business deals but creative and highly profitable business relationships that are the real goal of international business negotiations.[19]