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BUS341 Business Negotiations: An International Perspective (tja, 2023)

Assignment 2-Negotiating The Climate

Case Study Analysis Report

20th March 2023

Murdoch University

By Tan Farlynda CT0353369

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Table of Contents

1. Introduction (Project Brief) 3

(Background)

2. Discussion Features 6

What went wrong ( From an intercultural communication perspective )

3. How would you have handled the negotiation if you had been the Chief 8

Executive Officer of the United States Co.?

4. Conclusion 9

5. References 11

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Introduction

This case study highlights the challenges of conducting cross-cultural and cross-language

business negotiations. The American team from Videomart, a leading video-game industry

company, attempts to secure a license agreement with Osatech, a renowned Japanese video

software company, in the nature of an international setting. Videomart, a leading video-game

company in the US, failed to secure a software agreement with Osatech, a highly-regarded

Japanese video software company. Despite the potential advantages of such a partnership, the

negotiation failed due to the lack of cultural understanding and miscommunication between the

two parties. The study cites Moen et al. (2019) to highlight the benefits of international

partnerships, including access to new markets, knowledge transfer, and increased innovation.

International partnerships can also help firms mitigate the risks associated with operating in

unfamiliar territories and increase their global competitiveness. However, the failure of the

negotiation in this case highlights the importance of cultural understanding and effective

communication in cross-cultural business partnerships.

The opening moments of the meeting were marked by a positive atmosphere, with both parties

engaging in customary introductions and the exchange of business cards. Present at the table

were representatives from both the Japanese and American sides, with the American team

comprised of Vice Presidents (VPs) from Videomart, two VPs from the sales and marketing

departments, and an engineer. However, the American team made a significant misstep by

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neglecting to bring a translator to the meeting, rendering them incapable of understanding the

subtleties of the Japanese conversational language.

The American team's confrontational and assertive approach, combined with a lack of

understanding of Japanese business culture and language barriers, led to a breakdown in

negotiations. The clash between the Americans' focus on results and market share and the

Japanese team's emphasis on building relationships and trust before making commitments

created an impasse. The case underscores the significance of cultural understanding and

relationship-building in cross-cultural business negotiations.

Discussion Features

What went wrong ( From an intercultural communication perspective )

Based on the case study, several intercultural communication issues could have contributed to

the breakdown of the partnership between Videomart and Osatech.

One of the issues was the lack of basic Japanese language knowledge by the American team,

which is considered a sign of respect in Japanese business culture. This lack of effort to

understand and reciprocate this gesture may have been perceived as a lack of interest or

respect towards the Japanese.

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Secondly, there may have been different communication styles and expectations regarding the

meeting itself. The differences between American and Japanese approaches to goal setting and

negotiation and how these differences may impact competitiveness (Gudykunst, W. B., &

Nishida, T. (1994). The potential disparity in communication styles between the Americans and

the Japanese cannot be overlooked. While the Americans may have prioritized directness and

efficiency with “Dog and Pony Show” presentation necessarily providing substantial or relevant

content the Japanese may have preferred a more indirect and relationship-focused approach,

emphasizing feedback and goal setting (Greenleaf 2002). This could have hindered the

potential for successful collaboration between the two parties.

In the failed negotiation, the language barrier may have contributed to the breakdown of

communication between the American and Japanese teams. While both parties could speak

English, differences in language proficiency and cultural nuances could have led to

misinterpretations and miscommunications. Japanese culture is known for its use of silent nods

and gestures instead of verbal communication, which is rooted in the practice of emotional

suppression. This form of communication has been seen as a unique part of Japanese culture

that can lead to better relationships by creating an atmosphere of understanding between both

parties involved (Wenner, 2007).

Westerners tend to process information in a linear and logical manner, with a focus on

associating sensory input with factually reasonable and logical conclusions. They tend to see

the world as an objective place, where reality can be observed and quantified. This approach to

thinking and problem solving often leads to a preference for direct and explicit communication,

as Westerners tend to value clarity and precision in their interactions with others. This is due to

the fact that culture shapes cognition, and critical thinking is highly valued in the West, leading

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to a great need for products, processes, and authors who can provide information in this way

(Educ. Sci. 2018).

As a result, when interacting with people from cultures that have a more indirect or ambiguous

communication style, Westerners may feel frustrated or confused. This can lead to

misunderstandings and miscommunications, which can erode trust and damage relationships.

Diving deeper into this case study analysis, it is important to consider two key concepts:

relationship building and the importance of cultural orientation. The Japanese approach to

relationship building may differ from that of Americans, and their lack of dialectic mannerisms

could be seen as a flaw. To fully understand the impact of culture on cross-cultural business, it

is necessary to adopt a Hofstede framework for analyzing cultural differences and their potential

effects on business outcomes (Huimin Gu, Donald L. Buresh, and Fan Wang, 2016).

Overall, the intercultural communication issues between the two parties could have led to a lack

of trust, misunderstandings, and ultimately, the failure of the partnership.

How would you have handled the negotiation if you had been the Chief Executive Officer

of the United States Company, with the planning, setting of the climate, and framing of

the negotiation?

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The foundation of successful negotiation lies in the ability to strategically select the appropriate

approach and employ models and perspectives that foster cross-cultural comprehension.

Furthermore, the outcomes resulting from skillful planning, climate setting, and framing are of

utmost importance in any negotiation endeavor.

As the Chief Executive Officer of the US Company, there are several strategies I would take to

handle the negotiation with the Japanese Company. Firstly, I would ensure that my team is well-

prepared by conducting extensive research on Japanese culture and business practices. This

would include studying their communication style, decision-making process, and negotiation

tactics.

Secondly, I would create a positive climate for the negotiations by establishing a friendly and

respectful relationship with the Japanese representatives. This would involve getting a translator

to represent us.

Thirdly, I would frame the negotiation in a way that emphasizes mutual benefits and highlights

the strengths and unique value propositions of both companies. This would involve prepping

beforehand, down to the technical aspect of the models of the software and agendas of the

meeting, as well as identifying areas of potential collaboration and demonstrating how working

together could result in a win-win outcome.

Finally, the failed negotiation could have been improved if the team had used BATNA (Best

Alternative to a Negotiated Agreement) and ZOPA (Zone of Possible Agreement) in our

negotiation strategy. Establishing the BATNA strategy before the negotiation and identifying the

ZOPA could have given our team more leverage and increased its negotiation power. By

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focusing on finding common ground with the Japanese team, we could have worked towards a

mutually beneficial agreement, with a backup plan leading to a more successful outcome.

Conclusions

Based on the case study analysis, it can be concluded that cultural differences can significantly

impact cross-cultural negotiations. The American negotiators, who had an individualistic

mindset, focused on achieving their goals and objectives, while the Japanese negotiators, who

had a collectivistic mindset, focused on building relationships and establishing trust first. This

led to misunderstandings and misaligned expectations between the two parties.

For example, when the Americans presented their proposal, they emphasized the benefits to

their own company and the potential for profit. In contrast, the Japanese negotiators were more

interested in how the proposal would benefit their company as a whole and how it would fit into

their long-term goals and plans. The Americans' individualistic approach may have come across

as self-centered and insensitive to the Japanese negotiators.

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References:

1. Moen, Ø., Blegen, M. A., & Nesset, E. (2019). Collaboration across borders: Benefits

and challenges of international partnerships. Journal of World Business, 54(6), 1-13.

DOI: 10.1016/[Link].2019.06.003

2. Gudykunst, W. B., and T. Nishida. Bridging Japanese/North American Differences.

Thousand Oaks, CA: Sage, 1994.

3. Greenleaf, Robert J. Negotiating Across Cultures. (San Francisco, CA: Jossey-Bass,

2002).

4. Wenner, Melinda. "Americans and Japanese 'Read' Faces Differently." Live Science,

February 25, 2008. [Link]

[Link].

5. Sellars, Maura, Razia Fakirmohammad, Linh Bui, John Fishetti, Sarfaroz Niyozov, Ruth

Reynolds, Nisha Thapliyal, Yu-Ling Liu-Smith, and Nosheen Ali. 2018. "Conversations

on Critical Thinking: Can Critical Thinking Find Its Way Forward as the Skill Set and

Mindset of the Century?" Education Sciences 8, no. 4: 205.

[Link]

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6. Gu, H., Buresh, D. L., & Wang, F. (2016). The role of relationship building and cultural

orientation in facilitating cross-cultural business: A study of US and Chinese managers.

Journal of Business and Psychology, 31(3), 407-422. doi:10.1007/s10869-016-9453-3

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