A Report

On
“NEGOTIATION SKILL AND TECHNIQUES IN

CROSS-CULTURAL BUSINESS”

Submitted in partial fulfilment for the award of the degree

Master of Business Administration
Chhattisgarh Swami Vivekanand Technical University, Bhilai
(C.G.)

Submitted By
<NAME>
< Enroll. No.>
MBA – Semester 3rd
(Session………….)

Approved By, Guided By,

Dr. Chandra Mohan Singh Mrs. Sanjana Mitra
(Head of the Department) (Assist. Profes sor)

Lakhmi Chand Institute of Technology

Bilaspur (C.G)
 DECLARATION BY THE CANDIDATE

I the undersigned solemnly declare that the report of the thesis work entitled A Study on
“Negotiation Skills & Techniques In Cross-Cultural Business ” is based on my own work
carried out during the course of my study under the supervision of Mrs. Sanjana Mitra.
I assert that the statements made and conclusions drawn are an outcome of my research work. I
further declare that to the best of my knowledge and belief the report does not contain any part of
any work which has been submitted for the award of MBA degree or any other
degree/diploma/certificate in this University or any other University of India or abroad.

(Signature of the Candidate)

<NAME>
Enrollment No:-………………….
 CERTIFICATE FROM THE SUPERVISOR

This is to certify that the work incorporated in the thesis “Negotiation Skill & Techniques In
Cross-Cultural Business” is a record of research work carried out by <…NAME…>
Enrollment No: …………. under my/our guidance and supervision for the part fulfillment for the
award of MBA Degree of Chhattisgarh Swami Vivekanand Technical University, Bhilai (C.G.),
India.

To the best of my knowledge and belief the thesis

i) Embodies the work of the candidate him/herself,

ii) Has duly been completed,

iii) Is up to the desired standard both in respect of contents and language for external viva.

(Signature)
Mrs. Sanjana Mitra
(Asst. Professor)
 ACKNOWLEDGMENT

It is a pleasure to acknowledge many people who knowingly helped us, to complete our project.
First of all, let us thank God for all the blessings, which carried us throughout these years. We
express our utmost gratitude to Mrs. Sanjana Mitra, our project guide, who has always stood by
our side and guided, appreciated and encouraged us during the course of excellent research work.
Continuing the same, she enlightened us in the various stages during the development of this
project and provided us with many insights and useful examples, which proved to be of immense
help in successful completion of this project. We extend our sincere gratitude to our friends and
family for their encouragement and support throughout the research work and project
preparation. We thank all the non-teaching staff of our institution that was always ready to help
in whatever way they could.

<NAME>
Enrollment no. …………..
(SESSION:…………………..)
 Table of Content

1. Declaration

2. Certificate by the Examiner

3 Meaning & Introduction of negotiation

.
4. Stages of Negotiation

5. Types of Negotiation

6. Barriers to Successful Negotiations

7. Steps of Negotiation Process

8. NEGOTIATION SKILL AND TECHNIQUES IN

CROSS- CULTURAL BUSINESS

9. Four Negotiation Tips for Bargaining in China

10. Barriers to Cross-Cultural Business Communication

11. Bibliography
 INTRODUCTION

Negotiation is a method by which people settle differences. It is a process by which compromise

or agreement is reached while avoiding argument and dispute. In any disagreement, individuals
understandably aim to achieve the best possible outcome for their position (or perhaps an
organization they represent). However, the principles of fairness, seeking mutual benefit and
maintaining a relationship are the keys to a successful outcome. Specific forms of negotiation
are used in many situations: international affairs, the legal system, government, industrial
disputes or domestic relationships as examples. However, general negotiation skills can be
learned and applied in a wide range of activities. Negotiation skills can be of great benefit in
resolving any differences that arise between you and others.

Stages of Negotiation
In order to achieve a desirable outcome, it may be useful to follow a structured approach to
negotiation. For example, in a work situation a meeting may need to be arranged in which all
parties involved can come together.
The process of negotiation includes the following stages:
 Preparation.
 Discussion .
 Clarification of goals.
 Negotiate towards a Win-Win outcome .
 Agreement 6. Implementation of a course of action.

Types of Negotiation
Negotiation can take a wide variety of forms, from trained negotiator acting on behalf of a
particular organization or position in a formal setting to an informal negotiation between
friends. Negotiation can be contrasted with mediation, where a neutral third party listens to
each side's arguments and attempts to help craft an agreement between the parties. It can also
be compared with arbitration, which resembles a legal proceeding. In arbitration, both sides
make an argument as to the merits of their case and the arbitrator decides the outcome. This
negotiation is also sometimes called positional or hard-bargaining negotiation.
Negotiation theorists generally distinguish between two types of negotiation. Different theorists
use different labels for the two general types and distinguish them in different ways.

1
1).Distributive negotiation:-
Distributive negotiation is also sometimes called positional or hard-bargaining negotiation and
attempts to distribute a "fixed pie" of benefits. Distributive negotiation operates under zero
sum conditions and implies that any gain one party makes is at the expense of the other and
vice versa. For this reason, distributive negotiation is also sometimes called win-lose because of
the assumption that one person's gain results in another person's loss. Distributive negotiation
examples include haggling prices on an open market, including the negotiation of the price of a
car or a home.
In a distributive negotiation, each side often adopts an extreme position, knowing it will not be
accepted—and then uses a combination of guile, bluffing, and brinkmanship to cede as little as
possible before reaching a deal. Distributive bargainers conceive of negotiation as a process of
distributing a fixed amount of value. A distributive negotiation often involves people who have
never had a previous interactive relationship, nor are they likely to do so again in the near
future.
In the distributive approach each negotiator fights for the largest possible piece of the pie, so it
may be quite appropriate—within certain limits—to regard the other side more as an adversary
than a partner and to take a somewhat harder line.

2 ).Integrative negotiation:-
Integrative negotiation is also called interest-based, merit-based, or principled negotiation. It is
a set of techniques that attempts to improve the quality and likelihood of negotiated
agreement by taking advantage of the fact that different parties value various outcomes
differently.
While distributive Negotiation assumes there is a fixed amount of value (a "fixed pie") to be
divided between the parties, integrative negotiation often attempts to create value in the
course of the negotiation ("expand the pie").
Integrative negotiation often involves a higher degree of trust and the forming of a relationship.
It can also involve creative problem-solving that aims to achieve mutual gains. It is also
sometimes called win-win negotiation.
In the integrative approach, unlike the distributive approach, parties seek to find an
arrangement that is in the best interest of both sides. A good agreement is not one with
maximum gain, but optimum gain. Gains in this scenario are not at the expense of the other,
but with him.
A common negotiation technique in integrative negotiations involves trading one favor for
another, commonly referred to as logrolling. It focuses on the underlying interests of the
parties rather than their arbitrary starting positions, approaches negotiation as a shared
problem rather than a personalized battle, and insists upon adherence to objective, principled
criteria as the basis for agreement.

2
Perspective taking in integrative negotiation can be helpful for a few reasons, including that it
can help self advocating negotiators to seek mutually beneficial solutions, and it increases the
likelihood of logrolling (when a favour is traded for another i.e. quid pro quo). Social motivation

3
can increase the chances of a party conceding to a negotiation. While concession is mandatory
for negotiations, research shows that people, who concede more quickly, are less likely to
explore all integrative and mutually beneficial solutions. Therefore, conceding reduces the
chance of an integrative negotiation.
However, negotiators need not sacrifice effective negotiation in favour of a positive relationship
between parties. Rather than conceding, each side can appreciate that the other has emotions
and motivations of their own and use this to their advantage in discussing the issue. In fact,
perspective-taking can help move parties toward a more integrative solution. Fisher et al
illustrate a few techniques that effectively improve perspective-taking in their book Getting to
Yes, and through the following, negotiators can separate people from the problem itself.
 Put yourself in their shoes – People tend to search for information that confirms his or her
own beliefs and often ignore information that contradicts prior beliefs. In order to negotiate
effectively, it is important to empathize with the other party's point of view. One should be
open to other views and attempt to approach an issue from the perspective of the other.
 Discuss each other's perceptions – A more direct approach to understanding the other party
is to explicitly discuss each other's perceptions. Each individual should openly and honestly
share his or her perceptions without assigning blame or judgment to the other.
 Find opportunities to act inconsistently with his or her views – It is possible that the other
party has prior perceptions and expectations about the other side. The other side can act in a
way that directly contradicts those preconceptions, which can effectively send a message
that the party is interested in an integrative negotiation.
 Face-saving – This approach refers to justifying a stance based on one's previously expressed
principles and values in a negotiation. This approach to an issue is less arbitrary, and thus, it
is more understandable from the opposing party's perspective.

Additionally, negotiators can use certain communication techniques to build a stronger

relationship and develop more meaningful negotiation solution.
 Active listening – Listening is more than just hearing what the other side is saying. Active
listening involves paying close attention to what is being said verbally and nonverbally. It
involves periodically seeking further clarification from the person. By asking the person
exactly what they mean, they may realize you are not simply walking through a routine, but
rather take them seriously.
 Speak for a purpose – Too much information can be as harmful as too little. Before stating an
important point, determine exactly what you wish you communicate to the other party.
Determine the exact purpose that this shared information will serve.

4
 Types of negotiators
Three basic kinds of negotiators have been identified by researchers involved in The Harvard
Negotiation Project. These types of negotiators are: soft bargainers, hard bargainers, and
principled bargainers.

Soft
These people see negotiation as too close to competition, so they choose a gentle style of
bargaining. The offers they make are not in their best interests, they yield to others' demands,
avoid confrontation, and 8 they maintain good relations with fellow negotiators. Their
perception of others is one of friendship, and their goal is agreement. They do not separate the
people from the problem, but are soft on both. They avoid contests of wills and insist on
agreement, offering solutions and easily trusting others and changing their opinions.

Hard
These people use contentious strategies to influence, utilizing phrases such as "this is my final
offer" and "take it or leave it." They make threats, are distrustful of others, insist on their
position, and apply pressure to negotiate. They see others as adversaries and their ultimate goal
is victory. Additionally, they search for one single answer, and insist you agree on it. They do
not separate the people from the problem (as with soft bargainers), but they are hard on both
the people involved and the problem.

Principled
Individuals who bargain this way seek integrative solutions, and do so by sidestepping
commitment to specific positions. They focus on the problem rather than the intentions,
motives, and needs of the people involved. They separate the people from the problem,
explore interests, avoid bottom lines, and reach results based on standards independent of
personal will. They base their choices on objective criteria rather than power, pressure, self-
interest, or an arbitrary decisional procedure. These criteria may be drawn from moral
standards, principles of fairness, professional standards, and tradition.

3 Barriers to Successful Negotiations:

Negotiating is among the most feared and stress-inducing functions for a sales professional, and
also among the most important. If you struggle with negotiations, there may be bad habits
undermining your success in this role:

 Viewing negotiations as a battle – Negotiations should be about finding solutions and adding
value for all parties, not about winning or losing. As soon as we view the customer as the
opponent, we compromise our ability to empathize and get into their “Odds Are” to identify
mutually beneficial outcomes.

5
 Not asking enough questions – Nowhere is the power of the Exploratory Process more evident
than when negotiating! Your responsibility is to ask the right questions to find out what your
customer really values. Skilled use of the Exploratory Process will help you guide the discussion
and potentially uncover value considerations that the customer was not even aware of.
 Focusing on price – Sales professionals identify price as the number one objection in the sales
process and the most significant barrier in negotiations. Don’t give price more weight than it
deserves! Be sure your Exploratory Process and discussion encompass all value considerations,
including consultation, quality, service, delivery, customization, and response time and
payment terms. This practice not only prevents unnecessary price concessions, it actually
improves the overall satisfaction of customers via a comprehensive value solution.

It is impossible to overstate the importance of your relationship with customers during

negotiations. A high level of trust will eliminate emotional barriers, facilitate openness and idea
sharing, and pave the way for a productive discussion centered on mutually beneficial
outcomes.

5 Steps of Negotiation Process:

Negotiation process permeates the interactions of almost everyone in groups and
organizations. In today’s loosely structured organizations, in which members work with
colleagues over whom they have no direct authority and with whom they may not even share a
common boss, negotiation skills become critical.

 Preparation and Planning:

Before the start of negations, one must be aware of the conflict, the history leading to the
negotiation the people involved and their perception of the conflict expectations from the
negotiations etc.

 Definition of Ground Rules:

Once the planning and strategy are developed, one has to begin defining the ground rules and
procedures with the other party over the negotiation itself that will do the negotiation. Where
will it take place? What time constraints, if any will apply? To what issues will negotiations be
limited? Will there be a specific procedure to follow in an impasse is reached? During this
phase, the parties will also exchange their initial proposals or demands.

 Clarification and Justification:

When initial positions have been exchanged both the parties will explain amplify, clarify,
bolster and justify their original demands. This need not be confrontational. Rather it is an

6
 opportunity for educating and informing each other on the issues why they are important and
how each arrived at their initial demands.
This is the point where one party might want to provide the other party with any
documentation that helps support its position.

 Bargaining and Problem Solving :

The essence of the negotiation process is the actual give and take in trying to hash out an
agreement, a proper bargain. It is here where concessions will undoubtedly need to be made
by both parties.

 Closure and Implementation:

The final step in the negotiation process is formalization the agreement that has been worked
out and developing and procedures that are necessary for implementation and monitoring.
For major negotiations – this will require hammering out the specifics in a formal contract.

Negotiation Process has five stages. In all steps of a negotiation process, the involved parties
bargain at a systematic way to decide how to allocate scarce resources and maintain each
other’s interest.

7
 CROSS-CULTURAL BUSINESS

Cross-culture business:
Cross culture is a vital issue in international business, as the success of international trade
depends upon the smooth interaction of employees from different cultures and regions. Some of
the considerations in cross-cultural business include concerns about the differences that are
caused by culture, beliefs, law, and language. We can distinguished mainly three kinds of business
culture effects:

 Business roles: The fact that the differences in cultures usually have a direct effect on the
manner in which business affairs are carried out by the members of such a community. For
example, cultures that do not allow women to have certain rights will also reflect this bias in
the business aspect of their dealings, something that businessmen and women from other
less repressive cultures would have to understand in order for them to communicate
effectively. Since culture is not something that can be changed merely through the operation
of a foreign company, the management and staff of such a company would have to look for
common grounds on which they and the business partners from those different cultures can
meet.
 Business law: Another consideration in cross-cultural business is the manner in which the
law of the foreign culture affect the manner in which they conduct their business. This is very
important because miscommunication may occur due to the assumption by one party to a
business communication that the law in his or her country is also the same in the country of
the foreign business partner. One way to avoid this miscommunication is through a conscious
effort by a business to study the law and customs in a country before it ventures into that
country.

8
 Language: It is also a concern in cross-cultural business that language barriers must be
surmounted in order for business communication to occur. Some businesses achieve this by
hiring interpreters or using translation services as a medium for channeling to the other party,
and for them to decipher what the other party is trying to say.

Cross Cultural Negotiations in International Business: Four

Negotiation Tips for Bargaining in China

China is a vast, rapidly changing country bursting with economic opportunity for locals and
foreigners alike. Since market reforms began in 1979 , real GDP growth has averaged 9%
annually.
It’s no wonder that American entrepreneurs are traveling to China in droves to open plants,
hawk cell phones and cars, and create new partnerships – and launch broad-scale international
negotiations.
What special insights do outsiders need to prepare for international negotiations in China?
Much of what you know already about negotiation holds true, but four characteristics
complicate business negotiation in China:
 A strong emphasis on relationships. Deals tend to depend heavily on the relationship
between the parties involved; social gatherings are common during the negotiation process.
 High commitment, loose contracts. Your new partner in China is likely to expect you to
invest significantly in the relationship, often without fixed terms, and to respond to his
shifting needs. Calls for flexibility can frustrate Westerners accustomed to ironclad
contracts.
 A long, slow deal-making process. The Chinese focus on building relationships rather
than on contracts tends to prolong the negotiation process. Westerners befriend their
9
 counterparts only after making a deal, while the Chinese make a deal only when some level
of friendship has been reached.
 Widespread opportunism. Despite the importance placed on relationships, negotiators in
today’s China keep their options open—and may abandon a deal when a sweeter one
appears.

10
 Barriers to Cross-Cultural Business Communication

Cross cultural communication is defined by Gotland University as “a process of exchanging,

negotiating, and mediating one's cultural differences through language, non-verbal gestures,
and space relationships.” In business, cross-cultural communication plays a critical role in
successfully carrying out business with teams and stakeholders in other areas of the globe.
When the communication is effective, everyone benefits from increased bandwidth,
institutional knowledge, and competitive advantage. Ineffective communication however, can
offend, confuse or send a misconstrued message which could lead to broken relations with
customers, partners, vendors, and employees.
 Language Barriers -
A common cross cultural barrier in business communication is of course, language. Although
English is regarded as the common international language of business, not every business
globally uses English on a regular basis. Employees may have more difficulty when
communicating in English, which can lead to misunderstandings when taking direction,
understanding level of urgency and communicating issues or concerns. Never assume that
because your instructions receive head nods. Check for real understanding by asking others to
summarize what they just heard you say.

 Cultural Barriers –
13 Every culture has a different set of values, business ethics, accepted behavior and
decorum− even different facial expressions and gestures. It is important to understand
these differences – to show genuine respect for other cultural mores –when communicating
with professionals from other cultures. For example, in the United States it is common for
the speaker to share personal anecdotes to build audience rapport, but in other countries
this is considered tiresome. Humour can be especially tricky to employ; better to be
straight

11
 forward rather than run the risk that your joke may inadvertently embarrass or insult the
listener.

 Presentation Style
Believe it or not, culture influences how people in different countries prefer to receive
information. For example, how interactive you should make your presentation depends on
the culture to which you present. In general, English speaking cultures like presentations to
be lively and interactive. However, Eastern Europeans are accustomed to presentations that
are formal, high detailed and with few interruptions. Questions are answered at the end of
a presentation. Japanese audiences expect more technical information. Canadians, like
Americans, enjoy a brisk pace; and Latin American audiences prefer a speech with a high
level of emotional appeal.

The key with any group of listeners from another culture is to do your homework, and don’t
rely on your personal frame of reference when addressing an audience of another culture. By
focusing on their own frames of reference, you acknowledge their customs and perspective,
which goes far towards winning them over

12
 Bibliography

Crucial Conversations: tools for talking when the stakes are high
Kerry Patterson, Joseph Grenny, Ron McMillan, Al Switzler
New York: McGraw-Hill, 2002
Difficult Conversations: How to Discuss What Matters Most
Douglas Stone, Bruce Patton and Shelia Heen
New York: Penguin Books, 1999
Getting Past No: Negotiating With Difficult People
William Ury New York, NY: Bantam Books, 1993
Getting Ready to Negotiate: The Getting to YES Workbook
Roger Fisher and Danny Ertel New York, NY: Penguin Books, 199512
Getting to YES: Negotiating Agreement without Giving In
Roger Fisher, William Ury, and Bruce Patton (for the 2nd edition) New York, NY: Penguin Books,
1991
Websites:-
https://www.pon.harvard.edu
https://www.calumcoburn.co.uk
https://www.businesstopia.net
https://www.linkedin.com
www.simplynotes.in
www.diva-portal.org

13