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1、Xinyang Normal University Graduate Graduation Thesis Subject： Impacts of Cultural Differences on International Business Negotiation Major: Business English Name： yangzisai Student No: ID number: Department: henan poly-technic institute Tel: Supervisor: Date: 2012-10-29 Contents Introduction.1 1. Typ
2、es of Cultural Differences.2 1.1Value View.2 1.2. Negotiating Style.2 1.3. Thinking Model.2 2. Impact Of Cultural Differences on International Business Negotiations.4 2.1 .1Environmental Factors . 5 2.1.2 Personal Factors in Business Negotiation . 5 2.1.3 Impact between USA cultural differences; imp
3、rove; negotiation skills Introduction Along with the advancement globalization and Chinas WTO entry, business enterprises in China have to face more and more business negotiations with foreign enterprises, especially with American enterprises. In these negotiations, Chinese negotiators sometimes fee
4、l uncomfortable, puzzled, lost, irritated and the alike, because of unfamiliar custom and behaviors demonstrated by American negotiators. Meanwhile, American negotiators confront the same situation. Cult rural differences between China and west countries could cause many problems. Therefore, underst
5、anding cultural differences and overcoming them is crucial in international business negotiations. Although the definition of culture is numerous and vague, it is commonly Recognized that culture is a shared system of symbols, beliefs, values, attitudes and expectations. Culture is a major determina
6、nt in business negotiation. So have a clear picture of culture differences if of great significance. 1. Types of Culture Differences The east countries and west countries have produced different cultures on the different continents. Among the different cultures, value views, negotiating style and th
7、inking model appear more obvious. 1.1Value View Value view is the standard that people use to asses objective things. It includes time view, equality view and objectivity. People may draw a different or even contradictory conclusion about the same thing. Value view is one of the most important diffe
8、rences among the many factors. It can influence the attitude, needs and behavior of people. The value view varies from nation to nation, people know that the eastern person focus on collectivism, while the western people pay more attention to individualism. 1.2. Negotiating Style Negotiating style r
9、efers to the tolerance and graces which the negotiator shows in the negotiation. The negotiators show their negotiating style through behavior, manners and the method of controlling negotiation process during the negotiation. The negotiators negotiating style has a bearing on their culture backgroun
10、d. According to the culture differences, negotiating style falls into two types: the east negotiating style pattern and the west negotiating style pattern. 1.3. Thinking Model Thinking model reflects the culture. Because of the influences of history background, continents, words and living method, d
11、ifferent nations generate different thinking models. Surely, there is more than one thinking model of a nation, but one is more obvious compared with others. As a whole, east people, especially Chinese have strong comprehensive thinking, image thinking and curved thinking, while analytical thinking,
12、 abstract thinking and direct thinking are possessed by the west people. 2. Impact of Cultural Differences on International Business Negotiations With the rapid development of economy, we need to do business with businessmen under different culture background, so in order to reach trade agreement, i
13、t is necessary for us to study the impact of culture differences on international negotiation in global business activities. The impact of culture differences on international negotiation is extensive and deeply. Different cultures divide the people into different group and they are also the obstacl
14、es of peoples communication. Accordingly, it is required that the negotiator should accept the culture of each other. Furthermore, through culture differences, it is important that the negotiator reveal and understand the other partys goal and behavior and make him or herself be accepted by the oppo
15、nent to reach agreement finally 2.1.1 Environmental Factors Environmental factors in business negotiation including politics, belief, law, social customs, commercial tradition, financial situation, recommendation, the climate and some other factors. Changing in the political environment will usually
16、 cause changing in the content, procedure and the result of business negotiation. Therefore, in order to ensure the smoothness of the negotiation, in international business, talented negotiator always pay much attention to analyzing political environment, especially to the international currency, th
17、e situation of the opponents country, etc. “Rational belief is playing a rather important role in the following aspects: political affairs, social communication and personal behaviors, legal system, holidays and work-time and so on” (Salacuse). The financial situation is also a crucial factor in bus
18、iness negotiation, which includes external debt, foreign exchange reserves, the payment credit and the tax. Take a project in L city for example. The negotiator chose a middle cooperation M in America as the technical supplier. It proves that this is not a perfect choice. M has advanced techniques,
19、but its ability and commercial coordination are not so good. Whats worse, it had little knowledge of Chinese market, and the experience is not sufficient. Besides, M acquired another company T in America. T had loaned some money from the bank and cant return it on time. M had to pick on this loan. H
20、owever, M also didnt have enough money, and the bank stopped all of its accounts between banks. M had to stop all its business. As the project was crucial to L city, it couldnt be put off any more. At last, the negotiator had to take some extraordinary measures to help M perform the contract, and co
21、mplete the project. (Robert D and Gulbro) As for the climate factor, there is also an example. One company in China once had a project in Thailand. At the very beginning, the company didnt know the construction would be carried on during the rain season, the instrument could not be used in the const
22、ruction sites. In the end, the other side asked an extra claim for delaying the construction period (Robert D and Gulbro). 2.1.2 Personal Factors in Business Negotiation Personality is the total of ones mental characters, it is shown in peoples characteristics, abilities and qualities. Peoples perso
23、nality will affect the behaviors in some degree mainly on their emotion and attitude. Impression refers to the perceptual knowledge of things in peoples mind (Ting-toomey). It is usually divided into the first impression and the follow-up impression. The first impression will give a great influence
24、on the follow-up impression. Therefore, first impression in business negotiation is of great importance. The reflection of people, affairs and such things that affect directly on peoples sense organs is called perception. It is limited by knowledge, skills, needs, the objective environment and menta
25、l qualities. Different people have different conceptions towards a same thing. Considering all the factors above and some other factors affecting business negotiation is necessary both before and during the negotiation. In this way, can negotiators grasp the overall situation of the negotiation. 2.1
26、.3 Impact USA culture on Negotiation The large cultural wave of Modernism, which emerged in Europe, and then spread to the United States in the early years of the 20th century, expressed a sense of modern life through art as a sharp break from the past. As modern machinery had changed the pace, atmo
27、sphere, and appearance of daily life in the early 20th century, so many artists and writers, with varying degrees of success, reinvented traditional artistic forms and tried to find radically new onesan aesthetic echo of what people had come to call “the machine age.” 2.2 Impact of Negotiating Style
28、 Differences on International Business Negotiations The impacts of negotiating style differences on international business negotiation mainly exist in negotiating method and negotiating structure. Take the negotiation between America and China as a example, since the oriental care more about unity i
29、n thinking, they method they adopt in negotiation is from unity to parts, from the big to little, from the abstract to the concrete, that is to say they should each agreement on general terms, then begin to talk about the concrete terms. And usually not until the end of the negotiation do they make
30、compromise and promise based on all the items, and then to reach agreement. The west people are influenced by analytic thinking, so pay more attention to logical relations between things. They consider more about concrete things than integrity. And they tend discuss the concrete items at the beginni
31、ng of negotiation, so they often resolve the price, delivery and issuance respectively at first. And they may make compromise at every detail, so the final contract is the combination of many little agreements. The negotiating structure is linked with cultures. Negotiating structure mostly refers to
32、 the number of the participants. In business negotiation, the foreign delegation is usually composed by 3- 5 people, while the Chinese one could be more 15 people. The foreign negotiators not only need to negotiate with their counterparts but also need to discuss with related person in charge or the
33、 government. When making the final decisions, the Chinese negotiators often discuss the results repeatedly from the workers to the board to avoid being decided by a single person. That results from the influence of collectivism. So they often said to their partners: Let us think about it. Let us dis
34、cuss it. But the west negotiators could make the final decision without going back for discussion. That because their admire individualism and hard working. They have strong independence. They would carry on according to the best ways after knowing their goals. Whats more, most west people think tha
35、t they have the ability to deal with the negotiation situation on their own. And truly, they are brave enough to take responsibility. 2.3 Impact of Thinking Model Differences on International Business Negotiation The thinking model of Chinese tends to be comprehensive, concrete and curved, while the
36、 Americans are usually analytic, abstract and straight-line. We Chinese are accustomed to talking about general principles at first and then move onto details. To Chinese negotiators, the core is the general guideline, and the details are subject to the guideline. After figuring out the big picture,
37、 other problems are easier to resolve. It is the most obvious feature of Chinese negotiators. But west businessmen, especially Americans are likely to discuss the details first and try to avoid the principle. They value details very much and think noting about the unity. Accordingly, they want to di
38、scuss the details at the beginning of negotiation. They are direct and simple in negotiation. As a matter of fact, many facts show that General principles first have impact of constriction on the parts and details. For instance, our government insists on the principle that Hong Kong and Macao are un
39、divided parts of Chinas territory. In the important diplomatic negotiations such as Entering into relationship with America, Hong Kongs and Macaos Coming back into their motherland. It is under such principle that we established the tone of the negotiation and controlled the skeleton of the negotiat
40、ion, thus we get the advantage and prompt the success of negotiation. 3. Coping Strategy of Negotiating across Cultures The culture differences in cross-cultural communication have various impacts on operation of enterprises. These differences will influence negotiation and management of transnation
41、al operation; whats more, it may have bad effects on the harmonious relationship between our country and foreign countries. Maybe that will lead to the missing of market opportunities, the increase of trade cost and the low efficiency of company management. So, it is really necessary for us all to e
42、liminate and avoid disadvantageous effects. 3.1 Making Preparations before Negotiation. The negotiators must make good preparations if they want control the development of negotiation successfully in the complex situation. Only do they make good preparations can they make changes freely according to
43、 the situation of negotiation and avoid the happening of conflicts. Because the international business negotiation involves extensive aspects, more preparations are needed. The preparations often include the analysis of the negotiators themselves and the opponents; the constitution of negotiation gr
44、oup, elaborating the negotiating goal and strategy and going on imitation negotiation when necessary. When making preparations, you should try to know the opponents while you analyze yourselves. Analyzing yourselves mainly refers to studying if the project is feasible. To knowing about the opponents
45、 means understanding their strength such as credit status, the policy、 business customs and regulations of their countries and the conditions of their negotiating members and so on. 3.2 Overcoming Cultural Prejudice Tolerating different cultures and overcoming cultural prejudice contribute to better
46、 communicating with each other and understanding each other. West people often think that they are powerful, capable and experienced, so sometimes, we need to recognize then and give then some good comments. We should learn about the foreign cultures before negotiation and accept and understand thei
47、r cultures in negotiation, because every country regard their own cultures as a matter of course and hope that their culture could be recognized and accepted. 3.3 Conquering Communication Barriers Two trains running at different railways in the opposite direction will collide with each other; maybe this is the best arrangement for trains. But