Negotiation is a social process by which interdependent people with conflicting interests determine how they’re going to allocate resources or work together in the future (Hames, 2012). Business negotiations can range anywhere from remuneration between employer-employee to international trade agreements. Before negotiating, it’s critical to understand the other party’s principal interests as well as your own; from this point each party is able converse and make concessions to best achieve their goals. In order to understand the opposing party’s principal interests and conduct a negotiation, there must be effective communication. Effective communication can only be achieved when the receiver interprets a message exactly as the sender intended. Without effective communication, issues and interests may be misunderstood or misinterpreted and the negotiation may fail. When conducting negotiations in a national context, generally both parties are residents of the same country, speak the same language, and share the same culture or have strong cultural similarities. In an international business context, parties may not share these similarities, in turn; negotiations may suffer from ineffective communication.
International negotiations are more complex than domestic negotiations as there are different elements relating to foreign cultures and governance that are introduced to the negotiation process. People from foreign cultures may not only speak different languages but also have different communication styles and use different forms of non-verbal communication. Geographic distances and foreign climates may also affect a negotiation process, altering the physical environment of the negotiation. Every nation has a particular culture to which its people communicate and conduct business; which impacts international negotiations. The economic, legal, and political characteristics of a country are a manifestation of a nation's culture. These elements increase the complexity of negotiations in an international context. Political systems dictate the channels of negotiation, the bureaucracy involved in reaching and communicating with various groups. Legal systems are closely tied with political systems and may constrain where and how international negotiations are conducted. Lastly, economic systems shape the way businesses operate in a country.
This paper will compare and discuss the cultural differences in business negotiation processes between Western and Asian cultures, specifically examining the negotiation processes of German and Chinese cultures. We will evaluate each negotiation style using a seven-step-process designed for international negotiations (see Appendix).
German Negotiation Process
Step 1: Preparation (7 Key Issues)
Germans have a saying, ‘Das Land der Mitte’ - The Land in the middle – whereby, they’ve never had a place to escape. Being in the centre of everything meant successfully negotiating to survive (Benea & Onita, 2013). One central governing concept for Germans - Gesamtkonzept - creates a framework and provides for a “logical structure…for the general position…German goals and aims… German interests…and…how the position will address the interests of counterparts” (Moore and Woodrow, 2010, p. 319).
The goal for Germans is to find allays to “rally and support the future German position” (Benea & Onita, 2013, p. 26). This ties into the concept above, where Germany’s survival largely-depended on forming relationships with surrounding nations.
“Germans often even recognize the interests and needs of counterparts with whom they disagree.” (Moore & Woodrow, 2010, p. 319). Unlike most cultures, Germans’ position is established bilaterally, with regard for the interests and concerns of the other party they’re negotiating with.
Knowledge about other side:
To understand the environment and context