Communication Skills for Effective Negotiations
He who knows does not speak. He who speaks does not know.
—Lao Tzu
With a growing number of countries becoming actively engaged in world trade resulting in intensified contacts between exporters and importers from different cultures, and with increased competition in both domestic and international markets, business executives are faced with a demanding environment for their commercial negotiations. In particular, those in small-and medium-size firms entering the global market for the first time need to master negotiating skills in a multicultural setting. Communication techniques are an important part of these skills. Negotiating is first and foremost about communications. It is a dialogue in which each person explains his or her position and listens to what the other person is saying. During this exchange of views, proposals are made and concessions are explored. The end result is intended to create added value for both parties.
In negotiations, communication occurs at two levels: the logical level (for example, a specific price offer) and the pragmatic level (for example, semantics, syntax, and style). The meaning of the communication received by the other party is a combination of logical and pragmatic messages. What matters is not simply what is said and how it is said, but also the inferred information intended, conveyed, or perceived. Thus, extreme care must be taken to control pragmatic messages. Many times negotiators are not aware of the potential of pragmatic miscommunication, and often, they end up sending a wrong message—even with the best of intentions.
Communication between two negotiators tends to be more difficult and complex when it involves people from diverse cultures than when it involves people with similar backgrounds.1 For example, negotiators from a traditional culture often attach more importance to the way in which a proposal is made than to what is being said. In such discussions, what is not said may be just as important as what is said. In the opening minutes of the discussions, a negotiator has the opportunity to set the climate of the talks by making a short, clear statement of what is expected. Establishing credibility from the outset is essential if the negotiation is to progress smoothly. The first impression tends to influence the rest of the discussions.
Negotiators discussing in a language other than their mother tongue should rely to a great extent on visual aids, printed materials, samples, and references to facts and figures. The old saying “A picture is worth a thousand words” is appropriate in this context. Furthermore, these negotiators should use simple, clear language with frequent questioning to ensure that the other person is following the discussions. Idioms, colloquialisms, and words with multiple meanings should be avoided. Similarly, certain words or phrases that can irritate the other party should be omitted. For example, phrases such as “To tell the truth,” “I’ll be honest with you,” “I’ll do my best,” and “It’s none of my business but . . .” convey a sense of distrust and make the other person more apprehensive and possibly less cooperative. Likewise, a negotiator should avoid stating or accepting from the other party the reply “No problem” when discussing a specific point. The negotiator should explain what he or she means or seeks clarification about what the other party means.
In addition, one cannot assume that a message has been received and understood in the same way as the person speaking meant it to be. A typical example is when someone answers with a yes or no. In some cultures, yes means “Yes, I understood the question,” or “Yes, I will consider it,” or “Yes, I heard you.” In certain cultural environments, the word no is uncommon and is replaced by a number of expressions to convey the message in an ambiguous indirect or neutral manner.
In cultures in which conflict avoidance is predominant, the negotiator is unlikely to receive straightforward refusals to proposals, but will get vague responses instead. An inexperienced or unprepared negotiator may interpret these messages as relatively positive, or may be led to believe that the other party is not ready to negotiate or is not in a position to make decisions. Vague replies should be followed by more discussion until it becomes clear what the problem is.
Cross-Cultural Communication-Related Problems
Communication with someone from a different culture can lead to two problems: perceptual bias and errors in processing information.2
Perceptual Bias
Perception is the process of attaching meaning to a message by the person who receives the communication. The receiver’s own needs, desires, motivations, and personal experience create certain predispositions about the other party, which lead to perceptual bias, such as stereotyping, halo effects, selective perception, and projection.
Stereotyping: Stereotyping refers to assigning attributes to another party based on his or her membership in a particular society or group. Generally, the individual is assigned to a group based on very little perceptual information; then other characteristics of the person are derived or assumed. For example, at the first meeting, you see the negotiator, who happens to be in her fifties; you immediately think of her as “old” and perceive her to be conservative, risk-averse, and not likely to accept new ways of doing things. Cultural differences between negotiators significantly enhance stereotyping.
Halo Effect: The halo effect is the generalization made about numerous attributes of a person based on the knowledge of one attribute. For example, due to the halo effect, a negotiator may be judged as friendly, knowledgeable, and honest simply because he greets you with a smile in your language, following your custom. In reality, there may be no relationship between smiling and honesty, knowledge, and friendliness. Halo effects can be positive or negative. A good attribute leads to a positive halo effect and vice versa.
Halo effects are common in negotiations because people tend to form quick impressions of one another based on limited information such as appearance, group membership, and initial statements. Thus, matters such as clothing, greeting, posture, tone of voice, eye contact, and so on, assume great significance.
Selective Perception: In terms of negotiations, selective perception means choosing certain information that supports one’s earlier beliefs and leaving out other information from consideration. For example, based on initial impression, you judge another person as friendly and sensitive to your culture. Later in the day, the person relates a joke that is not in good taste in your culture. According to selective perception, you tend to ignore the joke and remember only the information that reinforces your prior belief that the person has due regard for your cultural values.
Projection: Projection means using one’s own attributes to describe the characteristics of another person. Projection occurs because people have a need to project their own self-concept. One person believes that honestly sharing the facts will enhance the process of negotiation. And that person assumes the other person has the same tendencies.
Errors in Processing Information
Negotiations involve sharing information. A person must correctly process the information received from the other party. Often, however, negotiators make systematic errors in processing the information. Such errors or cognitive biases can impede performance. Examples of such errors include the following:
• An irrational escalation of commitment (maintaining commitment to a chosen course of action even if it appears irrational)
• The mythical belief that issues under negotiation are a fixed pie (assuming the negotiation to be a zero-sum game of a win-lose exchange)
• The process of anchoring and adjusting in decision making (the effect of a faulty anchor or standard against which subsequent adjustments are made)
• Issue and problem framing (negotiators’ perceptions of risk and behavior are determined by the manner in which a negotiation issue is framed)
• Availability of information (the information made available may be presented badly, leading to bias)
• Winner’s curse (the feeling of discomfort generated by a quick settlement of the issue)
• Negotiator’s overconfidence (leading him or her to accept less or give up more)
• The law of small numbers (drawing conclusions based on limited experience)
• Self-serving biases (justifying one’s errors to unavoidable circumstances)
• The tendency to ignore others’ cognitions (ignoring the perceptions and thoughts of the other party)
• The process of reactive devaluation (attaching little value to the concessions made by the other party)
Improving Communication in Negotiation
Communication is the core of negotiation. If communication is disrupted or distorted, negotiation fails. Parties have difficulty coming to an agreement if the communication process breaks down. This is true even when the goals of both parties are compatible. There are, however, techniques for improving the communication in negotiation. These include listening, asking questions, reversing roles, and ensuring clear understanding.
Listening
A major weakness of inexperienced negotiators in any cultural context is their inability to listen carefully to what the other person is saying. Their main concern is usually to present their case and then to counter objections made by the other party. This approach can only lead to a monologue, rather than a real discussion.
The perception that good negotiators talk a lot and dominate the discussions to achieve optimum results is false. In reality, skilled negotiators spend more time listening and asking questions to ensure that they fully understand the other side than they do talking. The ability to listen effectively is fundamental to the success of any business negotiation.
Good listeners do more than listen; they think, analyze, and assess what the other party is saying. They hear everything that is being said, not only what is important to them. By listening attentively, a negotiator can obtain valuable information about the other party and eventually gain more negotiating power. Effective listening contributes to identifying alternatives and options not considered during the preparatory phase. For example, by taking care to listen to an importer’s needs and concerns, an exporter can adapt his or her offer and make counterproposals to meet the exporter’s requirements.
Good listening habits include observing body language. Studies on the effectiveness of communication reveal that words account for only 7 percent of the message being received versus the voice accounting for 38 percent, and body language for 55 percent.3 For example, movements such as nodding one’s head, inspecting a sample, taking notes, and moving the chair forward indicate interest in what is being said.
An experienced negotiator spends more than 50 percent of the time listening; the remaining time is used for talking and asking questions. By developing good listening skills and asking relevant questions, both parties can move closer to a negotiated agreement.
Three forms of listening can be distinguished: passive listening, acknowledgment, and active listening.4
• Passive listening amounts to receiving a message without providing any feedback. It tends to show one’s complete lack of interest in what the other person is saying.
• Acknowledgment involves some interest in the information delivered. The acknowledgment occurs through nodding one’s head, maintaining eye contact, or interjecting responses (such as “I see,” “interesting,” “sure,” “go on,” and “please continue.”) Such acknowledgment encourages the other party to continue sending messages.
• Active listening means being thoroughly involved in the messages received and carefully analyzing and attaching meaning to the information contained in the messages. Active listening is characterized by placing greater emphasis on listening than on speaking, responding to personal rather than abstract points (i.e., feelings, beliefs, and positions rather than abstract ideas), following the other party rather than leading him or her into areas to explore, clarifying what the other party says without diverting attention away from what one thinks or feels, and responding to the feelings the other party expresses.
An experienced negotiator engages in active listening. This encourages the other party to speak more fully about his or her feelings, views, and priorities. In this process, the other party is likely to state his or her position, which often leads to successful negotiation.
Asking Questions
In international business negotiations, one of the most important skills is the ability to ask good questions. By asking relevant questions, negotiators can obtain valuable information from the other party as well as test various assumptions they made when preparing for the discussions. During the preparatory phase, negotiators collect information, but not all data and facts may be available; negotiators need to supplement this information during the discussions. A negotiator should not ask questions to show his or her knowledge of the subject or to impress the other party. Such an attitude can easily lead to a monologue. Instead, questions should be used to obtain information from the other party, to exchange concessions, and to move toward agreement. Therefore, they should be used selectively and they should be timely.
Good questions must be prepared in advance. For example, in the initial phase of the business discussions, exporters present their offers. The importers are most likely to want more details about the product specifications, after-sales service, payment conditions, delivery schedules, quantity requirements, price discounts, and so on. Information about such details is best obtained by asking relevant questions.
Broadly, questions can be classified as open-ended questions, and probing or conditional questions. Open questions allow respondents to talk freely about their needs. In such situations, listening to the answers is extremely important as the essential elements must be sorted out, notes need to be taken of the key points, and critical information must be used to phrase succeeding questions. Open-ended questions are useful for clarifying specific points, for seeking details, for obtaining missing information, as well as for validating assumptions. For example, if a buyer refers to a product as being of inferior quality, the seller should ask what standards the buyer is applying, insisting on specifics.
A typical question an exporter is likely to hear after stating price is, “Can you do better than that?” This type of question should be answered with another question instead of a concession. For example, the exporter should reply by asking for clarification, such as, “What is meant by better?” or “Better than what?” At that stage, the importer may say that a competitor is offering better terms. Again, the exporter should ask for more details about the conditions and terms.
Before asking a question, particularly in the early phase of the discussions, a negotiator should ask permission to do so. If the other party agrees, he or she is most likely to be more cooperative in replying to the question. Another benefit when the answer is yes is that the discussions begin with a positive answer, which is conducive to a productive atmosphere.
After a series of questions that give both the parties a good idea of what each other wants, the discussions enter into an exchange of proposals and counterproposals. This requires shifting from open questions to conditional questions. These are probing questions that seek specific information for repackaging of the proposal. Some of the most useful questions are, “What . . . if” and “if . . . then.” For example, the exporter can say, “What if we agree to a two-year contract? Would you give us exclusive distribution rights in your territory?” This question permits one party to make a proposal subject to the acceptance of one or more conditions. The other party can accept the offer, make a counterproposal, or reject the offer. No harm is done in case of rejection. The other negotiator can continue making further conditional offers until common ground is reached.
An example of such conditional questions from the viewpoint of exporters and importers is provided in Figure 10.1. These questions illustrate how one party can make conditional offers while asking reciprocity through concessions. The other party can counter the offers with his or her own conditions. The conditional offer allows the negotiating process to move forward until common ground is identified and agreement is in sight.
Figure 10.1 Example of useful questions when negotiating
Source: Adapted from Claude Cellich, “Communication Skills for Negotiation,” International Trade FORUM, 3/1997, p. 25.
The use of “what if” is most appropriate when objecting to an offer. By responding with a conditional counterproposal, instead of rejecting it outright with a “no,” a negotiator gives the other party the opportunity to provide more details about his or her offer. This exchange of offers and counterproposals eventually leads to the areas important to each side.
A negotiator should prepare a list of key questions in advance since this enhances the effectiveness of the negotiation. The questions should be well thought-out. They should generally be asked to obtain additional information currently unavailable and to test assumptions made when the negotiator was developing negotiating strategies and tactics. These questions should include finding out what is and is not negotiable, what is important to the other party, how badly the other party needs the transaction, and what the other party’s minimum and maximum limits are. To gain this information, a negotiator should complete a thorough analysis of his or her strengths and weaknesses along with those of the competition.
Reversing Roles
The role reversal technique implies the negotiator putting himself or herself in the shoes of the other party and, then, contemplating various aspects of the negotiation. This gives the negotiator the opportunity to better understand the position of the other party. For example, another party may insist on certain terms you find unreasonable. But self-reversal role-playing allows you to appreciate the other party’s position of asking for the terms. Subsequently, you can come up with a solution acceptable to both of you, that is., modifying your position while responding to the needs of the other party. This way your respective positions become compatible, leading to the agreement.
Ensuring Clear Understanding
Techniques that can help provide clear understanding in negotiations include restating, rephrasing, reframing, and summarizing. Restatement of the other person’s comments encourages clear communication between the parties. Repeating the main issues in different ways by rephrasing them is helpful during the discussions. For example, a negotiator can rephrase what he or she just heard by saying, “If I understand you correctly, what you are really saying is . . .” The negotiator expresses in his or her own words the understanding of the point just made. This technique acknowledges the other person’s point of view as well as indicates what was heard.
Reframing is also a useful tool for getting discussions back to the main issues. By reframing, a negotiator recasts what the other party said in a way that redirects attention of the discussions to the core theme that needs to be addressed.
Summarizing is considered a useful tool for bringing negotiations to a close. It consists of one person presenting in his or her own words the points agreed to and asking the other side to approve them. Precise note taking throughout the discussion can serve as the basis for summarizing. If the summaries are accurate, both parties can concentrate on the remaining issues or proceed toward finalizing the agreement. The person presenting the summaries must be careful to be factual.
Nonverbal communication refers to meaning given to behavior beyond words. It includes body language, facial expressions, physical appearance, space, time, and touch. In the context of cross-cultural negotiations, even when people do not speak a word, through nonverbal communication such as appearance, facial expression, and use of time, they send certain messages to the party. The other party receives the messages and attaches meanings to them. Unfortunately, the meanings a person attaches to nonverbal communication vary from culture to culture. Thus, without intending to do so, a negotiator’s nonverbal communication can send a wrong message to the other party, inadvertently harming the negotiations. Therefore, a negotiator must be aware of his or her nonverbal cues to avoid transmitting false or unilateral messages to the other party. After all, 60 percent to 70 percent of meaning in social interactions is interpreted from nonverbal cues.5
Figure 10.2 lists the different types of nonverbal behavior. All of these behaviors have an impact on negotiations, as illustrated below.
Figure 10.2 Different types of nonverbal behavior
Body Language
Body movements vary from culture to culture. Consider the following conversation in a hotel lobby with a Japanese businessperson asking the North American about the hotel.
The American responds with a well-known “A-OK” ring gesture. To the Japanese, this means “money,” and he concludes that the hotel is expensive. The Tunisian onlooker thinks that the American is telling the Japanese that he is a worthless rogue and is going to kill him. But the Frenchman, overhearing the question, thinks the hotel is cheap because the ring gesture in France means “zero.”6
Aspects of body language vary depending on where people are negotiating. Consider the case of eye contact. In the United States, maintaining eye contact is important because this shows a person is interested in what is being said. In Japan, however, anything more than brief eye contact is considered rude, amounting to invasion of privacy of the other party.
Vocalics
In the United States, people often raise their voice when they get upset. In China, on the other hand, people maintain prolonged silence when they are unhappy, rather than speaking in a loud tone. A wise negotiator should try to behave normally without using this aspect of vocalics to his or her advantage. For example, if a negotiator is not accustomed to pounding on the table to emphasize a point, the negotiator should not do so simply because he or she heard this would strengthen his or her argument in the context of the other party’s culture. The best advice to follow is to be yourself.
Touching
In some cultures, people rarely touch each other. In other cultures, touching is common. For example, physical closeness between men is not commonplace in the United States. But men holding hands and hugging each other are gestures of friendship in some societies. In Latin America, a warm embrace, called abrazo, is common among well-acquainted businessmen, but is not found in other parts of the world.
What should a negotiator do when touching practices vary worldwide? The best thing to do is to avoid touching at all. This way he or she avoids doing the wrong thing. Just shaking hands is the safest way to avoid the touching dilemma.
Use of Space
In negotiations, space refers to the distance at which people feel comfortable when interacting with another person. In some parts of the world, such as Latin America, Italy, France, and the Middle East, people maintain short distances. The Americans, Germans, Chinese, and Japanese feel comfortable with more space. In addition, such factors as age, status, and gender of the opposite party affect the comfort distance.7
When a person with a preference for more space interacts with a person who likes less space, the latter often keeps coming closer to the first person to reduce the distance. The first person then begins to move back to maintain his or her comfort distance. Such a situation becomes very embarrassing for the parties involved.
What should be done when two negotiators have different perspectives on distance? The rule of thumb is to let the host set the distance limit, with the guest adapting to the cultural traits of the host.
Time
Different cultures have varying attitudes about time. In the United States, time is a precious commodity. The U.S. attitude toward time is common among Anglo-Saxons. In many societies, time is a boundless resource. It need not be distributed into time slots. People in such societies are relaxed about schedules and deadlines. If something cannot be accomplished today, it can always be accomplished tomorrow.
In negotiations, the time attitude becomes relevant with regard to three areas: keeping appointments, pursuing the meeting agenda, and devoting time to unrelated items. People who attach more importance to time like to start the meeting on time, like to discuss each item one at a time rather than moving from one issue to the other without any order, and prefer to avoid “wasting” time on unrelated matters. One type of attitude toward time is no better than the other. Both parties should adapt to the needs of the other through mutual respect and understanding.
Physical Appearance
There is a suitable business attire in each society. A person appears properly dressed following the professional perspectives of his or her society. A negotiator can expect the other party to dress according to his or her culture. No adaptation is necessary. A negotiator respects the way the other party appears and the other party respects the way the negotiator presents himself or herself. Not all people are alike. They dress differently and have different customs with regard to physical appearance.
Artifacts
In the United States, a large corner office on the top floor communicates status. Status symbols are common in other cultures too. A guest should abstain from criticizing the host about his or her artifacts. An executive may make positive comments about something with which he or she is familiar, but should otherwise ignore bothersome artifacts. For example, if an executive finds a picture on an office wall to be in bad taste, he or she should just ignore it instead of characterizing the other party based on the picture.
Summary
To negotiate, a person must communicate. In negotiations, communication occurs at a logical level (for example, a specific price offer) and a pragmatic level (for example, semantics, syntax, and style). Communication between negotiators is more complex when the negotiators belong to different cultures even if the discussion takes place in the same language.
Cross-cultural communication leads to two problems: perceptual bias (i.e., attaching meaning to a message received by a person) and errors in processing information (e.g., maintaining an irrational escalation of commitment, considering negotiation to be a zero-sum game, using faulty standards, among others). These problems can be overcome by using the following techniques: listening, questioning, reversing roles, and incurring clear understanding. Three types of listening are passive listening, acknowledgment, and active listening. A good negotiator should engage in active listening. By asking relevant questions, negotiators can obtain valuable information. Two types of questions are open-ended questions and probing or conditional questions. In the context of negotiations, both types of questions make sense depending on the type of information sought. Reversing roles means putting oneself in the position of the other party and examining various aspects of the negotiations. This helps the negotiator understand the position of his or her counterpart. To seek clear understanding in communications, the parties should employ restating, rephrasing, reframing, and summarizing.
Nonverbal communication is equally important in cross-cultural negotiations. Even when a person does not speak a word, his or her appearance; facial expressions; and use of time, space, and touch send certain messages to the other party. Nonverbal communication takes place through body language, vocalics, touching, use of space and time, physical appearance, and artifacts. A person should control his or her behavior related to these matters in order to send the right message to the other party.