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International Negotiations: United States vs. Japan

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Your company has been approached by a reputed Japanese firm that wants exclusive production and selling rights for one of your innovative products. Your company has been looking for a strategic partner for the production of this product to reduce costs. The company president is very interested in exploring the possibility of developing relationship with this Japanese firm. This deal is very critical to the growth of the firm in the international market. Both parties are anxious and preparing for their first meeting in a month's time to move this deal forward. This is the first time your firm is doing business with Japan, and this is also the case with the Japanese firm.

What do your negotiators need to know about Japanese bargaining behaviors to strike the best possible deal with this company?

In your small group, develop a strategic plan for negotiation and conflict resolution for your firm's executive team in its first meeting with the Japanese. Include explanation of the bargaining behaviors of both countries. Are there any similarities between the two culture's bargaining behaviors? Can you create a win-win deal? Additionally, include all the relevant information you can about building relationships with the Japanese because to increase the chances of successful negotiations, the negotiating team will be deployed to Japan for a full month before the negotiations.


What are Hofstede's cultural indexes for the U.S. and Japanese cultures?

What do the Japanese need to know about U.S. behavior?

What do the Americans need to know about Japanese behavior?

How do you obtain a win-win situation?

Any help will be much appreciated. Thank you.

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Solution Preview

Starting with Hofstede's cultural indexes for the U.S. and Japanese cultures

To begin constructing your negotiation strategy, you are asked to start with Hofstede's cultural indexes. This aids in understanding the cultural values of your negotiation counter-party (e.g., Japan), so you can effectively appeal to the values that impact your negotiation strategy. As an illustrative example (Example 2 below), you would appeal to the Chinese value of being indirect in the negotiation process.

In your research process, for example, you would refer to Hofstede's four dimensions at culture-level: power distance, individualism/collectivism, masculinity/femininity and uncertainty avoidance, for example. Knowing these dimensions about your counter-party often results in more successful negotiation outcomes. From the chart above (see attached response), we can first see that Power Distance is somewhat similar, but the other indexes are significantly different. Below the chart, see the meaning of each cultural index (in attached response). Read through the scores and the explanations of the indexes, thinking about what would be important for your team to understand. Then, we will look at the questions.

Hofstede's Dimension of Culture Scales (see attached response for chart of rankings)
Country Power Distance Individualism Uncertainty Avoidance Masculinity Long term orientation

Geert Hofstede Analysis is discussed on each Country's page in this Website (http://www.cyborlink.com/besite/hofstede.htm) with the following format:

Power Distance Index (PDI) focuses on the degree of equality, or inequality, between people in the country's society. A High Power Distance ranking indicates that inequalities of power and wealth have been allowed to grow within the society. These societies are more likely to follow a caste system that does not allow significant upward mobility of its citizens. A Low Power Distance ranking indicates the society de-emphasizes the differences between citizen's power and wealth. In these societies equality and opportunity for everyone is stressed. Japan (54) United States (40)

Individualism (IDV) focuses on the degree the society reinforces individual or collective, achievement and interpersonal relationships. A High Individualism ranking indicates that individuality and individual rights are paramount within the society. Individuals in these societies may tend to form a larger number of looser relationships. A Low Individualism ranking typifies societies of a more collectivist nature with close ties between individuals. These cultures reinforce extended families and collectives where everyone takes responsibility for fellow members of their group. Japan (46) United States (91)

Masculinity (MAS) focuses on the degree the society reinforces, or does not reinforce, the traditional masculine work role model of male achievement, control, and power. A High Masculinity ranking indicates the country experiences a high degree of gender differentiation. In these cultures, males dominate a significant portion of the society and power structure, with females being controlled by male domination. A Low ...

Solution Summary

Referring to the case on international business between United States and Japan, this solution discusses what negotiators need to know about Japanese bargaining behaviors to strike the best possible deal with this company. It includes Hofstede's cultural indexes for the United States and the Japanese cultures, as well as examines what both countries need to know about each others behavior and how to best obtain a win-win situation. Supplemented with an article on how cultural values impact the negotiation process.