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International Exercise to Increase Awareness of Cross-Cultural Issues by U.S. Negotiators

INTRODUCTION In a role-play negotiation exercise, students are faced with a business problem, with constraints and goals. The participants assume the roles of decision makers, and address the problem from the point-of-view of their role. The output of the role-play exercise is the product of the interaction between the "players," such as a negotiated agreement or "signed" contract. The simulation of business activities, as defined by the American Assembly of Collegiate Schools of Business (AACSB) Task Force is, "a business curriculum-related endeavor which is interactive (other than between teacher and pupil) and is characterized by variability and uncertainty" (Gentry, 1990, p. 10). This pedagogy provides an active learning environment versus a passive one (Graham & Gray, 1969). The purposes of such an environment vary, but could focus on enhancing the learning environment (Lamont, 2001) and conveying knowledge that one could not attain elsewhere (Goosen, Jensen, and Wells, 2001). The use of a negotiation exercise expands both teaching and learning options available to instructors and students. It does so by giving the students the "experience" and then the opportunity for reflection upon the experience once completed (Kolb, 1984). Such techniques are used to conduct experiments and provide "real world" experience at a low cost. These techniques when used effectively are excellent tools for preparing students. The environment of a simulation exercise is one of uncertainty and less than perfect information. This is the type of environment that students will be faced with once they reach the "real world" (Karns 1993; Wellington and Faria, 1996). Therefore, simulation exercises are to business classes what labs are to Chemistry or Biology classes. They create a semi-realistic place where students apply knowledge and put into practice what they have learned. Furthermore, it allows them to see results of decisions they've made (Frank, 1993), which gives them a sense of ownership of knowledge and turns abstract ideas and theory into practical experience. The interest in using simulated business exercises in teaching has been growing in popularity throughout the world, including the United Kingdom (Burgess, 1991), Australia (McKenna, 1991), and Germany (Rohn, 1986). Its popularity has also increased across various cultures, including both socialist (Asa, 1982) and post-socialist (Wolfe 1993) nations. A simulated environment gives participants an arena in which to learn about decision-making, social interaction, and various other "real-life" skills, relevant to the subject matter. DESCRIPTION OF THE EXERCISE The negotiation exercise was adapted from Cateora & Graham (2007a, 2007b). This is a simulated negotiation between a U. S. manufacturer (General Medical) of magnetic resonance imaging (MRI) machines and a Brazilian hospital (Corcovado). The exercise was designed for use with Americans (United States of America) on both sides of the negotiating table, so modifications were made to use the exercise in a cross-cultural setting. First, the instructions for the Brazilian roles, purchasing objectives, and price quote were translated into Portuguese. Second, the Brazilian "cultural/behavioral instructions" were deleted; these were originally written so that Americans could "play" the Brazilian roles and were deemed unnecessary. Finally, the prices in the Brazilian team purchasing objectives were changed to reflect currency rates. The Brazilian team price objective for the basic MRI unit was set at a level of reais (the Brazilian currency) to convert to about U$750,000. The price quote from the U. S. team for the basic unit was U$1,200,000. The U. S. team price quote of U$1,200,000 and the Brazilian price objective of about U$750,000 left a gap of about $450,000. It was a significant challenge for the groups to find a point of overlap in this gap between prices, and in hindsight a gap of about U$200,000 would have yielded less frustration in the negotiation process. …