Negotiation processes are social interaction forms. Simply put, negotiation entails efforts tailored towards resolving seemingly incompatible goals. Notably, negotiations tend to involve two or more parties that try to determine how much they are willing to give in exchange for what they will receive in return. Negotiation processes are never easy. In addition, almost everything counts in negotiation. Whether it is how people exchange pleasantries before the meeting starts, language barriers or the use of body language, even the seemingly slightest detail affect how people engage each other in a negotiation. Towards this end, cultural differences influence negotiation processes. In fact, most negotiation breakdowns involve parties with cultural differences. Ordinarily, negotiation entails direct face-to-face or electronic confrontation. Direct confrontation between negotiating parties from different cultural backgrounds may have either adverse or positive effects on the negotiation process. To avert adverse effects of culture on negotiation, negotiators engage third parties. Principally, third parties also participate in negotiation process, especially during agency relationships.
Various cultures have varying worldviews. Consequently, people from different cultures negotiate differently. Culture entails norms, beliefs, values and behaviors. In places such as Europe, the United States and United Kingdom, Goodwin & Midlane (2002) contend, people maintain eye contact is usually a sign of one’s confidence and strength. By contrast, in South America, it would be taken as a sign of trustworthiness, in the Arab world it should not be done because it can create discomfort, while in Japan doing it for a prolonged amount of time is perceived as impolite. People from different cultures may have differing languages. This creates language barrier especially in negotiation processes. Language barrier remains a major obstacle to negotiation processes. Oftentimes, negotiating parties fail to understand each other due to language barriers (Kennedy, 2004). Due to this shortcoming, there is a great need for interpreters, which as a result could be tedious. In addition, the same body language can bear different meanings across cultures. Negotiation can be a forum that helps people settle their differences. Such differences may entail purchasing, sale, mergers, and contracts. Misleading these cultural signals out of ignorance may lead to all parties being embarrassed.
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In Western countries, time is money. This means that for them, time is very important thus need for punctuality. The same applies to Germany where punctuality is almost like a religion. Cultures such as those in Nigeria, the Arab world and even Spain are not as concerned about time. If two cultures with contrasting views on time worked together, there would be great difficulties all because of their different approach in relation to time. These differences have immense influences on negotiation processes. People from different cultures bring their perceptions and attitudes in the negotiation table. Therefore, cross-cultural negotiations face problems. Finally, Kennedy (2004) argues that in various cultures, negotiation methods differ. Certain cultures prefer one negotiator whilst others prefer many negotiators. Some cultures emphasize on friendliness in negotiation processes while others prefer a more stoic approach.
Negotiation involves two or more parties who attempt to strike a consensus on issue(s). Most importantly, negotiation processes begin from perceptions, reactions and information processing activities. According to Pavlenko (2001), negotiation originates from exchanging patterns between the negotiation parties. Negotiation is a several-step process that is used for managing disagreements while attempting to achieve satisfaction of needs. It is a method of dealing with disagreements when the parties are unable to agree on a way to satisfy their personal needs. Moreover, negotiation is defined as a discussion that is set or even intended in producing an all-inclusive and participatory agreement. In addition, negotiation is the succinct and formal discussion between negotiation parties trying to strike an agreement. Moreover, negotiation can be termed as a business activity that entails negotiation to reach a mutual consensus by resolving their differences.
Culture, a fundamental element that affects negotiation processes amongst international stakeholders, refers to the individual unique practices of a people (Parra, 2001). These unique practices influence negotiation processes. In addition, social interactions breed cultural exchanges. Lewicki, Saunders & Barry (2015) stated that culture is the accepted values and norms that influence how people think, behave and feel. In order to enter into successful cross-cultural business negotiations, cultural competence is important. Understanding various negotiation styles is very important. In addition, it is integral to comprehend different cultural issues that influences the behavior of negotiating parties. Starkey, Boyer & Wilkenfeld (1999) assert that cultural characteristics can involve sexual orientation, religion, ethnicity, gender, class and language. Education and religion are used for the purposes of data collection to reflect the differences in culture. Education levels and religious affiliations are nominal variables. Demographics can also influence the negotiation processes.
Cultural differences culminate to challenges within negotiations in international business because of varying values and verbal behaviors. The many differences across cultures are very complex and thus a lot of care has to be taken in respect to the dangers associated with stereotypes. In modern business, before engaging in a cross-cultural negotiation, it is necessarily to first learn about the culture of the other negotiating party. That can be done by reading books or even receiving suggestions and advice from a person of that culture in question. It is important to understand the culture expectations from that negotiation process. In particularly, it is necessary to keep the negotiation professional no matter how challenging it may seem, and always remain courteous even when your patience is being tested. If confusion arises during negotiation, there should be clarification for proper understanding (Laborde, 1987). Whenever interpreters take part in negotiation processes for parties who do not shared a similar language, they should tend to support their respective parties in overcoming cultural barriers. For this reason, it is very important to carry out a background research before engaging in a negotiation with people from different cultures.
According to Lewicki & Litterer (1985), the most common types of negotiations involve win-loss outcomes. For instance, while negotiating the price of a car, such outcomes are realized. When facing a negotiation that is based on a win-lose situation, you should aim your strategy by determining the minimum requirements of the other party. In a win-lose situation, both parties try to gain an absolutely advantage without regard for the outcome of the other side. In this scenario, one side falls within or higher than the range they had targeted while the other side falls lower than the target range set. However, in some cultures win-win outcomes are preferred. Win-win negotiations usually comprise expansion of the pie. For instance, when two stakeholders make a decision to pursue a business together, the partnership they share is a win-win negotiation. This type of negotiation aims to create a bigger pie and then divide it equally. Therefore, both parties are interested in the success of the business. In this scenario, both sides often end up within the minimum range of their target.
In some cases, a win-win situation may also mean a brand new solution has been found, thus improving the position of the parties. Contrariwise, lose-lose negotiations are ones in which there are no winners. Moreover, win-lose together with lose-lose negotiations also involve haggling between negotiating parties. On the other hand, adversarial negotiations entail stiff competitions between the negotiating parties. Therefore, a negotiation can make an avalanche of concessions that worsen their prior circumstance. It is important to try to maintain a collaborative strategy during negotiation processes. Eventually, the two negotiating parties can find themselves in poorer positions in comparison to the position prior to the negotiation process. Indeed, no one wants to be at the losing end of a negotiation and this may drive off stiff competition. On the other hand, collaborative negotiations are very creative in nature and are made in goodwill. Examples of collaborative negotiations include of this include business partnerships and the win-win negotiation. This type of negotiation involves techniques that are persuasive and creative. The bargaining advantage differences also come in handy during negotiations with its extent depending upon the alternatives available to each party. Negotiators with a greater advantage than their opponents can choose the adversarial approach. This way, they extract more concessions from the other party.
Multi-party negotiations are quite complex because the mutual needs of several parties must be met. Such negotiations are very challenging and in some cases take years to complete due to the advanced techniques required. Another type of negotiation is one that is done in bad faith, which is a situation whereby a party has no intention of honoring any of the commitments it agrees to. It is a situation where the parties act in pretence to reason in order to reach a settlement but in reality reneges when the opportunity arises. It is important to think of the legal penalties in the agreement when you suspect that the other party has bad faith in mind.
Distributive negotiation entails parties who have never worked together before. Notably, distributive negotiation is also hard bargaining or position negotiation. In distributive negotiations, each party takes extreme position. The negotiating parties take these extreme positions knowing well that these extreme positions are unacceptable. In order to give room for concessions, negotiators utilize a blend of bluffing and guile strategies. Hard bargainers perceive negotiations as a process that entails distribution of fixed amounts. In addition, these negotiating parties may never meet again. Distributive as a term entails finite things that should be divided between the involved parties. For instance, in representative democracies, politicians seek to distribute scarce resources. Towards this end, they engage in distributive negotiation with the intent of ensuring that the electorates have a small share of the national resources. In this type of negotiation, all parties benefit.
In addition, we have good faith negotiations. Notably, during a good faith negotiation processes, it is inevitable that the parties involved will make concessions with the intent of striking a fair consensus. However, showing eagerness is a weakness that the other party would use to its disadvantage. Therefore, it is important to get as much information as possible from the other party (Kumar & Worm, 2011). Always keep the deal honest by not being too stingy and greedy. On the contrary, integrative negotiation is another method that is employed. It is also referred to as principle or interest-based negotiation and involves a set of techniques that tries in improving the quality and increase the changes of an agreement. Most importantly, whether the negotiation goal is making a deal or building a relationship, the negotiated agreement in most cases is often in written form. The building of an agreement in relation to is it top down or bottom up. Negotiation is a quite challenging process and thus it requires attention for realization of successful outcomes in cross-cultural negotiations.
Notably, interest-based negotiation usually involves a very high degree of trust and in the formation of a relationship. It also requires problem solving that is very creative and which focuses on achieving mutual gains. Moreover, interest-based approach involves a collaborative approach where the negotiating parties liaise together with the intent of benefit maximization. Ordinarily, finding a purely integrative negotiation and a pure distributive negotiation is difficult. In fact, most negotiation processes blend the features of distributive negotiation and integrative negotiation. It requires that both parties be good at creating value as well as claiming it. Integrative approach bargaining basics include building a bridge, while more businesses are beginning to engage in building and maintaining relationships in the long-term. These relationships provide greater security. Problem solving is extremely important for finding solutions to each party’s problems. Sharing information conveys the message that the negotiating parties are willing to understand each other’s situation (Di, Günthner & Orletti, 2001).
In addition, managerial negotiation is also known as day-to-day negotiation. The parties involved can include trade unions, managers at different levels, colleagues and even legal advisors. Examples of these types of negotiations include increasing productivity, negotiating for payment terms and conditions of working, assigning of responsibility and job description. Itis usually done within an organization and it relates to the internal problems in that organization. Moreover, commercial negotiations involve parties such as public, legal advisors, trade unions, customers, government, suppliers and management. Examples of commercial negotiation include negotiating with a financial institution regarding the availability of capital, negotiating the price of the quality of goods to be bought, making a contract with a customer. This type of negotiation is typically conducted with sides or parties from outside. A legal negotiation involves parties such as management, customers and government. An example of a legal negotiation is staying in compliance with local and national laws. Oftentimes, it is legally binding and formal.
Regardless of the negotiation type, learning the culture of the negotiating party is important. This helps in understanding their expectations during negotiation processes. In addition, it is imperative to make concessions during the negotiation process. Some negotiation processes consume immense resources because of poor strategy and hard stance by the parties. Parties should avert jumping into conclusions and assumptions regarding the negotiation. By understanding different negotiation styles by different cultures, parties utilize their listening skills to understand their negotiating partners. Moreover, it helps in clarification of positions and in paying attention to prospective cultural dynamics.
Brett (2007) contends that internal negotiation entails parties from various countries. International negotiation may occur between large delegations too where each of them is organized properly along skills, specialization and competencies. Cultural experts participate in international negotiation. Chief negotiators and linguistic experts handle negotiation challenges to avert misunderstandings occasioned by cultures of the negotiating countries. A situation may present itself in that a particular country might put a lot of emphasis on politeness and integrity yet another one may emphasize deception and coerciveness during negotiation. It is quite easy to offend individuals from a different culture without even being aware of it. Body language, for instance varies across different cultures just like gestures. Innocent gestures may be construed to mean rudeness. In addition, cultural differences lead to challenges within international negotiations due to varying values and verbal behaviors. The form of agreement, whether it is specific or even general, can be a determinant of a negotiation process.
Conducted with facts and diplomacy, international negotiation often take careful notice on customs and as well as the local culture. A good international negotiator is very smooth and possesses a practiced art, and makes sure to stay well informed. The complex nature of negotiation means that the process of negotiation can be very time consuming, even taking months or years to complete. International negotiation can be quite risky, and at times literally a matter of life and death as well as the survival of the planet itself. For instance, the scenario of not coming to an agreement on issues of global warming and survival demonstrates the difficulties of international negotiation (Plantey, 2007).International negotiators encounter different ideologies in matters of business. For instance, negotiating countries might have very different concepts concerning individuals’ rights, private investment and so on. According to Strauss (1978), good negotiators are always aware of differences in ideology. The presentation of their proposal is done in a way that is ideologically acceptable to the other party, or in a way that is ideologically neutral. Cultural diversity is a very important factor while dealing with international negotiators. Apart from language differences, cultures can differ in terms of values, philosophies as well as perceptions. Consequently, a given idea may have quite different connotations for different cultures. In comparison to Americans, Japanese have varying perceptions regarding the rationale behind negotiation processes. For instance, the Japanese culture gives premium to agreement of the general principles governing a negotiating process while Americans prefer dealing with a single issue in an individual manner.
Individual negotiations should never conform to stereotypes related to culture. International ventures appear very much affected by sudden and drastic changes in their issues. Events like currency devaluation, wars, and changes in government have big effects on international business, which in most cases is greater than the effects domestic changes cause. Therefore, such risks call for the international negotiation to possess a breadth of knowledge as well as social insight. When it involves matters of international affairs, governments usually play a larger role in matters of foreign business compared to private companies, while private firms may primarily be concerned with profits. In some cases, state entities might be willing to sacrifice profits for greater employment (Hayes, 1997). Different nations have different and unique currencies. This factor of possessing different currencies causes problems since the relative value of a given currency will fluctuate over time. According to (Kumar & Worm, 2011), the actual value set by a contract might vary and consequently leads to unexpected losses or gains, yet there is another problem in that every government strives to control domestic and foreign flow at the national boundaries. Therefore, business deals often depend on the government’s willingness in making currency available, as such unexpected changes may affect the international business a great deal.
In international negotiations, those involved have to deal with the laws and political authorities that may be quite inconsistent and even directly contradict the laws in their respective countries. Measures have been put forth to address these differences. They include tax havens, arbitrations, and clauses and so on. Negotiation processes that are effective lead to positive results, and that helps in the promotion of the international objectives which includes political stability, economic development, environmental protection, labor rights, business interests and so on, which as a result helps minimize the effects of poverty and other important issues.
Almost all of the day-to-day negotiations carried between the government on issues regarding international commerce usually focus on certain problems related to that sphere. According to Di, Günthner & Orletti (2001), an ideal negotiator ought to understand the subject of negotiation as well as the nature of the parties involved. This is very important during planning and preparation stages of the formal negotiation processes. There are different types of negotiators, including the principle bargainers who are seeking integrative solutions. Through this course of action, this they sidestep commitments to certain positions, usually focusing on the problem and not the intentions. Hard negotiation usually makes use of contentious strategies based on persuasion (Fisher, 1980). Soft negotiators often view negotiations very close to competition and thus want a gentle style of bargaining. International business negotiations are quite different from domestic negotiations, thus requiring different skills and knowledge. Effective negotiators are usually aware of the ideological differences and other differences that exist.
The negotiation goals are based on whether it involves a contract or a relationship. Various negotiating parties from dissimilar cultures can perceive the intent of negotiations differently. In cultures that promote deal making, the rationale behind any negotiation process is business. Towards this end, signing contracts by the different negotiators is given a premium. On the other hand, other cultures focus on the main goal of a business negotiation and not the signing of the contract. Even though a written contact shows the relationship, the main essence is the deal itself. For instance, from the perspective of Spanish stakeholders, the main goal of negotiation is the signing of a contract. Thus, it is very important to have knowledge about how those you are working with the view of the negotiation purpose. For relationship negotiation, the mere act of sitting and convincing the other party that you can deliver during the initial meeting will not be enough to reach agreement on a deal. Instead, building a cordial relationship helps in creating trust between the negotiating parties in the long-term. Accordingly, when the negotiating party focuses only on striking a deal, frantic efforts aimed at building a long-lasting relationship constitute energy and time wastage.
The form of agreement in relation to whether it is specific or even general matters. Whether the negotiation goal is to make a deal or build a relationship, the negotiated agreement is often in written form. Some cultural factors determine the form of a written agreement that the two parties make. For example, Americans prefer a formal, detailed contract that takes into account all of the potential scenarios. In this way, the contract serves as the reference point whenever a complicated issue needs to be resolved. By contrast, in Chinese culture the preference is for contracts that are drafted in the form of general principles and not detailed rules. The reason for this is because in their view, the relationship building process forms the basis of any negotiation process. Whenever new circumstances emerge, the two negotiating parties should give priority to the cordial relationship as opposed to the contract. Solving negotiation challenges differ in various cultures. In some places, culture is given premium over context. According to Di, Günthner & Orletti (2001), particular general principles and conventions guide negotiators in striking a consensus. In France, for instance, negotiators begin by agreeing upon the general principles. On the other hand, Americans seek agreement on specific issues like price and delivery dates. After making sound observations, Americans seek to a building-down strategy. The French see negotiation as a deal-making process, as do Indians. By contrast, the Japanese and Brazilians look at negotiation as an explicitly inductive process. In any negotiation process, the parties involved make concessions with the intent of striking a deal.
The organization of the team in relation to whether it is a single leader or even a group is an important factor. Before engaging in any negotiation, it is crucial to have knowledge of how the other party is organized, who is in charge of making commitments and the way they make decisions. The culture affects the way executives arrange themselves while negotiating a deal. While some cultures may prefer individual negotiators, others insist on making the decision as a group. Such values affect and influence the organization of these parties. Most American negotiators follow the individual approach where there is a chief negotiator while the Chinese insist on team negotiation. All the same, the consensus approaches usually takes a lot of time in negotiating a deal.
In terms of the level of risk-taking, research shows that some cultures are more willing to take risks than others. The question is whether the risk is high or low. While making a deal, the cultural beliefs of the negotiation party might affect the will of one party in taking risks. Typically, Americans are thought of as risk takers while Japanese are usually risk-averse. The French, British and Indians and commonly considered to be risk takers as well. Different cultures vary in relation to the extent of risk taking. Negotiations from the cultures that are mire risk taking tend to move to a deal fast and are willing to take chances.
Cultural diversity culminates to differing formality degrees. Cultural in the U.S. is not very formal. Americans utilize casual communication styles. In addition, Americans prefer first names to titles. In many European countries like Germany, the manner in which somebody is addressed is quite formal and the use of titles is emphasized. Not using the appropriate title when addressing a person is often taken as an insult. The way business cards are presented, dress codes and the shaking of hands are a subject to be interpreted by the negotiators. Culture has a very significant effect on the conclusion of an agreement and on the form the agreement takes. In America, agreements are usually based on logic. For instance, a producer who bids their services at the lowest cost gets the contract deal, and it is usually formal. For other cultures, status and family connections determine whether you will get the deal or not, not the merits of the negotiator. Furthermore, agreements can be interpreted in vastly different ways depending on the culture. In addition, the difference in culture on how to seal the agreement might cause misunderstandings. The cultures that emphasize on team negotiations usually act in favor of the superiority of a group and usually view the group’s collective needs over the individual’s needs. The cultures that are group oriented often appreciate the members that are loyal to the team by rewarding them. The Japanese, who are group-oriented, make decisions collectively by reaching a consensus.
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Emotions play an integral role in negotiation processes. Oftentimes, emotions can have either adverse or positive effects on negotiation processes. In addition, emotions culminate to conflicts and irrational behavior. The adverse effects of emotions on negotiation lead to collapse of the process. Fortunately, positive emotions assist negotiating parties strike a mutually beneficial agreement. However, research on the influence of emotions on negotiations remains an area under study. In addition, these positive emotions facilitate the maximization of mutual gains. Di, Günthner & Orletti (2001), observed the ways that negative emotions, just like positive emotions, may be displayed in a strategic manner in order to yield rational results. Before the onset of a negotiating process, parties who show positive emotions demonstrate outright cooperation as well as confidence. Consequently, the preponderance of striking a mutually beneficial agreement increases. Some research shows that the negotiators’ emotions do not directly influence the negotiation process. Albarracin et al. (2003) aver there are usually two existing conditions for emotional effect as well, which are related to ability as well as motivation. The first one is the identifying the effect which require motivation and ability. In this case, both should be high. Determining whether the effect is of any relevance requires that motivation and ability be low.
The criteria for selecting those who would participate in a negotiation process varies in different cultures. The factors that determine this might include understanding and sufficient knowledge of the topic being discussed, status, seniority, age, family connections, experience and gender. The cultural response in respect to the selection of negotiation range culturally, in response between experts and trusted associates. Oftentimes, cultural factors affect the manner through which negotiators perceive opportunities. Some people see opportunities as integrative while others see them as distributive. North Americans perceive negotiation as chiefly distributive while other cultures see it as integrative. In addition, negotiation processes across different cultures are affected by the manner through which people from dissimilar culture negotiate. The definition “negotiation” itself is quite negotiable, as it differs across cultures, and whatever happens when people negotiate differs a lot across cultures. For example, while Americans see negotiating as a competitive situation of offers and counteroffers, the Japanese view it as a good opportunity for information sharing.
During the negotiation process, it is crucial to know the type of negotiator who is seated across the table. Most of the Japanese negotiators approach negotiation in a win-win process, while the Spanish negotiation involves a win-lose attitude. In win-lose situation, the two sides compete to gain all of the benefits while in win-win situation, one of the party lies within the target or even a better range. In the situation of win-win, the two parties get out at the minimum ranges. In addition, personal styles influence negotiation processes, regardless of whether the style is formal or causal. Some negotiators prefer to avoid discussing their private lives and they avoid personal anecdotes. Negotiations with informal style usually try to initiate a discussion based on a personal relationship with the other party. All cultures have formal ties with special meanings. For Americans, calling somebody by their first name is often encouraged and conveys a sense of comradely. On the other hand, for Japanese negotiators, addressing somebody by their first name at the first meeting would be considered disrespectful. Negotiators have to respect the formalities of others in the foreign cultures. It is advisable to always begin in a formal manner and only shift to informal once a rapport has been established (Spangle & Isenhart, 2003).
According to Faure (2003), the formality degree in the relationships is integral. For introductory purposes, exchanging business cards is the expected practice when negotiating with either the Chinese or Japanese. Failing to bring business cards by negotiation is seen as an insult to the counterparts as it is considered a breach of protocol. The way of presenting the business cards is a formulated process. Shaking hands as well as the dress code are observed, as they are subjects to interpretations and can also be a way of showing an individual’s background as well as their personality. Moreover, win-win negotiation techniques help in ensuring communication has underlying value to disputants, and it assists in mediation. Most cultures favor win-win outcomes during negotiating. It is imperative to pay attention to non-verbal clues to avert the possibly of a looming impasse during this negotiation stage. Communication helps negotiators make very essential symbolic closure through imminent settlement. Learning negotiation skills is very crucial for negotiators as it enables them to create values and cooperates effectively through cooperative strategies (Faure, 2003).
Communication methods differ across cultures. Some cultures give premium to direct and simple communication methods. Contrariwise, some cultures emphasize on indirect and complicated methods. During negotiation processes, some people utilize body language, gestures, facial expressions and figurative speech. Americans together with Israelis prefer directness since it helps in averting unambiguous responses to questions. The Japanese, on the other hand, provide indirect reactions to a proposal. Confrontation of the two styles of communication in one negotiation may lead to friction (Kumar & Worm, 2011). For instance, the indirect way that the Japanese express disapproval can often lead to false hopes that the proposals are seriously being considered when in reality they are not. Cultural factors affect the way people communicate verbally as well as non-verbally. Difference in the meaning of the same body language may affect communication, since a behavior can be seen as an insult in one culture while for the other, it is an innocent act. To avoid these misunderstandings, it is important for the negotiator to observe all the cultural rules carefully during communication. For instance, in America using a desk as a footrest indicates relaxation while in Thailand it would be an extremely offensive gesture.
The art of negotiation arises when interests conflict. In negotiations, navigating around the conflicting positions in to find common ground through unanimity is vital. Finding common ground can be achieved when the negotiators satisfy their own concerns and individual goals. Lewicki, Saunders & Barry (2015), assert that communication is a very important art in any form of interaction. Furthermore, communication is an important element in successful negotiations. Such negotiation skills encompass but are not limited to the ability to listen keenly to the other party as well as the ability to comprehend the sender’s intended message. It also involves the capacity to express your own ideas and thoughts clearly in a manner that can be easily understood and followed. Learning and building communication skills in negotiation helps the communicator gain an edge during the communication process. Misunderstanding arising from differences in cultures and languages hampers negotiations. Additionally, negotiation is important in tackling social problems. Building partnerships, community problem solving, conflict management, stakeholder organizing and participatory planning require negotiation skills too. All these activities involve informal bargaining. For effective negotiations, it is important to negotiate mutual interests and not positions.
In terms of the level of being emotional, some cultures exhibit higher levels of expressiveness. There is a stereotype that Latin Americans often wear their emotions on their sleeves. The rules are displayed on the negotiation table too, so negotiators ought to seek to learn them. Cultural differences usually influence negotiators extent of displaying emotions. The
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