International Negotiations

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NegotiationsDefinition:

1. Two or more parties must make a decision about their interdependent goals and/or objectives.

2. The parties are committed to a peaceful solution.

3. There is no clear method or procedure for making a decision.

Negotiations

Definition:

A process in which one party tries to change the attitudes and/or beliefs of another party.

Negotiations

Definition:

A method of conflict settlement.

Elements of a Negotiation

ActorsStructureStrategy ProcessOutcome

Distributive Bargaining

Positive Bargaining ZoneExample

Negative Bargaining ZoneExample

BATNA

Best Alternative To a Negotiated Agreement

“Plan B”

Integrative Bargaining

Win-Win Negotiations

Mutual Gains Bargaining

“Getting to Yes”

Integrative Bargaining

Problem solving vs. fighting

Both parties working towards a solution

One party doesn’t gain at the loss of another party.

Integrative Bargaining

Characteristics:Open flow of information

Search for solutions

Parties understand conflicting & common goals

Understand each other’s point of view

Integrative Bargaining

Separating the people from the problem

Focusing on interests not on positions

Insisting on objective criteria

Inventing options for mutual gain

Short vs Long Term PlanningIs the substantive outcome important?

Is the relation-ship important?

YES NO

YES

CollaborateWin-WinLong term

AccommodateYield-WinLong term

NO

CompeteWin-LoseShort term

Culture

Definition

Culture is a set of meanings, values and beliefs that characterize national, ethnic, or other groups and orient their behavior.

DefinitionTrue values will be revealed through

behaviorCulture is a substitute for instinctCulture Answers questions before they

are raisedCulture is a bearer of social norms a

guide to behavior or triggers specific actions in a particular situation

Definition

The basis of understanding other cultures comes from the comparison to our own culture.

“A fish does not know how essential it is to live in water until it is taken out of it”

Iceberg Theory

Iceberg Theory

Iceberg Theory

Points of CultureBeliefs, values, ideas

Language

Customs (habits)

Rules / Laws

Family patterns

Artifacts (art, architecture)

History

Points of CultureSocial Groups (status and gender)

Position in the world

People

Environment

Space & Time

Ability to change

Personality

Subcultures

Age

Profession

Industries

Education

Interests

and so on …

Stereotypes

National Negotiating StylePower DistanceCollectivism / IndividualismMasculinity / FemininityUncertainty AvoidanceConfucian Dynamism

Parts of International Negotiations

Actors

Structure

StrategyApollonian – conflict avoidanceDionysian – elicit conflict

Parts of International Negotiations

Process

Outcome

Research

Books, Magazines, Periodicals

Who?

Where?

What is their background?

Research

Internet

Respectability of the site

Verify the information

Who?

Where?

What is the background

Research

Natives of the country

Who?

What is their background?

What is the relation or knowledge to your culture?

Research

People from your own country that have been to the foreign country

Who?

What is their background?

Why were they there?

What experiences did they have?

Negotiating Globally

Negotiating Globally

1. Individual Characteristics

2. Situational Contingencies

3. Strategic & Tactical Processes

Individual Characteristics

Qualities of good negotiators differ culture to culture.

Individual Characteristics

Communication

Direct / Indirect

Emotionalism

High / Low

Individual Characteristics

Risk Taking

Buyer / Seller Relationship

Situational ContingenciesLocation

Physical Arrangements

Participants

Time Limits

Situational Contingencies

Status

Personal Style

Informal / Formal

Strategic & Tactical Processes

Integrative Bargaining

Win – Win Negotiations

Structure of International Negotiations

1. Preparation

2. Relationship Building

3. Information Exchange

4. Persuasion

5. Concessions

6. Agreement

Extras

Dynamics of International Business

Negotiations

External Stakeholders

Competitors

CustomersDemand vs. Boycott

Labour Unions Reduce vs. Increase

Employment Organised Business Organisations

Shareholders

Immediate Stakeholders1. Negotiators

• Personality• Background• Experience• Culture• Attitude• Knowledge• Personal Benefits

2. Company’s Managers, Employees, BoD

• Financial• Career (Promotion)• Ego• Prestige• Wages / Salary• Economic Security

Integrative Bargaining

Win-Win Negotiations

Mutual Gains Bargaining

“Getting to Yes”

Integrative Bargaining

Separating the people from the problem

Focusing on interests not on positions

Insisting on objective criteria

Inventing options for mutual gain

What do we need to do?TRUST

Location

Timing

Obfuscation (confusion)

Positioning

What do we need to do?Surprises

Avoid “us” versus “them”

Agendas / Plans of action

Emotions

Bridge Building

What do we need to do?Choose your team carefully

Don’t think you are right and they are wrong

BE OPEN TO OPTIONS

Team Negotiations

Team Negotiations

Negotiating Individually

Versus

Negotiating in a Team

Team Negotiations

Define Roles:

Speakers

Decision Makers

Observers

Team Negotiations

How many negotiators should be on a team?

Too many

Too few

Match the number of the other side

Team Negotiations

Common goal, strategy

Uniform

Don’t contradict

Common reactions

Team Negotiations

Changes (how to deal with them)

Don’t pass notes or whisper

Use Breaks

Too Few

Too Many

Team NegotiationsTrust

Good Cop/Bad Cop routine

Define the leader

Define the different styles

Languages

Team NegotiationsTips

Less negotiators is betterDefine Roles

Don’t change the speakerBackup speakers

Be cohesive

Negotiate with a team as a team!

Interpreters

Interpreters

Immediate Barrier

Who will provide?

Lose feeling & reactions

Interpreters

Pay attention to negotiator not interpreter

Ask advice

Check & verify everything

Interpreters

Listen

Wait

Speak slowly

Do not interrupt

Take notes

Be prepared for longer negotiations

Verify everything agreed upon