International Management: International Negotiations

1. Preparation
2. Building the relationship
3. Exchanging information and first offer
4. Persuasion
5. Concessions
6. Agreement

Culture

WHERE to negotiate
WHEN to negotiate (time is money) don’t let the other side of the negotiations know that you have a deadline or time-frame because they will try to drag them out, so you will make more concessions
WHO negotiates (by yourself or with a team?)
WHO has authority to decide
WHY negotiate (decide what you want)
HOW to negotiate

Win-lose
Win-win
High or low emotions
*Latin Americans and Spanish show their emotions through negotiation
*Germans are more reserved

First stage of the actual negotiation process
*No focus on business
*Partners get to know each other
*Social and interpersonal exchange
*Duration and importance vary by culture

Parties exchange task-related information and first offer
*Task-related info: actual details or the proposed agreement
*First offer: first proposal by parties of what they expect from the agreement

Hard bargaining begins. Each side in the negotiation attempts to get the other side to agree to its position and to give up some of its own.
– Heart of the negotiation process
– Numerous tactics used

Promises & Threats

Body posture, facial expression, hand gestures, and the use of personal space are a natural part of international negotiations

Negotiation tactics that pressure opponents to accept unfair or undesirable agreements or concessions

Deliberate deceptions or bluffing–point out what you believe is happening
Stalling–do not reveal when you plan to leave
Escalating authority–clarify decision making authority
Good-guy, bad-guy routine–do not make any concessions
You are wealthy and we are poor–ignore the ploy
Old friends–keep a psychological distance

Sequential approach– each side reciprocates concessions
Holistic approach– each side makes very few concessions until the end of the negotiation

Competitive negotiation- each side tired to give as little as possible and tries to “win” for its side
*the negotiation as a win-lose game
Problem solving- negotiators seek out ground that is beneficial to both companies’ interests
* Search for possible win-win situations

Bring small, sensible gifts

Yes! This allows them to be more skillful and improves the likelihood that they will be able to conclude the negotiations and reach a deal that is beneficial for their organization

Goals-contract v. relationship
Attitudes-win/lose v. win/win
Personal styles-informal v. formal
Communications-direct v. indirect
Time sensitivity-high v. low
Emotionalism-high v. low
Agreement Form-specific v. general
Agreement Building-bottom up v. top down
Team Organization-one leader v. consensus

A strong emphasis on relationships.
High commitment, loose contracts.
A long, slow deal-making process.
Widespread opportunism