CHAPTER 3 INTERNATIONAL NEGOTIATION AND CROSSCULTURAL COMMUNICATION

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Managing Political Risk and Negotiations
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INTERNATIONAL NEGOTIATION

• More complex than domestic negotiations
• Differences in national cultures and differences
  in political, legal, and economic systems often
  separate potential business partners

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STEPS IN THE INTERNATIONAL NEGOTIATION PROCESS
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STEP 1 PREPARATION
STEP 2 BUILDING THE
RELATIONSHIP
STEP 3 EXCHANGING
INFORMATION/FIRST OFFER
STEP 4 PERSUASION
STEP 5 CONCESSIONS
STEP 6 AGREEMENT
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STEP 1 PREPARATION

• Is the negotiation possible?
• Know what your company wants
• Know the other side
• Send the proper team
• Agenda
• Prepare for a long negotiation
• Environment
• Strategy

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DIFFERENCES IN CULTURES IN KEY NEGOTIATING
PROCESSES

• Communication stylesdirect or indirect
• Sensitivity to timelow or high
• Forms of agreementspecific or general
• Team organizationa team or one leader

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STEP 2 BUILDING THE RELATIONSHIP

• No focus on business
• Partners get to know each other
• Social and interpersonal matters
• Duration and importance vary by culture

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STEP 3 EXCHANGING INFORMATION AND THE FIRST OFFER

• Task-related information is exchanged
• First offer

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STEP 4 PERSUASION

• Heart of the negotiation process
• Attempting to get other side to agree to a
  position
• Numerous tactics can be used

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VERBAL AND NONVERBAL NEGOTIATION TACTICS

• Promise
• Threat
• Recommendation
• Warning
• Reward
• Punishment
• Normative appeal

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OTHER NEGOTIATION TACTICS

• Commitment
• Self disclosure
• Question
• Command
• No
• Interrupting

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EXHIBIT 3-4 FREQUENCIES OF VERBAL NEGOTIATION
BEHAVIORS
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DIRTY TRICKS IN INTERNATIONAL NEGOTIATIONS

• Dirty tricks are negotiation tactics that
  pressure opponents to accept unfair or
  undesirable agreements or concessions

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PLOYS/DIRTY TRICKS - POSSIBLE RESPONSES

• Deliberate deception - point out what is
  happening
• Stalling - do not reveal when you plan to leave
• Escalating authority - clarify decision making
  authority

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• Good guy, bad buy routine - do not make any
  concessions
• You are wealthy and we are poor - ignore the ploy
  
• Old friends - keep a psychological distance

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STEPS 5 AND 6 CONCESSIONS AND AGREEMENT

• Final agreement The signed contract, agreeable
  to all sides
• Concession making requires that each side relax
  some of its demands

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STYLES OF CONCESSION

• Sequential approach - consider each issue as a
  separate point
• Each side reciprocates concessions
• Holistic approach - more common in Asia
• Concession making begins after all issues are
  discussed

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BASIC NEGOTIATION STRATEGIES

• Competitive
• The negotiation as a win-lose game
• Problem solving
• Search for possible win-win situations

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COMPETITIVE OR PROBLEM SOLVING INTERNATIONAL
NEGOTIATION

• Cultural norms and values may predispose some
  negotiators to one approach
• Most experts recommend a problem solving
  negotiation strategy

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THE SUCCESSFUL INTERNATIONAL NEGOTIATOR PERSONAL
CHARACTERISTICS

• Tolerance of ambiguous situations
• Flexibility and creativity
• Humor
• Stamina
• Empathy

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• Curiosity
• Bilingual