International Business Negotiation

International Business Negotiation Overview

• A seminar on international negotiation is scheduled for February and March 2024.
• The seminar includes: reading and presenting conclusions on Harvard negotiation strategies, a group discussion of a TED Talk on video by Mathieu Jouve Villard, and an individual end-of-course quiz.

Core Topics in International Negotiations

• Basics and framework conditions define the types of international business negotiations.
• Understanding negotiation strategies and tactics is crucial.
• Ethical and legal aspects need consideration.
• Acknowledging intercultural differences in thinking and communication styles is necessary.
• Being aware of leadership and negotiation styles is important.
• Decision making processes need to be navigated in international settings.
• Skills are necessary to deal with conflicts and crises in international negotiations.

The Basics of International Business Negotiations

• Thoroughly research and familiarize with the target market
• Include its culture, business customs, and legal frameworks.
• Understand the needs and expectations of the other party.
• Know the target country's legal and regulatory framework to assess the negotiation's impact.
• Be aware of international trade laws, intellectual property rights, and industry-specific regulations.
• Ensure effective communication using professional interpreters, if needed.
• Avoid misunderstandings by providing translated materials.
• Account for time zone differences when scheduling meeting times.
• Be flexible and accommodating to ensure comfortable participation for all parties.
• Conduct negotiations ethically and compliantly, following international standards and laws.
• Refrain from bribery, corruption, or unethical practices that may impair negotiations.

Framework Elements for International Business Negotiations

• Cultural sensitivity is essential.
• Demonstrate respect for cultural differences and avoid stereotypes.
• Building trust is crucial.
• Show respect for other cultures, maintain integrity, and be reliable.
• Different cultures have varying negotiation styles and approaches.
• Adapting to cultural norms and preferences is necessary.
• Explore win-win solutions and display patience.
• Understand the power dynamics and hierarchies within the other party's organization or country.
• This knowledge aids in navigating negotiations effectively.
• International negotiations may take longer which requires long-term focus for relationship building.

Conditions Impacting International Business Negotiations

• Assess political stability and potential risks in the negotiating country.
• Consider potential changes that could affect the business environment.
• Use communication technology for remote negotiations, including secure channels, document sharing, and video conferencing.
• Comprehend economic climate factors like currency exchange rates, inflation, and market trends.

Critical Concepts in Negotiations

• Negotiations occur daily in all walks of life.
• Negotiating skills are mastered with understanding and practice of the rules and strategies.
• The goal of power negotiating is to make the other party feel as though they won

The Negotiation Process

• Consists of three stages: beginning, middle, and end.
• Beginning involves clarifying objectives.
• Middle involves gathering/confirming information and sharing.
• End involves agreement through compromise.

The Four Variables in International Business Negotiations

• Power: Competition adds value
• Time: Incentive to reach agreement
• Knowledge: Diligent Research
• Leverage: Availability of all other resources

Power Negotiating Strategies for the Beginning Stage

• Reluctant buyer/seller
• Moon, stars, and sun
• Flinch
• The feel/felt/found technique
• First offer
• The vice technique

Stage Strategies for the Middle Stage

• Trade-off
• Set-aside technique
• Splitting the difference
• Referring to a higher authority

Final Stage International Business Negotiation Strategies

• Nibbling
• Good guy/bad guy
• The hot potato

Win/Win or Integrative Approach

• Focuses on the prospects for gains on all sides
• A strategy for reconciling positions.
• Results in stability
• Requires open and empathetic communication styles

Win-Lose or Distributive Approach

• Seeks maximum gains and imposes maximum losses on the other party.
• Results in inherent instability in outcomes

Integrative Approach for the Modern Negotiator

• A mix of win/win and win/lose strategies.
• Used where long term relationships are required
• Results in stability of the outcome

Achieving Stability in the Outcome

• Achieved by the focus on key objectives
• Achieved by fairness
• Achieved through flexibility
• Actively listening and compromising
• Including trade-offs and concessions
• Focus should be on the series of episodes
• Find an amicable agreement
• Avoid locking into narrow positions to facilitate better outcomes

Negotiation as a Way of Professional Life

• Negotiation is a long haul endeavor, not a competitive sport
• Every negotiation is an episode in an ongoing professional relationship.
• Treats the other party as a partner, not an opponent
• Includes bargaining and trust
• Requires mutual understanding
• Requires common, complementary interests and collaboration

Interest-Based Negotiations

• Concentrates on overall interests of all parties
• Results in fair, durable, meaningful commitment
• Requires authority and confidence in performance

Creating an Interest Map

• Requires the collection and listing all data
• Data includes a list of opposing stakeholders
• List should address interest in the outcome and the reasons

Negotiating the Conflict

• Includes defining the nature of the conflict
• Differential views of the nature of the conflict

Conflict Negotiation Process

• Requires identification of the conflict itself
• Utilizes strategies like annihilating, competing, avoiding, compromising, collaborating, and accommodating

Conflict Resolution Processes

• Can be constructive or destructive for business
• Optimal conflict levels are necessary
• Optimal levels prevent stagnation, stimulates creativity, release tension, and initiates change

Five Modes of responding to conflict

• Incorporates
• Collaborative
• Competitive
• Yielding
• Avoiding
• Compromising

Different Levels for Negotiation

• Separating the person from an issue
• Having a process for the use of objective standards
• Having a payment for the flow of negotiations
• Knowing how pay attention to the intangibles for both parties

Two Top-Level Negotiation Factors

• Rational decision making which includes
• Psychological (emotional) factors

Typical negotiator styles

• Aggressive
• Long-pauser
• Mocking
• Interrogator
• Cloak of reasonableness
• Divide and conquer
• Act dumb

Types of People in a Negotiation

• Hostile aggressive
• Complainers
• Clams
• Super agreeables
• Negativists
• Know it alls
• Indecisive stallers

Preparation for Negotiation

• Requires consideration of any stakeholders and their interests
• Requires knowledge of the sources of power in the negotiation
• Requires listing the available options open to both parties
• Review what strategy is best

Knowing Your BATNA

• Best Alternative To a Negotiated Agreement
• Includes identification of alternative strategies should negotiation fall through
• Determination of actual points for deals vs. the point at which one walks away

Metrics for an Effective Negotiator

• Requires measuring the power for both sides
• Requires considering stakeholders to both sides
• Assesses based on outcome and process factors
• Ethical and Legal Considerations
• Based on collaborative, mixed, or competitive factors
• The impact/risk is weighed for both sides

Ethical and Legal Aspects of International Negotiations

• Basics and framework conditions
• Negotiation strategies and tactics
• Ethical and legal issues
• Intercultural issues
• Leadership
• Decision making processes
• Conflict management

Role of Ethical and Legal Considerations in International Negotiation

• Ethical and legal aspects must be considered throughout the negotiation
• Notions of fairness and equity must be considered during negotiations
• Trust must be maintained between the two countries involved

The Impact of Globalization on Negotiations

• Globalization brings businesses and attorneys together
• Transactions isolate risk, facilitate local business transactions, and local ownership
• Globalization impacts information and communication
• Government changes its policies/regulation to keep pace with globalization trends

Culture to International Negotiations

• Ethical Considerations include
• Cultural differences
• Practicing Honesty
• Promoting fairness and equity

Consideration for Drafting and Reviewing Legality

• Familiarization with international trade laws
• Compliance with any data protection and privacy regulations
• Requires expert international contract law counsel
• Requires legal advice on jurisdictions

Consequences of unethical and illegal conduct

• There's a erosion of trust
• Compliance builds foundation
• Cultural Sensitivity is vital in international negotiations

Cultural Differences in Communication Styles

• Cross-Cultural vs. International vs. Multicultural vs. Intercultural Communication
• Considers the communication between different cultures

What is Intercultural Communications?

• It's the effective communication between clients, employees, workers, and people of all backgrounds
• Requires the management of non-verbal cues and thoughts

Importance for Intercultural Communication

• Needed for Marketing
• Critical for managing international business teams,
• Necessary for overall international business success

Globalization

• Reduction of barriers between nations

Trends in Intercultural Communication

• Globalization
• Multicultural Workforce

Multicultural Workforce

• Refers to diversity in the workplace: age, gender, ethnicity, and physical ability

Communication Management and Increased Retention

• Reduces recruitment costs improving productivity and resolves more conflict in team environment

Best-Practices in Communication

• Avoid assumptions, jokes, slang, idioms;
• Use symbols, diagrams and other denotative tools.
• Show Respect and Understanding
• Have respect for local cultures

Avoid these Communication Pit-falls

• DO NOT apply the same approaches and techniques across different countries.
• DO NOT consider certain traditions backwards.
• DO NOT assume cultural differences become a point of conflict,
• DO NOT to ignore cultural differences,
• DO NOT avoid to take into account any language barriers.

Examples of Cultural Difference

• North Americans view eye contacts as an act of honesty while Asian do NOT.
• The thumbs up is view different around the world.
• Raising hand a sign of different in other countries

Conclusion of Intercultural Communication

• Diversity allows positive and negative influence to occur.
• Allows differences in order to to create equal opportunities for all

Types of Leadership and Negotiation Styles

• Involves The use of power and influence to direct the activities of followers towards goal achievement

Understanding Power

• "Effective leaders" show ability to influence and resist others when they wanted return

Types of Power

• Organizational: Legitimate, Reward, Coercive
• Personal: Expert, Referent

Organizational Politics

• Political behavior to influence others

Organizational Factors Increasing Political Activity

• Uncertainty on the organizational chart
• Uncertainty with a high-pressure environment

Conflict Resolution Leadership Methods

• Knowing the right style is appropriate and different at any time
• Be careful on how your are with your regard

Management Negotiation Methods

• Requires an understanding on how it all works

Leadership Styles

• Kurt lewin determined 3 top categories for leadership

Top 3 Leadership Styles

• Autocratic
• Participative
• Delegative

Autocratic

• Centralization of authority with tight control over others.
• Quick decisions
• Subordinates follow directives

Participative or Democratic

• Decentralization and delegation of others
• Democratic leaders worry about people and work

Free rein

• Laissez Faire
• Managers give complete freedom to their subordinates for greatest productivity and opportunity. Trust and Honesty in Leadersship
• Must be consistent
• Have to take advantage to learn what others think
• Leaders much be Honest

Important Leadership Behavior

• Most important to believe in: integrity, trust others and give it to them first. They must express goals and confidence always.

Leaders Encourage Thinking

• Allows questions to asked in various parts and can use it to complete assignments

Important Behavior To Build for Team Improvement

• Most important for coaching and seeing developing from all areas of life and the environment

Reward Achievements

• Allow support in exchange all effort most important

Decision-Making in International Negotiations

• Effective decision-making in international negotiations leads to successful outcomes.

Clear Objectives in Decision-Making

• Start by stating goals and ensure everyone understands what must be achieved

Information and Analysis in Decision-Making

• Collect accurate information before and during negotiations such as market research and culture

Decision-Making Strategies

• Utilizes:
• analytical:cost-benefit analysis, decision trees;
• intuitive: instinct;
• consensus: agreement through dialogue

Reflection and Evaluation

• Asseses on what work and allows for for improvement of various skills

Dealing with Conflicts and Crises

• Conflict: disagreement. Crisis: emergency
• Ethical Considerations is most import key of international negotiations.

There are Four Common Types of Conflict

• Includes:
• Interpersonal
• Intrapersonal
• Intergroup
• Organizational

Causes of Conflict in General

• Can be caused by miscommunications, a lack of understanding, assumptions or poor communications

General Prohibitions for Conflict Negotiation

• Effective Communication
• Active Listening- Empathy is most important
• Conflict resolution = identifying common ground with encouragement and perspective for all

Common Crises

• Natural disasters
• Public health emergencies
• Financial crises
• Reputation crises
• Workplace emergencies

Management of Conflict Should Look Like

• Building open communication and cooperate action with resolution and regulation of what policies.