International Business Negotiation

International Business Negotiation Overview

• The seminar on international negotiation takes place in February and March 2024.
• The course involves reading and presenting on Harvard negotiation strategies and discussing a TED talk by Mathieu Jouve Villard.
• The course concludes with an individual quiz.

Key Areas in International Negotiations

• Essential to understand the basics and framework conditions for negotiations, including different negotiating forms.
• Negotiation strategies and tactics play a crucial role.
• Ethical and legal considerations are important.
• Intercultural differences in thinking and communication should be considered.
• Awareness of one's leadership and negotiation styles is also important.
• Decision-making processes are key in international negotiations.
• Dealing with conflicts and crises that arise is vital.

The Basics of International Business Negotiations

• Thorough preparation is required, including researching the target market's culture, business customs, laws, and regulations.
• Understanding the other party's needs and expectations is also important.
• Negotiators should understand the target country’s legal and regulatory frameworks, including trade laws and intellectual property rights.
• Language can play an important role.
• Use professional interpreters for high-stake negotiations.
• Translate materials to avoid potential misunderstandings.
• Considering time zone differences when scheduling meetings and being flexible is important.
• Conduct negotiations ethically and in compliance with international standards and applicable laws.
• Bribery, corruption, and unethical practices should be avoided.

Framework for International Business Negotiations

• Cultural sensitivity is essential.
• Be respectful and mindful of cultural differences, stereotypes should be avoided, and one should be open to diverse perspectives.
• Establishing trust is crucial by demonstrating respect, integrity, and reliability.
• Different cultures have varying negotiation styles and approaches, so adapt strategies accordingly.
• Consider exploration of win-win solutions, building relationships, and displaying patience.
• Understand the power dynamics and hierarchies within the other party's organization or country.
• International business negotiations may take longer, so patience and a long-term focus are necessary.

International Business Negotiation Conditions

• Assess the political stability and potential risks of the country of negotiation.
• Consider future potential changes affecting the business environment.
• Use communication technology to facilitate remote negotiations, ideally video conferencing with secure channels.
• It's important to understand the target country's economic climate, including currency exchange rates and market trends.

Critical Concepts in Negotiation

• Negotiation happens every day in all situations.
• Negotiation can be mastered through understanding its basic rules, strategies, and practices.
• Power negotiating involves motivating the other party in a way that advances the negotiator's objectives while making them feel like they've succeeded.

The Process of Negotiation: Three Stages

• Beginning: Clarify objectives.
• Middle: Gather, confirm, and exchange information.
• End: Achieve agreement through compromise.

Four Variables in Negotiation

• Power
• Time
• Knowledge
• Leverage

Power Factors in Negotiation

• Competition increases the value.
• The written word adds credibility and authenticity.
• Time creates an incentive to reach an agreement.
• Money provides obvious resources.
• Persuasive capacity aids the process
• Commitment strength is key.

Time in Negotiation

• Human nature is affected by deadlines.
• Timelines impact choices.
• Risks increase for concessions during hurried negotiations.

Knowledge Factors in Negotiation

• Diligent research is key.
• Gathering information is important.
• Priorities need to be established.
• Deadlines should be noted.
• Real needs and organizational pressures need to be identified.

Leverage Factors in Negotiation

• Availability of other resources.
• Quality of what is being offered.
• Power within the negotiation.
• Financial risk and reward involved.
• Marketability/Notoriety.

Power Negotiating Strategies - Beginning Stage

• Projecting an air of reluctance from the buyer or seller.
• Promising the moon, stars, and sun.
• Showing surprise or shock.
• Using a “feel, felt, found” technique relates to the other party's feelings.
• Making the first formal offer to guide the negotiation.
• Employing the “vice technique” to show mild disappointment.

Negotiation Strategies - Middle Stage

• Making Strategic Trade-Offs.
• Set-Aside Techniques.
• Splitting Differences.
• Referring to Higher Authority.

Ending Strategies in Negotiation

• Nibbling and securing minor concessions at the end.
• Good Guy/Bad Guy: Using a pair of negotiators, one appearing reasonable (good guy) and the other difficult (bad guy).
• Hot Potato involves introducing a controversial topic.

Negotiation Approaches

• Integrative Approach: Focuses on prospects for joint gains, reconciling positions, and open empathetic communication.
• Distributive Approach: Goal is to seek maximum gains and maximum loss to the opponent, involving inherent instability.
• Mixed Approach: Integrates win-win and win-lose strategies for long-term relationships. Stability is needed.

Achieving Stability in Negotiation Outcomes

• Focus on key objectives from the start, avoid ancillary points that can be destructive.
• Maintain fairness.
• Incorporate flexibility.
• Listen and compromise to make mutually agreeable resolutions.
• Be prepared to make trade-offs and concessions.

Principles of Negotiation

• Negotiation is a series of episodes, not a competitive sport.
• It’s important find and reach agreements that allow both sides to win.
• Locking into a position may narrow the range of outcomes.
• Short-term tactics can be counter-productive.
• Feeling like a loser decreases the likelihood of commitment and fulfilment.
• Treating a counterpart as a partner, not an opponent, improves collaboration.
• Every negotiation is an episode in an ongoing relationship where bargaining and trust are essential.
• Seek mutual understanding to build a lasting relationship
• Interest-Based Negotiations concentrate on the interests of both parties.

Create an Interest Map

• Compile a list of opposing stakeholders and their interests.
• Identify the interests in the outcomes & potential hot buttons.
• Outline the rationale behind the process.

Conflict Resolution

• It is important to define, differentiate views, and understand the conflict process.
• Conflicts can also be managed by annihilating, competing, avoiding, compromising, collaborating, and accommodating.
• Conflict can be constructive or destructive.
• An optimal level of conflict prevents stagnation, stimulates creativity, releases tension, and initiates change.
• 5 modes of responding to conflict consist of collaborating with a win/win, competing into win/lose, yielding, avoiding, and compromising.
• Negotiation should separate the person from the issue, use objective standards, pay attention to the flow, and recognize intangibles.
• Rational decision-making combined with psychological awareness impacts negations.

Types of Negotiators

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

Types of People

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

Preparing for Negotiation

• Identify whose interests are at stake.
• Outline what the interests are.
• Understand the source of power.
• Determine the best options.
• Decide what the best strategies are.

Key Considerations for Negotiators

• Know your BATNA (Best Alternative To a Negotiated Agreement).
• Identify alternative strategies.
• Determine deal points and walk-away points.

Effective Negotiators

• They recognize who has the power.
• They acknowledge the stakeholders.
• They understand if it is about the outcome, the process, or both.
• They are able to define what effectiveness means.
• Ethical and legal considerations are a must.
• They can define if collaborative, competitive or mixed approaches are most effective.
• They recognize how wide the impact might be.

Ethical and Legal Aspects of Negotiations

• Ethical and legal components are critical for successful, sustainable agreements.
• Ethical considerations include fairness, equity, and honesty.
• Upholding ethical standards builds trust in cross-cultural interactions.
• Agreements must be enforceable and comply with relevant laws.
• Adherence to international business law & trade regulations is crucial.

Globalization Impacts on Negotiation

• Globalization brings businesses and legal providers together.
• It also enables lawyers and businesspeople to facilitate local transactions.
• National governments have introduced regulations to benefit from globalization.

Ethical Negotiation Focuses

• Conducting business ethically across borders relies on careful consideration of ethical principles and the law.
• Cultural differences have an influence on negotiations.
• Maintaining ethical standards through honesty.
• Promoting fairness and equity for mutually agreeable resolution.
• Protecting from copyright violations.

Legal Considerations

• Familiarize with trade regulations.
• Draft contract in legal language.
• Safeguarding sensitive data transfer.

Unethical/Illegal Conduct Consequences

• Damaged reputations.
• Legal repercussions.
• Jeopardized partnerships.
• Unsuccessful outcomes.

The Impact of Culture

• The need to be aware of cultural backgrounds, thinking processes and varying communication styles.
• Be cognizant of how history, education, social background, ethnicity, religion, ecology and technology might impact a negotiation.
• Identify if communication style is cross-cultural, international, multicultural or intercultural.
• Remember that intercultural communication refers to effective communication between people of different cultural backgrounds.
• Recognize there is a need for global marketing campaigns and international business growth.
• Identify trends for globalization and multicultural workforces.

What is Globalization

• Reduction and removal of barriers between national borders, services, capita and labor.
• Multicultural workforce refers to the changing age, gender, ethnicity and physical ability and race of employees.
• As shown in 2008, there were 922 million international tourist arrivals with growth of 1.9%.

Staff Management

• Lower retention.
• Increased productivity.
• Resolutions for conflicts.

Dos for Intercultural Communication

• Investigate cultures.
• Take into account diversity.
• Follow through with action.
• Communicate in line with the intended audience.
• Be understandable.

Don’ts For Intercultural Communication

• Using universal approach.
• Disregarding the source of the communications, particularly for sensitive issues.
• Neglecting cultural differences.
• Overlooking language barriers.

Examples of Intercultural Differences

• Direct eye contact can be a sign of honesty in North America and disrespect in Asia.
• Thumbs up can mean good, and considered rude in many Islamic countries.
• Raising a hand can request permission in Asia, and an indication to stop in parts of Europe.

In Conclusion

• Diversity is a challenge that can lead to equal-employment.
• Understanding can lead to diverse perspectives.

A Leaders Impact on Success

• Consider power dynamics and the flow of communication.
• Think about an "effective leader" & be cognizant of their skills.
• Remember that leaders can use influence positively and negatively within an association.

Five Conflict Resolution Styles

• Leaders must be appropriate in separate circumstances to ensure success during a negotiation.
• They must be highly cooperative to address the concerns of others.
• Lewin's leadership framework can influence people and can help the decision-making process.
• There should be awareness of autocratic participatory and delegative skills amongst the leaders.

Additional Leadership Styles

• When a leader in an autocratic, it is also known as leader centered style.
• When a leader is participatory, the human role is recognized.
• A decentralized leader means that high authority to his subordinates.
• Subordinates may get guidance and support.
• It includes consistent trust.
• The most important values and beliefs need to be considered.
• Innovative-thinking is key.
• People must be engaged in thinking and communication.
• Rewarding achievement by clarifying expected outcomes.

Negotiation Techniques

Distributive bargaining with win-lose is one method. Integrative bargaining can lead to mutual respect.

Internal Negotiations

• Reduce uncertainty.
• Take part in the decision-making to help with organizational skills.
• Recognize the levels of strain when faced with increased task performance.
• Follow the three models of influence: Most, Moderately, and Least Effective.
• Ensure you create an environment of trust and mutual collaboration.

Effective Decision-Making

• Is critical, therefore it is key to:
• Recognize clear objectives.
• Adapt intuitive decision-making.
• Evaluate information and analyses effectively that can lead to strong strategic planning.
• Have effective processes for collaboration.

Steps to Resolving Conflict

• Be a good communicator.
• Mediate and negotiate effective resolutions.
• Develop conflict resolutions by identifying common ground and seeking understanding with diverse perspectives.
• Be prepared to protect against natural issues that can damage business.
• Proactive crisis management.

Proactive Crises

• Building a culture of open communication and cooperation.
• Developing conflict resolution and crisis management policies.
• Training and empowering employees.
• Incorporating regular evaluation and improvement.