Negotiaiton

7/29/2019 Negotiaiton

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INTRODUCTION

With the globalization and cross country business activities, negotiation proficiency has turned

into a basic prerequisite for every venture between two or more businesses. Culture is defined

as a set of shared and enduring meanings, values, and beliefs that characterize national, ethnic,

or other groups and orient their behavior. Culture shapes societies, and that shaping comes

from their similar life experiences and interpretations of what those experiences meant. It

helps people to set up priorities and establish rules for behavior.

Figure 1 : Impact of Culture on Negotiation

PRE-NEGOTIATION PHASE

When considering pre-negotiations it is necessary to place it in the context of the whole

negotiation process. Pre-negotiations provide parties an opportunity to approach and to be

involved in the managing of significant issues, including conflicts, without risk of a formal

commitment. This allows parties to prepare themselves for a possible negotiation process


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whilst not being bound to any decisions or actions, and so providing a way of avoiding formal

negotiations which may be counterproductive or useless to parties involved.

Cultural differences cause four kinds of problems in international business negotiations:

Language Nonverbal behaviors Values Thinking and decision-making processes

For Negotiation to be successful, a negotiator must put himself in other partys shoes in order

to understand them. Culture awareness is not just knowing the part of the culture, it is about

knowing how to deal with the culture and how to do a long term and successful deal.

An understanding of the cultural differences can prevent misunderstanding between individuals

and thus create mutually beneficial business relationships. It is evident that culture plays an

important role in international business negotiations. Its influence can make or break a

transaction.

During Pre-Negotiation phase the negotiation strategy should be:

First, in addition to analyzing the current issue that brought the parties tothe table, it is advisable to study the other negotiators culture and history.

Next, it is equally necessary that a negotiator be self-aware of his or herown cultural proclivities.

Finally, establishing a relationship with the other parties involved evenbefore the negotiations begin.


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DURING NEGOTIATION

Once we have done all our homework regarding the cultural influences of the party with whom

we have to negotiate, we have to ensure that all our preparations come good during the

negotiation process. Many a times during negotiations, both the parties get so much involved in

the business aspect of the deal that they get a little carried away in terms of winning their own

terms of agreement and they end up giving little importance towards the issues related to a

third party. This third party can be anybody. It maybe a group of employees from our own

organization, employees from our counter partys organization or any other informal/formal

group operating outside the deal but has significant impact on the deal. These parties have

issues because their cultures may not match with that of the other party which eventually may

lead to conflicts in the way work is done.

So, once these issues are identified before the negotiation process, parties should ensure that

these issues are duly addressed during the negotiation process. Following steps might be

followed by the parties during the negotiation process to remove all the cultural differences

that may crop up after the deal:

Identifying the Parties and the problem involved

Parties who are negotiating must first identify carefully all the parties which will be affected by

the deal being discussed. The reasons why they will be affected must also be clearly articulated

so that they can be addressed effectively.

Clarification of the Problem

The problem to be addressed must be thoroughly clarified by the parties involved because

people from different cultures interpret the same problem differently. This kind of

misunderstanding can create an even bigger problem.


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Involvement of these parties

One of the most effective way of addressing cultural issues during negotiations is to involve the

aggrieved party/parties in the negotiation process. For example a particular deal may involve

exchange of employees from one country to another (very common in IT companies). This

exchange will also involve cultural issues as an Indian may find it difficult to get himself/herself

acquainted to Chinese culture. So, if the employee who has to travel to another country is also

allowed to take a little part in the negotiation process, it will be very nice for the deal to be

effective. This strategy is not always recommended as involving every other individual in a deal

may create problems but to the extent possible, their views should be incorporated in the

negotiation.

POST NEGOTIATION

Making workforce aware and acknowledge cultural differences:

The negotiators should be well acquainted with the cultural differences of the two parties. One

might be a strong believer of open discussions in large groups and the other might prefer a one

on one. Their perception of a problem at hand and outlook of a feasible solution might be

completely different because of their culture. Both should come up with a system that puts

both the parties at ease while discussing. This will lead to better group dynamics and favourable

outcomes of the negotiation.

Awareness of standard operating procedures:

The two parties who have entered a negotiation and plan to work together in the future should

be well aware of each others policies, corporate culture, the way they communicate, the

differences in their organizational values. One party might be a strong believer in establishing a

long-term relationship with customers while the others concern might only be quality and cost.

The way the two parties communicate: whether written or verbal.


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Integrating learning in training programs:

Whatever has been the learning from the negotiation should be incorporated in developing

customized training programs that will help in intercultural communication in the future.

Trainees should be strongly motivated to learn these skills because of clear connection between

these skills and their teams productivity.

Making required changes in company procedures:

The competencies and skills learned by experiencing the resolution process can be

institutionalized in training, evaluation and reward systems. All learnings should be well

documented. Cross-cultural teams should be formed to better equip the organization in future

negotiations.

Developing efficient and transparent channels of communication:

There should be adequate and more efficient communication between the two parties. This will

increase transparency and strengthen relationships for any future negotiation. The liaison

should work in coordination with both the parties so that flow of information is smooth and

they can respond to each others needs effectively.

Difficulty in ending a deal:

Sometimes, if a deal falls apart, it takes some behind-the-scenes negotiation on the part of a

local law firm to end a contract, an outcome that demands local counsel well versed in the

intricacies of local culture. Many countries' legal systems are corrupt or controlled by local

political powers. In short, successful cross-border negotiators begin by discarding home-market

presumptions and developing a clear map of the players who are likely to influence the formal

and informal decision process. Only when you know exactly who these players are can you

develop a strategy.

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Negotiaiton