Discuss the strategies that negotiators need to consider in international business.

Question

What will be an ideal response?

Answer 1

While negotiators do not need to consider factors such as culture and language in the domestic environment, they need to think about such differences in international environments. Differences in culture and business customs can affect the negotiation process. Each negotiator is partially affected by his own culture and customs even before starting the negotiation process. Thus, each negotiator then faces the risk of misinterpreting the other side’s attitude or motives if he evaluates the other side solely on the basis of the norms of his own culture

Preparation
With this in mind, the best strategy for successful negotiating is good preparation (Zhang and Zhou, 2009). Knowing as much as you can about your partner’s position and your own will help reduce anxiety, as well as provide you with more insight towards achieving your goals. As with all negotiations, stress and pressure are the real enemies to making a good deal. Stress makes us tired, and when we are tired, we make more mistakes. It is important to analyse every offer for what it is worth, rather than accept or reject it because we feel the need for some kind of conclusion. Negotiation teams need to try to learn about the other party, focusing on issues such as the other party’s culture, organization’s culture, and their options.

Acquiring information about the counterparties
An acute knowledge of your negotiating partner is also very important (Galinsky et al., 2008). This includes information about the company as well as political, social, cultural and strategic factors. These things make up the background against which negotiations are played out. A more complete understanding of the environment in which your partner operates will help you understand their position and lend insight into how they will approach negotiations.

Acquiring information about the country and the business environment
Knowing the political climate of a country is extremely important, not only because it will affect the stability of your investment but also because it shows how a foreign partner might approach a binding agreement. In countries without a strong legal system, a company may see a written agreement as an indication of intention. Trying to hold a company to an agreement in a country with a weak legal system may be difficult or impossible. Moreover, in many countries in which businesses cannot rely on legal recourse, business culture may insist on more rapport-building efforts to establish a relationship.

In preparing for negotiations, negotiators have to learn about the other parties especially on essentials such as the type of decision making process, the accepted norms in presentations and the negotiation strategy commonly employed.


Creating alternatives and maintaining flexibility
Creating alternatives ahead of time is one way of remaining flexible. Your ability to appear willing to do business and work toward a mutually acceptable agreement will be easier if you know your position ahead of time, have a good idea of the other party’s position, and can readily present alternative solutions to expected impasses. Anticipate things now because it will be harder to come up with solutions under pressure. Keep asking yourself, “What should we do if they won’t accept this?”