01 j = managing political risk n negotiation

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Managing Political

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INTERNATIONAL NEGOTIATION INTERNATIONAL NEGOTIATION

More complex than domestic More complex than domestic negotiations

negotiations

Differences in national cultures and Differences in national cultures and differences in political, legal, and

differences in political, legal, and economic systems often separate economic systems often separate

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STEPS IN THE INTERNATIONAL STEPS IN THE INTERNATIONAL

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STEP 1: PREPARATION

STEP 2: BUILDING THE RELATIONSHIP

STEP 3: EXCHANGING

INFORMATION/FIRST OFFER

STEP 5: CONCESSIONS

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STEP 1: PREPARATION STEP 1: PREPARATION

Is the negotiation possible?Is the negotiation possible?

Know what your company wants Know what your company wants Know the other side Know the other side

Send the proper teamSend the proper team AgendaAgenda

Prepare for a long negotiation Prepare for a long negotiation EnvironmentEnvironment

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DIFFERENCES IN CULTURES IN DIFFERENCES IN CULTURES IN KEY NEGOTIATING PROCESSES KEY NEGOTIATING PROCESSES

Communication styles—direct or Communication styles—direct or indirect

indirect

Sensitivity to time—low or highSensitivity to time—low or high

Forms of agreement—specific or Forms of agreement—specific or general

general

Team organization—a team or one Team organization—a team or one leader

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STEP 2: BUILDING THE STEP 2: BUILDING THE

RELATIONSHIP RELATIONSHIP

No focus on businessNo focus on business

Partners get to know each otherPartners get to know each other Social and interpersonal mattersSocial and interpersonal matters

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STEP 3: EXCHANGING STEP 3: EXCHANGING

INFORMATION AND THE FIRST INFORMATION AND THE FIRST

OFFER OFFER

Task-related information is Task-related information is exchanged

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STEP 4: PERSUASION STEP 4: PERSUASION

Heart of the negotiation processHeart of the negotiation process

Attempting to get other side to Attempting to get other side to agree to a position

agree to a position

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VERBAL AND NONVERBAL VERBAL AND NONVERBAL

NEGOTIATION TACTICS NEGOTIATION TACTICS

PromisePromise

ThreatThreat

RecommendationRecommendation

WarningWarning

RewardReward

PunishmentPunishment

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OTHER NEGOTIATION TACTICS OTHER NEGOTIATION TACTICS

CommitmentCommitment

Self disclosureSelf disclosure

QuestionQuestion

CommandCommand

NoNo

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EXHIBIT 3-4: FREQUENCIES OF VERBAL NEGOTIATION EXHIBIT 3-4: FREQUENCIES OF VERBAL NEGOTIATION

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“

Dirty tricks are negotiation tactics Dirty tricks are negotiation tactics

that pressure opponents to accept that pressure opponents to accept

unfair or undesirable agreements or unfair or undesirable agreements or

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PLOYS/DIRTY TRICKS - PLOYS/DIRTY TRICKS - POSSIBLE RESPONSES POSSIBLE RESPONSES

Deliberate deception - point out what is Deliberate deception - point out what is

happening happening

Stalling - do not reveal when you plan to Stalling - do not reveal when you plan to

leave leave

Escalating authority - clarify decision Escalating authority - clarify decision

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Good guy, bad buy routine - do not Good guy, bad buy routine - do not

make any concessions

You are wealthy and we are poor - You are wealthy and we are poor -

ignore the ploy

Old friends - keep a psychological Old friends - keep a psychological

distance

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STEPS 5 AND 6: STEPS 5 AND 6:

CONCESSIONS AND CONCESSIONS AND

AGREEMENT AGREEMENT

Final agreement: The signed Final agreement: The signed

contract, agreeable to all sides contract, agreeable to all sides

Concession making requires that Concession making requires that

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STYLES OF CONCESSION STYLES OF CONCESSION

Sequential approach - consider each Sequential approach - consider each issue as a separate point

issue as a separate point

Each side reciprocates concessionsEach side reciprocates concessions

Holistic approach - more common in Holistic approach - more common in Asia

Asia

Concession making begins after all Concession making begins after all issues are discussed

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BASIC NEGOTIATION BASIC NEGOTIATION

STRATEGIES STRATEGIES

CompetitiveCompetitive

– The negotiation as a win-lose game_{The negotiation as a win-lose game}

Problem solvingProblem solving

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COMPETITIVE OR PROBLEM SOLVING COMPETITIVE OR PROBLEM SOLVING

INTERNATIONAL NEGOTIATION INTERNATIONAL NEGOTIATION

Cultural norms and values may Cultural norms and values may predispose some negotiators to predispose some negotiators to

one approach one approach

Most experts recommend a Most experts recommend a problem solving negotiation problem solving negotiation

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THE SUCCESSFUL INTERNATIONAL THE SUCCESSFUL INTERNATIONAL

NEGOTIATOR: PERSONAL NEGOTIATOR: PERSONAL

CHARACTERISTICS CHARACTERISTICS

Tolerance of ambiguous situations Tolerance of ambiguous situations

Flexibility and creativity Flexibility and creativity

HumorHumor

Stamina Stamina

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Curiosity Curiosity