Negotiation Journal - Research Paper Example

?Q.1Negotiation Strategies Negotiation refers to a dialogue between people, parties or countries with an intention to bargain for something; reach anunderstanding; resolve a situation; gain advantage; produce an agreement on courses of action to be taken; or create outcomes to satisfy interest of a given group or parties, which got involved in a negotiation process. Often, negotiation is aimed at arriving at a compromise. However, each party to a negotiation wants to get the best deal from the other. There are different negotiation strategies. They include win-win strategy, win-lose strategy, lose-win strategy and lose-lose strategy. There are different pointers of what strategy to adopt in an impending negotiation activity. Before choosing a given strategy to use in a negotiation, it is important to consider three main factors. The first factor is extent of valuation of a product, issues or services that cause negotiation to happen. If a given party values an issue, product or service under consideration extremely than relationship, then a win-lose strategy is appropriate. In a win-lose negotiation strategy, relationship is not important and one party of the negotiation will wish to win and does not care of the other party. Win-lose strategy also applies when a party is discussing a fixed position or idea. It is applicable when a price of a product or an idea is fixed. Second factor to consider is the relationship between negotiators. If both parties perceive that they need each other after the negotiation, then win-win negotiation strategy is the most appropriate. In a win-win negotiation strategy, both parties to a negotiation must cooperate, participate or compromise part of their interest to accommodate each other. Both parties to a negotiation agree and discus mutually profitable actions to take. Consequently, both parties benefits after the negotiation. For example, a seller and buyer may sit and discus on how both parties can benefit after considering the market size of the product and cost of producing a product or an item and agreed on a specific price. The third factor to consider when choosing a negotiation strategy is the culture of both parties. In a cross-cultural business negotiation, it is important to adopt a business negotiation strategy that allows the client to be comfortable and freer with the other. Some cultures may prefer win-win strategy while others may prefer win-lose strategy. Win-win negotiation strategy is always possible. It is also one of the most preferred business negotiation strategies available. The purpose of two parties entering into a negotiation is always to benefit from one another. Therefore, it is possible to pursue win-win strategy especially when both parties can cooperate and compromise without incurring any loss. For example, a supplier may agree to reduce a price by a certain percentage and retain some substantial profits. Both parties win because a buyer saves some money and supplier builds a favourable business relationship. At times, win-lose negotiation becomes the only negotiation strategy viable. This is often applicable where a situation or price product is fixed and cannot be changed further because it will result in a loss. Therefore, there will be no room for adjustments and the other party can either agree to the terms of the situation as they are or forfeit the matter or the product altogether. Win-lose negotiation is always confrontational and each party tries to take advantage of the other party. The forty-eight laws of power can be helpful when crafting a distributive negotiation strategy and tactics. This applies when the other party to a negotiation is confrontational, short sighted, stereotype, aggressive and uncooperative. Forty-eight laws of power can be useful in disarming the other party’s uncompromising stance. However, if the other party is genuinely willing to cooperate, compromise and is interested in long-term relationship, it may not be an appropriate strategy. Therefore, negotiation strategies should be used according to the nature of an issue under discussion. Culture influences the overall strategy of a negotiator. A culture refers to behavioral patterns, beliefs, arts and thoughts that can be transmitted socially from one person to another. Willingness to trust one another varies among people of different national cultures. For example, westerners are more likely to trust people swiftly on the assumption that people deserve to be trusted unless they proved otherwise. On the other hand, Easterners are less trusting and believe in establishing long term relationships. I am flexible, sensitive, tenacious and patient negotiator who prefers a win-win strategy. In addition, I am open minded, articulate, persuasive and undetached. As a result, I am able to negotiate a wide variety of issues across a number of cultures that I am acquainted to. I prefer win-win strategy because I am always interested in long-term relationships that are more productive in the end. Win-win strategy is the only practical negotiation strategies that can help parties gain some competitive advantage in the market place. This strategy should often be applied in a sensible manner in the current global market place. According to Fisher and Ury (1993), a number of strategies and tactics can be used in any given negotiation. They include not rejecting an offer immediately, not engaging in unnecessary arguments during negotiation, reframing ideas or propositions, playing a soft ball and educating the other party on the cause of action decided by the other party. Win-win strategies and tactics learned include the collaboration and cooperation, compromising, satisfying the needs of the other party, being hard on the problem but soft on people and making proposal consistent with the values of the other negotiating party. In addition, it is good to use a specific criteria based on agreed principles to arrive at a negotiation agreement. Win-lose strategies and tactics learned include the use of threats, refusing to negotiate, use of lock-in tactics, calculated delay, making extreme demands and applying positional pressure tactics among others. The above tactics makes one appear ruthless in his or her business approach, which makes the other party timid. This is because the party to a negotiation does not care if he or she loses. In addition, the party to the negotiation is not interested in long term relationship. Business Case: According to Majumdar (2010), Dinesh Keshkar who is the president of Boeing India successfully negotiated a deal to sell 10 Boeing Co’s C-17 Globemaster III planes to the United States of America. Dr. Dinesh Keshkar applied win-win negotiation strategy to win the United States of America biggest tender. This is because he was interested in building a long term relationships between the company and its customers (United States Defense Department). Some of the strategies that the Dr. Keshkar applied during the negotiation were collaboration and cooperation, a tactic that stipulated that the relationship between India and United States would deepen after deal. He solicited the assistance of India’s government in negotiating the deal. This was most appropriate because United States wishes to trade with India for global political reason following strengthening China’s military might. Dr. Dinesh Keshkar is a polished negotiator with diverse cultural experience and has helped secure sales deals in United States, Brunei, India, Indonesia, Malaysia, Maldives and Nepal. He is flexible, quick learner, insightful and keen to details. Therefore, he was able to fit into various cultural diversities. Finally, Dr. Dinesh Keshkar is highly learned and intelligent and he is sensitive to other people’s opinions and values. Though Dr. Dinesh Keshkar is considered a good negotiator, at times he is impatient and too aggressive. Consequently, he always places the other party to a negotiation in the defense of their ideas and issues. This creates tension and slow pace in the negotiation process. Furthermore, though he is perceived to use win-win negotiation, he is often uncompromising and confrontational. Q2. Cross-cultural aspects of international business negotiations Culture influences international business substantially. Cultural inclinations can either cement or break international business negotiation. This is because cultural differences impede effective flow of communication from one party to another. When culture between two parties to an international business negotiation clash, the negotiation automatically fails before it begins. Culture dictates thought patterns, personal space, relationships, time, competitiveness, individuality as well as social behaviour. Consequently, if a party to an international negotiation sense, observe or experience situations that negates their culture, they may feel that the other party is not willing to negotiate and they may fail to continue with negotiation. For example, some cultures demand punctuality and failure by the other party to be punctual may indicate that the party that arrived late to a negotiation may not be interested in the deal. Furthermore, some body cues may be insulting to other parties for a negation. A German negotiation team will feel offended if a person negotiating with them touches his or her forehead with an index finger. Germans consider touching forehead with an index finger an insult that indicates a person with fewer brains. Thus, to increase the chance of success of international negotiation, it is important for people in international business to understand the cultures of people they are dealing with to prevent them from sending negative or mixed communication signals to the other party to a negotiation. I posses a number of strengths and weaknesses in cross cultural negotiations. The strengths that I posses include flexibility, patience, sensitive to social cues, tenacious, creative, persuasive, undetached and insightful. In addition, I can easily trust and be trusted; forgive and be forgiven; and I have power to get things done as planned and get predetermined results. I am also sensitive to other people feelings, equipped with good communication skills and I can establish and maintain friendships. These strengths enable me to undertake some negotiations with trans-cultural friends and clients. On the other hand, I have a number of weaknesses in cross cultural negotiations. I do not understand cultural identity appropriately and I lack global consciousness. In addition, I can be confrontational and stereotype. I feel inadequate in managing cross cultural conflicts and leading cross cultural teams. Furthermore, I am inexperienced in international issues. These weaknesses are likely to impact negatively to cross cultural negotiation that I am likely to lead. However, I am reading widely and seeking advice to improve the situation. Cultural and emotional intelligence are two key components in any international negotiation. When a person is culturally and emotionally intelligent, he or she increases chances of successful international negotiation. I believe am emotionally intelligent. This is because I have the ability to understand, sense and apply the power of emotions effectively to influence the negotiation outcome. I am emotionally mature because I can face anxieties, fears, sadness, discontent and anger constructively. I am able to empathise with people of different cultures. This is because I am concern with how they feel; I am always ready to respect their perspectives; I value their difference and I have the capacity to trust them and be trusted. Furthermore, I can easily build mutual trust and handle disagreements constructively. Above all, I am able to create and sustain friendship over a long period. I also believe that I am not culturally intelligent. This is because I have narrow understanding of diverse cultural settings in various countries and I have less capacity effectively deal with people of diverse cultural realms. Therefore, these have raised cultural barriers and I cannot predict behavioral patterns of people from other cultures. This situation will be changed through continuous learning and experience with foreigners. However, I feel am culturally compatible because I can build relationships and add real value to it. I believe that cross cultural differences need to be dealt with appropriately. This is because by dealing with it, it enables one to comprehend the dynamics in international markets. Therefore, considering cultural differences helped to devise ways of learning cultures of potential parties to a negotiation, which will help promote positive cross cultural negotiation. One of the cultural-cross cultural components is body cues. Americans consider signaling with a middle finger an offensive while Germans consider touching ones forehead with an index finger during conversation an insult. Other factors are extremely important as culture in intonation business negotiation. The factors include foreign laws and negotiating environment. Foreign laws may not allow certain things to be done in its soil and negotiating team from other countries should respect that because infringing it results to legal actions. Negotiation environment is also important. Consider a country with unstable political environment. In such an environment, negotiation may be limited to certain issues only. This class has been extremely helpful. This is because it has enabled me to understand how culture dictates international business negotiation. I have realised the need for continuous training in international culture to enable me undertake international negotiation appropriately. Q3. The international legal and ethical aspects Before taking this class, I had rudimentary information about the legal and ethical issues that affect business globally. However, I did not understand how legal structures, licenses and permits, patents, copyrights and trademarks could influence the performance of international trade. Furthermore, I did know that ethical issues varied across different countries and regions. Different people in different countries view ethical issues such as creative accounting, insider trading, bribery (kickbacks), facilitation payments and discriminations as unacceptable actions and behaviours. Other ethical issues that varied across countries and cultures include use of sex in advertising, shilling, spam, bait and switch, green washing, dumping, price discrimination My level of experience and expertise was low but has increased significantly. I am now able to appreciate the culture of other people. The fact that different countries have different views on legal and ethical issues makes it extremely difficult to understand and cope with ethical challenges. This is because some legal and ethical aspects may be permitted in one country and not be permitted in another country. Therefore, it is important to study international issues carefully to prevent one from entering into problems with laws and morals of people from other countries. I do not accept bribery. Use of bribes in international business negotiations should not be accepted at all. This is because it results in unfair advantage whereby companies that offer bribes are likely to win tenders and contracts even if they do not have the means and capability to execute them. Meritocracy should be the guiding principle in international business negotiations. If an international lawyer helped me to comply, I need to pay the legal fees and not bribes. Business case: I have not faced an ethical challenge. However, I have read about Alstom. According to Laville and Evans (2010), the French, Swiss, United Kingdom and United States of America authorities are investigating Alstom on allegation of bribery and money laundering. It is alleged that foreign officials from Singapore, Indonesia, Venezuela, Brazil, Italy, Zambia, Poland and Mexico were involved in the rackets. It was alleged that bribes worth US$ 6.5 million was given in a bid to win a contract to expand an underground network in Brazil city of Sao Paulo worth US$45 million. Furthermore, a bribery of about US$ 200 million was given to win a contract to build an hydroelectric power plan in Brazil worth US$1.4 billion. Following this events, Stephen Burgin (Alstom UK president), Robert Purcell (finance director) and Altan Cledwyn (legal director) have been arrested by Serious Fraud Office in the United Kingdom on several occasions and accused of bribery, money laundering, corruption and false accounting. However, they were released without being charged in the court of law. A number of Alstom properties have been searched in London, Knutsford, Derby, Ruby and Ashby de la Zouch. Police revealed that the company was involved in bribery in order to win contracts in foreign countries. Reference Cellich, C and Jain, CS 2003, Global Business Negotiation: A Practical Guide, 1st edn, South-Western Pub, Fisher, R & Ury, 1993, Getting To Yes, Negotiation Agreement Without Giving In, The Penguin Group Ghauri, NP 2003, International business negotiations, 2 edn, Emerald Group Publishing, Oxford. Laville, S & Evans, R 2010, ‘Three directors of rail engineering firm Alstom held in bribery investigation’, The guardian, 24 March, viewed, 3 April,. Majumdar, B 2010 ‘India, U.S. finalizing $5.8 billion Boeing aircraft deal’, Reuters, 22 September, viewed, 3 April http://www.reuters.com/article/2010/09/22/us-boeing-india-idUSTRE68L0TX20100922 Ury, W 1993, Getting Past No, Negotiation Your Way from Confrontation to Cooperation, Bantam Books Read More