Negotiation in international business

NEGOTIATION IN INTERNATIONAL BUSINESS

PRESENTED BY

•LAKSHITA ASAWA

INTRODUCTION

• Negotiating with international customers , regulators and partner often require a lot of meticulious prepration.

• Successful negotiation requires analysis and evaluation of the commercial and there impressive presenntation and proper understanding and appreciation of cultural nuances of the negotiation a party and skillfully navigating the negotiation process accordingly.

Negotiation is a process to manage relationship.

It is basic human activity that exist between employers and employee ,buyer and seller and between business associates.

Characteristics of a negotiation situation :

There are two or more parties.

There is a conflict of need and desires between two or more parties .

Parties expect a “give-and-take” process

Key step to an ideal negotiation process

Preparation .

Relationship building .

Information gathering.

Information using.

Bidding .

Closing the deal.

Implementing the agreement .

5 strategies for negotiation international business contracts

1. Hire a consultant .

2. Choose your team wisely.

3. Gauge your counterpart’s.

4. Meet them in person.

5. Fix the agenda and keep detailed records.

FACTORS AFFECTING NEGOTIATION PROCESS

• AUTHORITY

• CREDIBILITY

• INFORMATION

• TIME OF NEGOTIATION

• EMOTIONAL CONTROL

• COMMUNICATION SKILLS

TWO TYPES OF NEGOTIATION

COMPETITIVE NEGOTIATION:

ONE TIME DEAL

COOPERATIVE :LONG TERM NEGOTIATION

4 C’S OF NEGOTIATION

• Common Interest

• Conflicting interest

• Compromise

• Criteria

PREREQUISITES OF EFFECTIVE NEGOTIATION

• Selection of the appropriate negotiation team.

• Management of preliminaries , including training, preparation and manipulation of negotiating setting.

• Management of the process of negotiation, i.e., what happens at the negotiation table.

• Appropriate follow-up procedure and practices.

CULTURAL PROBLEM IN INTERNATIONAL NEGOTIATION

• Language & Non verbal behaviour.

• Values

• Thinking & Decision making process.

• Difference in political , legal & economic system.

NEGOTIATION WITH REGULATORS

• In many instances government is a party in International Business Negotiation.

• There are 2 view point of governmental authority:

1. Hierarchical view

2. Bargaining view

THIRD PARTY NEGOTIATION

• MEDIATOR : A mediator is a neutral third party who facilitates a negotiated solution by using pursuasion , reasoning & suggestion for alternative.

• ARBITRATOR : Third party negotiation to dictate an agreement.

• Conciliator : It is a trusted third party who provides an informal communication link between 2 parties.

• CONSULTANT : It is an important third party skilled in conflict management who attempts to facilitate by creative problem solving tactics.

DETERMINANTS OF BARGAINING POWER

• Relative importance of the project.

• Alternative

• Urgency

• Strengths

VERBAL AND NON VERBAL NEGOTIATION TACTICS

• PROMISE

• THREAT

• RECOMMENDATION

• WARNING

• REWARD

• PUNISHMENT

• NORMATIVE APPEAL

• COMMITMENT

• SELF DISCLOSURE

• COMMAND

INTERNATIONAL NEGOTIATOR : PERSONAL CHARACTERSTICS

• Tolerance of ambiguous situation.

• Flexibility & creativity

• Humor

• Stamina

• Empathy

Negotiation in Different Countries

• FRANCE : The french like to conflict in Negotiation. They Don’t pay much attention to likes & dislikes of the opposite party.

• Chinese : They use How & Why in Negotiation process. Whenever we fell that they are about to take decision they start negotiating again.

• North Americans : very impatient , they take decision on the basis of facts & logic . They want to approach more & more.

• Arabs : They are very casual regarding deadline. There is difference in gender negotiation.

• Brazilians : They have a habit of saying no as much as 83 times in 1 hour. They always try to there opponent by making physical touch.

THANK YOU

ANY QUESTION ?