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INTERNATIONAL NEGOTIATION

Culture is the set of shared values and beliefs of a group of people.


What Makes International Negotiation Different?
Two overall contexts have an influence on international negotiations: the environmental context
and the immediate context.
Environmental Context:
Includes environmental factors that neither negotiator controls that influence the negotiation.
Seven factors:
1. Political and Legal Pluralism

Firms conducting business in different countries are working with different legal and
political systems
Political considerations may enhance or detract from business negotiations in various
countries at different times

2. International Economics

Exchange value of international currencies naturally fluctuates


The less stable the currency, the greater risk for both parties

Any change in the value of a currency can significantly affect the value of the agreement
for both parties

3. Foreign Governments and Bureaucracies

Countries differ in the extent to which the government regulates industries and
organisations

4. Instability

Instability may take many forms: lack of resources, shortages of other goods and
services, and political instability
Challenge for international negotiators to anticipate changes accurately and with enough
lead time to adjust for their consequences
Negotiators facing unstable circumstances should include clauses in their contracts that
allow easy cancellation or neutral arbitration, and consider purchasing insurance policies
to guarantee contract provisions

5. Ideology

Negotiators from other countries do not always share the same ideology
Clashes in ideology may lead to parties disagreeing at the most fundamental level about
what is being negotiated

6. Culture

People from different cultures appear to negotiate differently


People from different cultures may also interpret the fundamental processes of
negotiations differently

7. External Stakeholders

International negotiators can receive a great deal of promotion and guidance from their
government via the trade section of their embassy, and from other business people via
professional associations

Immediate Context:
Includes factors over which negotiators appear to have some control.
1. Relative Bargaining Power

Relative power has frequently been operationalized as the amount of equity that each side
is willing to invest in the new venture
The presumption is that the party who invests more equity has more power in the
negotiation and therefore will have more influence on the negotiation process and
outcome

2. Levels of Conflict

High conflict situations those based on ethnicity, identity, or geography are harder to
resolve
Also important is the extent to which negotiators frame the negotiation differently or
conceptualize what the negotiation concerns

3. Relationship between Negotiators

Negotiations are part of a larger relationship between two parties


The history of relations between the parties will influence the current negotiation, just as
the current negotiation will become part of any future negotiations between the parties

4. Desired Outcomes

Tangible and intangible factors play a large role in determining the outcomes of
international negotiations

Countries often use international negotiations to achieve both domestic and international
political goals

5. Immediate Stakeholders

Include the negotiators themselves as well as the people they directly represent
Skills, abilities, and international experience of the negotiator clearly can have a large
impact on the process and outcome of international negotiations

Conceptualizing Culture and Negotiation


Concept of culture:
1. Culture is a group-level phenomenon a defined group of people shares beliefs, values,
and behavioral expectations.
2. Cultural beliefs, values, and behavioral expectations are learned and passed on to new
members of the group.
Cultural attribution error the tendency to overlook the importance of situational factors in favor
of cultural explanations
Culture as shared values

Cross cultural comparisons are made by finding the important norms and values that
distinguish one culture from another and then understanding how these differences will
influence international negotiation.

Four Dimensions that Describe the Important Differences Among the Cultures:
1. Individualism/Collectivism

The extent to which the society is organized around individuals or the group
Negotiators from collectivist cultures will strongly depend on cultivating and sustaining a
long-term relationship, whereas negotiators from individualistic cultures may be more
likely to swap negotiators, using whatever short-term criteria seem appropriate

2. Power Distance

Describes the extent to which the less powerful members of organizations and
institutions accept and expect that power is distributed unequally
Greater power distance will be more likely to concentrate decision making at the top
Negotiators from comparatively high power distance cultures may need to seek approval
from their supervisors more frequently, and for more issues, leading to a slower
negotiation process

3. Career Success/Quality of Life

Cultures differed in the extent to which they held values that promoted career success or
quality of life
Increases competitiveness when negotiators from career success cultures meet

4. Uncertainty Avoidance

Indicates to what extent a culture programs its members to feel either uncomfortable or
comfortable in unstructured situations

10 Different Ways Culture can Influence Negotiations


1. Definition of Negotiation
2. Negotiation Opportunity
3. Selection of Negotiators
4. Protocol
5. Communication
6. Time Sensitivity
7. Risk Propensity
8. Groups versus Individuals
9. Nature of Agreements
10. Emotionalism
Culturally Responsive Negotiation Strategies
According to Familiarity with the other partys culture:
Low Familiarity

Employ Agents or Advisors (Unilateral Strategy)


Bring in a Mediator (Joint Strategy)

Induce the Other Negotiator to Use Your Approach (Joint Strategy)

Moderate Familiarity

Adapt to the Other Negotiators Approach (Unilateral Strategy)


Coordinate Adjustment (Joint Strategy)

High Familiarity

Embrace the Other Negotiators Approach (Unilateral Strategy)


Improvise an Approach (Joint Strategy)

Effect Symphony (Joint Strategy)