Whether an individual notices or not, at some stage of their life, they negotiate, and this makes every person a negotiator. Negotiation can be stated as an obvious aspect of the life of every individual, whether the same is about negotiating with different consumers, so that they can attain the services or products being offered, or negotiating the rent of an apartment, negotiation is such an aspect, which is commonly found in the daily lives of people (Salacuse, 2013, p. 3). And whilst the same is present at such a common level, its significance can be noticed when the Management negotiations are carried on at crucial levels, for instance, a negotiation between a member of the United States with that of a member of United Nations, for an adoption or any other aspect of the guidelines provided by the United Nation. An effective negotiation can make the entire case, and an ineffective one, can ruin the entire matter (Benoliel, 2014, p. 197).
Lewicki et al (2011) stated that negotiation cannot be deemed as a process which is simply reserved for the ardent advocate for an organized lobby, skilled diplomat or top salesperson. Instead, he stated that negotiation is something, which is carried on in a daily manner by everyone. However, this statement raises a question on whether the negotiation skills are same at each and every place? Or whether with the level of sophistication or the intricacy of matter, the negotiations change? In the following parts, a discussion has been carried on to critically evaluate this very statement made by Lewicki. This has been done to establish, that even though, every aspect of life is covered with negotiations, the level of negotiation skills are changed with the circumstances of a particular case. However, before the same can be done, the very basic meaning of negotiation has been clarified.
What is Negotiation?
Negotiation can be defined as such a process whereby two or more than two parties communicate with each other, where each of the parties has their own goal. These communications present the respective perspective of each party and depict their interests. And ultimately, through compromises and concessions, an agreement is reached between the parties and a decision is made. This entire process is known as negotiation (Chaturvedi, 2011, p. 200). So, under negotiations, an agreement is attained which best suits the aims and objectives of both the parties, where both the parties lose some points and gain some, in a mutually beneficial way. It can also be stated as a manner of reaching a solution to the problem between two or more disputants (Dwyer, 2012, p. 83). And until the dispute remains unresolved, the negotiation process cannot come to an end.
The process of negotiation can better be explained with the help of an example. Suppose two individual want to have the container full of rare and precious mangos for themselves, but they do not want to use the method of violence to reach a decision. In such situation, these two individuals would open up a communications channel between them and reach the terms which best suit them. This could be a 50-50 distribution of the mangos, or any other arrangement, which they both agree upon in a mutually non-violent manner. So, negotiations are the more civilized manner of resolving a matter. By adopting this process the common interest of the parties are achieved in the most fruitful manner. And as the interests are mutually decided upon, long term relationships are attained through effective negotiation process. Negotiations not only help in resolving an issue, but also in reaching a beneficial agreement without the presence of a dispute (Fells, 2009, p. 4).
There are four kinds of negotiations and it is essential to determine the suitable form of negotiation, as each of them requires a different strategy.
Descriptive Negotiation- this form of negotiation is also known as Management competitive or claiming value approach, which states that one party can win at the expense of the other party. The significant concern related to this approach is that both the parties aim at maximizing their respective interests. This form of approach requires a person to obtain advantage through concealing information or by using manipulative and misleading conduct to obtain information regarding the concealed information. The negotiator must influence the beliefs of the other person and obtain information about the person.
Lose-lose Approach- this negotiation approach is adopted when one of the partners believe that his own interests are threatened, he ensures that the consequence of the negotiation is not suitable to the other party as well. Therefore, in this approach, both the parties end up as losers at the end of negotiation. Hence, it is the most undesirable negotiation approach.
Compromise Approach- This form of approach aims at improving the outcome of the lose-lose strategy. This form requires both the parties to compromise and convince each other and settle down for a common solution that would enable both the parties to achieve their own respective interests or objectives.
Integrative Approach- this form of approach is also called creative value or collaborative approach and is deemed superior to all other forms of negotiation approaches. This approach makes both the parties believe that they are capable of attaining their respective interests. The major concern of this approach is to maximize joint outcomes and the most appropriate strategies include cooperation, sharing information and mutual problem-solving objectives. This negotiation approach is the most desirable approach.
Stages of Negotiations
Broadly, there are four phases of negotiations, i.e., the pre-negotiations phase, conceptualization, settling the details, and finally, the follow up. For the pre-negotiations stage a degree of preparation is needed before the negotiations actually begin. In this, the reasons for negotiating are determined firstly and then the specifics of the matter on which negotiations have to take place are decided. At this stage, as much as is possible, the information is collected and on the basis of this information, a picture is painted for the contentions which can be made by the other side, so that their goals, needs and motivations can be assessed. The next stage in the negotiation process relates to the conceptualization, where the foundation of the agreement is developed so that the issues are framed in a manner that even the most intricate details are considered. At this stage, the goals and objectives of each of the phase is defined through fact finding (Negotiations, 2017).
Once these two stages have been effectively undertaken, the next step in the negotiation process is to set out the details. This is the stage where the agreement is completed and in this stage, the details of venture are completed. The problems which can be faced in the partnership, on the basis of reality are discussed so that the agreement can be workable, and viable. This is not easy as it sounds as the setting of details in a correct and meticulous manner is crucial. Often the negotiations collapse due to the failure of the parties in devoting the time and efforts in chalking out the details in an effective manner. The last stage is the follow up stage, where the problems are identified and at times, the contract is re-negotiated. Just signing of dotted line is not sufficient to finish negotiations, and a careful analysis of adherence to each and every aspect is crucial. Only when all these steps are properly undertaken, can a negotiation process end (Crump, 2007).
Linkage Theory and Negotiations
As per Crump (2007), linkage theory can be defined as the manner in which the negotiations influence or the manner in which determines the outcome or the process of the other. This theory helps in gaining an effective insight over the relationship between the negotiation, and the pertinent environment. A single negotiation has the power of different outcomes and for these outcomes, a number of different explanations can be provided, depending upon the variables. The environment in which the negotiations take place plays a key role in the process of negotiations. The environmental factors have the power of advancing, halting, supporting and even suspending the negotiations. And this relationship between the environment and the negotiations outcome is explained through the linkage theory (Maggi, 2016).
Negotiations are quite hard to start, and even more difficult to maintain, as well as, conclude. Hence, linking the process of negotiations to something with momentum is of high importance and is a technique that has utility. For understanding the relationship between the particular negotiation and its relevant environment, the negotiation linkage process to be a useful conceptual tool. The EU-Mercosure or the NAFTA negotiations did not take place on their own and they did not initiate the EU-Chile and US-Chile negotiations on their own too, respectively. However, each one of them played a crucial role in this process (Devereaux, Lawrence and Watkins, 2006).
State of affairs can be designed or may evolve in particular environment, which results in creating of an action, which forces events like the deadlines (Watkins, 1998). However, the state of affairs also has the power of obstructing the negotiations process, through the issue linkage (Tollison and Willett, 1979). Hence, linkages can be deemed as the most effective in initiating and finishing the stages of negotiations. This is because this is the place where the opportunities are created initially, and are secured finally. Though, the linkage challenges and opportunities can be observed throughout the process of negotiations.
BATNA refers to Best Alternative To a Management Negotiated Agreement, which was a term given in 1981 by Roger Fisher and William Ury, in their bestseller book. BATNAs are considered as critical tool for negotiation as it is believed that a wise decision with regards to a negotiation agreement cannot be made till such time, when the people involved in the negotiations are aware about the possible alternatives (Spangler, 2012). BATNA reveals such an alternative course of action which is the most advantageous for a party, in case where an agreement cannot be reached or where the negotiations fail. A successful negotiator knows that they are the driving force behind their success. BATNAs allow the parties to avoid such agreements which are worse for them, where these alternatives are available. However, it becomes crucial to make certain that the deal has been valued in a proper manner, after considering all the facts like toe likelihood of other party to undertake their side of bargain, and the value of relationship and time (Brett, 2007).
Instead of viewing these as a safety net, the negotiators view BATNA as a point of leverage in the negotiations. For BATNA to be adopted, it has to be actionable and real, and due to the lack of these being actionable in reality, the parties often do not invest in BATNA. A successful negotiator needs to be aware about the manner in which BATNA has to be used, along with the techniques which could give best results under this. So, on one hand the soft style may be used for avoiding the conflict or for compromising, and on the other hand, an aggressive and threatening technique representing a hard negotiation style can be adopted (Barsky, 2017).
Three suggestive had been given by the authors in their bestselling book to denote the manner in which BATNA could be accomplished. The first one was related to the invention of a list of actions, which could be taken by an individual, in case an agreement is not attained. The second one was related to the conversion of promising ideas into partial or tangible alternatives. And the last suggestion was related to the selection of the best sounding alternative. The culture also plays a significant role in the negotiation process and under BATNA, which has been discussed in the upcoming section.
Negotiation Skills: Same Everywhere?
The statement made by Lewicki et al (2011) denoted the presence of negotiations at every stage of life. And this is very true, as demonstrated from the examples put forward earlier. However, the negotiations skills are changed widely due to the scenario in which they take place, or the level of the matter for which they are used. In the international business, negotiations are a common parlance. The parties who are involved in negotiations have to face a lot of difficulties in attaining the desired outcome. One of the problems which crops up while the negotiations are carried on international level relates to the difference in cultural backgrounds (Chang, 2006).
Culture is a set of values and beliefs. And this forms the basis for the perceptions, behavior, expectations, assumptions and the values in the people (Javidan and House, (2001). By effectively perceiving these differences, based on the particular cases, the negotiators can effectively close a deal. When the international business takes place, the culture of the different nations, acts as a contributory factor in the intricacies of negotiation process. The representatives of international business closely analyze the properties, differences and the traditions which are followed in the nations, with which they prepare to form business transactions or partnerships (Peleckis, 2013).
For this purpose the analysis of cultural dimensions, the cultural differences proves very helpful as it helps in conveying the critical incompatibilities which are present amongst the parties. And in this regard, the Hofstede's cultural dimensions’ analysis is used as it helps in designing the international business negotiation process as the same conveys the difference between the various dimensions in a culture of the negotiating parties (Hofstede, Hofstede and Minkov, 2010). At the international level, the negotiations are faced with a range of differences in the cultures, the power placement, and the emotional differences between the parties, a long-term attitude towards communications, and the various other uncertainties (Peleckis, 2013).
The intercultural differences dimensions have the power of influencing the negotiation process amongst the different cultures’ representatives. There can be a presence of different understanding to the actions or symbols in different cultures. Hence, it becomes crucial to initiate the business negotiations at the international level when all the requisites have been gathered and properly acquainted with the cultural features. In case, such is not possible, a mediator, who is an expert in the culture of a particular nation, could be taken help of (Peleckis, 2013). For instance, the swastika sign is considered as a sign of religion in India and the same is also a symbol used by the Nazi Party (Voorst, 2014, p. 66; Issitt and Main, 2014). So, if this symbol is criticized in front of a Hindu, them the same could prove fatal for the negotiations taking place in front of a Hindu in India. And the same may prove as helpful in case of dealings with a German national.
The case study which was carried out between one global Dutch company and two of its local subsidiaries located in Korea and Japan revealed the complexity of the negotiations between the subsidiaries and their head office. In this case, the barrier of culture was coupled with the lack of cultural awareness. And along with these issues, the influencers between the two parties, the organization, the relationship and the atmosphere also contributed towards the complexities in negotiations. The last part affirms the role of linkage theory in negotiations (Fjellstr?m, 2005).
In this study, it was held that the culture was of utmost important for the cross Management cultural negotiation with the head office of the subsidiary. And this very cultural gap reaffirms the need of negotiations. These negotiations help the parties in understanding the manner in which they communicate and ultimately understand each other. It was also held that the organization also had the power to influence the negotiations. The culture of the organization was deemed as important for the subsidiaries in other nations, so that they could strive and work for the same organization as their main drive. But, the difficulty in attaining a strong organizational culture, which is over the national culture, remains a barrier (Fjellstr?m, 2005).
The international business relationships’ success is dependent upon the effective business negotiations. And this is the reason why the negotiators have to be properly prepared. By understanding the manner in which the desired outcomes can be attained, along with the factors which are relevant to this entire process, helps the negotiator in being more successful. The negotiation process and the outcomes, as are perceived by the International and Thai business negotiations, with regards to the cross-cultural international business negations were analyzed through a study conducted in Thailand. A questionnaire was used in this regard, which focused upon the positive retrospective negotiations experience and this was sent across too the executives who were working in Thailand (Numprasertchai and Swierczek, 2006).
The result of this questionnaire highlighted the significance of the successful cross-cultural negotiators in the performance, as well as in the future-oriented prospects. This study also highlighted that protocol and tactics do not have much emphasis in successful experiences. Instead, the relationship orientation and information focus act as the key factors in defining the success in both the international and the Thai negotiators. It was also established in this study that the emphasis over the specific time orientation is significantly more for the international business negotiators in comparison to the Thai counterparts (Numprasertchai and Swierczek, 2006).
The emphasis of culture can most commonly be noticed in the Chinese reference. For a negotiation to be successful in China, the same has to be conducted in a manner which can be deemed as acceptable in China and to the Chinese people. For doing this, a successful negotiator needs to know the ways to influence the side of Chinese and the awareness regarding their cultural dynamics. The European negotiators are required to have the awareness regarding the prevalent negotiation characteristics of patience, Guanxi network, ambiguity, status, friendship, trust and face. This is crucial for avoiding the misunderstandings or tensions, which can otherwise be brought forward while dealing with the people of the nation (Woo and Prud'homme, 1999).
The negotiations in China are never an easy task. The people departing for China, especially the European business people, are most commonly advised that they need to be polite as the Chinese people value good relationships and harmony. Even though these warnings are given, when these individuals reach China, and initiate the negotiations, they have to face the fierce adversarial bargaining, which lacks the politeness, as well as, the considerations which the European negotiators expected (Blackman, 1997). Further, it is often noted that the Chinese negotiators are not only shrewd but also experienced in the art of effectively using the timing and of psychology (Gordon, 1986). This highlights the success on part of the Chinese negotiators and the lack of experience on part of the too cautious European business negotiators.
It has been argued that it is crucial to have a relationship between cultural knowledge and the communication skills (McCall and Warrington, 1989). Though, negotiations are not merely a sole skill or a combination of skills. Broadly, negotiation is such a process which occurs in a specific context. For instance, a negotiator, in every scenario needs to have good communication skills, along with the knowledge of stating their points with precision; this is a common skill. However, when negotiations are done with Chinese people, their perception of justice, their customs and their philosophy is to be kept in mind while negotiating; and this brings forward a specific skill set (Wong-Scollon, and Scollon, 1990).
Negotiations are a manner of resolving the conflicts which take place between two or more parties and is even helpful in cases where a matter has to be decided upon, in absence of a dispute. From the above discussion, it can be concluded that for the success of negotiations process, merely the knowledge of business is not sufficient and instead, a good grasp over the difference in cultural backgrounds of the individual has to be understood. BATNA is one of the alternatives which can be used as an alternative to the negotiations; though, a lot of skill is needed to undertake this technique.
The linkage theory proves as helpful in cases of negotiations as it helps in understanding the impact of the environment or the atmosphere over the negotiations. This theory helps in ascertaining the challenges and opportunities which a negotiator has in a particular scenario, which allows the negotiators to make the most of it. The discussion also highlighted the manner in which the cross cultural differences play a major role in negotiations process. The example of the Chinese negotiators has highlighted the reason for their success; they have formed a perception of being polite and harmony. To conclude, even though negotiations are present in every sphere of life, in the international business context, they become very complex and definitely are not the same everywhere.
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