Cross Cultural Negotiation Essay Example

Assignment: A2 Reflective Journal.

Task One — Reflection on the three Negotiations during the Course

Negotiating is challenging process by itself since it basically involves reconciling or finding a middle ground between two parties who have different views not only on what the outcome of the process should be but also the substance and form of the negotiation procedures themselves. Therefore, conducting cross cultural negotiations, where the negotiating parties are drawn from different cultural backgrounds, only intensifies the complexity of an already complex and challenging process. The dynamic essence of culture implies that individuals from different cultures will have different customs, rules, beliefs, values, and societal norms (Schneider and Barsoux 2002; Cohen, 2007). This compounds any negotiation process where each negotiating party approaches the process with a different point of interest and the success of the negotiation or solution lies in arriving at a decision that satisfies each party.

We were given the opportunity to participate in four negotiation processes during the trimester. The first negotiation was a face to face negotiation which involved the sale of a second hand car for a Thai student to a foreign client. The marked price for the car at the start of the negotiations was $ 18,500 in cash with a one year warranty. Our principal objective was to strike the best possible deal from the sale. Therefore, we agreed on a flexible and negotiable price and leveraged it by negotiating on the added features or services. The first reduced offer was made for $ 18,200 with a year’s warranty. We eventually settled on a cash sale of $17, 200 with three months warranty. This price was satisfactory for both us and the client. While the price was lower than the limit selling price, we were able to use added features and services, the warranty, as a bargaining tool to offset the reduction in price. We justified the initial selling price to the customer by offering a one year warranty which positively influenced the client’s trust in the negotiation process while at the same time providing us with a tool to leverage the process. We drew from the behavioral approach which emphasizes the importance of roles and personalities in ensuring successful or favorable negotiation outcomes (Heavrin and Carrell, 2008). I learned that successful negotiation requires good communication and leadership skills and intend to apply the lessons learnt in the next negotiation (Lothar, 2008).

The second negotiation was decidedly more challenging than the first. This negotiation involved hammering out a deal on behalf of Stephenie Meyer, renowned American author best known for her Twilight series novels, and Bestbook International Publishers. The success of the negotiation hinged on obtaining the best possible deal for Stephenie Meyer on eight different points. The negotiation was made even more challenging by the short time span (30 minutes) and the demanding nature of the client who approached the negotiating process with several expectations that were non-negotiable such as the advance, signing bonus and a contract that offered a significant increase from the previous one. I was able to play my role effectively as an agent by leveraging on my client’s star power to demand higher royalties, contract signing bonus and advance which were most important to my client and leveraged it on the number of weeks that Stephenie Meyer would be required to promote the book. The negotiation took 45 minuets , 15 minutes longer than the time that had been allocated but we were possible to obtain the highest possible score from the agreed contract (Cateora, Gilly, and Graham, 2009). During this negotiation, we use strategic analysis where we evaluated different sets of outcomes and drew a veto to settle on the most favorable for the client.

Task Two

Cultural diversity in any negotiating team presents several opportunities as well as constraints. My team was multicultural in nature with 5 Chinese students, one Philippine student and two of us from Saudi Arabia. Therefore, in the run up to the negotiation, it was important to minimize any conflicts that could potentially arise from stereotyping by addressing a number of variables in the negotiation (Evangelista, 2003). However, in our case, it was easier to accommodate the diversity since a majority of the students were Chinese and they shared largely similar cultural orientations with the Filipino student. The first group meeting was hamstrung by lateness and trying to reconcile the diversity in patterns of thinking. However, all subsequent meetings (3-4 times a week) were attended punctually.

The main strategy employed during our group meetings was brainstorming. Through brainstorming, we were able to exhaust the most effective strategies that could be used during negotiations. We met mainly during the evening which was not only convenient but also for us as Saudi students as well as the Chinese students who were a majority of the group. We had to make several adjustments to accommodate the Chinese in light of their culture. This includes not interrupting them while they speak or finishing their sentences for them as their culture places a high premium on respect. We also tried to learn from one another different styles and approaches to negotiating. For example, the Chinese prefer a less aggressive, more flexible, and conciliatory or compromising approach in negotiation while in my culture, we are prone to taking rigid positions and horse trading. This influenced our goals and views of the negotiating process. Instead of viewing negotiation as a zero sum process, we adopted a view of negotiation as a way of simultaneously attaining out objectives and offering the other party an opportunity to obtain something from the process. This viewpoint reoriented our skills in all negotiation processes.

Task Three — Plan before Final Negotiation

Before the final negotiation, we had to make clear a few concerns about what our strategic priorities would be. Principally, we were concerned with identifying on which points for discussion and agreement Datong would absolutely not concede ground and consequently placing least emphasis on them. For instance, if the opportunity cost of having at least 100 Chinese engineers would either be in the form of increased funding for the railway or the preservation of more jobs (workforce). Our strategy hinges on obtaining agreement on our maximum constraint that either no money would be invested by Zijan Mining or 40 mines would be closed and 3,000 jobs lost. However, drawing from strategic analysis that trust during game theories can only be achieved by what appear to be reliable behavioral patterns , we eventually conceded to agreement on the option with the second highest point value (25 mines closed) (Camerer 2003). This will make us appear generous, serve as a measure of good faith and a willingness to be flexible on out positions which would then increase the likelihood of them ceding ground and earning us more points on other points of discussion and agreement.

Going into the negotiation process, our biggest priority is to maintain a 60/40 profit share. This profit share ratio represents the biggest points increase and is the one area on which we must insist and not relent on even at the cost of capitulating on the other points for discussion and agreement. It is hoped that we would minimize capitulation of only one of the smaller points of discussion and agreement by reiterating that Fernet Brio has an incentive for higher financial investment since Zijan will already have invested a lot of money in safe mining technologies. The impression that we hope to create is that what Zijan is providing for the financing of railways and training of engineers is very generous in comparison to what has already been invested in safe mining technologies. Any non conditional concession made by Datong on either of these points will be welcomed. In addition, Datong and Fernet have a 15 year working history which can be leveraged to obtain some compromise for the deal and to avoid souring the business relationship (Camerer 2003).

Task Four: Final Negotiation

The final group negotiation took place in the last week of the trimester on April 23.. As part of our strategic plan and acknowledging that the other team would be equally if not more prepared, we has assigned roles, responsibilities and authority to each individual group member for efficiency and effectiveness. We identified group members who would assume roles in finance, strategic views, technique and the explanation of human resource related aspects. I was assigned the responsibility of negotiating and making decisions on the fourth option about splitting profit between Zijan and Fernet Brio. As earlier indicated, this had been the central focus and primary objective of the negotiation strategy. We had felt that victory or a favorable outcome from the negotiations could only be guaranteed through prudent time management and the development of sound strategies (Heavrin and Carrell 2008). It was important to approach the process by appearing to present proposals that would satisfy parties or presenting win-win scenarios rather than zero sum outcomes. The strategy employed balanced and integrated both the structural approach and strategic approach- the concessional exchange approach (processual approach). This approach afforded us flexibility in terms of enabling us to employ different negotiation mechanisms or tactics during the process and similarly approach our negotiation with a win-win potential.

The negotiation commenced with introduction of the group members to the opponent team and a brief presentation by each of the group members who articulated their perspectives on the various points of agreement and discussion which they had been tasked to. The team also circulated printed handouts. My assigned role was ensuring the 60/40 profit ratio split for the next 20 years. After long discussions and deliberations, we finally agreed on closing down 25 mines, reducing 1000 jobs, training 100 engineers and allocating this project to 50 Australian engineers. We came out of the negotiation process satisfied since our core objective had been realized, the 60/40 profit split. Overall, the negotiation went smoothly save for a few hesitancies by the other team in making decisions which could also have been part of their strategy as a form of bluff.

We learned several important lessons from the negotiation. First, it is important to adopt a common view that bridges the team’s various perspectives especially if the team is multicultural. Nothing would hamper a negotiation more than not being on the same page. Secondly, strategic planning is importance. While you may not achieve every objective, it is important to know what the key priorities are and to have a fallback plan or concession to offer to protect the core objective. Lastly, negotiators that appear to offer win-win potential are more likely to create trust and good faith which they can leverage in the negotiating process.

References

Camerer, C. (2003). Behavioral Game Theory: Experiments in Strategic Interaction. Russell Sage Foundation

Cateora, P., R., Gilly, M. C, and Graham, J, L. (2009). International Marketing (14th edition, McGraw-Hill

Cohen, R. (2007). Negotiating Across Cultures. Washington, D.C.: United States

Institute of Peace

Evangelista, M. (2003). «Culture, Identity, and Conflict: The Influence of Gender,» in Conflict and Reconstruction in Multiethnic Societies, Washington, D.C.: The National Academies Press

Hernandez R., W. and Graham, J., L, (2008) Global Negotiation: The New Rules, New York: Palgrave Macmillan, 2008

Heavrin, C., and Carrell, M. (2008). Negotiating Essentials: Theory, Skills, and Practices, Pearson Education, pp 41-43

Lothar K, (2008). Negotiating International Business and Principles of Negotiating International Business Charleston, SC and Booksurge LLC,

Schneider, S.C. and Barsoux, J.L. (2002) Managing Across Cultures. Financial Times, Prentice Hall