Discuss about the Negotiation in International Business.
The concepts utilized in business originated from the concepts practiced in daily life. The basic of all the concepts followed are somehow interrelated with the common lifestyle. One such concept, which plays a role both in daily lifestyle and in business, is negotiation. Negotiation is that practise which is adoptive commonly grasp to a decision between two or more people to make one agreement (Turban, Liang, and Wu, 2011). The process can be in any form including agreement, talk, settlement, conference, debate, or any kind of discussion. In the words of Lewicki, negotiation is been defined as:
“Negotiation is not a process reserved only for the skilled diplomat, top salesperson, or ardent advocate for an organised lobby; it is something that everyone does, almost daily.”- (Lewicki et al, 2011)
According to the author, negotiation is a series of step or actions that are adept by every human of the society leading normal life or a huge business organisation. In simple words, negotiation can be understood by the term used frequently bargaining, it help individuals to find a solution to an issue or mutually agree to one decision by cutting off the clashes (Kennedy, 2017). A man bargaining with car washer or Walmart taking over Flipkart, everywhere negotiation is being experienced and analysed. Thus, the words of the author holds true in the real life as well. His perception that negotiation is witness and practiced by everyone is a realistic approach.
In the ensuing text, wider aspects of negotiation with reference to international business have been present. Businesses are that activity carried out on a regular basis to fulfil the necessity of the market in order to earn profit through social means. When business activities spread their roots and reach in different, other nations well known as international business (Peleckis, 2016). Different aspects of application of the negotiation process is been discussed further below.
A business works for the social and personal growth and beneficial purpose. There are some sets of moral values, which is been initiated while catering to the society. The ethics of the organisation reflects the value, believes and norms that are certainly pursued by the employees of the business. Ethics are generalised principles that structures out the operative system of the business in certain limits as they utilise the resources of the surroundings, serving the best becomes responsibility of organisation.
During negotiation both the parties involved are to be working in an appropriate set of limits. While negotiating, it is obligatory to maintain a standard of ethical procedure to come across one solution. Maintaining morality by focusing on the transparency and flourishing fair practices while conduction of the process (Dwyer, 2012). In the world of businesses, every organisation demands different principles for applicability. To deal with the variation many principles set forth by legal entity and authors to carry forward a certain unity throughout the global. Few of the principles have been enlightened further.
The Caux Round Table (CRT) Principles of Business bottomed in 1986 was an initiative by creating a network of the international business leaders who aimed at attaining and promoting capitalism supporting free, transparent, and fair society throughout the global (Phillip, 2015). There are seven essential philosophises which focused on the stakeholders more. Those seven elements concentrated on trust, enhancement of environment, peace, world community, trade cooperation, social and economical responsibility, and stakeholders. According to the present scenario, aiming for the betterment of the stakeholders through negotiation is one of the keys to success for the organisation (Fells, 2016). When the customers, investors, employees, and suppliers are satisfied and feel beneficial then they will turn out to loyal to the business and assist expanding in different parts of the global. Competitor too needs monitoring on regular intervals to find out the loopholes in the business. This is a traditional principle that is ethically beneficial to the organisation in every aspect.
Another principle is, propounded in 1999 The United Nations Global Compact by the Secretary General that aimed at combining the organisational strategies and operations with the environment, labour, anti-corruption, and human rights (Williams, 2014). This principle is inclusive of 10 accepted universally acted principles based on the four areas mentioned. The following table elaborates the 10 principles:
With regard to present situations above table, holds a strong applicability. These principles play an important role in today’s ethical code of conduct of the organisations negotiation strategies. Negotiation depicts the interdependency of each party on one another, which makes following the ethical path mandatory for them. With increase in the needs and wants of the society, to increase the profit organisation to alter their approach towards attaining the target but to preserve the authenticity such principles play the role. It helps in finding the solution in such a way that no one interrelated with the organisation gets affected (Rasche, and Waddock, 2014).
Culture is the set of norms, values, traditions, attitudes and believes that the society of a place follows. Intra culture or cross culture negotiation is the main feature of the international business that needs the outmost attention of the participated groups. When the business extends over boundary of one’s country, the responsibility of cross culture automatically comes into role. While trading or conducting activities with the intentions for establishing buyer and seller relationships in the market to satisfy the existing demand in various country and places follows with the obligation to cater the audience with according to the values and traditions of the people (Ke, 2011). To survive in market the organisation needs to consider the preference of the customers as the growth of the organisation depends on them.
When negotiating the aim of each of the involved party is to overcome the other and win the process in their favour. While dealing with different cultures there are certain things that need considerations namely body language, different languages, and code of conducts, the rules and regulations, laws and policies and many more (Zhang, and Zhou, 2009). To deal with the cultural differences the general practices that is been accompanied by keeping the communication strong. Without communication, there is no base of any process to while conducting.
Cross culture is crucial element for the organisation. The major task is to bridge up the gap between the two various cultures dealing with one another and maintain the outlook according to the perception that one holds for the different cultures (Brett, and Thompson, 2016). Giving priority and respecting the variations lead to have positive outcome of the negotiation to attain the planned result. For more clearance on this topic, let us consider an example to know the importance and role played by the cross culture. Singapore is an opened economy to work with while during a conversation in Singapore, maintaining a quiet and gentle tone even silence represents positive response. Singaporeans will always be indirect as being direct make allowance for rude behaviour. Eye contacts, as well considered an indication of rudeness and a yes never indicates an agreement about the conversation but the mark that whatever the other person said was, heard (Lees, 2015). Whereas in western country eyes contacts is taken as the sign of confidence, to show a strong agreement a yes is taken as the correct word and silence is usually the sign of disinterest in the conversation. These were the few examples of the values and beliefs that can differ from one to another culture.
The cultures have an important role of consideration to look into while negotiation as ignorance of any of the facts will have an impact on the outcome. To have a win over the other there need to understand the cultural terms and norms of the one another to have effective communication. To minimize the difference between two cultures, communication acts as the tool to bridge up the gap (Gelfand, and McCusker, 2017).
As discussed earlier, negotiation is the process where two or more than two individuals or groups seek to find a better solution through combined efforts and jointly come to a decision. Through this statement, one can understand that there is a minimum presence of two individuals or group to commence the process. With reference to the universal fact that every individual have different perspective for the same thing or situation it can be said that whilst the process there will be situation of clashes. In general, arguments or clashes are those critical points where point of views of individuals does not match or vary from one another while collectively trying to come up with the decision (Forsgren, and Johanson, 2014). In negotiation, there are more chances of clashes when negotiating with different cultures as every culture consists of various elements to develop any society.
From negotiation point of view, argument refers to the convincing power of parties of their point to the negotiator. For representing, the idea of negotiation in a positive influencing way to the opponent negotiators uses some basic and universal principles for follow up. Starting with choosing the strategy to negotiate, under this the negotiators makes a deep analysis about the opponent thoroughly so that their approach towards the decision-making is understandable. An appropriate strategy will define the aim on the area that needs the command of agreement of both the parties. Base of negotiation is either interest-based, competitive approach or cooperative approach with pros and cons of these three depending on the situation of implementing it.
Strategising actions to reach a favourable result one needs to know the competitive advantages they pursue and how well they can mould it to create a positive environment while negotiating. This assists the business or organisations to turn the advantages work in realistic and profitable manner for the negotiators (Gelfand, Aycan, Erez, and Leung, 2017). For example, if talking about the Chinese negotiators it is a tough job to convince them for the negotiating argument whereas on the other hand if considering the western negotiators than after a certain discussion limit moulding them towards the aiming argument is possible.
When such sort of situation prevails, where the negotiating process has possibilities for strict or facing restrictions by the opposite negotiators, to avoid such circumstances understanding about the existing opportunity must be there. Once when the basic idea of the opportunity is clear in the minds of negotiators they can easily identify the scope of their goal (Gillespie, 2017). Before convincing other individuals for negotiation criteria, suggestion for having a clear vision is the basic priority.
These are the certain principles followed whilst directing international business negotiation. Applicability of which is seen throughout the globe setting a basic structure of all the negotiators to work with harmony. Negotiations are win to win in nature where both parties try to win over the other by adapting the strategies mentioned above to achieve the targets.
Although, the process of negotiations consists of the most versatile element called humans still there are some sets of style and techniques established for them to perform into certain structure. The key to win any argument or reach the decided objective is to have an appropriate plan. In negotiation as well, planning is the highly required with regard to preparing before hands. Application of strategies according to the plan helps in maintain the clarified the vision and mission of the organisation (Ting?Toomey, 2017).
Environment and people are ever changing in nature. From one country to another the style and approaches towards negotiation varies. Considering all the dynamicity of the environment, few styles and techniques come into existence (Miller, 2014). Elaborated further in this content, are few approaches to negotiations used worldwide.
Based on time, there are two major styles known as monochronic and polychronic approaches. Monochronic approach means where the parties focus on a single issue at a single time without interruption of anything in between. Whereas polychronic approach means, performing and managing multiple tasks at the same time and there can be interruption of other while doing one task. Punctuality is overlooked in polychronic approach but time holds the utmost importance in polychronic approach.
The two most practiced styles, ‘win-win’ and ‘win-lose’ are familiar and outlines the strategy behind the purpose of negotiation. In win-win approach, allows both the involved parties to be at a beneficial deal. This creates a sense of high commitment between the involved people and gives satisfying outcomes to the business. When there are no opponents during the process of negotiation a high level of trust and confident climate is experienced. Not just only the professional relationships but personal relationships of the involved individuals take a hike and somewhere raise the chances of maintaining the same for a longer term. In win-lose approach, there stands a competitive environment during the negotiation. As the name suggests, only one of the involved party will enjoy the benefits of the negotiation. There are always risk factors that lie hidden in this type, as both the parties tries to win the argument but only one succeed. A situation of stress and pressure exists which influences the relationships. With accordance to the necessity and demand of the situations both of the above style exists. However, win-win is adopted on a general note, as it is satisfactory to both the parties (McCarthy, and Hay, 2015).
Further, negotiation interest is also one of the techniques of negotiations where parties declare the position before hand to other party and throughout the negotiation’s process insists on upholding their position. Such proposal hides the interest of the party that they do not disclose at the time of informing about the position (Parizas et al , 2015).
There are many techniques used but above ones gives the basic idea behind the use of the technicality in the dynamic world to apply uniform structure or way to have command over the process.
Negotiation is not just a process that is bound with technicality and rules but gets impact by psychological factors also (Ting?Toomey, 2017). Interacting with various humans involves psychology factors that one needs to understand. With change in human variation in the thinking pattern, also endure. In negotiation a strong self-understanding of these concepts are essential to understand. Based on, understanding of the psychological concepts determines the further process that will follow up by the individual during the negotiation process.
Irrespective of the nature of negotiation, whether it is of the style mentioned above or cross-cultured the ability to understand the changes plays a major role. Think of a situation where the negotiators communicate a condition but the information gets misinterpreted, such results are due to the lack about the other negotiator and the way they negotiate (Kong, Dirks, and Ferrin, 2014). The foremost step is towards the development of the knowledge of the thinking style, responding styles and the cultural style that exists in the environment.
Self-awareness creates the key to lead and build many paths and strategies to win the race. Certain skill sets need being required while dealing in negotiation. The theories in the books provide a person principles and rules but the practical implication depends on the understanding level of the person about the topic, which will vary from individual to individual. However, few universal elements need careful handling. Time is the first such elements the individuals need understand the importance of time. Being punctual and not delaying, the decision-making process makes the negotiators also interested in the deal. When trading with cross culture negotiators language and cultural values need the outmost attention by the negotiator before making the move for the negotiation. Analysis of the environment is necessary and having the skill of making grabbing the essential information and facts from the analysis depicts one’s own understanding. One can establish a viable strategy to implement while negotiating by keeping a regular check about the trends and practices (Stahl, and Tung, 2015). To stay in the long run one should follow the honest path while choosing the fair practices adopted to implement before the negotiators. The differences should be utilised as the advantages, which is beneficial to both or all the people involved.
Once the person attains the capability to grasp the useful resources and information along with the ability of foresightedness this will be a great tool and help in achieving the command over presenting the argument to the negotiators. These skills need to be polished and flexible with time, which is adaptable with the various alteration and requirements of the parties (Rolland, 2010).
Conclusion
With increase in the stratum of the discussion and people involved into that, increases the complexity of the negotiation implement. It is a daily routine practice founded everywhere in the world. There are no particular criteria set for the following this process of negotiation. This line brings an important feature into limelight about negotiation that with different situations the series of action will differ and still be correct. Implementation of the process exists with the alternative in every situation.
In the essay above, the variation in the situations and the complexity in application of the negotiation process, get examined. The major focus of the content was on the international business. Market and reach of the business as being on the international level comes bounding the organisation to certain limits to render the area catering.
The process of negotiation detailed out the feature of involvement of two or more people. Presence of as many people to talk over one situation to deliver mutual decision is a critical aspect. To maintain harmony and unity in the market and operations of the organisation there are few universal principles that assists in retention of the peace. Being on the international level, the business has to face number of cultural variation in order to expand and develop in other country. To have an impactful deal the organisations work within the prescribed and determined sets of guidelines so that it provides negotiation with a certain base for conduction. The principles formulated are with reference to the role of every that comes into play while negotiation so that interest of none is hindered.
Hence, concluded from the above writing while negotiating with various people there is a need to match up the culture and respect the differences for gaining the best outcome from them while meeting the requirements.
References
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