The daily life of people covers different levels of negotiations, even when the individuals may not realize that they are indulged in negotiations. The negotiations have a common place in the life of individuals, due to the frequency with which it is used (Salacuse, 2013). The individuals undertake negotiations on the price which is to be paid for a certain service, and even in the high end transactions, for instance, the ones undertaken for carrying out an agreement between Gulf nations and United States for oil. These discussions require negotiations to be undertaken, particularly before any final decision is made. To elucidate this with a real time example, the decision to go for a particular movie, or to choose the location where a group of friends would eat involves certain level of negotiation. When it comes to more crucial topic negotiations, there is inclusion of communication for ratifying a treaty of the United Nations, or for ratifying a particular terms of such treaty. All in all, negotiation is a very important and unique tool, which allows for the objectives to be attained in a successful and peaceful manner (Benoliel, 2014).
Negotiation is thus a skill which is used by all, despite the economic level to which a person belongs. So, it is used not only by general public, but also by skilled diplomats, top salesman, and even for the ardent advocates representing the organized lobby. Lewicki et al (2011) have rightly stated that negotiation is something which is carried regularly by different individuals. Despite negotiations being such a common parlance, these are not given the significance which they should be given. Also, negotiation skills are something which does not come naturally to individuals, and is thus not a cup of tea for individuals. This is the reason why the individuals need to have the negotiating skills, where they want to be an effective negotiator and where they want the desired objectives to be attained.
The negotiations skills also take different form, based on the level of significance of the topic for which these skills are made use of. So, based on the level of complexity and the situation, the process of negotiation is changed. An example of this covers the economic negotiations which are undertaken for the diverse and rick individuals, in which the goals relate to a particular business activity, or could be the ones related to the social production development at the very top level (Maude, 2014).
The negotiation process evolves with type and place of transaction, and there are different manners in which negotiation is undertaken for different individuals. The purpose and the need define the manner in which a particular negotiation would be shaped, along with factors like the culture of an individual. Where the negotiation is on sensitive issue, where the matter could go either way, a highly experienced negotiator is required. Also, such person needs to have the knowledge of dealing with complex situations and effectively solving the situation through negotiation skills. The negotiation techniques are commonly used in international business but the intricacies and nuances of negotiation techniques get changed based on different factors (Cellich, 2012).
In international businesses, the success of relationships is dependent on proper negotiations being undertaken. As a result of this, there is a need for effective negotiator. In gaining an understanding on how exactly negotiations have to be carried out, the negotiator takes into consider all such factors which are related to the process of negotiations, based on the goals set. As per the study which had been undertaken in Thailand, for understanding the negotiation process, there was a need to analyse how negotiations took place in Thailand and their results, which the business negotiators perceive in the nation and in international business. This required a particular reference to be made to the cross cultural international business negotiations. For getting the information which was desired, this study made use of a questionnaire, which had been focused on the retrospective negotiation, along with the experience associated with it. This questionnaire was then circulated to all such executive who had been working in the nation during that time period. This questionnaire highlighted the significance of cross cultural negotiators in future oriented targets and in performance of targets. This questionnaire highlighted the different protocols and tactics required to be successful in negotiations (Numprasertchai and Swierczek, 2006).
This discussion is focused on highlighting the different aspects which revolve around the concept of international business negotiations, particularly in context of what has been stated by Lewicki et al (2011). In doing so, the discussion would initially highlight the definitions of negotiations, followed by the negotiation skills required by an efficient, and the negotiations in context of linkage theory and the cross cultural theory.
Before the significance of negotiation skills can be elucidated upon, there is a need to gain an understanding on the very definition of negotiation. Negotiation relates to the communication of the common objectives, on such a topic which holds interest for the individuals involved in such negotiations mutually. The communication taking place in the negotiations depict the viewpoint of the parties and also show the vest interest of such individuals in a specific manner. As per Chaturvedi (2011), the process where two or a higher number of people get engaged in a communication line, where the purpose is to fulfil the goals in a mutually manner, is known as negotiation. Where the negotiations are undertaken, each side represents their interest through communication, and this communication supports the perspective which they have. Through the use of tools like concession and compromise, an agreement is attained between the parties to get to a decision. The process whereby the negotiations are undertaken is very crucial, and is required to be handled in a manner which is effective and can be controlled. Where the negotiation process is not able to give any resolution to the matter for which it was undertaken, the negotiation process does not end and cannot be concluded, and has to continue (Dwyer, 2012). Be it the negotiation of salary, or be it the negotiation of nuclear weapon deal, every aspect of life is hinged upon the effectiveness of communications. As per Albin (2001), negotiation is the patter of interaction which is undertaken between different parties, where they make attempts to reach an agreement.
In order to further explain what exactly negotiation is there is a need to take an example. There is a need to suppose such a scenario in which person A wants to have a box which is full of precious and rare mangos for his personal consumption and person B also wants the same. However, in order to get to a decision, they do not want to resort to violence. This situation requires that the two individuals A and B to start a communication line where they discuss the terms which would suit the both of them in the best possible manner. The two individuals could work an arrangement where they share equal number of mangos, or come to a different arrangement, without going for some violent tussle. Negotiations thus allow for the issues to b resolved in civilized manner. Through the adoption of negotiations, the parties attain their common interests in the most fruitful of ways. Where the interests are decided in a mutually agreed upon manner, the long term relations are established owing to the effectiveness of negotiation process. Thus, the negotiations not only allow for the issue to be resolved, but also allow a beneficial agreement to be attained, without a dispute being present (Fells, 2009).
Negotiation process though, is not an easy task, where the individuals could simply discuss their issues by sitting together. Under the process of negotiation, there are different phases, which include the pre-negotiation phase, after which comes the conceptualization phase after which the details are set up and the follow up is undertaken. The first stage begins even before the process of negotiation is officially started, where the negotiator prepares for negotiation. To start with, the negotiator tries to understand the reasons for undertaking the negotiation and then pays attention to the matter which has been specified for undertaking negotiation. This is the stage where the maximum information is gathered and this information allows for gaining insight on the claims which can be raised by the parties, in addition to getting a clear picture of objectives, needs and motivations. Once the pre-negotiations are done and dusted, the process moves on to conceptualization, in which the base of negotiation is created. This allows for the issues to be framed covering the details. This stage involves fact finding, and setting objectives and gaols for each stage of negotiation process (Negotiations, 2018).
In the process of negotiations, the third stage is of setting up the details clearly. This stage involves the agreements being finalized and details of venture being completed. The problems which can be raised at a later stage also have to be identified, and a workable and viable agreement has to be chalked around it. Even though this seems like an easy task, but this is the most crucial stage in the entire negotiation process. This is the reason why this stage has to be undertaken in a meticulous manner. There are cases where owing to improper settling of details, the entire process of negotiation fails as the problems are not addressed properly. The last stage is “Follow up” in which the problems are indentified and resolved, which even opens the option of renegotiation of contract (Negotiations, 2018).
Till now, an idea has been attained on what exactly negotiation is and the process of negotiation. This makes it clear that negotiation is a very complex and crucial process. In order for the negotiations to bear the results for which they have been undertaken, the negotiator needs to posses certain key skills. There is a need for the negotiator to understand that negotiating is an ancient craft, which includes a mixture of science, art, substance and style. Negotiation involves prizing of intuition as being highly intellectual, having good sense, as much as hard numbers. There is a need for high aspiration levels and emotional detachment. It is basically the game of power, both imagined and real. Some are able to play this game in a masterful manner and others are only able to understand it dimly. There are certain essential characteristics, without which a negotiator cannot master the purpose for which the negotiations are undertaken. Some of these characteristics have been summed up below.
Crump (2007) has defined linkage theory as the way through which the negotiation process is influenced, or the way which helps in determining the process or result of it. Linkage theory helps in bringing clarity to the relationship between the pertinent environment and the negotiation. A sole negotiation could result in different results and for each of these results, there can be different explanations which can be given, based on the variables. The environment where the entire process of negotiation is undertaken is pivotal. These environmental factors give the power of supporting, suspending, advancing and halting the negotiations. This very relationship between negotiation results and environment is explained through linkage theory (Maggi, 2016).
From the starting of negotiations, to maintaining and concluding these negotiations, a negotiator is required to make use of this linkage theory. The linkage theory does not only hold significance but is also a technique of utility. So, for understanding the relation between the environment and particular negotiation, this tool of linkage theory has to be made use of. As per Watkins (1998), the state of affairs can evolve or be designed for a specified environment through which an action is created, which results in events like deadlines. Though, the state of affairs also holds the obstruction power on such negotiations owing to the issue linkage (Tollison and Willett, 1979). Thus, linkages are crucial for initiating and concluding negotiations. The reason for this lies in the fact that this is the position where initially the opportunities are created and are ultimately secured. Yet, across the negotiations process, the linkage opportunities and challenges can be observed (Crump, 2009).
Culture covers the values and beliefs, which any individual follows. Culture is the foundation stone of the perceptions of individuals and nation, which guide the manner in which people behave, their expectations and what they assume (Javidan and House, 2001). Based on the situation being faced, such cultural differences can be perceived by a successful negotiator, which allows for the desired results to be attained. Owing to t he varied cultural differences, the negotiation process becomes complicated. The traditions, the faith and the varied nature of parties need to be analysed by the international businesses’ representatives (Peleckis, 2013).
By analysing the dimensions and differences in culture, the incompatibilities in the parties can be identified and worked upon by a successful negotiator (Chang, 2006). In this regard, assistance needs to be taken from the Hofstede model which is focused on cultural dimension analysis and helps in designing negotiation process in international transactions. It highlights how the individuals are varied based on the culture and how these impact the negotiations (Hofstede, Hofstede and Minkov, 2010). These differences in cultural dimensions not only manipulate the representatives but also persuade the representatives of different cultures under the process of negotiation. The manner in which people interact and the use of signs and symbols are some of the intricacies which a negotiator has to look out for a negotiation to be successful. It is important that the negotiations are started only when the requisite information is attained and the cultural details have been appraised by the negotiator. Where this is not possible, the option is hire a person who is expert in the culture of particular nation and who could be the negotiator (Peleckis, 2013).
An example of the role of culture in negotiation process can be taken in the cultural difference in Japan and US. The people from individual are informal, whilst the ones from Japan are very formal. In the former, emphasis is given to equality, whilst the latter has emphasis on hierarchy. The way of greeting in the two cultures is also varied (Adachi, 2010). The individuals from US shake hands for greeting, whilst the individuals from Japan use the Japanese Bowing Etiquettes for greeting (Japan Today, 2014).
To further elucidate the role of cultural difference, the case study of local subsidiaries located in Japan and Korea need to be looked at. The holding of these subsidiaries was a Dutch company and the undertaken study highlighted that the negotiation between subsidiaries and head office was very complex. This case study highlighted that there were cultural barriers and major absence of cultural awareness. The influencer between the different parties, the relationships between these parties, and the atmosphere shows the difficulties in negotiation process. The role of the atmosphere is aligned with the points covered under linkage theory earlier. Culture was a major part of this case study and a key focus was on cultural negotiations. As a result of the cultural gaps being present in the subsidiary and holding, there was a need for undertaking negotiations. These negotiations allowed for the individuals to understand the viewpoints of each other and also the manner which was acceptable or desired by the parties for undertaking communication. Along with this, there was role of organizational culture for holding and subsidiary company and here atmosphere was considered as a major driving factor (Fjellström, 2005).
To further elucidate on the role of culture, reference needs to be made to Chinese people. To be successful in negotiations with Chinese people, it has to be undertaken in which the people of the nation accept it. This requires awareness of Chinese culture, and behaviour of people. Europeans are advised to be patient and show trust when dealing with Chinese people (Woo and Prud’homme, 1999). Though, the advice of being polite and harmonious is seldom helpful, as Chinese are fierce in adversarial bargaining, which leaves the individuals helpless (Blackman, 1997). The Chinese negotiators are known to be shrewd as they have mastered psychology and use of perfect timings to their benefit (Gordon, 1986).
There has been an emphasis laid down on understanding the role played by communication skills in cultural knowledge by the scholars McCall and Warrington (1989). Negotiations have to be undertaken based on the specific situation being faced, the nature of parties, the subject matter for which the negotiations are undertaken and the level of formality. There is a need for the negotiator to hold certain skills, as highlighted above, and these have to be present compulsorily in the arsenal of negotiator. The practices which the Chinese adopt highlight this very practice, as it is shown that the Chinese give weight-age to their philosophies and customs and keep them at the top, even when it comes to the business dealings (Wong-Scollon, and Scollon, 1990).
Conclusion
From the discussion undertaken in the previous segments, clarity was brought to the concept of negotiation and its significance in international business. This discussion involved the statement made by Lewicki et al being discussed in detail. The statement made by Lewicki et al is true, but only partially. This is because Lewicki et al provided that negotiation was not a process which was reserved for the top salesperson, ardent advocate and skilled diplomat but is something which is undertaken on daily basis. It is true that negotiations do take place very commonly and are even undertaken daily, but one cannot deny the fact that the level of negotiations undertaken in the international business scenarios are far more complex then the negotiations which are undertaken in the daily lives of people. The daily lives of people decide on normal matters, which do not involve the complexities highlighted through the cross-cultural theory and the linkage theory. There is no need of skilled negotiator in such cases, and any person can take on the role of a negotiator. However, when it comes to the international business scenario, the level of negotiation process is amplified due to the level of complexities involved in such cases. So, based on the situation and place where the negotiations are undertaken, the intricacies of requisite negotiation skills are enhanced. With the help of the linkage theory, the role played by environment and the external factors in negotiations, is clarified. The cultural differences also play a crucial role in international business, which was highlighted through the conducted case studies. All these factors highlight the significance which is held by the negotiation process. Owing to these reasons, the skills summarized above become more crucial for a negotiator to have, where they aim to be successful in their endeavours.
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