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Negotiation 1

Table of Contents 1. Introduction .................................................................................................................................. 3 2. Critical evaluation of the act of negotiation ................................................................................ 3 3. Conducting effective negotiation ................................................................................................. 4 4. Cross-cultural negotiation ............................................................................................................ 6 5. Conclusion ................................................................................................................................... 8 References ........................................................................................................................................ 9 2

1. Introduction In this essay, the different aspects of negotiations in the business world would be discussed in order to highlight their role and utility in reaching a mutual consensus between two or more aggrieved parties ( Ebner, 2019) . It would be shown that the term “negotiation” is more extensive and deep than the common layman’s term called ”bargaining”. When and why negotiation is important and how to go about the process of negotiation would be discussed in great detail to throw light on the pertinent questions faced by the manager or the leader about the whole process ( Peleckis, 2016) . Also, techniques and ploys used in the negotiation would be discussed so as to present a comprehensive view of the entire bargaining process as it is conducted by an experienced negotiator. Also when to use which technique would be discussed so that it is clear that there is no fixed formula for the negotiation process ( Sandin and Francis, 2018) . Finally, the cultural side of negotiations would be discussed keeping in mind the global business environment of the 21 st century. How negotiations play out in the global arena is a widely studied topic in modern-day management due to cultural differences and also social barriers that arise in such discussions ( Zhang, 2018) . 2. Critical evaluation of the act of negotiation Negotiation is the art of entering into a discussion with an opposition party with the view of giving something to him and in return gaining something from him that could be an asset in a business, some projects to work on or even lessen the effect of a penalty due to some lapses that might have occurred due to fault of both the parties ( Wang, 2016) . It is a kind of mutual understanding in which both parties can take home something that is in the custody of the other. The act of negotiation can take place between rivals or business partners in order to reach a mutual consensus on some issues that affect both of them and which empowers them to have something from the other party ( Sandin and Francis, 2018) . The only other alternative to negotiation is legal recourse which is time-consuming, expensive and can lead to damage to the reputation of both parties. Negotiation helps to lessen the damage that each party has done to the other without resorting to legal action and punitive damages as it happens in the courts of law. Thus negotiation should be looked upon as a first option in the minds of business partners or rivals whereas legal action is the last resort to solve the impending problem ( Cheng and Shi, 3

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2019) . Emphatic communication is of utmost importance in negotiations since each party must place itself in the shoes of the other in order to understand the problem from his side also. Without unequivocal communication doubts and questions surrounding the dispute would not be removed and this would escalate into further problems in the future. The art of drawing up pragmatic solutions to dispute is the skill that the negotiator must master in order to succeed and also to give the maximum benefit to his side without compromising his basic stance. Looking from this point of view negotiation is both an innate talent as well as something which could be developed by sustained practice and experience ( Peleckis, 2016) . Most business corporations have in-house negotiators to take part in the discussions and also sometimes external negotiators are brought in as they are experts in that field. It is important to realize that it would be inevitable that there would be differences at first and both parties have to work through layers and multiple rounds of disagreements in order to reach a mutual consensus, failing which they would be left with no alternative but to take it to the law courts that would eventually harm both ( Ebner, 2019) . The disputes would have to be resolved in an amiable manner so that both parties could benefit something from the other and thus be able to make the most of the situation ( Zhang, 2018) . Negotiation should be based on the win-win principle particularly when both parties are equally powerful or else the matter would drag onto law courts and the whole exercise of coming to talks would prove to be futile. Negotiation could be seen as a multi-disciplinary science where a whole gamut of skills like effective communication, respect, empathy, patience, and persuasion are all required rather than just one skill. 3. Conducting effective negotiation There are certain skills that a good negotiator must possess-the the first being that he should be articulate and be in a position to weigh all the pros and cons of the agreement proposal proffered to him from the opposite side of the table ( Zait, 2016) . He should have a clear cut understanding of his own position as well as the position of the opponent in the dispute and thus be able to take the opportunity to make the best use of the things that are in his side. He should be assertive and emphatic at the same time-assertive enough so that the opponent does not take him for granted and emphatic to understand what his needs are vis-à-vis that of his opponent ( Ebner, 2019) . A reasonable amount of business and management experience is required to be a good negotiator so 4

that he has a clear idea of the business landscape and other factors that play out in the discussion. He should also be aware that he is bound to produce results for the company and also to prevent any damages if the negotiations and the talks fail and they do not arrive at a consensus ( Wang, 2016) . A good negotiator should be smart enough to understand the nuances of the deal that is offered to him lest he should make a mistake in judgment regarding the underlying motives of his opponent. The next important trait of a negotiator is flexibility and presence of mind so that he is able to navigate his way through a maze of pros and cons and also to grasp new opportunities that might emerge from the discussions ( Zhang, 2018) . The presence of mind is of utmost importance since a lot of new things arise in the course of discussions which have to be handled and countered on-spot in order to subdue the negotiator and reminding him of his weakness in the proposition. He should also have good listening skills so as to understand the position of his opponent and have an idea of his aspirations and needs and what he really wants out of the deal ( Sandin and Francis, 2018) . He should also have adequate technical and domain knowledge so that he understands the value of the agreement proposal that is offered to him, in the light of the objectives, aims, and goals of his own company. He should have a clear idea of the limits of power of the other party and his own limitations so that he is able to exploit the other party without running into trouble ( Cheng and Shi, 2019) . There are two main types of bargaining –distributive bargaining and integrative bargaining. The main objective of distributive bargaining is simple- who achieves the most out of the deal. The main aim of this style of hard bargaining is to subdue the opponent and extract as much as possible out of him by the dint of his power and position ( Wang, 2016) . This is a kind of win- lose bargaining where the key sense that prevails is victory over the other and not cooperation or compromise. The negotiator does not care for any long term relationship with the other and this type of bargaining mainly takes place between business rivals ( Zait, 2016) . It’s all about one side exerting pressure and the other side that is weak is yielding to it as they have no option. The hardstyle dominates here and the weaker party loses out and may have to leave without any benefits received from the other. But this type of bargaining fails when both parties are equally powerful. The style of negotiation that should be used is integrative bargaining in that case ( Sandin and Francis, 2018) . This type of bargaining usually takes place between business partners who need each other to function in a long mutual relationship. The main feature of this type of bargaining is compromised and not applying pressure on each other as in the case of 5

distributive bargaining. This is an example of win-win negotiation where each party tries to win the bigger share of the pie for each other. In this type of negotiation, both parties try to maximize the output of the deal keeping in mind the interest of each other ( Wang, 2016) . However, this type of negotiation is possible where multiple issues are involved between two parties as opposed to distributive bargaining where a single issue is involved. Integrative bargaining is motivated by a spirit of cooperation rather than a spirit of competition. Sometimes the question arises as to which method or approach to apply while bargaining about a proposition ( Ebner, 2019) . The solution to this problem is to act according to the situation. For example, an amicable move by the opponent is responded with a similar move in kind whereas a hostile move is answered accordingly with vindication and non-cooperation. It is important to understand that each situation is unique and calls for its own unique response- not all discussions should be win-win or win-lose ( Cheng and Shi, 2019) . Also, the negotiator should have a good foresight as to what is likely to happen in the future if he goes ahead and accepts the deal that is offered to him ( Zhang, 2018) . Thus he should have good background knowledge as to what leads to what and then make a wise decision. He should be patient and not be in a hurry to seal the deal as this might cause him to make mistakes which he would regret later ( Sandin and Francis, 2018) . It is also to be noted that in actual practice the negotiation is neither totally win- win or totally win-lose but a mixture of both. Collaborating and compromising are essential activities in all negotiation process, even in the case of distributive bargaining. It is to be kept in mind that in order to gain something other things have to be sacrificed and there is always a trade-off ( Peleckis, 2016) . But the goal when starting a discussion is to reach an amicable solution since a court case would entail a lot of financial damages on both parties and the judgment pronounced by the court can go in the favor of any side and reputations could be damaged all the way. 4. Cross-cultural negotiation Now a real-world example of cross-cultural negotiation would be presented in order to highlight the role of cultural issues surrounding negotiations and deals that happen in the business world ( Sandin and Francis, 2018) . It is a well- known fact that China is the largest market in the world for Apple’s products like the iPhone, iPad, and iMacs. These products are very attractive to 6

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Chinese consumers and owing to the huge population in China it’s the biggest market for Apple for such products. However recently a dispute arose in China regarding the warranty policy of electronic gadgets, in the country ( Ebner, 2019) . Apple offers a warranty of 1 year on its products while in China the law states that it has to offer a 2-year warranty on each electronic goods. The events unfolded on International Consumers day when the Chinese State Television media did a show on how western companies cheat Chinese consumers and this year the target was Apple ( Zhang, 2018) . Apple initially did not take it seriously but soon afterward many Chinese celebrities launched an offensive on the company in Weibo, the Chinese equivalent of Twitter. This negative media campaign resulted in decreased sales of Apple’s products for a few months until the company began to take it seriously. About this time the Chinese government also stepped in and launched an offensive on the company relentlessly citing arrogance and high- handedness ( Wang, 2016) . At this point in time, Apple’s Chief Executive Tim Cook intervened and offered an apology which worked in bringing the things under control. The point to be understood in this case study is the issue of cultures in negotiations. The cultures of America, Western Europe, and Australian are known as individualistic cultures whereas the cultures of East Asian countries are collectivist in nature. In individualistic cultures, the freedom of the opinion and the rights of the individual are highly valued. Their society comprises of loosely linked individuals who assert their own freedom to work and live as they want ( Zait, 2016) . Also, they are of huge respect for the exact word of the law. On the other hand in collectivist cultures, the group identity is all-important over and above the individual identity. Here unity and joint effort preside over the individual freedom to assert itself ( Cheng and Shi, 2019) . The fact that the Chinese state media took up this issue which was affecting a very small section of customers and the consequent support of the Chinese celebrities highlights the collectivist nature of the culture. This shows that unity is very important in these cultures ( Wang, 2016) Also another aspect of the collectivist culture is that an apology from the wrongdoer works wonders in solving the dispute and it did in the case of Apple. This shows that cultural values play a dominant role in negotiations and resolution of disputes or arriving at an agreement. Thus when doing international business it is very important for the leaders to keep in mind cultural nuances while holding talks and discussions across cultural barriers. Thus there is a cultural side to negotiations as proved by this case study ( Zait, 2016) . Similarly, there are high and low context cultures. In high context culture non- verbal messages and implicit communication cues 7

play a large role in interactions. Relationships are based on trust and build slowly over time with an emphasis on group identity and collective identity. There is a centralized social structure and authority which everybody has to follow. Family and community values are held in high esteem and are regarded as the reference point in everything. Risk-taking is generally avoided. In low context cultures of Europe and America importance is given to goals and precision in everything one does ( Sandin and Francis, 2018) . Relationships begin and end very fast. There is a decentralized social structure and no set norms as such. Thus these cultural differences come into play during negotiations. 5. Conclusion Thus in this essay, it has been shown that a negotiation is an important tool of entering an agreement or resolving a dispute rather than the traditional way of going to the court of law. The entire negotiation process has to be handled in a careful manner so as to bring the maximum benefit to most parties ( Peleckis, 2016) . The two methods of negotiations discussed in the essay have to be chosen wisely after deciding which fits the situation and the context best. Thus it is up to the individual judgment of the negotiator to use the tools of negotiation in a careful manner so as not to jeopardize the chances of resolving the dispute in an amicable manner as much as possible ( Zhang, 2018) . Finally, it has been seen with an example that cultures also play a crucial role in these days of globalized business environments where the movement of people and goods take place across international borders ( Ebner, 2019) . Thus the international negotiator must use the appropriate cultural cues when dealing with cross-cultural discussions and people of other countries. References Peleckis, K., Peleckienė, V. and Leonavičienė, E., 2019. International Business Negotiation Strategies: Cases of Discrimination in Public Procurements. 8

Peleckis, K., Peleckienė, V., Peleckis, K.K., Lapinskienė, G. and Nedelko, Z., 2020. Preparation of International Business Negotiation Strategies: Competitive Assessment Aspects in The Market Power System. In SHS Web of Conferences (Vol. 74, p. 06024). EDP Sciences. Wang, M., 2016. Applying Psychology of Persuasion to Business Negotiation. Business and Management Research , 5 (2), p.12. Ebner, N., 2019. Wind of change: the future of cross-cultural negotiation. In The Palgrave Handbook of Cross-Cultural Business Negotiation (pp. 517-544). Palgrave Macmillan, Cham. Fells, R. and Sheer, N., 2019. Effective negotiation: From research to results . Cambridge University Press. Zait, A., 2016. Conceptualization and operationalisation of specific variables in exploratory researches–an example for business negotiation. Scientific Annals of Economics and Business , 63 (1), pp.125-131. Sandin, R. and Francis, J., 2018. The Complexity of Executing International Negotiations while Maintaining Business Ethics-Developing the value-based International negotiation model from an ethical perspective-the Sanfran Ethical International Business Negotiation Model (SEIB NM): An exploratory case study within the defence industry. Zhang, T., 2018, May. On the Application of Vagueness in Business Negotiation. In 2018 4th International Conference on Humanities and Social Science Research (ICHSSR 2018) . Atlantis Press. Lam, N.T.H. and Liaw, S.Y., 2017. Comparing Mediation Role of Cultural Intelligence and Self- Efficacy on the Performance of International Business Negotiation. International Business Research , 10 (7), pp.22-33. Peleckis, K., 2016. International business negotiation strategies based on bargaining power assessment: the case of attracting investments. Journal of business economics and management , 17 (6), pp.882-900. 9

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Li, X., Liu, F., Li, A. and Xu, L., 2018. Business Negotiation based on Extenics. Procedia computer science , 139 , pp.521-528. Cheng, Q. and Shi, Y., 2019. The Promoting Effects of Psychology in Business Negotiation. Journal of Language Teaching and Research , 10 (4), pp.832-837. Khan, M.A. and Ebner, N. eds., 2019. The Palgrave handbook of cross-cultural business Khan, M.A. and Baldini, G.M., 2019. Global Business Negotiation Intelligence: The Need and Importance. In The Palgrave Handbook of Cross-Cultural Business Negotiation (pp. 3-16). Palgrave Macmillan, Cham. Xiao, T., 2018, July. The Functions and Expressions of English Euphemism in Business Negotiation. In 4th International Conference on Arts, Design and Contemporary Education (ICADCE 2018) . Atlantis Press. Chen, Y., 2017, January. On the Study of Cross-cultural Assimilation in Business Negotiation. In 2016 2nd International Conference on Economics, Management Engineering and Education Technology (ICEMEET 2016) . Atlantis Press. Varela, S.A., 2018. The Influence of Cultural Intelligence on Intercultural Business Negotiation. International Journal of Business and Social Science , 9 (3). Gangyi, S., Hoque, M.R. and Zhangwen, P., 2018. The Impact of Culture on Business Negotiation Styles: A Comparative Study between Bangladesh and China. International Journal 10

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