Negotiation in international business

1. NEGOTIATION IN
INTERNATIONAL BUSINESS

2. INTRODUCTION
• Negotiating with international customers ,
regulators and partner often require a lot of
meticulous preparation.
• Successful negotiation requires analysis and
evaluation of the commercial and there
impressive presentation and proper
understanding and appreciation of cultural
differences of the negotiation a party and
skillfully navigating the negotiation process
accordingly.

3. Negotiation is a process to manage relationship.
It is basic human activity that exist between
employers and employee ,buyer and seller
and between business associates.
It has all the elements of a psychological and
commercial warfare of individual and
corporate interest. It is the final state of
business diplomatic skill.
Some ground work to be done before
negotiation are:-

4. A:- Opening
B:- Resistance
C:- Comeback
D:- Bargaining
E:- Agreement
Characteristics of a negotiation situation:
There are two or more parties.
There is a conflict of need and desires between two or
more parties .
Parties expect a “give-and-take” process

5. Key step to an ideal negotiation
process
Preparation .
Relationship building .
Information gathering.
Information using.
Bidding .
Closing the deal.
Implementing the agreement .

6. 5 strategies for negotiation
international business contracts
1. Hire a consultant .
2. Choose your team wisely.
3. Gauge your counterpart’s.
4. Meet them in person.
5. Fix the agenda and keep detailed records.

7. FACTORS AFFECTING NEGOTIATION
PROCESS
• AUTHORITY
• CREDIBILITY
• INFORMATION
• TIME OF NEGOTIATION
• EMOTIONAL CONTROL
• COMMUNICATION SKILLS

8. TYPES OF NEGOTIATION
COMPETITIVE
NEGOTIATION:
ONE TIME DEAL
COOPERATIVE :
LONG TERM
NEGOTIATION

9. From an international perspective, trade and investment negotiations
must continue.
In doing so, trade and investment policy can take either a multilateral
or bilateral approach:
bilateral negotiations are carried out mainly between two nations.
multilateral negotiations are carried out among a number of nations.
TYPES OF PARTIES AND FORM OF NEGOTIATION FLOW:-
1:- Inter Government negotiation (Negotiation between govt. of 2
country)
2:- Intra Government Negotiation:- Within and among one govt.
usually b/w govt. agencies, political parties or with constitute group.

10. 3:- Commercial Negotiation:- b/w business
corporation. This may include business negotiation
related to contracts sales agreement, investment,
joint venture etc. or may involve negotiation within
a business or trade association.
4:- Internal Business Negotiation:- Within the
company or management . Example :- labour
negotiation, Human recourses, inter departmental,
union negotiation etc.
5:- Non Governmental negotiation:-
Example:- Business association, environment,
labour, human right, development etc.

11. 4 C’S OF NEGOTIATION
• Common Interest
• Conflicting interest
• Compromise
• Criteria

12. The Advantages of Negotiation
It is easier to lower tariffs as part of a
mutual agreement than to do so as a
unilateral policy because:
1:-It helps mobilize exporters to
support freer trade.
2:-It can help governments avoid
getting caught in destructive trade
wars.

13. PREREQUISITES OF EFFECTIVE
NEGOTIATION
• Selection of the appropriate negotiation team.
• Management of preliminaries , including
training, preparation and manipulation of
negotiating setting.
• Management of the process of negotiation,
i.e., what happens at the negotiation table.
• Appropriate follow-up procedure and
practices.

14. CULTURAL PROBLEM IN
INTERNATIONAL NEGOTIATION
• Language & Non verbal behavior.
• Values
• Thinking & Decision making process.
• Difference in political , legal &
economic system.

15. NEGOTIATION WITH REGULATORS
• In many instances government is a party in
International Business Negotiation.
• There are 2 view point of governmental
authority:
1. Hierarchical view
2. Bargaining view

16. THIRD PARTY NEGOTIATION
• MEDIATOR : A mediator is a neutral third party
who facilitates a negotiated solution by using
persuasion , reasoning & suggestion for
alternative.
• ARBITRATOR : Third party negotiation to dictate
an agreement.
• CONCILATOR : It is a trusted third party who
provides an informal communication link
between 2 parties.
• CONSULTANT : It is an important third party
skilled in conflict management who attempts to
facilitate by creative problem solving tactics.

17. DETERMINANTS OF BARGAINING
POWER
• Relative importance of the project.
• Alternative
• Urgency
• Strengths

18. VERBAL AND NON VERBAL
NEGOTIATION TACTICS
• PROMISE
• THREAT
• RECOMMENDATION
• WARNING
• REWARD
• PUNISHMENT
• NORMATIVE APPEAL
• COMMITMENT
• SELF DISCLOSURE
• COMMAND

19. INTERNATIONAL NEGOTIATOR :
PERSONAL CHARACTERSTICS
• Tolerance of ambiguous situation.
• Flexibility & creativity
• Humor
• Stamina
• Empathy

20. Negotiation in Different Countries
• FRANCE : The french like to conflict in
Negotiation. They Don’t pay much attention
to likes & dislikes of the opposite party.
• Chinese : They use How & Why in Negotiation
process. Whenever we fell that they are
about to take decision they start negotiating
again.
• North Americans : very impatient , they take
decision on the basis of facts & logic . They
want to approach more & more.

21. • Arabs : They are very casual
regarding deadline. There is
difference in gender negotiation.
• Brazilians : They have a habit of
saying no as much as 83 times in
1 hour. They always try to there
opponent by making physical
touch.

22. THANK YOU
ANY
QUESTION ?