Download 1. A framework for Intl Business Negotiations

Oulu UAS – School of Business and …
Business Competence – Ismo Koponen
OKBIT22 Managing International Relations
Contents (topics for us) of the course book: Ghauri Pervez N. & Usunier,
Jean-Claude, Ed:s (2005). International Business Negotiations.
Amsterdam, … Pergamon. A collection of articles. 522 p.
[Ismo’s comments]
Part One:
1. A framework for Intl Business Negotiations
“In literature, sometimes ‘bargaining’ and ‘negotiation’ are used
interchangeably. But in our opinion, they mean different things. Bargaining is
more like haggling in a typical ‘bazaar’ setting, … It refers to a typical win-lose
negotiation, where the resources are limited or fixed, … “ (p. 3).
[On the other hand, the ‘bazaar setting’ can be seen being the original form of
a network of relationships. A bazaar was / is managed – by all the members
of the network – with a long-term approach].
“… negotiation, also called ‘integrative bargaining’, refers to win-win
negotiation where both or all parties involved can end up with equally
beneficial or attractive outcomes“ (p. 4).
[Why should all win ? In a larger scale, the Scandinavian welfare society: why
should all survive] ?
“Some characteristics of this type of negotiations are:
- open information flow … [transparency of … ]
- a search for a solution that meets the objectives of both parties [Swedish:
consensus; the time concept; the question of motivation]
- parties understand that they do have common as well as conflicting
objectives …
- … parties sincerely try to understand each other’s point of view” (p. 4).
[All in all, this is a long-term approach to mutually beneficial business].
Elements of the framework are e.g. (G&U: 2005, 5 … 15):
Background Factors
Atmosphere
The negotiation Process i.e. Stage I: Pre-Negotiation -> Stage II: Face-toFace Negotiation -> Stage III: Post-Negotiation
Cultural Factors
Strategic Factors
What is a Good Outcome (G&U: 2005, 22) ?
“A good agreement is one which leads to successful implementation. There
are many examples of firms getting into trouble because they could not
implement the contract conditions of particular deal. therefore, in some cases,
no agreement may be a better outcome for the firm. A good outcome benefits
both parties and does not make either party feel that it has less advantageous
contract. Sometimes negotiators want to avoid specifying some issues and
want keep them ambiguous”. …
“It is normally considered that a good business deal is one which provides
financial gains. … A successful negotiation is … a problem-solving approach
to a ‘win-win’ outcome” (ibid.).
“The main purpose of the contract is to avoid misunderstandings and trouble
in the future. The agreement should foster relationship development and be
flexible enough to deal with expected or unexpected future changes. The
language and terminology used in the contract must be simple and clear. It
must not be necessary to seek legal help every time the contract is consulted”
(ibid.). [Is our – national – business culture changing ? What is a possible
trend like ? What is the answer of our educational system] ?