Chapter 3

International Negotiating Styles

International negotiation is about strategies, tactics, cultures, and styles. While it isn’t true that each country has a specific negotiation style, there are some common aspects to the way people from the same country negotiate. Negotiation is a process composed of several steps and requires a lot of time to prepare before you arrive at the negotiating table. In this chapter, you will learn about the features of an international negotiation by walking through the whole process in integrating the cultural aspects.

The Negotiation Process

The most famous authors in the field of negotiation state that negotiation is a fact of life (Fisher and Ury 2011). It is a basic means of getting what you want from others. It is a back-and-forth communication designed to reach an agreement, when you and the other side have some interests that are shared and others that are opposed. People differ, and they use negotiation to handle their differences. In addition, some people will be easy to negotiate with and others will be difficult.

Here is the first aspect of negotiation that you should keep in mind. It is a systemic process composed of interdependent stages. Each stage must be consistent with the others to make sense and to be a real reflection of the negotiation strategy.

Negotiation is defined as a process by which two or more parties reach agreement on matters of common interest. All negotiations involve parties (people dealing with one another), issues (one or more matters to be resolved), alternatives (choices available to negotiators for each issue to be resolved), positions (defined response of the negotiator on a particular issue), and interest (underlying needs a negotiator has) (Cellich and Jain 2003).

Before getting to the core of the negotiation process, let’s talk about the negotiation dilemmas.

Negotiation Dilemmas

When designing their strategies, negotiators go through several questions, doubts, and hesitation. What should be done? How? When? And what if …? The so-called negotiation dilemmas make negotiators think about the actions they should take and the consequences of doing them. There are five main negotiation dilemmas.

The Honesty Dilemma

The honesty dilemma has to do with how much you should tell your counterpart about your intentions, possibilities, and constraints. It is also about the type and amount of information to share with them.

On the one hand, giving too much information can be threatening, as they can take advantage of you. On the other hand, withholding information can result in negative consequences. This can be perceived as a lack of honesty and transparency, and you will be seen as an untrustworthy negotiator. As a result, when preparing your negotiation strategy, you should determine the type and amount of information you want to put on the table and measure the consequences of that choice.

It is worth noting that honesty and transparency are not the same concept, and neither are they universal. Honesty relates to lies or not telling the truth. In some cultures, lying is defined as saying the opposite of the truth, whereas in other cultures, omitting information is lying. So if you are honest, you are supposed to tell the truth; if you are transparent, you are supposed to tell all the truth.

One recommended technique is triangulating the truth. That means you need to check the information that was given to you by several other means. One of them is to keep asking your counterpart questions that relate to the information you need, and look for consistency. The Chinese use this technique at each interaction. Another approach is looking for other sources of information, such as other people who work with them, their direct reports, their website, information from their industry, and so forth (Malhotra and Bazerman 2008).

You also should be able to pick up on nonverbal communication to see whether or not it confirms what was said. In addition, you should watch for responses that don’t answer your questions. Latin Americans often use this technique, either to avoid conflict or because they don’t know the answer to your question and want avoid losing face by admitting this. It is the technique of creating a diversion to avoid the topic. It can also happen that the response you get is true, but it just doesn’t answer your question. Ambiguity is part of the communication game in negotiation, and you need to be ready to cope with that. Finally, you can check reliability by asking questions about what you already know.

The Trust Dilemma

Without trust, you cannot do a deal. And trust is not given but earned. However, trust is not defined or built the same way in different cultures. In low-context cultures, for example, you earn trust from your counterparts by being objective, factual, and by not revisiting contract clauses once you have signed the document.

On the other hand, in high-context cultures, trust is dependent on people, and building relationships is the only way of earning it. Trust is needed for a negotiation to move forward, but you should measure how much trust you can have with someone, and how much you want them to feel they can trust you. Your counterparts will trust you if you are reliable. Reliability might be determined by your ability to tell the truth, be consistent and keep your promises.

Trust is a delicate thing. It requires a long time to build, yet you can blow it in a matter of minutes. All it takes is one incident of behaving inconsistently with what someone considers trustworthy behavior. It has to do with the relationship between pretrust—the belief that you will do what you say—and posttrust—the judgment about what you have done. If you go back on your word, you generate distrust (Blanchard 2013).

When you understand how your behaviors affect others, it’s much easier to gain respect, earn trust, and accomplish mutual goals. Keep in mind that people usually won’t tell you that they don’t trust you. You will need to deduce it based on their behavior.

The ABCD trust model is presented in Table 3.1 (Blanchard 2013).

One of the most convincing ways of motivating someone to do something is to use strategies that lead to early trust, particularly among multiactive and reactive negotiators. Societies can be divided into high-trust and low-trust categories. Members of high-trust cultures are usually linear-active. They assume that people will follow the rules and will trust a person until that person proves untrustworthy. By contrast, members of low-trust cultural groups are often reactives or multiactives. They initially are suspicious, and you must prove to them that you are trustworthy (Lewis 2006).

Research recently conducted with 173 participants from 26 countries demonstrated that trust is not a universal concept, as people can come up with several different definitions of it (Karsaklian 2013). Table 3.2 presents some quotes to illustrate this statement.

The Empathy Dilemma

A key factor about human interactions is that people tend to deny or project parts of themselves on other people. This means creating empathy is about building identification and avoiding denial. It is about demonstrating that you and your counterpart share something meaningful, so are able to walk together toward the fulfillment of your respective objectives.

Being empathetic is focusing on the feelings of the other person. It does not have to do with your emotions. Emotion is about your feelings; empathy is about the other party. If you are lucky and have a natural ability to empathize with people, you might get empathy quickly with your counterparts, thanks to shared values and some common ground. It will require less effort from both parties to feel a kind of belongingness and identification.

The Compete or Cooperate Dilemma

Negotiators who see negotiation as a competition have a hard time when their counterparts look for cooperation. Should you really choose one of them? Deals can hardly be totally cooperative, and one party may concede a bit more than the other one. Competition is inherent in negotiation but should not jeopardize the deal or the relationship. Cooperative competition is possible when negotiators establish objectives and rules together, so are connected by a process they both create.

The Strategy or Opportunity Dilemma

You have carefully done your homework and your negotiation strategy is well-designed. You have tried to foresee unexpected situations and are ready to get down to business. But some unexpected opportunities occur as you negotiate, and you want to take advantage of them. Should you really do that? How much risk would you take by deviating from your well-established strategy? How can you measure these risks? Negotiating is about risk taking, but you need to be aware of the consequences of capitalizing on appealing opportunities as they arise. It can be a tempting siren song.

The Role of Emotions in International Negotiation

You might have an angry person before you. It can be a genuine anger or just a tactic to make you feel frightened or angry, too. Don’t try to stop them or to make them be reasonable at that moment. People who are feeling their emotions stop listening. If it is a genuine anger, people need to vent it. They will not hear a single word you say, as they are blinded by what upsets them. Let them say all they have to say. Once they calm down, you may start talking.

Take their anger seriously, and don’t try to minimize what seems to be a relevant issue to them. It would sound like a lack of respect—or worse—like mockery to people who are emotionally shaken.

It would be better to help them release their anger, frustration, and other negative emotions. People get psychological release through the simple process of recounting their grievances to an attentive audience. When they are mad and you tell them to calm down, you devalue them—which makes them more emotional and perhaps even angrier.

Instead, listen to and commiserate with them, and they will calm down by themselves. They want to be listened to as an emotional payment. Don’t avoid negative and stressful situations. Deal with them instead, if you don’t want to increase frustration on the other side. But you should avoid expressing an emotional reaction to it. The consequences can be disastrous if you lose your temper, because emotions make people unpredictable. You can control your emotions but not those from others.

When your thoughts are driven by negative emotions, you are more likely to be anxious, defensive, and view the negotiation as a conflicting, stressful situation. You will be ready to attack instead of compromise. Your reasoning will be more emotional than rational, and you will lose sight of your objectives and might make hasty, poor decisions. Thus, you will be more likely to give up as the negotiation gets tougher, and as your goals begin to look unattainable. It is pointed out that anger can blind, fear can paralyze, and guilt can weaken. You’d better ask for a break or change to another topic, so that you and your counterparts can return to rationality (Ury 2008).

Your thoughts lead to your perception of the negotiation. What you see is not the truth, but your perception of it. This can be either positive or negative, depending upon your state of mind. Some people see financial crisis as a terrible threat. Some others see it as an opportunity. Many companies do much better during tough periods than when everything seems easy for everybody.

It is when things are getting tougher that you need to be more creative. The Chinese understand it very well. The Chinese word for crisis is WeiJi. This word in composed of two words: Wei means danger and Ji means opportunity. Each risky situation holds valuable opportunities ready to be seized by the people who see them. These are the positive thinkers. They take the best spots in the market while others spend time and energy just complaining about how bad things are. Make sure that your thinking supports your actions rather than pulls you down to mediocrity.

Human beings are reaction machines. The most natural thing they do when confronted with a difficult situation is to react—to act without thinking. It is noted that there are three common reactions: striking back (attacking right back or attacking is the best defense), giving in (just to be done with it), and breaking off (abandoning the negotiation). You should not engage in any of them. That is why you need to take rationality as your guide throughout the whole negotiation process. Rationality enables you to have a distant view of close things (Ury 2007).

Mastering your thoughts is mastering your emotions. If you are rational, you are objective and able to get perspective on the opportunities rising before you. Being overcome by emotions will blind you to opportunities, as your mind will be busy thinking how miserable you are, how badly the negotiation is going, and how far away you are from attaining your goals. You will take every single action from your counterpart as a personal attack. As a result, you will increase the size of the problem instead of looking for solutions to it. No problem is permanent or impossible to overcome. Solutions exist, but you must be able to see and use them. However, being optimistic is not enough. You must be able to see problems from different perspectives to find solutions to them.

To do so, you should know what you want and your ability to obtain it. The triangulation between what you want to get, what you have to do, and what you are able to do will show you what you are negotiating for. The want-have-able matrix represented in Figure 3.1 enables you to measure the power of your wants (motivations), your duties (constraints), and your ability to succeed in your negotiations. Ask yourself specific questions about the negotiation you are going to conduct. Insert your answers in the model on a scale of 1 (does not apply at all) to 10 (totally applies). Place a dot in the corresponding degree of the scale in each one of the three dimensions, and then connect them with a line. You will see in which sides the cloud is bigger and thus, more influential in your negotiation.

You are always in control of what your mind should focus on. To stay focused, your mind needs to be sure that you know where you are going. This clarity on your ideas and thoughts will prevent you from getting distracted with other factors that might naturally intervene, or be introduced by your counterpart. It will also avoid the periods of inactivity from your counterpart. If your counterparts use emotions just as a tactic to destabilize you, don’t fall in that trap. Let them play their game. Keep your temper and carry on objectively. This is the best way of neutralizing their tactic. They will understand this does not work with you and will give up on it.

One of the worst feelings negotiators have is to feel stuck in the same stage of the negotiation. You need to know how and when to take action. You must make the negotiation evolve at each step. However, this evolution does not always rely on concessions, deals, or contracts. It can also be about building relationships, getting more information, getting more involved in your counterpart’s life and building trust. Whatever it is, make sure that you are getting something worthwhile from each encounter. To do so, you need to understand the value of the intangible.

You are already wondering which types of cultures are more likely to use emotions in negotiation. You won’t be surprised that multiactive and affective cultures use them. It’s an easy way to lead people to do what they would not have done without this kind of emotional pressure. It might work very well when you know how to use it. However, the consequences can also be dramatic when the other side expresses regrets when it later understands that you have manipulated them. This may not be seen as fair play. Be very careful about using and facing emotions during negotiations, because they reduce information-processing abilities, which are critical in negotiation, and destabilize the situation. Use creativity instead of emotions.

Creativity is a key activity in international negotiation. It has been stated that creativity is the consideration of a wide variety of alternatives and criteria and the building of novel and useful ideas that were not originally part of the consideration set (Stahl et al. 2009). Because cultural differences are associated with differences in mental models, modes of perception, and approaches to problems, they are likely to provide strong inputs for creativity. If you are able to list new and old ideas by comparing them, the next step is to place them in the thinking outside the box model between chaos and order. You will then see the emergence of new and viable solutions, as represented in Figure 3.2.

The Role of Attitudes in International Negotiation

Negotiators can be in different states of mind, such as happy, sad, depressed, puzzled, and so forth. Among these, he identifies four typical negotiating attitudes (Rich 2013):

•Fusing: This is the one who wants to combine the agendas of both sides to create a common currency for each participant. Fusers bring a positive, confident, and optimistic attitude to the negotiating table, without being intent on putting one over on the other side.

•Using: These people take advantage of the other side. They may bring confidence and self-confidence to the negotiation, but this comes at the expense of the other side’s state of mind. They may be assertive and uncooperative, focusing on their own needs and not caring about their counterparts.

•Losing: Losers come to the negotiation with a defeatist attitude. Often this happens to satisfy the concerns of others.

•Confusing: These people labor under mistaken assumptions, misapprehensions, or prejudices, which may cause them to be losers or users.

Independent of their attitudes, never neglect your counterparts’ problems. Their problems are your problems, because these can get in the way of the agreement you want. Listening to their problems and helping them to resolve these will move your negotiation forward more quickly, and you will be viewed favorably and appreciated by your counterparts.

Listening is the least expensive—and most valuable—concession you can make. We can say that you will have some credit to use with them after that. And, if you are unable to come up with a solution, you can bring more people to the negotiation who would (1) help them with their problems and (2) be your allies for the rest of the process. Your help will add to their well-being and they will be grateful. Do them a favor and they will owe you one.

From Preparation to Closing

If you fail to plan, you plan to fail.

—Benjamin Franklin

You will go nowhere without a well-prepared negotiation. Preparation should take at least 70 percent of the time you allocate to your negotiation process altogether. This includes a number of steps:

•Get extensive information about your counterpart’s company, market, and competitors.

•Analyze all alternatives—besides your offer—that your counterpart would have to satisfy the same needs.

•Know your company, products, market, and competitors very well. It is embarrassing when you learn about your own market from your counterpart. You look unprofessional and unreliable.

•Know about the people you are likely to interact with: their positions within the company, their reputation, their relationships with one another, their preferences, and dislikes.

•Know about your culture and the related stereotypes.

•Know about your counterpart’s culture and create your own do and don’t list.

•Establish your goals by creating your BATNA, your reservation price, and your potential ZOPA.

•List all the concessions you would be able to make and the ones you would find unacceptable.

•List all the concessions you expect your counterpart to make and the arguments you could use to persuade them to give you what you need.

•Choose your negotiation style and design your negotiation strategy.

Try to envision the whole negotiation process when you start preparing it. Think about the information you must have, the way you will use it, what your goals are, the strategies, and tactics you will need. Also consider concessions, closure, follow-up, and possible renegotiations. Think about the whole process, and then work backward. In other words, establish what you want to get and work through everything you need to get it. You can also draft an agreement and follow it to make sure that you are not forgetting anything important.

An effective way of having a good overview of your counterpart’s business environment is performing a Porter’s analysis. The five forces theory to industry structure was developed to help companies survive in a competitive environment. The five forces are (1) the threat of substitutes, (2) the threat of new entrants, (3) the bargaining power of suppliers, (4) the bargaining power of clients, and (5) the intensity of rivalry among competitors, as illustrated by Figure 3.3 (Porter 1980).

You can fill in the bubbles with the information you get from your counterpart’s market. Insert their competitors in the rivalry bubble in the center of the model and you will understand the types of pressure they face. Then list their suppliers and their clients, including you. The more companies you list on each side, the more bargaining power your counterpart has, and vice versa. Finally, assess the barriers to entry by identifying the potential competitors likely to enter the same market, and the alternative products your counterpart might have to satisfy the same types of needs. What your company offers also can be among the alternative products. This analysis of your counterparts’ competitive situation enables you to identify their BATNA, and anticipate their objections to your arguments, which will be extremely useful to you in your negotiation.

In addition, surprise your counterparts by showing how much of their market you know, but avoid any sign of arrogance. You are not there to tell them about their job, but to help them to do it better. Never rely totally on their brief about their market, because it can be misleading for two main reasons. First, they might not disclose some relevant information because they believe it is proprietary. Second, they might have an incomplete or inaccurate perception of their own market.

Know the Market Better Than Your Counterpart

Consider the following situation. A director of an international company asks you to make a presentation to his clients over a lunch he organizes for his clients’ enjoyment. Because there are a couple of topics you can speak to, you ask him to pick the most appropriate one for his clients. He chooses international negotiation. As an international negotiator, you are happy with that. You prepare your 30-minute presentation and fly to his country for that meeting. Nothing can go wrong, because you have mastered your topic, and the company’s director knows his audience very well, as he organizes these events quarterly with different speakers.

Upon your arrival, he asks you to cut some of your slides to allow more time for questions. You would rather not do it. You know the reasons for creating those slides, but again, you think, “He knows his audience and this is the first time we are working together.” Then you make your first concession by deleting the slides.

You give your presentation. Despite your enthusiasm and knowledge, the audience is attentive but there is little interaction. You finish early because there are not many questions from the floor. Why? They were mostly HR managers and not negotiators. Although they found it interesting, the topic wasn’t connected with their day-to-day work life.

You realize you should have talked about other topics that you know well, such as intercultural management (which was among the topics you offered to your client and he did not pick). But should you show him that he has made a bad decision? Does he realize that he committed a strategic error in choosing the wrong topic? No, he does not. He would rather say that people would not have come if they weren’t interested in the topic. Would you agree? And what if people would have come just for the networking, independently of the topic?

At the end of the day, everybody is disappointed. The participants would have rather attended a speech about something closer to their daily work lives. Your host, who paid for your trip, would have preferred to make his clients happy. And you, who had spent a lot of time preparing and traveling to deliver a presentation on a topic you have mastered, would have liked a more receptive audience.

Now that you have this experience, you know that: (1) you always need to check the information you are given, because often people say that they know more about something than they do; (2) in your follow-up, when you get back home, you already suggest some alternative ways of working together next time; and (3) he owes you a concession, and next time you work with him, he will be more willing to consider your advice.

Take your time to perform a Porter’s analysis for your own company to have a better overview of your own competitive situation, too. But make sure that you see the markets as they are, that is, across physical boundaries. You are working in an international environment, so your analysis must not be bound to one country. Analyze all the possible alternatives of being part of your counterparts’ competitive world, and not only his local market. The same applies to your company. If you focus on local competitors, suppliers, clients, potential entrants, and product alternatives, your analysis will be misleading. It will take you away from reality through a phenomenon called myopia.

Beware of Myopia That Can Lead to Negotiation Errors

Myopia is also an illness negotiators suffer from by being self-centered. Their preparation focuses only on how to persuade their counterpart to buy their product. Or, for the purchaser, how to make the seller accept their terms for the negotiations. People rarely take time to see beyond themselves. They don’t know much about the other side, which is a paradox, because they will need the other side’s participation to reach their goals.

This illustrates that preparing your negotiation is defending yourself against losing sight of your negotiation goals. The most common negotiation errors are the following (Cellich and Jain 2003):

•Unclear objectives

•Inadequate knowledge of the other party’s goals

•An incorrect view of other party as an opponent

•Insufficient attention to the other party’s concerns

•Lack of understanding of the other party’s decision-making process

•No strategy for making concessions

•Too few alternatives and options prepared in advance

•Failure to take into account the competition factor

•Unskillful use of negotiation power

•Hasty calculations and decision making

•A poor sense of timing for closing the negotiations

•Poor listening habits

•Aiming too low

•Failure to create added value

•Not enough time

•Uncomfortable negotiations

•Overemphasizing the importance of price

Prepare Your Negotiation

The preparation stage of any negotiation is often overlooked, as people feel that they are too busy to invest time thinking about the deal in advance. Negotiators often are so sure that their strategy will work as well abroad as it has at home that they just take a few minutes to coordinate with the team members on the plane. This is also the moment when they read some tourist guides to learn a bit about the counterpart’s culture before landing.

You understand that this is a very unrealistic and risky approach to international negotiation. When you are seriously preparing your negotiation strategy, start by asking yourself these questions:

•Who will be part of your team? Who should be part of your team? Do you need any experts? Which type of attitude do you want your team to bring to the negotiation?

•What roles are your team members going to play? Who is authorized to make concessions?

•Do you need any materials prepared in advance? Should you send some materials to the other side in advance?

•Where is the negotiation going to take place? Will you make presentations? How long should they take?

•Who is on the other team and how do they work? What do you know about them? Where did your information come from?

•Is there any history between your company and your counterparts’?

•What agenda will you create and how are you going to share it with your counterparts?

•What should you and your teammates know about your counterparts’ culture?

You should make sure that you have all the needed people, each one with their specific competences and roles as negotiators. But other people than negotiators might intervene in some moment as experts. For example, engineers and lawyers are not trained to be business negotiators but their expertise is often needed in moments when the topics put on the table of negotiations become more technical.

In more deal-based cultures like the United States, negotiators talk about contracts from the beginning and to do so they take their lawyers to the table of negotiation at the very first round. This approach might be efficient when dealing with other contract-oriented cultures. However, it is not appreciated in relationship-based cultures. In these cultures, contracts and agreements are the last topic that negotiators talk about and it looks aggressive to bring attorneys from the start. It is perceived as a lack of trust in your counterparts and as if you were a contract hunter with no interest in building human relationship.

It is recommended that negotiators have a devil’s advocate. This person’s job is to criticize your decisions and find faults in your logic (Malhotra and Bazerman 2008). You will often miss some points in your strategy because it is your strategy. Even if you step back and try to get an objective look at your strategy, it is still your creation. Someone else, who is not involved in it, will have a different perception of it. The devil’s advocate is not only useful for finding errors in what you have done, but also may highlight and confirm positive aspects of your strategy. Basically, you need a trustworthy, neutral person reviewing your strategy as an outsider to bring more clarity to it, thanks to an unbiased judgment.

Establish Your Goals

You need to feel that you are in control of yourself to be in control of the negotiation. If you have a clear idea of what you want and where you are going, you will feel much more confident. Make sure that you have listed everything that has to do with your negotiation, so you do not forget.

When you are writing down your negotiation strategy, first establish the different levels of goals you want to reach, and the factors influencing them—both positively and negatively. Then divide the factors into the ones you can control and the ones you can’t. It’s not worth spending time and energy trying to change what you cannot control. This will increase frustration and anxiety. You would be better served by focusing on the important items that you can control. Then you are able to make a difference.

You can even depict goals and factors in a situation and give them the needed importance as your negotiation evolves. Next to each controllable factor, write how and why you can use it. Next to every uncontrollable factor, write how you will deal with it. Give your scheme the shape you like. See the previous Table 3.3.

Making it clear what the negotiation is for will help you to persevere and overcome obstacles, because you are well prepared and know where you are going. Persistence is a key factor for your success. You need to be linear and objective to get what you want. But first you need to make sure that you are heading to the right place. Remember that efficiency is doing the right things, while effectiveness is doing things right.

Goals are the focus that drives a negotiation strategy (Lewiki et al. 2011). Determining the negotiation goals is the very first step in developing and executing a negotiation strategy. Then they can focus on how to achieve those goals. There are several types of goals negotiators may aim for: substantive goals (money), intangible goals (building relationships), and procedural goals (shaping the agenda).

Effective preparation for a negotiation includes listing all goals negotiators wish to achieve, prioritizing them, identifying potential multigoal packages, and evaluating possible trade-offs among multiple goals. The authors make it clear that wishes are not goals, and that your goals are often linked to the other party’s goals. Effective goals must be concrete, specific, and measurable.

You should use a great deal of rigor to establish your goals. The Table of the Right Goal will help you to do that by using the smart/pure/clean attributes of your goals, as presented in Table 3.4.

Let’s assume that you are negotiating the quantities of products with a purchaser. Table 3.5 is an example of how to establish your goals for that round.

Use the goals portfolio matrix represented in Figure 3.4 to monitor the evolution of your negotiation toward achieving your goals. Establish your timeframe. Be realistic when doing this: it’s not when you want it to happen, but how long it can really take to get you where you want to go, factoring in your counterpart’s behavior. After each negotiation round, take your goals portfolio matrix and write down what you have achieved. First you need to list your goals, and then place them on the matrix. Some examples of goals in international negotiation are presented here.

List Your Goals and Then Place Them on the Matrix

1. Socializing

2. Getting to an agreement

3. Price figures

4. Delivery terms

5. Quantities

6. Gathering information

Here is an idea to consider. Sometimes, achieving the goal you have written down won’t be the most important or rewarding part of a negotiation. Often it’s the journey that matters. You walk side-by-side with your counterpart. If you don’t reach your initial goals at some stage, you still need to be happy about the journey. In many cases, the journey itself should be your goal. It has to do with building relationships, earning trust, and gathering information. What can look like a waste of time in the short term can end up being the best way of succeeding a negotiation in the long term.

If you have not achieved what you wanted in some round of negotiations, that doesn’t mean you failed. It can mean that your goal was not consistent with that particular stage of your negotiation, and that you needed more time and information to reach it. This also may mean that you will need to review some of your goals to make them more realistic and coherent with this stage of the negotiation process.

In other words, establishing negotiation goals is not enough. They should be realistic and attainable, and you should try to reach them—however you can get there. Sometimes it may take longer; sometimes it may go fast. This depends on several factors, such as the compatibility with your counterpart’s goals, the evolution of the negotiation, your own and your counterpart’s willingness to work together, and so forth.

Establish Your Strategy

In some situations, you will feel you are in a weak negotiating position. There is a common belief that sellers are always in a weaker position, as purchasers hold the power. As a purchaser from a French company once said, “We have our requirements and it is their (suppliers’) job to take them into account.” Sellers often forget to consider the switching costs to the buyer, and the intangible value of what they offer. They feel weaker because they are trapped in the price negotiation.

You can overcome this by leveraging your counterpart’s weaknesses. It will be much easier for you to deal with the balance of power when you develop a SWOT analysis and are clearly aware of the strengths and weaknesses of all parties. Another way to minimize your weaknesses and to increase your strengths is building coalitions with other people who will bring the resources you are missing.

The SWOT analysis is based on a Stanford University study from the 1960s. This analyzed data from Fortune 500 companies and found a 35 percent discrepancy between the companies’ objectives and what was actually implemented. The reasons for the difference were that the objectives were too ambiguous and that many employees were unaware of their own capabilities. Today, the SWOT analysis is an important tool for every person who needs to have a clear overview of the positive and negative aspects of their activities.

SWOT stands for strengths weaknesses, opportunities, and threats. It includes both internal and external factors. The strengths and weaknesses are internal factors that depend on the company’s strategy and are totally controlled by it. They actually are consequences of the company’s strategic choices. In contrast, the opportunities and threats are general tendencies generated by the market itself, over which companies have no control.

The strategic decisions based on a SWOT analysis aim at leading the company toward leveraging its strengths for taking market opportunities and reducing its weaknesses, to be protected from market threats. As for the Porter’s analysis, don’t forget that the markets you are analyzing are not limited by geographical boundaries. Table 3.6 depicts some potential aspects of your offer that you can include when performing a SWOT analysis.

The SWOT analysis can be used in several levels: for the company as a whole, one business unit, one line of products, one product, or even one person. Perform a SWOT analysis for yourself as a negotiator. Writing down your strengths and weaknesses will give you a clear overview of your abilities. Use Table 3.7 as an example.

Now focus on your strengths. If this comes naturally to you, then you are more likely to be confident, positive, and enjoyable. Use your strengths to leverage your actions as a negotiator and make a difference. In order to fully use them, you must be aware of them. More often than not, people are not conscious of their own strengths and weaknesses, and that is why they cannot identify opportunities and threats. Your strengths are your best assets, and you should rely on them. In addition, they will make you feel more motivated, and you will take negotiation as an enriching human interaction instead of the common classical perception: that it is stressful and confrontational.

When you believe you have done enough preparation, spare some time to rehearse. This may sound useless, or silly, or even appropriate only for junior negotiators. Think again. You will never know how long a presentation will take without rehearsing it, and you don’t know how well your team will perform without putting it in a real-life negotiation situation. In addition, when you rehearse, you may think of some reactions from your counterpart that otherwise might not have occurred to you. As a result, you will look and be much more confident.

Meet Your Counterparts

Now that your preparation is done, you are ready to meet your counterpart. This is the so-called moment of truth. Whatever their culture, spend some time bonding with them. Try to find any common ground that could help you to empathize with them. Start building trust by showing that you have something to share. Build relationships by showing who you are, but avoid actions that could be interpreted as arrogant.

Negotiation is not just a technical problem-solving exercise. It’s a political process in which different parties must participate and craft an agreement together. The process is just as important as the product (Ury 2007).

Negotiators come to the table because they need something from the other side. Your role is to create a favorable environment for both of you to work together and be productive. It’s imperative that both sides feel comfortable and are in good spirits before getting started. Linear negotiators are just starting to understand and value what multiactives and reactives recognized thousands of years ago: investing in good long-term relationship.

There are several things to prepare before meeting your counterparts.

Agenda

The agenda for each meeting establishes what topics will be discussed, and in what order. You should reconcile your agenda with the one from your counterpart by making sure that critical issues are addressed. By doing so, the parties strengthen their confidence in each other. They are equally involved in decisions about the agenda, instead of one of them imposing it on the other. One important criterion to decide is the order of difficulty. Some negotiators might start with the easy topics to create a pleasant beginning and leave the tougher ones to the end. Others would rather get rid of the most complex issues at first and then move smoothly to easiest ones.

However, deciding on the contents and the order of the topics doesn’t mean much in different cultures. Polychronic cultures have a more holistic view of the issues and will move back and forth across the subjects in the agenda. Moreover, what might be seen as peripheral in some cultures can be viewed as pivotal in others.

For example, Chinese negotiators find it relevant to present the history of the company and its founders’ values, because the whole company draws on these values. If you are not patient enough to listen to that, you will not only be perceived as rude, but will also miss valuable information that will be extremely useful to you later in the negotiation. Establish an agenda that will lead you to your goals. Start the meeting with pleasant subjects, and create a collaborative feeling and atmosphere.

Some people confuse pleasant with humorous, and might start a meeting by telling jokes. This is a tricky way of breaking the ice. Humor doesn’t travel well. You never know how jokes will be interpreted. If your joke requires translation, that will take all the fun out of it. In addition, some jokes are ironic or use stereotypes that your counterparts may perceive as humiliating or inappropriate. And how embarrassing is it when you tell a joke and your counterparts keep looking inexpressively at you? Instead of creating a pleasant environment, you are more likely to make everybody feel uncomfortable.

A classic example is the story of an American giving a speech in Japan. He is happy to see his audience nodding at everything he says, as the interpreter translates his words. He decides to close his speech with a joke. Before he has finished telling it, all the floor bursts into laughter. He is flattered and amazed and can’t help going to see the interpreter to congratulate him. “You are so skilled,” he says. “I know that translating jokes is not easy. You did it so well that people were laughing even before I finished!” “Thank you,” replies the interpreter. “It is very nice of you to congratulate me. But you should know that I did not translate anything. I just told the audience that our guest was going to tell a joke and that it would be polite to laugh.”

Establishing a good working environment is not only necessary to get agreements, but also to get through disagreements. The best time to lay the foundation for a good relationship is before a problem arises. This allows you to create a more favorable environment to present your counterarguments and objections, without being aggressive (Ury 2007).

People should be receptive to what you say. But if the atmosphere is already tense, then every disagreement sounds aggressive, and counterparts are more likely to defend themselves than to listen to the other side and try to find solutions together. Don’t attempt to separate substance and relationship, because this is not how people’s minds work. What you say has more to do with you than with what you sell or buy.

Gather Information

While you are talking with your counterparts, try to gather relevant information that would be useful for you during the negotiation. Establish dialogue that allows each of you to ask questions and get answers directly from each other. Negotiation is more about asking than it is about telling. For instance, you may ask how they have been satisfying the need you are supposed to address, about their plans for expansion, the countries they envision reaching, and the ways they will do it (direct investment, alliances, etc.).

To make sure you get the information you need from your counterparts, first prepare a favorable environment for them to talk. Spend as much time as needed to socialize and get to know them. Let them get to know you, too. This phase of the negotiation is important, because it is also when you start creating empathy and building trust. You cannot work with someone who is a complete enigma to you. In addition, people don’t give concessions to people they don’t know. You can’t make a request or present a proposal to someone with whom you have not established any kind of human relationship. Listen actively and acknowledge what was said. Everybody has a deep need to be understood.

Expressing agreement with the other side does not mean suppressing your differences. If you address these openly, it shows the other side that you understand their perspective, and they will welcome your arguments after that. Ury suggests that your counterpart will be positively surprised and might think, “This person actually seems to understand and appreciate my problem. Since almost no one else does, that means this person must be intelligent” (Ury 2007, 73). Then you have opened the door to show that you are, indeed, an intelligent international negotiator.

But realize that the other side will be aiming at gathering information from you as well. One traditional question when you are negotiating abroad is about how long you will stay in the country. Although it might sound just like a courtesy or curiosity question, it might represent important information for their strategy. In several relationship-oriented cultures, negotiators like to drag the other side out until their departure date by avoiding getting down to the core topics all over the time you spend there. They will wait until you are hurried to make you an offer that you might accept just not to go back home empty-handed.

Meeting Site

Decisions about the place to meet for the negotiation are strategic. Doing this on the home turf gives that negotiator a territorial advantage. It is psychologically more comfortable, practical for getting people involved, and gathering additional information—not to mention less costly.

If the meeting takes place in your country, you are responsible for making your counterpart’s stay enjoyable. Think about their well-being in terms of accommodation, food, and visits. People who travel often need to feel comfortable when they are abroad. A bad night might put them in a very bad disposition to work the next day. The more you look after your counterparts, the better spirits you will put them in to work with you. In addition, they will feel valued and grateful and willing to reciprocate in some way.

Many people believe that negotiating in their counterparts’ country puts them in a weaker position. This assumption has not proven true. Negotiating at your counterpart’s place has several positive aspects, too. First, you may visit the facilities and verify statements they might make during the negotiation. Second, you can meet relevant people in addition to the negotiators, and you can get a sense of the company’s atmosphere. Finally, because you invested in a trip, you made the very first concession. Your counterpart already owes you one.

However, there are some logistic aspects that you can’t master if you negotiate at your counterpart’s location. For example, if you need to make a PowerPoint presentation, ask your counterparts if they would agree for you to make a quick presentation at the beginning of your meeting. Follow-up to make sure that the equipment will be available, or bring your own. Don’t forget to include that in the agenda.

Wherever the encounter takes place, be sure that there will be social events associated with work. Few negotiations are effectively conducted in meeting rooms and offices. Lunches, dinners, trips, shows, and karaoke are part of the whole process. Each culture has its own traditions, and you need to be ready to go along with them.

Your counterparts expect you to be an agreeable person, interesting to talk with about other topics beyond work. You should have some general knowledge and be able to discuss different subjects with different people. Nothing is more boring and disappointing than taking someone to a nice place to relax only to have them keep talking about work and deals. Your counterparts also want to know if they can have fun with you and spend pleasant time together. This can really make a difference when they are deciding between working with you or someone else.

You might argue that socializing does not look professional. But remember: negotiation is a human interaction more than anything else. It is imperative that your counterparts appreciate your human side. The more comfortable they feel, the more positive they will be about you and your business. Some negotiators do exactly the opposite. They want to make the other side feel uncomfortable, under pressure, and weak in order to take advantage of them. As an intelligent international negotiator, you want to take your counterparts to the negotiating table, not to a battleground.

Schedule

The time allocated to discuss each topic, as well as for breaks, does not mean much in several cultures. Time pressure is not always productive. The amount of time depends on how many people participate in the negotiation and also on the questions. Be structured with linear-active counterparts, and flexible with multiactive and reactives. In any case, always be punctual. If possible, arrive early to check the meeting room and its facilities.

Now is the moment when you will use your list of concessions and demands. You and your counterpart will try to get what you both had planned during the preparation phase. There will be arguments and counterarguments. Depending on your counterpart’s culture, this phase may be more or less time-consuming and might require a few or several rounds.

Master the Bargaining Phase

You know that it is impossible to reach any deal alone. Negotiation is a collective activity. There should be at least two parties to create a deal. The other parties have to be as involved in the process as you, if you want to work toward a deal. You have strings linking you to your counterpart. If each one of you pulls too hard, the string is more likely to break and both will be left with nothing. The classic image of the two donkeys linked by ropes and wanting to eat on their own sides at the same time is a good illustration of a negotiation, as represented in Figure 3.5.

Concessions and Reciprocating

Negotiators are often reluctant to make concessions because they think that is a sign of weakness. They believe that if you give a hand, next time they will ask you for the whole arm. This makes them afraid of not being in control of escalation. So when they make one concession, they expect their counterparts to immediately reciprocate. But there is a value attached to each concession.

If you want your counterpart to understand what a concession means to you—and what it should mean to them—then you need to label it. People tend to undervalue or ignore the concessions of others just to escape the obligation to reciprocate. Instead of simply giving something away, you should make it clear that your action has a cost to you, whether monetary or nonmonetary. Then it becomes embarrassing to your counterpart to justify nonreciprocity (Malhotra and Bazerman 2008).

However, make sure that all parties understand what reciprocating is supposed to mean. Even if the other side acknowledges your concession, they might still try to reciprocate with something of lower value. Your job is to eliminate all sources of ambiguity and state the level of reciprocity you expect. It is recommended that negotiators make contingent concessions, that is, that you explicitly tie your concessions to specific actions by the other party. Although this strategy may guaranty balanced concessions in your negotiation, it might reduce your opportunities for building trust, and developing and strengthening your relationship with your counterparts. They should be used at the right moment and for the right reasons. Do not overuse them.

Negotiation helps to create value through agreements that make both parties better off than they were before. Sometimes what you want to earn from a negotiation is not vital to you. You could keep going alone, but it makes you better if you work together with a counterpart because this enhances performance and quality.

The Importance × Strategy Matrix represented in Figure 3.6 will help you to assess the value of each concession you might be able to make during your negotiations. There is a cell in which you will place every aspect of your negotiation that is not negotiable, because it is highly important and strategic. Very high-value concessions should be traded with other highly valuable concessions from your counterpart. The same is true for high-value concessions. Finally, you can play with the low-value concessions by using them at opportune moments throughout your negotiation.

Introducing New Ideas

If you are conducting your negotiation the way you wish—based on dialogue and mutual understanding—a new proposition should not come as a surprise. This will flow from the work you have been doing with your counterpart so far. The more what you present dovetails with your counterparts’ interests, the easier it is to introduce new ideas.

Sometimes, it can be tough to convince the other side about the value of the alternative you are proposing. Remember that novelty can be frightening. People tend to stick to their well-known references and often are reluctant to change their habits and accept something that is totally new to them. They might argue that “we have never done it before,” or “we have always done it this way.”

Cultures with a high uncertainty avoidance index are the most reluctant about and suspicious of new ideas and about working with new people, too. Your job is to reassure them and make it easier for them to accept your new ideas by walking side-by-side with them throughout the process. But first they need to trust you. No other type of guarantee can replace the trust they have in you.

A very efficient way to get people to accept new ideas is to make them think they thought of them, as the French novelist Alphonse Daudet said in the nineteenth century: “La meilleure façon d’imposer une idée aux autres, c’est de leur faire croire qu’elle vient d’eux” (The best way to impose an idea to others is to make them believe it comes from them). This allows you to open the way for your counterparts to come up with an idea that matches the point you wanted to convince them about. Once they select an alternative, it becomes their idea.

The fact that we better accept our own ideas aligns with a well-known issue in international business, called the not invented here (NIH) syndrome. The NIH syndrome prevents people from buying imported products because they want to support local businesses, or because they don’t trust the quality of foreign products. On the management level, the NIH syndrome creates tension between headquarters and local subsidiaries, because the local managers are reluctant to implement the decisions made by the headquarters without being able to adapt them to their particular market. Some intercompany negotiations happen because of the NIH syndrome, which end up having considerable impact on the company’s international marketing strategies.

The Boston Consulting Group (BCG) matrix can help you make it easier to have your new suggestions accepted by your counterparts. This tool was developed at the BCG in the 1970s to assess the value of the investments in a company’s portfolio. Each of the four cells has a specific name, based on the level of market growth and relative market share.

The items in each cell also can fall into four categories. The question marks have high growth potential but a low relative market share, because they represent new products, ideas, and concepts in a market. These need considerable financial support to develop awareness and value. The stars have a high market share and a high growth rate, but still require a lot of effort to become profitable and enjoy customers’ support. The cash cows are former stars that benefit from customer preference and loyalty. They are the most profitable products for the company. Finally, the dogs have a low share in a saturated market and should not be kept in the long-term portfolio. The BCG box relates to the product life cycle with its four stages: launch (question mark), development (star), maturity (cash cow), and decline (dog).

You may use the same model, in Figure 3.7, for your new suggestions and arguments, since they have a limited lifespan, too. First, you present your new argument and face your counterpart’s hesitation about accepting a novel idea. Then you prove its value for you both, search for their support, and ask for their agreement. Showing how your argument is valuable and unavoidable will create a need to the other side, and lead to acceptance. Finally, do not waste time and energy trying to convince your counterpart about the value of old arguments, which have already proven inefficient and no longer persuasive.

The BCG box enables you to introduce your arguments step-by-step. People are frightened when you present something that is perceived as being too big, too different, too fast, and too hard to achieve. Too much and too fast always sounds overwhelming. By taking an incremental approach, you walk your counterpart through the whole process by anchoring each step. This reduces the distance between each anchor and the next, because big steps look much more risky.

To convince your counterparts about the value of your arguments, tell them what they wish to hear. Some facts and arguments can be presented differently, according to the needs of the people across from you. It is a matter of perception, which is, by the way, based on their personal values. For example, if you take Schwartz’s model as an indicator, you will want to use a slower paced and reassuring approach with conservatives, while underscoring innovativeness to those who are open to change. You also should talk about how much your counterparts will gain by adopting your new arguments to self-enhancement-oriented people, or how much everyone would profit from the new idea to any self-transcendent people.

Dealing With Disagreements

Sometimes you will feel that bargaining is tougher, and you see that you are heading toward disagreement. Then you need to bring up potential losses instead of potential gains. At this point, your counterpart will be more open to hearing what you both will lose rather than what he can gain, because no one likes to lose something. This has nothing to do with threats, but with an objective analysis of what you both will miss if you don’t reach an agreement. Use your power to focus your counterparts’ attention on their own interest in avoiding the negative consequences of not agreeing to move forward.

When your counterpart only focuses on the negative aspects of your negotiation, you might be heading toward a lose-lose outcome. Talk about objective and factual consequences and not about what you will do if they don’t agree. It is not about threatening them: it’s about warning them and opening their eyes by projecting them into a future without the benefits of an agreement.

Consider the following situation. You have supplied your services to a foreign company for several years. You have recently been in a very successful partnership with them, working together for one of their clients. One day, that client calls and asks you to supply them with your services. To ensure you are not being unfair to your partner, you ask the client if they want to work directly with you or via your partner. They say that they contacted your partner first, but the partner had proposed another supplier. Since the client had been very happy with your services, they wanted you to give them a proposal for a new project.

While you work on the proposal, your partner calls: upset because you should not be competing with them, since you are their supplier. You explain that they had chosen another supplier this time, and that you have the right to market your services as much as they do—mainly because the client requested this.

Your partner asks you to withdraw your proposal. They almost threaten you, because their company is larger than yours. You try to show them where you both are heading if they continue to behave in this way. You say, “We are competing with other companies. If the client sees that there is animosity between us, they will choose someone else.” You propose a partnership as a solution. You say, “Then everybody wins, and I am sure that the client will select our common proposal.”

Your partner does not accept. They want you to get out of their way. They try another tactic with you: using cultural differences as an excuse. They say you don’t have the same understanding of the terms of your partnership, and that is why you should take yourself out of contention. “We know about our market,” they say. Next, your partner tells the client that they should not consider your proposal. As a result, another company is hired to do the job and, just as you predicted, you and your former partner are out of the game.

Principled Negotiation

Knowing that some people run from conflict and others run toward it, arguing over positions produces unwise outcomes: it is inefficient and endangers an ongoing relationship (Fisher and Ury 2011). Negotiators tend to lock themselves into their positions. The more you defend your position and try to convince the other side, the more your ego becomes identified with your position. Then you end up trying to save your face rather than trying to get an agreement. It becomes a matter of honor instead of business.

There are four points that deal with the basic elements of negotiation and can be used under almost all circumstances (Fisher and Ury 2011):

•People: Separate people from the problem. Avoid being blind because of emotions.

•Interests: Focus on interests, not positions. A negotiating position often obscures the underlying interests.

•Options: Invent multiple options to find mutual gains before deciding what to do. Trying to decide in the presence of an adversary narrows your vision and inhibits creativity.

•Criteria: Insist that the result be based on some objective standard. Use fair factual and objective standards, such as market value, financial results, the law, and equal treatment—­anything that can be used as a measuring stick that allows you to decide what would be a fair solution.

Note that standards might have limited impact on more implicit cultures, where perception plays a crucial role in interpreting facts and figures. In contrast, linear negotiators tend to stick to objective standards.

The principled negotiation’s goal is to decide issues on their merits rather than through a haggling process focused on what each side says it will and won’t do. This means that you look for mutual gains whenever possible. However, when your interests conflict, you should insist that the results be based on some fair standards that are independent of the will of either side. The method of principled negotiation is hard on merits, soft on the people. Table 3.8 presents the comparison between soft, hard, and principled negotiation (Fisher and Ury 2011).

One of the biggest mistakes a negotiator can make is to focus on trying to reconcile the demands of each party when they should focus on reconciling interests. While the demands can be incompatible, the underlying interests can be similar. In other words, negotiators should dig deeper to get to the interests instead of focusing only on the apparent demands. This strategy enables negotiators to have a broader view of the real problem and search for more creative solutions. It is even more important to dig deeper with counterparts from multiactive and reactive cultures, as they tend to dissimulate their real interests by focusing more on relationship than on substance (Malhotra and Bazerman 2008).

Positive thinking gets help from the willingness to understand one another. People say that negotiation is about giving and taking. But when you give first, you are more likely to take more. If you show your genuine willingness to understand your counterpart first, they might reciprocate. This will make your interaction more pleasant and efficient, and you will move ahead faster. Being able to put yourself in your counterpart’s shoes demonstrates that you are flexible, honest, and sincere. Also, once you have shown a willingness to understand their constraints and demands, you may more legitimately present your own difficulties and ask for their understanding.

Taking the first step forward is not showing weakness: it’s showing willingness. You might get some pressure from your supervisor about having to be a tough negotiator. Sometimes you may be criticized for being too nice to your counterparts. Being willing to work together, being understanding, and making concessions is not being weak: it is being wise. As a tough negotiator, you are likely to get what you want faster and without making many concessions, but what you get won’t last very long. It is a short-term strategy.

The long-term strategy is building things together with your counterpart. It is involving them in any decision you may make rather than imposing ways of deciding upon them. When people are associated with a decision, they feel committed and cannot walk away or disagree afterward. There is a personal involvement, because it becomes our decision instead of my decision. It creates bonds among people and high involvement throughout the negotiation process. This is the best way of creating standards to be followed by both parties. Because people hate to contradict themselves, they will be less likely to deviate from what was already agreed.

A good negotiator knows how to be flexible but firm. It means being objective and sincere without being aggressive. You can be tough but friendly. Being understanding and flexible does not mean that you are not firm in your commitments.

There is some confusion between flexibility and changing your mind. Being flexible does not mean that you change your mind every day just to go with the flow. It means that you are able to listen, analyze, and understand other standpoints. It means that you are intelligent. Once you have listened, analyzed, and understood, you can position your offer, make a commitment, and be firm about it. Better yet, you can legitimately ask your counterpart to do the same. Indeed, by making an exception, you create precedents you can use later.

In summary, focus on these four negotiation factors during the encounter: interests for reaching your goals, standards for resolving differences fairly, alternatives to negotiation, and proposals for agreement (Ury 2007).

When Negotiations Go Wrong

Working in situations where everything goes as you have predicted is easy but unrealistic. You should know how to negotiate in situations that can be very different from what you have imagined.

It is often annoying to have a demanding counterpart. Sometimes this feels like a never-ending negotiation, as your counterpart always asks for something more. This is like being nibbled to death by ducks. Instead of being upset by their demands, take these as opportunities to better negotiate. If they ask for more, you may ask for more, too.

This is the way people from several countries negotiate. Latin Americans and some Asians do not ask for everything at once. Just as their negotiating style is incremental, their demands are incremental, too. Once they get your initial agreement about one subject, they will wait to ask more about it bit by bit. You should also take into account their nonlinear perception of time. Because they mix past, present, and future, they see no point in asking for everything they need all at once.

The bargaining phase is over when both parties have agreed on several requests and are happy with the outcomes. Or the negotiation might also be over because no agreement was possible. In this case, the negotiators have few options: abandon the deal, ask for a mediator, and ask for ­arbitration.

Abandon means that both parties agree to give up on the negotiation, or one of the parties refuses to continue negotiating because it sees no possible deal. Mediation is a third-party negotiation in which one outsider will listen to both parties and help them to reach reconciliation. The mediator’s main role is to take the parties back to objective analysis by showing the advantages for both parties in getting a deal done. Finally, arbitration occurs when one person makes a decision for the negotiators. In this case, the negotiators no longer have the option to decide and must abide by the decision made by the arbitrator.

The Jodari house, depicted in Figure 3.8, represents the role of the mediator if the negotiators are unable to see new solutions.

The Jodari House represents the need for creativity and open-mindedness in negotiation. There are only two rooms (Room 1 and Room 4) out of four in the house that you can see. Your counterpart can also see only two rooms (Room 2 and Room 1). You both have one room in common (Room 1) and that is a convenient way of starting your negotiation. As long as your negotiation evolves, you might want to expand the alternatives in trying to attract your counterpart to Room 4 by explaining the advantages of going there. But he cannot see Room 4 and would rather drag you to Room 2, which you cannot see and where you are reluctant to go. Then it becomes a matter of persuasion and the balance of power.

This picture perfectly illustrates the possibilities for negotiators: (1) one common ground to start negotiating, (2) alternatives that each can propose to the other, and (3) one existing alternative that they ignore because they cannot see it. While Room 3 is as much a part of the house as the three other rooms, it does not exist for the two negotiators because they cannot see it. It is a matter of perspective. Only a person placed on the other side of the house could see it is there. Ideally, the third person needs to have a higher view to be able to see the whole house. In addition, the picture represents how much of reality each negotiator can know. Reality and truth are one thing, and the other is how much people know about them. The difference explains the limited number of alternatives that individuals can see.

Ideally, the third person should be someone from your counterpart’s network, with whom you will empathize. Their word has much more impact because there is already trust between them. In multiactive and reactive cultures, this is the only way of doing business. There should always be a third party—with a different but accurate view of the negotiation—whom they trust. Everything works via recommendation. You will need someone to open the doors for you and to help with supporting your arguments.

When positioning your offer, give one or two good reasons why your counterpart should agree with you. If you elaborate too much, they won’t listen to them all and they will focus on the first ones. And the more you talk, the more you take risks, because what you say can also be used against you.

You always need to have some alternatives to keep the negotiation moving forward. Sometimes negotiators arrive at a deadlock and are unable to get out of it because they lack alternatives. If you are stuck in one point of your agenda, leave it and move to another one. You may come back when you have created better alternatives to suggest to your counterpart.

This is how polychronic people conduct negotiations, and you should feel comfortable with it. If you are to lead the negotiations, do it with your conditions and not with your concessions. Your conditions establish the tone and the pace of the negotiation. Your concessions allow you to move forward. Posit your conditions first and negotiate concessions after.

Not all negotiations are worth the time and effort you would allocate to them. You need to know when to give up on a negotiation and be happy with what you already earned. Walking away from a negotiation is not humiliating. Au contraire, it shows your counterpart that you know where you are going and that you are perfectly aware of the value of what you are negotiating.

The No Syndrome

No one likes to get negative responses, although no is still the word people hear most often in their everyday lives. While it is upsetting to get a negative answer, negotiators should see it as a new opportunity to improve their strategies. More often than not, negotiators think that the lowest price is all a client would ask for. Then they squeeze their offer to get the best price. By doing so, they often must cut features from their offer that would interest their clients and, as a result, their offer is rejected. If your offer is turned down, ask the client why this happened, so you can improve it for future negotiations. You will get very valuable information and will be very positively perceived by your counterparts because you are able to accept criticism positively.

If you don’t want to have a flat no as an answer, ask questions for which the answer cannot be no. For instance, if you ask, “Do you agree with what I say?” it is easy for your counterpart to answer with a short no. Instead, ask, “How does what I say align with your expectations?” Then your counterparts will need to elaborate on their answers, and you will get more information to keep going with your arguments.

In addition, remember closed-ended questions are the last approach you should use to get information from counterparts in multiactive and reactive cultures. They might always answer positively, which will be misleading to you. They may not even answer your questions, and you will be trapped in their digressions without knowing how to get out of these and back on track.

Also consider that your counterparts may have limited power to make decisions or to deliver information, because they might have strict instructions not to do so from their hierarchy. Of course, this is more likely to happen in cultures where the power distance is strong. If you always ask them the same type of questions, you will always get the same answers. There are mechanical answers to well-expected questions. It is like pushing a button to turn a machine on and off. The result will always be the same. But if you ask your questions differently, and make it more of a conversation than an inquiry, your counterparts might be grateful because you are making their lives easier by opening other alternatives to avoid constraints.

Ask What Your Prospect Wants—and Then Listen

Never try to guess what a prospect wants. Instead, learn about their real needs and interests. A French company that specialized in training programs had to learn this the hard way. It was involved in a competition to earn a sizable contract for a program with a large organization in Belgium. The manager decided to design the offer by using two trainers. Each one was an expert in the different fields the project needed to cover.

During the presentation, the manager proudly presented their proposal by highlighting the extreme professionalism of the instructors who would handle the training. The potential client argued that, although their program was interesting, it was twice as expensive as what the other competitors offered. The French manager said that they could lower the price a bit, but could not match the other competitors because their offer was much better—thanks to the two experts. The potential client suggested the alternative of having only one trainer: a possibility the French company immediately rejected. They lost the deal. Why? They were so deeply persuaded about the superiority of their offer that they did not listen to their counterpart. What the Belgians wanted was to have only one trainer to give a quick overview of the topic to the participants.

Two years later, the same company was competing for a similar program for an institution of the French government. They designed a program with several trainers. They lost the deal again. Did they learn anything from those two failures? No. They were upset by the rejections and said that other providers were not serious, because one trainer cannot specialize in everything. The French company missed its prospects’ point. They were not looking for great expertise in some fields. They wanted to provide their staff with an overview of a subject.

There are two lessons to learn from this. First, never try to guess what your client wants: know it instead. Second, what you consider a big value might not make sense to your prospect or client. People do not always search for the most sophisticated offer in the market. They just want to fulfill their needs.

In contrast, reducing features may also reduce value. You are lowering the value of your own offer without even trying to present it to your client. And when the client battles for a price reduction, both parties may end up dissatisfied. The seller loses, because the price and the offer were not as high as they were supposed to be. The buyer loses, because they will not be happy with the product’s performance. The risk here is that the buyer might justify their own requests for a reduction by saying that the product did not satisfy their needs, and then look for another provider next time. Conversely, add-ons should really relate to qualities that add value to the client, not to your company.

Pay Attention to Your Counterpart’s Negotiation Style

You will very quickly identify your counterparts’ negotiation style by observing the way they reply to your arguments. If they are destructive and negative, they are playing the bad cop role (which is explained in the negotiation strategies section later in this chapter). If they are constructive and positive, they are playing the good cop role. You know how to play this game by using the good cop as an ally and by keeping your temper and never getting into a conflict with the bad cop.

As opposed to these two well-known behaviors in negotiation, negotiators tend to ignore the negative and constructive as well as the positive and destructive arguments, which is a strategic error. These types of replies provide you with precious information on what is appropriate or not about your arguments. That enables you to reorient your arguments in the right direction. Use the appreciative inquiry model in Figure 3.9 to help you to position your counterpart’s responses.

Give undivided attention to what your counterparts criticize about your offer. This will give you the key to make them a new and more appropriate offer. When they explain the reasons why they reject your arguments, they are keeping the door open for you to return with a more persuasive case. Take it as a chance to improve your performance as a negotiator and to come up with something that better suits your counterparts’ needs.

Of course, the message will be conveyed differently, depending on the culture. In low-context cultures, your counterparts will tell you frankly and directly what is not acceptable in your arguments. But high-context cultures will use evasive and nonverbal communication for that. It is useless to ask them to be explicit. They can’t and will avoid making you and them lose face by openly criticizing you. Remember, in high-context cultures, the person and the subject are considered the same, so any open criticism about the argument is taken personally.

You also need to consider the role of bluffing in negotiations. Linear negotiators rarely use it, because they consider this a waste of time and are more likely to put their cards on table. But multiactives might use it to see how far you will go to compromise and give them what they want. They might also do it because it is part of their tactics to destabilize you, or to measure your flexibility, or even to see how much you are on their side. Reactives are more likely to use constraints than bluffing.

Once again, during your preparation phase, determine what is negotiable and what is not. This is the best way of learning to say no at the right moment, when you see you are entering the walk-away zone. To have an overview of what is at stake in your negotiation, place challenges and risks in the negotiation zones graph in Figure 3.10. Make sure that you accept challenges with measured risks.

Tactics That Can Cause Upset

Another tactic used by negotiators to destabilize their counterparts is making them cool their heels in the waiting room. In most multiactive and highly hierarchical cultures, making others wait is a sign of importance and superiority. The one who does not hold the power should wait. The waiting time can vary from minutes to hours. If you are from a linear, nonhierarchical culture, you will perceive this as a lack of respect and professionalism and will be upset. Even worse, you might leave the room after a while and give up on the negotiation.

If you are an intelligent international negotiator, you will be prepared to this. First, you will not take other appointments on the same day or half day. Second, you will be psychologically prepared to wait. Any time earlier than you expected your counterpart to welcome you will be a bonus. Take some work or reading to do while you are waiting. It should be something that makes you feel like you are not wasting your time, but using it to do relevant things. Time will fly without you even noticing it, and you will be in a very good mood when your counterpart picks you up to start the meeting.

Here is another upsetting tactic. Your counterparts will start the meeting late but will not add any time onto the back end, instead saying they have another meeting to go to. Of course, you will not say that they can make the other people wait as long as you had to. Instead, say that you understand how busy they are, ask how much time you have, and show them that you are grateful to have the opportunity to tell them about your subject. Then present a teaser of your topic, apologize for rushing, tell them that you are at their disposal to answer further questions and offer explanations, and get ready to leave.

You will be surprised with the results. They may spend much more time with you than what they had announced at the beginning of your meeting, because they are curious about your teaser. Or they may get back to you very shortly, because they have tested you as an individual and a negotiator and admire your professionalism. They may even apologize for having made you wait for so long. Moreover, they know very well that you came over just to meet with them and how long you patiently waited just to have few minutes of their time. They are able to appreciate this without you having to tell them about it. Indeed, they expect people to complain about waiting and the short amount of time allocated to them, and show how upset they are about it. But as an intelligent international negotiator, you are changing the game in your favor.

Review Each of Your Rounds

It is imperative that after each day of negotiation, you do a debriefing with your teammates. Take a measure of what happened without judging anything. Just be descriptive and objective. Then compare what you got with what you intended to get. Assess the results and focus on the main takeaways. Make sure that you are aware of what happened, be it positive or negative. Shed light on what you got and what you could have gotten.

As you review the situation, clarify what you have achieved, what is left to do, and where you are going with your negotiation. Make sure that your actions and outcomes are consistent with your strategy and that you are not deviating from it. After each round, debrief by using the round review matrix in Figure 3.11. It enables you to compare your expectations with your outcomes and guides you in any reorientations you may need to consider before moving on to the next round.

Sometimes the gap between expectations and outcomes is due to the strategy itself, or to inappropriate actions you took. Other times, it can be a matter of inconsistency between your goals and your ability to reach them in that situation. It’s important to know the difference.

The best way of getting better as an international negotiator is to step back from what you have done and learn from it. After each negotiation, use the learn-by-doing matrix, in Table 3.9. Define a time frame, then write the goals you established, and how many of them you reached. Think about what you learned from the negotiation, which obstacles you needed to overcome and how. Consider the aspects of the negotiation in which you were successful, and the roles people played in the negotiation. This process will help you to keep preparing throughout the negotiation. Each round review will make you reconsider what you have prepared and make the needed adjustments to move your negotiation forward.

Having clear objectives and precise ideas of where you are going to will lead to successful negotiations. Your actions are consequences of your thoughts. Things do not just happen. Your thoughts change your actions. Each of your actions will lead to reactions from your counterpart, which in turn will trigger new actions from you.

This action–reaction process can create either a negative or a positive chain of events. The negative chain will draw on threats and revenge, and will pull you and your counterpart apart. It has to do with punishing each action with less flexibility. The positive chain will be constructive, and each action and reaction will add to building value together. It has to do with rewarding each positive action with new concessions. By being positive, you create a virtuous circle in which you and your counterpart negotiate by collaborating. It will take a lot of pressure off your negotiation, and your interactions will be much more pleasant.

Closing the Deal and the After-Deal

Often neglected by negotiators, closing a deal after reaching an agreement is the last but most critical part of any negotiation. When you close a deal, you are starting something new with your counterpart. You are saying hello and not goodbye. Some negotiators take the closing step of the negotiation process for granted. Once they have an agreement, memorandum or signed contract, negotiators stop attaching importance to the relationship with the other party. You should realize that signing a deal is not the end of a process but the beginning of something you worked hard to obtain.

Negotiators often forget that the purpose of making a deal is not to sign a contract, but rather to accomplish what the contract specifies. Reaching an agreement is one thing; implementing the agreement is another. Remember that you depend on each other to make things happen afterward. If you don’t consider implementation throughout the negotiation process, you might end up not reaching your goals. Make sure that the agreement isn’t only a signed piece of paper but a real commitment for all parties. You need to ensure that your counterparts carry out both the contract and the spirit of the agreement.

This is a main difference between low-context and high-context cultures, and also between linear and multiactive and reactive cultures. The main goal for low-context and linear negotiators is to have a signed contract. The whole negotiation process must take them there. After that, the counterparts go their separate ways and each one knows how to handle the work on their side.

In contrast, negotiators from high-context, multiactive, and reactive cultures see the contract just as an administrative formality for two reasons. First, they see the path to arrive at an agreement as just the first part of a collaboration. Signing anything more formal only means that they agree to work with you, and the serious work will now begin. Second, because they’re nonlinear, they often review some clauses during the action plan. They find it natural to make some adjustments to the written contract as they put the words into action to fit new situations. You may feel as though your counterparts are niggling as they always have a little something else to ask you, whereas you think that the negotiation is over and don’t want to start reviewing what was already said. This is just the way they get where they need to be with you.

You must be able to conclude your negotiation properly. First, you need to identify the closure moment. Negotiators are frequently tempted to keep the negotiation going by asking for more or reviewing what was already said. This is a very dangerous game to play. You get what you need during the bargaining phase. After that, you wrap up and leave the negotiation with what you received.

Bringing business negotiations to completion requires special skills and techniques. Negotiators must use their own judgment in selecting the most appropriate method to close the negotiations (Cellich and Jain 2003):

•Alternative: One party makes a final offer to the other side

•Assumption: The negotiator assumes that the other party is ready to agree

•Concession: The negotiator saves some last concessions to stimulate the counterpart to agree

•Incremental: Proceed by agreement on one issue after another from the agenda

•Linkage: Use the reciprocity approach and continue making mutual concessions until reaching consensus

•Prompting: The negotiator makes a final offer with special benefits if the offer is accepted immediately

•Summarizing: The negotiator sums up the key achievements of the negotiation and highlights the benefits for both parties if an agreement is reached

•Splitting the difference: Both parties are close to an agreement and the remaining issues are not relevant, so they close the negotiation instead of continuing discussions on minor details

•Trial: One party makes a proposal and the objections to the trial offer indicate how far they are from an agreement

•Ultimatum: One side forces the other to make a decision on the final offer

To conclude, summarize the main points you agreed upon, talk about a memorandum of agreement or contract, and, if possible, invite your counterpart to celebrate the agreement. But don’t talk about it anymore. Just socialize and have fun.

Follow Up

Following up on a signed deal is paramount in the whole negotiation process but also often overlooked. In this moment, you show your counterpart that you are able to put into action what you promised in the negotiation. If things go wrong during this period, you are likely to lose your counterpart’s trust and ruin your reputation. Information is quickly propagated throughout the market, so others might see you as an unreliable person, too.

Never forget to follow-up. When you are back in your office, call or e-mail your counterpart in a cordial way. It is not only about the contract or signing of an agreement but also about thanking them for their welcome, their time, or whatever positive and friendly aspects of your negotiation you can mention in the ensuing few days. Do it immediately after your encounter. If this isn’t possible, never apologize for the delay by saying you were busy. That will make them feel devalued. They will believe that you have other priorities and just think of them when you have some spare time—even if this was not what you meant.

Remember: what you say is less relevant than what they hear. After this, keep in touch frequently. What the eyes cannot see the heart cannot feel. Show that you have strong links with them, and make sure they know that you care about and want to hear from them.

In one of your follow-up interactions, you will probably have a need to review some points of your agreement. Renegotiations happen more often than you think.

Renegotiations

Static agreements are unrealistic in today’s ever-changing business environment. Too many uncontrollable and unpredictable factors happen and can lead negotiators to renegotiate their deals. Thus, intelligent international negotiators include potential renegotiation costs in the original offer to absorb these future expenses, which can be costly in time and money. There are some key points to remember (Cellich and Jain 2003):

Before the Contract Begins

•Consider negotiations as a dynamic process, requiring constant monitoring of the agreement.

•Build extra costs into the contract to cover future expenses related to renegotiations.

•Make the implementation phase an integral part of the overall negotiation strategy.

•Encourage a healthy relationship between the parties, as it is the best guarantee for a lasting agreement.

During the Contract

•Prepare for the possibility of renegotiations and maintain records of all transactions.

•Remember that agreements mean different things to different cultures, requiring flexibility, understanding, and patience.

•Do not blame the other party for any wrongdoing until you know all of the facts.

•Do not wait for minor problems to develop into major ones before considering renegotiations.

If Renegotiations Are Needed

•Before beginning renegotiations, consult with everyone involved in the original negotiation, as well as those responsible for implementation.

•Be sure you clearly understand the factors that trigger the reopening of negotiations.

•Foster constructive discussions between concerned parties, which is preferable to legal recourse.

•Keep long-term business objectives in mind when renegotiating.

•Encourage steps that ensure that all parties are satisfied to secure profits.

Negotiating Styles

Negotiators have their own personality, culture, and a specific way of negotiating. Some will ground their thoughts and arguments on past facts, others in the present, and others in the future. Use your energy to convince them in the way they find most appealing.

First, think about what drives your own thoughts and behaviors: is it the past, the present, or the future? Then analyze your counterparts’ actions. If their arguments are more likely to be supported by past evidence, they are memory-driven. In this case, you will be more convincing if you ground your arguments on past facts and figures. If they are dream-driven, they will be more willing to hear about future projections of today’s deals. Finally, if they are reality-driven, you would want to show them how beneficial it is for them to work with you right now.

Use Figure 3.12 to measure the proportions of time for each one of these approaches.

It was suggested that Europeans are memory-driven, as they tend to look for historical facts to explain current facts. Americans are dream-driven, by being a land of opportunities and future oriented. Asians are reality-driven, reflecting the industrialization of commerce in those countries (Krogerus and Tschäppeler 2011).

There are five main categories of negotiation styles (Cellich and Jain 2003):

•Dodgers: They don’t like situations where decisions must be made and risks assumed. They try to postpone making a choice and avoid risk-taking situations.

•Dreamers: Their main goal is to preserve the relationship, even if it means giving up unnecessary concessions. They tend to agree with the counterpart and avoid being assertive.

•Hagglers: They view the negotiations as a give-and-take game. Persuasion, partial exchange of information, and manipulation dominate the discussion. They are characterized by a short-term outlook and quick movements.

•Competitors: They like conflict, feel comfortable with aggressive behavior, and employ hard tactics. They enjoy struggling to meet their objectives, even at the cost of alienating the other side, because satisfying their own needs is their primary goal.

•Problem solvers: They display creativity in finding mutually satisfying agreements. They take time to identify the underlying needs of the other party to explore how they can best meet their mutual interests. These people take into account substantive issues as well as relationship.

Despite the fact that it is unrealistic to generalize negotiating styles, some common aspects can be seen in negotiators belonging to the same culture.

Negotiating by Yourself or Negotiating in Teams?

In collective cultures, negotiators are more likely to be part of teams than to negotiate by themselves, which is characteristic of more individualistic countries. Also, in countries with high power distance, senior negotiators participate in the very first rounds as a sign of respect for the counterpart. In masculine countries, negotiators tend to be more assertive while in feminine countries they are more accommodating.

You might need to create a team of negotiators so you have a diverse set of abilities. This can increase creativity, and it conveys an image of strength and power. In addition, you feel less pressure because responsibilities are shared. Finally, your teammates can observe nonverbal clues from the other side while you are busy presenting arguments to your counterpart.

But working in teams can also lead to a lack of focus and consistency. It is important that one of the negotiators be appointed as leader, and each member has a specific role to play throughout the negotiation. Be aware that any inconsistency or tension within your group can be sensed by your counterparts, who will use this to their advantage. These situations will increase the pressure you feel instead of the relief you get by sharing responsibilities with others.

Let’s say you are negotiating abroad with your team. Your counterpart asks for a concession. Your teammate says yes and you say no. You see that this will lead to a trap, but your teammate does not. You try to dissimulate and take over the subject so your position will prevail. But your counterpart uses your colleague as an ally, addressing only him when talking and totally ignoring you. In some countries, counterparts will even try to manage you by creating an incident (spilling water or coffee, taking a visit to a facility, being called out of the meeting to talk to someone else in the company) to make you leave the room so that they can convince your teammate.

This can happen in any culture where negotiators don’t put their cards on table. What can you do? Change the topic, or stop the negotiation by giving any excuse that will take you and your colleague out of that room to have a couple of minutes to talk privately.

Measuring and Taking Risks

The degree of uncertainty avoidance tells much about the willingness to take risks. Negotiators from low uncertainty avoidance countries take more risks than negotiators from high uncertainty avoidance ones. And the measures of risks can also be culture-dependent.

In linear cultures, negotiators tend to calculate probabilities of success and failure. In multiactive and reactive cultures, negotiators have a more qualitative and intuitive approach to measuring risks, which are based mainly on personal relationship and trust. Figure 3.13 demonstrates three types of cultures according to whether their main focus is in on deals or relationship.

The categories presented here demonstrate what you should focus on when working with some of those cultures. In the deal-focused cultures, negotiators put their cards on the table and share information readily, because they believe that makes negotiation move forward faster. To them, the negotiation is over once the deal is signed.

In contrast, the relationship-oriented cultures invest a lot of time in building relationship and trust, getting to know you as an individual, and relying on a personal network. To them, a contract is just a written formality, and negotiations keep going along with the action plans.

Finally, the moderately deal-focused cultures require both objectivity and relationship building. Negotiators’ reactions are less predictable because they move between two opposing ways of dealing with ­negotiation.

Here’s a complication that often arises for international negotiators. You know about cultural differences and their impact on negotiation, but your manager does not. This means you are likely to experience some pressure from your manager to be a tough negotiator and get things done fast. Your company might ask you for short-term outcomes, while you know you need to build long-term relationships with your counterparts to get what you need. If you take an incremental approach, you may have both. You can get some short-term outcomes at each anchor, while you are building the long-term relationship.

Often international negotiators feel like the cheese in a sandwich between the cultures of their counterpart and their own company. They understand both but can hardly bring them together because, unlike him, the other parties don’t understand that things happen differently in both cultures.

Cultural Schizophrenia or the Dual Personality Cultures

Using cultural dimensions to describe cultures can lead to the idea that they are stable and somehow predictable, thanks to general aspects common to all citizens. But this approach fails to take into account the fact that some cultures are highly influenced by others, so seem to have a dual personality.

For example, Indians are very mystic, implicit, and collective. But all of a sudden, they can switch to very goal-oriented behavior by asking direct questions and wanting accurate and immediate answers as part of the strong Anglo influence in the country. Other countries—such as Egypt, Lebanon, Mexico, Singapore, and Hong Kong—can have dual negotiation personalities as well. When negotiating with counterparts from these countries, you might be disturbed when they switch from one style to another very quickly, and several times during the same negotiation round.

Negotiating Strategies

There are two well-known types of negotiation strategies: win-win and win-lose. In the first, all parties should benefit from the negotiation outcomes, while in the second, only one party can win. People often forget to mention the third negotiation strategy, which is lose-lose. Surprising but real, counterparts might get to a negotiation with no intention of getting to an agreement. Let’s see these in more detail.

Win-Win Strategy

As said earlier, win-win negotiations became the norm because they are politically correct. This means that your goal is to secure beneficial outcomes for all parties. If you chose this objective, you search for collaboration and are more likely to make concessions and avoid conflicts. It also means that you want to create good relationships with your counterpart, even if you don’t get as much as you could out of that specific business. Your approach is more long-term oriented.

The win-win strategy relates to an integrative approach to negotiation. Objectives, constraints, and needs of all parties are integrated in the whole process. It also means that one party’s problems become all parties’ problems, to which a common solution should be found. By working together to find solutions to all parties’ problems, the global gains are bigger and shared by everybody.

What motivates negotiators to use win-win strategies is fairness. It is more about sharing than about dividing. You and your counterpart need to believe that your negotiation process and outcomes are fair for both. But just as for trust, fairness is not defined the same way in different cultures. Recent research demonstrated how different the perception of fairness could be across cultures, as described in Table 3.10 (Karsaklian 2013).

See the win-win strategy as a pot-luck dinner. Each party contributes with what they can bring, and all foods and drinks are put together and shared by all participants. In doing so, everybody has more to eat and drink in an enjoyable collaborative environment, and the organizer has a list of who brings what. This type of strategy is a good fit for universalistic, individualistic, low-context cultures, because they naturally share information, care about the community, and are objective in their requirements.

Win-Lose Strategy

Negotiators choosing this strategy don’t believe that all parties can win, so they aim at protecting only their interests. Their rationale is that other people’s problems are not their problems. They don’t believe in transparency and sharing gains. They think that only one party can win, which implies the defeat of the other party. This strategy is a bit tricky, because the negotiation does not always look aggressive as it can be subtle. In addition, negotiators might announce win-win intentions but get into a win-lose strategy as the negotiation progresses.

Using the pot-luck dinner analogy, we can imagine a situation where each participant eats and drinks what he or she brought, instead of sharing with others. The party might be somewhat enjoyable, but there is less interaction and creativity because each person will stick with what she or he already knows and is used to, without being exposed to novelty. Participants might think since everybody does not bring the same amount of food and beverages, it would be unfair for them to share in what others have brought. As a result, participants would have exactly what they would have had for dinner if they had stayed home. Better yet, they will try to get some food from others without sharing their own.

It is a distributive approach because it divides people instead of bringing them together. This type of strategy is often used by collective, particularistic, and high-context cultures, in which people deserve different treatment according to the degree of familiarity and intimacy.

Lose-lose Strategy

It can happen that negotiators don’t aim at working with their counterparts and cannot openly say so. They still might go to the negotiating table to play the game, but they will refuse all possibilities of agreement. No alternatives will ever be good enough. Lose-lose strategy leads to no outcome. Parties are unable to do business together.

Another possibility is that the negotiation starts with a win-win or a win-lose strategy and turns into a lose-lose one. Several factors can lead to confrontation, so each party says to the other, “If you don’t give me what I want, I won’t give to you.” Back to the pot-luck dinner. One person would say, “If you don’t bring the food, I won’t bring the drinks” and they end up with no dinner at all. Often, lose-lose strategies require third-party mediation or arbitration.

Cultural adjustment aligns with the negotiation strategy; it depends on the balance of power. The one who adjusts the most is seen as needing the other more. In integrative negotiations, both parts are willing to adjust because the common goal is to get to a beneficial deal for all parties. But in distributive negotiations, one party will expect the other side to adapt more. Submitting the other party to cultural constraints is a way of increasing pressure and accelerating concessions and decision making.

Independently of negotiations, human nature can be more confrontational or more accommodating. Some people like provoking others, fighting passionately for their ideas and goals, versus others who run away from any conflict or aggressive situation. Culturally speaking, it has more do to with whose interests are to be protected and with how much we trust others.

In collective cultures, negotiators’ responsibility is to defend the interests of their group instead of compromising with outsiders. On the other hand, in individualistic cultures, that responsibility does not exist, and compromising with the other party—who is not seen as an outsider—is more productive. It can also relate to universalism and particularism. Universalistic cultures aim at giving and obtaining the same things from any people they would be negotiating with, while particularistic cultures adjust their goals and strategies to the specific person they are negotiating with.

Conflicts of minor or major degree can emerge during negotiations, and you should be ready to face any of them.

Conflict Management

Conflict is the expression of differences in opinion or priority because of opposing needs or demands. People with diverse backgrounds and experiences hold different belief structures and values, which affect their prioritization, interpretation, and response to stimuli (Stahl et al. 2009).

The degree of conflict in a negotiation depends on the strategies used by the negotiators. The distributive strategy is more aggressive and can generate some conflict. Conflicts depend on the degree of assertiveness and cooperativeness, as shown in Figure 3.14 (Pruitt and Rubin 1986).

Analyzing the negotiation strategies in the light of Figure 3.14, we would say that there are five types of strategies—but they all relate to win-win (collaboration) and win-lose (competition). The figure shows that no matter what situation you and your counterpart are in, you should make your way to collaboration.

Compromise and accommodation are often used in some countries. In cultures where the conception of time is not linear, negotiators tend to postpone their assertiveness, letting you win today so they have better opportunities to win next time. They might play the accommodation strategy to use their concessions as arguments to obtain others from you.

Compromise can also be part of the negotiation rules, and negotiators follow them by winning and letting others win. Finally, avoidance might seem simple to deal with, thanks to the low level of assertiveness. However, it’s tougher to bring people together when some admit that there is a conflict and others deny it exists.

Conflict can be analyzed from the personality style’s point of view, as follows (Diamond 2010):

•Assertive: The more aggressive you are, the more you try to meet your own goals at the expense of others, and the less you will get in a negotiation.

•Collaborative: Highly collaborative people tend to be more creative, look for joint gains, and search for items of unequal value to trade. That is, what is not of high value for you may be highly valued by your counterpart. They solve problems and see any problem as an opportunity.

•Compromising: Compromisers get less because they often pursue speed instead of quality. Busy people tend to be compromisers, as they take the first reasonable option and move on.

•Avoiding: High avoiders generally meet no one’s goals. They don’t engage, they avoid conflict, and, as a result, they get nothing.

•Accommodating: Accommodators tend to be great listeners, but they can go overboard in trying to reach a deal at the expense of their own goals.

These five styles could lead negotiators to the Three-A trap (Ury 2008). The first A stands for accommodation and reflects situations in which you say yes when you want to say no. That is, you protect the relationship even if it means sacrificing your key interests. This can be tricky, because it buys a temporary peace. After a while, you will regret having agreed because you did not really want to, and you might wish to take revenge for your dissatisfaction.

The second A stands for attack (assertive), in which you say no poorly. If accommodation is driven by fear, attack is driven by anger. You may want to punish your counterpart because of some behavior and so disagree with him in a harmful way. You use your power without concern for the relationship.

The third A is avoidance.This is when you say nothing at all. Because you are afraid of the other side’s reaction, you say nothing in hopes that the problem will go away by itself. No solution can be found by you or your counterpart. You will never know what goes wrong on their side and will never let them know about what you think. There is frustration on both sides.

A recurring theme in international business studies is that problematic misunderstandings arise from cultural differences in styles of negotiating and handling conflicts. Several studies have analyzed East-West differences in negotiating by comparing U.S. managers to matched group in Asian society. Two patterns of findings have been observed repeatedly. Asian managers rely on a style of avoiding explicit discussion about the conflict, while U.S. managers are more inclined toward assertively competing with the other person to see who can convince the other of their preferred resolution of the conflict. Low concern for the opponent reveals two different styles: passively avoiding discussion of conflict as opposed to actively collaborating, and competing as opposed to accommodating (Morris et al. 1998).

Negotiating Tactics

A strategy is the overall plan to achieve the goals, which includes the action sequences that will lead to accomplishing these goals. Tactics and strategy often are confused. Tactics are short-term, adaptive moves that pursue higher levels strategies. Strategy is a broad, stable, long-term plan that indicates the direction for tactical behaviors. The most common tactics used by negotiators are presented next.

Deceptive

Negotiators play good cop, bad cop. You will face one negotiator who always agrees with you and reassures you (good cop) and another on the same team who always disagrees with you (bad cop). It is an effective way of making you deliver more information and respond about both the positive and the negative aspects of your offer. Some Asians might use these tactics.

Pressure

Your counterpart rushes you toward a decision. The last offer is usually used as a pressure strategy. It involves making you feel that if you don’t accept their conditions now, you will miss a very good deal. This is your last chance to get it. Russians and negotiators from some Eastern European countries might use this tactic.

Oppressive

Your counterpart will demonstrate a high lack of flexibility. “Take it or leave it now.” This means you are not likely to request something specific to your needs but to accept what you are offered. Again, Russians and negotiators from some Eastern European countries might use this tactic.

Emotional

Your counterparts will omit all objective arguments, instead stimulating your emotions. They will attempt to make you feel guilty, either because you are not making the concessions they ask you for, or because you are not accepting their arguments. Latin American negotiators might use this tactic.

Defensive

Your counterpart is evasive and does not answer your questions. You have serious difficulties in getting to the point and see that they always divert the conversation by changing the subject to get you distracted. Latin American negotiators might use this tactic.

Finally, you should consider the influence of governments and bureaucracy. Relationships between government and companies are country-dependent, and local laws align with local cultures. You should consider that, in several countries, a business negotiation integrates political negotiation. This means you first will need to negotiate with the government before getting to business with companies.

Different countries have different tax codes, labor laws, legal philosophies, and enforcement policies, and laws that influence any foreign investment in the country. Moreover, in some countries, government bureaucracy is deeply embedded in business affairs, and businesses are constantly required to secure government approval before they act. Sometimes you might think that decision making is taking too long and that your negotiation is not moving ahead as fast as you would like. Although it can be part of the other side’s tactics, it also may result from the local bureaucracy. Being aware of it beforehand will prevent you from being upset, and then accusing your counterparts of deliberately slowing down the process.

Whatever your negotiation strategy and tactics, you will face the seven steps of international negotiation.

The Seven Steps of International Negotiation

Create Empathy

Find common ground and establish an immediate relationship with your counterpart.

Build Relationship

Dig deeper by building on common interests and values.

Earn Trust

Demonstrate honesty and reliability.

Create Value

Do this by showing outcomes and the benefits of the deal for all parties.

Use Time, Information, and Power: Information is power, so the more you know, the better prepared you can be. Use and share information properly and in due time. Manage time instead of being managed by it. Control the negotiation pace by anticipating unexpected situations. Be realistic in calculating the time you need to get where you want to be. And understand that there is no such thing as a waste of time if you know how to use it in your favor.

Bargain

You know what you want to take and what you can give. If you give first, you earn a legitimate right to ask for concessions. Use a positive approach. Instead of saying, “If you don’t, I don’t,” say, “If you do, I do,” or even better, “I do, then you do.”

Get the Deal: Never show triumph or relief when you sign a deal. This is just one more phase of a negotiation. Include your counterpart in the joy of a we-made-it-happen approach instead of an I-made-it one.

The Triangle of Power: Time, Information, and Trust

Power is a central factor in determining the outcomes of the negotiation process. Realize that power is not static and you should continuously assess and enhance it. In other words, sometimes you will hold the power during the negotiation, while at other times you will be in a weaker position. Never forget that information and opportunities may arise at any point.

The expression balance of power is very often used when people talk about negotiation. Power plays a very important role in all negotiations, and you need to know how to deal with it.

Power takes a number of different forms, as follows (Cellich and Jain 2003):

•Reward power: This is the ability to influence the behavior of another person by giving or taking away rewards.

•Coercive power: This is the ability to influence the behavior of another person by punishment.

•Legitimate power: This is the authority to demand obedience.

•Referent power: This is respect and admiration related to one’s position or status.

•Expert power: This is attributable to a person’s knowledge, skills, or abilities.

To have a clearer idea of how power can influence your negotiations, list its possible sources both for you and for your counterparts by using Table 3.11.

Nothing makes you more powerful than trust. The triangle of power in Figure 3.15 represents the role of information and time in building trust. When your counterparts understand that you have knowledge thanks to information, that you deliver accurate data and that you share it with them, they will tend to trust you. Information is power—if you use it to develop your negotiation strategy and not if you hide it, which would be a source of distrust.

In addition, if you just use raw power, your counterparts will use their energy to defend themselves, instead of building something beneficial with you. If you manage time in a way that makes all parties feel comfortable without unnecessary pressure, you will enhance trust with your counterpart. Moreover, your counterparts will like to see you investing time in getting to know them and their culture.

Always set aside some time to visit your counterpart’s country. It is useful for you to better know the country—as well as its culture. This also is flattering to your counterpart and demonstrates that you are not there just to catch a contract. Don’t view it as a waste of time.

The Moderating Role of Effort in International Negotiation

Negotiating internationally requires more than information and time. It takes a lot of effort. Not only will you make the effort of collecting data and preparing your negotiation, but you also will make the effort of adjusting to several cultural environments and unfamiliar situations. Accepting differences is not natural to human beings, and it requires a great deal of effort to be tolerant. Also, you may need to make some effort to avoid being judgmental and getting upset by behaviors you would not naturally approve.

When you live in a world of cultural diversity, you need to cope with ideas and behaviors that don’t make sense to you. Although it is important to be aware of them, you are not asked to accept them. Awareness is not understanding; understanding is not approving; and approving is not accepting. You just need to know about them to respect them. Respect is an expression of yourself and your values. You respect other people because you respect yourself.

There is a correlation between the success of your strategy and the amount of effort used in designing it. If you take shortcuts, the preparation may go faster, but your strategy could be incomplete. The effort you put into creating and implementing your strategy demonstrates your seriousness and professionalism as a negotiator, and it might lead you more surely to the deal, as illustrated by Figure 3.16.

The amount of effort you need depends on how specific you’re willing to get. In other words, the more accurate and specific you are, the more targeted your effort will be. Having a specific focus helps you to avoid wasting time and energy, which is tiring, reduces your motivation, and ultimately is unprofitable. It’s like swimming. You make a lot of effort when you swim against the flow and barely move forward. But when you swim with the flow, you move ahead quickly and smoothly.

Several decades ago, the Italian economist Vilfredo Pareto observed that the ratio in many economic activities was 80 percent of output for 20 percent of input. This has been confirmed in other business and nonbusiness situations. This ratio became then the Pareto rule. You know now that only 20 percent of the time and energy that you spend in your negotiations will provide you with most of the outcomes you envision. Your job is to identify which 20 percent of your actions will be more likely to make your negotiation move forward, and then make them your priority.

Likewise, do not lose your temper if you think that you are wasting time in what appears to be meaningless interactions. These just might turn out to be the 20 percent you need to get to your 80 percent. In other words, 20 percent of high-value actions should enable you to reach 80 percent of your goals. The rest will represent the 80 percent of low-value actions, which are part of the overall transaction. Be ready to weigh your actions and concessions values accordingly. Use the Pareto principle in Figure 3.17 to better assess the type and amount of effort you need to be productive.

Using Silence and Other Disturbing Techniques

One confusing tactic is the use of silence. Asian cultures are naturally silent and accommodating. And ever since Asian negotiators realized that silence is disturbing to Western negotiators, their periods of silence have gotten more frequent and longer. You need to be patient and just wait until they break the silence themselves. If you feel uncomfortable with that, and talk more to break the silence, two things happen: (1) you give them much more information than what you will get and (2) you will look as though you are rushing them.

You already know that some cultures are neutral while others are affective. Neutral cultures might be disturbing to affective negotiators, because they cannot read their counterparts’ facial expressions to know whether or not they are agreeing with what is being said.

Although some cultures are naturally neutral, others deliberately use the poker face to confuse their counterparts. Your job is to look for clues to understand their motivations and constraints. You need to identify their underlying needs. When Abraham Maslow came up with a theory of human needs in 1943, he stated that there are five levels that people want to satisfy, represented by what is known as the Maslow’s hierarchy of needs (Maslow 1943). in Figure 3.18

By observing human behavior and evolution, Maslow identified a pyramid of needs, ranging from the most basic ones for survival—such as physiological and security needs—to more sophisticated and social needs—including belonging to a group and being respected by its members. The highest level describes self-actualization needs, which motivate people to transcend barriers and move toward perfection by constantly striving to become a better person.

Maslow’s typology has been applied to several disciplines, such as marketing, management, and, of course, negotiation. You should not miss the intangible motivations that drive your counterparts’ behaviors. When you will identify your counterpart’s needs, you must know how to deal with these to get what you need from them, as described in the following:

•Achievement needs: Help them to achieve their goals by walking all the way with them.

•Security needs: Reassure them by showing that they are making the right decision and how much they will benefit from it.

•Belonging needs: Make them feel part of an exclusive group by accepting your conditions. Show them that the two of you are on the same team.

•Esteem needs: Show respect by recognizing their expertise in their field.

•Self-actualization needs: Help them feel they are being open-minded people by accepting novelty and change, and transcending barriers.

For example, when your counterparts never stop presenting objections to your arguments, the best way to convince them is by rephrasing. Say something like, “If I understand—and please, correct me if I’m wrong—what you need is…” This way, your counterpart won’t feel you challenged his authority or competencies. Then he may correct you by giving you additional information, which you will need to counter any objections. People need recognition, and showing openly that people are wrong, or that what they say is not relevant or pertinent, makes them lose face and compete instead of collaborate.