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Paper for A Detailed Analysis of the Challenges Faced by International Business Negotiators

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A Detailed Analysis of the Challenges Faced by International Business Negotiators

Introduction

The business is no more restricted to the geographical boundaries of a country. It has touched the length and breadth of the world connecting people, business houses and organizations across the world.

Today, every business firm keep searching for business opportunities and new marketplaces to capitalize on the opportunities. The reason is simple. Either their domestic market has been saturated or the competition has become concentrated. Either of the condition prompts the company to move out of its current marketplace and find out the new one. However, it is a highly challenging task for the negotiator to crack the deals in a place which is unknown or unfamiliar to him.

It is a knotty social procedure, connecting complicated constitutions of attitude and opinion, social relationships between the parties involved in the negotiation process and the way such aspects are evolving. The process involves a large number of decisions influenced by the past and influenced by the anticipation (HBR 2002). Some of the most important challenges faced by international negotiators have been analyzed in the following sections of the report.

Cultural factors

Cultural factors play an important role in international business negotiations(Pon). Some of the cultural factors that pose challenges to the negotiators are:

Time

The term ‘time’ has different significance across different geographical locations. For example, time is considered as ‘money’ in western societies where it has less significance and value a decent number of countries in the region of Asia, Africa and Latin America.

This factor influences the pace of negotiations and timing for the meeting. Therefore, it is an important element for an international negotiator to have clarity on the amount of importance given to the time by the client or prospect (Fjellstrom 2015). The negotiator may have to wait in case the client doesn’t show that punctuality for the meeting. Further, the negotiator may have to be on time when the clients are very specific about the time. Neither of the rules can be broken.

Individual Vs Collective Behaviour

The behavior of the individual across the world is uncommon among different countries. According to the survey conducted by Fjellstrom 2015, we can position countries on a different scale. In some countries, the parties to the negotiation prefer to earn collective benefits while in some countries parties show interest in personal gains. Having clarity on this aspect help negotiator to prepare presentations and arguments which is fruitful at the end of the negotiations.

Pattern of Communication

The pattern of communication differs from country to country. The individuals in a few countries would prefer to direct communication while in some countries they prefer indirect communication. That means some individuals would prefer to communicate one to one while others may prefer mail or chat conversation (Usunier. 2003). This generally happens when the negotiator and clients are from different cultural backgrounds. Language may be a factor that impacts the negotiation process. For example, when a negotiator is from India Knows Hindi and English, he may find it hard to deal with the person from Portugal who doesn’t speak any language other than the Portuguese language.

Further, a few terms like maybe, perhaps, rather an inconvenient are ambiguous in international communication.  The terms ‘Inconvenient’ and ‘maybe’ may mean impossible in some cultures which may have a negative impact on the negotiation process (Lewicki 2016). Therefore, international negotiators may lose opportunities due to such asinine mistakes in the process. They must know that the clients may read between the lines.

Personal Relations

The relevance of personal relationships in business differs from country to country. In some countries in the West, the international negotiators are apprehensive with the issues in hand and its impact on the future relationships irrespective of who is representing the business or a client. However, in some cultures, the personality, behavioral pattern, and the dynamism shown by the negotiator to provide business solutions to their problems are more important than the company he/she is representing (Flanja 2015).

Strategic Factors

Strategic factors play a role in the process of negotiation. While a negotiating in the cross-border business environment the parties involved will have a clear set of expectations, anticipations, agenda, and outcomes. Therefore, the negotiator needs to understand strategic aspects related to the discussions. For example, the preparation of presentations to the requirements of the clients, recording information that is expected from the clients, clear note on the benefits that the client would get etc. In the international business negotiations, nobody wants to hear stories. The clients will be matured enough to understand in case the negotiator beat around the bush or if he is attempting to push the product or service(Usunier. 2003). It is important for a negotiator to show that the client has a problem and he has the solution to the problem and that is a rewarding mindset to be carried by the international negotiator. Preloaded or pre-planned product pitching may end up with plain discussions which would fail in impressing and convincing the clients.

Some of the strategic aspects are briefly discussed below:

Presentations

Often the international negotiators are encountered with presentation related issues. They fail to understand whether the negotiation location is a formal or informal setting. Further,  the negotiators fail to keep Plan- B ready to handle either of the situations. When the negotiator is not ready with these basic arrangements then it is a blunder for which a negotiator may have to pay the price at the later stages.

Business Strategies

There are a series of strategies in a business negotiation.  The most commonly used strategies are soft, intermediate and tough strategies.

In soft strategy, the negotiator doesn’t begin the conversation with the high initial offer and stay strong to expect the client to make the first move in concessions and demands. In intermediate strategy, the negotiator doesn’t begin the discussion with a high initial offer but waits for the client to make the first comment and lock it if the deal is lucrative and win-win. In tough strategies, the negotiator begins the negotiation process with a high initial offer and allows the client to ask for the first concession. In this strategy, the negotiator works backward to achieve his goals. When an international negotiator has a poor understanding of the above aspects, he may end up losing the conversations (Peleckis 2014).

Decision making

From the review of literature is it evident that often the negotiators face challenges in terms of understanding the decision-making pattern of their clients in the international business environment. A few clients are rational while others are impulsive in nature. Further, the negotiators find it hard to understand the instincts of a decision maker. Further, the negotiators may fail to understand;

•           Who is the decision, maker?

•           Who is the influence on the discussion table?

•           What makes a client to take a decision?

•           Whether the party on the table has ability and authority to make decisions?

Conclusion

 

From the above analysis, it is evident that the cross-cultural and strategic aspects have a greater bearing on the results of international business negotiations. Further, we have identified the way in which each factor can determine the success of international negotiations. In a dynamic business world, a standard template of items for the negation process may appear to be of utility for an international negotiator. Nevertheless, the basic preparations on the cultural and strategic aspects related to different geographical locations will immensely help negotiators to win the deals.

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