INTERNATIONAL BUSINESS NEGOTIATION

Ta Hoang Thuy Trang, MBA

Content

Chapter 1: A framework for international business negotiation

Chapter 2: Vis-à-vis: International Business
Negotiations and cross-cultural communication
Chapter 3: Principled negotiation
Chapter 4: Steps in international business negotiation
Chapter 5: Negotiating different types of projects
Chapter 6: Negotiation in different parts of the world
 Class hours: 30
 Allocation of credit hours for activities:
– Theory: 50%
– Exercises, group activities, simulations, discussion in
class: 50%
 Assessment:
– Class participation , Chapter Exercises, Q&A and
attendance, Quizzes, simulations, presentation and
Mid-term paper 40%
– Final test 60%
– Class participation 20%
– Chapter Exercises, Q&A and attendance 40%
– Mid-term 40%
How to negotiate effectively ?

 By practicing in a variety of settings

 By feedback: sharing your experiences
 By analysis: Mathematical and Descriptive
Our focus =>skill building and learning by doing
Doing negotiation in different substantive context
sharpen our ability to recognize untested
assumption, alternative explanations
Increase our sensitivity to what works, what
doesn’t work and why.
Reference
 Lecture provided by lecturer.
 Ghauri, P. and Usunier, J-C. 2003.
International Business Negotiations.
2nd Edition. Elsevier Ltd. UK.
 Fisher, R. and Ury, W. with Patton, B.
(editor). 1981/1991. Getting To Yes:
Negotiating Agreement Without Giving
In. 2nd Edition. Penguin Books.
 Chapter 1
A FRAMEWORK FOR INTERNATIONAL
BUSINESS NEGOTIATION

“The goal is not the deal, The goal is to get

a good deal”
Content

Chapter 1: A framework for international business negotiation

Chapter 2: Vis-à-vis: International Business
Negotiations and cross-cultural communication
Chapter 3: Principled negotiation
Chapter 4: Steps in international business negotiation
Chapter 5: Negotiating different types of projects
Chapter 6: Negotiation in different parts of the world
Chapter 1: A framework for international
business negotiation

– A Case Study of Successful Dispute Resolution

– What is International business negotiation?
– Types of negotiation
– Negotiation principles
– Strategies and Tactics in International business negotiation
– Dos and Don’t in Negotiation
– A framework for International business negotiation:
 Background factors: objectives, environment, third parties, negotiators;
 The asmosphere: conflict and cooperation, power/dependence, expectation,
 The negotiation process:
 Apple and Samsung
Successful Dispute Resolution
What is negotiation?

The definition of negotiation is very simple, while its scope is

wide. Every wish or need may cause a negotiation. Once
people exchange their ideas to adjust their relation, or they
exchange views to reach agreements, they are negotiating.

Gerafd I Niernberg, The Art of Negotiating

What is negotiation?

Various definitions have been given; but researchers have not agreed on a common one. A few are
quoted for your reference:

1. Negotiation is a basic means of getting what you want from others. It is 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 (Fisher, Ury & Patton, 1981).

2. Negotiation is a discussion intended to produce an agreement; a treaty with another respecting

sale or purchase; a transaction of business between nations; the mutual interaction of governments
by diplomatic agents, in making treaties, smoothing differences, etc.
What is negotiation?

3. Negotiation is an activity that all managers and professionals engage in.

It’s necessary to negotiate at every stage of a project or business
transaction, in order to reach an agreement.

4. Negotiation is a basic, generic human activity---a process that is often

used in labor-management relation, in business deals like mergers and
sales, in international affairs, and in our everyday activities.
 Definition of negotiation

Negotiation
->the action and the
process of reaching an
agreement by means of
exchanging ideas with the
intention of dispelling
conflicts and enhancing
relationship to satisfy each
other’s needs.

Zhuge, Liang Disputes With The

Southern Scholars
Characteristics of negotiation

(1) Every negotiation involves two or more parties.

(2) The objective of a negotiation must be definite.
(3) Negotiation must be conducted on an equal basis.
(4) A consensus must be built on the basis of mutual concession.
(5) Negotiation involves exchange of ideas, communication, persuasion,
compromise and suchlike.
What is business negotiation?
Definition of Business negotiation

Business negotiation
->a process of conferring in which the
participants of business activities
communicate, discuss, and adjust their views,
settle differences and finally reach a mutually
acceptable agreement in order to close a
deal or achieve a proposed financial goal.
Characteristics of
Business Negotiation

(1) The objective of business negotiation is to obtain financial

interest
(2) The core of business negotiation is price
(3) Its principle is equality and mutual benefit
(4) Items of contract should keep strictly accurate and rigorous
Definition of
International Business Negotiation

International Business Negotiation

-> the business negotiation that takes place between the
interest groups from different countries or regions.
Types of negotiation
Approaches: Integrative vs. Distributive,
Contingency

 Integrative approach is opposite to distributive (also called competitive or win-lose approach) approach.

 Integrative approach (also called a cooperative or win-win approach) → “Everybody wins”.

Distributive Negotiation
 The most distributive feature is that it operates
under a zero sum game
 the gain made by one person is loss incurred by
the other person.
 Each person involved in the negotiation defines
ultimate point where the settlement will be made.
 The sellers goal is to negotiate as high a price
as possible; the Buyers intention is to negotiate
as low a price as possible
 Win –Lose Situation
Integrative Negotiation 

 Parties cooperate to achieve maximize benefits by integrating

their interests
 Both parties involved in negotiation process jointly look at the
problem, try to search for alternatives and try to evaluate
them and reach a mutually acceptable decision or solution.
 Win-Win Situation
Distributive Verses Integrative
Negotiation principles
Principles of business negotiation

1. Equality principle
2. Cooperation principle
3. Flexibility principle
4. Positions-subjected-to-interests principle
5. Depersonalizing principle (Separating the people from the
problem)
6. Using objective criterion
Strategies and Tactics in International
business negotiation
Dos and Don’t in Negotiation
The Dos

 Determine goals. Decide on your objectives. Know your

bottom line.
 Anticipate the desires of your opponent. Think collegially –
envision the person as your partner in the deal.
 Analyze the assets. What do both of you bring to the table?
 Evaluate options. That means for both of you.
 Stay calm, no matter what. You’ll keep the emotional
advantage. Focus on issues, not personalities.
The Dos

 If you have a history with the other party, analyze your track
record and precedents with the person. What issues have
impacted the two of you?
 Assess the power you bring into the discussion, and that of
the other person.
 Try to put the other person’s needs first.
 Keep in mind plan B. Know your options for a fallback
position.
 Document the deal – get it in writing immediately.
The don’ts

 Never bargain with someone using the word, “between”.

 Don’t signal the person that you’re done negotiating by using
the phrase, “I think we’re close.”
 Don’t get into a bidding war.
The don’ts

 If you need time to think, don’t establish at the beginning that

you’re the final decision-maker.
 Don’t be afraid to ask what you want – be specific about what
you want and don’t want.
 Don’t negotiate with a person who doesn’t have authority to
sign off on a deal.
 Don’t do all the talking.
 Don’t ignore the person’s body language. Know the green
lights.
The don’ts

 Don’t ignore the person’s body language. Know the green

lights.
 Don’t argue, but discuss items in which there are
disagreements.
 Steer clear of form contracts.
 Don’t forget to prepare.
A framework for
International business negotiation

Sources: Ghauri, P. and Usunier, J-C. 2003, International Business

Negotiation,
The negotiation process

1. Pre-negotiation

2. Face-to-face negotiation

3. Post negotiation
Group assignment

1. High-context and Low-context Culture Styles

2. Key to successful email, text negotiation
3. Principled negotiation
4. Steps in international business negotiation
5. Negotiating different types of projects
6. Negotiation in different parts of the world
Thank you!