Literature Review
Discuss about the Concepts Of Power In the International Business Negotiations.
In our life, every people have to face differences and then, people have to negotiate to mitigate these differences even though they like it or not. Whenever, the need and desires clashes of one party to other, this is a start for negotiation in order to satisfy all the needs, desires and demands, maintain the relationship and achieve agreement. Negotiation is an obvious thing in our life, no matter we like it or not. People have to negotiate with the boss for salary, customer negotiates with product seller about the price, product, or services and a country negotiate about the business with another country about to deal of import and export products, services or taxation rate (Thompson, Wang, and Gunia, 2010). Although negotiation is a part of human life and happens daily, it is not easy for a person to negotiate easily with other, because of the difference in interest, likes, nature and motives. When a business organisation negotiates the purpose of another party so they can get a better deal than just accepting or rejecting what the other business organisation is offering. Negotiation is generally a voluntary process of managing the relationship between two parties where both bargaining with each other and try to come closer to their expectations. Negotiation is usually so much in practice in business organisations where every organisation wants to earn the highest profit. This need for earning the highest profit depends on diplomatic negotiations of business organisation with their counterpart.
Now in these days, negotiation is the main aspect of international business. The two countries (Parties) negotiating with each other faces different problems related to negotiation because of their cultural difference. Negotiation is not an easy-going task for any party (People, organisation or country) rather it will be so complex when a party does not have ideas about the culture, thinking, motive or need of another party. The business negotiations are different from other negotiations and require a number of strategic decision-making of a business manager (Vingtoft, 2017). Therefore, it is the necessity of business to understand the importance of negotiation, which involves a challenging communication process and task
According to Khakhar and Ahmed (2017), negotiation is generally a way of what we expected and want to achieve from others. Whenever, the needs and desire of a person or party clashes with another, this is a start for negotiation. Negotiation can be defined as a communication process between two parties, which designed to reach an agreement, which has right to share for the gaining advantage over other parties. Negotiation conditions have basically the same objective whether the negotiation of countries at war, negotiation of a buyer with the seller about the product or services regarding price, facility or post-selling services, or negotiation about labour conditions between the management and labour, negation in finding sponsor company for arranging an even which is including apportion benefits and resolve conflicts. Corresponding to the preferred position in which parties want to win the conflict whereas the need corresponds to the major profits of their own. Negotiation is an essential activity in international business and is particularly important when there is a cultural difference between the two countries and their interest and desire profit. The negotiation terminology and different strategy of negotiation used in when two parties involved in a conflict regarding their interests, desires and need.
Role of ethics in Negotiation
Nelson, Bronstein, and Ben-Ari (2015) defined in his article “The Power to Oblige: Power, Gender, Negotiation Behaviours, and Their Consequences,” differences in negotiating style originate from the cultural and social difference of the society or of two countries. These social and cultural differences push every society to give importance to “relationship development, decision-making methods, contracting practices, negotiating strategies and illegal activities such as bribery. The effective negotiation skills not only require the technical communicative abilities, but it also requires an understanding of the negotiation context by both the parties. After successful accomplishment of the negotiation process, both the parties in a formal agreement which is the exchange of conditional promises and rules and regulations, in which both the parties decide and settle to act in accordance with their promises.
Ramsbotham and Schiff (2018), described in his article “When Formal Negotiations Fail: Strategic Negotiation, Ripeness Theory, and the Kerry Initiative,” different countries negotiate in a different style, which is according to their culture. Negotiating style of a party directly determine the terms of the final agreement. Therefore, good understanding of the negotiating styles and culture of other party determine the behaviour during handling the negotiation. All the business agreement and transactions between two parties require having a certain level of knowledge and skills (Vetschera, 2013). Understanding and knowledge of agreement terms and conditions require another high level of skill and knowledge. One big problem in the agreement is that a single word keeps different meaning and interpretation in a different culture. Therefore, it requires a common language in agreement after the final negotiation that is understandable for both the parties.
Ethics and value is a more important aspect of both negotiation and modern business world. It is important for a negotiator to maintain ethical balance during negotiation. A trained negotiator always thinks about the honesty and strong relationships with other people or party (Bucaro, 2018). The ethical judgement depends on what types of people you dealt with and that is eventually shaping the ethical behaviour of a negotiator (Staff, 2018). A trained negotiator always try to honest with others and with himself as well, because if he/she is lying over time, he may get in a habit of lying regularly or using other false tactics that are harmful and risky for himself in future. For many professional negotiators, the idea of being ethical during negotiation is dangerous for the business and its profit (Jacobs, 2012). The ethical practice of negotiation can lead to the impossible feat and create a weak negotiation. The ethical negotiations can be harmful to the business when it allows parties to disclose information. It sets a degree of trust against the traditional negotiation process.
Strategies used in Negotiation
Vetschera (2013) explains in his article “Negotiation processes: an integrated perspective,” that there are different negotiation strategies that determine the tactics of a negotiator with another party. Understanding the other party’s interests and tactics is also important for a good negotiation. Selection of the best negotiation strategy helps to best response to other party’s interest and tactics and helps negotiator to achieve the best outcome (Druckmann and Olekalns, 2011). A negotiator generally tries to understand and predict the interest and desires of the opposition party and try to dominate by rejecting his offers and ideas. Good initiators always believe in giving benefits to other parties when the negotiator found that the point is not vital and give any benefits. Compromising is also a strategy during negotiation where both parties preceding their idea outcomes, settling for an outcome that is satisfactory for both the parties.
The chosen strategy of negotiator depends on to whom he/she is negotiating with and the also on the relationship between them. For example, the level of interest and cooperation between negotiator and other party determines the negotiation style and behaviour of the negotiator during the negotiation process (Henery, 2012). It is essential during the negotiation strategy that which type of approach does the negotiator adopt. Many researchers prefer the soft approach of negotiation where some beliefs in a hard approach to issues handling during negotiation.
Successful negotiation means find out positive results under any possible circumstances. An untrained negotiator generally avoids proper planning before negotiation with other parties. A trained negotiator always focuses on the time constraints and must aware of the interest of other parties. Usually, two parties facing the same problem and want the same desired result from the negotiation (Khakhar and Rammal, 2013). This situation is called “congruent issue,” when both parties want the same thing. An untrained negotiator often fails to recognise this situation and that cause a loose negotiation with the opposition. A trained negotiator needs to analyse the biases their opponents bring to the table. However, an untrained negotiator generally fails to recognise these aspects of negotiation and that cause a big loss in the negotiation for the party. An untrained negotiator is failed to judge the cross-cultural aspects in negotiation and act in unprofessional way (Heiba, 2013). A negotiator must understand and aware of the differences exist between these two parties. Generally, these differences are not necessarily unfavourable in negotiation rather it can create huge potential benefits for the negotiator. For a successful negotiation process, it is compulsory to care about these aspects. An untrained negotiator often discloses the deal and does the dance of joy in public (Schoop, Kohne, and Ostertag, 2010). The untrained negotiator wants to show the opponents that the negotiator would have done it for less. A trained negotiator never does such types of stupid acts because it harms his/her image in the future. A good understanding of negotiation details and process helps the negotiator to minimise the pitfalls of the deal (Long, 2013). Therefore, it is usually recommended that a trained and experienced negotiator should do the negotiations. A trained negotiator always cares about the interest of their own party and respects of emotions and dignity of others.
According to Lewicki “Negotiation is not a process reserved only for the skilled diplomat, top salesperson, or ardent advocate for an organized lobby; it is something that everyone does, almost daily” (Lewicki, Barry, and Saunders, 2016). Lewicki gave this statement, in his famous book in which he tells about the daily uses of negotiation in human life. According to Lewicki, the professionals like diplomats or Advocates rather it is a part of human life do not only practise Negotiation. People negotiate almost all the time in their life. A friend negotiates about the place where to have dinner, children negotiate to decide where and which game to play, business persons negotiate about the purchase products and about the price (Saee, 2008). An advocate negotiates about to settle the case and legal claims before they go to court. Police negotiate with the thief to surrender without harming people. Therefore, it is a journey of human lives to negotiate at every step in life for getting success in both our professional and personal life. Sometimes people fail to negotiate because they do not have known either they recognize that they are in a negotiation situation. In that circumstance, when they fail to recognize the negotiation opportunities, people may fail to attain their targets and desired results (Fleck et. al., 2017). Apart from this, people may also recognize the negotiation need but because lack of expertise in negotiation skills they poor understanding of the negotiation process they lost their benefits from the deal.
The concept of negotiation drew from three main sources i.e. our experience, media, and social science research. The first negotiators are human beings and the large numbers of negotiations that occur every day in our lives. Second negotiation source is from media like television, newspaper, radio, social networks, and internet (Imai and Gelfand, 2010). These media sources are supporting real negotiations every day. Finally, the last source is the social science research that has been leading numerous source aspects of negotiation. The negotiation is related to various fields like social science, economics, psychology science, communication and labour relations, law etc.
Notini (2009) described that BATNA (Best alternative to a negotiated agreement) is a term that is helpful is to understand the negotiator’s need to understand their own BATNA and BATNA of another party. The value of a person’s BATNA always provides an alternative to the possible settlement in the current negotiation plan. A BATNA may offer different alternatives to the current negotiation plan by considering interdependence, independence, and dependence on someone else (Pandey, 2017).
The business conflicts can easily solve by using negotiation. Negotiation can work when there is a dispute found between two business organisations. Negotiation serves as a dispute management instruments to keep the peace between two business organisations. Negotiation is helpful to resolve the business disputes at the interpersonal, organisational and international level (Gunia, Brett, and Kamdar, 2011). The negotiators who deal with another party in the negotiation process have to need certain skills and knowledge to be effective in the negotiation situation. The negotiator must need the expertise and knowledge of proper planning before the negotiation process, knowledge of subject matter being negotiated, listening skills, integrity, general intelligence, ability to handle the pressure and patience.
The outcome of the negotiations must display the professional way of negotiation style where the outcomes reflect the quality of discussions and process that should be expected from a trained and expert negotiator. Negotiation requires a quality foundation for any further discussion and dealings that one party may need to have with the other party on concerning issue (Lars-Johan and Eklinder-Frick, 2017). An experienced and trained negotiator is one, who has observed the negotiation in a larger context and negotiating with the other party by considering the purpose of the organisation in his/her mind.
A UK based organisation established in 1982, for assisting other companies to improve performance through the deployment of new strategies considering people, process, markets and direction. They focus to establish a balance in their negotiating action and words. They feel that because of using more non-verbal communication, it can frame a positive negotiation environment. They feel that listening and an educated decision is compulsory for the negotiation process. Successful negotiation is a vital part of communicational skills and one can easily gain more profit and get success by mastering in negotiation. The quality negotiation skills are compulsory everywhere, no matter it is your personal life or professional life.
Understanding other arguments, the strength of your discussion and relationships with others can make the difference between success and failure of negotiation. Weak argument and discussions always break down by others. The weak discussions always bring trouble into both, your personal life and your business life. Strong argument, discussions and agreements bring you benefits during the negotiation and helpful in achieving your objectives, while you considered the mutual satisfaction to all the parties who involved in negotiation with the negotiator (Salacuse, 2015).
Negotiation is the way of exchanging information between parties for the purpose of fulfilment of their needs. It means that every negotiation is traded between two individuals or parties. The simple theory behind the negotiation is to give something and accept something in turn. This gives and takes exchange is the soul of every negotiation. Generally, negotiation is a solution to a problem where two parties negotiate with each other for their own benefits by accepting or rejecting the offer of other parties.
The success or failure of the negotiation based on to produce a beneficial and wise agreement, that is efficient and helpful in improving the relationship with the opponents or at least not damage the relationship (Goldwich, 2010). This is the ideal outcome of a negotiation or bargaining process. The positional bargaining is normally a bargaining power over the positions that are beneficial for each side and not damage the relationships between two parties. Positional bargaining is generally used to give and take the theory of negotiations and produces unwise positions that better the relationships between the parties involved in the negotiation.
This is the time of the digital world, where computers are taking place of humans and replace the human work by the robotic works. E-negotiation taking place of human negotiator and improve the efficiency of settlement (Harkiolakis, Halkias, and Abadir, 2012). Therefore, the number of definitions of negotiation in context to the human factors and characteristics is useless because of re-negotiation. The e-negotiation has the capability of suggesting solutions within a second without any error. The negotiating party can quantify their choices to the computers and it gives them the best possible results and solution. The e-negotiation reduces the time, effort and cost as compared to traditional human negotiation techniques and process. The modern time uses such as management science, computer science and information technology for research and design related to negotiation technology regarding e-negotiation (Mehta, 2016). According to various authors and negotiation experts, the human factor plays an important role in negotiation but after the adoption of e-negotiation, there is no need for human intervention in the negotiation process. In recent time most of the researchers work on e-negotiation a negotiation support system (NSS) which have been focusing on decision support in negotiation and considering the cultural effect in negotiation.
The most of the past studies on negotiations focused on the human negotiation style and its importance, but the use of e-negotiation systems reduce the work of human factors in business organisations. However, the problem with these new electronic systems is that these systems are so costly and they are not commercially available for everyone. Therefore, the human negotiation is still used in small business organisation for negotiation.
Conclusion
Negotiation is an essential part of human life. Negotiation is a process where one party try to reject or accept the offer of another party for their own benefits. Negotiation can prevail everywhere where two parties involved and try to settle the differences. Negotiation is a situation where either both the parties happy or think about the mutual benefits or think for their own benefits that cause other’s loss. Negotiation is essential in a business organisation where a businessperson wants to gain benefits by settling the differences with their customer or supplier. Every manager or businessperson needs to negotiate in his daily work life. A manager has to play a role of negotiator that needs empathy. Knowledge, skills and planning that determines the success or failure of the negotiation process. For effective negotiation, it is essential for a negotiator to understand the cultural differences of the parties and taking care of others interest. The skills and knowledge of a negotiator determine the success or failure of the negotiation deal. An ideal negotiation is one in which both the parties are in a win-win situation. The various authors and negotiation experts explain in their books about the human factor that determines the negotiation success or failure, but in modern digitalize word focuses on e-negotiation that provides an accurate and suitable solution for a negotiation without consuming so much time or extra resources. The use of e-negotiation system eliminates the human error and biases from the negotiation process. However, in the end, the success of a negotiation process depends on the outcome of the negotiation because negotiation is a give and take exchange process. If all the parties concerned should feel that they won or secured a good deal under the given circumstances, then the negotiation is considered as a successful negotiation between the parties.
References
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