Negotiation Planning Guide Negotiation is an essential aspect of any business. Businesses that know how to negotiate become successful since they can get the best deals for their companies. One must know how to consult with different stakeholders. Negotiation planning must begin with goals and strategies being set by the organization. It is a three-way process that involves goal setting, strategy formulation and finally, the negotiation planning process (Claydon 69). Goals and strategies are different when it comes to negotiation. Goal and Strategy Setting Goal setting in negotiation involves coming up with both short-term and long-term goals that will enable achievement of the negotiation strategy. There are several types of goals, the main ones being substantive, intangible and procedural goals. Goals must be written down in terms of priority. Once characteristic of a goal is that it is focused. Secondly, goals may or may not be linked to another party’s goals. An example is that the supplier’s goal is to get a favorable price, while the organization’s goal is to get the cheapest price that will enable it to benefit its customers. Goals must also be a realistic. An organization should not set goals that cannot be achieved. Goals must also be concrete, specific and measurable. This enables the organization to determine whether the set goals are working or not. Goals that are simple can be attained in a single negotiation strategy. Negotiation goals that are difficult may require a long-term planning since there must be a change in attitude when it comes to the parties. Selection and development of strategy take place once goal-setting has been done. Strategy enables an organization to achieve the set negotiation goals. Organizations must first have tactics for attaining negotiation, which is considered as short-term plans. Tactics are driven by strategic considerations. Strategy can be approached either in a unilateral or bilateral manner. Approaching negotiation strategy unilaterally involves choosing without actively engaging the second party (Claydon 80). They do not consider any objectives that may have been set by the second party. A bilateral strategy, on the other hand, will involve reviewing the goals and objectives that have been established by the other party. One of the strategies that can be adopted by a company is an active engagement strategy, which can be done through accommodation, competition or collaboration. Compromise involves the negotiator considering the relationship outcome more critical hence taking an approach known as, I Lose, You Win. Collaboration is a Win-Win situation while competition is an I Win, You Lose, situation. Negotiation Planning Process The negotiation planning process takes place in the ten steps that are outlined below. In this case, the example that will be used is that of a clothing company negotiating with a supplier. 1.Defining the Negotiation Goal: This means defining what the company aims to achieve through negotiation. In this case, one of the negotiating goals is to get cheap textiles so that it can produce clothes in a costeffective manner and give fair prices to consumers due to the high competition (Yahya, Ayadi & Masmoudi 1988). Another goal is to get variety, quality and fast textile supplies. 2.Major Issues in Goal-Achievement: The major issues that can be experienced in goal achievement are: • Supplier refusing to lower prices • Supplier offering lower quality due to lower price being offered • Supplier refusing to offer quality due to lower price being offered 3.Bargaining Mix and Issue Importance: Here, there will be a consideration of the bargaining range between the supplier and the organization. A positive bargaining range will mean that the buyer’s resistance point is above seller’s resistance point (Yahya, Ayadi & Masmoudi 1989). A negative bargaining range will mean the opposite. The settlement zone means that the parties will probably agree. In this case, a positive bargaining range will be better. 4.Interests: The supplier’s interest is to make sure that they can be a long-term supplier for the company while at the same time getting favorable prices for their supplies. They also hope that if they do a great job, they can acquire more clients to supply to. The interest of the organization is to ensure they get good prices for their supplies by buying in bulk so that they benefit from economies of scale. This will also enable them to provide competitive prices for their products. 5.Alternatives (BATNA’s): The best alternative to the negotiated agreement, if the process does not work, is for the organization to look for an alternative supplier. This is because the organization cannot afford to buy textiles expensively. 6.Limits and Resistance Point: Here, there will be a consideration of the resistance point of both negotiators in terms of the condition they can meet and those that they are unable to meet. 7.Understanding of Other Parties Goals: The organization must understand that the textile supplier also incurs operation, production and delivery costs. This must be considered during the negotiation process. 8.Targets and Opening Bid: The target of the company is to have the current price of 1 yard of textile reduced from $10 to $6 and the organization will therefore start with an opening bid of $4 since the supplier will most likely raise this. 9.Social Context of Negotiation: The negotiations will be done in a social environment so that neither party feels uncomfortable. It will be done over a business dinner. 10.Presenting Issues to Other Party: The organization will present its concerns and why it needs favorable pricing for its textiles. This will enable the supplier to understand the organization while its considering the needs that have been presented. Overall, following the above process is crucial since it will enable the organization to successfully achieve negotiation planning. Setting goals and having a clear strategy is very important in any negotiation process. The three-step process must, therefore, be followed by any organizations that intend to be successful in approach. References Claydon, Jim. "Planning implementation through negotiation." Infrastructure Provision and the Negotiating Process. Routledge, 2017. 69-86. Lewicki, R. J., Saunders, D. M., & Barry, B. (2015). Negotiation (7th ed.). New York, NY: McGraw-Hill Education. Yahia, Wafa Ben, Omar Ayadi, and Faouzi Masmoudi. "A fuzzy-based negotiation approach for collaborative planning in manufacturing supply chains." Journal of Intelligent Manufacturing 28.8 (2017): 1987-2006. Getting Ready to Implement the Strategy: The Planning Process 125 TABLE 4.3 | Negotiation Planning Guide 1. Define the negotiating goal. 2. List the major issues in the negotiation related to achieving the goal. 3. Define their relative importance of each issue, and define the bargaining mix. 4. Define the interests. 5. Define the alternatives (BATNAs). 6. Define your limits, including a resistance point. 7. Describe your understanding of the other party's goals, issues, and resistance points. 8. Set your targets and opening bid. 9. Assess the social context of the negotiation. 10. Outline how you will present the issues to the other party: what to say and how to say it. The Influence of Culture on Negotiation: Managerial Perspectives 491 The Influence of Culture on Negotiation: Managerial Perspectives Cultural differences have been suggested to influence negotiation in several different ways. then discussed in turn. Table 16.2 summarizes 10 different ways that culture can influence negotiations." Each is Definition of Negotiation The fundamental definition of negotiation, what is negotiable, and what occurs when we negotiate can differ greatly across cultures (see Ohanyan, 1999; Yook and Albert, 1998). For instance, “Americans tend to view negotiating as a competitive process of offers and counteroffers, while the Japanese tend to view the negotiation as an opportunity for information-sharing” (Foster, 1992, p. 272). ande SOL dey DUNGEN Negotiation Opportunity Culture influences the way negotiators perceive an opportunity as distributive versus in- tegrative. Negotiators in North America are predisposed to perceive negotiation as being fundamentally distributive (Thompson and Hastie, 1990b). This is not the case outside North America, however, as there appears to be a great deal of variation across cultures in the extent to which negotiation situations are initially perceived as distributive or integra- tive (Salacuse, 1998). Cross-cultural negotiations are influenced by the extent that negotia- tors in different cultures have fundamental agreement or disagreement about whether or not the situation is distributive or integrative. Selection of Negotiators The criteria used to select who will participate in a negotiation is different across cultures. These criteria can include knowledge of the subject matter being negotiated, seniority, fam- ily connections, gender, age, experience, and status. Different cultures weigh these criteria differently, leading to varying expectations about what is appropriate in different types of TABLE 16.2 | 10 Ways That Culture Can Influence Negotiation Range of Cultural Responses Negotiation Factors Definition of negotiation Negotiation opportunity Selection of negotiators Protocol Communication Contract Distributive Experts Informal Direct High High Collectivism Specific High Relationship Integrative Trusted associates Formal Indirect Low Low Individualism General Low Time sensitivity Risk propensity Groups versus individuals Nature of agreements Emotionalism Moron and Strinn (1001). and Saladuse (1998). Sources: Based on Foster (1992: Hondon BOX Example of Communication Rules 16.3 for International Negotiators Never touch a Malay on the top of the head, for that is where the soul resides. Never show the sole of your shoe to an Arab, for it is dirty and represents the bottom of the body, and never use your left hand in Muslim culture, for it is reserved for physical hygiene. Touch the side of your nose in Italy and it is a sign of distrust. Always look directly and intently into your French associ- ate's eye when making an important point. Direct eye contact in Southeast Asia, however, should be avoided until the relationship is firmly estab- lished. If your Japanese associate has just sucked air in deeply through his teeth, that's a sign you've got real problems. Your Mexican associate will often cause for mistrust. want to embrace you at the end of a long and successful negotiation; so will your central and Source: Dean Allen Foster, Bargaining across Borders: How eastern European associates, who may give you to Negotiate Business Successfully Anywhere in the World a bear hug and kiss you three times on alternating (New York: McGraw-Hill, 1992), p. 281. cheeks. Americans often stand farther apart than their Latin and Arab associates but closer than their Asian associates. In the United States, people shake hands forcefully and enduringly, in Europe, a handshake is usually quick and to the point; in Asia, it is often rather limp. Laughter and giggling in the West Indies indicates humor; in Asia, it more often indicates embarrassment and humility. Additionally, the public expression of deep emo- tion is considered ill-mannered in most countries of the Pacific Rim; there is an extreme separation between one's personal and public selves. With- holding emotion in Latin America, however, is negotiations. For instance, in China it is important to establish relationship connections early in the negotiation process, and selection of the appropriate negotiators can help with this (see Zhu, McKenna, and Sun, 2007). Protocol Cultures differ in the degree to which protocol, or the formality of the relations between the two negotiating parties, is important. American culture is among the least formal cultures in the world. A familiar communication style is quite common; first names are used, for example, while titles are ignored. Contrast this with other cultures. Many European coun- tries (e.g., France, Germany, England) are very formal, and not using the proper title when addressing someone (e.g., Mr., Dr., Professor, Lord) is considered insulting (see Braganti and Devine, 1992). The formal calling cards or business cards used in many countries in the Pacific Rim (e.g., China, Japan) are essential for introductions there. Negotiators who forget to bring business cards or who write messages on them are breaching protocol and hands are shaken, and dress codes are observed are subject to interpretation by negotia- tors and can be the foundation of attributions about a person's background and personality (items such as business cards are passed with two hands from person to person throughout Asia--using only one hand is considered quite rude). insulting their counterpart (Foster, 1992). Even the way that business cards are presented, Communication Cultures influence how people communicate, both verbally and nonverbally. There are also differences in body language across cultures, a behavior that may be highly insult- ing in one culture may be completely innocuous in another (Axtell, 1990, 1991, 1993). 492 Cross-Cultural Miscommunication Although many multinational organizations have problems persist. Language and cultural differ- extensive experience in overseas markets, some ences make it difficult to translate slogans and ideas effectively in new environments. For example: In Taiwan, the Pepsi slogan "Come alive with the Pepsi Generation" translated into "Pepsi will bring your ancestors back from BOX 16.4 When Chevrolet introduced the Nova in South America, they were apparently un- aware that in Spanish "No va" means "It won't go." When Parker Pen marketed a ballpoint in Mexico, the slogan was supposed to inform customers that the pen "won't leak in your pocket and embarrass you.” However, the com- pany used the word embarazar for embarrass. Mexican consumers read the advertisement as "It won't leak in your pocket and make you pregnant." In Italy, a campaign for Schweppes tonic water translated the name as "Schweppes Toilet Water." the dead." -3 In Chinese, Kentucky Fried Chicken's "Finger-lickin' good" became "Eat your fingers off." Salem cigarette's slogan, “Salem-Feeling Free" became "When smoking Salem, you feel so refreshed that your mind seems to be free and empty" in Japan. Source: Anonymous Dd "You'll have to phrase it another way. They have no word for 'fetch."" Drew Dernavich/ The New Yorker Collection/ www.cartoonbank.com To avoid offending the other party in negotiations, the international negotiator needs to observe cultural rules of communication carefully. For example, placing feet on a desk in the United States signals power or relaxation; in Thailand, it is considered very insulting (see Boxes 16.3 and 16.4 for more examples). Clearly, there is a lot of information about how to communicate that an international negotiator must remember in order not to insult, can provide considerable advice to international negotiators about how to communicate in anger, or embarrass the other party during negotiations. Culture-specific books and articles various cultures, seeking such advice is an essential aspect of planning for international 12 negotiations. 493
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