Abstract
The 21st century accentuated the globalization, regardless of some cases apparently returning to the previous regionalization paradigm. In both cases, human communication has been and will be key to overcome the major challenges ahead. Within the global context, communication is increasingly cross-cultural, which brings additional challenges related to misunderstandings and the potential to escalate conflicts, sometimes ending up at crises. Therefore, communication and negotiation across cultures has never been as relevant as now, and the purpose of this chapter is to provides a fundamental knowledge base to cross-cultural negotiation, taking into account the main culture models from the last 50 years. It will be based on several relevant culture models, taken from multiple lines of research from reference authors in the field of culture models, negotiation, leadership, and decision making.
TopNegotiation: A Fundamental Background
To address such an eclectic subject, some fundamental concepts are in order. The starting point concerns the answer to the question: “what is negotiation?”. If one takes the etymology of the word from the Latin negotium, it is related with carrying on business, occupation, an endeavour that is entailed by difficulty, trouble, pain or labour. It is the negation of the Latin word otium, which means ease or leisure, and therefore negotiation can be understood as the negation of the leisure (otium), which also means putting effort to attain intended goals. Negotiation is also a concept close to bargaining, however, negotiation is a much broader concept, as besides tactics it involves strategic thinking, and a care for human interrelation, psychology and personal communication.
Negotiation, as many aspects of life and systems have may be approached as a process composed of different stages (Fisher & Ertel, 1995). Hence some main identifiable stages are: (1) the planning stage, (2) the ‘at the table’ stage, and (3) the closing stage. Such classification is however incomplete, as one could also add a preplanning stage where a negotiator decides if it is worth negotiating or not, together perhaps with some set-up measures, that may, for instance, include lobbying to arrange pre-negotiation alliances (Lax & Sebenius, 2003). And suffice to say that after the negotiation has closed or the deal has been done, there is a need for follow-up in order to ensure the objectives are materializing, something that may involve “post-negotiation’ negotiation” (Mendenhalt, 1996; Craver, 2012).
Negotiations may involve two parties or multiple parties. The later makes them substantially more complex. Considering one of the simplest negotiation types - a two parties’ negotiation, involving a seller and a buyer - a simpler graphical representation of the frame applicable to such negotiation could be understood as a continuum where the interests of two negotiators would somehow be superimposed or paralleled when a single negotiation variable is at play (Figure 1).
Figure 1. Negotiated outcomes must occur inside the ZOPA bandwidth.
Key Terms in this Chapter
Walkaway Point: A concept similar to the reservation price, however it may consider variables other than price, as would be the case of the reservation price concept, which is a particular case of the walkaway point concept.
Die-Hard Bargainers: People to whom every negotiation is a battle.
Reservation Price: A concept similar to the walkaway point, i.e., that point in a negotiation range that when reached the negotiator abandons the negotiation. In this case, reservation price relates to the actual price involved in the potential purchasing.
Framing: How one understands and tries to describe a situation. The way one party frames a proposal or solution will affect the way the other party will behave.
Win-Win: Win-win refers to a negotiation outcome where both parties are better-of with the negotiated agreement, than without it. Some author may refer to it as “both-win” outcomes.
Distributive Negotiations: This is one of the two main types of negotiation and typically characterized by competitive approaches, where long-term relationships are not a concern.
Tactics: This refers to the specific methods, and sometimes processes, to implement a strategy.
Strategy: Defined typically as a planned sequence on how one intends to approach a negotiation.
Procurement: Concentrates on the strategic process of product or service sourcing, which typically involves researching, negotiation and planning. procurement is not the same as just purchasing.
ZOPA: The acronym for “Zone of Possible Agreement”, which defines the ranges along which an agreement may be closed. Each party walkaway point defines the boundaries of the ZOPA. The ZONE gives a graphical visualization of the superposition between both parties’ negotiation ranges.
Trade Off: To substitute or bargain one issue for another. A move typically found in many selling vs. purchasing actions.
BATNA: Best Alternative to a Negotiated Agreement. The term would better describe its meaning if it was renamed as solution away from the table, because the “best alternative to the considered negotiated agreement” might be another negotiated agreement.
Negotiation: A process involving planning and discussion aimed at reaching an agreement.
Collaborative or Integrative Negotiations: One of the two main types of negotiation. Usually characterized by a true attempt to reach a win-win situation for both parties in a negotiation.
Positions: What the parties to a negotiation will be asking for. A bad initial positional may become a very expensive mistake.
Scenario: An initial set of conditions and timeline of significant events imposed on trainees to achieve exercise objectives.