International Negotiation and Diplomacy

Negotiations can be totally unexpected and can sometimes bring along a completely new learning experience. It is imperative to keep preconceived notions and assumptions back at home, before jumping into the negotiation and understand people and process in both an explicit and an implicit manner. The explicit manner is to form a 'Protocol and Deportment' when engaging in cross cultural negotiations.

Tangible / Intangible Aspects of Deportment

It always pays off to be aware of how the signs are read and body language interpreted in the culture of people we will be negotiating with. Being cognizant of basic dos and don¡¦ts (as shown in the figure below) help us in behaving in a way that is not disrespectful or insulting to the other side. It also conveys maturity and seriousness, which are prerequisites for a successful negotiation.

TANGIBLE Greeting

¡EHow to greet (words/ handshake/ body posture)

¡EHow to address

¡EWhat about business cards Dressing

¡EFormal or Informal Eating

¡EDining table Manners

¡EOffering more food or not

¡EAvoid foods considered taboo Eye contact

¡EDirect or indirect eye contact

¡EConstant or Partial Touching

¡EDifferent cultural reactions

¡ETowards body contact gestures

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INTANGIBLE Behavior

¡EInformal or Formal

¡EIn sync with opposite culture Is Silence

¡EAwkward or Expected

¡EInsulting or Respectful Display of Emotions

¡EUsual/ common

¡ERude/ Embarrassing Punctuality

¡EPerception of time

¡EFlexible /Fluid versus Rigid/ fixed Gift Giving

¡EForbidden or allowed

¡EKind of gifts

The first step to a successful negotiation process is to prepare one's own negotiating team.

ƒæ Firstly, every member¡¦s priorities, preferences and interests should be defined clearly. The ideal outcome for each one of them can be documented.

ľ Secondly, a negotiation and bargaining process should first take place inside the team that aligns the interests and objectives of all the members.

ľ Thirdly, it is important for the team to decide on a common goal and think of a strategy to be followed when negotiating externally. It is always beneficial if the team goes with a BATNA (Best Alternative to a Negotiating Agreement) in mind.

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Paying attention to how one is expected to behave is a necessary but not a sufficient condition. Despite keeping all the do's and don'ts in mind, there is no guaranteeing that an agreement will be reached. Certain implicit things to be kept in mind are

ľ WHO: Influencer's are people whose decisions and thought process can make or break the deal for you. In an international context they can be any external party. Be it United States where the SEC or the Federal State Commission can turn the tide, be it Germany, where apart from management - labor, shareholders and supervisory board can represent in matters of importance, or be it China, where state officials hold an integral position in the process, irrespective of whether the company is private or public.

ƒæ WHAT: After understandings, who are the key players, next important step is to understand what their ¡¥role¡¦ is. For example in United states a party having majority shares has the sole power to make decisions, but in Germany any of the key players can obstruct the decisions of those majority shareholders (with reference from merger and acquisition attempt of 'Continental Gummiwerke' a Germany tire maker by Italian company Pirelli). Somewhat similar is the story in Switzerland and Japan where non- shareholding board of directors exercised restrictions on voting powers of the shareholders.

How Gucci used the loophole (non applicability of certain stock rules for companies outside United States) against French luxury conglomerate LVMH is an illustration of misunderstanding in the formal decision rights. Apart from this it is also important to understand cross cultural assumptions in strange territories.

ľ Informal WHO's and WHAT's: The approval of signatories to the deal or solely trusting the legal parties is not enough. One needs to understand the powerful informal parties (that might be controlling the formal or legal systems) and the role they can play. Keiretsu in Japan, Italian influential families or in Russia its mafia network can impact strongly the negotiation and its outcome. One can learn from the experience of US Stone Container Corporation while dealing with Honduras, and their mistake in overestimating the status of presidency and democracy in the country and underestimating other centers of informal power. In other words, one needs to comprehend the reality between the legal lines.

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AIDS IN UNDERSTANDING PEOPLE

How a person appears to outside world is defined as his behavior. Understanding does not come from merely knowing how a person will behave, but by understanding the belief system, culture and attitudes of person that are very internal to him. Outer behavior is easier to mold, whereas the internal system has been ingrained in the person and very difficult to change. However it is this internal system that defines how the person acts or behaves externally in a particular way as he does. Therefore, we attempt to understand some cultural variables (CRST) that can define a person's outer behavior.

C: Communication

ľ Indirect v/s Direct

ľ High context v/s Low Context

ľ Verbal v/s Non Verbal

ľ Detailed v/s Concise

INVESTIGATIVE NEGOTIATION

Trying to convince other party of one's own interests can have a negative impact. Educating them about your own position has a disadvantage. Rather one should try to GET information about what other side interests