As part of our series on topics of international relevance by our author Sergey Frank, we are devoting a three-part article to the extremely important question of how, in practical terms, to conduct a successful negotiation on the international stage.
Negotiations play a significant role in any business transaction – including, of course, at an international level – and rarely follow a standard pattern. Internationally, complex situations frequently arise, for example due to differences in the parties’ language proficiency or divergent cultural and value systems. Discussions usually take place in English or in third languages, often with the assistance of interpreters, as described earlier. Added to this are differing priorities and perceptions of time.
These aspects are complex and involve significant risks that can lead to misunderstandings, wasted time and frustration. To prevent this whilst at the same time improving communication and mutual understanding between the negotiating parties, it is important to observe certain rules.
These ground rules include a clear four-step negotiation process: Opening the negotiations and setting key milestones (Part 1), communicating and exploring the other party’s interests (Part 2), the actual negotiation (Part 3), and reaching an agreement and, ideally, concluding a contract (Part 4). The outcome of a negotiation may initially be only a partial agreement, before further issues are negotiated in a subsequent round. Furthermore, the process of reaching an understanding, listening and negotiating may be repeated several times. Particularly in people-oriented cultures, such as those in the Middle East, Asia or Russia, negotiations can drag on for a considerable period of time.
In many countries, the personal level is perhaps even more important than the factual level. To avoid serious conflicts, it is therefore important to keep the two levels separate. Often, the other party is seen not as a representative of a company, but as a person. Consequently, frustration over an unpleasant situation can lead to taking that anger out on the other person. To avoid this, it is best to keep relational elements – such as understanding, respect, affection, fear and anger – strictly separate from factual elements – such as prices, specifications, competitive advantages, and payment and delivery terms. You can always negotiate your interests consistently, whilst at the same time treating your counterpart with courtesy.
The aim
Personal respect and integrity are essential components of any business relationship, whether national or international. In this context, it is impossible to provide a one-size-fits-all formula for successful negotiation at an international level. Furthermore, it is not the intention to teach rhetorical tricks that might be used to „deceive“ or „cheat“ the other party. The following focuses on conscious negotiation, i.e. how to act in a factual, rational and structured manner. It is in the negotiator’s primary interest
- to negotiate effectively and professionally
- to avoid ineffective conflicts
- to achieve appropriate results as quickly as possible
- To foster a sense of commitment, even in an intercultural context.
Once thorough preparation has been carried out, including clearly defining what you want to achieve, the actual negotiations can begin. Negotiations generally follow the pattern shown in the diagram below, although the process of reaching an understanding, listening and negotiating may be repeated several times. The final agreement is often reached through a series of partial agreements.
The diagram above clearly illustrates the overall structure and dynamics of contract negotiations. In principle, these are based on thorough preparation, the reaching of partial agreements and, subsequently, the continuation of negotiations. Ultimately, an overall contract is concluded (or not).
It is worth considering the following points regarding each step:
The preparation
Before the actual negotiations begin, you should try to get to know your counterpart. The more you know about them – both professionally and personally – the better. That is why it is very important to create a positive atmosphere at the start of a negotiation.
Politeness and hospitality go without saying in this context. Added to this are an interest in your counterpart as a person, open communication, friendly eye contact and, last but not least, a sense of humour. Furthermore, national customs play a very significant role in international negotiations.
As a general rule, it is advisable to allow sufficient time for negotiations. Time pressure often leads to a great many negative outcomes. A lack of time is often used as a means of exerting pressure, particularly in international negotiations.
Anyone who defines the specific topic for a negotiation in advance can expect the negotiation to proceed according to plan and not get out of hand. A useful approach is to structure the discussion into a main topic, sub-topics, and main and supporting arguments. This helps to structure a matter that may initially seem complex, making it clearer both in itself and to the other party. The following points should be borne in mind:
- Agenda – organise the topic of the meeting
- Definition of key terms, as it is often the case – ideally in consultation with the other party – that the precise definition of these terms is crucial
- Developing a negotiation strategy and preparing to achieve one’s own objectives, whilst also considering the other side’s priorities
- Flexibility – exploring options and reconsidering possible concessions
- A step-by-step approach – moving from the smaller to the larger issues as the negotiations progress
The line of reasoning
In addition to personal considerations, the procedural approach is also important, and a clear structure for the discussion is essential. When it comes to presenting your case, care should be taken not to begin the negotiation in a manner that is too cold or too matter-of-fact. This style of negotiation, characterised by high opening positions and negative statements such as „this far and no further“, is regarded in many countries as far too demanding. There is also a risk of losing face if one relents on one’s expectations as the discussions progress.
It is therefore important not to adopt positions that are too extreme from the outset, but rather to establish reasonable ones. Factors such as saving face and taking an interest in the other party’s culture and personality are generally of great importance. You should therefore negotiate less on positions and more on the underlying interests. Anyone who manages to summarise the other party’s position effectively and then explain their own viewpoint will significantly improve their chances of success.
A clear and therefore consistent line of argument should be well prepared. Preparing for this usually takes some time. It is advisable to check that your own position – and any changes to it – is logically sound. At the same time, you should develop as many options as possible in advance for your negotiating objective and strategy.
It is equally important to take into account any objections the other party might raise, insofar as they are foreseeable, so as to be able to respond to them promptly and appropriately.
In reality, however, such preparation is often lacking, particularly due to time constraints. The parties usually go into negotiations ill-prepared and with a solution which they believe to be correct and therefore infallible; conflicts are then inevitable.
Please bear in mind that there are few other areas where so much can be gained – but also lost – so quickly as in international negotiations. In the next section, we will look at the correct structure and show how helpful a change of perspective can be in this context.
Go to the article Rules for Conducting International Negotiations (Part 2)
To the Article Rules for Conducting International Negotiations (Part 3)
