As part of our "mini-series" on international negotiation, we discussed the goals of negotiation as well as effective preparation and argumentation in the last article . Today we will look at other essential aspects of international negotiation with the help of a case study.
Peter H. is negotiating today with representatives of the Australian company Smith Ltd, a competitor in the V-belt sector. Smith Ltd. wants to improve its product quality and is negotiating with Peter H. about a know-how licence. As it is not worthwhile for Peter H.'s company to produce in Australia itself for various reasons, he is also interested in obtaining a manufacturing licence.
Smith Ltd. is seeking an exclusive manufacturing licence for Australia. They have to invest a lot to implement the know-how and therefore want to be protected in Australia. Peter H. is concerned about a secure income from royalties. He fears losing money because if Smith Ltd. cannot implement the know-how as intended, his royalty income, which is linked to Smith Ltd.'s turnover, will remain low. Peter H. intends to grant a licence without exclusivity in order to be able to sell a licence to another company if necessary.
Failure seems inevitable. Both parties insist on their positions and the negotiating atmosphere deteriorates. The problem is reduced to the position of whether the manufacturing licence should be exclusive or non-exclusive. Even if the parties agree on the other issues, the licence becomes the core issue. A positional approach to negotiation leads not only to disagreement on the substance, but also to a mixing of the factual and relational levels.
How can this problem be solved? Peter H. must try to negotiate in a factual and interest-oriented way. First of all, the unresolved issue of the "licence" should be declared a common problem by both parties. Furthermore, a structure should be developed that shows where interests and common points of intersection lie. Ideally, this structure has already been developed by one of the parties and could look like the following figure:
A closer analysis of these structures reveals that the interests of both parties overlap at a certain point: Peter H. grants Smith Ltd. an exclusive licence with the proviso that a certain minimum turnover per year is achieved after a fixed start-up period. This secures a minimum licence fee. As long as Smith Ltd. achieves this minimum turnover, which may also be staggered over the years, the licence may not be granted to third parties in Australia. The exclusivity is thus linked to a minimum turnover - the licence is thus quasi-exclusive and Smith Ltd. remains unrivalled in its country.
As a rule, both parties grant each other concessions in the course of the talks and converge in their positions. One should also negotiate on the individual concession. If possible, a wise negotiator will only give a concession if the other party is willing to make a concession in return. The better one knows one's own interests and those of the other side, the greater the possibilities for making concessions.
Relevant aspects of international negotiation:
Communication level
Analyse the other side's understanding of the language, i.e. how profound and detailed is their knowledge of the language and how much overlap there is between what you say and what the other side replies. The more accurate your analysis, the better you can assess whether the statements of both parties are congruent.
Active listening and questions
Interests need to be explored through interested listening and questioning. The ability to listen is a trump card in the age of internationalisation! If you let your negotiating partner finish what he or she has to say, put yourself in his or her place, ask specific questions and refrain from lecturing, you have a good chance of getting the fullest possible picture of the other side. Because listening and understanding does not mean agreeing with a specific opinion. Besides, one gets the chance to expose contradictions based solely on the other party's presentation. Then you beat them with their own weapons, i.e. with their own arguments.
Definition of key terms
In many negotiations it is a good idea to define key terms of the deal together in advance. This reduces misunderstandings from the outset and structures the course of negotiations.
Interests instead of positions
Positions are often associated with negative definitions and reflect personal attitudes. It is difficult to move away from such a position without losing face, at least in part. It is better to explore the interests hidden behind the obvious positions and discuss them.
Interest-based negotiation has a de-escalating effect and shows how to recognise the underlying ideas of both parties and find possible points of intersection.
If one knows the interests, it is more possible to respond to them appropriately and effectively. Those who manage to successfully summarise the position of the other party and then explain their own point of view significantly improve their chances of success.
Broadening the scope of negotiation
When one has explored both one's own and the other party's interests, new, previously unrecognised possibilities for a solution arise - the scope of negotiation is thus broadened.
Contract coordinator
It often helps to appoint a contract coordinator on both sides. If such an approach has been unusual with your business partner so far, you should make the advantages of a functioning working level clear to him. While respecting all intercultural realities, also emphasise his duties to cooperate in order to ensure necessary preparatory work for the contract negotiation. Suggest the further procedure and work out the individual implementation steps or milestones together with your partner: Who? When? With whom? In what way? Also determine who is responsible for meeting the milestones. This way you ensure that the euphoria after a jointly achieved negotiation result does not fizzle out, but that the further procedure proceeds efficiently, quickly and purposefully with the help of a contract coordinator.
Delayed or no feedback, too complicated application procedures or too high demands from the HR departments - mistakes in the internal processes often make it difficult to fill vacancies quickly. The problems are known, but are too rarely actively dealt with.
In view of the shortage of skilled workers, which in some cases is already assuming considerable proportions for some occupational groups, one should actually be able to assume that companies would pull out all the stops to be able to fill success-critical positions as quickly as possible. But the word actually is in many cases also the key term that describes the failure of the efforts. "Actually, we should coordinate much more closely with the specialist department", "Actually, the candidate should now receive our contract offer as quickly as possible", "Actually, we should build up a pool of applicants". Every experienced HR manager knows how important internal processes are for successful recruiting, but in practice these internal processes are not handled as they should be.
Lack of feedback is the biggest point of criticism
According to a reader survey by the job and application portal Karrierebibel.de*, applicants are particularly annoyed by receiving no response or only a very late response to their application or interview. Almost 23 percent of the participants stated that they never heard anything from the company again after their application. 13.5 percent of the respondents did not receive any feedback after the interview.
Other points of criticism are too little openness about why the application failed (18 per cent) and the fact that the job in question is re-advertised after the rejection (just under 10 per cent). All of this shows little appreciation for the applicants and ultimately damages both the image and the recruiting of the company looking for a job.
Threats to new hires
A current study by the personnel service provider Robert Half** also confirms that recruiting processes take too long and applicants are lost as a result. On the one hand, the reasons lie in the overly extensive processes, but on the other hand also in the increased demands of applicants. More than half of the CFOs surveyed in the study (55 percent) agree that applicants have become more impatient. This is because most candidates have several options available to them through multiple applications and thus have a choice.
"The consequence: long application processes jeopardise the quality of new hires," the study says. In plain language, this means: If the searching companies wait too long with their decision, the good applicants will have left in the meantime and, in the worst case, the search will have to start all over again.
After graduating as an automotive engineer and industrial engineer, he began his career in the automotive industry in the areas of sales, development and marketing and also spent a year in Japan with one of the largest automotive suppliers.
He then moved to a world-renowned premium car manufacturer, where he was responsible for product marketing in Japan and South America and marketing strategy in North and South America.
In 1994 he decided to become self-employed and founded a personnel consultancy in Munich, where he has been driving development and expansion for over 20 years. As managing director, his industry focus is naturally on the automotive world as well as mechanical and plant engineering.
With his doctorate in the field of aptitude diagnostics, he ideally rounds off his fields of competence, especially with regard to personnel and management consultancy. The dissertation deals with the identification and proof of typical personality traits of engineers as well as the definition of development areas for a successful professional career.
These are scientifically derived and presented in the book "Eignungsdiagnostik im Praxiseinsatz".
At the same time, his focus is on building networks and cooperation models as well as the continuous further development of systems and processes in HR consulting.
Within the last 20 years in personnel consulting, he has developed several brands that are still successful on the market today.
Companies that need support in crisis management or need to fill a vacant management position on a transitional basis often resort to so-called interim mandates. One area of application is project work when the capacities or project management know-how of the respective company are not sufficient. Other possible uses are, for example, special topics for which a company does not need to have one or more experts permanently on staff.
But how willing are specialists and managers to accept such interim positions? This is one of the questions the HR experts of the HR Consult Group asked in a survey with over 10,000 participating candidates. The aim of the study is to get to know the wishes and needs of the candidates even better in order to adapt the offers of the personnel consultancies as precisely as possible.
Back to the initial question: Do candidates even want to accept temporary leadership positions?
Yes, they do!
When asked about interim mandates, the vast majority of participants (60 per cent) indicated a willingness to take on such positions. Of these, slightly less than one-fifth of respondents (18 per cent) indicated that they are basically willing to fill an interim position. In doing so, they consciously accept the short-term nature and the special challenges that such jobs entail. At 42 per cent, a large proportion of participants would accept project-based interim positions, thus establishing a firmly defined (thematic) framework for the job from the outset. However, 40 per cent of the candidates would not want to take on such a job.
Interim positions are often associated with rather difficult and sometimes also unpleasant tasks, such as restructuring or even closing down and winding up a company. Therefore, it is not surprising that many of the interviewed candidates are not interested in such a position. Particularly ambitious job seekers, on the other hand, can find fulfilment in the often tricky problems. Once the case is solved, the next challenge awaits the candidate in the form of another interim position.
After graduating as an automotive engineer and industrial engineer, he began his career in the automotive industry in the areas of sales, development and marketing and also spent a year in Japan with one of the largest automotive suppliers.
He then moved to a world-renowned premium car manufacturer, where he was responsible for product marketing in Japan and South America and marketing strategy in North and South America.
In 1994 he decided to become self-employed and founded a personnel consultancy in Munich, where he has been driving development and expansion for over 20 years. As managing director, his industry focus is naturally on the automotive world as well as mechanical and plant engineering.
With his doctorate in the field of aptitude diagnostics, he ideally rounds off his fields of competence, especially with regard to personnel and management consultancy. The dissertation deals with the identification and proof of typical personality traits of engineers as well as the definition of development areas for a successful professional career.
These are scientifically derived and presented in the book "Eignungsdiagnostik im Praxiseinsatz".
At the same time, his focus is on building networks and cooperation models as well as the continuous further development of systems and processes in HR consulting.
Within the last 20 years in personnel consulting, he has developed several brands that are still successful on the market today.
Not only professional knowledge, such as qualifications, professional experience and industry knowledge, are decisive for the successful exercise of a position. Above all, soft skills, professional interest, motives, values and social behaviour must be taken into account.
The thesis was put forward that the successful people of a professional group are almost identical in the characteristics of their personality traits, the soft skills. Each norm or best practice profile forms its own specific image typical for the respective occupational group.
The following phenomenon was observed when defining personality traits for typical area managers:
There was a need for personnel in the sales department of a well-known car manufacturer. The question arose as to how the vacant positions should be filled.
In contrast to the usual procedure of comparing new candidates with a demographic group in a personality test or concentrating on specific characteristics desired by the supervisors, a reference profile of people in the same profession was drawn up here. Thus, a comparison already allows far more meaningful conclusions to be drawn.
For further optimisation, a best-practice profile has been created so that a statement can be made not only as to whether a candidate has the characteristics required for the position, but also as to whether he or she is also likely to be successful.
To verify this revolutionary approach, HR Consult Group AG then tested the top 10 percent of 1,400 salespeople from the same premium car manufacturer and created a Best Practice Profile (BPP). Surprisingly, this BPP was also very clear. The characteristics of the key competences and thus the profiles of the best salespeople are like two peas in a pod, irrespective of age, region, ethnic origin or nationality.
To get further proof of the correctness and success of this approach, the most successful salespeople of another premium car manufacturer were surveyed. The corresponding BPP shows that the best salespeople of this manufacturer were also almost identical.
An example of an almost identical match for the key criteria can be seen in the following figure:
Therefore, there is a conviction - and evidence could also be provided for this - that successfully acting members of a professional group have personality traits with a high degree of congruence in the key competences. These are further crystallised in the best practice profiles. They represent those personality traits that are actually decisive for success in the profession.
From the differences between the candidate profile and the norm profile, the need for personnel development in the form of training or further education can be derived and implemented.
The central finding is that the successful people of a professional group are almost identical in the characteristics of their personality traits, the soft skills. Each norm or best-practice profile forms its own specific image, typical for the respective occupational group.
The next article in this series will describe how to create a best practice profile.
After graduating as an automotive engineer and industrial engineer, he began his career in the automotive industry in the areas of sales, development and marketing and also spent a year in Japan with one of the largest automotive suppliers.
He then moved to a world-renowned premium car manufacturer, where he was responsible for product marketing in Japan and South America and marketing strategy in North and South America.
In 1994 he decided to become self-employed and founded a personnel consultancy in Munich, where he has been driving development and expansion for over 20 years. As managing director, his industry focus is naturally on the automotive world as well as mechanical and plant engineering.
With his doctorate in the field of aptitude diagnostics, he ideally rounds off his fields of competence, especially with regard to personnel and management consultancy. The dissertation deals with the identification and proof of typical personality traits of engineers as well as the definition of development areas for a successful professional career.
These are scientifically derived and presented in the book "Eignungsdiagnostik im Praxiseinsatz".
At the same time, his focus is on building networks and cooperation models as well as the continuous further development of systems and processes in HR consulting.
Within the last 20 years in personnel consulting, he has developed several brands that are still successful on the market today.
As part of our series on internationally relevant topics by our author Sergey Frank, we are devoting a 3-part article to the extremely important question of how to conduct a successful negotiation in detail on the international stage.
Negotiations play a significant role in any business, including at the international level, of course, and rarely proceed in a uniform manner. Internationally, complex situations often arise, for example due to different language levels of the negotiating parties or diverging cultural and value views. Discussions are usually conducted in English or third languages, often with the help of interpreters, as described above. In addition, there are diverging priorities and time constraints.
These aspects are complex and carry considerable risks that can end in misunderstandings, loss of time and frustration. To prevent this and at the same time improve communication and understanding between the negotiating partners, certain rules of the game must be observed.
These rules include a clear negotiation process in four steps: opening and setting the essential milestones (part 1), communication and exploring the interests of the other side (part 2), the actual negotiation (part 3), and agreement and ideally conclusion of the contract (part 4). The result of a negotiation can initially only be a partial agreement before the further issues are negotiated in a further round. And the process of understanding, listening and negotiating can also be repeated several times. Especially in people-oriented cultures, such as in the Middle East, Asia or even Russia, negotiation talks can drag on for a long 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 separate the two levels. Often the partner is not seen as a representative of a company, but as a human being. Displeasure about an unpleasant situation can lead to taking it out on the other person. To avoid this, it is better to precisely separate relationship elements such as understanding, respect, affection, fear and anger on the one hand and factual elements such as prices, specifications, competitive advantages, payment and delivery terms on the other. You can always negotiate your interests consistently, but at the same time be polite with your partner.
The goal
Personal esteem and integrity are essential components of any business relationship, whether national or international. In this context, it is impossible to provide a patent recipe for successful negotiation at the international level. Furthermore, it is not the intention to provide rhetorical tricks that may "trick" or "bamboozle" the other party. The following is about conscious negotiation, i.e. how to act factually, rationally and structurally. It is in the negotiator's overriding interest to
negotiate effectively and professionally
Avoid ineffective conflicts
Achieve appropriate results as quickly as possible
to achieve bindingness also in an intercultural context.
After thorough preparation, including a clear definition of what is wanted, the actual negotiations can begin. In principle, negotiations follow the pattern shown in the figure below, whereby the process of understanding, listening and negotiating can be repeated several times. Often, the final agreement is reached in the form of partial agreements.
The figure above clearly shows the overall constellation and also the dynamics of the contract negotiations. In principle, these are based on good negotiation preparation, reaching partial agreements and then continuing the negotiations. Finally, one arrives (or not) at the overall conclusion of the contract.
It is a good idea to think about the individual steps as follows:
Preparation
Before the actual negotiations take place, you should try to get to know the partner in question. The more you know about him, both in business and personally, the better. Therefore, it is very important to create a positive atmosphere at the beginning of a negotiation.
Courtesy and hospitality go without saying in this context. Added to this are interest in the person of the partner, open communication, friendly eye contact and, last but not least, humour. In addition, national customs play a very important role in international negotiations.
It is always advisable to allow enough time for negotiations. A lot of negative results are achieved under time pressure. The lack of time often becomes a means of pressure, especially in international negotiations.
If you define your negotiation topic precisely in advance, you can be sure that the negotiation will proceed according to plan and not get out of hand. A good way to do this is to divide the issue into main topic, sub-topics, main arguments and sub-arguments. An issue that initially appears complex will thus become structured and comprehensible, both in itself and for the partner. The following points should be noted:
Agenda - structure the negotiation topic
Definition of key terms, because it is often important, ideally together with the other side, to define terms precisely
Developing a negotiation strategy and preparing for one's own goals, but also reflecting on priorities of the other side
Flexibility - looking for options and considering possible concessions
A Step-by-Step Approach - From Smaller to Larger in the Course of Negotiation
The argumentation
Apart from personal aspects, the procedural approach is also relevant and a clear structure of the conversation is indispensable. With regard to argumentation, care should be taken not to start the negotiation too coldly and too soberly. This form of negotiation with high initial positions and negative stipulations such as "up to here and no further" is seen in many countries as clearly too demanding. You also risk losing face if you give in on your expectations in the course of the talks.
It is therefore important not to be too demanding from the outset, but rather to build up appropriate positions. Factors such as saving face and being interested in the other person's culture and personality are generally very important. Therefore, negotiate less about positions and more about upstream interests. If you can successfully summarise the position of the other party and then explain your own position, you will significantly improve your own chances of success.
A clear and thus consistent argumentation should be well prepared. The preparation for this usually takes some time. It is advisable to check the coherence of one's own position and possible changes to it. At the same time, as many options as possible for the negotiation goal and strategy should be developed in advance.
It is no less important to take into account objections from the other party, insofar as they are foreseeable, in order to be able to react to them quickly and appropriately.
In reality, there is often a lack of such preparation, especially due to time constraints. The parties usually enter the negotiation ill-prepared and with what they believe to be the correct and therefore infallible solution; conflicts are then pre-programmed.
Please bear in mind: In few other areas can so much be won so quickly, but also lost, as in international negotiations. In the next part we will look at the right structure and show how helpful a change of perspective can be.
Recruitment consultancies constantly receive new interesting job offers from their corporate clients and then check which candidates from their career pool could match them. If the candidate's qualifications match the requirements of the searching company, that is a match. The more accurate a candidate's profile is, the better the match will be in the end.
It is essential that the data stored is up to date. If, for example, a candidate has indicated that he or she is willing to change jobs, but this information is not up to date, this ultimately brings disadvantages for both sides. On the one hand, the recruiter contacts the candidate in the hope of being able to place him or her, and remains unsuccessful. On the other hand, the candidate receives supposedly unwanted calls or e-mails from the recruitment consultancy.
In order to ensure that the candidate pools are up-to-date, the cooperation of the candidates is therefore indispensable. The HR experts of HR Consult Group AG have investigated the level of willingness to do so in their study with over 10,000 participants, among other things.
More than half would like to be reminded by e-mail
In principle, a large proportion of respondents (57 per cent) are willing to check their candidate profile regularly and update it if necessary. More than half would like to receive a reminder by email, while 17 percent would update their profile every six months. Updating their profile once a year was indicated by 13 per cent of the candidates. Likewise, 13 per cent are not prepared to update their data themselves.
We are very pleased with this positive response from respondents. The topicality of the data in our candidate pool is one of the keys to our work. Only with up-to-date data can we guarantee precisely fitting placements and thus optimally help both our clients and our candidates to take the next career step.
After graduating as an automotive engineer and industrial engineer, he began his career in the automotive industry in the areas of sales, development and marketing and also spent a year in Japan with one of the largest automotive suppliers.
He then moved to a world-renowned premium car manufacturer, where he was responsible for product marketing in Japan and South America and marketing strategy in North and South America.
In 1994 he decided to become self-employed and founded a personnel consultancy in Munich, where he has been driving development and expansion for over 20 years. As managing director, his industry focus is naturally on the automotive world as well as mechanical and plant engineering.
With his doctorate in the field of aptitude diagnostics, he ideally rounds off his fields of competence, especially with regard to personnel and management consultancy. The dissertation deals with the identification and proof of typical personality traits of engineers as well as the definition of development areas for a successful professional career.
These are scientifically derived and presented in the book "Eignungsdiagnostik im Praxiseinsatz".
At the same time, his focus is on building networks and cooperation models as well as the continuous further development of systems and processes in HR consulting.
Within the last 20 years in personnel consulting, he has developed several brands that are still successful on the market today.
