the art of negotiations (by k zybina) (for nbs mc42 module, february 2014)

NBS MC42MANAGING ACROSS THE GLOBE

The Art of Negotiations:Be a Fox

By Kristina Zybina

HE WHO HAS KNOWN BEST

HOW TO EMPLOY THE

FOX HAS SUCCEEDED

BEST

(Machiavelli 1532)

NEGOTIATING IS A WAY OF LIFE FOR A MANAGER…

YOU HAVE TO BE NEUTRAL ALL THE TIME

• RESOLVE CONFLICTS• FIND COMMON INTERESTS

• REACH AGREEMENTS

…AND SOMETIMES NOT ONLY WITHIN A COMPANY

WE CREATE VALUE BY CREATING A WIN-WIN

SITUATION

MAKING SOMEONE LOSE IN A NEGOTIATION WILL NOT CREATE

ANY VALUE AT ALL

MYTHS ABOUT NEGOTIATIONS Negotiations are fixed-sum You need to be either soft or tough Good negotiators are born Life experience is a good teacher Good negotiators take risks Good negotiators rely on intuition

(Adapted from Thompson 2012)

STRATEGIES THAT….DO NOT REALLY

WORKARE EFFECTIVE

Commitment to reaching a win-win deal

Focusing on a long-term relationship

Adopting a cooperative orientation

Taking extra time to negotiate

Perspective-talking Asking questions about

interests and priorities Providing information

about your interests and priorities

Unbundling issues Making ‘package-deals’

(Adapted from Thompson 2012)

PREPARATIONS ARE THE KEY TO ANY

NEGOTIATION!!

….DO YOUR HOMEWORK(AKA RESEARCH)

INTERNATIONAL NEGOTIATIONS ARE AN ENTIRELY DIFFERENT

BEAST!!

MULTICULTURAL NEGOTIATIONS TAKE MORE TIME AND EFFORT, BUT IT IS WORTH IT

…it took 14 years of negotiations for the 1st McDonalds in Russia to be opened

RESULTS? More than 30 000 people served on first day

....compared to previous record of 9 100 people Big Mac cost 3,75 roubles

….which equals roughly price of 1 month bus pass(Adapted from Business Today 2014)

BARRIERS TO GLOBAL DEAL:

The Negotiating Environment Culture Ideology Foreign Organizations and

Bureaucracies Foreign Governments and Laws Moving Money Instability and Sudden Change

(Adapted from Salacuse 2003)

Culture

PREPARATIONS ARE THE KEY TO ANY

NEGOTIATION!!DO YOUR HOMEWORK

(AKA RESEARCH)

….BUT NO AMOUNT OF RESEARCH WILL HELP IF

YOU DON’T UNDERSTAND THE OTHER CULTURE

WHY DO WE STUDY CULTURE?

…needs, values, interests may differ dramatically.

Culture directs opinion and judgment!

It also affects our strategy of negotiation.

CULTURE KNOWLEDGE =

TRUST AND RESPECT

SOME DIMENSIONS OF CULTURAL DIFFERENCE

Individualism Power distance Uncertainty avoidance Masculinity Temporal perspective

(Adapted from Fells 2010)

CASE STUDY:AMBIENTE 2014: THE SHOW

(adapted from Ambiente YouTube channel)

If you want to know what Ambiente is: https://www.youtube.com/watch?v=Fc7zZHpQLWw

NEGOTIATIONS WITH ROMANIAN PARTNERS

BE A FOX! Feeling like a victim

of stereotypes? Use the stereotypes

as your weapon!

…no one expected a student to show deep understanding of economics and knowledge of culture.

…A NICE SURPRISE, ISN’T IT?

(Adapted from Petre 2012)

SOME DIMENSIONS OF CULTURAL DIFFERENCE

ROMANIAN CULTURE

relationship driven culture

…at the same time very private

maintain a relatively formal approach in communication

do not ask personal questions unless a Romanian starts

be straightforward, but deliver information in a sensitive way

ROMANIAN CULTURE (CONT.)

avoid confrontational behaviour or high-pressure sales tactics

decisions are only made by the most senior member

remain flexible

…NOTHING IS CONCRETE WHEN DOING BUSINESS WITH

ROMANIANS

…LAST TIPS React quickly Create an impression of progress Make an impression Verify deadlines Take notes Make sure you can express yourself

clearly Don’t take things personally

THANK YOU FOR YOUR ATTENTION

REFERENCES Ambiente (2014). Ambiente: The Show. [Online]

Available at: https://www.youtube.com/watch?v=Fc7zZHpQLWw Accessed on: 23 Feb 2014

Business Today (2014) McDonald’s in Russia – Defeated Communism with a “Happy” Meal. [Online] Available at:

http://www.businesstoday-eg.com/case-studies/case-studies/mcdonalds-in-russia-defeated-communism-with-a-happy-meal.html

Accessed on: 23 Feb 2014

Docstock.com (2011). The Culture Iceberg. [Online] Available at: http://www.docstoc.com/docs/85990913/The-Cultural-Iceberg Accessed on: 23 Feb 2014

Fells R.E. (2010) Effective negotiation: from research to results. Cambridge ; New York, NY : Cambridge University Press.

Frankfurt Messe (2014). Ambiente. [Online] Available at: http://www.ambiente.messefrankfurt.com Accessed on: 23 Feb 2014

Gelfand M. J. and Brett J. M. (2004) The handbook of negotiation and culture. Stanford, Calif: Stanford Business Books.

Kwitessential Ltd (2013) Doing Business in Romania. [Online] Available at:

http://www.kwintessential.co.uk/etiquette/doing-business-romania.html Accessed on: 23 Feb 2014

Lewicki R.J. et al. (2003) Negotiation: readings, exercises, and cases. London : McGraw-Hill/Irwin.

REFERENCES

Machivelli N. (1532) Il Principe (The Prince). Oxford: Oxford University Press (2005)

Petre L. and Constantinescu-Stefănel R. (2012) Business negotiations between the Romanians and the Japanese - a cross-cultural perspective. SYNERGY, 8 - 2/2012.

Salacuse J.S. (2003) The global negotiator: making, managing, and mending deals around the world in the twenty-first century / 1st ed.. New York, N.Y; Basingstoke: Palgrave Macmillan.

Thompson L.L. (2012) The mind and heart of the negotiator / 5th ed., International ed.. Boston, [Mass.]; London: Pearson.

REFERENCES