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Essay: Business negotiation

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  • Published: 8 October 2015*
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Business negotiations could be understood as encounters between firms or economic organisations with the goal of reaching agreements to provide economic benefits. Although their coverage is immensely varied; buying and selling goods and services, cooperation agreements, mergers and acquisitions, franchising contracts joint ventures or joint projects. They all have the common denominator of their involvement in coactions in order to gain economic benefits. Business negotiation is said to be international when the parties involved are of different nationalities. (Kremenyuk 2002).
Negotiations take place within the context of the four Cs; common interest, conflicting interests, compromise and criteria (Moran and strip, 1991). Common interest considers the fact that each party in the negotiation shares has or wants something that the other party has. Without a goal there would be no reason to negotiate. Reaching a compromise involves finding a way around disagreements, the compromises reached does not completely ensure the result. On the other hand, the criteria consist of the conditions at which the negotiation is being taking place. (Donald et al, 1996).
The background of the negotiation, the group involved and also the degree of formality determine the skills that are required in any particular form of negotiation. (Woo and Prud’homme, 1999).
Negotiation is simply a part of our daily routine in which we endeavour to make our business partners or associates, staffs, managers or director, lectures, spouse, family members /friends etc understands why and how things are the way they are and also what could be done to make it better or easier. For instance, the way we handle our relationship between our friends, family and spouse is different from the way we handle it in a business environment. We sit our friends, family or spouse down and layout the problems or issues and then after all said and done we come up with a solution on how to go about our relationship with them and how to make it better.
On the other hand, negotiation in a business environment, negotiation is quite complex. Take a wage payment and contract between a football club and a player for instance; it takes a long string of paper work and talks to reach an agreement. As its stated in the examples above, the first scenario was not really simple but fairly easy; there was no need of sleepless night or long day preparation or preplanning because it isn’t of high priority at that moment. But in the cause of business negotiations, being of high priority it requires a whole lot of preparation and preplanning in order for it to be well executed.
Nevertheless, It is evident enough to say business negotiation is way different from an everyday kind of negotiation. According to (Woo and Prud’homme. 1999), in the business arena, negotiation is said to be a very challenging task of communication. Negotiation is also said to be an important part of managerial process, In other words, it is very significant to the execution of business strategies (Ghauri, 2003). The simplest model is symmetry or equality. There is a basic symmetry in any negotiatory situation in that both parties have the power to veto the agreement. Extended, this condition provides the situation of power equality, identified in many experiments as the most propitious condition for satisfactory negotiations (Rubin and Brown 1975). There are cultural impacts on negotiations either between Norwegian and a Brazilian or a chinese and someone from Kenya.
Strategy in Negotiations
Negotiators usually face a choice among three strategies for moving forward towards agreement in an ongoing negotiation; contending, problem solving and yielding (Pruitt and Rubin, 1986; Rubin, Pruitt and Kim, 1994). In contending negotiators pursue their goals by the persuasion of the other party to concede. This strategy is sometimes called distributive bargaining, competition or claiming value. When it comes to problem solving, negotiators tries to weigh out options in other for both parties to be filled with satisfaction. In this case, this strategy is called collaboration (Thomas, 1976), integrative bargaining (Walton and Mckersie, 1965) or creating value (Lax and Sebenius, 1986). The final strategy, yielding, involves diminishing one’s goals, that’s is, reducing one’s aspirations. This strategy is sometimes called accommodation (Thomas, 1976). The first two strategies must be implemented by means of overt tactics (Kremenyuk, 2002, p. 85).
To people, there are different perspective as to what culture really mean thus it is difficult to place a finger on the exact meaning of culture as it has been discussed and argued by well known authors anthropologists.
As stated by Marx (1999, 2001, p.42), the biggest challenge in international management is understanding other people’s culture, which manifests itself in different ways. We often use the word culture all the time without considering the concrete definition, but in this context, culture can be defined as the way things are done. Obviously this can express itself in various forms. According to Lederach (1995, p.9), culture is the shared knowledge and schemes created and used by a set of people for perceiving, interpreting, expressing, and responding to the social realities around them. That is to say, Lederach (1995) means that it is these shared knowledge that differentiates a group of people or community from other groups. Lustwig and koester (2010, p.24) defined culture as, ‘a learned set of shared interpretations about beliefs, norms values and social practices, which affects the behaviour of a relatively large group of people.”
In addition, Culture is a set of human-made objective and subjective elements that in the past have increased the survival and resulted in satisfaction for the participants in an ecological niche, and thus became shared among those who could communicate with each other because they had a common language and they lived in the same time and place (Samovar et al, 2007, p.20).
Furthermore, Kelly & Kluckhohn (1945, p.97) describes culture as all those historically created designs for living, explicit and implicit, rational, irrational and non rational, that exist at any given time as potential guides for the behaviour of men. As stated by (Kitayama and Cohen, 2010) ” culture is the knowledge that is stored in the memory of men in order to be used later. A well known author also defined culture in a simple form ”as the collective programming of the mind that distinguishes the members of one group or category of another people from another (Hofstede, 2001).”

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