Conducting Interpersonal Negotiations in Business

Negotiation is a very important skill in the business field. Apart from knowledge and understanding of the market and the other party, negotiators should be prepared for a psychological game. This article will discuss the steps a company should take if it is trying to go international and wants to negotiate with a potential partner in an overseas country.

Planning

When preparing for negotiation, a company should first establish the goals it wants to achieve and be fully prepared to form a BATNA.

It must identify itself, the other party, and both locations to understand various factors. This includes the position of the two sides, their respective advantages, disadvantages, and cultural differences. In addition, the company should study potential strategies the other party may use, appropriate responses, and how to react when the opposite side presents an undesirable condition. It should also establish its lowest acceptable limit. Other considerations may include whether the company should establish an anchoring bias by making the first offer, or deciding the order of topics to be discussed during the negotiation.

Interpersonal Relationship Building

After analyzing and planning, the second stage is to get to know the people on the opposite side. Besides understanding cultural differences, it is more important to know the people themselves, as rushing to conclusions may create stereotypes. In the process of communication, constantly analyze the behaviour and words of the other party to establish a trustworthy and stable relationship. Be patient, display cultural acumen, and adopt negotiation strategies suitable for the host country’s environment.

Exchanging Task-Related Information

After building interpersonal relationships, the third step is for each group to set forth its position on the critical issues. At this stage, negotiators should focus not only on presenting their situation and needs, but also on demonstrating an understanding of their opponent’s viewpoint. This helps them determine what the other party aims to achieve and what they are willing to concede. Meanwhile, focusing on the overall situation facing each party is also crucial at this point. This approach encourages negotiators to assess a broader range of resolution alternatives, rather than confining themselves to their preconceived, static positions.

Persuasion

Persuasion is the hardest bargaining stage in the negotiation process. Typically, both parties try to persuade the other to accept more of their position and to give up some of their own, but each knows that without giving some concessions, it is unlikely to reach a final agreement. According to the textbook, the success of the persuasion step often depends on

1. How well the parties understand each other’s position;
2. The ability of each to identify areas of similarity and difference;
3. The ability to create new options; and
4. The willingness to work toward a solution that allows all parties to walk away feeling they have achieved their objectives.

International managers usually find that this process of bargaining and making concessions is fraught with difficulties because of the different uses and interpretations of verbal and non-verbal behaviors. Although variations in such behaviors influence every stage of the negotiation process, they can play a particularly powerful role in persuasion.

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