Vortrag Rogers
-
Upload
parul-asthana -
Category
Documents
-
view
225 -
download
0
Transcript of Vortrag Rogers
-
8/3/2019 Vortrag Rogers
1/36
International Business NegotiationsAn Overview
Dr Helen Rogers
-
8/3/2019 Vortrag Rogers
2/36
Business Negotiations
Negotiation is something
that everyone does, almostdaily
-
8/3/2019 Vortrag Rogers
3/36
Characteristics Common to All Negotiation Situations
There are two or more parties
There is a conflict of interest between them
Parties negotiate because they think they can get a better
deal than by taking what the other side will give them
Parties prefer to search for agreement rather than:
Fight openly
Capitulate
Permanently break off contact
Take their dispute to a third party
-
8/3/2019 Vortrag Rogers
4/36
Characteristics Common to All Negotiation Situations
Parties expect give and take. They expect both sides willmodify or give in somewhat on their opening statements or
demands
Successful negotiation involves:
The resolving of tangibles e.g., the price or the terms of agreement
The resolution of intangibles
underlying psychological motivations
-
8/3/2019 Vortrag Rogers
5/36
Why Negotiate?
(1) To create something new that neither party couldattain on their own
(2) To resolve a problem or conflict between the parties
Negotiations occur for one of two reasons:
-
8/3/2019 Vortrag Rogers
6/36
-
8/3/2019 Vortrag Rogers
7/36
Functions of Conflict (+)
1. Awareness of problems
2. Allows change and adaptation3. Strengthens relationships (intra-group)
4. Awareness of self and others
5. Encourages psychological development (realistic in self-
appraisal)
6. Can be stimulating and fun
-
8/3/2019 Vortrag Rogers
8/36
Types of Negotiation
1. Distributive bargaining (win/lose)
e.g. labour management negotiations
vs
2. Integrative negotiation (win/win)
e.g. business negotiations
Fisher & Ury (1991) divide the pie, versus larger pie
-
8/3/2019 Vortrag Rogers
9/36
Framework for International Business Negotiations
Atmosphere
Conflict / cooperation
Power / dependence Expectations
Background factors
Objectives Environment Third parties Negotiators
Ghauri (1996)
-
8/3/2019 Vortrag Rogers
10/36
Framework for IBN (Ghauri,1996)
Conceptual model of business negotiation process
Highlights importance of planning and preparation in successfulnegotiations
Negotiation strategy: overall guideline, indicating direction totake, based on wishes, needs and objectives
Negotiation tactics: follow after strategy providing a line of
action
-
8/3/2019 Vortrag Rogers
11/36
Stage 1: Preparation
Identify contents of the deal
Create alternatives
Put yourself in their shoes
Gauge the appropriateness of the message
Build up relative power
Understand cultural differences
-
8/3/2019 Vortrag Rogers
12/36
Stage 2: Face-to-Face
Who within the firm should negotiate
Expendable person
Individual versus team
What makes a good negotiator
Patience
-
8/3/2019 Vortrag Rogers
13/36
Stage 3: Post-Negotiation
Clarity of the agreement
What is a good outcome?
Can no agreement be a good outcome?
Are contracts used after signing?
-
8/3/2019 Vortrag Rogers
14/36
Cultural Factors
Differing definitions of negotiation
Differing degrees of protocol Communication processing information, argumentation
Views about time
Risk taking
Balance of group think vs individuality
Nature of agreements oral vs written Intervention of lawyers
Ghauri (1991); Lewicki (2003)
-
8/3/2019 Vortrag Rogers
15/36
Trust in cross - cultural negotiations
Limited number of studies
Indications that national culture influences how trustbuilds among negotiators
Trust affects the perceptions re ethical behaviour ( trustlevel< > use unethical negotiation tactics)
A multicultural team increases the chances of a win-win
outcome
Elahee et al. (2002)
-
8/3/2019 Vortrag Rogers
16/36
the "what" if the negotiation fails often if win-win cant be achieved, going for a no dealcould be the best answer.
1. Separate the people from the problem
2. Dont bargain over positions
3. Insist on objective criteria
4. Develop your best alternative to negotiated agreement (BATNA)
Getting to Yes - BATNA
Fisher & Ury (1991)
-
8/3/2019 Vortrag Rogers
17/36
Getting to contract - some practicalissues to negotiation
-
8/3/2019 Vortrag Rogers
18/36
Contract award criteria include:
Contract award criteria: 10 suggested attributes [Cousins]
1. price
2. delivery3. quality4. innovation
5. level of technology6. culture7. commercial awareness8. productive flexibility9. ease of communication10. current reputation
Note: qualitative nature of some of these
-
8/3/2019 Vortrag Rogers
19/36
Getting to Contract Stage
Arriving at handshake stage- between two or more parties
interesting process
Negotiations may take 10 minutes, 10 hours, 10 days or10 weeks
Depending on many factors inc. nature of relationship complexity of order flexibility / room for manoeuvre
-
8/3/2019 Vortrag Rogers
20/36
Preparation
Establish scope- whats in and whats out?
Clarify bottom line
Justify scope & determine areas of flexibility- good practice
Brainstorm what..ifs
- encourages creative solutions
-
8/3/2019 Vortrag Rogers
21/36
Characteristics of Negotiations
Initially can be very slow going
Why?- both parties have clear agenda of what they want to achieve fromthe agreement
All issues debated and each side will not give too muchground
A: it is vital that this is includedin the spec.B: we cant possibly do all thatfor this price
-
8/3/2019 Vortrag Rogers
22/36
With time, deadlines become closer- pressure applied by management on
both sides to close the deal
Each party:
wish list
-inc. must-haves &nice-to-haves
Characteristics of Negotiations
-
8/3/2019 Vortrag Rogers
23/36
if you.. then I
- discounts will be offered on future deals- longer term collaboration may be discussed
Once the most of the must
haves have been achieved,compromises come into play
Characteristics of Negotiations
-
8/3/2019 Vortrag Rogers
24/36
Tactics
time out
good cop / bad cop
bring in the team bring in the heavyweights
- technical experts & senior managers
emotional outbursts
documentary evidence
sometimes e-mails provided as evidence ofimplied agreement
dont always hold around negotiation table
C
-
8/3/2019 Vortrag Rogers
25/36
A deal will eventually be struck
with a handshake
Characteristics of Negotiations
..followed up by immediate drafting of thecontract
-
8/3/2019 Vortrag Rogers
26/36
some companies take lawyers to all meetings- others keep it informal
- based on trust& knowledgeof negotiation teams
Success depends on:
Who has power in the relationship
- size of company
- importance of deal
Who has the best team of negotiators
S
-
8/3/2019 Vortrag Rogers
27/36
Success depends on:
Choice
- availability of goods from another supplierinterchangeably of supply
- X has been specified by final customer
Whos need is greater- time constraints
detrimental in long term but may be pursued if v. largeorder- cost excludes other options
S d d
-
8/3/2019 Vortrag Rogers
28/36
Autonomy of the contract
- there is less room to move if part of a large consortium
or have to fit into someone elses project schedule
Success depends on:
M i N ti ti S
-
8/3/2019 Vortrag Rogers
29/36
How do you measure success?
Reached agreement?
Both parties did what was agreed?
KPIs reached (%)
pre-agreed KPIs written into the contract; used as thebasis for measuring progress throughout contract term
Number of orders???
Measuring Negotiation Success
V d M t
-
8/3/2019 Vortrag Rogers
30/36
Vendor Management
Supplier rating schemes
ABC
Many parties make much work
Needs project management
Red / amber / green light system
V d R ti S t
-
8/3/2019 Vortrag Rogers
31/36
Vendor Rating Systems
What?
Vendor rating is used to measure, evaluate & improve supplier performanceto ensure that companies make informed sourcing decisions
How?
1. Objective, regular and systematic evaluation against pre-agreed criteria
2. Benchmark supplier performance against performance of similar suppliers used
3. Measure against fulfilment of specific objectives e.g. contract SLAs
4. Awarded points on a standardised weighted points scale
Two way process:
Useful feedback to suppliers to identify action plans & ways to improve
Contract Reviews
-
8/3/2019 Vortrag Rogers
32/36
Contract Reviews
How else should you evaluate progress on during a contractterm?
Agree on a schedule of audits- classic project management charts
- detail projected against actual progress
1
2
Arrange review meetings
- nominate project managers who monitor progress fromboth parties
Contract Reviews
-
8/3/2019 Vortrag Rogers
33/36
Visits to both company sites3
4 Additional incentives may be set- positive and negative- consistently high delivery reliability may warrant a one off
bonus
Contract Reviews
Use of Written contracts
-
8/3/2019 Vortrag Rogers
34/36
Use of Written contracts
Contracts are the work of the devil! (Macaulay, 1963)
Cost, time, energy/relationship testing to agree them
So.why do most companies use them?
1. As a communication tool expectations clearly set out
2. Negotiators wish to reduce perceived uncertainties especiallywhen doing business for the first time
3. Drawing up a contract is the normal thing to do contractsymbolises the existence of a deal
.In other words, when usefulness is perceived as greater than cost
Roxenhall and Ghauri (2004)
Use of written contracts
-
8/3/2019 Vortrag Rogers
35/36
Use of written contracts
An extensive contract is more cumbersome than a simple one
Unilaterally vs bilaterally written
- depending on the relationship between the parties
Boilerplate standard contracts vs bespoke contracts
The longer lasting the business deal, the less the contract is used
Contracts rarely used except in times of conflict (Tung, Gulbro &Herbig)
Roxenhall and Ghauri (2004)
-
8/3/2019 Vortrag Rogers
36/36