At least seven aspects of the negotiation setting should be manipulated ahead of time if possible:
2) Physical arrangements
3) Number of parties
4) Number of participants
5) Audiences (news, media, competitors, fellow vendors etc.)
6) Communication channels
7) Time limit
Location speaks loudly about power relations. Travelling to negotiate in the counterpart’s home turf is a big disadvantage and not just because of the cost of travel in terms of money and fatigue. A neutral location may be preferred – indeed, many trans-Pacific business negotiations are conducted in Hawaii. The weather and golf are nice and the jet lag is about equal. Location is also an important consideration because it may determine legal jurisdiction if disputes arise. If you must travel to your negotiating counterpart’s city then a useful tactic, is to invite clients or partners to work in a meeting room at your hotel. You can certainly get more done if they are away from distractions at their offices.
Physical arrangements can affect cooperativeness in subtle ways. In high context cultures the physical arrangements of rooms can be quite the source of embarrassment and irritation if handled improperly. To the detriment of their foreign business relationship, Americans tend to be casual about such arrangements. Furthermore views about who should attend negotiations vary across cultures. Americans tend to want to get everyone together hammer out an agreement even if opinions and positions are divergent. Japanese prefer to talk to everyone separately then once everyone agrees to schedule inclusive meetings. Russians tend towards a cumulative approach, meeting with one party and reaching an agreement, then both parties calling on a third party and so on. In addition, the importance of not being outnumbered in international business negotiation has already been mentioned.
Audiences can have crucial influences on negotiation processes, purchasing executives at PetroBras, the Brazilian national oil company are well known for putting competitive bidders in rooms adjacent to one another to increase competitive pressure on both vendors. Likewise, news leaks to the press played a crucial role in pushing along the negotiations between General Motors and Toyota regarding a joint venture production agreement.
As electronic media become more available, efficient and sometimes necessary (e.g. The war in Iraq or the SARS outbreak mentioned, more business can be conducted without face to face communication. However, Americans should recognize that their counterparts in many other countries do not necessarily save their attraction to the Internet and teleconferencing. Indeed, recent research has shown that when using e-mail trust is harder to build and in Hong Kong business people and to negotiate more competitively. A conversation over a long dinner may actually be the most efficient way to communicate with clients and partners in places like Mexico Malaysia and China.
Finally, it is important to manipulate time limits. Recall the example about the Russians and American in Nice. The patience of the home office may be indispensable and major differences in time orientation should be planned for when business negotiations are conducted in most other countries.
The Digital impact on international negotiations:
All in e-commerce is good for global marketing. It allows domestic firms to internationalize more quickly and at less cost. It allows international firms to communicate internally and externally with greater efficiency. Fax replaced telex, which in turn, replaced the telegram. But e-mail is only part replacing mail box and phone, it is better seen as a different and more informal medium than fax and more convenient than phone. For networking purposes, e-mail is easily copied and relayed though excess of it should be avoided. Many of us have learned to screen out e-mails addressed to multiple recipients.
Excerpts from International Marketing