Negotiation and Global Partnerships

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Negotiation and Global Partnerships

• Chapter 10

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When negotiating in Russia, the slower you go,
the further youll get. Dont hurry to reply,
but hurry to listen. 

• -- Traditional Russian proverbs

(p. 318)
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When Arabs give a yes answer to a request, they
are not necessarily certain that the action will
or can be carried out. Etiquette demands that
your request have a positive response. A positive
response to a request is a declaration of
intention and an expression of goodwillnot more
than that. . . . If an action does not follow,
the other person cannot be held responsible for
failure.

• -- Margaret Omar Nydell
• University of Alexandria, Egypt

(p. 318)
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Opening question

• If listening is more important than speaking, and
  saying yes is often a meaningless gesture, how
  can managers negotiate or build global
  partnerships with any degree of confidence?

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Consider GE and Mitsubishi

• How could a formal meeting (aisatsu) between two
  highly experienced CEOs go so wrong so quickly?
  How common are such failures?

(p. 319)
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Topic for today Negotiation and global
partnerships

• Seeking common cause
• Culture and negotiation A model
• The negotiation process
• Negotiation patterns across cultures
• Building global partnerships
• Managing global partnerships

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Potential benefits of global partnerships

1. Promote growth and development.
2. Acquire new technologies for market applications.
3. Respond to government policies or restrictions.
4. Take advantage of exchange rates between
   countries.
5. Respond to changes in the economic environment.
6. Reduce operating costs and/or increase
   productivity.
7. Get closer to clients.
8. Diversify operations and markets.
9. Open opportunities for increased vertical
   integration.

(p. 324)
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Consider Hyundai and Samsung

• What did Hyundai Motors seek in their global
  strategic partnerships? Were their endeavors
  successful?
• How did Samsung Electronics build its own network
  of strategic partners to achieve its growth
  targets?
• Today, do you consider either of both or these
  companies to be world-class brands? Why or why
  not?

(p. 324)
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Potential drawbacks of global partnerships

1. Long-term objectives and aspiration can sometimes
   remain ill-defined, leading to an incompatibility
   of goals as the partnership gets down to managing
   details.
2. Potential for lack of long-term commitment by one
   or both partners.
3. Partners may be reluctant to share key
   information.
4. Disagreements over distribution of profits.
5. One partner may fear losing control to other
   partner.
6. Changing business conditions may lead to better
   opportunities elsewhere outside the partnership.

(p. 328)
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Consider Secoinsa and Pharmacia

• Was the Secoinsa partnership between Spain and
  Japan doomed from the beginning, or could
  managers from both sides have done things
  differently at the beginning to build a stronger
  alliance?
• What was the nature of the conflicts that
  eventually sank the Swedish-American partnership
  Pharmacia? Could these conflicts have been
  anticipated early enough to resolve them before
  things got out of hand?

(p. 325)
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Culture and negotiation A model
Exhibit 10.1. Cultural influences on the
negotiation process
Culture 1 Manager 1s normative beliefs about
uncertainty and social control (e.g., risk
oriented rule oriented)
Culturally compatible negotiation style (e.g.,
win-lose approach to bargaining buffer risk
through legal contracts contracts before
relationships)
Manager 1s negotiation style (e.g., competitive
negotiation sequential bargaining seek written
contract doctrine of fixed circumstances)
Other influences on the negotiation
process (e.g., previous experiences with
prospective partners preparedness for
negotiation and bargaining degree mutual trust
and mutual benefit degree of competition
control over valued resources personal and
situational differences realities on the ground)
Manager 2s negotiation style (e.g.,
problem-solving negotiation holistic bargaining
seek verbal contract doctrine of changed
circumstances)
Culture 2 Manager 2s normative beliefs about
uncertainty and social control (e.g., risk
averse relationship oriented
Culturally compatible negotiation style (e.g.,
win-win approach to bargaining buffer risk
through personal networks relationships before
contracts)
(p. 330)
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Competitive bargaining strategy/1
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Problem-solving bargaining strategy/2
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Sequential and holistic bargaining strategies
(p. 335)
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Contracts and the doctrine of changed
circumstances
(p. 337)
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Negotiating in Japan and Brazil
(p. 339)
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Criteria for selecting global partners

1. Solid compatibility of strategic goals and
   tactics.
2. Complementary value-creating resources.
3. Complementary corporate cultures.
4. Strong commitment to partnership.
5. Strong philosophical and operational
   compatibility.

(p. 343)
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Preparing for global negotiations

1. Start with the end result in mind.
2. Help the other side to prepare.
3. Treat alignment as a shared responsibility.
4. Send one clear signal.
5. Manage negotiations like a business process.

(p. 345)
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Managing the negotiation process

1. Concentrate on building long-term relationships
   with partner.
2. Focus on understanding the organizational and
   personal interests and goals behind stated
   bargaining positions.
3. Avoid overreliance on cultural generalizations.
4. Be sensitive to timing.
5. Remain flexible throughout negotiation process.
6. Plan carefully.
7. Learn to listen.

(p. 347)
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Management arrangements for global partnerships

• Shared arrangements
• Assigned arrangements
• Delegated arrangements

(p. 348)
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MANAGERS NOTEBOOKCan people be trusted?
(p. 353)
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MANAGERS NOTEBOOKBuilding mutual trust
(p. 354)
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MANAGERS NOTEBOOKAligning corporate cultures
(p. 357)
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MANAGERS NOTEBOOKConflict resolution strategies
(p. 359)
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MANAGERS NOTEBOOKDealing with conflicts

• Prepare people
• Prepare processes
• Explore past and present
• Envision the future
• Create solutions
• Rejuvenate and reflect
• Dont forget relationships

(p. 360)
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ApplicationJeff Depew

• Assume you are Jeff Depew and you could start
  over in preparing for the meeting between the two
  CEOs of GE and Mitsubishi. Mid-level negotiations
  are well underway, and it is your job to prepare
  your boss (GEs CEO) for the upcoming formal
  meeting in Tokyo.
• Outline a specific plan of action to lay the
  groundwork for this meeting, doing everything in
  your power to make it successful. What would you
  do?
• What are the biggest hurdles that might lead to
  failure?
• What would you do to try and overcome, of at
  least minimize, these hurdles?

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Think about it Negotiating skills

• Think about times when you had to bargain with
  other people (colleagues, supervisors, friends,
  parents, etc.). With these experiences in mind
• Do you believe you won most of the negotiations?
  Why or why not?
• What are your strengths and weaknesses as a
  negotiator?
• What specific skills do you wish to develop to
  enhance your ability to negotiate successfully
  with others?