Academic journal article Journal of International Business Research

Negotiation Concession Patterns: A Multi-Country, Multi-Period Study

Academic journal article Journal of International Business Research

Negotiation Concession Patterns: A Multi-Country, Multi-Period Study

Article excerpt

ABSTRACT

Research has shown that managers spend a significant amount of time negotiating and that this trend will likely escalate in the future. Cross-cultural studies of negotiation tactics are needed as instances of international negotiations increase geometrically. This study analyzes the concession patterns of over 10,000 executives from 21 different nations over a 15 year period. Significant differences are found in the most and least preferred methods of concession. Implications for practicing managers are discussed in light of the results.

INTRODUCTION

There has been an increasing trend toward cooperative arrangements as companies engage in cross-product, cross-industry and/or cross-border alliances. There are many reasons for this phenomenon, but the two most prominent are: 1) technological advancements which have created a new division of thought with the power of combining the best minds in the world at the push of a button and 2) trade agreements have largely eliminated national boundaries making cooperation among people of varying nations of utmost importance. The first step in any cooperative arrangement involves negotiation of roles, expectations, time commitments, etc. Consequently, negotiation skills are crucial and becoming more so every day. This paper seeks to answer the question, are negotiation strategies and tactics similar in different nations?

The heart of negotiation is the concession process. This is the stage where individuals give up some things to ensure that they get what they really want. One of the goals of this paper is descriptive--to highlight differences in the way executives from 21 nations on six continents make one specific concession: price. More specifically, practitioners will gain knowledge of what to expect when negotiating with executives from these nations.

The rough hypothesis is that people from the same nation employ similar negotiation strategies. Alternatively, people from different nations employ different negotiation strategies. Data was collected from 10,424 executives attending negotiation seminars over a 15 year period (1985-1999). The results confirm the hypotheses that executives in different nations employ different negotiation strategies. There is little agreement among nations regarding the most preferred negotiation strategy. There is however much more agreement regarding the least preferred negotiation strategy. Asians appear to dislike one style much more than Westerners and consequently it should be avoided if possible. International negotiations will become increasingly more important in the future. This paper provides insights into strategies to employ and tactics to avoid given the nation of origin of the other person/company involved.

LITERATURE REVIEW

The Importance of Negotiation Skills

The rapidly changing nature of business has resulted in the emergence of new organizational forms to deal with the oft chaotic business landscape of today. These new organizational forms (international joint ventures, self-managed work teams, virtual groups, etc.) have created unprecedented pressure on managers to be effective communicators (Roy & Dugal, 1998; Brett, Northcraft, & Pinkley, 1999; Byrne, Brandt, & Port, 1993; Kanter, 1991). More specifically, some researchers boldly claim that the process of negotiation is essential for managers (Butler, 1999, Mintzberg, 1973). Bazerman and Neale (1992) argued that organizational negotiations are becoming not only more frequent but also more complex and crucial to corporate survival. Conditions driving these trends include: (1) an increased foreign presence in the nation with the world's largest economy, the USA; (2) the many dramatic changes within Europe, ranging from the reunification of Germany to the introduction of the Euro; (3) Japan's dependence on exports for survival; (4) the rapid development of what were called Asia's tiger nations before the economic turmoil of 1997; (5) more internationally focused MBA degrees offered by universities in many nations; (6) increased seeking of the so-called best deal anywhere in the world because of shorter planning horizons at many companies and the accompanying emphasis on short-term profits; and (7) more multinational alliances in the fast-growing high-technology industrial sector as a result of the difficulty of one firm controlling critical elements of production (Hendon and Hendon, 1989). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.