11.14.07
International Negotiating — Step 3 - Pace and Timing
Negotiations have their own pace — and part of it reflects cultural aspects. The successful negotiator understands how the counterpart sees the negotiation and adjusts strategy to achieve the win-win situation. Here are some questions to think about:
- What is the expected distance between the various offers? In the markets of the Middle East, it is expected that the seller will ask a price many times the perceived value and the buyer will similarly give a very low counteroffer. In Germany, opening offers and responses are expected to be fairly close. If you begin a negotiation expecting a “reasonable” offer and receive a high one, that can be taken as a sign of bad faith. Similarly, if one is negotiating in the market place and come in at the “reasonable” level, the buyer will think you weak and will push for even greater concessions.
- When are the concessions made? The Soviets were particularly effective in negotiating with the US during the Cold War. The Soviet style was to have prolonged discussions and save any concessions (all of which had to be approved by the Kremlin) until the end. The US negotiators, expecting a series of mutual concessions throughout the negotiations, frequently arrived in the final sprint with only major concessions left to give, while the Soviets had many.
- How much authority does the counterpart negotiator have? In very hierarchical societies (and sometimes companies), the negotiator frequently has little room to deal at the table and most decisions have to be referred back to the home office. I ended up being in that position once — the US proposed an “open skies” civil aviation treaty for Central America and my instructions were no negotiating, i.e. take it as is or leave it. My Salvadoran colleague really wanted to deal but I couldn’t do anything. That wasn’t the most pleasant setting that I was in.
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Ron Kleist said,
November 14, 2007 at 8:07 pm
Part of negotiations is asking for a “price”. If you are asking for a price for CUSTOM manufacturing of YOUR product, it is essential that you describe to the factory or sourcing agent exactly how you want them to measure the quality of the final part or product and what are the allowable range of values or levels of defects. Too often, Americans simply “expect” off-shore manufacturers to understand what is necessary for the market. Never, ever state “must be perfect” unless you can define how you (and they) will know it is perfect. For example, if you say “no visible defects” on a particular surface, make certain you describe the lighting, the magnification, the color rendering, etc., all of which figure into what defects can actually be seen. I have walked into inspection rooms in China where there is a single 40 watt florescent bulb 10 feet up in the air; no one could see any defects until I took the parts outside into the sunlight!