Effective negotiation skills are becoming increasingly important for today’s global business. A lot of time is spent negotiating in a global setting as companies and individuals conduct business. This paper will attempt to critically assess the significance of cross cultural negotiation skills for the success of international mergers and alliances.
To begin with let the definition of negotiation be deduced. Daniels, Radebaugh and Sullivan (2004) identify negotiation as a sequence of actions in which two or more parties address demands, initiate, conduct or terminate operations in a foreign country. Gulbro and Herbig (1995) define it as the process by which at least two parties try to reach an agreement on matters of mutual interest.
In order to be successful in such a diverse and complex business environment, negotiators must be globally aware and have a frame of reference that goes beyond a country or region and encompasses the world (Fowler, 2005).
International executives attempt to negotiate for an optimal solution minimizing conflicts and maximizing gains. According to Martin et al. (1999) a clear negotiation strategy is the most important factor for successful international business relationships. Cross cultural negotiation skills are vital in today’s business. It is not just about closing deals but it also involves looking at all factors that can influence the proceedings.
Cross cultural negotiation skills not only shows the people involved how to start from a strong position and find common ground with others, but also provides practical techniques for to use when talking and bargaining during business ( Kozicki, 2005).
People from other countries and cultures do things differently. For alliances and mergers to succeed, these cultural differences must be taken into account when negotiating to reach a deal that will last and bring benefits to both sides. Therefore as these people play an essential role for the success of merging companies, it is crucial to have an understanding of different national and organisational cultures. Cross culture is an integral part of the overall corporate culture of the firm, which is applicable for all international alliance and merging partners (Luo,1999).
Negotiation skills bring added challenges that help the international negotiator to understand how partners from other cultures view negotiation and how they think it should be handled (Michal, 2005). Although there may be much commonality between members of both sides it should not be assumed that people have the same benefits, values or priorities as each other.
Nowadays, businesses of all sizes search for international partnership. The increasingly global business environment requires the approach to the negotiation process from the global business person’s point of view as the process can be complex and difficult but will create huge opportunities to develop and increase success in avoiding barriers and failures in international mergers and alliances.
As one partner better understands that the other partner may see things differently, they will be less likely to make negative assumptions and more likely to make progress when negotiating.
Nations tend to lead a national character that influences the type of goals and process the society pursues in negotiations and this is why specifying and understanding cultural differences is vital in order to perform successfully in inter-cultural communication (Copeland, 1996).
In addition, for international mergers and alliances to succeed, it is important for both sides to agree that no one approach is better than another. Lack of cross- cultural skills can cause difference in problem-solving and decision making and this can easily lead to misunderstanding. Therefore it is important for everyone involved in the proceedings to be able to use a range of decision making and problem solving techniques.
Nonetheless, companies from other countries run into...
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