Introduction International Business Negotiations

Introduction  Background  Fair Exchange  Historical Background  International Negotiations –Features –Complexities –Roles –Principles

Background From earliest times, people have met to exchange things and asked:  Will you exchange?  What will you give me for my item? or  What do you want for your item?

What is a fair exchange ?  One tiger skin=meat from three deer?  Beads and blankets for land –Early European settlers and American Indians  $1 million for a painting by Picasso

Trade was complicated  Buy in China, sell in England. Pay transport costs, taxes in different currencies: –By road over the Silk Road –By sea to Baghdad –By road to Damascus –By sea to Genoa –By road to Bordeaux –By sea to London

Best deals  Buyer and seller at each stage of the trade route will each want the best deal possible.  May use persuasion, trickery or other means to win.  The rules help make trade possible, and forms the features of international business negotiations.

Features of International Business Negotiations  Value of the goods to be purchased  Where purchase takes place  Costs of transport and taxes  Which currency to use  Where sale will take place  Price of selling on arrival  Guarantee of performance

International Business Negotiations  Require understanding between two parties of different nationalities and cultures  Set the basis for future business which benefits both sides  Creates trust between the parties

Roles of International Business negotiations  Negotiations have explicit and implicit roles: –Explicit  Substance of the negotiations –Implicit  Develop understandings  Foundation for future cooperation  Reducing misunderstanding and fear

Principles  The features and roles of international business negotiations have been observed so as to improve the outcomes.  Negotiations between two parties can end up with: –Two satisfied parties or –One very satisfied and one not so satisfied party or –Two very dissatisfied parties

This book  Purpose is to introduce the rudiments of negotiations.  The book is there to help improve but can never replace experience.