There are 6 distinct stages to the negotiation process and they are all about effective communication. Since people’s culture has a strong bearing on how they communicate, the culture of the negotiating parties impacts how they negotiate and also determines whether they are successful in achieving the goals of their side. :
- establishment of negotiator identities and the tone for the interaction;
- information exchange;
- exchange of items to be divided;
- closing the deal;
- maximizing the joint returns. ” (Craver, 2004)
Gather the relevant facts on economic issues, and, where applicable, any legal or political issues (Craver, 2004). Example: Car buy – How much can you spend on a down payment? Can you afford adequate insurance? Does the car you want comply with the clean air standards in your state? Know your bottom line- What will you settle for and under what circumstances?
Remember that no deal is better than a bad deal (Craver, 2004). Example: Will you settle for any red sports car or does it have to be a Mustang? Will you take a blue Mustang if the price is right or does it also have to have the top of the line engine? Know your opponent’s bottom line (Craver, 2004)- Same as above only for your opponent. Know what the dealer price range is on the model that you want. The dealer maybe more likely to give you a better deal if he is desperate to clear out last year’s models. Know your goals (Craver, 2004)- What do you want to happen as a result of this negotiation?
If negotiating for more than one item/issue, have goals for each item/issue Do you just want a great deal on a red sports car or do you willing to settle for a fair deal on a red Mustang? Role of culture: What is your opponent’s culture? Is a culture whose values include having clear and organized goals? Americans value this but others might not. Negotiators need to see these cultural values and utilize them pragmatically, rather than judgmentally. Americans for example, see negotiations as mostly a competitive process while Japanese see it an opportunity for exchange of information, a more cooperative process (Chang, 2006).
Establishment of negotiator identities and the tone for the interaction
This is when culture of the negotiators begins to make a difference. Americans are impatient, for example, as they want to get down to the brass tacks of a deal quickly. Other cultures such as Mexicans prefer to spend time in social situations getting to know their negotiating counterparts. Getting to know your opponent through small-talk type interactions will reduce your natural anxiety about the negotiation process and give you a better chance of succeeding.
It is worth it to take extra time to do this to establish trust between negotiating opponents from different cultures. Being insightful about your opponent’s culture helps establish a mutually beneficial negotiating environment and set up ground rules so inadvertent offenses due to personal or cultural incompatibility won’t derail negotiations (Craver, 2004).
At this stage, it is important to ask broad, open ended questions to get your opponent to talk and disclose important information. If you want your opponent to take the information you give as truthful, disclose it slowly and only when directly asked.
Pay close attention to what your opponent says as to what their wants, needs and priorities are. These can disclose opportunities which you can then use to your advantage to get a better deal. Silences especially prolonged ones make people want to talk and it is during these such talks that they disclose important information (Craver, 2004). Culturally you need to understand how the culture of your opponent perceives silence, for example. Is your opponent Chinese, then he or she may view silence as golden and those who are talkative as showy or immature (Chang, 2006).
Exchange of items to be divided
At this stage negotiators stop focusing on their opponent’s needs and priorities and state their own needs and priorities. It is about creating value for your side and asking for the value that you want in exchange. It is the most highly competitive stage of negotiation. Arguments often take place about the value of items on either side of the equation and whether sufficient value is being offered from the opposing side in exchange. It is important that these arguments are handled even handedly even when negative tactics such as threats are used to move one or the other side to action (Craver, 2004).
Some cultures would not take some negotiating tactics well. Chinese, for example, value interpersonal relationships in any sort of deal, so threats and attempts at intimidation will most likely backfire with them (Chang, 2006).
Closing the deal
This is the stage where one or both parties are anxious to close the process and make a deal. The more anxious party will end up giving the most concessions so patience and calmness are in order if you want to secure your goals (Craver, 2004). Culturally it is important to know how they view time and its usage.
Do they think urgent action requires more time to consider, like the Chinese do, for example (Chang, 2006) 6. Maximizing the joint returns This stage is cooperative between the negotiating parties. While during the previous three stages, the parties may have over and under stated the value of items for strategic purposes and wound up with the wrong values on one or both sides (items that they didn’t really want), this cooperative stage allows the time to correct these inefficiencies. It establishes good will between the parties to work cooperatively and make trades that will help improve their joint returns.