Communication is one of the most important aspects of the human civilization. It allows establishing contacts, cooperating and collaborating when performing tasks, and reaching objectives and other. Thus, the ability to render one’s ideas to other people has always been valuable. Communication may be performed at different levels, ranging from casual conversations to international connections among the top managers of multinational companies or leaders of the countries. It performs different functions but serves one general aim that is the collection and sharing of knowledge, skills, and practices as well as coordination of resources. One of the vivid examples of communication importance is the international negotiation by various companies and organizations. It is evident that multinational companies have aims of increasing profits and entering the new markets. Therefore, they use negotiation as a useful tool for reaching their pragmatic aims in different countries and cultural settings. The rationale behind the investigation is that it enhances the understanding of the successful international communication in any enterprise or organization. Reasoning the peculiarities of international negotiations as well as the discovery of the critical details of the negotiation process allows increasing the efficacy of work in the international setting. As a result, any company or organization can increase its profits through effective application of beneficial strategies of negotiation.
The General Characteristics of International Negotiations
First, there is a need for the provision of the general characteristics of international negotiations in order to render its position among the list of tools practiced by companies’ salesmen. Thus, negotiation is based on communication, but presents its pragmatic aspect. Thus, negotiations it is mostly argumentative as it bears a significant amount of impact on the communicants. The reason for the impact and the wide use of different strategies of communication is the goal to reach agreements, which are beneficial for a particular business entity. The traditional point of view on argumentative communication is that it encompasses two main features, which are claiming and justifying (Tseronis, 2013). Therefore, the two aspects for the representatives of negotiating parties characterize any business situation from a perspective of reaching the agreement, which would allow increasing sales. Moreover, scholars claim that modern international negotiation has become the primary mechanism that stimulates industrial nations’ trade policies (Winham, 2014). The suggestion allows viewing international negotiation from a broader position. Thus, not only individuals and their entities play a role in negotiations, but the nations behind them as well. Indeed, cross-country interaction in the sphere of industry and business is based on various precedents, which benefit its constituent development. At the same time, in case a company fails to enter the international market, it reduces the national presence, hence decreasing its influence on the world arena. Thus, one of the characteristics of the international communication is that it is “a trend into the future” (Winham, 2014). The support for the statement is that successful negotiations serve as precedents, which gradually change the international economic system. The phenomenon is supported by the example that the postwar system of international cooperation allowed evading the crisis of the early 1970s (Winham, 2014). Likewise, scholars argue that “policy formation related to international trade agreements should take into account broader issues of public welfare, natural resource management and local subsistence economies” (Alfredson & Cungu, 2008). The aforementioned aspects are important tool to control the economic progress of the poor and developing countries, as well as the increase or decrease of their internal conflicts. Additionally, one should state that cross-country communication of business entities and their further agreements fall under the influence of international law (Schlechtriem & Butler, 2008). Consequently, the negotiating parties cannot organize their cooperation with the violation of regional or international laws. As a result, any negotiations involving further business and sales cooperation should result in agreements that meet the standards prescribed by the Convention of the International Sale of Goods. Moreover, one of the significant differences of cross-country cooperation among business entities and organizations is signing of a contract. The legal contracts communicate a wide range of social and corporate responsibilities and create a framework for the relevant interaction of the parties. Therefore, international negotiating is a complex system of industrial interactions, which influence a broad range of social, political and economic aspects as a result of business cooperation.
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Concepts and Approaches towards Negotiations
The discussion of the theoretical basis for negotiations is a requisite to adequately apply the lessons to business industry. Thus, any negotiation involves the dialogue of peculiar strategies and tactics of communication. Strategies can be understood as thorough plans regarding the achievement of the communication aim, whereas tactics is the skill of applying communicative knowledge into practice (Alfredson & Cungu, 2008). Furthermore, business negotiations are rendered as a battle of concepts, where the interests of one company face the preferences of another business entity. It is evident that certain communicative strategies allow the negotiating parties reaching an agreement, which might be beneficial for one or both participants. Despite the fact that the reached consensus may present value to both members of negotiations, in many cases, one of them may be pursuing a more beneficial outcome. The situation of discrepancy may complicate the communication. Furthermore, the framework of the communication plays a significant role in the negotiating type of business interaction. Thus, any of the parties may regard the outcomes as cooperative or competitive. On the one hand, cooperative framework is present when the companies share interests in one sales region or sector of the economy and see no obstacles in uniting their initiatives. On the other hand, competitive framework can be characterized by the presence of the distributive strategies. The term means that a participant of negotiations secures one’s benefits along with pursuing the profits of the partner. It is important to note that the involved members have a reservation point or a “bottom line” when entering the negotiations (Alfredson & Cungu, 2008). The point presents participant’s key interests, which cannot be sacrificed in any condition and may lead to the interruption of negotiations. The existence of reservations points in the negotiation process allows identifying the scope of possible agreement. The calculation of the limits is a challenge that takes a significant amount of time. However, when the maximum sacrifice is identified, the process of negotiations becomes more substantial and the possibility of achieving a mutual agreement increases.
Scholars identify different theoretical approaches to negotiations. The difference between the approaches lies in their structural and strategic frameworks, which identify the positions of the interacting parties and the scope of communicative strategies and tactics. Thus, theoretical frameworks of negotiations are characterized through the strategic, structural, behavioral, integrative, and processual approaches (Alfredson & Cungu, 2008). Firstly, the strategic approach to negotiation identifies it as a process of interaction of parties, which aim at reaching their individual goals. The phenomenon implies that the parties clearly recognize steps they require for reaching their targets. Further interaction between the participants of business negotiation means that parties take the steps, which have the similar patterns to the ones defined as ideal for reaching the final goal. Scholars regard the approach towards negotiations as one of the most beneficial because the participants believe that “there is one best solution to every negotiation problem” (Alfredson & Cungu, 2008).
Secondly, structural approaches to negotiations regard that each particular negotiation is based on the sum of its features. One can name the number of the parties, the questions put for discussion, and other details of the encounter. Moreover, the framework identifies that negotiations are “conflict scenarios between opponents who maintain incompatible goals”, having power as the central means of influence on the opponent (Alfredson & Cungu, 2008). Therefore, the participants may take certain positions and use particular tactics to transform their abilities into powers. For instance, the parties may operate on the political influence or economic significance, as well as many other features.
Thirdly, behavioral theoretical approach rests on the assumption that the key role in negotiations is given to the types of personalities involved. The individuals serve as the leaders of the communication process and guide the parties through applying their individual abilities. Scholars state that the approach is based on psychological and experimental traditions and centuries-old famous diplomatic treaties, which structure the negotiations (Alfredson & Cungu, 2008).
Fourthly, one more strategy, which places accent not on the structure or individual behavior, but on the exchange of cohesions, is a processual approach. According to the method, the communicants “use their bids both to respond to the previous counteroffer and to influence the next one; the offers themselves become an exercise in power” (Alfredson & Cungu, 2008). However, it is mostly criticized for the perspective of reaching fewer gains for both parties instead of progressive achievement of mutual interests. Apparently, the theoreticians tend to use integrative approaches in order to achieve the best results in assessing the described activity. For instance, the integrative approach was used when analyzing labor negotiations in 1965 by means of applying different methods and strategies, as well as political theories (Alfredson & Cungu, 2008). The latter may be regarded as the most beneficial to the negotiations success because of its complexity.
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Furthermore, it is evident that any type of negotiations has different components, which characterize the process and differentiate from any other kind of communication. The characteristics include the presence of clearly identified interests, the involved people, negotiation strategies, goals and options, legitimacy, commitments, communication, and agreement. Each part has a peculiar importance for the entire process of negotiations. Thus, the identification of interests allows parties to interact and either achieve a consensus or split. Additionally, any negotiation involves people and their roles in the process as well as the outcomes. Similarly, the application of strategies and tactics allows the parties achieving more or less benefits for the participants. The parties are flexible when bringing collaborative decisions through goals and options. Moreover, it is non-productive to make illegal decisions, since they endanger the entire idea of negotiations and the characteristics of the involved parties. Commitment and communication are important, since they serve as the basis for the transmission of ideas and influence. Finally, the major goal of any negotiation is reaching the agreement and signing the legal contract, which would clearly describe the framework of further interaction. Therefore, the theoretical background of the negotiation process presumes that it may be characterized as the most beneficial strategy for the increase of sales.
The Role of Negotiations within the International Selling Process
Despite the fact that there are numerous business entities, their major aims present increasing sales and profits. The theoretical rationale behind the process of negotiation regards the sales to be an influential toolkit of communication and international business interaction. However, there is a need for the analysis of practical efficacy of international negotiations in order to approve validity and reliability and increase sales. Thus, one of the examples to demonstrate the influence of negotiations on the economic proficiency of the participants is the formation of the European Union. The initiation of the process was caused by the countries suffering from the economic crisis. The participants expected to format the political, cultural, legal and economic framework, which addressed their economic condition. Moreover, EU was regarded as a basis for further collective economic development. However, each country had to preserve its uniqueness as stated in the Constitution. Therefore, the process of negotiation implied reaching agreements, which allowed blending domestic structure, strategies, and values with the newly emerged collective ones. As a result, the EU negotiation process started in 1950s and finished at the end of the 20th century. The outcome of the course of actions was the creation of a unified economic community with a single market, a free move of people and capital, and a single currency (Archick, 2015). Despite the fact that the process was initiated by politicians, it turned out to be beneficial for thousands of business entities and individuals.
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Moreover, negotiations have a crucial role in the formation of business partnerships, which may drastically increase the competitiveness, gross sales, and the profits of the parties. For instance, the research of the Transatlantic Trade initiatives indicated that the business cooperation results increased the size of the EU and the US economies. The agreements resulted in the European economy increase by around 120 billion Euros, while the US trade increased by 95 billion Euros (“Transatlantic Trade and Investment Partnership: The Economic Analysis Explained”, 2013). The growth has affected metal, processed foods, chemical and other industries, as the companies transported their products for reduced state fees. Similarly, the reached agreements created additional jobs and presented new opportunities in transportation (“Transatlantic Trade and Investment Partnership: The Economic Analysis Explained”, 2013). Likewise, the period after 2000 is characterized by the emergence of “born-global” companies, which basically are international joint ventures (Fan & Phan, 2007). The peculiar aspect of the new business formations is that they enter international markets on the basis of two-side agreements between the companies from different countries. Moreover, the analysis shows that the organizations result coexistence of different corporate cultures, thus better adaptation in the global market (Fan & Phan, 2007). It is evident that the creation of the international structures is impossible without advanced negotiations. Additionally, the companies that gain their profits on the international markets benefit from negotiations and cooperation. The interaction presence increases competitiveness, when compared to purely domestic business. The vivid example is the agreements between Apple and Foxconn and local Chinese electronic factories. The initiatives of the two companies to become global required profound negotiations with local producers of microchips in China. As a result, Apple’s policy of outsorsing led the company to a commercial triumph (Chan, Pun & Selden, 2013). One the other hand, the Foxconn, owned by Taiwan businessmen, has created one of the most powerful “buyer-driven supply chains” (Chan, Pun & Selden, 2013) serving the needs of other international IT companies. Therefore, negotiations between the industry leaders from different countries are important because the competitors present a particular threat for each other. For instance, if Apple attempts producing micro components, it will endanger Foxconn’s operations. Likewise, Foxconn may become a threat to Apple if it wants to assemble components into a complete product. Therefore, it is important for the companies to find a zone of possible agreement, which is that Foxconn produces components and Apple designs and assembles them into a finished good (Downie, 2013),. Thus, although the participants of the negotiations may have different interests and represent different cultures (Weber, Belkin & Tarba, 2011), they have to decrease potential confrontation and seek cooperative solutions. Therefore, negotiations allow bridging the interests of companies with different structure, culture, occupation, and sphere of interests. Being one of the most efficient tools of communication, negotiations increase sales and profits of the parties in the global arena. The reason is the fact that companies reach cooperative agreements, which benefit all participants despite minor concessions.
Summarizing the presented information, the paper comes to a conclusion that negotiation plays a critical role in the international selling process. Negotiation is a specific form of communication that allows reaching a collective agreement between the participating groups. There are various theories, which attempt identifying negotiation processes and classifying them based on peculiarities. The means enhance the role of international communication and business interaction within a globalized community. Although the theoretical approaches towards cross-entity communication differ, all of them have a single conclusion that negotiation is the most beneficial form of communication in the business world. It is evident that various international companies have different interests, which may coincide or not. If any business entity wants to enter an international market, it encounters other organizations and their interests. The sector of sales in the globalized community has the characteristic of the increased competitiveness. Therefore, negotiations allow specifying particular business arenas that stimulate corporations’ coexistence and productivity. The agreements are impossible without negotiations with potential competitors or companions because even the most powerful companies cannot compete with the world’s economies. Therefore, if any company wants to enter a foreign market and increase its sales, it should cooperate with its counterparts by the means of negotiations.