Instability

Businesses negotiating within North America are accustomed to a degree of stability that is not present in many areas of the world. Instability may take many forms, including a lack of resources that Americans commonly expect during business negotiations (paper, electricity, computers), shortages of other goods and services (food, reliable transportation, potable water), and political instability (coups, sudden shifts in government policy, major currency revaluations). The challenge for international negotiators is to anticipate changes accurately and with enough lead time to adjust for their consequences. Salacuse suggests that negotiators facing unstable circumstances should include clauses in their contracts that allow easy cancellation or neutral arbitration and consider purchasing insurance policies to guarantee contract provisions. This advice presumes that contracts will be honored and that specific contract clauses will be culturally acceptable to the other party.

Ideology

Negotiators within the United States generally share a common ideology about the benefits of individualism and capitalism. Americans believe strongly in individual rights, the superiority of private investment, and the importance of making a profit in business. Negotiators from other countries do not always share this ideology. For example, negotiators from some countries (e.g., China, France) may instead stress group rights as more important than individual rights and public investment as a better allocation of resources than private investment; they may also have different prescriptions for earning and sharing profit. Ideological clashes increase the communication challenges in international negotiations in the broadest sense because the parties may disagree at the most fundamental levels about what is being negotiated.

Culture

We do not have to leave the United States to see the influence of culture on negotiations. Clearly it is challenging when the fundamental beliefs about what negotiation is and how it occurs are different. The critical role that culture plays in international and other cross-cultural negotiations will be discussed at length later in this chapter; here we mention some highlights.

People from different cultures appear to negotiate differently. In addition to behaving differently, people from different cultures may also interpret the fundamental processes of negotiations differently (such as what factors are negotiable and the purpose of the negotiations). According to Salacuse, people in some cultures approach negotiations deductively (they move from the general to the specific), whereas people from other cultures are more inductive (they settle on a series of specific issues that become the area of general agreement. In some cultures, the parties negotiate the substantive issues while considering the relationship between the parties to be more or less incidental. In other cultures, the relationship between the parties is the main focus of the negotiation, and the substantive issues of the deal itself are more or less incidental. There is also evidence that preference for conflict resolution models varies across cultures.

External Stakeholders

Phatak and Habib defined external stakeholders as “the various people and organizations that have an interest or stake in the outcome of the negotiations.” These stakeholders include business associations, labor unions, embassies, and industry associations, among others. For example, a labor union might oppose negotiations with foreign companies because of fears that domestic jobs will be lost. International negotiators can receive a great deal of promotion and guidance from their government via the trade section of their embassy and from other business people via professional associations (e.g., a Chamber of Commerce in the country in which they are negotiating).