Immediate Context

At many points throughout this book, we discussed aspects of negotiation that relate to immediate context factors, but without considering their international implications. In this section, we discuss the concepts from the Phatak and Habib model of international negotiation, highlighting that the immediate context can have an important influence on negotiation.

Relative Bargaining Power

One aspect of international negotiations that has received considerable research attention is the relative bargaining power of the two parties involved. Joint ventures have been the subject of a great deal of research on international negotiation, and relative power has frequently been operationalized as the amount of equity (financial and other investment) that each side is willing to invest in the new venture. The presumption is that the party who invests more equity has more power in the negotiation and therefore will have more influence on the negotiation process and outcome. Research by Yan and Gray questions this perspective, however, and suggests that relative power is not simply a function of equity, but appears to be due to management control of the project, which was found to be heavily influenced by negotiating. In addition, several factors seem to be able to influence relative power, including special access to markets (e.g., in current or former communist countries), distribution systems (e.g., in Asia, where creating a new distribution system is so expensive that it is a barrier to entering markets), or managing government relations (e.g., where the language and culture are quite different).

Levels of Conflict

The level of conflict and type of interdependence between the parties to a cross-cultural negotiation will also influence the negotiation process and outcome. High-conflict situations – those based on ethnicity, identity, or geography – are more difficult to resolve. Ongoing conflicts in Pakistan, the Middle East, and Mali are but a few examples. There is historical evidence, however, that civil wars concluded through a comprehensive, institutionalized agreement that prohibits the use of coercive power and promotes the fair distribution of resources and political power lead to more stable settlements. Also important is the extent to which negotiators frame the negotiation differently or conceptualize what the negotiation concerns, and this appears to vary across cultures. As do the ways in which negotiators respond to conflict. For example, Fisher, Ury, and Patton discuss how conflicts in the Middle East were difficult to deal with for several years because the different parties had such different ways of conceptualizing what the dispute was about (e.g., security, sovereignty, historical rights). Diplomatic “back-channel” negotiations conducted in secret may help resolve high conflict situations, but their success is not guaranteed.