Business Negotiation Strategy
Selection of Negotiation strategy
Negotiation is an important process that entails bringing different parties to the table to deliberate on a common issue with the objective of deriving a mutually acceptable resolution (Baesu, 2015). For an effective negotiation to be possible, it is important for the negotiating parties to have adequate knowledge and background information of each other and of the situation at hand. Economic theories classify knowledge as an integral component of production that greatly influences the management of factors of production (Baesu, 2015). In this context, a negotiation between Kenyan and American business entities would require comprehensive knowledge of not only the business arrangement but also the social, cultural, and economic background. To meet the primary objective of enjoying a mutually beneficial outcome for both entities, an integrative negotiation approach would be appropriate.
Rationale
As highlighted herein, an integrative negotiation strategy assures both parties mutually beneficial outcome. In the case of a negotiation between America and Kenya, the two countries have significantly different interests. Both countries have different goals to achieve. In a business arrangement with Kenya, therefore, it would be important to use an approach that is beneficial not only to American interests but also to Kenya interests. According to Zerres et al. (2013), an integrative approach in such a situation would allow the negotiators to reconcile their individual interests.
Kenya would never consent to enter into a business arrangement with an American entity if it does not stand to gain from the negotiation. The reason for this is that the country has a negative attitude towards associating with America for its alleged ‘exploitative’ approaches. With this culture in their background, it would be unwise for an American business group to use an approach that only serves their own interests. In as far as the country’s level of education is not at par with the American literacy levels, chances of using a negotiation strategy that only serves American interests would be futile (Wa Thiong’o, 2011).
Cross-cultural negotiation presents different challenges to the negotiation process. In this case, the Kenyan and American cultures are significantly different. Both cultures have different approaches to an international business negotiation. For instance, while Kenya mainly approaches an international business negotiation to improve the living standards of its citizens, the majority of whom are poor, American’s approach is to maximize capital gains from the arrangement (Wa Thiong’o, 2011). Using an integrative approach, in this case, would increase the chances of reaching a joint agreement in the negotiation.
How the strategy would impact the outcome of the negotiation
To apply this strategy, both groups will first table all the prospected benefits that they hope to achieve from the arrangement. Once these facts have been tabled, the negotiators will then seek to achieve the perfect combination of factors that would make it possible for the entities to achieve maximum benefits from the arrangement. Ideally, the purpose of revealing the anticipated benefits is to not only establish trust between both parties but to also make it possible for the entities to express their intentions of arriving at a mutually beneficial arrangement. The Kenyan group would be impressed by the many opportunities for a lifestyle change for its people and the economic growth that this business arrangement would precipitate. In effect, this would motivate them to accept the terms of the agreement. The idea of having a mutually beneficial business arrangement would also be a motivating factor for the Kenyans to be receptive to the agreement.
My BATNA in the negotiation
If it became apparent that both parties were unlikely to arrive at a mutually acceptable agreement, the next best alternative would be to approach Ethiopia. Ethiopia is an emerging economy in the East African region. Recent economic data in the region is conflicting with some sources indicating that Ethiopia has a slightly higher gross domestic product as compared to Kenya (CNBC, 2017). The only backside of approaching Ethiopia is that its gross domestic product per capita is nearly half that of Kenya. In addition, it lacks the advantage of a strategic location that Kenya enjoys in the East African region. Nevertheless, it would be the next best alternative if the negotiations were not successful.
How the strength of the BATNA influences my approach to the negotiation
In this case, the BATNA is not as strong because both countries offer different benefits. The difference in anticipated benefits gives Kenya an edge over Ethiopia. For this reason, it would be in the best interests of our American team to reach a joint agreement with Kenya to avoid being forced to take the less appealing option. Nevertheless, the availability of a viable alternative means that the American team will not be approaching the negotiation with an attitude of desperation to reach an agreement. The implication is that if the minimum requirements for the American interests are not met by the Kenyan negotiators, there is a chance that an almost equally beneficial settlement can be made with Ethiopia albeit with some compromises on the original plan.
References
CNBC, (2017). Africa’s economies ranked by GDP, which is really the largest? – CNBC Africa. Retrieved from https://www.cnbcafrica.com/zdnl-mc/2017/10/21/africas-economies- ranked-gdp-really-largest/
Băeșu, C., Bejinaru, R., & Iordache, Ş. (2015). Contextual Strategies for Conducting Effective Negotiation. The USV Annals of Economics and Public Administration, 2(22).
Wa Thiong’o, N. (2011). Kenyan culture: The national struggle for survival. Writers in Politics. Essays.
Zerres, A., Hüffmeier, J., Freund, P., Backhaus, K., & Hertel, G. (2013). Does it take two to tango? Longitudinal effects of unilateral and bilateral integrative negotiation training. Journal Of Applied Psychology, 98(3), 478-491.