International Business is a complex concept as well as phenomenon. A lot of the regular guidelines that apply to managing a business or an organization strategically need to be transformed when implemented for international business. One of the most critical areas of international business is negotiations. These need to be managed strategically to ensure that the results are as per what all parties need. The role of strategic management in international business is crucial and therefore cannot be underplayed.
Some crucial strategic management steps in international business negotiations are –
- Preparation – Before the negotiations the parties involved, which could be countries or organizations across countries, need to prepare well. They need to define the objectives, the outcomes they desire, people who will be part of the negotiation process and past history. They also need to spend time in researching about their negotiating partner and the kind of commercial aspects that are involved. Spending time in working out the legal elements is also crucial.
- Cultural and political differences – Even before any deal goes into negotiation stage, the cultural and political differences between the two entities involved, need to be understood and prepared for. There is value that each partner brings to the relationship. Being able to talk about that value which possibly arises from the differences, is what negotiation is all about.
- Team allocation – Getting the right team in place is very important. This team is responsible for ensuring not only seamless negotiations but also the fact that overall value needs to be communicated well. The negotiation should result in a win-win for all involved. Only the right team can achieve that kind of outcome. There should also be experts in the team from a technical and legal perspective, who can handle the overall queries on those aspects.
- Aim at a relationship not closing a deal – Relationship building is the first step of a healthy negotiation. Focusing on that and not on just on deal closure is the approach to take when it comes to managing such a situation strategically. The focus should be long term impact and not short term gain. Having that emotional maturity and business acumen are the core attributes of the members of the negotiating teams. They have to remember to deal with such a situation with integrity.
These are some core aspects of international business negotiations that come under the purview of strategic management. Ensuring that they are followed will ensure a smoother process and better results for all parties that are involved in the same.