Literature Review 5
Background Factors 6
Third Parties 7
Conflict and Cooperation 8
Power and Dependence 8
Face-to-face negotiation 9
Post negotiation 10
Cultural Factors 10
Personal Relations 11
Strategic Factors 11
Decision making 11
Need for an Agent 12
General Critique on Ghauri’s Framework 12
Introduction to the Case 13
Applying Ghauri’s IBN framework 14
Third Parties 16
Face-to-face Negotiation 19
Internet References 25
People negotiate on daily basis in order to get a better deal for themselves (Ghauri, 2003). When negotiations occur internationally factors such as, “Cultural differences and greater uncertainty make international business negotiations (IBN’s) more complex than domestic ones” (Moran and Stripp, 1991). Therefore more planning and preparation is needed for a successful outcome in IBN’s (Ghauri, 2003).
When IBNs are for Joint Ventures (JV) they become increasingly complex. This is because of “resource commitment differs for International Joint Ventures (IJV)” and other factors such as “government pressure / hindrance” (Luo, 1999, Phatak and Habib, 1996).
As the GM-Toyota negotiations were seen as a meeting of cultures it can be assumed culture played a significant role in the case. The negotiations were a successful win-win, however, there were still many clashes and conflicts due to factors such as, cultural differences and differing/similar negotiation strategies.
Negotiation transcripts, Academic research and Ghauri’s framework for IBNs will be used to identify what happened between the GM and Toyota and how these two culturally different companies were able to come to an agreement.
Ghauri’s framework simplifies/generalises the negotiation process and is one of the most up to date frameworks in the field of IBN’s due to its continual developments. This allows it to be applicable to constantly developing negotiation styles.
The framework is divided into three variables: 1. Background Factors. 2. The Atmosphere. 3. The process.
Below is Ghauri’s framework. Each variable is split into sub-variables. These will be thoroughly reviewed through academic research and models to judge whether it is applicable for the GM-Toyota JV.
Background factors influence both parties during negotiations. They consist of; Objectives, Environment, Third parties, and the Negotiators.
Background factors affect the process and atmosphere during negotiations. Although their influence will vary in intensity (Ghauri, 2003). Negotiations could come to a halt if the background factors aren’t dealt with appropriately. Therefore planning is needed with the background factors prior to negotiations. Planning is particularly crucial to IJV negotiations due to the complex nature of their negotiations (Luo, 1999). Planning also creates a positive atmosphere through aligning both parties’ interests/problems. This facilitates cooperation later on in order to help achieve a beneficial outcome (Adler, 1992).
Background factors can either positively or negatively influence the process. Positive influencers allow the process to carry on smoothly. Whereas, negative influencers delay the process (Ghauri, 2003).
Ghauri (2003) defines this as each party’s desirable outcome. They play a large role in “determining the outcomes of IBN’s” (Phatak and Habib, 1996). Ghauri splits these objectives into; Common, Conflicting and complementary interests.
Common interests relate to both the parties desiring a successful outcome. This is similar to the win/win outcome recognised by Salacuse (1999), where negotiators work