Question

In: Operations Management

You, as a commercial administrator, make a comparative analysis between the different factors that negotiate in...

You, as a commercial administrator, make a comparative analysis between the different factors that negotiate in the United States in comparison with the international negotiation in the sale of a certain product.
(You can choose any product to make this analysis.)

Solutions

Expert Solution

When doing business internationally, there are various areas for negotiation to be considered.

  1. What happens if the product is damaged during transportation?
  2. What inspections to be conducted or authorization paperwork is necessary?
  3. When is payment to be made, in which currency and by what date?
  4. What kind of packaging for delivery of goods?
  5. What are the regulations related to importing and exporting the product with the transaction in both countries?

Negotiation is where these and many other questions should be answered. If the contract does not address these questions and it is not clear, they will be answered by applying the law of a country or international convention has been chosen to govern the contract.

Negotiation is the essential part of the commercial transactions. When parties consider of buying or selling, importing or exporting goods with the intention of gaining something that will benefit their bottom line.

1) Hire a consultant, if there is no in-house expertise skilled in the international negotiation, who can provide you the expert services. If cost is an issue, you can buy literature or search online to subscribe to an accredited expert.

2) Choose your team wisely, select a group of members in a competent team to manage expenses, schedules and communication more effectively, especially if travel is necessary. Also, if there is a language or cultural barrier, ensure to include a translator or customary expert as part of your team for the easy and effect communication.

3) Analyze your counterpart’s bargaining power and negotiation style. Usually, one party has substantially more to gain or lose from an international business deal. Over or underestimating the bargaining power can cause you unnecessary concessions or failed negotiations. If your negotiation approach is aggressive and your counterpart is more passive, or likewise, if you are technically focused and they are financially focused, the business deal does not seem like a good fit for each other.

4) Meet your counterpart in person. if it is possible, it is important to meet with prospective parties face to face. Be diligent of cultural norms, be punctual about the time, dress in appropriate attire and demonstrate proper manners and respect approach. First meeting goes a long way in establishing the trust level for further negotiations. Choosing a comfortable place or persuading them to invite your home territory can help you overcome or address cultural biases for a successful negotiation.

5) Fix the agenda or a checklist and keep detailed records, in addition to be perceived as professional and informed, an agenda or a checklist helps keep time, expenses and schedules in check, limits the number of issues that can be overlooked, provides reference for future negotiations with your counterpart, and helps to arrive to a win win situation for both the parties.


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