Essential elements in international contract negotiations

Abstract

This research examines the interaction of groups in the environment of international contract negotiations. The thesis addresses psychological aspects of negotiation, such as roles of social relationships, egocentrism, motivated illusions and emotion. The thesis examines the role of culture in cross-border negotiations and describes major effects from negotiation definitions, selection of negotiators, protocol, communication, time, risk propensity, group versus individual decision making, and nature of the agreement. Interviews conducted with expert negotiators yielded a set of factors that research participants identified as the most influential in the negotiation process and its outcome. Recommendations are offered in regards to common issues that arise during an international negotiation process. These include: (a) thoroughly preparing for all aspects of the contract; (b) aiming toward mutual gain; (c) planning for alternatives that the other party can accept; (d) expressing disagreements with a polite and non-argumentative manner; (e) adjustment to the degree of formality of the host team; and (f) understanding the other party's authority to commit as well as the decision making structure of the organization it represents. If a negotiator learns to cope with them at a sufficient level, then he/she has enough tools in his/her possession for the purpose of negotiation.