Topic Name Description
Course Introduction Page Course Syllabus
Page Course Terms of Use
1.1: What is Negotiation? URL Mary P. Rowe's "Negotiation: Theory and Practice"

Author Mary Rowe describes various opportunities for negotiation, specific strategies you can employ to create effective outcomes for you and others, and questions to consider when preparing for a negotiation. Before you begin reading these lecture notes, attempt the thought exercises on pages two through six and record your responses. Do not worry if some of the terms are unfamiliar since we will discuss them later in this course.

URL Organizational Behavior: "11.3: Faulty Decision Making"

Study this section to learn how several factors can negatively impact our decision making. After decades of study, researchers Daniel Kahnemann and Amos Tversky found that in decision making, individuals are influenced by overconfidence bias, hindsight bias, anchoring bias, framing bias and escalation of commitment. Awareness of these decision making traps can help us avoid them.

URL Organizational Behavior: "10.5: Negotiations"

Read this section to learn the five phases of negotiations and strategic advice to plan for effective outcomes. This section describes how to avoid some common mistakes made during the negotiations.

1.2: Managing Conflict Page Managing Conflicts
Watch this video.
URL An Introduction to Group Communication: "Chapter 10: Managing Conflict"

Read this chapter which defines conflict, describes various conflict styles, and offers effective conflict management strategies. To gauge your understanding of this material, try to answer some of the exercise questions at the bottom of each section.

Page Analyzing Disputes

Watch this video

URL Organizational Behavior: "10.3: Causes and Outcomes of Conflict"

This section describes various potential causes of conflict including (but not limited to) organizational structure, limited resources, task interdependence, personality differences, communication problems, incompatible goals. Surprisingly, you will learn that conflict can have both positive and negative outcomes.

URL Organizational Behavior: "11.4: Decision Making in Groups"

Read this section to recognize tools and techniques for making better decisions.

URL An Introduction to Group Communication: "11.2: Group Decision-Making"

This section will help you distinguish between decision-making and problem-solving. The author describes five methods for group decision-making and defines autocratic, democratic, and participative decision-making styles.

URL Human Resource Management: "13.1: Workplace Violence and Bullying"

Read the "Workplace Violence and Bullying" section on pages 444–451. The United States Occupational Safety and Health Administration (OSHA) describes the types of workers who are at an increased risk of workplace violence. The Workplace Violence Research Institute cites indicators of pre-violence in the workplace. Click on the embedded link on page 445 to watch the video on workplace violence training.

URL An Introduction to Group Communication: "10.3: Conflict is Normal"

Read this section to learn about two models for characterizing conflict and how healthy conflict can benefit a group.

2.1: Problem Solving URL Communication in the Real World: "6.2: Conflict and Interpersonal Communication"

Read this section to define interpersonal conflict, compare and contrast the five styles of interpersonal conflict management, explain how perception and culture influence interpersonal conflict and list strategies for effectively managing conflict. For the time being, skip over the subheading titled "Culture and Conflict" on pages 425 through 428. You will read this material in Unit 6.

URL Communication in the Real World: "14.3: Problem Solving and Decision Making in Groups"

Read this section to learn about common components/characteristics of problems, to explain the five steps in group problem solving. This article also describes the brainstorming and discussion that should take place prior to group decision making, compares/contrasts decision making techniques and discusses various influences on decision making.

2.2: Contending URL Organizational Behavior: "10.4: Conflict Management"

Read this section to learn how people often employ a contending (or competing) style "to reach their goal or get their solution regardless of what others say or how they feel".

Take a look at the exercise questions at the bottom of the section. Do you deal with conflict differently with friends and family than you do with your coworkers? If so, why do you think that is?

The yielding (or accommodating) style is "cooperative and unassertive. In this style, the person gives in to what the other side wants, even if it means giving up one's personal goals". Have you employed this style in either a work or home situation? Was the outcome successful?

The compromising style is a "middle-ground style, in which individuals have some desire to express their own concerns and get their way, but still respect the other person's goals". Does it sound good to "compromise"? Is the compromising style always appropriate? Why or why not?

2.3: Building Relationships URL Human Relations: "1.3: Human Relations: Perception's Effect" and "Chapter 9: Handle Conflict and Negotiation"

Read section 1.3, "Human Relations: Perception's Effect", on pages 24–27 to learn that other's perceptions may not be identical or compatible to our own. The author reminds us that "perception is important to recognize because it is the driving force behind our reaction to things".

Then, read Chapter 9, "Handle Conflict and Negotiation", on pages 256–293 to refresh your knowledge of conflict management styles and to learn effective management techniques including changing organizational structures to avoid built-in conflict, changing team members, creating a common "enemy", using majority rules, and problem solving. 

2.4: Understanding Bias Page Clover Park Technical College: "Recognizing Stereotypes and Bias"

Read this article for an overview of how to improve critical thinking by moving beyond biases and stereotypes. While we may recognize a bias (or the preferred way of looking at things) in others, it is easy to overlook our own biased thoughts or emotions.

The authors suggest two methods for developing a way to apply critical thinking to question information and situations and consider their context. These include: 1. Recognize assumptions, and 2. Examine information for accuracy, assumptions, biases, or specific interests. Subsections 2.6.1 to 2.6.5 offer more information on biases that create obstacles to effective decision making, especially in our negotiations.

Page Management: "10.6, Part 1: Cognitive Biases as a Barrier to Decision Making"

This article explains how decision making is a cognitive activity. Our predispositions "can be either an obstacle or an enabler to the decision-making process". It briefly describes the most common types of cognitive bias: confirmation bias, anchoring, halo effect and overconfidence bias. Awareness of these concepts enables us to negotiate and resolve conflicts more effectively.

URL Communication in the Real World: "Chapter 2: Communication and Perception"

Read this chapter which explains that interpretation is the part of the perception process in which we assign meaning to our experiences using mental structures known as schemata.

Our previous knowledge and experience helps us to make sense of the perceptual cues around us. The process of perception "affects our communication because we respond to stimuli differently, whether they are objects or persons, based on how we perceive them".

Take time to review the exercises questions at the end of each section of the chapter. Pay special attention to the questions at the bottom of the chapter. These questions may require some insight on your part!

File Paul C. Giannelli's "Independent Crime Laboratories: The Problem of Motivational and Cognitive Bias"

Read the introduction to this case study.

Read Part 1. In this article, you will learn that forensic scientists (who are supposed to remain impartial) can become partisan and "see their function as helping the police".

Motivation bias is usually conscious and may depend on one's personal situation. You may be interested to read the entire article and note the Supreme Court's statement in the conclusion.

Page Clover Park Technical College: "Recognizing Stereotypes and Bias"

Read this section to learn why our emotions can help or hurt us in our decision making. For example, "emotions that allow you to deny reality generally produce undesirable results; emotions that encourage you to explore alternatives based on principles of fairness and justice can produce very desirable results".

File Judgment and Decision Making: "Gender Differences in the Endowment Effect: Women Pay Less, but Won't Accept Less"

The endowment effect "refers to the well-established finding that individuals are willing to pay less for something than the amount they require to sell the same item if they own it".

Additionally, "the stronger the link between the self and the item, the more one would be willing to pay or require to sell an item". Do you agree? Why or why not?

This article focuses on women's willingness to accept risk (WTA) and willingness to pay (WTP). Read the introduction, section 1.1, and section 5. The researchers test a popular theory that women are more risk averse than men.

2.5: Shared Interests URL Project Management from Simple to Complex: "5.1, Part 6: Negotiation"

Read the section on negotiation to learn why managers need to "generate options that advance shared interests".

This article cites Vjay Verma's description of four principles of negotiation:

  1. separate people from the problem,
  2. focus on common interests,
  3. generate options that advance shared interests, and
  4. develop results based on standard criteria.
File Collaborative Leaders Network: "Collaborative Problem Solving"

Read the "Strategy Overview on Collaborative Problem Solving" section. In the overview, we learn that collaboration is necessary to craft plans, policies, and programs that are regarded as legitimate and sustainable.

The strategy "systematically builds toward consensus by having participants analyze the issue, hear from experts, generate and evaluate options, review draft documents, and revisit group agreements at every stage".

Author Kern Lowry, Ph.D. takes us through nine stages in the process and offers helpful key tasks, checklists, and vignettes for each of the stages.

URL Project Management from Simple to Complex: "5.1: Emotional Intelligence"

Robert Cooper and Ayman Sawaf define emotional Intelligence as, "the ability to sense, understand, and effectively apply the power and acumens of emotions as a source of human energy, information, connection, and influence".

"Daniel Goleman discussed emotional intelligence quotient (EQ) as a factor more important than IQ in predicting leadership success". Emotional Intelligence is critical to managers. "The more complex the project profile, the more important the project manager's EQ becomes to project success".

3.1: Distributive Negotiation URL Organizational Behavior: "10.5: Negotiations"

Read the "Negotiation Strategies" section to learn how the distributive approach may result in missed opportunities to "expand the pie". Rather, one party may get more of the pie, and one party may get less: a win-lose outcome.

Page Clyde A. Warden's "Business Negotiation Part Four: Distributive Bargaining"

Watch this video lecture on distributive negotiation to learn when this strategy might be appropriate and when a collaborative (or integrative) strategy may result in "expanding the pie" for both parties. Clyde A. Warden from National Chung Hsing University, Taiwan, explains the concept of distributive bargaining (or win-lose bargaining).

Parties often use this strategy when they are negotiating over price. Words often associated with one or both parties in this type of bargaining include: deadlock, final offer, firm, hostile, ultimatum. Inherent in distributive negotiation are the concepts of target price, buyer's resistance point, seller's public (asking) price, seller's resistance point, and bargaining range.

Page Roman Troschel's "Introduction to Augmenting the Bargaining Zone"

In this lecture, Roman Trotschel from Leuphana Digital School describes positional bargaining and cites Fisher and Ury who argue that positional bargaining will not produce sustainable agreements and is an inefficient means of reaching win-win solutions. Pay particular attention to the "orange" example that Trotschel gives to explain the benefits of moving beyond the position to the issues of the conflict.

File Christopher Griffin's "Game Theory: Penn State Math 486 Lecture Notes"

Read Chapter 1, Section 2: An Overview of Game Theory. This theory has applications for economics, operations research, and psychology, to name a few disciplines.

This reading will provide a basic explanation of game theory, which Griffin defines as the study of optimal decision making under competition when one individual's decisions affect the outcome of a situation for all other individuals involved.

For a classical example, watch the video below on the Prisoner's Dilemma, which you will read about it in many discussions about game theory. How would you describe this "story" in relation to game theory?

Page Gerald Friedman's "Prisoner's Dilemma"

View this lecture from Gerald Friedman from the Department of Economics at the University of Massachusetts to learn that the Prisoner's Dilemma illustrates a situation where you base your strategy on what you think the other party will do, and that party bases his strategy on what he thinks you will do. In game theory, the Prisoner's Dilemma illustrates how people's individual choices can lead to the worst situation possible.

Page What is a Zero Sum Game, and How Do I Play?

View this brief video to learn the basic concept of a zero sum game. 

File Kathryn Kovacs' "Hobby Lobby and the Zero-Sum Game"

Read this article by Kathryn E. Kovacs from the Washington University Law Review to learn how she compares the Hobby Lobby case to a zero-sum Religious Freedom Restoration Act (RFRA) claim: the Bald and Golden Eagle Protection Act (also known as the "Eagle Act").

Page Winton Bates' "Does a Positive-Sum Attitude Promote Happiness?"

In this blog Winton Bates describes research that seems to indicate that "there are a variety of reasons why people who view life as a positive-sum game should be happier than those who view it as a zero-sum game".

While there does not seem to be any direct survey evidence relating to this question, Bates cites Bruce Headley’s assessment on the effects of different life goals on happiness.

In his discussion paper 639, DIW, 2006, Headley suggests that goals relating to personal success can be viewed as zero-sum, whereas altruistic goals and goals relating to family life are positive-sum goals. Research on neuroeconomics experiments in which participants play games relating to cooperation and trust, tends to confirm that people who believe that others can generally be trusted would tend to have a positive-sum attitude to life.

Page Complexity Labs: "Cooperation and Competition"

Watch this video to learn examples of zero-sum and positive-sum games. "Zero-sum games create a dynamic of competition", whereas "positive-sum games can create strong attractors for cooperation".

The narrator reminds us that complex scenarios exist "where there are incentives for both cooperation and competition". You will learn how these complex and adaptive systems are affected by negative externalities in subunit 3.1.5.

Page Zero-Sum Game

Read the article and pay special attention to non-zero-sum, and economics. This article reminds us that "valuable goods and services can be created, destroyed, or badly allocated in a number of ways, and any of these will create a net gain or loss of utility to numerous stakeholders".

Page Complexity Labs: "Cooperation and Competition"

Watch this video to see how negative externalities result in the "tragedy of the commons" and social dilemma.

3.2: Integrative Negotiation URL Human Relations: "9.4: Negotiations"

Read the sections on the distributive and integrative approaches to negotiations. The often cited analogy for an integrative or collaborative concept is to "expand the pie", whereas in a distributive negotiation, the parties view the pie as fixed. Each of the parties "tries to get more of the pie and win".

Page The Importance of the Integrative Negotiation

Read this article to expand your knowledge of the distributive and integrative approach to negotiations. The author gives pragmatic examples of using distributive and integrative approaches in his life. He also lists requirements for effective negotiations.

Food for thought: If the negotiation involves a "fixed pie", what type of approach is that? What type of negotiation is it if the parties hope to "expand the pie"? Is one approach necessarily better than the other? Why or why not?

Page Boundless Management: "Overview of Negotiating Strategies"

Read this article for a description of five negotiation styles and strategies. There are three negotiating types "in which to express these styles: soft, hard and principled". Principled negotiation is "focused on the problem and the pragmatic and organized pursuit of solving it".

Page Suzanne Ross' "What is Emotional Intelligence and Why Do You Need It?"

In her article on emotional intelligence in The Conversation, Suzanne Ross cites a study of more than 300 managers, "which found superior performers scored higher in all emotional intelligence attributes including self-awareness and self-management". Ross also tells us what we can learn from low emotional intelligence.

For example, "lack of emotional intelligence – in particular lack of self awareness and self control – are key leadership derailers".

Food for thought: In a study of more than 300 managers, what are two major emotional intelligence attributes that indicate how EQ can contribute to leadership success?

3.3: Phases of Negotiation URL Human Relations, "9.4: Negotiations"

This section describes five phases of negotiation: 1. Investigation, 2. Determine your BATNA, 3. Presentation, 4. Bargaining and 5. Closure. You will learn that although the presentation stage normally receives the most attention, each phase can affect the outcome of the negotiation.

URL The Power of Selling: "12.2: Collaborate to Negotiate"

The chart in this section depicts the negotiation process in three steps: 1. pre-negotiation, 2. negotiation, and 3. post-negotiation. Read the suggestions to consider during pre-negotiation, including assessing your level of confidence, learn what is really important to your "prospect", identify your pre-negotiation goal (the minimum you will accept during negotiation). Attempt the exercises questions at the end of the section.

Page Boundless Management: "5.7: Setting the Right Goals"

Read this article and pay special attention to the description of SMART goals in the "introduction to goal setting" paragraphs. Note that effective goals should be specific, measurable, achievable, realistic and time-bound. Using quantitative (numeric) terms in their goals will allow parties to measure and benchmark progress.

URL Recognizing and Avoiding Negotiation Mistakes

After you have read the entire text, ask yourself whether you have missed opportunities for effective outcomes by omitting this pre-negotiation planning. You are not alone! Expert negotiators often bypass some of these important questions to their detriment. These basic principles will help you achieve your desired outcomes during future negotiations. 

URL The Power of Selling: "12.2: Collaborate to Negotiate"

This section breaks the negotiation into three steps to ensure a successful negotiation. In the third step, "Post-negotiation", the author reminds us to celebrate with all of the appropriate people who were part of the negotiation. This is an important step to help build your relationship and prepare for your next negotiation.

4.1: Multi-Party Business Negotiations Page Clyde Warden's "Business Negotiation, Part One: What is Negotiation?"

In this video lecture, Clyde Warden describes four parts to negotiation: goals, strategy, issues, planning. A key point for knowing whether you have won or lost in a negotiation is to compare the outcome with your initial goals: for example, what value do you place on the item or the issue. Outcomes must be clear and measurable so you can compare them to your original and subsequent goals.

Page Clyde Warden's "Business Negotiation, Part Three: Strategy Planning"

In this video, Clyde Warden stresses the need to prepare for successful negotiations. Two ideas will guide the chosen strategy: the importance of the outcome to you, and the importance of your long-term relationship with the other party. Warden explains four strategies in light of outcome and relationship importance.

File Massachusetts Institute of Technology: "MultiParty Negotiation" and "Power and Negotiation"

Read this article to learn about the advantages and disadvantages of coalitions, and the challenges of multiparty negotiations. For example, in multi-party negotiations, the complexities are informational, procedural, and social.

According to these articles, what is the definition of a coalition?

4.2: Negotiating Mergers and Acquisitions URL Boundless: "Mergers and Acquisitions"

Locate and read the four sections under the Mergers and Acquisitions header.

File Bruce Berkowitz's "Investment Thesis on Sears: Case Study"

Review this presentation to learn about the selling points that would be included in the "Investment Thesis for Sears", including real estate, operations, top brands, leadership, liquidity, and catalysts.

URL Public Speaking: "9.3: Putting It Together: Steps to Complete Your Introduction"

Read this section to learn more about how to write a clear and effective thesis statement. A key takeaway from this article is that a clear thesis statement is essential to provide structure for a speaker and clarity for an audience.

Answer the questions at the end of the section.

Page Orlando Kelm's "Preparing for Negotiations with North Americans"

This article cites how important it is for international professionals to prepare thoroughly when negotiating with people from North America. There is an ingrained perception that North Americans are less adept at being flexible and at changing things on the fly. As thorough as our preparation may be, we need to allow for flexibility at any point during negotiations to ensure a successful outcome.

4.3: Sales Negotiations URL The Power of Selling: "12.1: Closing Starts at the Beginning"

Read this section to learn how to successfully close a sale. The author tells us that successful closings start at the beginning. You will see many of the concepts you have been reading about in this course come to life. For example, a successful close is based on having your preparation meet the opportunities. The analogy used in this article is that the "selling process is analogous to building a house; if the foundation is poured right, everything else will easily come together".

The steps to close a complex sale (usually $100,000 and higher) are described in this article. You may find that these steps (discover, diagnose, design, deliver) are, in fact, similar to negotiating phases you have read about in previous units of this course. Compare your answers to those given at the end of the section. How did you do?

URL Business Communication for Success: "12.4: Principles of Persuasion"

This section describes social psychologist Robert Cialdini's six principles of persuasion. While there may not be a definitively correct answer to what is the best way to persuade your listener, these principles are powerful and effective.

Post your thoughts on the discussion forum. Leave a reply to your classmates' posts as well.

4.4: Negotiating with Suppliers Page James Stuart's "The Essence of Negotiation"

Read this article to learn why "the best business runs on sustainable arrangements". In discussing the necessary roles of co-operation and collaboration, the author writes that "the age old business philosophy of 'maximizing profit at any cost', where suppliers and partners and clients and even the consumer is drained of every available penny, is no longer appropriate for a world of finite resources, of increasing consumer power and increasing supplier importance".

4.5: Labor Negotiations Page Management: "7.2: Collective Bargaining"

Read this article on collective bargaining to learn the conditions and negotiation process between groups of employees (unions) and employers in the human resource frame. In the United States, the National Labor Relations Act of 1953 covers most collective agreements in the private sector. What actions are deemed illegal by this act? How would you describe arbitration?

4.6: Gender in Business Negotiation Page RCSI Institute of Leadership: "Women in Negotiation"

In this video lecture, you will learn that there are stark differences in how women and men negotiate. Research has found that men are more likely to negotiate on behalf of their own issues. Women, if they negotiate at all, are more likely to negotiate on behalf of others. This difference has implications to the overall organization, and has "accumulated disadvantage to women". In fact, even if a woman does negotiate on her own behalf in an assertive way, the perception of her efforts may be negative.

4.7: Negotiating for Yourself URL Human Relations: "9.4: Negotiations"

In this section, the author takes us through the phases of negotiation with an explanation for how we can use these phases to optimize our negotiated outcomes. You may not want to accept the first offer extended to you. This article offers tips for negotiation success.

URL Six Steps to Job Search Success: "10.8: Q&A Focused on Negotiation and Closing the Offer"

Read this section. Note the paragraph on "better positioning", which says that your past salary signals to employers your level, title, and responsibilities. To obtain a higher salary, you need to position yourself so employers do not question your abilities because you have not received a high salary in the past. However, sometimes it makes sense to take a lower salary.

The article responds to similar questions, such as:

  • What is the best way to approach a recruiter about salary negotiation?
  • How does someone new to the workforce approach negotiation?
  • How does that approach change after you have had a few years of experience?

There may be other benefits worth negotiating besides salary. This reading helps you to consider several scenarios and appropriate approaches to formulate your initial position.

URL Six Steps to Job Search Success: "10.3: Items Open to Negotiation: Cash and Noncash Components"

Read this section to learn that in addition to salary and other cash components, non-cash components (stock options, stock grants, retirement accounts, benefits, start date, employee perks, paid versus unpaid leave, lifestyle and flexibility, outplacement service and severance pay) can play a major role in whether or not to accept a job offer.

4.8: Principals and Agents in Negotiation URL Business Law and the Legal Environment: "Chapter 38: Relationships between Principal and Agent"

Read this chapter to learn about the types of agents and their relationship to their principals.

URL Business Law and the Legal Environment: "Chapter 39: Liability of Principal and Agent; Termination of Agency"

Read this chapter to learn about the agent’s duty to principal (fiduciary and general) and the principal’s duty to agent (contract and tort).

4.9: Moves and Turns in Negotiation Page Boundless Management: "9.1: Sources of Power"

Read this section to learn how leaders can employ sources of power and influence in a meaningful and ethical way. The author describes six sources of power and tactics (legitimate, referent, expert, reward, coercive, and informational) people use to push or prompt others into action. What are the six sources of power and from where does each source derive?

5.1: Intra-Organizational Conflict Page Donna Benjamin and Gina Likins' "Teaching Open Source Communities about Conflict Resolution"

In this interview, Donna Benjamin and Gina Likins give their views on conflict resolution. They compare bad and good conflict resolution. They agree that compassion and respect are at the heart of effective conflict resolution and recommend looking deeper at the situation to discover why conflict occurs. Although many task-oriented people do not want to discuss their feelings and emotions, Benjamin recommends they take time to address underlying issues rather than avoid the conflict.

Page Boundless Management: "Managing Conflict"

Read this article to learn that substantive and affective conflict can occur in intra-organizational (within the organization) and inter-organizational (among two or more organizations) situations. How does substantive conflict contrast with affective conflict?

Page Talya Bauer and Berrin Erdogan's "Understanding Conflict"

This article discusses three types of conflict: intrapersonal, interpersonal, and intergroup. Although a moderate level of conflict (task conflict, for example) may be beneficial, personal conflicts are never healthy because they cause stress and distress, which undermines performance. Complete the exercises at the end for practice.

5.2: Mediation URL The Legal and Ethical Environment of Business: "4.2: Mediation"

Mediation is relatively inexpensive, fast and confidential. A downside to this method of alternative dispute resolution (ADR), may be that mediation relies on the willingness of the parties to participate and on the skill of the mediator.

Answer Question 2 in the Exercises section of 4.2. You are asked to identify a situation in which you might choose mediation and to explain the potential benefits and drawbacks of this ADR. The description of mediation has traditionally been focused on the presenting problem of the parties. The mediator looks on the conflict as a solvable problem. The objective is similar to a win-win negotiation in which the goal is to have the interests of both parties met.

In problem solving mediation, success for the mediator is to have resolution of the dispute. In this sub-unit, you will learn that in transformative mediation, the mediator's goal is to increase the parties empowerment and recognition of each other rather than just a one-time settlement of the presenting dispute.

Page Michael Herman's "Transformative Mediation"

Michael Herman explains that the occurrence of conflict "tends to destabilize the parties' experience of both self and other, so that each party feels both more vulnerable and more self-absorbed than they did before the conflict".

According to the transformative theory, "people have the capacity to regain their footing and shift back to a restored sense of strength or confidence in self". This outcome matters most to the parties in conflict. A transformative mediator will view empowerment and recognition as successful outcomes for the parties.

How would you compare and contrast the objective of traditional mediation with that of transformative mediation?

5.3: Arbitration Page Political Science: "18.5: Arbitration"

Arbitration is another alternative dispute resolution that differs in its process and function from mediation. In arbitration, a third party reviews evidence in a dispute and makes a decision that is legally binding for all involved.

Arbitration can be used to resolve international, commercial, investment, and interstate conflicts. You will learn about the advantages and limitations of this type of ADR and how arbitration was used historically to settle boundary disputes.

File Sophie Pouget's "Arbitrating and Mediating Disputes"

Read the following sections:

  • Pages 3–5: 1. Introduction, 2. Context and Importance of an Effective Alternative Dispute Resolution System for Foreign Investors;
  • Page 7: AMD Results; and
  • Page 23: Conclusion: Policy implications.

In this paper, Sophie Pouget describes the need of foreign investors to have assurance that disputes in countries throughout the world are settled fairly and in a timely manner. Unfortunately, there is great inconsistency among global economies regarding policy and best practices. In her conclusion, Pouget cites several opportunities for improvement arising from the research data including greater flexibility in domestic arbitration regimes, reduction of the length of arbitration proceedings in many parts of the world, and specialized courts with the capacity and experience to deal with commercial arbitral awards. Significantly, many economies have "acceded to the New York Convention to recognize and enforce arbitral awards".

6.1: Cross-Cultural Communications in International Business Negotiations URL International Business: "Chapter 3: Culture and Business"

Read this chapter for an overview of how cultural understanding applies to business negotiations. For example, you will learn how a message is communicated in high and low context cultures. In high-context cultures, body language is as important and sometimes more important than actual words spoken. In low-context cultures, people tend to be explicit and direct in their communications. Verbal language and body language can impact our chances of understanding and being understood in a positive or negative way.

URL Human Relations: "9.5: Ethical and Cross-Cultural Negotiations"

Read about the role of ethics when negotiating with others and how national culture plays a role in negotiations. This section gives an example of the need to understand differences in cultures. In China, companies and workers do not like to say no. A question that asks for a yes or no answer, therefore, may put a Chinese official in an uncomfortable position of saying no, which they likely would not do. To accommodate this way of thinking, the author suggests that we might rephrase the question to open-ended questions, like "how will you do this for us and will it be done?".

Page Oliver Phillips' "CQ Action"

Watch lecture to learn about CQ (cultural intelligence). While Phillips describes four adaptive CQ capabilities needed in cross-cultural negotiations (drive, knowledge, strategy, and action), and explains why CQ action ideally depends on understanding the other three CQ capabilities. CQ action is the extent to which we appropriately change our verbal or non-verbal actions when we interact cross-culturally. The goal is to be ourselves while figuring out what behaviors need to change in order to lovingly express who we are and what our intentions and objectives are in establishing the relationship. Phillips says the challenge is to know when to "flex" our natural behavior to accommodate another culture.

Page Connor Zhang's "Chinese Nonverbal Communication"

This video illustrates the dynamics between a Chinese father, his son, the father's boss, and a waiter. The scenario is communicated through nonverbal behaviors and communication.

6.2: The Application of Cultural Dimension Theories to International Business Negotiations Page Trompenaars' Model of National Culture Differences

Fons Trompenaars, a Dutch organizational theorist, management consultant, and author, has developed a model of national culture differences to use as a framework for cross-cultural communication.

This model has seven dimensions:

  1. Universalism vs. particularism;
  2. Individualism vs. communitarianism;
  3. Neutral vs. emotional;
  4. Specific vs. diffuse;
  5. Achievement vs. ascription;
  6. Sequential vs. synchronic; and
  7. Internal vs. external control.

Which of Trompenaars' five orientations describe a culture in which people are accorded status based on how well they perform their functions?

Page Gijs Vroom's "Interview with Fons Trompenaars"

Now that you have read about Trompenaars' model of national culture differences, you may find it interesting to hear his perspective on social media as he is interviewed by Gijs Vroom. Trompenaars compares social media users by their age, country, and other demographics.

Page Management: "4.1: Types of Organizational Culture"

Read this article to learn about four models that provide a useful framework for managers. With an eye toward recognizing the need to understand global differences in culture, Geert Hofstede addressed six dimensions of culture in a study at IBM offices in 50 different countries. These include power distance, uncertainty avoidance, individualism vs. collectivism, masculinity vs. femininity, long-term orientation, and restraint. 

Which of Hofstede's Cultural Dimensions describes "an organization's comfort level with risk-taking"?

Page Media Studies 101: "Intercultural Communication"

To expand on the reading above regarding Hofstede’s six dimensions, this article offers the New Zealand scores. In each of the dimensions, the lowest possible score is zero and the highest possible score is 100. The scores in this article are interpreted to describe people in New Zealand relative to the characteristics of a particular dimension. Look at the discussion questions at the end of the article. What answers would you give? Why?

6.3 Regional and Country-Specific Case Studies on International Negotiations Page Rob Hendrick's "Finding a Common Language in Intercultural Negotiation"

This article describes a negotiation between a Chinese energy company (Sinopec) and a Brazilian energy company (Petrobras). The stage is set for a difficult experience by both parties because of several factors. The leaders on both sides had only limited experience with international negotiation, and both teams were hesitant to get the conversation started. Without an understanding of each other's backgrounds, it was hard to know where to begin. The facilitators had their work cut out for them.

Read to learn their progress on such issues as relationships, speaking a common language, research on each country's customs, history and politics. In striving to make the negotiation a win-win, each side needed to learn what the other side hopes to accomplish. What are their goals? Through homework assignments, and simulation exercises, the participants gained knowledge and skills to proceed with multiple negotiations.

Page Anders Brendstrup's "Cultural Awareness Should Come from Both Sides"

In this video, Brendstrup cites the challenges of working with employees from multiple countries. He stresses that management must possess an understanding of how different employees wish to be managed and what style that they use to manage others. He points out that this becomes more complex when adding Asian management styles to the mix.

Page International Business: "Chapter 3: Culture and Business"

This chapter describes the difficulty of doing business globally without a sound knowledge of another country's local business practices and culture. Dunkin' Brands had first-hand experience with these challenges when they returned to Russia in 2010 after pulling out of that country 11 years earlier.

The company planned to open 20 new stores. A "challenging balance for Dunkin' Brands is to enable local operators in global markets to customize flavors and food product offerings without diminishing the overall brand of their companies".

In Russia, for example, people were largely unfamiliar with donuts, so Dunkin' has created several items that specifically appeal to Russian flavor preferences. You will also read about Dunkin's experiences dealing with cultural differences in China, Latin America, etc. Consider the questions in the opening case exercises at the bottom of the introduction. How would you respond?

Page Dubai Debates: "Arab Women as Business Leaders will Always be the Exception"

This five-member panel debate the topic "Women, Civil Society and Leadership in a New Arab World". You will need to follow along reading the subtitles in English, but is interesting to note the difference in opinion expressed by the male and female members of the panel.

A male speaker, for example, explains that there are many women in business, in various sectors. A female panelist , however, posits that if we look at the world of business as a world of profit and loss, there are exceptional and competent women who possess capital and leadership characteristics. Since they are capable of attracting capital, why are they being left out? She refers to families or traditions that may stand in the way of women's progress in business. Another obstacle for many women in some Arab countries prohibit women from signing contracts, or traveling to another country to conclude a deal. A vote is taken at the end of the debate to decide: Is the role of women in business less than it is supposed to be, or is it adequate?

What do you think the vote will be?

Page Center for Strategic and International Studies: "Anthony Cordesman on the United States and the Arab World"

In this brief video, Anthony Cordesman responds to the question, "What can the United States do currently to improve our relationship with the Arab World"? Rather than thinking of the Arab world as a "region", we should recognize it is comprised of different countries, often with divergent cultural and political values. Cordesman says "we need to have strong country teams" to interact successfully with specific countries. Using television and radio to deal with an entire region is ineffective. A "country-by-country approach based on the values of the people there is absolutely critical".

Page Lee Iwan's "Business in Mexico"

Read parts 1–28. In the introduction, Lee Iwan tells us that "Mexico is an immense country, with enormous economic and social contrasts, thousands of cultural and regional differences, and a complex history that probably can never be understood completely by the foreign business person".

Iwan holds a similar view to Anthony Cordesman. One must treat each region separately to effectively respond to that area's economics and cultures. This article addresses such topics as relationships, language, mealtimes, acceptable and unacceptable topics of conversation, politics and political parties, taxation system, to name just a few.

Page University of California, Berkeley: "Latino vs Hispanic: Constructing a New America"

In this brief video, Cristina Mora traces the commercial, cultural and political interests that created a national Hispanic identity in the 1970s and boosted the political clout of Mexicans, Puerto Ricans, Cubans, Salvadorans, Guatemalans and other Latin Americans in the United States. Interestingly, Mora explains how these disparate cultures in America gained strength through developing a common identity, whereas you have learned in other reading and viewing assignments in this course that global business leaders are realizing a need to identify and relate to specific cultures even within the same country.

Page Kevin Chang's "How to do Business in China"

Watch this video to learn some of the challenges people will meet in China due to cross-cultural differences.

URL International Business: "3.1: What Is Culture, Anyhow? Values, Customs, and Language"

Read this section. Today, the physical territories that constitute the countries of India and Indonesia are far different than they were a hundred years ago. The previous British rulers in India "tended to hire locals for administrative positions, thereby establishing a strong and well-educated Indian bureaucracy". Although many business people complain about India's slow bureaucracy focused on rules and regulations, the government infrastructure and English-language education system helped position India as a strong high-tech economy.

Page Indian Diplomacy: "India by Choice"

This representation of India is through the eyes of several expatriates who describe their journeys and experiences and explain why they have chosen India as their home. More than just a tourist destination, many foreigners are learning that India has a "booming economy which allows them to earn and live in India by taking up permanent residence".

6.4: Political and Legal Issues in International Negotiations Page Political Impact on Global Negotiations

This article describe Raytheon's effort to negotiate a NATO weapons system with a consortium of European companies. We return to a recurring theme that businesses need to understand the various economic, political and social cultures of a particular country or region with whom they wish to negotiate. In this case, Raytheon learned that the governments of the countries they wished to negotiate with in Europe would make the purchasing decision, not them.

Page Wang Zhanpeng's "China's Response to TTIP Negotiations"

In his lecture, Wang Zhanpeng "analyzed the opportunities and constraints of the Transatlantic Trade and Investment Partnership (TTIP), which will strengthen economic and trade ties between the U.S. and Europe". Zhanpeng offers an historical background about TTIP, advantages and issues of TTIP, and three prospects for the future. The now-failed Trans-Pacific Partnership (TPP) was the idea of a "regional free-trade agreement throughout the Asia-Pacific region (12 countries) including Australia, Canada, Japan, Mexico, the US, Singapore and Vietnam". One significant issue of TPP was its exclusion of China.

URL International Trade: "Chapter 1: Introductory Trade Issues: History, Institutions, and Legal Framework"

Read this chapter. While "we are all a part of the economy, we all buy and sell things daily … we cannot observe all parts and aspects of an economy at any one time". This chapter endeavors to describe policy issues, controversies, the discussions and the history of international trade. You will learn terms, such as international economics, FTAs, GATT, WTO, anti-subsidy laws, and bound vs. applied tariffs.

You will read about real-world issues such as policies that restrict trade and forging agreements to reduce trade barriers. Test your knowledge by answering the exercises in each section.

File Vera Thorstensen and Carolina Müller's "How Does International Trade Regulation Addresses Exchange Rates Measures?"

Read this study on how international trade regulation addresses exchange rates measures. The authors "look for provisions under the World Trade Organization (WTO) agreements that could address the exchange rate issue and rebalance the impacts caused by misaligned currencies on trade".

These misalignments "can cause significant impacts on international trade instruments, creating incentives to exports and representing barriers to imports" (Thorstensen et al., 2012).

URL International Business: "Chapter 7: Foreign Exchange and the Global Capital Markets"

Read this chapter to learn about currencies, foreign exchange rates and global capital markets. It gives us a real-world example of a company that has to deal in different currencies. Small changes in the daily foreign currency market can significantly affaect a company's costs and profitability.

At the end of the chapter, read the ethical dilemmas. What would your responses be? Would you recommend that Walmart set up an offshore company? Why or why not?

URL International Trade: "Chapter 11: Evaluating the Controversy between Free Trade and Protectionism"

This chapter argues for economic free trade through the lens of trade theory. While free trade may not be optimal, it is "the most pragmatic policy option a country can follow".

During the 19th and 20th centuries, policy makers asked whether free trade was in everyone's best interest. The modern case for free trade "argues that each exception supporting government intervention in the form of a trade policy brings with it additional implementation problems that are likely to make the policy impractical".

Read section 11.4 to learn why free trade is not always the best policy choice when the objective is to maximize national welfare. The authors argue that free trade is pragmatically, rather than technically, optimal because it is attainable and most likely to produce the highest level of economic efficiency.

Page Commercial Diplomacy

Commercial diplomacy is designed to influence foreign government and regulatory decisions that affect global trade and investment. This article differentiates commercial and economic diplomacy, which are often used interchangeably. It describes public and private sector practitioners and lists traditional commercial diplomacy activities under the umbrella of network, intelligence, image campaigns, and support.

Page Marketing: "7.3: The World Trade Organization (WTO)"

Read this article on the World Trade Organization (WTO) to learn about why it was formed, its members and observers, the Doha Development Round, major obstacles, and agreements.

URL Debra Steger's "The WTO and the Future of International Organizations"

Listen to this podcast from the International Relations and Security Network (ISN) to learn why Debra Steger from the Centre for International Governance Innovation (CIGI) believes the World Trade Organization (WTO) needs to adapt its approach to trade negotiations, and strike a balance between its strong dispute settlement mechanisms and a comparatively weak negotiating framework.

6.5: Bargaining Ethics URL Human Relations: "9.5: Ethical and Cross-Cultural Negotiations"

It may be legal, but is it ethical? Read this section to learn about the role of ethics in negotiations and how one culture may consider something to be "right and fair", while another perceives it to be threatening and antagonistic.

For example, an American nods their head to convey agreement, while someone from China nods their head to simply convey they are "listening and following what you are saying". The exercises at the end of the chapter section pose some thought-provoking questions. How would you respond?

Page Michael C. Munger's "When is Voluntary Choice Really Voluntary?"

In this lecture, Michael Munger discusses when voluntary choice is not really voluntary. He says that "one of the things that is a benefit and a harm of capitalism is that we're constantly trying to find new ways to make better stuff more cheaply". Because of this, he says, "it's really about consumer sovereignty".

He continues:

"The reaction of markets is to create things that don't now exist and it's a very hard argument to make because we tend to be materialists and look around and say, 'How can we allocate the fixed amount of stuff around us? How can we do better?' Not let's take advantage of the dynamism and creativity and entrepreneurship of people who are admittedly motivated by profit."

Munger describes a scenario where he contends a transaction is morally wrong because a sale violates the property rights of the seller. The item is needed by the consumer and the seller is not doing any harm by bringing in the "needed stuff and selling it". Secondly it's wrong because there's a supply response: the only way to have a low price is to allow a high price". This creates an inducement to buy at the low price.

Munger says people tend to think of this as a lifeboat example, in which there is a "fixed amount of stuff":

"I've really got to be a kind of a jerk if you really need water and I have some, to say, 'Well, how much are your children worth?' because you're never going to see them again without this water."

Munger asks us: What counts as voluntary? Is it possible to be coerced by circumstance? An overriding question raised in this lecture is "just what is justice in market pricing"?
Study Guides Page Unit 1 Study Guide: What Is Negotiation?
Page Unit 2 Study Guide: Negotiation Strategies and Biases
Page Unit 3 Study Guide: Processes and Phases of Negotiation
Page Unit 4 Study Guide: Managing Different Types of Business Negotiations
Page Unit 5 Study Guide: Conflict Resolution
Page Unit 6 Study Guide: International and Cross Cultural Negotiation
Course Feedback Survey URL Course Feedback Survey