The Global Negotiator: Making, Managing and Mending Deals Around the World in the Twenty-First Century

321 Pages·2003·1.14 MB·English

by  Jeswald W. Salacuse

THE GLOBAL NEGOTIATOR
Making, Managing, and Mending Deals
Around the World in the
Twenty-First Century
Jeswald W. Salacuse
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THE GLOBAL NEGOTIATOR
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ALSO BY JESWALD W. SALACUSE
The Wise Advisor: What Every Professional
Should Know About Consulting and Counseling
Making Global Deals: Negotiating in the International Marketplace
The Art of Advice: How to Give It and How to Take It
International Business Planning: Law and Taxation
(with W.P. Streng, six volumes)
Social Legislation in the Contemporary Middle East
(co-editor with L. Michalak)
An Introduction to Law in French-Speaking Africa:
North Africa
An Introduction to Law in French-Speaking Africa:
Africa South of the Sahara
Nigerian Family Law(with A.B. Kasunmu)
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THE GLOBAL
NEGOTIATOR
Making, Managing,
and Mending Deals
Around the World in
the Twenty-First Century
JESWALD W. SALACUSE
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THEGLOBALNEGOTIATOR
Copyright © Jeswald W. Salacuse, 2003.
All rights reserved. No part of this book may be used or reproduced in any
manner whatsoever without written permission except in the case of brief
quotations embodied in critical articles or reviews.
First published 2003 by
PALGRAVE MACMILLAN™
175 Fifth Avenue, New York, N.Y. 10010 and
Houndmills, Basingstoke, Hampshire, England RG21 6XS.
Companies and representatives throughout the world.
PALGRAVE MACMILLAN is the global academic imprint of the Palgrave
Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd.
Macmillan® is a registered trademark in the United States, United Kingdom
and other countries. Palgrave is a registered trademark in the European Union
and other countries.
ISBN 0-312-29339-9 hardback
Library of Congress Cataloging-in-Publication Data
Salacuse, Jeswald W.
The global negotiator : making, managing and mending deals around the world
in the Twenty-first Century / by Jeswald W. Salacuse
p. cm.
Includes bibliographical references.
ISBN 0–312–29339–9
1. Negotiation in business—Handbooks, manuals, ets. I. Title.
HD58.6S246 2003
658.4’052—dc21
2002193099
A catalogue record for this book is available from the British Library.
Design by Letra Libre, Inc.
First edition: July 2003
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America
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In memory of Anne
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CONTENTS
Preface viii
1. The Global Negotiator 1
Part I
Global Deal Making
2. Negotiating Deals, Contracts, and Relationships 7
3. Seven Steps to Prepare for Global Deal Making 29
4. Seven Principles for Global Deal Making 43
5. Seven Special Barriers to Global Deal Making 73
6. Special Barrier No. 1: The Negotiating Environment 77
7. Special Barrier No. 2: Culture 89
8. Special Barrier No. 3: Ideology 117
9. Special Barrier No. 4: Foreign Organizations and
Bureaucracies 127
10. Special Barrier No. 5: Foreign Governments and Laws 145
11. Special Barrier No.6: Moving Money 165
12. Special Barrier No. 7: Instability and Sudden Change 179
Part II
Global Deal Managing
13. After the Contract, What? The Challenges of Deal
Management 193
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14. Power Tools for Global Deals 205
Part III
Global Deal Mending
15. Deal Stress 223
16. Renegotiating Existing Transactions 229
17. Deal-Mending Mediation 257
18. The Art of Deal Diplomacy 267
Appendix A: The Global Negotiator’s Checklist 273
Appendix B: A Primer on International Business Transactions 277
Appendix C: Suggestions for Further Reading 291
Notes 299
Index 307
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PREFACE
The globalization of economic and business activity now more than ever be-
fore requires executives, lawyers, entrepreneurs, and officials to make deals
with companies and organizations around the world, work productively with
foreign partners and associates, and effectively handle disputes that inevitably
arise with affiliates and governments in other countries. The basic tool for
accomplishing each of these tasks is negotiation. Negotiation is the means to
make deals, to manage them, and ultimately to mend them when conflicts
arise. From this perspective, economic life in the twenty-first century de-
mands that all of us become global negotiators.
The aim of this book is to provide guidance in the complex process of
making, managing, and mending international business transactions. It draws
on more than ten years of research conducted in a variety of settings in
North America, Europe, Latin America, the Middle East, North Africa, and
parts of Asia. The work was particularly informed by the twice-yearly, two-
day executive seminar that Antonia Chayes, the late Abram Chayes, and I led
under the auspices of the Program on Negotiation at Harvard Law School.
During the decade of that seminar’s existence, more than 1,200 senior inter-
national managers, lawyers, and officials shared their experiences and in-
sights into the challenges of creating and managing international business
relationships throughout the globe in many industries. It proved to be a rich
source of information and ideas, a source that has informed this book from
start to finish. In particular, many of the examples and anecdotes in the book
came from participants in the seminar.
I am also grateful to my colleagues at the Program on Negotiation and at
the Fletcher School of Law and Diplomacy for their thoughts on negotiation
and international relations generally. I especially want to thank Joel Tracht-
man and Brian Ganson of the Fletcher School of Law and Diplomacy for
reading and commenting on individual chapters, Lindsay Workman for help-
ing to develop the bibliography, Josh Robbins for tracking down documen-
tary sources, and my assistant, Lupita Ervin, for helping to prepare the index
and final manuscript.
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1
THE GLOBAL NEGOTIATOR
Why do all the tough problems seem to land on your desk?
Your company’s product development division in Houston, Texas, has lo-
cated a small manufacturer in Hungary that claims it can supply components
at 35 percent less than what you are now paying your Dallas supplier, with
whom you have had a relationship for over ten years. Your boss is pushing
you to fly to Budapest to negotiate a long-term supply contract with the
Hungarians. You don’t know anything about Hungary and are worried about
how to handle the Dallas supplier when you get back.
Or, your company and a Chinese enterprise have established a joint ven-
ture to manufacture and sell high-grade machine tools in China and South-
east Asia. The venture has clear mutual benefits, but you both have become
cautious about sharing information. Your Chinese partner is withholding in-
formation about customer problems with products and requests for new
product features. In response, your engineers have slowed the transfer of
technology badly needed by the enterprise. Both of you are also fighting
about advertising expenses. Your company wants to spend heavily on adver-
tising, but the Chinese oppose additional advertising as unnecessary. On top
of that, during your last visit to China, you met the new provincial governor,
who took you aside at a cocktail party and suggested that the joint venture
would have an easier time with provincial authorities if you sold a portion of
your interest to one of his cronies.
Or, your company has begun construction on a resort hotel in Egypt
near the pyramids after securing the necessary land from the government.
Your company is financing the deal with a combination of its own money and
loans from two London banks. So far the project has spent $15 million in