Page 298 - DMGT519_Conflict Management and Negotiation Skills

Conflict Management and Negotiation Skills

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Case Study Political Impact on Global Negotiations

egotiators have a general understanding of their own local political environment.
They are raised in a business milieu that clearly distinguishes who the key
Nplayers are, and who has to be pitched about a proposal. They learn the roles that
each level of government may bring to the table, and its impact on the negotiations.
When negotiators take their proposals abroad and negotiate with a foreign power, they
may not fully realize the impact that different political systems will affect the manner in
how the negotiation should be conducted. The scope of the impact by the governments of
individual nations will vary in the degree in the amount of influence they may have on
international negotiations.
A major US defence contractor, Raytheon found out for themselves several years ago just
how differently this impact can have on their negotiations. Their first initial foray into
international negotiations occurred in Europe. Raytheon was attempting to put together
a consortium of European companies to produce a NATO weapons system. They had
thoroughly researched all the possible contenders and compiled a list of those companies
that they believed were best able to handle the contract they were trying to put together.
Raytheon then contacted those companies and started negotiations. Talks became suddenly
stalled in their tracks when, much to Raytheon’s dismay, the governments of several
European nations abruptly advised Raytheon to cease negotiations with the firms within
their respective countries. These European governments said it was not up to Raytheon to
decide who they would conduct business with in their respective countries. They would
decide which companies could be contacted, and that Raytheon had no choice in the matter
if they expected to fulfill the contract.
Raytheon realized that it had no choice in the matter. Accepting the political reality of the
situation, they terminated talks with the companies that they had initially chosen. They
then entered into talks with the consortium of companies chosen by the respective NATO
members instead, and successfully completed the weapons system contract.
Several years later, the US Government convinced Raytheon to develop a similar weapons
system for Japan. Having learned their lesson with the European consortium, they
immediately initiated their talks with the Japanese government instead of going to
individual companies like they did in the NATO situation. They sat back and waited for
the Japanese government to tell them which companies to use in their weapons system
project.

Nothing happened. The Japanese government remained curiously quiet. Some time elapsed
before a senior executive from Raytheon had a conversation in private with the Japanese
deputy minister of defence. The deputy minister advised the Raytheon executive that it
was up to the US company to make the decision about which companies to use, and not the
Japanese government. It turned out that since two of Japan’s main electronics firms were
considered as possible contenders; the Japanese government did want to anger either of
these companies by choosing one over the other on behalf the American firm. The reason
was because both of these companies wielded some considerable political clout with the
Japanese government.

Contd....

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