Page 253 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes building a relationship is more important than adhering to a schedule. The actual clock time
spent discussing and resolving issues is of minor importance.

14.4.6 Risk-Taking Propensity: Risk Averse versus Risk Tolerant

This dimension refers to negotiators’ willingness to take risks.

Risk Averse: Risk-averse negotiators are hesitant to proceed with proposals that may have
unknowns and/or contingencies associated with them. Risk-averse negotiators will take steps
to avoid the risk of failing to come to an agreement. Consequently, they may be more likely to
make concessions in order to avoid the risk of failing to come to an agreement.
Risk Tolerant: Risk-tolerant negotiators adopt a perspective that there is a level of acceptable
risk that should be taken in a negotiation. They are interested in reducing risk, rather than
avoiding it altogether. Risk-tolerant negotiators are willing to proceed with proposals that may
have unknowns and/or contingencies associated with them. Risk-tolerant negotiators show
greater willingness to run the risk of failing to come to an agreement. They accept the possibility
that they may need to walk away from the table without a deal; hence, they are less likely to
make, concessions.

14.4.7 Basis of Trust: External to the Parties versus Internal to the
Relationship

Trust is one party’s belief that the other party will take action to honour agreements that have
been reached. In all countries, trust provides the foundation upon which both parties to a
negotiation can work together; however, negotiators from some countries trust that the other
party will fulfill its obligations because there is a signed contract and the sanction of law to back
it up, while negotiators from other countries trust that the other party will fulfill its obligations
because of the relationship that exists between them.
External to the Parties: Negotiators with this viewpoint trust the other party because a contract
has been negotiated and agreed to, which can be litigated and enforced. The legal system and
governmental agencies are viewed as providing an adequate, reliable, and effective underpinning
for commercial transactions. A partner will honour the terms of the contract because the legal
system will impose sanctions otherwise. The written word is binding; a deal is a deal. In this
context, a trustworthy partner is one who complies with the law.
Internal to the Relationship: Negotiators with this frame trust the other party because they
have invested in a relationship that has been built up over time, and they believe that the other
party is committed to it. The relationship between the parties is what matters; the contract is
simply a symbol of the bond between the parties who drafted it. A trustworthy partner is one
who strives to maintain the relationship, possibly by modifying an existing contract to reflect
new developments.

14.4.8 Concern with Protocol: Formal versus Informal

Concern with Protocol has to do with the importance placed on rules for acceptable self-
presentation and social behaviour.
Formal: Negotiators with a high concern for protocol will adhere to strict and detailed rules that
govern personal and professional conduct, negotiating procedures, as well as the hospitality
extended to negotiators from the other side. Rules governing acceptable behaviour might include
dress codes, use of titles, and seating arrangements. Negotiators believe that there is a limited
range of appropriate behaviours, and there is strong agreement on the team about what
constitutes correct action.

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