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INTERNATIONAL BUSINESS NEGOTIATIONS (2Nd Edition) INTERNATIONAL BUSINESS NEGOTIATIONS (2nd Edition) INTERNATIONAL BUSINESS AND MANAGEMENT SERIES Series Editor: Pervez N. Ghauri Published CONTRACTOR & LORANGE Alliances and Co-operative Strategies GEMÜNDEN, RITTER & WALTER Relationships and Networks in International Markets HAVILA, FORSGREN & HÅKANSSON Critical Perspectives on Internationalisation MOROSINI Managing Cultural Differences NAUDE & TURNBULL Network Dynamics in International Marketing BUCKLEY & GHAURI The Global Challenge for Multinational Enterprises HÅKANSSON & JOHANSON Business Network Learning LI Managing International Business Ventures in China HYDER & ABRAHA Strategic Alliances in Eastern and Central Europe YANG Intellectual Property and Doing Business in China Forthcoming titles OXELHEIM & GHAURI European Union and the Race for Foreign Direct Investment in Europe Other titles of interest FATEMI International Trade in the 21st Century DUNNING Globalization, Trade and Foreign Direct Investment MONCARZ International Trade and the New Economic Order KREININ Contemporary Issues in Commercial Policy Related journals sample copies available on request European Management Journal International Business Review International Journal of Research in Marketing Long Range Planning Scandinavian Journal of Management INTERNATIONAL BUSINESS NEGOTIATIONS (2nd Edition) EDITED BY PERVEZ N. GHAURI UMIST, Manchester, UK JEAN-CLAUDE USUNIER University of Lausanne, Lausanne, Switzerland SERIES EDITOR PERVEZ N. GHAURI 2003 Pergamon An Imprint of Elsevier Amsterdam – Boston – Heidelberg – London – New York – Oxford Paris – San Diego – San Francisco – Singapore – Sydney – Tokyo ELSEVIER Ltd The Boulevard, Langford Lane Kidlington, Oxford OX5 1GB, UK © 2003 Elsevier Ltd. All rights reserved. This work is protected under copyright by Elsevier, and the following terms and conditions apply to its use: Photocopying Single photocopies of single chapters may be made for personal use as allowed by national copyright laws. Permission of the Publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use. Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone: ( + 44) 1865 843830, fax: ( + 44) 1865 853333, e-mail: [email protected]. You may also complete your request on-line via the Elsevier homepage (http://www.elsevier.com), by selecting ‘Customer Support’ and then ‘Obtaining Permissions’. In the USA, users may clear permissions and make payments through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; phone: ( + 1) (978) 7508400, fax: ( + 1) (978) 7504744, and in the UK through the Copyright Licensing Agency Rapid Clearance Service (CLARCS), 90 Tottenham Court Road, London W1P 0LP, UK; phone: (+ 44) 207 631 5555; fax: ( + 44) 207 631 5500. Other countries may have a local reprographic rights agency for payments. Derivative Works Tables of contents may be reproduced for internal circulation, but permission of Elsevier is required for external resale or distribution of such material. Permission of the Publisher is required for all other derivative works, including compilations and translations. Electronic Storage or Usage Permission of the Publisher is required to store or use electronically any material contained in this work, including any chapter or part of a chapter. Except as outlined above, no part of this work may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the Publisher. Address permissions requests to: Elsevier’s Science & Technology Rights Department, at the phone, fax and e- mail addresses noted above. Notice No responsibility is assumed by the Publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. Because of rapid advances in the medical sciences, in particular, independent verification of diagnoses and drug dosages should be made. First edition 1996 Second impression 1999 Third impression 2002 Second edition 2003 Library of Congress Cataloging in Publication Data A catalog record from the Library of Congress has been applied for. British Library Cataloguing in Publication Data A catalogue record from the British Library has been applied for. ISBN: 0-08-044292-7 (Hardbound) ISBN: 0-08-044293-5 (Paperback) ᭺∞ The paper used in this publication meets the requirements of ANSI/NISO Z39.48-1992 (Permanence of Paper). Printed in The Netherlands. Contents Series Editor’s Preface ix Editor’s Preface xi List of Tables and Figures xvii The Contributors xix Part I: Introduction 1. A Framework for International Business Negotiations 3 Pervez N. Ghauri 2. Vis-à-vis: International Business Negotiations 23 John L. Graham 3. Strategies and Tactics in International Business Negotiations 51 Ramond Saner 4. How National Culture, Organizational Culture and Personality Impact Buyer-Seller Interactions 75 Sudhir H. Kalé Part II: The Impact of Culture on International Business Negotiations 5. Cultural Aspects of International Business Negotiations 97 Jean-Claude Usunier 6. Hofstede’s Dimensions of Culture and their Influence on International Business Negotiations 137 Geert Hofstede and Jean-Claude Usunier 7. International Multilateral Negotiations and Social Networks 155 R. Bruce Money vi Contents 8. The Role of Time in International Business Negotiations 171 Jean-Claude Usunier 9. The Role of Atmosphere in Negotiations 205 Pervez N. Ghauri Part III: Negotiating Different Type of Projects 10. Negotiating Sales, Export Transactions and Agency Agreements 223 J. B. McCall 11. Negotiating Licensing Agreements 243 Vernon Parker 12. Bolter Turbines, Inc. Negotiation Simulation 275 John L. Graham 13. Negotiating Mergers and Acquisitions in the European Union 291 Viviane de Beaufort and Alain P. Lempereur Part IV: Negotiating in Different Parts of the World 14. The IBM-Mexico Microcomputer Investment Negotiations 327 Stephen E. Weiss 15. Negotiating with Eastern and Central Europe 363 Pervez N. Ghauri 16. Business Negotiations between Japanese and Americans 393 John L. Graham and Yoshihiro Sano 17. Negotiating with the Chinese: A Process View 411 Pervez N. Ghauri and Tony Fang Part V: General Guidelines 18. Ethical Aspects of International Business Negotiations 437 Jean-Claude Usunier 19. Some General Guidelines for Negotiating International Business 461 Pervez N. Ghauri and Jean-Claude Usunier Contents vii References 481 Author Index 509 Subject Index 515 Series Editor’s Preface The first edition of this book, published in 1996, was one of the most successful books in this series. It was printed twice and was sold out very quickly. For a couple of years we have been receiving messages from colleagues to publish a second edition of the book. A decision was made an year ago and we asked for some reviews from some colleagues in the field. They were all very enthusiastic and recommended a second edition. These comments were forwarded to the editors. We also received suggestions that the second edition should be published as a paperback to make it more accessible for students. Through these reviews we also realized that the book has been used in a number of MBA and Master Courses and Modules in Europe, United States and Canada. The editors have also received direct comments from colleagues as how to improve the second edition. We thus believe that the second edition has been compiled with these comments in mind. A number of new chapters have been added while some dated chapters have been taken away. The sequence of chapters is now more logical and deals with the topics more thoroughly. We understand that there are very few books dealing with this important topic, while it is considered a most important field in international business research and practice. We trust that this second volume will be at least equally successful and will fill the gap in the market. Pervez N. Ghauri Series Editor Editor’s Preface Business negotiations are increasingly recognised as a full part of the managerial process, highly relevant to the implementation of business strategies. Traditionally, most of the business literature has focused on strategy formulation on the one hand, and management systems and procedures on the other. There is now more emphasis on “how to do” rather than simply “what to do”, implying an increased emphasis on relationships with clients, agents and partners as a key success factor in the implementation process. International marketers are now more and more business negotiators, who constantly discuss deals across borders with a variety of people, ranging from consumers to intermediaries and even competitors. The dramatic growth of international trade over the last five decades has been not only in terms of volume but in complexity as well: service offerings are now mixed with products, and technology often plays a central role as an object of the exchange. Deals are not only made through discussions of a bundle of physical attributes and a price; they are also drafted between merchants and business people from different countries having different
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