1 AIT Asian Institute of Technology

Assessing the success and failure of international business negotiations

AuthorHaruthai Numprasertchai
Call NumberAIT Diss. no.SM-06-02
Subject(s)Negotiation in business
NoteA dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy
PublisherAsian Institute of Technology
AbstractThis study analyzes negotiation outcomes and the key factors associated with success and failure of international business negotiations focusing on the negotiators' characteristics, the context, and the process. The survey approach was used with sample of 244 Thai and foreign business executives with experience in international business negotiations working in Thailandbased firms. 125 respondents were in the success-oriented group and 119 were in the failure-oriented group. Factor analysis, cluster analysis, discriminant analysis, analysis of variance, and regression analysis were the analytical techniques used. The executives in the success-oriented group emphasized the four aspects of outcomes: future-oriented prospects, balanced results, performance, and self gain. From the regression analysis, the significant factors determining each dimension of successful outcome were identified. First, the future-oriented prospects were influenced by patience, tactics, information focus, and the relationship orientation. Secondly, the balanced results were influenced by local orientation, logical coherence, and protocol. Third, performance was affected by persistency, personal status, and an information focus. Finally, self gain was influenced by the continuity of ne(yotiation, tactics, time orientation, communication skill, and visibility. Comparing perceptions of the Thai and the International executives, the Thai executives significantly emphasized self gain, experience, personal status, persistency, local orientation, way of thinking, level of conflict, logical coherence, consensus, information focus, and limits more than the International executives who considered time orientation the only factor significantly more important. The executives in the failure-oriented group emphasized two aspects of outcomes, namely 1) future-oriented performance and 2) a balanced approach. Based on a regression analysis, the key factors determining the failure of future-oriented performance were the result orientation and the way of thinking. The balanced approach significantly depended only on the short-term orientation. Comparing the perceptions of Thai and International executives in terms of failure, the Thai executives significantly emphasized future-oriented performance, experience, adaptability, initiation, way of thinking, result orientation, and specific focus more than the International executives. Considering the negotiation factors in successful and failed negotiations, there were factors commonly identified in both negotiations. First, related to the negotiator characteristics negotiator's experience, communication skill, personal status, and local orientation prevailed in both successful and failed negotiations. Secondly, it was the negotiation context factors which included the way of thinking, transparency, and level of conflict. Lastly, the process factors dominant in both orientations were logical coherence, protocol, and focus on differences. This implies that these factors make neither successful nor failed negotiations by themselves but it is how negotiators treat them in the negotiations that influence success or failure of negotiations. The results of this research should help negotiators better prepare for and be more successful in international business negotiations. Particularly, in order to be successful ill negotiations within the Thai context as well as Asian situations, negotiators should realize what feature of negotiation outcomes are expected from the negotiation. The prime competencies of a negotiator include patience, communication skill, persistency, local orientation, experience, and personal status. A negotiation process should have information focus and use friendly approach with clear objectives and an emphasis on consensus. To avoid failure, first, negotiators should improve their communication skill and emphasize learning. This is because the core function of negotiations involves communication which makes all parties understand each other more clearly. Second, because each negotiating situation is unique, they should not use their past negotiations as a standard to pursue. Third, negotiators should perceive conflicts positively in order to gain an insight of problems or issues and search for the best solution for all parties. Forth, negotiators should be careful when employing power and tactics such as delaying, confrontation, silence. These tactics may cause negative reaction from the partners. Fifth, they should also concentrate on the long-term oriented process and the result. A longterm orientation helps sustain and strengthen business relationship. Lastly, because there is a divergence in value, thought process, and behavior of negotiators in international business negotiations, negotiators should be open to different logics and be flexible or they end up with failure
Year2006
TypeDissertation
SchoolSchool of Management (SOM)
DepartmentOther Field of Studies (No Department)
Academic Program/FoSMaster of Business Administration (MBA) (Publication code=SM)
Chairperson(s)Swierczek, Fredric William
Examination Committee(s)Johri, Lalit M.;Zimmermann, Willi;Pannapa Herabat
Scholarship Donor(s)Kasetsart University
DegreeThesis (Ph.D.) - Asian Institute of Technology, 2006


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