Negotiation Management. A Case Study on Strategy Selection

Essay, 2014

55 Pages, Grade: 1,0


Table of Contents

1 Introduction
1.1 Type of Settlement

2 Vision
2.1 Negotiation Interests
2.2 Negotiation Strategy
2.3 Negotiation Preparation
2.4 Negotiation Tactics

3 Value
3.1 Deal Objectives
3.1.1 Aspiration Base (AB)
3.1.2 Real Base (RB)
3.1.3 Zone of Possible Agreement (ZOPA)
3.1.4 Best Alternative To Negotiated Agreement (BATNA)

4 Negotiation Process
4.1 Framing
4.2 Questioning
4.3 Team Negotiation
4.4 Seating Arrangement
4.5 Value Creation (win more / win more)
4.5.1 The Disney Method / Creativity Model

5 Relationship
5.1 Trust
5.2 Communication
5.3 Cultural differences
5.3.1 Negotiation in China
5.3.2 Corporate Culture
5.4 Persuasion
5.5 Negotiation Strategy
5.6 Negotiation Tactics
5.7 Appraisal of Potential Risks
5.7.1 Dealing with Oligopolies
5.7.2 Complex and Multi-stage Projects
5.7.3 Failed Deal
5.8 Negotiation Preparation Checklist
5.8.1 Pillar 1: Vision
5.8.2 Pillar 2: Value
5.8.3 Pillar 3: Process
5.8.4 Pillar 4: Relationship
5.9 Negotiation Strategy
5.10 Negotiation Tactics
5.11 Appraisal of Potential Risks
5.11.1Capture Problem
5.11.2Conflicts of Interest
5.11.3Failed Deal
5.12 Negotiation Preparation Checklist
5.12.1Pillar 1: Vision
5.12.2Pillar 2: Value
5.12.3Pillar 3: Process
5.12.4Pillar 4: Relationship

6 Conclusion

7 Literature
7.1 Books and Papers

8 Appendices
8.1 Chemical Company International (confidential)
8.1.1 Three Questions Test - (Appendix Part 1)
8.1.2 Negotiation Strategy Selector Test - (Appendix Part 2) Selection of the Strategy from CII`s Perspective (Potgieter, 2014) Importance of Time The Number of Alternatives The Importance of the Relationship The Negotiation Strategy Outcome from DM`s Perspective Importance of Time The Number of Alternatives The Importance of the Relationship Confidential Section for Dragon Manufacturing
8.2 Dragon Manufacturing (confidential)
8.2.1 Three Questions Test - (Appendix Part 3)
8.2.2 Negotiation Strategy Selector Test - (Appendix Part 4) Selection of the Strategy from DM`s Perspective Importance of Time The Number of Alternatives The Importance of the Relationship The Negotiation Strategy Outcome from CII`s Perspective Importance of Time The Number of Alternatives The Importance of the Relationship


You will be supplied with an information brief describing the confidential negotiation positions and interests of two international organisations about to engage in negotiations.

You have been engaged by both parties to the negotiation to prepare an inde- pendent detailed report advising them on a recommended approach to the nego- tiation. This should include a recommended negotiation strategy, negotiation best practices and an appraisal of the potential risks that may contribute to the con- clusion of a suboptimal agreement or no agreement being reached. In preparing your report, you should consider all the relevant factors that may have a bearing on the negotiations. Whilst most of the report would apply to both organisations, you may wish to include separate confidential briefings for both parties on issues which are specific to them. In particular, you should make ref- erence to relevant literature and concepts studied within the module.


CCI is a UK-based pharmaceutical company that manufactures many different kinds of drugs and lenses for the ophthalmological market. The company has a proud culture of innovative and engineering-driven production. Traditionally the key strengths of CCI centred on a solid understanding of the strategic aspects of the industry, backed by solid engineering and research disciplines that constitute the very fabric of the company. Last year CCI had global revenues in excess of $ 8 billion.

Dealing with CCI as a supplier can be difficult as CCI is a big player in the market and is not afraid to use this to its advantage during negotiations. The strong engineering discipline within the company has also ensured that supply chain management has become a key competitive advantage to CCI.

CCI has recently developed a new product line, the TGB range of lenses. CCI’s experience indicates that the TGB range of lenses has the potential to be a block- buster for the company. These lenses could potentially increase the revenues of the company by as much as 5% should they capture market share as intended.

As with all pharmaceutical products, managing the competition is a key element of success. It is critical to protect the investment costs incurred in designing the TGB range of lenses, and exclusive supplier agreements are one of the most effective tools to raise the barriers to entry into the marketplace for competitors.


Just when you thought your work load was easing off and you were in the final straight heading towards your annual holiday, the CEO of CHEMICAL COMPANY INTERNATIONAL (hereinafter CCI), your employer, has asked you to lead the negotiations with one of your most critical suppliers. The price of success can sometimes be high! You have worked with CCI for over 10 years and you are well respected in the organisation for the quality of the purchasing agreements that you have concluded with suppliers.

After eight years of research costing over $ 500 million, the company is due to launch a new range of lenses that will cost 20% less than traditional lenses, yet will still offer an improvement of up to 50% in quality and durability. The manu- facturing process for this type of lens, the TGB range of lenses, is highly special- ised and dependent upon the supply of the VBY compound manufactured in China by DRAGON MANUFACTURING (hereinafter DM). The manufacturing process for the VBY compound is highly specialised and there are only three suppliers of VBY compound worldwide. Out of the three available suppliers, only DM were prepared to consider an exclusive supply arrangement whereby they will supply the VBY compound to CCI exclusively, thereby denying potential com- petitors access to this product.

DM indicated that it was prepared to consider an exclusive supply arrangement based on certain criteria:

- A maximum exclusive period of three years coupled with a supply agree- ment of 7 years.
- A minimum supply level of $ 50 million of the VBY compound per year, escalating at 10% per year.
- Payment terms of 30 days.

You have a mandate to be able to conclude an agreement based on the following terms:

- A supply contract for 10 years of which you would like to have at least 3-5 years on an exclusive basis.
- You would like a guaranteed level of $ 30 million of the VBY compound per year - you could increase this if you can get favourable terms.
- Payment terms of 30 to 60 days.

Whilst DM is an attractive potential supplier due to the fact that it is prepared to consider an exclusive supply arrangement, CCI has some concerns:

- There is concern within CCI engineering circles about the quality guaran- tees that will need to be in place with regard to the VBY compound, as the quality of the TGB lenses are highly dependent on consistent quality in the base materials.
- DM has very little experience dealing in the international market, as they have mostly only traded in the Chinese domestic market.
- CCI has some concern about managing the cultural dimensions of an on- going relationship.


Dragon Manufacturing (hereinafter DM) is a specialist chemical compound man- ufacturer based in Shanghai in the People’s Republic of China. The main market for DM’s products has been small to mid-size Chinese pharmaceutical, engineer- ing and chemical companies. DM’s turnover for the past year was $ 300 million. DM has been in exploratory talks with Chemical Company International (CCI) re- garding a possible supply agreement for one of the products that DM produces - the VBY compound. The potential contract with CCI will have a significant impact on DM’s revenues and margins, as well as enabling DM to appoint more staff in its Shanghai plant if an agreement could be reached with CCI. This is sure to win the company favour with local authorities as it is important these days to be po- litically well positioned in an emerging capitalist environment.

In some ways, the Executive of DM couldn’t believe their luck when this oppor- tunity was brought to them by Chris Waters. Chris Waters is an expatriate Englishman who has spent the past 20 years living and working in China, specifically focusing on creating opportunities for Western and Chinese companies to trade products and services.

As CCI is a UK-based company and Chris Waters is English, it has made a lot of sense to the DM Executive to appoint Chris as the lead negotiator on behalf of DM with a full mandate to strike a deal on favourable terms. The Executive of DM has deemed the following terms as the basis of a favourable deal.

- An overall supply contract of at least 8 to 10 years if CCI were to expect DM to be an exclusive supplier for a period of between 3 to 5 years.
- A minimum contract value of $ 200 million measured over the first 5 years.
- Payment terms of 60 days

The DM Executive is well aware of the strategic nature of this deal, as this would provide the working capital and a key reference to fund further growth in the ex- port market. As a matter of fact, should this deal be closed, DM will probably want to establish a permanent presence in London to drive further development of ex- ports to Europe and the USA. Culturally, DM knows that they will have to over- come their lack of international exposure and experience if they wish to take ad- vantage of the export market.


Finally you have the opportunity to convert a substantial opportunity! You have been living and working in China for the past 20 years and have been involved in more deals than you can remember, but never have you had the opportunity to facilitate something of this size! What’s even better is that you see a natural syn- ergy between the companies participating in this opportunity, CCI and DM. DM has appointed you to lead their negotiation team. Your mandate is to close a deal on favourable terms with CCI. It is your responsibility to ensure a cultural fit with CCI, translate some of the vagaries of the western culture and apply your significant negotiation experience to structure a sustainable deal. Being a con- servative Chinese organisation, DM views the business relationship as the most important component of a profitable agreement. You know this from your own experience as you have had a long and personal association with the Chairman of DM, Mr Won. This is why you have been requested to lead the negotiation.

However, you suspect that the negotiation may be challenging, as CCI has a strong engineering and research-based culture, and building relationships is not necessarily what they are best at doing. CCI has a proud track record of success and is a huge potential customer which will provide significant credibility to DM’s export efforts. From a strategic perspective, this deal holds immense value to DM. DM in turn could provide CCI with a potential strategic advantage, as you are aware that there are only three companies in the world that are able to man- ufacture the VBY compound in the quantity and to the quality standards required by CCI. Of these three companies, you are convinced that only DM is prepared to consider an exclusive supply agreement with CCI as the other two already trade with CCI competitors.

In your previous correspondence with CCI, you indicated to them that the criteria you would like to attach to an exclusive supply arrangement would include:

- A maximum exclusive period of 3 years coupled with a supply agreement for 7 years.
- A minimum supply level of $ 50 million of VBY compound per year, esca- lating at 10% per year.

Payment terms of 30 days.

Note: The two confidential sections have been highlighted with different colours:

Chemical Company International Dragon Manufacturing

The general section is without any highlighting

1 Introduction

Chemical Industry International (CII) and Dragon Manufacturing (DM) have agreed to negotiate about the delivery of the VBY compound. This paper aims to give both parties recommendations about best practices in negotiation. A negotiation is the process by which two or more parties seek to satisfy their respective interests by attempting to come to some mutual agreement (Hughes, Weiss, Kliman & Chapnick, 2010; Rubin & Brown, 2008). Negotiation is critical, as it is necessary whenever you are dependent on one another for accomplishing objectives (Lewicki, Litterer, Minton & Saunders, 1994).

Common Section for both parties

1.1 Type of Settlement

During a business negotiation like yours, a buyer and a seller try to establish the terms of a purchase agreement (Dobler, Lee, and Burt 1984). This is a funda- mental phenomenon in inter-firm exchange behaviour in industrial markets (Bar- bara, Perdue, Summers, 1991; Alderson, 1957, Bonoma and Johnston 1978; Kutschker, 1985).

The following practise-based negotiation is based on The Negotiation Toolkit by Potgieter (2014) and is divided in the categories: Vision, Value, Process and Re- lationship.

2 Vision

2.1 Negotiation Interests

Your interests are your goals, needs and motivation. These interests are funda- mental drivers during a negotiation (Dobler, Lee and Burt, 1984). A lot of negoti- ators assume that their goals are adversarial with the main focus on conflicting interests, but the potential value of shared interests may be larger than the value in dispute (Malhotra & Bazerman, 2008). Especially in your case the potential value is huge.

Interest-based negotiating is called integrative negotiations (Fisher, Ury & Patton, 1987). It is a set of techniques that attempts to improve the quality and likelihood of negotiated agreements by providing an alternative to traditional distributive ne- gotiation techniques. While distributive negotiation assumes there is a fixed amount of value (a "fixed pie") to be di- vided between the parties, Integrative negotiation often attempts to create value in the course of the negotiation ("expand the pie") (Brazeal, 2009).

illustration not visible in this excerpt

But remember that Integrative negotiating often involves a higher degree of trust and the forming of a relationship (Barry & Friedman, 1998). It can also involve creative problem-solving that aims to achieve mutual gains for both parties.

In the case of your negotiation I can ensure both parties that they have a common ground that makes an integrative negotiation possible. It is critical that both par- ties structure their own interests and know the interests of the other party. This is especially very useful if you want to work with the hierarchy of needs during your negotiation. The hierarchy of needs is a pyramid that de- scribes different layers of fundamental needs from a physiological per- spective. The basic idea is that needs of a higher level do not appear until the needs of a lower level are fulfilled (Maslow, 1943). If you are willing to fulfil some of your counterpart`s needs you can ask for something in return and your counterpart will be more willing to do so.

2.2 Negotiation Strategy

The choice of the right negotiation strategy is the most critical part of a negotiation. Along with the negotiator`s own goals and the goals of the negotiators’ counterpart, the right level of assertiveness and cooperativeness defines the strategy in the end. Keep in mind that there are only four possible outcomes of a negotiation: win / win; lose / lose, win / lose and lose / win.

According to Potgieter (2014), the negotiation strategies can be derived into 5 fundamental strategies:

- Competing
- Collaborating
- Compromising
- Avoiding
- Accommodating

When selecting a strategy, remember that a ruthless, aggressive and cold blooded negotiation style is the framework approach most people have in mind when it comes to negotiation, (Nolan-Haley, 2001). But in reality, as mentioned by experts and researchers such as Fisher, Ury and Patton (Fisher, Ury & Patton, 1987), it doesn’t have to be that way. And it is not the right way if you intend to create a win / win situation.

However, there are authors who doubt it is possible to create a “win / win situation”, because some negotiators would use this information to reach their own goals and maximize their profit. (Lobel, 2000). Nevertheless, this is not the theoretical approach behind an integrative negotiation, which needs a certain amount of trust and reliability (Barry & Friedman, 1998).

To determine the right negotiation strategy, each party should ask themselves the following set of questions (Potgieter, 2014):

But do not forget to think about what strategy your counterpart might choose, as this could influence your own choice as well. The negotiation strategy selection will be dealt with for both companies separately in the confidential section.

2.3 Negotiation Preparation

Please keep both in mind that there is no right or wrong way of negotiating, but good and bad preparation for a negotiation. Negotiations are a very complex ac- tivity and a good preparation is not an easy thing to do. Useful insights may be drawn from game theory, psychol- ogy, economics, theories of organiza- tional behaviour, and the law (Hughes, Weiss, Kliman & Chapnick, 2010; Rubin & Brown, 2008).

However, to help you both with the preparation you can use the Seven Element Model which was developed by Hughes, Weiss, Kliman & Chap- nick, 2010; Rubin & Brown (1975) as a part of the Harvard Negotiation Pro- gramme and answer all the questions in it before starting your negotiation. Alter- natively you can use the Negotiation Preparation Checklist by Potgieter (2014), 4 which is more up-to-date and better structured. Both parties will receive their Negotiation Preparation Checklist (Potgierter, 2014) in the confidential section.

illustration not visible in this excerpt

(Hughes, Weiss, Kliman & Chapnick,

2010; Rubin & Brown, 2008)

2.4 Negotiation Tactics

Potgieter (2014) provides a huge list of negotiation tactics in “The Negotiation Toolkit Handout”. Those tactics try to help you achieve your goals and must be fully in line with your overall strategy. Nevertheless, you should be aware that the other party has this set of tactics as well and might use them.

3 Value

3.1 Deal Objectives

The focus of a lot of negotiators lies on the price during a negotiation, but this is only one of many components of the value portion (Potgieter, 2014). Price and value are two distinctly different issues and it is critical that negotiators under- stand this difference (Potgieter, 2014). The deal objectives of a negotiation are the Aspiration Base (AB), Real Base (RB), Zone of Potential Agreement (ZOPA) and the Best Alternative To Negotiated Agreement (BATNA).

3.1.1 Aspiration Base (AB)

The Aspiration Base is where you ideally and realistically could settle (Van Poucke & Buelens, 2002). Setting a realistic but optimistic Aspiration Base helps you to work harder, to think more creatively and to find value in order to achieve your goals (Thompson, 1995; Brown, 1991; Korobkin, 2002). Researchers have shown that those negotiators entering a negotiation with an optimistic AB tent to achieve better results in the end (Shell, 2006; Galinsky & Mussweiler, 2001). However, you should not set the Aspiration Base unrealistically high (Gaerling & Kristensen, 1997; Bazerman & Neale, 1992). Those with unrealistically high as- pirations will tend to use an opening offer that is too extreme, which may lead to distributive behaviours from the other side.

3.1.2 Real Base (RB)

As problematic as it is to establish a high Aspiration Base, you must know when it is best to walk away from the negotiation. If the Real Base is not clearly defined, it is likely that you will stay in the negotiation beyond the point where it is reason- able (Jennings et al., 2001). Trying to determine this point not before but during the negotiation progresses is very dangerous because it is then psychologically very difficult to act against the flow. Potgieter (2014) describes this with going to the casino without having a limit beyond which you want to stop gambling.

3.1.3 Zone of Possible Agreement (ZOPA)

The Zone of Potential Agreement describes the area in a negotiation in which you could come to a potential agreement (contracting zone). This is between the Real Base of the two counterparties. Out- side of the ZOPA there is no possibility of coming to an agreement. (Spoelstra & Pienaar, 1999)

illustration not visible in this excerpt

3.1.4 Best Alternative To Negotiated Agreement (BATNA)

The BATNA was established by the researches Fisher and Ury of the Harvard Negotiation Program in their book “Principled negotiation” starting with the book “Getting to YES” (Fisher, Ury & Patton, 1987; Myerson, 2012), unwittingly dupli- cating the game theory concept of a disagreement point from bargaining prob- lems pioneered by Nash (1950; 1951) decades earlier (Myerson, 2012).1

The word BATNA stands for Best Alternative To Negotiated Agreement (Fisher, Ury & Patton, 1987). It is the course of action that you might take, if the negotiation fails and an agreement cannot be reached (White & Neale, 1991). The BATNA is the key and driving power behind your negotiation.

Nevertheless you should not accept an offer that is worse than your BATNA (Kim & Fragale, 2005). But it is difficult to take all the factors of the deal into account. For example: What is the exact value of a good relationship with a supplier? The problem is that those factors are based on uncertain or qualitative considerations, rather than easily measurable and quantifiable factors.

Do not forget that an option must be real and actionable; if this is not the case, you cannot think of it as a BATNA. You should always know your bottom line, but never reveal it during the negotiation.

4 Negotiation Process

4.1 Framing

Framing is a form of cognitive bias (Kahneman & Tversky, 1979, 1984, 1986), which was developed by Bateson (1972) in his book “Steps to an Ecology of Mind”. He defines framing as "a spatial and temporal bonding of a set of interac- tive messages." Framing is related to the anchoring techniques. Anchoring de- scribes the common human tendency to rely too heavily on the first offer (the "anchor") when making decisions (Vass, 2013; Wilson, Houston, Etling, Brekke, 1996).

The way a negotiation is framed can make you more or less risk averse or risk seeking (Lewicki, Saunders & Berry, 1985; Dwyer & Schurr, 1987, Bazerman, Magliozzi & Neale, 1985; de Dreu, Carnevale, Emans & van de Vliert; 1994; Neale, Huber, and Northcraft, 1987). A basic finding from research that led to the development of what is known as “prospect theory” is that people are more risk- averse when a decision problem is framed as a possible gain, and risk-seeking when it is framed as a loss (Kahneman & Tversky, 1979). In other words, during your negotiation, your counterpart is likely to overreact to a perceived loss when he might react more positively to the same situation if it is framed as a perceived gain (Lewicki, Saunders & Berry, 1985). Both of you must “avoid the pitfalls of being framed while, simultaneously, understanding positively and negatively framing your opponent” (Neale and Bazerman, 1992). Prepare a set of frames you may want to use during the negotiation and be aware that your counterpart sometimes reframes your own statement.

4.2 Questioning

You should always ask questions during a negotiation for the purpose of:

- Gaining information
- Checking understanding and interest level - Gaining participation
- Giving information
- Getting an opinion
- Bringing attention back to the subject - Reaching agreement
- Reducing tension
- Giving positive feedback

However there are two types of questions you can ask:

- Closed-ended and restrictive. Closed-ended, restrictive questions are those that can be answered very briefly, often with a simple yes or no.
- Open-ended and expansive. Open-ended, expansive questions do not lead your counterpart in any specific direction. They reveal much more about your counterpart’s objectives, needs, current situation and behav- ioural style than restrictive questions do. Those are the time of questions you should ask during a negotiation.

4.3 Team Negotiation

When negotiating in a team environment, a lack of preparation regarding unan- ticipated situations and a lack of proper management can put your team in a dire position. A team typically consists of a maximum of six members with separate roles (Min, LaTour & Jones, 1995). Proper negotiation managing occurs when the lead negotiator sets the stage for his team members when he needs them to perform their roles.

4.4 Seating Arrangement

If your negotiation is between two people both negotiators should sit on the same side of the table.This seating arrangement creates the op- portunity to create the impression of a joint working environ- ment on a future business relationship.2 If it is a discussion between more than two people a round table should be cho- sen. This arrangement is the best way to ensure that nobody feels he might have a disadvantage through his seating.3 As you both try to establish a profitable relationship, this will help you make a deal that is valuable for both sides.

illustration not visible in this excerpt

4.5 Value Creation (win more / win more)

Value creation is key for both parties in this negotiation. Every participant should be aware of his own interest during the negotiation, but always keep in mind the interest of his counterpart.

4.5.1 The Disney Method / Creativity Model

You should use a creative approach to generate true synergy and brainstorm all possible options for collaboration (Hansen, Nohria & Tierney, 1999). An appro- priate model for that is the creativity model (Potgieter, 2014). The creativity model, which is based on the Disney Method, was developed by Dilts in 1994 and is a model that is especially useful for situations in which both parties tend to choose an interrogative negotiation strategy (Brown, 1991; Nonaka, 1991). Both parties can unlock potential value for their negotiation if they share information. The model involves parallel thinking to analyse a problem, generate ideas, eval- uate ideas, construct and critique a plan of action (Dilts, 1994). The four thinking styles are - outsiders, dreamers, realisers and critics. The method is comparable to De Bono's method of the Six Thinking Hats (De Bono, 1985, 1999). The differ- ence is, that in the Disney method the sequence is constant, whereas the Six Thinking Hats can be used in any appropriate order.

5 Relationship

5.1 Trust

Another very important factor is the relationship you want to have with the other party. As you want a relationship for the long run, it is important that you consider the interests of your counterpart. Moreover, a strong existing relationship, espe- cially one characterized by a high level of trust and mutual respect, often makes reaching agreements easier, while mistrust and hostility can make it much more difficult to come to a conclusion (Hughes, Weiss, Kliman & Chapnick, 2010; Rubin & Brown, 2008).

In addition, you should always keep in mind that the outcome of the negotiation could influence the future relationship between you. If that relationship becomes heated and hostile by rude offers, the chances of finding future agreement decline and the relationship suffers (Hughes, Weiss, Kliman & Chapnick, 2010; Rubin & Brown, 2008).

5.2 Communication

Communication builds trust and reduces distance between the parties by lowering uncertainty whilst increasing involvement (Klein, 1996). However, the success of communication also depends on using the right methods. The content of a message is as important as the way in which it is communicated (Klein, 1996). When starting a business relationship, you should meet face to face with the other party as often as possible. This allows you to link your words with body language and build trust (Mehrabian, 1981).

5.3 Cultural differences

5.3.1 Negotiation in China

Hofstede (1980, 1984) has undertaken various studies to define the cultural dif- ference. He classified these differences in four different categories, which were later extended to six (Minkov, 2011; Forgas 1984). The findings of his study point out that the Chinese prefer collective harmony and put a strong emphasis on communication (Kirkbride, Tang & Westwood, 1991). In the Western world the individual is more important than the collective. Another aspect is the difference between the long-term orientation of the Chinese in comparison to the short term orientation of the Western world.

Nevertheless, there are other studies that put a stronger emphasis on cultural aspects and differences in negotiations. National cultural differences in negotia- tion behaviour have been catalogued by Adler, Brahm & Graham (1992) and Gra- ham (1985). Some researchers attribute these differences to culture (Cohen, 1991; Druckman, Benton, Ali & Bagur, 1976; Fisher, 1980; Graham, Mintu & Rog- ers, 1994; Weiss, 1997), while others are more sceptical of this relationship (Faure & Rubin, 1993; Zartman, 1993). Recent books for practitioners, which pur- port to teach techniques for negotiating in different cultures (Brake, Walker & Walker, 1995; Hendon, Hendon & Herbig, 1996; Kublin, 1995; Morrison, Cona- way & Borden, 1994), suggest a common understanding that culture and negoti- ation are correlated, and show managerial interest in modelling and understand- ing this relationship (Tinsley & Pillutla, 1998).

Tinsley and Pillutla (1998) have developed the main differences between Western and Chinese negotiation norms.


1 Equilibrium theory explains that, if in a group of players, each player has in consideration the other player’s decisions, then no one will benefit from altering their decisions, if the other play- ers have not either (Hawkins and Steiner, 1996).

2 (Diagram by Potgieter, 2014)

3 (Diagram by Potgieter, 2014)

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