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SCENARIO:
Six weeks ago, the Presidents of four of the world’s largest aircraft engine companies drafted a joint memorandum announcing an “agreement in principle” on a 30-year joint partnership in the design, manufacture, and sales of a new generation engine, the A-2000. The memorandum requested that the company negotiators convene to negotiate details of the agreement.
The U.S. company, Airborne, has been the world leader in engine technology and will be the lead partner in the venture, with primary responsibility for coordinating with the other three partners. Each of the partners has agreed to pay Airborne a fee in exchange for which Airborne will provide the majority of the technical information needed to build the A-2000. Today, three negotiators from Airborne will meet with one representative from each of the other companies: SERSI (France), Novo (Italy), and Kiatsu (Japan), to try to reach a universally acceptable agreement.
MAJOR LESSONS:
- This exercise demonstrates the dependency of successful external negotiations on successful internal negotiations. Thorough preparation is required.
- Don’t jeopardize long-term relationships for short-term gains.
- Effective cross-cultural negotiation depends upon making sure what you are saying is what is being heard, and what you are hearing is what is being said.