The concepts of power in international business negotiations: An [PDF]

JOURNAL OF TRANSNATIONAL MANAGEMENT 2017, VOL. 22, NO. 1, 25–52 http://dx.doi.org/10.1080/15475778.2017.1274613

The concepts of power in international business negotiations: An empirical investigation Priyan Khakhara and Zafar U. Ahmedb a

Haigazian University, Beirut, Lebanon; bAcademy for Global Business Advancement, Fort Worth, Texas, USA ABSTRACT

KEYWORDS

This article examines the bases of social power, namely individual information power, expert power, legitimate power, and referent power on successful international business negotiations (IBNs). The author conducted an online survey among international business executives working in the UK for multinational corporation subsidiaries who were asked to report on the success of their most recent negotiating experience in terms of cooperative (integrative) and competitive (distributive) outcomes. Information power, expert power, and referent power were supported by these results in terms of significance. Unexpectedly, however, information power was positively correlated with integrative or cooperative outcomes and processes. The correlation related to legitimate power was negative but not statistically significant so this hypothesis was not supported. Our results not only contribute to international negotiation theory, but also can assist in the selection and training of practitioners. The academic contribution of this study also relates to model exploration. It brings causal statistical objectivity to qualitatively developed concepts as an essential step in development of knowledge. These theoretical and managerial implications of the study are examined. Furthermore, directions for future research that build on the findings of the study are indicated.

Cooperative processes; integrative outcomes; international negotiation; power

Introduction and literature review International business negotiation is often a key element in marketing success. Negotiators frequently interact with potential business partners from markedly different cultural or social backgrounds. To be successful, they must acquire a complex skill set that must be acquired “on the job”—a skill set that is useful in preventing undesired perceptions, filtering out communication “noise,” and that promotes successful negotiation outcomes. To quote Shi and Wright (2001, p. 91), “In a global business environment, the business executive’s work has an increasingly international orientation and international business negotiation becomes an important competency.” Understanding the role and CONTACT Zafar U. Ahmed [email protected] School of Business, American University of Ras Al Khaimah, P.O. Box 10021, Ras Al Khaimah, UAE. Prof. Dr. Zafar U. Ahmed is now a professor and associate dean in the School of Business at American University of Ras Al Khaimah, Ras Al Khaimah, United Arab Emirates. © 2017 Taylor & Francis

26

P. KHAKHAR AND Z. U. AHMED

use of social power, (French & Raven, 1959) therefore, becomes an important element in formulating these competencies. International business negotiations, backed up with the advancement in technology, have been the focus of ambitious managers to find innovative platforms in hopes of penetrating new markets. Study proves that considerable research has been conducted on the style of negotiation between countries rather than the culture of the hosting country (Khakhar & Rammal, 2013). “International” and “Negotiations” are two important terms present in the agenda of industrial countries. Negotiation is a process in which two or more parties with different needs and goals discuss an issue to find a mutually acceptable solution. The growth of new emerging markets and of the global economy has seen increasing demand for negotiation training for marketing executives. Training consultants generally teach negotiation skills by drawing on communication theory and socio-psychological perspectives. They mostly emphasize “interest-based negotiation” (Fisher, Ury, & Patton, 1991), where negotiators work to identify underlying interests on both sides, explore creative options for mutual gain, and use legitimate standards to determine the best possible solutions (Senger, 2002). Scholars have offered both comparative and prescriptive studies (Francis, 1991; Ghauri, 1996; Zartman & Berman, 1982) since “International negotiators require additional skills and competencies on top of those required in domestic business negotiations” (Reynolds, Simintiras, & Vlachou, 2003, p. 236). The process of business negotiation is generally described as either taking an integrative or a distributive frame (also known as cooperative versus competitive frame, associated with win-lose and win-win outcomes e.g., Fisher & Ury, 1981; Ghauri, 1996; McCall & Warrington, 1984). Ghauri (1996) notes that the “atmosphere” of the negotiation can have varying degrees of either cooperative (associated with an integrative frame), or competitive (associated with a distributive frame) aspects. The outcome and processes therefore in international business negotiations can take the following forms: . Competitive vs cooperative . Win-win vs win-lose . Integrative vs distributive Competitive behavior relates to conflict “atmosphere” and can be defined as efforts to gain unilateral concessions from the other party i.e., distributive agreements. Competitive strategies manifest themselves through behaviors of the negotiators, hence having competitive behavior in the negotiation process will result in parties perceiving the negotiation as a game in which there can only be one winner. With IBNs there may exist conflicts of interest, hence conflicting atmosphere in the negotiation process. This can be due to differences in cultural opinions. The environment in which the negotiation is based

JOURNAL OF TRANSNATIONAL MANAGEMENT

27

can also affect the cooperation/conflict balance. Foreign exchange instability for example could cause the power balance to shift, and have effects on the level of cooperation each part expresses. As stated, two key approaches to IBNs are widely observed—cooperation and competition. These two strategies in turn correspond to two negotiation behaviors, namely cooperative and competitive behaviors during the negotiation process altering the power dynamics within the negotiations. The competition approach is also referred to as distributive bargaining, and is utilized by the negotiator to pursue personal goals, by convincing the opposite party to concede to demands. The study of international negotiator characteristics (including power dynamics) and varying negotiating methods has led, however, to prescriptive literature on the “ideal” ways to communicate and behave, often with reference to different cultures (e.g., Acuff, 1997; Al-Ghamdi, 1999; Brett, 2000; Brett et al., 1998; Ferraro, 1996; Ghauri, 1996; Gilsdorf, 1997; Graham, Mintu, & Rodgers, 1994; Herbig & Kramer, 1991; Khakhar & Leigh, 2015; Khakhar & Rammal, 2013; Kjaerbeck, 1998; Lewis, 1996; Marrotti, 1998; Martin et al., 1999; Mintu-Wimsatt & Gassenheimer, 2000; Nair & Stafford, 1998; Oikawa & Tanner, 1992; Rubin & Sander, 1991; Tracy, 1998; Ulijn & Verweji, 2000; Woo & Prud’homme, 1999). Other research has focused on negotiation styles, problem-solving, skills, tactics and conflict resolution from social psychological and behavioral theory perspectives (Shi & Wright, 2001). The success of negotiations in international settings relies on the ability of managers to effectively communicate their message in different cultural settings (Schoop, Kohne, & Ostertag, 2010). Managers must be aware of the contextual factors influencing the negotiation process, and should have the ability to alter their style and strategies to suit their needs (Saee, 2008). Various theoretical models have been proposed (Calantone, Graham, & Mintu-Wimsatt, 1998; Phatak & Habib, 1996). These generally rely on deductions from literature reviews and qualitative research (Dupont, 1991; Ghauri & Usunier, 2003). Quantitative tests have been done using student respondents and have been cross-cultural in nature (Graham et al., 1994). However, perceptions of international negotiator power dynamics have not been examined empirically among business executives, despite researchers’ speculation about their effects on negotiation behavior, process, and outcomes (Tung, 1988; Wall & Blum, 1991). For an international business setup to be successful, managers must have the capability to efficiently communicate in different environments than their actual marketplace (Schoop et al., 2010). According to Aldrich (1999), a successful manager must be adaptive to fast changes, be interactive, and be able to adjust towards new cultures. To be able to meet the needs of the later, managers must have a clean idea about the regulations of the new culture to be able to fit in (Saee, 2008). There are two opinions of research regarding negotiations. Study shows both negotiators end up with a mutual understanding in reaching their ultimate goals through extensive

28

P. KHAKHAR AND Z. U. AHMED

negotiations and communication (Ghauri & Usunier, 2003; Schellenberg, 1996). Others state that one of the negotiating parties loses in the transaction and surrenders for the other party to win and gain their wants (Duvalett, Garapin, Llerena, & Robin, 2004). Peleckis, Peleckiene, and Peleckis (2013) introduced some of the cultural variances between negotiators stating five criterions in viewing the cultural differences in international business negotiations: . Power Distance: Power of the managers within a company and their hierarchal level . Uncertainty Avoidance Dimension:— lack of tolerance between individuals and the need of strict rules . Individualism/Collectivism: —the magnitude at which individual interest is above the collective or group interest . Masculinity/Femininity: Gender differences and equality . Emotional Differences: Feeling of belonging Intercultural negotiations are defined as negotiations that entail communication between individuals from distinct cultures. Successful negotiations rely on several factors. Successful negotiators in an international context have the knowledge and proficiency to work with degrees of communication, principles, and behavioral indications of individuals from different cultural backgrounds. Peleckis et al. (2013) declares that it would be hard to identify which negotiation style to use if you don’t consider the legal atmosphere, cultural standards, and organizational values of the negotiators. The way the individual’s thinking is programmed in a certain culture categorizes that culture (Hofstede, 2001). Because of the general absence of empirical testing among actual business negotiators, these models have not been popular with practitioners (Weiss, 2006). This article contributes to filling this gap. In the methodologies of existing research on international business negotiations, the choice of research respondents and participants has been criticized (Agndal, 2007; Weiss, 2006). Much of the research in negotiations is experimental in nature, relying primarily on students as research subjects. Ramsay (2004) notes that the academic literature on negotiation is dominated by studies of American undergraduate psychology students. The rationale for using students is related to ease of access. There is some discussion whether negotiation behavior of students accurately reflects negotiation behavior of “real” negotiators, whilst the negotiating behavior of students has been shown to differ significantly from that of professionals (Zarkada-Fraser & Fraser, 2001). In this vein, this study has approached the subject in a non-simulation and non-experimental manner, with a non-student sample. This will provide a more relevant view of the negotiation process to provide a full essence of international business negotiations.

JOURNAL OF TRANSNATIONAL MANAGEMENT

29

Working definitions Power

Negotiators have power when they have “the ability to bring outcomes they desire” or “the ability to get things done the way (they want) them to be done” (Salancik & Pfeffer, 1977). It can be assumed that a party with power can induce another party to do what the latter otherwise would not do, thereby affecting the negotiation process (Dahl, 1957; Kotter, 1979). The sources or elements of power are considered as centrally important to international business negotiations, and so the question of what constitutes power in negotiations is of importance. Power has also been studied by social psychologists (Pruitt, 1981, 1993, 2005; Putnam, 1990; Rubin & Brown, 1975) and applied to business. These concepts and perceptions of power can also be found in political science, sociology, and social psychology offering a variety of distinctions among different types of social power (Asherman & Asherman, 1990). Power in relation to international business negotiations is defined as having different sources (information, expert, legitimate, and referent) each resulting in different perceptions at the negotiation level of analysis to both parties involved. Negotiation process

The author has assumed that a negotiation process will constitute the path during a face-to-face negotiation experience. The final process frames in international business negotiation are described as taking the following forms as per literature (Atkin & Rinehart, 2006; Fisher & Ury, 1981; Ghauri, 1983, 1996; Hall, 1993; McCall & Warrington, 1984; Phatak & Habib, 1996; Pruitt, 1981; Putnam, 1990; Rubin & Brown, 1975-seminally; Thompson & Herbec, 1996; Walton & McKersie, 1965): (1) integrative vs. distributive (also known as competitive frame and cooperative frame that constitute the general atmosphere of the negotiation as suggested by Ghauri and Usunier [2003]); (2) Win-win vs. win-lose corresponding to two negotiation behaviors, namely cooperative and competitive behaviors during the negotiation process. The competition approach is also referred to as distributive bargaining, and is utilized by the negotiator to pursue personal goals, by convincing the opposite party to concede to demands. These two approaches are not however absolute per se, i.e., the degree of integration or distribution of the international negotiation process. This has become common and established terminology within the study of international business negotiations. According to Jeswald W. Salacuse, there are two types of negotiators: either win-win negotiators, who see deal making as a collaborative, problem-solving process, or win-lose negotiators, who view it as confrontational (Salacuse, 2015).

30

P. KHAKHAR AND Z. U. AHMED

Effective business negotiation is a core leadership and management skill. In business, negotiation skills are important in both informal day-to-day interactions and formal transactions such as negotiating conditions of sale, lease, service delivery, and other legal contracts. Good negotiations contribute significantly to business success, as they help build better relationships between the parties involved. Research question and variables Our main research question for the focus of our study follows, followed by a discussion of the dependent and independent variables of the study: How do the bases of social power (expert, referent, legitimate and information power) affect the negotiation process in terms of being either a cooperative or competitive atmosphere? Dependent variable

Given the vast literature explained previously, the researcher has identified the main dependent variable of this research as the “negotiation process,” which in turn constitutes constructs of integrative versus distributive (corresponding to competitive frame versus cooperative frames and win-win versus win-lose flow). Hence the dependent variable of this study is the negotiation process, which varies between the integrative and distributive balance. Agndal (2007) identified that most of the articles on negotiations published between 1996 and 2005 rightly considered the integrative versus distributive continuum, balance or frame as the dependent variable, and is hence considered by the researcher of this study as a dependent variable for this study given the vast and valid agreement within literature. Independent variables: Power in negotiations

Most international business negotiation models consider the concepts and elements of power as an important factor within the negotiation process (e.g., Ghauri, 1996; Ghauri & Usunier, 2003). It has also been studied extensively by social psychologists in relation to negotiations (e.g., Pfeffer, 1992; Putnam, 1990; Rubin & Brown, 1975). Literature on the development of the bases of social power and application to business are detailed in Table 1. Cavusgil and Ghauri (2002), Kotter (1979) and Pfeffer (1992) point out that a power relation is a basic characteristic of all international negotiation processes, and state that the ability to control this relation is linked to the perceived power of the parties (i.e., relative power). Negotiators have power when they have “the ability to bring outcomes they desire” or “the ability to get

JOURNAL OF TRANSNATIONAL MANAGEMENT

Table 1.

31

Literature: The use and origins of the bases of social power.

Authors French and Raven (1959) Raven (1965) Raven and Kruglanski (1970) Kotter (1979) Raven (1983) (Podsakoff and Schriesheim (1985) Raven (1992) and Raven et al. (1998) Pfeffer (1992) Raven (1993) Colemen (2000) Phatak and Habib (1996), Ghauri (1996), Heiba (1984), Weiss (2004), Lewicki et al. (2006), and Potgieter (2007)

Description of study Proposed the bases of social power The relationship between social power and influence Power in the structure of conflict Application of power in management The effects of interpersonal power and individual influence Field studies of French and Raven (1959) bases of social power Proposed conceptualization and testing of a interaction model in relation to interpersonal influence Using power in management Developments to the bases of power The use of power bases in conflict management Application of some of the power bases to international business negotiations

things done the way (they want) them to be done” (Salancik & Pfeffer, 1977, p. 41). It can be assumed that a party with power can induce another party to do what the latter otherwise would not do, thereby affecting the negotiation process (Dahl, 1957; Kotter, 1979)). The concepts of power have received significant attention in negotiation research and have been referred to as relative power or power versus dependence (for e.g., Bazerman & Neale, 1983, 1992; Ghauri, 1983, 1996; Heiba, 1984; McCall & Warrington, 1984; Phatak & Habib, 1996; Zartman, 1978). Zartman (1978) points out the importance of power by stating that there are many phases of power, and that interrelation exists between the sources, or what constitutes “‘power.” Graham (1987) proposed that power relationships and the perceptions of such power influence negotiation practices, as well as mentioning the importance of interpersonal skills in the negotiation process frame (which this study is also exploring). Neslin and Greenhalgh (1983) in exploring the Nash equilibrium (and cooperative and noncooperative “games”), also observe that power provides “the ability of one party to take the initiative in a given situation and thus shape the issues or agenda in a way that benefits that party” (p. 32), becoming a key factor in international business negotiations. The sources of power are considered as centrally important to international business negotiations (Lewicki, Barry, & Saunders, 2006; Potgieter, 2007) and have therefore been applied in the international business negotiation study. Lewicki and colleagues were pressed to answer what constitutes power in international business negotiations, and to explain the influence on the negotiation process in terms of integrative processes or distributive processes. As Salancik and Pfeffer (1977) state: because power derives from activities rather than individuals, an individual’s or subgroup’s power is never absolute and derives ultimately from the context of

32

P. KHAKHAR AND Z. U. AHMED

the situation. The amount of power an individual has at anytime depends, not only on the activities he or she controls, but also the existence of other persons or means by which the activities can be achieved and those who determine what ends are desired. (Salancik & Pfeffer, 1977, p. 50)

This has implications for international business negotiations. The processes of power can be useful as well as complex as they are often disguised in negotiations (Pruitt, 1981). Power can be observed varying forms of literature concerning power in political science, sociology and social psychology offering a variety of distinctions among different types of social power (Asherman & Asherman, 1990), and debated in organizational behavior and organizational psychology literature. To understand international business negotiations and the power sources that arise, the study of power and its effect must first be understood; every interaction and every social relationship, both inside and outside international organizations, entails the use of power (Pfeffer, 1992). Potgieter (2007) views power as an easy means to accomplish things in the desired manner. The power of the manager who wants more financial resources, for example, is in his skill to obtain these resources (Pitulla & Nicholson, 2005). Power is comprised of a relationship between two or more people. The political scientist Robert Dahl (1957) encapsulated this important relational focus in his definition of power, “A has power over B to the extent that he can get B to do something B would not otherwise do. A person or group cannot have power in isolation. Power has to be exercised or deployed, or have the potential of being deployed in relation to some other person or group” (p. 101). Given this, Kim, Pinkley, and Fragale (2005) in their article “Power Dynamics in Negotiation” argued that there are different types of power in negotiations, contending divisions into potential power, perceived power, power tactics, and realized power. Some empirical findings have indicated that when the most powerful party acts in a positive way, this generates integrative negotiations, partly due to the trust it fostered (Anderson & Thompson, 2004). Other studies have found that negotiators with low differences in perceived power reach more integrative agreements. The availability of alternatives (real or relative power in negotiations) also affected the negotiation processes (Wolfe & McGinn, 2005). The main purpose in the context of international business negotiations is to identify literature on the major sources of power and to define them systematically, so that one can compare them to the changes that they produce on the negotiation process. Sources of power imply a “persuasive message strategy” and can be significant in influencing negotiations, and hence strategy (Miller, 1983). We explore the sources or bases of power. In international business negotiations, power can take many forms, e.g., a negotiator may hold

JOURNAL OF TRANSNATIONAL MANAGEMENT

33

power in terms of his standing in an organization (e.g., the CEO) or may hold less power as he is anxious to receive “referred” business from the other party, i.e., referent power. In a seminal paper, French and Raven (1959) and revised by Raven (1993) proposed what constitutes the sources of power, and these sources have been extensively applied to international business negotiations (e.g., Lewicki, Barry, & Saunders, 2006) and will therefore be used as the independent variables of our study. We will explain these sources of power in relation to international business negotiations while formulating our hypotheses on this factor. The perceptions of such sources of power can greatly affect the negotiation process, as perceptions may vary of the use of such power (Garcia, 2002; Ghauri & Usunier, 2003) and these perceptions could alter the negotiation process. It is important to mention that the concept of parity in power is crucial; in negotiations, parity of power is the perception by one party that the other side can counter any form of power with a similar or different form of power that would render the further escalation of power useless (Bazerman & Neale, 1983, 1992). Parity in power demands a balance in power deployment and is hence key to the behavior of a successful negotiator (Potgieter, 2007). In literature, power and authority are seen as distinct (e.g., Colemen, 2000). Authority is viewed as the formal power that individuals have because of the position they hold in an organization (Potgieter, 2007) for example, managers who hold higher positions have legal authority over subordinates in lower positions. The sources of this power therefore have implications on the international negotiation process. The sections following will explain origins of sources of power (e.g., Raven, 1965, 1983, 1993; Raven, Schwarzwald, & Koslowsky, 1998) and applied to international business negotiations, followed by the resulting hypothesis inferred from the literature in terms of the effect on the international business negotiation process. Table 2 lists the studies in chronological order to demonstrate the use and origins of the bases of social power in relation to international business negotiation literature, while the section following discusses the bases of social power. Information power This type of power is associated with the special information an individual holds as a result of operations he performs and his special relationship with

Table 2. Average power variable scores. Information power Expert power Legitimate power Referent power

3.935 3.032 3.865 3.787

34

P. KHAKHAR AND Z. U. AHMED

sources of information, which are of significance for the performance of another individual (Raven, 1993). Information on the opposite party, as well its situation could be used to gain acceptance of proposals (McCall & Warrington, 1984). Thus, gaining information results in increased information power, which could be used in the negotiation process. Such information could be obtained through profile checks before the negotiation, and may also have an effect on the outcome of the negotiation, in terms of positive or negative process. Information about the other party’s capabilities, financial position, and limitations gives either party power to influence the negotiation process (Ghauri, 1996; McCall & Warrington, 1984). Proposals that are not initially accepted can gain acceptance if the opposing negotiator indicates knowledge of information of which the other party is unaware (McCall & Warrington, 1984), though it can also cause suspicion or surprise on the length the other party goes to obtain information on the negotiating party. Information gathered may also give the impression of adequate preparation for the negotiation, and thus integrative processes result. Literature on this variable seems to be split between those who suggest information power causes distribution; those who suggest it could cause integration, e.g., Brooks and Rose (2004) state information gathering could give the impression of adequate preparation and hence lead to integration, whereas McCall & Warrington (1984) suggest that it could go either way. Different nationalities may also have different perceptions of this information power and the effect on the overall negotiation process, as perceptions of these can be seen conflicting between international negotiators. For example, by accumulating and presenting data intended to change the other party’s point of view or position on an issue, and may be seen as offensive in some Asian cultures as they lose “face” (Fang, 1997). Information on the opposite negotiator can also alter expectations in the negotiations processes (Scott, 1984), and if these created expectations are then not met, the process can flow negatively. The opposite party’s choice of behavior, for example, is affected by transmitting positive information to opponents about the option they want them to “opt for,” or by hiding information about an option they don’t want them to choose (Kim et al., 2005; Potgieter, 2007). The perception of having information power is inferred to create a degree of suspicion (Garcia, 2002; Kim et al., 2005) between international negotiators, and hence lead to a distributive negotiation process frame. We therefore make the following hypothesis: H1:

The perceptions of having more information power by one of the negotiating parties will lead to a distributive negotiation process.

Expert power This type of power is the belief that an individual or an organization has special, unique, or in-depth knowledge or expertise within a given area

JOURNAL OF TRANSNATIONAL MANAGEMENT

35

(Kotter, 1979; Raven, 1992). For example, an expert winemaker negotiating with a restaurant chain can exercise “expert” power to the other party, which may or may not perceive these advantages (Pitulla & Nicholson, 2005). Thus, viewing the opposite party as superior in terms of expertise can alter the power perceptions on both sides and affect negotiations. Hence inferring logically that expertise can lead to a source of power as well as a competitive advantage. Dunning (1999) calls knowledge or expertise “ownership advantage,” and this has implications for the international business negotiation. Pfeffer (1992) states that expertise can greatly increase the chances of gaining a positive “framing,” as knowledge is related to advantages a firm processes. Such advantages can be perceived positively by the opposite party (Garcia, 2002; Pfeffer, 1992). Ghauri (1996) goes on to state that if a company is a leading expert in a particular field, it will use that as a source to influence the negotiation process, whereas Potgieter (2007) suggests that expert power will generally aid in clarifying operational details (and hence produce integrative negotiation processes frames). Lewicki, Barry, and Saunders (2006) state that expertise, and hence expert power can stem from specialist knowledge in terms of technology, financial management, and presence in a particular industry. Yulk and Tracey (1992) mention that “opponents” may give the impression of expert power in order to influence the negotiation process by attempting to clarify complex details that may arise. Hence the perceptions of having expert power may be inferred to better the knowledge between international negotiators (Garcia, 2002; Ghauri, 1996; Pitulla & Nicholson, 2005; Potgieter, 2007), and hence lead to a positive negotiation process frame, as well as explicitly being used to influence the negotiation process. Thus, the following hypothesis is made: H2:

The perception of existing expert power in either negotiating parties will lead to an integrative negotiation process.

Legitimate power Legitimate power comes from the ability to influence because of position, and is sometimes referred to as position-bases power (Raven, 1993). International business managers at higher levels have power over the people below. However, each person with legitimate power applies his or her own individual style (Raven, 1983). Potgieter (2007) points out that occasionally, one party will use legitimate power as a tactic against another party by: 1. Introducing someone who can influence important decisions, and who has credibility with the other party; and 2. Assigning a lot of legitimate power to an individual in opposing parties to use the need for power and status in individuals to get major concessions.

36

P. KHAKHAR AND Z. U. AHMED

This is related to the “location in structure” variable suggested by French & Raven (1959) and Raven (1983) which implies power derived from occupying a key position in a hierarchical organization, or control over control of supply flows and resources. According to Raven (1983), legitimate power is seen as the foundation of the modern social structure, i.e., when groups of individuals organize into any social system such as a task force or a negotiating team, which immediately creates a form of structure or hierarchy. The effectiveness of formal authority is derived from the willingness of followers to acknowledge the legitimacy of the organizational structure, and the system of rules and regulations that empowers its leaders such as CEOs (Raven, 1993). Therefore, in the context of international business negotiations; to the extent that a negotiator can convince the opposite party that he or she has a right to make a particular demand or proposal, the likelihood of an offer being accepted is increased (Podsakoff & Schriesheim, 1985). Sending “top management” to a negotiation can therefore affect the atmosphere if the other party is aware of this status, as assumptions will be made that high power would mean quicker decision-making processes, thus a positive atmosphere and smoother negotiations (Ghauri, 1996; Pfeffer, 1992). It is also possible to apply the notion of legitimate power to certain social norms or conventions, that exert strong control over people (Kotter, 1979; Raven, 1993; Raven et al., 1998) and hence resulting negotiations, as legitimate power brings with it the notions of control of available resources that are brought to the negotiating table by decision-making higher management, who have control of these resources, which the other party perceives (Potgieter, 2007). Legitimate power may also bring reciprocity (favors for favors) and dependence (future business through the top management at the negotiating table as suggested by Khakhar & Rammal, 2013 when discussing the use of “Wasta”1 in the Middle East), if the other party recognizes this legitimate power. The ability to control and dispense these resources is a major power source in organizations (Pfeffer & Salancik, 1974) and hence international negotiation processes. In his book Managing with Power, Jeffrey Pfeffer illustrated how powerful corporate figures have built successful businesses based on legitimate power (Pfeffer, 1992). Colemen (2000) also suggests that if this power is used appropriately, conflict (i.e., distribution) can be avoided. Hence the following hypothesis is made: H3:

The perception of having greater legitimate power by one of the parties will lead to an integrative negotiation process.

Referent power This type of power results from the willingness of one individual to be associated with another and to maintain such an association, in anticipation

JOURNAL OF TRANSNATIONAL MANAGEMENT

37

of future productive dealings (Raven, 1965, 1993). This could be with the same company or a company that it has been referred to. It seems to appear that such willingness may come from knowing that the opposite party is one with potential “influence” for business; this may cause concession making as well as a dependency role for a particular company. Referent power is made “salient” when one party identifies the dimension of commonality in an effort to increase power over the other. Thus, a negotiator might start getting to know the other to discover commonalities (i.e., they may discover that they could do “business” in the future, which may hopefully create a bond between the parties and facilitate agreement. It refers to the personal characteristics of the negotiator, i.e., a person who is perceived as reference has more power, as the other party can depend on him for business (implicitly implied by McCall & Cousins, 1989; McCall & Warrington, 1984). Therefore, a negotiator with this ability is inferred to have personal power that can positively contribute to the negotiation process frame. Yan and Gray (1994) presume that the party in a negotiation that has more equity (referred business assumed here to be intangible equity) has more power in the negotiations, and will therefore influence the process, and mentions management control of the project, special access to markets, favorable government relationships, and superior knowledge of new markets, whereas Cavusgil and Ghauri (2002) point out that the market position of either of the negotiating parties is an element influencing the negotiation process. All these elements contribute to reference power. Pitulla and Nicholson (2005) state that if there is at least a potential for a long-term gain to be made in future business, the negotiators will be inclined to concede in present negotiations for the sake of achieving greater gain in terms of business in the future; this keeps the negotiation process fairly straightforward, resulting in a positive process or frame. Colemen (2000) implies that negotiators differ in processing social information about such power, stating, “whether it is limited or expandable, competitive or cooperative (i.e., distributive or integrative), or equal or unequal” (p. 23) will depend on the orientation of the situation and their willingness to use this power. International negotiations are also characterized by long-term expectations of future business (Ghauri & Usunier, 2003) implying the importance of reference. Garcia (2002) states if this source of power is made transparent, positive processes are likely. Hence the following hypothesis is made: H4:

The perception of reference or the use of referent power by either party will lead the negotiation toward an integrative process.

Figure 1 represents the proposed relationships between the sources of power and the international business negotiation process frame. It represents the perceptions of power by either of the parties in the negotiation and their existence is assumed to affect negotiation process frames.

38

P. KHAKHAR AND Z. U. AHMED

Figure 1. Proposed hypothesized relationships of elements of power and the negotiation process.

Research methodology Participants in the study were executives who had been involved in international business negotiations. To gain an appropriate population we assumed that foreign multinational enterprise (MNE) managers of subsidiaries based in the UK would have international business negotiation experience within their work environments with UK or European counterparts. The rationale for this assumption was that most business transactions are preceded by business negotiations (Reynolds et al., 2003), and therefore foreign MNE managers of subsidiaries would have appropriate international business negotiation experience. The initial population consisted of managers from lists that were obtained from various sources, such as (1) The British Chambers of Commerce Directory of International Members based in the UK; (2) Manchester Business School Alumni Network lists; and (3) lists of foreign MNE subsidiaries based in the UK obtained from the database AMEDUS. These lists were considered reliable and comprehensive in detailing the electronic contacts, names, and positions, as well as identifying which foreign subsidiaries were inactive within the UK. We identified 1,213 potential respondents, who were sent a series of invitation and reminder e-mails describing the nature of the study, and an invitation to participate if they felt that they could be classified as executives with experience in international business negotiations. Thereafter, they were asked to recall their last international business negotiation experience when filling in the questionnaire. Following two reminder e-mails explicitly inviting the participation of experienced business negotiators only, 155 useable questionnaires were completed online. This data collection process took approximately three months.

JOURNAL OF TRANSNATIONAL MANAGEMENT

39

The study encompassed relevant respondents including business managers and negotiation practitioners from (1) international management consultancies specializing in advising on international negotiation strategies; (2) international business negotiators within international trade; (3) procurement consultants; (4) real-estate negotiators; and (5) sales negotiators. More than 60% of the respondents were male; most responders were 36–40 years old, and 37% were 41 years of age or older. Approximately 4% of responses came from individuals aged 61 years or above. More than 57% of the participants had greater than three years of international business negotiation experience, confirming the appropriateness of our sample. Only 19% of the respondents had less than one year of international business negotiation experience. More than 52% of the respondents were in senior management, 29% were in middle management, 61% had completed postgraduate studies, and 20% were educated to undergraduate level. A two-step approach recommended by Anderson and Gerbing (1988) was utilized in analyzing the data using structural equation modeling (SEM). This was executed using confirmatory factor analysis (CFA) to provide the reliability and validity of our scales. It is also consistent with other business research (e.g., Chia-Ling, 2005; Hadjikhani & Thilenius, 2005). Our resulting model had two components: a measurement model and a structural model. Substantive research in the social sciences has employed a two-step modeling approach for theory development and testing (e.g., Bollen, 1989; Chia-Ling, 2005; Li & Calantone, 1998). In this approach the measurement model is separately estimated prior to the estimation of the structural model. By doing so, more reliable measurements were secured to avoid interaction between the measurement and the structural model. After running both measurement and structural models, our analysis shifted to calculation of the parameter estimates of the structural model to determine their statistical significance. Findings The mean of each of our variables (on a scale from 1 to 5) are shown in Table 2. We analyzed the data by assessing the measurement model through CFA analysis, as the measurement items are required to provide adequate construct validity and reliability for the results of the data analysis to be credible (Ghauri & Grønhaug, 2005). Putnam (2005) recommends the use of factor analysis within negotiation research due to its general popularity within social science. An approach recommended by Anderson and Gerbing (1988) was utilized to assess the measurement model. A satisfactory measurement model using CFA demonstrates good reliability and validity (Anderson & Gerbing, 1988). In this research, evidence suggested that the indicator variables or questions really did measure the underlying constructs of interest and the model adequately fits the data. For both reliability and validity, there

40

P. KHAKHAR AND Z. U. AHMED

are a number of different ways that they may be measured using CFA. The model chi-square was 4029.865 with 1259 degrees of freedom, p < 0.0001. The “normed” or relative chi-square was (4029.865/1259) = 3.2. RMSEA = 0.113, 90% CI for RMSEA = 0.110; 0.117. The comparative fit index (CFI) was 1.000 and the goodness of fit index (GFI) was 0.945, and consistent with the fit statistics suggested by Stevens (2002). Fornell and Larcker (1981) recommend a minimum composite reliability of .60. An examination of the composite reliabilities revealed that all meet that minimum acceptable level. The variance extracted estimates assess the amount of variance that is explained by an underlying factor in relation to the amount of variance due to measurement error. Fornell and Larcker (1981) suggest that constructs should exhibit estimates of .50 or larger. Estimates less than .50 indicate that variance due to measurement error is larger than the variance captured by the factor. The variance extracted estimates meet this minimum threshold, so the validity of our latent constructs as well as the associated constructs was acceptable. Results for various reliability estimates are shown in Table 3. Data analysis thereafter focused on assessing the structural model fit. The aim of the structural model is to determine if the data fits the model well (Chia-Ling, 2005). A more “parsimonious” model was re-estimated yielding the following fit statistics. The chi-square for the model was 477.693 with 276 degrees of freedom (p < 0.001). The normed chi-square was 1.73. RMSEA was 0.065; the 90% CI was 0.055; 0.075. The comparative fit index (CFI) was 1.000 and the goodness of fit index (GFI) was 0.986. These values are indicative of a model that fits very closely with the data. All indices were also better than those in the previous measurement model. Analysis then moved to the deduction of the correlations between the constructs of this structural model to ascertain relationships between the dependent and independent variables. The results are presented in Table 4. Hypotheses one stated “The perceptions of having more information power by one of the negotiating parties will lead to a distributive negotiation process.” Examination of Table 4 revealed that the correlation between information power and negotiation process was 0.902, and significant at the 5% level (t = 2.183; p < 0.05). The hypothesized relationship was negative, suggesting an integrative negotiation process. The results do not support

Table 3.

Reliability estimates.

Constructs Information power Expert power Legitimate power Referent power Negotiation/process

Composite reliability

Variance extracted

Cronbach alpha

0.927 0.508 0.701 0.701 0.670

0.568 0.328 0.541 0.541 0.582

0.986 0.828 0.947 0.947 0.711

JOURNAL OF TRANSNATIONAL MANAGEMENT

Table 4.

41

Summary of the correlation analysis.

Explanatory variables Information power Expert power Legitimate power Referent power

Proposition

Correlation

Competitive/distribution Cooperative/integration Cooperative/integration Cooperative/integration

0.902* (t = 2.183; p < 0.05) 0.081*(t = 1.171; p < 0.05) 0.056 (t = −0.948; p > 0.10) 0.145*(t = 2.282; p < 0.05).

*p value < 0.05 (significant).

the hypothesis but suggest that the perceptions of having information power in either negotiating party will lead to an integrative negotiation process. Hypothesis two stated, “The perception of existing expert power in either negotiating parties will lead to an integrative negotiation process.” The correlation between expert power and negotiation process was negative and not significant and hence the hypothesis is not supported at the 10% level (t = −1.171; p > 0.10), and the results cannot be verified. Hypothesis three stated, “The perception of having greater legitimate power by one of the parties will lead to an integrative negotiation process.” The correlation between legitimate power and negotiation process was negative and not statistically significant. These results do not support the hypothesis at the 10% level (t = −0.948; p > 0.10), and the results cannot be verified. Hypothesis four stated, “The perception of reference or the use of referent power by either party will lead the negotiation toward an integrative process.” Examination of Table 3 revealed that the correlation between referent power and negotiation process was 0.145 and statistically significant at the 5% level (t = 2.282; p < 0.05). The results support the hypothesis that the existence of referent or the use of referent power by either party in a negotiation will lead to an integrative negotiation process. In summary, H1, H2, and H4 are thus supported by these results in terms of significance. Unexpectedly, however, information power was positively correlated with integrative and cooperative outcomes and processes. The correlation related to H3 was negative but not statistically significant so this hypothesis was not supported. Discussion and implications We proposed that the perception of having an information advantage that yielded information power in the negotiation process would lead to the process being distributive in nature, i.e., a competitive or one-sided process. It is interesting to note that analysis did not support this hypothesis even though it was statistically significant. Literature regarding information power was divided between two streams. First, it had pointed out that information power may be applied in a distributive manner by allowing the information to be manipulated so that parties can manage the options that are available to the other. The

42

P. KHAKHAR AND Z. U. AHMED

counter party’s choice of behavior, for example, was affected by transmitting positive information to the other party about the option they want them take, or by hiding information about an option they don’t want them to take (Raven, 1992) thereby creating suspicion. This use could be perceived as a tactic (e.g., Kim et al., 2005). Second, literature indicated information gathered may also give the impression of adequate preparation for the negotiation and thus integrative processes (e.g., McCall & Warrington, 1984). Our result may however be explained by observing Brett et al. (1998) who suggested that different nationalities have different perceptions of information power, and hence the effect on the overall negotiation process as perceptions of these can be seen as varying between international negotiators. Although literature indicated that information power could lead to distribution, our findings suggest an association to integration. Information on the other party may therefore not be perceived as a tactic or a negative element within the negotiation itself, but may for instance be seen by the parties involved as adequate preparation for the negotiation, in terms of gaining information on each of the parties. This preparation may therefore be perceived in positive terms as an effort to gain better understanding of the international partners and companies involved, and result in more integrative process frames for both the parties. We hypothesized that the perceptions of having expert power is inferred to better the knowledge between international negotiators, and hence lead to an integrative negotiation process frame. Viewing the opposite party as superior in terms of, for example, technology, management, or know-how could alter the power perceptions, and thus affect negotiations. Lewicki, Barry, and Saunders (2006) went further to suggest that expert power would aid in clarifying operational details. If the negotiating party acts in a negative way with their expertise, this may lead to distributive negotiations (Anderson & Thompson, 2004; Kim et al., 2005). The perceptions of this expertise could also vary from culture to culture (Ghauri & Cateora, 2006). Information power is negative and significant in terms of statistical significance. Schrieshiem, Hinkin, and Podsakoff (1985) pointed out that expert power can be correlated with information power, though were differentiated in conceptual terms stating “theoretical reasons for expecting the power bases to be correlated in real-world samples do exist” (p. 55). Expert power may have elements of information power, i.e., expert knowledge; either tacit or explicit is composed of information and knowledge accumulated by companies (Penrose, 1959). With this rationale, we can propose (conceptually) that expert power may yield integrative processes given our results on H1. This study proposed that the perceptions of legitimate power (e.g., top management) at the negotiation would lead to an integrative process, through the presence of decision makers in the negotiation. The results cannot be verified due to lack of statistical significance, though the direction can be

JOURNAL OF TRANSNATIONAL MANAGEMENT

43

observed to be negative. The perception of legitimate power stemming from top management may be negative if used inappropriately with some nationalities. Power if used positively can lead to favorable perceptions of realized power to both the parties. Hence if legitimate power is used negatively, distribution is possible. The existence of reference or the use of referent power was inferred to create the potential of future business, and hence lead to an integrative negotiation process. Our analysis supports this hypothesis to a significant level. The potential for reference can create a cooperative or integrative atmospheres and outcomes in negotiations (Khakhar and Rammal [2013] state that informal connections in IBNs greatly aid outcomes in the Middle East). Cavusgil and Ghauri (2002) point out that the strong market position of either of the negotiating parties (implying the possibility of reference through dominance in the market) is an element that influences the negotiation process. The ways international negotiators process information about such power may usually differ, and even if the negotiations are cooperative or competitive, would depend essentially on the orientations of the situation in terms of personal motivation (Khakhar & Leigh, 2015) and general willingness to use this referent power. This is also consistent with existing theory and the conceptual model by Ghauri and Usunier (2003), i.e., power is relative to both sides in an negotiation process, and one may have relatively greater power, if there is an equal “dependence” Ghauri (1983, 1996) by an opposite party. The potential of referred business may create this dependence as also implied by Khakhar and Rammal (2013). With regard to the implications of this finding, it will also depend on whether parties actually use referent power and their individual motivation to share personal points of reference and connections. Negotiators’ personal motivational issues can come from personal gains (e.g., bonuses for successful negotiations), possibility of developing connections as well as value placed on personal performance (Pitulla & Nicholson, 2005). A negotiator’s selfmotivation may influence the negotiation, as there are perceptions the opposite side can make on the strength of the particular team by observing individual motivation of their members Manning and Robertson (2004) also suggested that the negotiator must be motivated at a personal level to achieve integrative processes. Brooks and Rose (2004) argue that negotiation processes are also influenced by the reward structure as well as power relations. Game theory however, stated individuals make decisions that ultimately lead to self-gain (e.g., Myerson, 1999), and mould all mental processes to achieve this personal gain. The Theory of the Firm also suggested the notion of individual “opportunism” implying individual motivations (Murnighan, Babcock, Thompson, & Pillutla, 1999). It is interesting to note that Myerson (1999) states that all human actions are dictated and altered, at either an explicit or implicit conscious level for self-gain. In this situation the best outcome

44

P. KHAKHAR AND Z. U. AHMED

would be some monetary gain at the personal level (e.g., bonuses for performance), and at worst, no loss at the individual level (Duvalett et al., 2004). Hence, we can infer that if an international negotiator thinks something can be gained at an individual level (through reference and hence referent power), his or her actions (e.g., motivations) could be altered in achieving this personal gain dictating corresponding behaviors. This resulting behavior has implications for both integrative and distributive negotiation process frames. If it does, concessions could be made in the short term in view of long-term business and relationships. This is prevalent in literature concerning Chinese negotiations (e.g., Fang, 1997) and their importance based on forming future relationships. If referent power is not used, then short-term concessions that could have been made would not arise. Given this, the issue of trust must be taken into account (Khakhar & Rammal, 2013) i.e., giving the impression of future reference when it does not exist (and if this is realized by either of the parties) may be viewed as a tactic, possibly leading to distributive or competitive negotiation frames. Our analysis only indicates that the perception of reference leads to integrative process frames and that the relative perception of genuine referent power can lead to integrative process frames. We have not explored the relationship between the genuine or non-genuine perception of referent power in the international business negotiation process, leaving this question open for a potential base of future research. However, in a study by Hadjikhani and Thilenius (2005), higher trust was positively associated with commitment in business networks. Hence it may be possible to infer that a greater the relationship trust between the parties would entail a greater commitment between the parties in a business network implying a genuine use of referent power. Again, for genuine future referred business, the element of trust is important (Kim et al., 2005) as there is a possibility that it could be perceived as a tactic (Khakhar & Rammal, 2013). Limitations and directions for future research It is important to note some of the limitations of the current study. Where possible, we recommend further investigation to enhance our findings. Even though the response rate is comparable to studies of a similar nature in social sciences, it is still subject to the common biases associated with similar methods. Examples of these biases include sample selection bias and selfreporting bias. Second, this study highlighted the important elements of social power inspired by Raven (1965), but did not study the impact of each of the elements on different parties in the negotiation, i.e., dyads. Instead, as previously stated, the view was taken that the underlying factors would apply to all parties, and ultimately their interests in the negotiation could be both mutual and conflicting in terms of price or cost (Cavusgil & Ghauri, 2002; Ghauri & Usunier,

JOURNAL OF TRANSNATIONAL MANAGEMENT

45

2003). As a result, we did not distinguish the operational types of negotiations. This study approached the topic from a culture-neutral point of view. Therefore, the current study is limiting in this area. However, given this, an interesting area of further investigation with regard to individual motivation arises; researchers could assess the perceptions of personal motivation and the use of referent power in different types of negotiations (and distinguishing negotiating parties), or varying perceptions of motivations in different cultures or nationalities (e.g., applying the scales in this study between competing sets of cultures in international business negotiations can be proposed to infer conclusions that could be added to various prescriptive cross-cultural issues). Could it also be possible that motivated or “eager” negotiators (overstating their referent power or connections) cause competitive negotiation processes, with varying results for type of negotiations as well as potential cultural parties involved? As this research report did not examine these areas, further study is recommended to build upon our conclusions. Again, these perceptions could be either culture or negotiation specific and addressing these points could also generate a deeper understanding of the complexity of international business negotiations. The third limitation can be viewed in general terms by questionnaires. Questionnaire surveys are a good method of researching negotiations if the objective of the study is to deduce perceptions, and assess the distribution of those among the population. A major drawback of questionnaires, particularly in international negotiation research, is that the questions that are asked are couched in the researcher’s frame of reference, and hence run the great risk of missing important information that is outside that frame (Wright, 1990). The influence of different researchers means that survey items which may be inferred by one researcher may not be precisely those inferred by another researcher. The questionnaire items obtained by the researcher in this research are obtained from the ‘lens’ or the mind-frame of the researcher, and therefore experience a degree of subjectivity, in relative terms to other researchers who may have conducted the same study. The fourth limitation relates to our methodology including measurement and structural models; it must be noted that a SEM is not absolute, but relative per se. We accept that simplifying subjective concepts in negotiation study to linear structural equations may not reveal the true complexity and dynamism of negotiations themselves. Although structural equations analyses are intended for, and very effective in hypothesis-testing analysis among a comprehensive set of variables, it remains a statistical approach for determining causality, not a temporal one. Negotiations vary and their related variables may also alter with time (Ghauri & Usunier, 2003). Repeating the study using different sequences of actual negotiations can, however, be a very difficult task and may significantly reduce the sample size required for a SEM method. The possibility of following a negotiating team within the frame of one (or several related)

46

P. KHAKHAR AND Z. U. AHMED

business deals for a longer time might yield important new insights into negotiation process. To do this, either a researcher might be present during sequential negotiations, or participants would be asked to keep a protocol or complete questionnaires of their actions at every stage of the process (Agndal, 2007). Another important objective would be to determine how training should be designed to help negotiators act collaboratively and the use of certain forms of power. At the same time, can negotiators also learn assertive behavior (or learn to alter power dynamics) to probe and test the other party’s limits in an aim to achieve a more favorable outcome as suggested by Khakhar and Leigh (2015)? Conclusion Research on international business negotiation has been underway for 35 years and has developed within two major paradigms: the macro-strategic, which focuses on organizational wholes, and the micro-behavioral, which focuses on individuals (Weiss, 2006). This research report adds to the microbehavioral stream focusing on individuals and the bases of social power. The purpose of this research was to further the empirical understanding of factors related to international business negotiations and concepts of social power, and their link to corresponding processes. Previous prescriptive studies, although extremely useful in contributing to the understanding of often complex and dynamic negotiation processes, are sometimes lacking in quantitative analysis of real-life negotiation experiences. Gaining an empirical understanding of the factors studied will add to the existing body of academic and practical knowledge in a specific way. The study of international business negotiations is often subjective and theories about them are constantly being updated. An existence of a body of empirical analysis will aid the evolution of the discipline for both scholars and practitioners. Successful negotiation experiences should result in both parties feeling more satisfied with the relationship, thus enabling the parties to reap the benefits stemming from a long-term involvement. Thus, negotiation can be examined as a management mechanism that can allow both parties to benefit from the experience and move toward a stronger relationship (Atkin & Rinehart, 2006). Research that explores the impact of negotiator characteristics on negotiations will, we believe, facilitate the creation of these strong relations through the pragmatic understanding of the impact of these individual level characteristics. Note 1. Wasta is an Arabic word that loosely translates into nepotism, “clout,” or “who you know.” The English word cronyism overlaps in meaning but is not precisely the same. It also refers to someone with a good leverage of social capital.

JOURNAL OF TRANSNATIONAL MANAGEMENT

47

References Acuff, F. (1997). How to negotiate anything with anyone anywhere around the world. New York, NY: Amacom. Agndal, H. (2007). Current trends in business negotiation research: An overview of articles published 1996–2005. The Stockholm School of Economics, The Stockholm School of Economics Working Paper Series in Business Administration 2007:003 February. Al-Ghamdi, S. M. (1999). Success and failure in Saudi-American negotiations: American views. International Negotiation, 4, 23–36. doi:10.1163/15718069920848354 Aldrich, H. E. (1999). Organisations evolving. London, UK: Sage Publications. Anderson, C., & Thompson, L. (2004). Affect from the top down: How powerful individuals’ positive affect shapes negotiations. Organizational Behavior and Human Decision Processes, 95(2), 125–139. doi:10.1016/j.obhdp.2004.05.002 Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: A review and recommended two-step approach. Psychological Bulletin, 103(3), 411–423. doi:10.1037// 0033-2909.103.3.411 Asherman, I., & Asherman, S. (1990). The negotiation sourcebook. Amherst, MA: Human Resource Development Press. Atkin, T. S., & Rinehart, L. M. (2006). The effect of negotiation practices on the relationship between suppliers and customers. Negotiation Journal, 22(1), 47–65. doi:10.1111/j.15719979.2006.00085.x Bazerman, M., & Neale, M. (1983). Heuristics in negotiation: Limitations to effective dispute resolution. In M. H. Bazerman & R. I. Lewicki (Eds.), Negotiating in organizations (pp. 51–67). Beverly Hills, CA: Sage. Bazerman, M., & Neale, M. (1992). Negotiating rationally. New York, NY: Free Press. Bollen, K. A. (1989). Structural equations with latent variables. New York, NY: John Wiley & Sons. Brett, J. M. (2000). Culture and negotiation. International Journal of Psychology, 35(2), 97–104. doi:10.1080/002075900399385 Brett, J. M., Adair, W., Lempereur, A., Okumura, T., Shikhirev, P., Tinsley, C., & Lytle, A. (1998). Culture and joint gains in negotiation. Negotiation Journal, 14, 61–86. doi:10.1111/j.1571-9979.1998.tb00148.x Brooks, B., & Rose, R. (2004). A contextual model of negotiation orientation. Industrial Marketing Management, 33(2), 125–133. doi:10.1016/s0019-8501(03)00054-3 Calantone, R. J., Graham, J. L., & Mintu-Wimsatt, A. (1998). Problem-solving approach in an international context: antecedents and outcome. International Journal of Research in Marketing, 15, 19–35. doi:10.1016/s0167-8116(97)00028-1 Cavusgil, S. T., & Ghauri, P. N. (2002). Doing business in emerging markets: Entry and negotiation strategies. Thousand Oaks, CA: Sage. Chia-Ling, L. (2005). Knowledge acquisition from international strategic alliances—An empirical study of the electronics and IT industry in Taiwan. Faculty of Humanities, University of Manchester, Manchester, UK. Colemen, P. (2000). Power and conflict. In M. Deutsch & P. Coleman (Eds.), Handbook of conflict resolution (pp. 108–130). San Francisco, CA: Jossey-Bass. Dahl, R. A. (1957). The concept of power. Behavioural Science, 2, 201–215. doi:10.1002/ bs.3830020303 Dunning, J. (1999). Trade location of economic activity and the multinational firm. A search for an eclectic approach. In P. J. Buckley & P. Ghauri (Eds.), The internationalization of the firm: A reader (pp. 395–418). London, UK: ITB Press.

48

P. KHAKHAR AND Z. U. AHMED

Dupont, C. (1991). International business negotiations. In V. A. Kremenyuk (Ed.), International Negotiation: Analysis, Approaches, Issues (pp. 375–391). Oxford, UK: JosseyBass Publishers. Duvalett, J., Garapin, A., Llerena, D., & Robin, S. (2004). A game theoretical approach of price negotiation and coordination in an innovative firm-supplier context: An experimental analysis. International Negotiation, 9, 245–269. doi:10.1163/1571806042403045 Fang, T. (1997). Chinese business negotiating style, department of management and economics, Linkoping university publication (Doctoral dissertation). Linköping University, Linköping, Sweden. Ferraro, G. P. (1996). The need for linguistic proficiency in global business. Business Horizons, 39, 39–46. doi:10.1016/s0007-6813(96)90006-3 Fisher, R., & Ury, W. (1981). Getting to yes. Boston, MA: Houghton-Mifflin. Fisher, R., Ury, W., & Patton, B. (1991). Getting to yes: Negotiation agreement without giving in. New York, NY: Penguin Books. Fornell, C., & Larcker, D. F. (1981). Structural equation models with unobservable variables and measurement error: Algebra and statistics. Journal of Marketing Research, 18, 382–388. doi:10.2307/3150980 Francis, J. N. P. (1991). When in Rome? The effects of cultural adaptation on international business negotiations. Journal of International Business Studies, 22, 403–428. doi:10.1057/ palgrave.jibs.8490308 French, J., & Raven, B. (1959). The bases in social power, institute for social research. Ann Arbor, MI: University of Michigan. Garcia, S. (2002). Power and the illusion of transparency in negotiations. Journal of Business and Psychology, 17(1), 133–144. Ghauri, P. N. (1983). Negotiating international package deals: Swedish firms and developing countries. Stockholm, Sweden: Almgvist & Wiksell. Ghauri, P. N. (1996). Guidelines for international business negotiations. International Marketing Review, 3, 72–82. doi:10.1108/eb008312 Ghauri, P. N., & Cateora, P. R. (2006). International marketing (2nd ed.). London, UK: McGraw-Hill. Ghauri, P. N., & Grønhaug, K. (2005). Research methods in business studies (3rd ed.). London, UK: Prentice Hall. Ghauri, P. N., & Usunier, J. C. (2003). International business negotiations. Oxford, UK: Pergamon. Gilsdorf, J. W. (1997). Metacommunication effects on international business negotiating in China. Business Communication Quarterly, 60(2), 20–37. doi:10.1177/108056999706000203 Graham, J. (1987). A theory of interorganisational negotiations. Research in Marketing, 9, 163–183. Graham, J. L., Mintu, A. T., & Rodgers, W. (1994). Explorations of negotiation behaviors in ten foreign cultures using a model developed in the United States. Management Science, 40(1), 72–95. doi:10.1287/mnsc.40.1.72 Hadjikhani, A., & Thilenius, P. (2005). The impact of horizontal and vertical connections on relationships commitment and trust. The Journal of Business & Industrial Marketing, 20(2/3), 136–147. doi:10.1108/08858620510592759 Hall, L. (1993). Negotiation: Strategies for mutual gain. Newbury Park, CA: Sage. Heiba, F. (1984). International business negotiations: A strategic planning model. International Marketing Review, 1, 5–16. doi:10.1108/eb008259 Herbig, P. A., & Kramer, H. E. (1991). Cross-cultural negotiations: success through understanding. Management Decision, 29(8), 19–31. doi:10.1108/eum0000000000083 Hofstede, G. (2001). Cultures and organizations. London, UK: McGraw-Hill.

JOURNAL OF TRANSNATIONAL MANAGEMENT

49

Khakhar, P., & Leigh, L. (2015). The effect of negotiator characteristics on the success of international B2B negotiations. The International Marketing Trends Congress. Khakhar, P., & Rammal, H. G. (2013). Culture and business networks: International business negotiations with Arab managers. International Business Review, 22(3), 578–590. doi:10.1016/j.ibusrev.2012.08.002 Kim, P., Pinkley, R., & Fragale, A. (2005). Power dynamics in negotiation. Academy of Management Review, 30(4), 799–822. doi:10.5465/amr.2005.18378879 Kjaerbeck, S. (1998). The organisation of discourse units in Mexican and Danish business negotiations. Journal of Pragmatics, 30, 347–362. doi:10.1016/s0378-2166(98)00008-3 Kotter, J. (1979). Power in management. New York, NY: Amacom. Lewicki, R. J., Barry, B., & Saunders, D. M. (2006). Essentials of negotiation study (3rd ed.). Boston, MA: McGraw Hill/Irwin. Lewis, R. (1996). When cultures collide: Managing successfully across cultures. London, UK: Nicholas Brealey. Li, T., & Calantone, R. J. (1998). The impact of market knowledge competence on new product advantage: Conceptualization and empirical examination. Journal of Marketing, 62(4), 13–29. Manning, T., & Robertson, B. (2004). Influencing, negotiating skills and conflict-handling: some additional research and reflections. Industrial and Commercial Training, 36(3), 104–109. doi:10.1108/00197850410532104 Marrotti, J. (1998). Are you an effective negotiator? Industry Week 247(16), 70–71. Martin, D., Herbig, P., Howard, C., & Borstorff, P. (1999). At the table: observations on Japanese negotiation style. American Business Review, 17(1), 65–71. McCall, J., & Cousins, J. (1989). Communication problem-solving: The language of effective management. New York, NY: John Wiley & Sons. McCall, J., & Warrington, M. (1984). Marketing by agreement: A cross-cultural approach to business negotiations. Chichester, UK: John Wiley & Sons. Miller, G. (1983). On various ways of skinning symbolic cats: Recent research on persuasive message strategies. Journal of Language and Social Psychology, 2(2–4), 123–140. doi:10.1177/0261927x8300200204 Mintu-Wimsatt, A., & Gassenheimer, J. (2000). The moderating effects of cultural context in buyer-seller negotiation. Journal of Personal Selling & Sales Management, 1, 1–9. Murnighan, K., Babcock, L., Thompson, L., & Pillutla, M. (1999). The information dilemma in negotiations: Effects of experience, incentives and integrative potential. International Journal of Conflict Management, 10(4), 313–339. Myerson, R. B. (1999). Nash equilibrium and the history of economic theory. Journal of Economic Literature, 37(3), 1067–1082. doi:10.1257/jel.37.3.1067 Nair, A., & Stafford, E. (1998). Using an American perspective in understanding another culture: Toward a hierarchy of needs for the People’s Republic of China. The Journal of Applied Behavioural Science, 19(3), 249–264. doi:10.1177/002188638301900304 Neslin, A. S., & Greenhalgh, L. (1983). Nash’s theory of cooperative games as a predictor of the outcomes of buyer-seller negotiations: An experiment in media purchasing. Journal of Marketing Research, 20, 368–379. doi:10.2307/3151441 Oikawa, N., & Tanner, J. F. J. (1992). The influence of Japanese culture on business relationships and negotiations. Journal of Business & Industrial Marketing, 7(4), 55–62. Peleckis, K., Peleckiene, V., & Peleckis, K. (2013). Developing negotiation competencies of business management students: Structural and content dimensions. Business Theory and Practice, 14(4), 346–357. doi:10.3846/btp.2013.37 Penrose, E. T. (1959). The theory of the growth of the firm. New York, NY: John Wiley and Sons. Pfeffer, J. (1992). Managing with power. Boston, MA: Harvard Business School Press.

50

P. KHAKHAR AND Z. U. AHMED

Pfeffer, J., & Salancik, G. R. (1974). Organisational decision making as a political process: The case of a university budget. Administrative Science Quarterly, 19, 135–151. doi:10.2307/ 2393885 Phatak, A., & Habib, M. (1996). The dynamics of international business negotiations. Business Horizons, 39, 30–38. Pitulla, M., & Nicholson (2005). Negotiation: How to make deals and reach agreement in business. Norwich, UK: Format and Biztantra Publishing. Podsakoff, P. M., & Schriesheim, C. A. (1985). Field studies of French and Raven’s bases of power: Critique, reanalysis, and suggestions for future research. Psychological Bulletin, 97, 387–411. doi:10.1037//0033-2909.97.3.387 Potgieter, J. (2007). Negotiator power and authority report, the negotiation institute network. Sydney, Australia: Negotiation Academy Publishers. Pruitt, D. (1981). Negotiation behavior. New York, NY: Academic Press. Pruitt, D. (1993). Aspiration levels in bargaining and economic decision making (pp. 22–34). Berlin, Germany: Springer. Pruitt, D. G. (2005). Field experiments on social conflict. International Negotiation, 10, 33–50. doi:10.1163/1571806054741173 Putnam, L. (1990). Reframing integrative and distributive bargaining. In B. Shephard (Ed.), Research on negotiation and organisations (pp. 1–30). Greenwich, UK: JAI Press. Putnam, L. (2005). Discourse analysis: Mucking around with negotiation data. International Negotiation, 10(1), 17–32. doi:10.1163/1571806054741083 Ramsay, J. (2004). Serendipity and the real politics of negotiation in supply chains. Supply Chain Management, 9(3), 219–229. doi:10.1108/13598540410544917 Raven, B. F., & Kruglanski, A. W. (1970). Conflict and power. In P. G. Swingle (Ed.), The structure of conflict (pp. 69–109). New York, NY: Academic Press. Raven, B. H. (1965). Social influence and power. In D. Steiner & M. Fishbein (Eds.), Current studies in social psychology (pp. 371–382). New York, NY: Holt, Rinehart & Winston. Raven, B. H. (1983). Interpersonal influence and social power. In B. H. Raven & J. Z. Rubin (Eds.), Social psychology (pp. 399–444). New York, NY: Wiley. Raven, B. H. (1992). A power/interaction model of interpersonal influence: French and Raven thirty years later. Journal of Social Behavior and Personality, 7(3), 217–244. Raven, B. H. (1993). The bases of power: origins and recent developments. Journal of Social Issues, 49(4), 227–251. doi:10.1111/j.1540-4560.1993.tb01191.x Raven, B. H., Schwarzwald, J., & Koslowsky, M. (1998). Conceptualizing and measuring a power/interaction model of interpersonal influence. Journal of Applied Social Psychology, 28(1), 307–322. doi:10.1111/j.1559-1816.1998.tb01708.x Reynolds, N., Simintiras, A., & Vlachou, E. (2003). International business negotiations. Present knowledge and direction for future research. International Marketing Review, 20(3), 236–261. doi:10.1108/02651330310477585 Rubin, J., & Brown, B. (1975). The social psychology of bargain and negotiation. New York, NY: Academic Press. Rubin, J. Z., & Sander, F. E. A. (1991). Culture, negotiation and the eye of the beholder. London, UK: Sage. Saee, J. (2008). Best practice in global negotiation strategies for leaders and managers in the 21st century. Journal of Business Economics and Management, 9, 309–318. doi:10.3846/ 1611-1699.2008.9.309-318 Salacuse, J. (2015). The global negotiator: Making, managing and mending deals around the world in the 21st Century (1st ed.). New York, NY: St. Martins Press.

JOURNAL OF TRANSNATIONAL MANAGEMENT

51

Salancik, G. R., & Pfeffer, J. (1977). Who gets power and how they hold on to it: A strategiccontingency model of power. Organisational Dynamics, 5, 3–21. doi:10.1016/0090-2616(77) 90028-6 Schellenberg, J. (1996). Conflict resolution: Theory, research and practice. Albany, NY: State University of New York Press. Schoop, M., Kohne, F., & Ostertag, K. (2010). Communication quality in business negotiations. Group Decision and Negotiation, 19, 193–209. doi:10.1007/s10726-008-9128-8 Schrieshiem, A., Hinkin, T., & Podsakoff, P. M. (1985, November). Have measurement shortcomings produced erroneous results in field investigations of the five French and Raven power bases? An empirical examination. Paper presented at the annual meeting of the Southern Management Association, Orlando, FL. Scott, W. (1984). The skills of negotiating. Hampshire, UK: Gower Publishing Company. Senger, J. (2002). Tales of the bazaar: Interest-based negotiation across cultures. In R. J. Lewicki, B. Barry, & D. M. Sanders (Eds.), Negotiation readings, exercises and cases (pp. 385–400). Singapore: McGraw Hill. Shi, X., & Wright, P. (2001). Developing and validating an international business negotiators profile. Journal of Managerial Psychology, 16(5), 364–389. doi:10.1108/eum0000000005523 Stevens, J. P. (2002). Applied multivariate statistics for the social sciences. Mahwah, NJ: Lawrence Erlbaum Associates. Thompson, L., & Herbec, D. (1996). Lose-lose agreements in interdependent decision making. Psychology Bulletin, 120, 396–409. doi:10.1037//0033-2909.120.3.396 Tracy, B. (1998). Negotiating keys. Executive Excellence, 15(4), 18–19. Tung, R. (1988). Toward a conceptual paradigm of international business negotiations. In R. Farmer (Ed.), Advances in international comparative management (pp. 203–219). Greenwich, CT: JAI Press. Ulijn, J. M., & Verweji, M. J. (2000). Questioning behaviour in monocultural and intercultural technical business negotiations: the Dutch-Spanish connection. Discourse Studies, 2(2), 217–248. doi:10.1177/1461445600002002004 Wall, J. A., & Blum, M. W. (1991). Negotiations. Journal of Management, 17(2), 273–303 Walton, R., & McKersie, R. (1965). A behavioural theory of labor negotiations. New York, NY: McGraw-Hill. Weiss, S. (2004). International business negotiations research: Revisiting “bricks, mortar, and prospects.” In O. Shenkar & B. J. Punnett (Eds.), Handbook for international management research (pp. 415–474). Ann Arbor, MI: University of Michigan Press. Weiss, S. (2006). International business negotiation in a globalizing world: Reflections on the contributions and future of a sub field. International Negotiation, 11, 287–316. doi:10.1163/ 157180606778968371 Wolfe, R., & McGinn, K. (2005). Perceived relative power and its influence on negotiations. Group Decision and Negotiation, 14, 3–20. doi:10.1007/s10726-005-3873-8 Woo, H. S., & Prud’homme, C. (1999). Cultural characteristics prevalent in the Chinese negotiation process. European Business Review, 99(5), 313–322. doi:10.1108/ 09555349910288192 Wright, L. (1990). Observation as a method of negotiation research [Working paper 90(27)]. Kingston, ON: Queen’s University School of Business. Yan, A., & Gray, B. (1994). Bargaining power, management control, and performance in United States - China joint ventures: A comparative case study. Academy of Management Journal, 37, 1478–1517. doi:10.2307/256796 Yulk, G., & Tracey, B. (1992). Consequences of influence tactics used with subordinates, peers, and the boss. Journal of Applied Psychology, 77(4), 525–535. doi:10.1037//0021-9010.77.4.525

52

P. KHAKHAR AND Z. U. AHMED

Zarkada-Fraser, A., & Fraser, C. (2001). Moral decision making in international sales negotiations. Journal of Business & Industrial Marketing, 16(4), 274–293. doi:10.1108/ eum0000000005501 Zartman, W. (1978). Negotiation as a joint-decision-making process. In I. Zartman (Ed.), The negotiation process: Theories and applications (pp. 67–68). Beverly Hills, CA: Sage. Zartman, W. I., & Berman, M. H. (1982). The practical negotiator. New Haven, CT: Yale University Press.