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International Negotiation Can Be Challenging: Understanding Risks

August 16, 2010

IACCM recently completed a study on the relative ease of doing business in almost 50 of the world’s major markets. I find the results extremely interesting – and potentially of great use to contract negotiatiors.

The study asked members with direct experience of negotiating in overseas countries to rate their experiences on a scale of 1 to 5, where 1 was especially difficult and 5 was positive. IACCM then asked the participants to identify which of 9 categories of ‘issue’ they had encountered. These categories were:

  • Ethics / business culture
  • Contract or negotiation skills / understanding
  • Problems with payment
  • Demands for performance bonds or guarantees
  • Dealing with licenses
  • Local laws or regulations
  • Maintaining rights to assets or property
  • Language
  • Enforcing contracts

The survey has three major purposes:

  1. For the overseas negotiator: the findings will assist in anticipating some of the risks and issues they need to address or overcome. Of course, it may even mean they decide against a market entry at all.
  2. For the domestic negotiator, the survey offers insight to external perceptions of their country and equips them to think about how they may adddress the fears that their counterpart may have in doing business with them.
  3. For government agencies, the findings represent an agenda for improvement.

IACCM plans to dig deeper into the initial results and to capture specific issues. For example, if a country scores badly on local laws and regulations, what are the precise concerns or experiences that have generated this rating?

The study has already generated a high level of interest from professionals and the media. It is anticipated that it will become an annual study to ensure continued awareness for international negotiators, to provide advice on possible solutions and to monitor progress on improvements.

The table of results is available from IACCM, by writing to info@iaccm.com.

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