Guide To International Negotiation Planning
PurchTips - Edition # 42 February 10, 2004
By Charles Dominick
Tips From The Purchasing Expert Panel
This article is our second in a series featuring a "Purchasing Expert Panel" - experienced individuals who share their insights to help you became a better purchaser. Next Level Purchasing posed this question to the panel: "What should a supply manager do differently when preparing for international negotiations compared to preparing for domestic negotiations?" Here are the panel's responses...
"As with any negotiation, PREPARATION is the key. However, for international negotiations that preparation must include understanding the culture of the company/person with whom you will be negotiating. Essential elements to understand are the cultural norms, which generally dictate the negotiating style. I have personally observed the success or failure of negotiations in foreign procurements result more from understanding or lack of understanding of the culture than from any other reason."
Ernest G Gabbard, C.P.M., CPCM
Director, Corporate Strategic Sourcing
Allegheny Technologies, Inc.
"All negotiations require clear objectives, a well thought out strategy, and a plan for implementing the objectives and strategy. When preparing for international negotiations the supply manager should give careful thought to the culture of the other party, the implications of cultural differences for his/her negotiation strategy and plan, and the implications of international currency exchange rates. The supply manager should also recognize that cross-cultural negotiations may take much longer due to differences in language, culture, and business practices."
Dr. Michael A. McGinnis, C.P.M.
Associate Professor of Business
Penn State University New Kensington Campus
Upper Burrell, Pennsylvania
"There is one truism in negotiations and that is that the side that plans and prepares the best, wins. If the supply manger does a good job preparing for negotiations domestically then besides learning local customs and culture there is not too much of a difference in preparation for international negotiations. Unfortunately too many supply managers do very little preparation for negotiations and as a result give much more than they get. Just as in domestic negotiations, for international negotiations it is important to:
Negotiating internationally is one of the most interesting, challenging, and richest experiences of the supply manager and with proper preparation it can be one of the most rewarding as well."
Robi Bendorf, C.P.M.
Bendorf & Associates
Next Level Purchasing wishes to thank Ernest, Michael, and Robi for their insights. If you are interested in being on Next Level Purchasing's next "Purchasing Expert Panel," send your name and title to firstname.lastname@example.org.
Do you volunteer for a purchasing organization?
Next Level Purchasing allows several organizations to reprint these articles in their newsletters. If you would like details on how you can use our articles for your organization, send the name and Web address of your organization to email@example.com.
Spotlight On Professional Development Opportunities
If you are new to purchasing, are you ready for the many challenges you'll face in the months ahead? Next Level Purchasing's online class "Mastering Purchasing Fundamentals" walks you through the purchasing process step-by-step. You'll be ready for these challenges. And you won't need the years of experience usually required to learn how to deal with these challenges. You'll get more than just an introduction to purchasing - you will become an expert at flawlessly executing and managing purchases.
You will learn how to make the many decisions necessary to identify the best potential suppliers, plus...
- How to most effectively prioritize requisitions
- How to decide when to use competitive bidding, negotiation, or both
- How to successfully conduct competitive bidding using solicitation tools such as RFP's and RFQ's
- How to select suppliers with not only the best monetary offer, but also the least risk of failure
- How to determine whether a contract, purchase order, or other method of ordering is best
- How to ensure supplier compliance
- How to close out a transaction with confidence
- How to think like a purchasing manager
- How to prepare for the future of purchasing
- Visit www.NextLevelPurchasing.com to register
- When you register, you will get an email with a user name, password, and instructions
- Log in to our Web site at any time to read material, engage in interactive exercises, and take quizzes
- Receive a Certificate of Completion awarding you with Continuing Education Hours upon completion
For more information on this class and other online classes for purchasing professionals, visit:
Is poor supplier performance driving you crazy? You won't have to work so hard if you apply certain proven techniques for evaluating and improving supplier performance. If you have wanted to implement a supplier ratings program but had difficulty getting started, Next Level Purchasing's online mini-course "Managing Supplier Performance" (MSP) is the perfect class for you. And, oh yeah, it's FREE!!!