Processes for Choosing and Training Negotiators
Choosing Negotiators
HSBC, a banking and financial services organization, chooses a well-equipped team with goals and strategies for negotiation. The company’s management believes that the team’s characteristics and abilities significantly influence their role at the negotiation table. As an international organization, HSBC chooses a diverse team composed of individuals of different nationalities with professional and cultural differences. The international organization is keen to clarify individual team members’ roles during team formation to avoid stand-alone negotiations created by interpersonal differences.
HSBC begins by identifying the appropriate roles of members in a negotiation team and recruits people with the necessary skills and values that match the roles. The company appoints a team leader who understands the potential tradeoffs of the negotiation and the negotiation context—HSBC chooses stakeholders who understand the specific factors in the existing relations.
Training Negotiators
HSBC understands the importance of preparing the negotiating team through training. The company trains its team to equip them with knowledge of the negotiation context and enhance their experience in the American business context and other countries. It leverages its training to acquit its negotiation team with the negotiation environment, including American cultural values, ideologies, and legal systems. The company hires a local legal expert to train the team on cultural awareness and improve their negotiation skills.
Recommendations
HSBC operates in a global business environment and requires skillful negotiators in its negotiation team. It is not enough for the company to have a diverse team at the negotiation table. The company needs to choose negotiators who can evaluate issues and negotiation components and examine the possible outcomes and their causes. An effective negotiator for an international company should be able to determine the costs and benefits of the negotiation aspect. The negotiators should know their power position in the negotiation deal (Macy, 2022, p. 24).
Apart from the team of negotiators having a general understanding of the legal customs and rules governing the society, they should understand how these customs apply to the negotiation. The company needs to have negotiators with psychological techniques to help them understand the psychological state of the other parties. The psychological ability helps negotiators to exert pressure on the parties when necessary.
The training should not be limited but extensive to help the negotiators critically engage at the negotiation table. HSBC should adopt a training program to help the negotiators avoid irrationalities and behavioral biases. The human capital theory supports training for any company to have skillful, experienced, knowledgeable, and productive negotiators (Algezawy et al., 2023, p. 2). The training should promote maximized outcomes in all negotiation situations. According to Algezawy et al. (2023, p. 2), the behavioral theory argues that skillful negotiators make impulsive decisions and fall for many biases. HSBC should train the negotiation team on how to avoid judgmental mistakes.
Pre-Negotiation Process
Company’s Processes Before Negotiation
HSBC spends a significant amount of time preparing for any significant negotiation. The company begins by evaluating alternative positions, including the least acceptable. The first process involves considering the interests of both parties and includes the best alternative to a negotiated agreement (BATNA). HSBC’s second process before negotiation involves gathering intelligence about the other party. The information collected concerning the other party’s value helps the company make more informed decisions at the negotiation table.
The third pre-negotiation process at HSBC concerns making the company’s proposals the basis for discussion during the negotiations by drafting the proposed agreement. This process helps HSBC to gain control over the negotiation process by providing the agreement itself. The draft includes the company’s points of view and the terms around which the negotiation begins.
Before negotiation begins, HSBC ensures that the agenda for the negotiation table is formulated. The company and the other party jointly decide the matters constituting the agenda. The agenda formulation helps the parties determine the principles, issues, and policies that are most critical and worth attention. The agenda formulation process reveals to the company the extent to which the other party is interested in the negotiation process.
The final process undertaken by HSBC before the negotiation process is establishing a team of experts to sit at the negotiation table. The company ensures that a diverse team understands the different agendas presented for negotiation. It appoints a leader within the team with clearly defined powers, including doing most of the speaking and leading towards a conclusion in the negotiation process. The next move by the company involves briefing the negotiation team on the tasks they are supposed to perform to ensure successful negotiations. The company appoints a technical specialist within the team to record the arguments of both sides and agreements reached on specific issues.
Recommendations
Companies need to refine their goals and objectives and research issues in the preparation phase of the negotiation process. Though setting appropriate targets according to the goal-setting theory is essential, companies should set objectives on the basis for the development of integrative solutions (Hossiep, Harnack, and Bürkner, 2019, p. 2). HSBC should engage in a comprehensive preparation process that includes researching the context of the negotiation, their BATNAs, and the other party.
However, the company’s goals should reflect the realities of negotiation and focus more on the gains from the negotiation process. Lindholst, Bülow & Fells (2018, p. 119) state that preparation for any vital negotiation in a company is a multilevel, dynamic process that changes over time. Apart from goal formulation, HSBC should state its negotiation approach to the subject matter. Most importantly, the company should develop a strategy to adopt at the negotiation table during preparation.
HSBC should address the issues of communication as part of team preparation. Each party should share information openly to help them consider each side’s perspective and strive to build upon commonly shared values and principles (Berridge, 2022, p. 25). The company should have a diverse team and one with different professional roles to benefit from diverse expertise.
The team should have clearly defined roles and ground rules stating the expected contributions from every negotiator (Lindholst, Bülow & Fells, 2018, p. 121). The team should be able to outline scenarios that could occur and their reactions. Therefore, an emotionally intelligent team is critical in the planning process of HSBC’s negotiation.
Company’s Post Negotiation
Reviewing the Negotiation Process
HSBC intentionally reviews the negotiation process to assess the strengths and weaknesses and target areas for growth and development. The company starts by reviewing the negotiation styles used at the table and the results yielded by each style. This goes along with assessing the negotiation skills exhibited by each negotiator. As a result, the company’s management can identify the strengths and limitations of each negotiator and identify the areas of training for future negotiations.
HSBC’s review process after negotiation looks into whether the company achieved its goal. The company wants to know whether it could use the BATNA strategy effectively during the negotiation. It is in the company’s interest to examine the causes of failure to reach its goals and establish the final agreement and whether it was better than its BATNA. The company generates a report with lessons learned from the negotiation process, including the achievements and failures observed.
Importance of Reviewing the Negotiation Process and Proposed Improvements
Companies enhance their negotiation skills and close the most significant deals by actively reviewing their past negotiation processes and deriving lessons from them. The post-negotiation assessment helps the company examine the effectiveness of the negotiation techniques. Reviewing the negotiation process helps identify the inherent problems found in the negotiation table (Saee, 2008, p. 315). During the reviewing process, the company identifies the negotiation strategies that would have worked for them, the tactics used by their counterparty, and how well they countered their partners’ techniques.
There are many potential improvements that HSBC can consider in its negotiation to have an effective process. The company should employ different strategies depending on the involved negotiators’ situational characteristics and personal backgrounds. For instance, if the company is involved in a global negotiation, adopting a culturally synergetic strategy is essential to ensure successful negotiations. The company should consider separating the problems encountered during negotiations from the people involved. Saee, J. (2008, p. 312) states that any principled negotiations focus on fundamental interests and mutually advantageous solutions. The negotiators at HSBC should focus more on the interests gained from negotiations, not on positions. More importantly, HSBC should enhance its negotiation approaches for mutual gain.
A Negotiation Example
HSBC’s Negotiation Example
HSBC has been involved in many internal and external negotiations. One of the negotiations I was part of involved HSBC’s team and a party representing two senior cyber technologists that the company wanted to hire. The financial company, which works with various talented tech professionals, wanted employees who would build teams with highly specialized expertise. As part of the negotiators at the company, we sought information from the other party to understand our engagement in achieving the goal of having the experts work for the organization.
The two technologists wanted the company to relocate them from America to the UK with their families. The negotiation preparation process had started, and each party understood their goals and objectives. Despite both parties establishing negotiation teams, communication issues affected the success of the negotiation process. The company failed to draft its offer indicating its points of view about the negotiation context. HSBC’s terms were unclear and appeared generic and overwhelming for the other party.
The company’s failure to address the relocation concerns of the other party failed concessions in negotiations. As the negotiation team representing HSBC, we stuck to a distributive bargaining approach focused on getting the technologists’ representative to agree to our target point. The cyber technologists’ candidates had hired a single negotiator who faced serious difficulties engaging with a team of five negotiators representing HSBC. The negotiator failed to acquire as much information about HSBC’s interests and goals and could not predict the company’s responses.
Suggestions for Improvement
The negotiation between HSBC and the technologist experts could have been improved if both parties had paid less attention to the initial offers. The latter should have treated the initial offer as merely a point of departure because such offers can be extreme and idealistic. HSBC should have emphasized a win-win solution to support the technologists and enable them to work for the company. The company should have adopted a collectivist culture through an integrative bargaining strategy (Saee, 2008, p. 315). That way, HSBC could have created a strong bond with the other negotiating party, making them leave the table feeling successful. The company was dealing with a negotiator representing individuals from different cultures, and it would be essential to consider cross-cultural negotiations.
HSBC’s goal was to negotiate and have the technology experts take up the role of building teams in the organization. However, the company’s negotiation team undermined the importance of building a solid relationship with the negotiation party. Instead, the company enhanced its perceived power by considering a win-win approach. As a result, the latter felt like their priorities and goals were overlooked. They felt that a significant sacrifice involving relocating from the US to the UK was being ignored. HSBC should have focused mainly on the potential areas of agreement in the negotiation process and should have sought to expand these areas for a successful negotiation.
Reference List
Algezawy, M. et al. (2023) ‘Modeling negotiating abilities in the construction sector: a proposed mathematical model using the confirmatory factor analysis method’, Mathematics, 11(4), p. 1-15. Web.
Berridge, G.R. (2022) Diplomacy: theory and practice. Springer Nature.
Hossiep, C.R., Harnack, K. and Bürkner, P.C. (2019) Goal setting in distributive and integrative negotiations: a meta-analysis. University of Muenster.
Lindholst, M., Bülow, A. M., & Fells, R. (2018) ‘The practice of preparation for complex negotiations’, Journal of Strategic Contracting and Negotiation, 4(1–2), p. 119–140. Web.
Macy, K.V., 2022. Understanding your BATNA & other tips to feel empowered during your negotiations in work & life. Web.
Saee, J. (2008) ‘Best practice in global negotiation strategies for leaders and managers in the 21st century’, Journal of Business Economics and Management, 9(4), pp. 309-318. Web.