Australia: Negotiation Process

Preparation

        Stage one of the negotiation process is preparation and here is where we can gain an advantage by fully understand Australia. Most conflicts that arise while negotiating with other countries are caused by the differences in culture, language, and the environment so understanding the differences is important. As Starbucks top management team we understand there are differences and must prepare in order to reach success in Australia.

         We plan to bring a top executive to our first negotiations with Australia because having a top executive present during the initial meeting is crucial, it shows them the importance. We also plan to arrive 15 minutes early because Australians expect visitors to be punctual. Australia’s risk tolerance is considered stable and it is not any greater than the United States’. In Australia, the decision making process is usually conducted with top officials. Top officials have a strong impact on the decision making process even if they do not attend the negotiation. By preparing for negotiations we can gain an advantage in the negotiation process by understanding Australia.

Relationship Building

        In stage two the goal is to gain trust before beginning to discuss business related information. Trust is key to doing business in Australia and relationship building is considered moderately important. Australians tend to not trust those who are all about business, integrity and dependability are important traits for gaining their trust. Our goal for Starbucks in Australia is to have Australians trust us and for us to trust Australia as a host country. Mateship is a term often used in Australia and the concept is an important one. In Australia, being called a mate is a term of endearment.  To have success in Australia, we must form a mateship with our host country.

Exchanging Task Related Information.

        The third stage of the negotiation process is where each side makes a presentation and states their position. Negotiators in Australia believe that the sharing of information is a way to build trust, so we must understand this during the process. Even though Australians believe sharing of information is a way to build trust, it does not mean they will reveal everything we want to know during the negotiation. Although, if Australians believe we are hiding information from them negotiations may become difficult.

        The negotiation style in Australia often is engaging in a debate that is directed at a solution that is agreeable to both sides. Australians focus the same amount on long term beneifits than they do short term benefits. Australian’s believe in win-win negotiations and are primarily cooperative. They also view compromising as being helpful, so we may need to compromise in order to come to terms.

Persuasion

        The fourth stage of the negotiation process is where the hard bargaining starts. Both parties try to persuade the other to give up some of their own and accept more of their position. Australians sometimes use bargaining tactics, but they do not overuse them. The majority of Australians negotiate honestly and straightforward. The price of the agreement rarely changes more than 20-30 percent from the original offer. We cannot use pressure techniques because Australians do not like being under pressure and doing so can hurt our relationship. This also means we cannot put give them a time limit to enter an agreement.