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It is critical to have all stakeholders involved in the negotiation. If that doesn’t happen it’s all too easy for the party that is excluded to disrupt the deal or try to bring it down.

In the case of Hamid Karzai’s Government in Afghanistan, they no doubt feels very threatened by the fact that talks between the US and Taliban representatives have taken place without its involvement. You can understand how they might fantasise negatively about the possible outcome of talks on the future of the country from which they had been excluded. What reason could there be for them to be left out unless their interests were deemed somewhat inconvenient and immaterial to the final outcome?

The US has to support the Karzai government as “legitimate” as this itself gives the US a legitimate reason to be in Afghanistan – at the behest of its official government. If the US professes to support the Karzai regime then it has to involve them in any peace process. If they can’t be present because the mood is too tense or sensitive then they must be kept involved on a fully transparent and equal basis. If the US doesn’t trust or respect them sufficiently to do that, then it must expect Karzai’s Government to adopt the state of mind of a “loser” which believes it cannot win, and accordingly seeks to de-rail the possibility of a deal happening.

Some interesting deal-making issues are raised by the formation by Sony, Toshiba and Hitachi of a combined Liquid Crystal display operation funded by the Japanese Government (to be called ‘Japan Display’). The Innovation Network Corp of Japan is putting in 2.6 billion and will own 70% of the shares in the vehicle.

You can see why the deal has been done. This is a very competitive sector with increasing competition from players in Taiwan and South Korea including Samsung and LG. All 3 companies must have “reassurance” negotiating needs as must the Japanese Government which must view these companies’ interests as being of strategic importance nationally.

Creating this combined huge operation will certainly give scale which is an acknowledged source of potential bargaining power. However, whether such scale delivers genuine market power remains to be seen. Huge organisations can be very cumbersome and it is often difficult to realise internal synergies, which make great sense when discussed at Board level, but don’t have the commitment of the workplace at large. Workforces often find the prospect of such synergies rather frightening as they often involve people losing or changing roles – and as a result, they may resist change which can then become difficult to implement.

Moreover, organisations which are heavily supported by the Government often tend to be uncompetitive – they know they can rely on the Government to bail them out so they have less motivation to be lean and hungry. The history of Nationalised Industries in the UK and the former Soviet bloc tells us everything we need to know about that. So, if the Government holds 70% of the shares that may be an obstacle to turning scale into actual market power.

If […]

The patent wars between Apple and Samsung are another example of the “push” negotiating behaviour which seems to be part of Apple’s coding as an organisation. Apple has used its patents arsenal to gain a local injunction preventing distribution in Germany of the Samsung Galaxy 7.7 Tab.

Certainly one can see why patents are useful for this kind of purpose – Google’s otherwise baffling acquisition of Motorola only makes sense in the context of Motorola’s stockpile of patents. Here, they are once again enabling Apple to engage in typical “push” behaviour – “stating expectations” about what it will not accept and using “pressure” tactics to get what it wants. This has been their house-style in all their content negotiations too, going back to the launch of iTunes. It’s also pretty much the way they deal with consumers – forcing them to exist only within Apple’s domain and being obstructive when it comes to them porting their content to other devices.

It’s difficult to critique Apple’s success as an organisation to date. However, if all you ever do in negotiations is “push” people around, you will come unstuck eventually. You store up too much resentment and create too many enemies who will either fight you constantly, draining resources and energy, or wait patiently for their chance to take revenge.

The article here (paidcontent.org) refers to the blog by Matthaus Krzykowski, criticising Apple’s domineering approach and suggesting that the tech community and even consumers will come to resent this. There are others Apple may need to worry about too. It owns 80% of the tablet market – cue Regulator interest. And in a post-Steve Jobs world, shorn of his charismatic influence, Apple may find it needs friends […]

The negotiating stand-off at Bani Walid is not that surprising really.

Whoever it is from Gaddafi’s side that is holed up there must be feeling pretty anxious right now – with deep-seated reassurance or even survival needs. This is because after all the fighting and the casualties and now the discovery of appalling atrocities there will be a thirst for “justice” from the NCT rebels and their Western allies which is impossible to ignore. This will mean trials and probably executions. Gaddafi’s side know that if they negotiate a surrender now there is not much of a “win” in the deal for them – hence the standoff whilst they consider other options – including fighting to the last or, more likely, escaping if they can.

There seems to be a further complicating factor in the negotiation as well, in that the discussions are being brokered through the Warfalla tribe, who dominate this area. There are 140 different tribes in Libya and their influence on events has been under-stated in reporting to date. In this case the tribe seems somewhat split between those in Bani Walid who are pro-Gaddafi and those in other regions like Miserate who are pro NTC. It’s never easy to get things agreed with a divided team on the other side so that may be complicating events too…

It’s a shame really. What was the “win” here? It must have been regime change. Getting rid of Gaddafi bloodlessly would have been a major negotiating coup and might have been possible before the fighting began. He might not have been punished but, evil though he is, could we have tolerated that in the overall bigger picture? Was it necessary to punish the IRA for […]

Maybe the blocking of the proposed AT & T/T Mobile merger by the US Justice Department is not so surprising after all.

Commentators were surprised because negotiations with the Justice Department were ongoing, and the AT and T lobbying team in Washington was led by the successful and experienced Jim Ciocone who has worked in the Reagan and Bush Administrations. Those were of course Republican regimes and I just wonder if enough adjustment has been made to accommodate the differing negotiation needs of a Democrat-led Administration?

Republican regimes are notoriously business-led and the Justice Department in previous eras will have wanted to align itself with big business – it will have almost had a “belonging” need in this respect. The Democrats will have a different agenda – including a “respect” need for their policy agenda which would be more focused on the outcome for consumers and less on the interests of big business. Given the perilous state of the jobs market there may also have been a “reassurance” need that the merger would not reduce levels of employment through rationalisation.

On the AT & T side the agenda would seem to be driven by an “achievement” need for Chief Executive Randall Stephenson and his Board – perhaps that got in the way of a full perception of what the DOJ actually required. A clue to the fact that there may have been a mismatch in terms of addressing underlying needs is that the disapproval of the deal seems to have happened so suddenly and been such a surprise to commentators.

If one side’s needs are not being met at the “exploration” stage of a negotiation then this often surfaces when “bids” are made, as there […]

The article “how to achieve peace ‘tomorrow’ in Israel-Palestine” focusing on Stuart Diamond’s theories on solving the Israeli-Palestinian dispute raises many good points.

There is no real point in the Palestinian tactic of seeking a UN resolution. This move will be vetoed by the US, almost certainly, and the attention it creates will highlight Palestinian as much as Israeli intransigence. There is widespread support for the perceived “justice” of the Palestinian cause so there is no need to ventilate the issues again at the UN in order to further that objective. Furthermore, a resolution, if passed, would have absolutely no effect on Israel at all; it will just be perceived as a pressure tactic and will harden Israeli opinion.

The answer is for the two parties to adopt a mental position that peace is more desirable than a perpetual state of hostilities. Once that breakthrough is achieved it becomes possible to put in place a process that may get somewhere.

Stuart’s suggestion of economic co-operation as a part of that process is a good one. Economic co-operation within the EU has kept member countries at peace since 1945 – an unprecedented period of calm. Economic co-operation between Israel and Palestine can have a similar effect, because it delivers people on both sides what they most need – jobs, income, security. Once they see that these are the benefits of a peace process, that there is something to gain from a peace process and something to lose if it stops, then the process gains commitment. THEN, but not until then, is it possible to start talking about the content of a deal…

The tacit negotiation between Governments and debt Rating Agencies in relation to Eurozone debt (and indeed UK debt) illustrates some of the rules of power in negotiating very nicely.

Ratings Agencies seem to have the upper hand. Standard and Poor’s downgrading of the US ‘Triple A’ credit rating sparked a round of market falls and introspective comment concerning US debt and the way its political parties are managing the problem. Its constantly gloomy prognosis concerning Greek debt and the likelihood of default helps promote an air of ongoing crisis surrounding the Euro.

In recent days Moody’s Agency has cut the credit ratings of French Banks Societe Generale and Credit Agricole, partly because of their fears over exposure to Greek debt, immediately causing a further market funk across Europe. Only two days ago Standard and Poor warned that a widening of the debt crisis could have ratings serious consequences for German Banks, against a backdrop of another hastily arranged crisis conference call between Germany, France and Greece, and an anxious gathering of European Finance ministers in Poland

How do the Ratings Agencies do this? Firstly they are seen as having some expertise, because they often get their calls right. They say that a particular debt obligation or debt instrument should have its rating lowered and hey presto the markets respond to that judgement. This is of course self-fulfilling but the Agency’s expertise is nonetheless reinforced.

Ratings Agencies also do something else which devotees of power plays advocate. They win through action not argument. Some say that from the point of view of exercising power, argument or debate weakens your position, and that action is far more important. Standard and Poor’s don’t negotiate, they simply announce their decisions. This […]

Interesting piece on Chinese public sentiment following a tragic accident during the week. It’s only a vignette, but could it be an indicator of how Chinese negotiating needs may change over time?

Yue Yue, A young girl of two was run over by a car in a hit and run accident. Nobody came to help and the driver drove off without stopping to assist. The child was left injured in the road. 18 passers-by walked on and didn’t stop. It was only after she had been hit by a second car that people came to her aid. This story has prompted a period of moral reflection in China, about whether the Chinese have become so fixated with money and material progress that they have no time for morals. Lawmakers are even meeting to discuss whether they need to introduce a ‘Good Samaritan’ legislation.

This is interesting. Individual’s needs in life (and in negotiation) often go through a progression, starting with survival needs, and moving through to a need for reassurance, then respect, then belonging, and then through to achievement. Each level of needs must be satisfied in turn.

China has been on a fast-track journey of economic growth, catapulting its population through these various stages of need. Negotiations with the Chinese are often characterised as being very hard-nosed; which is consistent with levels of need such as “respect”. It is also consistent with a negotiating need to “belong” – to be taken seriously as a leading economic super-power.

However, as China’s population becomes wealthier, a new imperative for “achievement” develops. It was interesting to see in the Sunday Times that China is pre-occupied with a desire to develop its own original internet businesses rather than copying western internet […]

Dell’s decision to launch tablets via a joint venture with Baidu in China rather than in the US or Europe is only reported in passing in this article (Reuters.com) but it is fascinating when examined from the perspective of bargaining power. First of all it suggests a further subtle shift in the tipping of bargaining power from West to East. It would seem China can now potentially deliver greater scale than Europe or the US for a technology company like Dell. This is an important source of bargaining power. China can also deliver greater “network” bargaining power – literally; the giant Baidu search engine can deliver 294 million users – that’s 70% of China’s online users. China can also deliver “authority” power – trading success here counts for an increasing amount in the rest of the world.

The move is also interesting for what it says about Dell’s negotiating power. Some analysts are very cynical about the development and Dell’s weak market position – one is quoted as suggesting that it is just “grasping at straws to get any kind of publicity”. Yet companies can create “authority” in many different ways. One way is for a company to be prepared to recreate itself. This creates an air of unpredictability which wrong-foots opponents. In addition, carrying out a strategic course of action boldly and decisively rather than timidly helps develop your authority.

Dell has a reputation for steady reliability rather than flair, but launching products exclusively in China is an unusual and perhaps unexpected step, and tying up with the leading Chinese search engine is an innovative form of partnership. This kind of initiative gets noticed by commentators (as this article demonstrates). And whether or not this […]

The announcement of the Deezer UK launch and its tie up with Orange shows how important it is to be clear when you make your “bid” as a negotiator. If you don’t then the impact of your bid will be lost and the other side will be much less likely to accept it. In this case the “negotiation” with users over whether to accept the Deezer offering may already have been somewhat lost

There was definitely some initial confusion over what the Deezer offer is in the UK. The Telegraph reported the UK launch of Deezer by simply stating the standard Deezer offering:

– £4.99/month to listen to unlimited streaming via computer only
– £9.99/month to listen to unlimited streaming via computer or/ mobile device and an offline mode (presumably recently streamed songs are stored somehow in the device/pc)

This was followed within days by Mobile Today reporting the Deezer/Orange offering which provides mobile streaming only to all of their pay-monthly customers (but not PC streaming from what I can gather) to bypass the £9.99/month tariff that would otherwise have been paid for this service.

To cap it all I also read that Deezer are still finalising their licensing agreements with the UK labels and publishers, so it is not clear if this offering is ‘live’ yet (there is nothing on Orange’s website about it despite the announcement that this would be in place from last week).

When you are negotiating, offering confusion and complexity are not great ways of persuading other people (in this case the public) to accept your bid. So, it will be interesting to see what impact (if any) this service has on Orange’s sign-up rate in the UK.