Negotiation is an integral part of business. When we want something that someone else has, e.g. product, service, or even their business, we engage in negotiations to hammer out a deal that is in our best interest to achieve the desired end. Sometimes we can accomplish this; sometimes we fail and the deal falls through. Negotiation is an art form; our text refers to it as being similar to “a dance where partners in the dance influence each other (Moran, Abramson, & Moran, 2014, p. 71). My example is not international-culture example – it is an example of a clash of cultures from within our own country, pitting Texas against California.
In 2007, I was working for Weatherford Oil Country, a small subsidiary of Weatherford International. At the time, oil prices were high and business was booming. All of the us, the employees, were confident in our job security. Shortly thereafter, the oil market started to slump – a seriously steep slump. Suddenly, the confidence and high morale that were once palpable within the assembly plant were replaced by uncertainty and fear. Even managers feared for their jobs – they tended to be the first to go in some cases.
During the upswing, the company had been developing some promising new technology. The product developed was a new type of ‘jaw’ for tubing tongs, making the tong’s use safer and quicker. This new product caught the eye of National Oilwell Varco, a large oilfield services company. We soon began hearing rumors of a buy-out. NOV wanted to buy us from Weatherford. At the time, we were all excited, thinking that this move might shield us from the oil market downturn. My manager even jokingly slapped an NOV decal on his Weatherford hard hat (which he quickly removed when the General Manager walked through the plant). There was optimism in the air again.
Each day, we would ask about the progress of the negotiations from an employee ‘in the know.’ Things were looking up for us. Moran, Abramson, & Moran (2014) explain that in Western cultures negotiations are broken up into smaller, easier to work through portions. As these small portions were wrapped up in a positive manner, excitement grew. Then came the axe.
Everyone waited to hear the word from our manager that the deal was set and we were now NOV Oil Country. Unfortunately, negotiations were abruptly ended by the NOV team though they were so near to a deal. It seems that our negotiating team, headed by our GM, was dead-set on ruining the negotiations by not budging on what was reported as a ridiculous price for the company (considering the assets and revenue of Oil Country). NOV’s negotiators evidently decided that Weatherford was asking too much and backed out at the 11th hour. We were all deflated. We pinned our hopes and our jobs on this deal, and it seemed like our managers sabotaged a great opportunity. With the possibility of a buy-out gone and our hopes dashed, the fear crept back into the shop. Soon after, the layoffs began…
Afterwards, a handful of employees remained and did so until this most recent oil downturn. Now, the entire company has left the Ventura shop and moved to God knows where. If only Weatherford’s negotiators had a better understanding of their Texas counterparts, this story may have had a completely different ending. This incident cemented, in my mind, the importance of negotiations – well-thought out negotiations. It is vital to understand your counterparts and this is even more important when dealing with international business. Otherwise, your company could end up as another Oil Country.
References:
Moran, R. T., Abramson, N. R., & Moran, S. V. (2014). Managing Cultural Differences (Ninth ed.). New York: Routledge.
Oil Country Product Catalog: http://worldpetroleumsupply.com/wp-content/uploads/2013/02/Weatherford.pdf
Image retrieved from http://www.mediationpractice.ie/negotiation
It sounds to me like these negotiations were doomed from the start. It also sounds like egocentrism played a large role in the failure of these negotiations. Markman (2014) shares that egocentrism “can make it harder to negotiate successfully, because our rivals often are not like us. They have different priorities, and sometimes they even want the same outcome we do.” If one goes into a negotiation with an egocentric attitude, they may miss the opportunity for a “win-win” situation which is a successful negotiation.
It also sounds like leadership was not able to see the bigger picture and they definitely did not have their employees in mind during this negotiation. Markman (2014) also shares that “whenever we are in a disagreement, it is important to step back and figure out what the disagreement is really about. Often, there may be ways for everyone to get what they want, if only we pay attention to their actions rather than interpreting their views based on our own.” It is so important that when we communicate, we make every effort to study before-hand so that we have a better understanding of what the other company values and how they relate to ours. When we do, we have a better understanding of how to negotiate and we are less likely to allow egocentrism to get in the way of breaking what could potentially be a “win-win” situation for everyone involved.
Markman, A. (2014, January 22). Egocentrism and negotiation failure [Web log post]. Retrieved from https://www.psychologytoday.com/blog/ulterior-motives/201401/egocentrism-and-negotiation-failure.