RISK TAKING PROPENSITY IN

INTERNATIONAL NEGOTIATION
PRESENTED BY:
Lakshay Batra(138)
Jatin Dhall(132)
Jithen KP()
WHAT IS RISK TAKING PROPENSITY ?
Risk taking propensity means the degree to
which an entity is willing to take chances with
respect to risk of losses.
WHAT IS INTERNATIONAL NEGOTIATION ?
International negotiation is as it says: inter-
national. It is about negotiation between
countries.
RISK TAKING PROPENSITY IN
INTERNATIONAL NEGOTIATION
Risk taking propensity can be hence defined as the
willingness of a country to take a risk during a
negotiation being done among the two or more
different countries on a particular issue. International
negotiations happens between individuals and
companies also, where the traps and tricks of cross-
border negotiation can ensnare even the most
experienced home-country negotiators
Impact of good or bad negotiation can directly
affect revenues and sales.
Negotiation skills helps you resolve situations
where what you want conflicts with what someone
else wants.
Negotiation aims to explore the situation to find a
solution that is acceptable to both parties.
Styles of negotiation depends on the circumstances.

IMPORTANCE OF NEGOTIATION
FACTORS AFFECTING CROSS CULTURE
NEGOTIATIONS
1. Negotiating Goal and Basic Concept
2. Protocol
3. Communications
4. Risk-Taking Propensity - Uncertainty Avoidance
5. Power Distance
NEGOTIATING GOAL AND CONCEPT
How is the negotiation being seen? Is mutual
satisfaction the real purpose of the meeting? Do
we have to compete? Do they want to win?
Different cultures stress different aspects of
negotiation. The goal of business negotiation may
be a substantive outcome (Americans) or a long-
lasting relationship (Japanese).
RISK-TAKING PROPENSITY
There is always risk involved in negotiations. The
final outcome is unknown when the negotiations
commence. The most common dilemma is related to
personal relations between counterparts: Should we
trust them? Will they trust us? Certain cultures are
more risk averse than others, e.g. Japan. It means that
less innovative and creative alternatives are available
to pursue during the negotiation, unless there is a
strong trust-based relationship between the
counterparts.
NEGOTIATION
Negotiating Goal
(Contract
Or
Relationship)
Negotiating
Attitude
(Win-Win
Or
Win-Lose)
NEGOTIATION
NEGOTIATING GOAL
(CONTRACT OR RELATIONSHIP)
Negotiators from different cultures may tend to view
the purpose of a negotiation differently. For deal
makers from some cultures, the goal of a business
negotiation, first and foremost, is a signed contract
between the parties. Other cultures tend to consider
that the goal of a negotiation is not a signed contract
but rather the creation of a relationship between the
two sides
NEGOTIATING ATTITUDE
Because of differences in culture, personality, or both,
business persons appear to approach deal making with
one of two basic attitudes: that a negotiation is either a
process in which both can gain (win-win) or a struggle
in which, of necessity, one side wins and the other side
loses (win-lose). Win-win negotiators see deal making
as a collaborative, problem-solving process; win-lose
negotiators view it as confrontational
TYPES OF RISKS INVOLVED
The three major risk types are:
Enterprise risk Risk related to the operation of a business, execution
strategy, systemic issues, material issues, etc.
Project risk Risk related to the planning and delivery of a product
or service and not being able to meet project triple constraints
scope/quality, schedule, cost (including technology)
Process risk Risk relating directly to planning and delivery of a
product or service and not being able to meet 1. stability, 2.
capability, 3. improvement criteria, also the inability to achieve
consistent outcomes.
There are two aspects of risk that must be considered
when making a decision
those that can be controlled, and
those that cannot be controlled.
In the moment of decision making, the best thing
you can do is the right thing, the next best thing is
the wrong thing and the worst thing is doing
nothing.
TYPES OF RISKS INVOLVED