The Barents Sea Conflict: Russia and Norway Competing Over Fossil Fuel Riches in the Arctic

A negotiation is a bargaining process for a good, service, intellectual property right, commodity or any given case of conflict for which two or more parties claim or desire ownership for economical, psychological, political or personal motivations. In an international negotiation, this bargaining process has evolved to become more complex, taking account of international facets such as culture differences, power dependencies and variations of political agendas. Weiss (2006) defines international business negotiations as 'the deliberate interaction of two or more parties, originating from different nations, who are attempting to define or redefine the terms of their interdependence in a business matter.'

Due to this complexity, Cohen and Meerts (2008) argue that the study of contemporary negotiation cases needs to be preceeded by the study of historic negotiation practices for one to comprehend the full extent of negotiation structures and evolving nature of negotiations itself. Although political and economic globalisation have rapidly changed the landscape, scope and context within which negotiations are conducted, Cohen and Meerts (2008) argue for a significant resemblance between historic and contemporary negotiations based on our 'need to cooperate in situations of rivalry' - which leads to 'joint decision making under conditions of interdependent choice' (Cohen and Meerts, 2008). The lessons learned during the past should be able to teach us the structural components applicable to today's negotiation processes for which modern moderators on negotiation outcomes can be adapted. Cohen and Meerts (2008) also note that 'negotiation is situational and contextual' and that today it has evolved into 'a major -if not the only- tool of international conflict management and resolution.'

The purpose of this paper then is two-fold. Using a hybrid model of a variety of thoroughly practiced negotiation frameworks, it primarily examines the effects of moderators such as culture, power dynamics and political factors on the negotiation behaviour and processes in the context of the conflict between Russia and Norway over maritime sea-boundaries and associated ownership of hydrocarbon reserves in the Barents Sea. Besides this main objective, this paper also aims to establish if and to what extent media attention and third-party political coalitions have an influence on the behaviour exhibited during the negotiations as well as the final outcomes of bilateral agreements. We have to note that this conflict has been evolving since the 1970s and as such the changing national and international contexts are likely to have influenced the negotiations along the way.

Theoretical Footing

The following section reviews a variety of academic negotiation frameworks as well as concepts regarding coalitions, power dependencies and media attention in negotiation scenarios. The primary analysis of this negotiation case will be based upon the international business negotiations framework provided by Pervez Ghauri (2003). Ghauri distinguishes between 'integrative-' and 'distributive bargaining'; the latter is characterised by a single party's drive to increase individual benefits and denotes a typical win-lose situation. The former however refers to a win-win situation where both parties adopt a problem solving approach, have a thorough understanding of both common and conflicting objectives (absence of information asymmetries) and can end up with equally beneficial outcomes. Ghauri notes that if the integrative approach is practiced poorly, both parties may potentially arrive at an inferior deal.

He outlines three key aspects to his framework: the background, the atmosphere, and the negotiation process. Background factors are a group of variables, namely objectives, environment, market position, third parties and negotiators, which influence the process and atmosphere of the negotiation. For the atmosphere Ghauri identifies three criteria which are of essence: the existence of conflict and cooperation, the magnitude of which depends on the parties desired negotiation outcomes; the Power/Dependence factor, which is associated with control factors in the negotiation relationship; and the short-term vs. long-term expectations, which are dynamic and describe the perceived prospects of the deal by each party.

Ghauri splits the negotiation process into three stages, the pre-, face-to-face- and post-negotiation stage. Each stage entails different aspects of the negotiation, is dynamic and influenced by the atmosphere factors. Ott (2010) notes that 'it is important to appreciate the empirical differences and similarities between cultures' to develop an effective model for cross-cultural negotiations. To this end Ghauri suggests culture as a main moderator for his framework. He particularly focuses on the extent to which culture affects a party's perception of time, communication, relationships and individual vs. collective behavior. Other than considering strategic factors as an influencing factor, culture is in fact the only moderator which Ghauri suggests and as such draws criticisms of 'limited wider considerations' and 'constrained viewpoints' by some scholars including Metcalf et. al. (2007). Although Ghauri's framework indicates which aspects of the negotiations are influenced by culture, these dimensions are limited in quantity and he fails to address causal mechanisms as well as effects (Metcalf et. al., 2007). In addition to the aspects identified by Ghauri; Salacuse (1991) further argues for the negotiating goals, the personal negotiation styles and the attitude of risk-taking to be heavily influenced by culture. A variety of authors, (Ghauri, 2003; Hall, 1959; Hofstede, 1984; Salacuse, 1991; Usunier, 2003) all point to the varying role of time depending on the culture of negotiators. They agree that the importance of time itself and the way it is viewed in negotiations, either polychronic and monochronic, is an important consideration, especially in international negotiation scenarios between what Lewis (2006) describes as linear-active and reactive cultures.

Lewis' (2006) framework distinguishes 3 cultural types, linear-active, multi-active and reactive cultures; based on their activities and exhibited behaviour. Among these types Lewis describes possibilities for conflict and co-operation. However, Ott (2011) notes that his experimental framework falls short of actually proposing strategies of how to cope with cultural bargaining situations. Ott (2011) addresses this shortcoming and develops cultural negotiation strategies based on a game theory perspective. She offers guidance in terms of 9 scenarios relating to seller-buyer bargaining situations with particular emphasis on initial offer terms, offer frequency, rejection, length of negotiation and conflict/cooperation constitution. A noteworthy limitation of many negotiation frameworks, including Ghauri's, Lewis' and Hofstede's, is that they all consider national culture to be homogenous (Bülow and Kumar, 2011; Kirkman et. al., 2006; Rubinstein, 1989). For simplicity of analysis I will adapt this line of thought, but nevertheless acknowledge the validity of culture heterogeneity.

The relevance of this discussion regarding the influence of culture becomes obvious considering the nature of the case study to be examined in this paper and the following observation by Huntington (1996): 'The need to negotiate effectively across cultures is... painfully obvious in today's geo-political scene, where the source of conflict among humankind is thought to be increasingly cultural in nature.'

Metcalf et. al. (2007) argue that while frameworks such as Ghauri's (2003) account for 'myriad influences on international negotiating behaviour' and contextual issues of the negotiation, it places too much emphasis on the face-to-face interaction, in what Weiss (2004) identified as the 'micro-behavioral paradigm.' This according to Weiss (2004) is the focusing on individuals' intercultural behavior during negotiations (driven by national culture), which may result in detracting too much attention from macro issues in negotiations, such as business-government relations.

Metcalf and Bird (2003) therefore propose a more comprehensive framework based on original work by Weiss and Stripp (1985). Because Weiss and Stripp's original work was based on an American context only and little comparative research had been conducted at the time to allow empirical testing, Metcalf and Bird (2003) altered the negotiating tendencies identified by Weiss and Stripp to propose a viable framework for a contemporary international context. Notably this work identified 12 negotiating tendencies, some of which overlap with work by Ghauri (2003) and Salacuse (1991), but others which add valuable insight. Their key dimensions over and above those identified by Ghauri and Salacuse were: - the basis of trust (internal or external) and - the most significant type of issue (is the negotiation task related or relationship based?). Mannix and Neale (1993) note that many negotiation frameworks place too little emphasis on power dependencies. The RBC perspective proposed by Weiss (1993) argues that the outcome of negotiations ultimately lies within relationships among negotiating parties, influenced by the commonality of parties' interests and balance of power. Ghauri (2003) vaguely considers power dependencies in his atmosphere considerations, but provides little guidance on how and to what extend power may influence the negotiations.

In their research, Mannix and Neale (1993) note that 'equal power balance leads to more cooperative and integrative negotiation.' Roloff et. al. (1987) argue that 'dyads of unequal power are more likely to reach agreements of higher joint benefits than equal power dyads.' However, they fail to offer concluding evidence on how these higher joint benefits were split in unequal dyads.

Ghauri (2003) notes third parties as one of the background factors in his negotiation framework; thus, could third parties or coalitions potentially influence power dependencies?

Ghauri's framework suggests a one-way influencing relationship, i.e. third parties influence power dependencies (background determines atmosphere); whereas Weiss (1993) does acknowledge that they may influence each other.

Weiss's (1993) RBC perspective argues for the presence of primary, secondary and tertiary parties in negotiations; -parties with direct stakes, indirect stakes and those playing a facilitating role, respectively. Neither framework considers coalitions between parties (especially primary-secondary and primary-tertiary parties) and the effect this may have on power balance and ultimately the negotiation outcome.Continued on Next Page »