Business Negotiation – Lesson 2 Chapter 1Slide 1One of the most important things to remember in business is to never make enemies. You don’t haveto love everyone, but if you dislike someone make sure you don’t sho w it. Your enemy today may be your boss tomorrow.Slide 2The basic principles of negotiation are:- communication, negotiable issues, common interests, give and take, trust and to be a good listener.Slide 3The most successful negotiation ends with a win-win solution. Both parties must feel as though they have gained something. Both parties must negotiate towards a mutual gain.Slide 4Before negotiations begin, both parties should know thefollowing six details:- why, who with, what, where, when and how they negotiate.Slide 5Negotiation is a processof exchanging information between two sides and both sides try tounderstand each other’s points of view. Both parties know that theyhave common and conflictingobjectives, so they try to find a wayto achieve a common and helpful objective that will be acceptable to them both.Slide 6In summary: commoninterests must be sought.Negotiation is not a game. In a successful negotiation, everyone wins something.Slide 7Success isn’t winning everything –it’s winning enough.Slide 8In negotiation, both equality and mutual benefit are very important. Both parties are equal in status. They have equal rights and obligations. Remember that in a successful negotiation, each partymust gain something or there is no reason for the other party to participate. Both parties should prepare well for the negotiation andbe ready to satisfy the otherparty’s needs on an equal basis.Slide 9Through negotiation, both parties are seeking an arrangement ofa business situation. The purpose of this is to seek a win-win situation instead of a win-lose one. It is through sincere cooperation that this result can be made.Slide 10Sincerity is veryimportant for a negotiator’s style. Develop trust between the two parties. Treat others as you want to betreated, this will promote the negotiation and get successfulresults.Slide 11Keep it flexible and fluid. Do not be too rigid in what you want to give, and in what you want to take. All negotiations are a process of constant thinking, exchanging information and continuous giving. Before negotiation try and work out what the other party might be thinking, what their needs may be and what their tactics might be.Slide 12During negotiation, it is very easy for conflicts to happen.It may be that one side wants to take more than what they give. When this happens, either side may break out of the relationship. This is a lose-lose situation. It is in bothparties interests to find ways to minimize their conflict to achieve a win-win situation.Slide 13Most business negotiations take place between suppliers and purchasers (sellers and buyers). A supplier cannot exist unless he has a purchaser.Slide 14Of course in negotiations both parties want to give as little as possible, and to take as much as possible, gaining as much profit as possible in the process. So during negotiations both parties usually give only a little at a time.Slide 15Both parties must be flexible and make changes during negotiation as required by the situation.Slide 16Negotiators need to be cooperative and dedicated, to find the best solution possible, instead of just being concerned with their own needs.Slide 17In negotiation, bothsides must try to reach an agreement that maximizes their own outcome. This may lead either side to be concerned only with their own gainand ignore the needs of the other party. Remember that most business relationships last for a long period of time, so it is beneficial for both parties to gain a win-win situation and continue the business relationship.Slide 18The three stages of negotiation are:- pre-negotiation, during negotiation and post-negotiation.Slide 19The pre-negotiation stage begins from the first contact between the two sides. This is when they show interest in doing business with each other. During this stage the gathering of information will determine the success or failure of the negotiation. The information to be gathered by either party should include:- the market, policies, regulations and financial background.Slide 20The second stage of negotiation (during negotiation) has five phases through which it must proceed. They are:- exploration (finding out what the other party want), bidding (giving), bargaining, agreeing and making it official (contract).Slide 21 The third stage is post-negotiation. At this stage, all the terms have been agreed upon and thecontract is being drawn up, ready to be signed.Business Negotiation – Lesson 4 Chapter 2Slide 1Title page - Today we are working on chapter 2.Slide 2Proper Behaviour in Business Negotiation. People always make assumptions before negotiation and try to guess what the other party are assuming. Assumptions may betrue or false, they need to be verified. Listening, talking, inquiring and observing are very important for a successful negotiation.Slide 3Hidden Assumptions. We sometimes place ourselves at a great disadvantage with hidden assumptions about what other people’smotivations and actions might be. Don’t assume you know everything about your opponents.Slide 4Listening. Listening carefully to the words spoken by the other party is very important. You must understand what the needs of the other party are. Paying attention to phrasing (the vocabulary they use), their choice of expressions, the mannerisms of speech and the tone of voice they are using. All of these elements give you clues to the needsof what the other party wants.Slide 5The barrier of listening. Some topics are rather difficult and hard to comprehend, do not get distracted, stay focussed. If necessary ask the speaker to repeat something that you have missed or do not fully understand. When you are taking notes, concentrate on the concepts and principles first andthen if you have time, write down the facts.Slide 6Active listening. When someone is making a point or presenting an opinion, do notinterrupt until they have finished speaking. Then you can ask them to repeat any parts that you didn’t understand.Slide 7Negotiation language. You should only communicate thepoints needed, to encourage theaction your party desires.Your party should be informative, to support only the details necessary to make your offer clear. Keep your sentences simple. Your presentation should be fair and consider both the pros and the cons. Your presentation should be cooperative and friendly, not argumentative or hostile. It should emphasize the positive points, not the negative points.Slide 8Aspects to be aware of. Listeners judge you by how you talk. Your speaking voice is one of thefirst impressions people have of you.A person may be characterized as friendly if his or her voice sounds warm and well modulated. If someone has a flat monotonous voice they will be judged as dull and boring. Do not talk too fast or you will give the impression that you are nervous and not confident.Slide 9Asking questions. In an appropriate situation you should ask the other party “What do you want from this negotiation? What are yourexpectations? What would you like to accomplish?” Be quiet afterasking a question, encourage othersto talk as much as possible so youcan gain more information. When you ask questions, make sure you listento the answers.Slide 10Answering questions.Always give yourself time to think about the question being asked.Never answer until you clearly understand what is being asked. Donot be embarrassed to ask them to explain the meaning of their question. Before negotiations begin, anticipate what questions may be asked, so that you can plan your answers before the negotiation.Slide 11Observing. Besideslistening to the other party in an attempt to learn their desires and needs, you must also closely observe their gestures. Body language and gestures are very important. Our entire bodies, including our head, arms, hands, fingers and even our posture can convey a message.Slide 12Eye contact. A personwho looks away a lot while listeningto you is showing that they are not happy with with you or what you are saying.Slide 13 The mouth. When you meetor greet someone, you should do sowith a warm, genuine smile.Slide 14Hands. What you do with your hands is a very significant formof body language. Your handshake reveals clues to what you reallythink of someone. A firm handshake gives the impression of confidence and seriousness. The weak handshake has no energy at all and suggests a lack of confidence, interest and warmth. If the other party puts both of his/her hands on the table andhe/she leans forward, it means theyare confident and ready to get downto business.Slide 15 The nose. Touching the nose or slowly rubbing it usually means someone has doubt in what they are saying and maybe it couldindicate that this person is lying.Slide 16 The legs. A person whose legs are crossed, and who is leaning away from you is probably very competitive. If someone has theirlegs crossed and their arms crossed they will be difficult opponent. If the person has their legs crossed and they are swinging the top leg it means that they are probably boredwith your ideas and opinions.If someone likes you or your ideasthey will lean forward slightly in a relaxed manner with a slightly curved back.Slide 17 The Feet. A person whose toes are turned towards each other (pigeon toed) or tucked under thechair is very timid or scared.Business Negotiation – Lesson 6 Chapter 4Slide 1 Title Page– Today wewill work on chapter 4.Slide 2Preparing for Negotiation.A successful negotiation isdetermined by its preparation. Thinking beforehand about who you are going to meet, what is going to bediscussed, and what will be the best approach is very important. Good preparation has an impact on the opening stages of a negotiation,which sets the tone for the rest ofthe meetings.Slide 3Scheduling the first meetings. The first impression each side makes will most likely have a major effect on the style, progress and eventual outcome of the negotiations. Scheduling the first round of meetings is an importanttask for both sides and should be handled in a manner that preservesthe professionalism of all the attendees. Arrive to the meeting promptly and be prepared to get right to work.Slide 4Setting the agenda.From a communication point of view,the process of structuring and controlling a negotiation focuses on the importance of setting an agenda and a procedure for the meeting. The agenda includes the order of theissues to negotiate and its main negotiation methods like what to negotiate first, what others to negotiate later and what is the final goal to attain etc.Slide 5Negotiating Agenda. An agenda pay be presented by one sideor prepared by both parties, or each side may prepare a general agenda and a detailed agenda. The generalagenda is presented to the other side, and the detailed agenda is for your own use. Attention should be givento the various issues to be discussed so that strategies can be developed. The issues might be listed so thatthe major ones are discussed first. This will prevent wasting time onminor issues and to make sure ofleaving sufficient time to discussthe major ones.Slide 6Preparing for negotiation. Do your homework. Successful negotiation results are directlyrelated to its smooth implementation and will bring enormous results.Slide 7Establishing Objectives. The objective is the prerequisite ofa negotiation. Under the guidance of clear, specific, impersonal andfeasible objectives could the negotiation be in a positive position. Key elements of negotiationobjectives are:-Who can contribute to thisnegotiation, who will be affected by this negotiation, what are the maximum and minimum targets to seek. Minimum targets means the targets or benefits we would never give up, in other words there is no room for bargaining. Maximum targets are the targets or benefits we could think of giving up under critical conditions.Slide 8Key elements ofnegotiation objectives (cont.) When would we like to conclude the negotiation, where is the best placefor the negotiation, why has theother party chosen us to negotiate with, what concessions are we willingto make and what concessions will the other party be likely to make.Making the objective of a negotiation rigid might cause the negotiation to breakdown. An alternative method of formulating objectives might be tokeep them fluid so that theexpectations can change with the circumstances of the negotiation.Slide 9Issues and positions. Any information upon which there is disagreement can be organised into the negotiation issues. Issues are the things on which one side takes an affirmative position and the other side takes a negative position. Issues should be realistic. It is important that we should try to negotiate problems rather than our demands. Our demands are only a one-solution approach to the problems. There may be other solutions. It is said that your bargaining position should conceal (hide) as well as reveal (show), and as negotiations continue, concessions alternate from each side.Slide 10Meeting places. Should you conduct the negotiation in your office, or should you go to the other party’s home ground? The general rule is that you perform better on your own home ground. A negotiator on home ground is more assertive and more confident. In contrast a negotiator that is a guest on the other party’s home ground may feel subordinate.The fairest for both parties is to meet on neutral territory where no one will have the psychological edge.Slide 11Opening the meeting. Good negotiating atmosphere is better to be formed at the very beginning of the negotiations. Therefore, both parties should seize the occasion of the first meeting when doing self-introduction or being introduced. Try to behave gracefully and speak clearly to make the impression of being kind, natural and honest.Exercises from book Business Negotiation – Lesson 9 Chapter 5Slide 1Title Page – Chapter 5Slide 2The Bargaining Process.The pattern of bidding and bargaining is seen by many people to be the core of the negotiation process. Almostall the negotiations have somethingto do with bidding and bargaining. The bargaining process is normallyvery intense. Both sides are tryingto move to their own advantage. Orif it is not possible to cut the cake so that both parties get what they want, then they bargain in such a way that the dissatisfaction will be equally shared between them.Slide 3Bidding. The opening bid (price) needs to be ‘the highest’ because:- our first bid influences others in their valuation of our offer, a high bid gives room for manoeuvre during the later bargaining stages, the opening bid has a real influence on the final settlement level. The more we ask, the more we will achieve.Slide 4Bidding (cont.). Youmust be able to justify your original bid, you should not only seek to gain as much as possible but you also take the other party into consideration. Putting forward a bid thatunrealistic and cannot be defendedwill damage the negotiation process. If we cannot defend our bid when challenged we will lose face and credibility.Slide 5The Highest Realistic Bid. The highest defensible bid is not set in concrete. It is a figure that isrelevant to the particular circumstances. If the opposing party is pushing for their advantage, then for our advantage we must push for the highest price. If we have a lot of competition, we must tailor our opening bid to the level at which it at least enables us to be invited to continue negotiations.Slide 6Content of Bid. The content of the bid usually needs to cover a range of issues:- the price, how badly the product is needed, the amount of product needed, product credibility, credit terms (payment of goods), competition in the market. The parts of the opening bid in a commercial negotiation will not only be price, but a combination of :- price, delivery, payment terms, quality specification etc.Slide 7Presentation Tactics. In the bidding presentation of the negotiation process, there are three guidelines to the way in which a bid should be presented:- firmly, clearly and without comment. The bid should be put firmly, seriously and without hesitations. It needs to be understood clearly so that the other party recognises precisely what is being asked. In the process of negotiation, it’s better to have the quotation typed on paper, to ensure the clarity of the bid and to show the other party a sense of seriousness and legitimation.Slide 8Responding Tactics. Both sides at this time are trying to move the negotiation to a more favourable direction to their own side. It’s quite necessary to do some homework, researching the other side before responding to the bid.The competent negotiator should make sure they understand what the other party is bidding, should have an idea how to satisfy the other party and at the same time try and figure out what the other party’s expectation s are. The competent negotiator should summarise his/her understanding of the bid as a check on the effectiveness of communication between the two parties.Slide 9Bargaining. In this stage of the negotiation it is very important not to give the other party too much too soon. Bargaining should be to your advantage, however you must also make a fair deal in which both parties are equally satisfied or equally dissatisfied.Slide 10Bargaining Moves. As we start the bargaining process we need to take two steps:- get it clear, assess the situation. It is vital to establish a clear picture of the other party’s requirements at the beginning. You must have a clear picture of what the other party is bidding already. Your main concernis to understand what bid is being offered.Slide 11Clarification of Opposers Bid. Check every item of the other party’s bid. Inquire the reason and bases of the bid, ask how important the item is and how much flexibility is in the bid. Pay attention to the other party’s e xplanation and response. Listen to the otherparty’s answers without comment and reserve your opinion.Slide 12Clarification of your Bid. Try not to divulge too muchinformation and knowledge, keepthings simple. Give only the essentials asked for, do not go into lengthy comments or justifications.Slide 13Assessing the Situation. After understanding what the real expectations are of the other party, you have to assess the situation. Identify any differences between the two parties expectations are. Assess what direction should be taken inorder to obtain the best deal.Slide 14Assessment. What willthe other party accept, what won’tthe other party accept, what will the other party negotiate, bargaining strengths and weaknesses, price,terms and the probable settlement area.Slide 15Assuming. Having assessed the differences between both parties you need to analyse the other party’s real position. Remember assuming is only guessing, you can never be certain that you are right.Slide 16After Assessment. After assessment there are three options available:- to accept the termsoffered and asked for by the other party, to reject the terms offeredand asked for by the other party orto carry on negotiating.Slide 17Continue Negotiations.In order to continue the negotiation, preparation should be made for thenext round. These preparationsinvolve the following steps:- provide a new offer from our party, seek a new offer from the other party, change the shape of the deal. In summary the first stage of bargaining involves understanding what the other party really wants, assessing the situation and the differences between both parties, preparing for the next round of negotiations.Slide 18Influencing the Deal. A deal can be influenced by the situation. To influence thesituation a party can offer:- a different deal, better conditions and new opportunities.Slide 19Making Concessions. Making concessions is the most popular tactics used in the bargaining process to keep the negotiations on going. Making concessions depends on many factors:- when to concede, what to concede and how to concede. Every concession is closely connected to a party’s own interests.Slide 20Trading Concessions. A party should trade their concessions to their own advantage, doing their best to give the other party plenty of satisfaction even if the concessions are small. To trade concessions to your party’s advantage you should use thefollowing tactics:- listen to the other party very carefully, give the other party detailed specifications, show the other party how they can benefit from the agreement on the terms that are asked. Reserve concessions until they are needed in the negotiation, you may be able to negotiate an agreement without giving too many concessions.Slide 21 Breaking an Impasse. In the bargaining process, the two parties may be rigid with what they want to give and what they want to take. If this occurs thenegotiations fall into a dilemma. This kind of situation is called negotiation impasse. The two parties should try to find the cause of it and actively search for ways out of the impasse. Negotiators strive to preserve their face, their status, their credibility, their reputation and their self respect.Slide 22Coping with Conflict. The first principle in coping with these conflicts is to keep it fluid. Start talking discounts, terms of payment, change of specification and quality control.Slide 23 Towards Settlement. When the parties become aware that a settlement is approaching a new mood is established. At the end of the negotiation both parties should work together to summarize, produce a written record of the agreement and identify what actions and responsibilities need to be taken care of and by which party.Business Negotiation – Lesson 11 Chapter 7Slide 1Title page– lesson 11 Chapter 7Slide 2Negotiation Strategies. Negotiation strategies are established in order to achieve the negotiation objectives. They are acting guidelines and policies of the whole negotiating process and are subject to modification with the progress of the negotiation.Slide 3Choice of Strategies. There are quite a few background considerations which will influencethe strategy, these are:- repeatability, strength of both parties, importance of the deal and time scale.Slide 4Repeatability. Repeatability is an importantinfluence on the styles and tactics that should be used. If it is aseries of deals with one organisation, then there needs to be goodwill and lasting relationships built with that organisation, a personal relationship is essential. If on the other hand, the negotiation is for a one timeonly deal with an organisation not likely to be met again, then the situation is strategically different.Slide 5Strength of Both Parties. The second influence on the choice of strategies is each party’s strength. If the party is the only people with whom a deal could be made, then the party are in a strong position. If there are many potential customers or suppliers, then the party are in a relatively weak position. A party is strong if they dominate a marketeither as buyers or sellers. A party is weak if they are just one of many.Slide 6Importance of the Deal. If the negotiation is a deal worth millions of dollars, then thestrategy needs to be different from negotiations that are worth thousands of dollars.Slide 7Time Scale. The timescale for the deal may also influence the strategy. If it is imperativethat the deal be concluded quickly,then the negotiation strategy may be different from what it would be ifthere was little urgency.Slide 8Guidelines for Strategic Decisions. The first of thestrategic decisions which must bemade is the choice of the other party. If there is a choice, how manyparties should be negotiated with? Which parties should be chosen? The choice of the other party with be strongly influenced by the range of commercial interests, the reputation, the reliability, the integrity andthe quality etc. of the possibleother parties.Slide 9Guidelines for Strategic Decisions. The second of thestrategic decisions which must bemade is how quick the negotiations should proceed. The most dominateparty should choose a quick deal.The weaker party should hold back.If there is no clear pattern of the stronger or weaker party, thestrategy should be to hold back.Slide 10Quick Deals. For a quick deal, there needs to be precisetargets and very clear views aboutthe extent to which compromises could be made. What style should be usedto negotiate? If a quick dealstrategy is adopted, the need is to move quickly and the style should beto our advantage. If the strategy isto hold back, then the option is to either be creative oriented or advantage oriented. Each negotiator has their own strengths, and it is desirable that they should negotiatein a style which reflects those strengths.Slide 11Negotiation Strategies.A s trategy is a plan of techniquesand tactics used in the actualprocess of an action, in this case a negotiation. Techniques to planare:- when to move, where to go andhow fast to go. These are all determined by certain conditions. To accomplish the aims in a negotiation, the inexperienced negotiator’sstrategy will be limited to a fewsimple and obvious devices e.g price, terms etc.Slide 12How and Where Strategy. The how and where strategy involvesthe method of application and thearea of application. Often it is advantageous to use two or morestrategic approaches in the same negotiation. Some of the main formsof the how and where strategy are:- participation, crossroads, blanketing, salami, agency and shifting levels.Slide 13Participation. Is theform of strategy where we enlist the help of the other party on our behalf.Slide 14Crossroads. With the crossroads strategy either party may introduce several matters into the discussion so that there can be concessions on one hand and gains onthe other.Slide 15Blanketing. Inblanketing, one technique is to tryto cover as large an area as possibleto achieve a breakthrough in one or more places.Slide 16Salami. The strategy of salami means a slice at a time. This strategy involves dealing with an issue bit by bit, slice by slice.Slide 17Agency. The agency strategy is when you ask someone else to conduct the negotiation on your behalf.Slide 18Shifting Levels. And finally we come to the final type of strategy which is shifting levels. Shifting levels deals with a strategy or tactic in which involvement in the problem is changed to a higher or lower level.Slide 19Reminder. You will have to use all different types of strategies when negotiating. You will have to adapt to the other party and to the situation.Lesson 13 Chapter 11Slide 1Title Page – different business cultures and negotiations.A business negotiator should have some understanding of different cultures, customs and business conventions of different countries.Slide 2There are two main rules of international business. The first is that the seller is expected to adapt to the buyer. The second is that the visitor is expected to observe the local customs. To observe the local customs doesn’t mean to copy the local behavior, just be yourself. But of course, you should include being aware of local sensitivities and generally honoring local customs, habits and traditions.Slide 3One classification of organizational style distinguishes between people who are task-oriented and people who are people-oriented. People who are purely task-oriented are concerned entirely with achieving a business goal. They are not concerned about the affect that their actions have on the people that they will come into contact with. As negotiators they will be very tough, very aware of tactical ploys and anxious to make maximum use of them. The American business culture is usually very task or achievement oriented.Slide 4People-oriented persons, on the other hand, are highly concerned about the well-being of those who work for them or around them. In this respect, they givetime to some small talk before the meeting starts because they believe this will improve communication and lay the basis for possible future relationships.Slide 5This can be a greatdivide between business cultures. Deal-focused people are basicallytask-oriented while relationship-focused people are more people-oriented. Conflicts can arise when deal-focused export marketers try to do business with prospect from relationship-focused markets.Slide 6Many relationship-focused people find deal-focused types pushy, aggressive and offensively blunt. In return, deal-focused types often consider their relation-ship focused counterparts vague and unintelligible.。
