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1、Negotiations in businessNegotiations in businesssome theoretical aspectsmaterials for IB studentsprof. UG dr hab. Dorota Simpsonsimpsonug.edu.plLiterature- basicRoger Fisher, William Ury, Getting to Yes: Negotiating an Agreement Without Giving In, Random House 2003Richard R. Gesteland, Cross-Culture
2、 Business Behaviour, Handelshojskolens Forlag, Copenhagen 1997Roger Fisher, Daniel Shapiro, Building Agreement: Using Emotions as You Negotiate, Random House 2007Supplementary literatureG. Richard Shell, Bargaining for Advantage: Negotiation Strategies for Reasonable People, 2nd Ed. Penguin 2006Jim
3、Thomas, Negotiate to Win: The 21 Rules for Successful Negotiating, HarperBusiness, 2005G. Richard Shell, The Morality of Bargaining: Identity versus Interests in Negotiations with Evil, Negotiations Journal, Vol. 26, No 4, p. 453-481Robert M. March, Su-Hua Wu: The Chinese Negotiator: How to Succeed
4、in the Worlds Largest Market, Kodansha International Ltd., 2007Program1. Introduction the essence of negotiationsDefinitionsThe essence of negotiationsReasons for negotiationsProgram 2. Phases of negotiationsPreparations - acquisition of information, selecting members of the negotiating team, choice
5、 of the venue, BATNAOpening of negotiationsProposals Concessions and bidsConclusions of the negotiations and signing the contractProgram 3. Characteristics of the negotiation teamSelection of team membersRoles in the negotiation team:LeaderMinutes secretary ListenerCriticControllerProgram4. Differen
6、t styles of negotiations - rivalry or cooperationWin - win Lose loseWin - lose Program5. Difficult situations in negotiationsDifficult partnerTricks and manipulationsPsychological and positional warMachiavellianism Program6. Conflicts in negotiationsDeterminants of conflictCourse of conflictsConflic
7、t resolutionProgram 7. Negotiations in international business - students homeworkCultural differences and their impact on the negotiation processGestelands and Hofstedes models1. Introduction the essence of negotiationsDefinitionsReasons for negotiationsNegotiations can be described as a two-way com
8、munication process which aims to reach agreement when one of the parties disagree with the opinion or solution proposed by the other party.DefinitionsNegotiations are about cooperative problem solving rather than confrontation between adversariesDefinitions Negotiation is a way of mutual communicati
9、on in order to solve the problem/conflict and come to an agreement by the partiesDefinitions It is the process of submitting bids (offers) and / or concessions by the parties concerned to work out a common position in a situation of divergent interestsDefinitions Negotiations are a way of agreement,
10、 containing elements of cooperation and competitionDefinitions Negotiations are the process of exchanging offers until the agreement will be reached the purpose is to set a common point of 6view and adjust activity to itBoth parties have to be actively involved to reach the agreementDefinitions Nego
11、tiations are about mutual searching the solution satisfying involved parties The essence of negotiationsAlthough both parties have common interests they start negotiations from different positionsThe essence of negotiationsParties have different views on goals and methods for their implementationit
12、is the main barrier to get an agreement by negotiating partiesThe essence of negotiationsUsually the purpose of business negotiations is to exchange resourcesEvery party should be ready to accept compromise solutionsEvery party should have a certain margin of independence in relation to the negotiat
13、ion partnerReasons for negotiationsgaining benefits by both partiesUnilateral benefits mean violence, blackmail, persuasion rather than negotiationsThe negotiations processPreparationsOpening Consessions ClosingProcess of negotiations consists of phases, events and activities It is not face-to face
14、conversationsIt requires a certain amount of hard work2. Phases of negotiationsPreparation collecting informationOpening of negotiationsProposal - concessions and offersClosing - Conclusions of the negotiations and signing the contractPreparation acquisition of information, selecting members of the
15、negotiating team, choice of the venueidentifying issues and fields of negotiationscollecting informationPreparationneeds analysis both us and our partnersidentifying goals of parties involved in the negotiation processdetrmining ZOPA Zone of Possible Agreementdetermining BATNA Best Alternative to a
16、Negotiated AgreementPreparationPreparation is the heart of negotiationsthe situation is dynamicwe and our business partners are changing needs, wants and interestspreparation must always be taken and done with a special careZOPA Zone of Possible AgreementIt is the range in which the agreement satisf
17、ies both partiesIt is impossible to determine ZOPA accurately if we do not know other partys ZOPAThe basic thing is to understend they have it and predict its levelZOPA ?Blue Sky and Bottom Line” ?Blue Sky” your ideal situationyou ask and you get itBlue sky should be realistic If it is too high our
18、business partners can find a more realistic party BATNAif it is too low we can loose ZOPA?Bottom Line” your party cannot go below it the least amount possible for the proposal of our business partnersBATNABest Alternative to a Negotiated AgreementIt is the alternative action when the final proposal
19、of our partners is not acceptable below our bottom lineSearching new business partnerLooking for substitute productsExercise 1: determine ZOPAYour company wants to buy a house for its representativeYour Blue Sky is 550 000 PLNYour Bottom Line is 600 000 PLNSellers Blue Sky is 620 000 PLNSellers Bott
20、om Line 570 000 PLNFind ZOPAFive ?Ws” of preparationWhatWhoWhyWhereWhen What is the situation?Assessment the situationAssessent how much research has to be undertakenThe greater risk the more research has to be undertakenYou have to find out your business partners culture, decision-making process et
21、c.Who is involved?Who are your business partners directly involved in the netotiation processTheir communication and social styleThe decision-making style of the individuals and the teamWho is the core decison-maker Who informally influences individuals or/and groupWhy are you negotiating?What are y
22、ou going to achieve for your company?What are you going achieve for your department and your manager?What are you going to achieve on both business and personal level? Where to negotiate?You can negotiate virtually web conferences), on the telephone or face-to-faceLocation and the means of communica
23、tion are key elements to be considered during the process of preparationWhen to negotiate?It depends on whether you are the core decision-maker or a team participantTry to avoid improvised negotiationsImpropmtu negotiation can be a tactical play to force a quick and early decision without enough inf
24、ormationInternational negotiations demand checking religious and national holidaysWho - recruiting a negotiation teamNegotiators profile:negotiating abilities and skillspersonality traitsknowledge of negatiating issues law, commercial, technological, etc.ability to work in a team inner balance, trus
25、t, flexibilityRoles in the negotiating teamLeaderRecorder Listener CriticController Characteristics of a leader Can make decisionsCompetent in terms of:negotiating issuesintellectual (precise thinking in stressful situations, selection of optimal solutions, etc.)emotional (calmness, tact, trust, und
26、erstanding)Recorder Recording all findings during negotiationsRecording data presented by both partiesCooperation with the leader on the main issues and data arising in the course of negotiations, etc.ListenerHe/she does not participate actively in the negotiationsHe/she observes negotiators behaiou
27、rs, in particular the other party Registration the most important and significant statements and opinionsRegistrations methods of expressionCritic Observing the progress of negotiationsObservation of individual team members in terms of carrying out their Reviewing the various stages of negotiation A
28、ssistance in improving the assigned tasksController A person of a high standing and a high positionEvaluate the activities and progress of the negotiating teamSometimes deliberately introduce tension to the negotiating teamExercise 2Buying the house for the rep. of the company in Poland consider the
29、 5 ?Ws”:What is the situation?Who is invlved?Why are you buying it?Where will the negotiations take place?When will the negotiations take place?Opening of negotiationsEstablishing contacts:Via traditional mailVia e-mailVia telephoneDirect meetingCollecting informationDuring the preparation processDu
30、ring indirect and direct contactsNon-verbal communication gestures, behaviour, way of moving, facial expression, appearance (clothing, hearstyle) The first impression Kindness, smileCollecting informationPresentation of the team membersCommunication process Sender of the message message and the way
31、of communication recipient Collecting informationIdentification of the competences of the opposite teamIdentification of the most important person in the oposite teamAsking questions open and closed questionsActive listeningParaphrase Proposals, concessions and offersOpening positionsNegotiations st
32、rategies - avoidance, concessions, rivalry, cooperation, compromiseArgumentsCoping with difficult situationsNegotiations stylesProposals, concessions and offersThe impact of cultural factors in international business negotiations - time orientation - relationship orientation versus task orientation
33、Offers Offers are the most important part of any negotiationsPresenting offers means controlling the progress of negotiationsOffers are proposed in a conditional form (we can reduce the prices by 5% if you purchase X pieces more)Arguments play only a supportive role OffersSubject of negotiations is
34、not only price and quantity but also:method of paymentcurrency of the contractdelivery timemode of transporttransport managementOffers insurance managementdistributionpackagepenalty for delayloan guaranteescooperating banks, etc.ClosingConclusions of the negotiations summary of the topics of negotia
35、tionsSummary of the mutual obligationsSigning the contractClosingDetermination of the next stepsBuilding and maintaining long-term contacts if the netotiations were successful4. Negotiating stylesWin win cooperative styleWin lose rivalry style (hard negotiations)Lose lose - rivalry style (hard negot
36、iations)5. Difficult situations in negotiationsDifficult partner Psychological warPositional warMachiavellianism Conflict conditions, course, solutionDifficult partnerComplainingAggressiveUnfriendly Coping with a complaining partnermaintaining peacenot yielding to provocationsmaintaining a friendly
37、tone of voiceListen carefully and save all allegationsPatiently listen to claimsCoping with a complaining partnerChecking the significance of allegationsPresenting an understanding of the emotional state of the other party Caution in making promisesAn aggressive partnerAggression is usually a manife
38、station of anxiety, frustration and uncertaintySelf-confident partner is calmAn aggressive partner do not controll of his/her nagative emotions such as anger, raising the voice, etc.Coping with an aggressive partnerkeep the calmness and hushed voicecontrolli emotions not to be provokedask about the
39、facts, specific numbers, etc. Coping with an aggressive partnerBe ready to provide assistance when the other party wants itKeep him/her shouting - the longer he/she shouts the more he/she calms downCoping with an difficult partnerCalmly and tactfully point out the consequences of extending this type
40、 of behaviour and dragging out negotiationsSuggest a break in negotiation if the aggressive behaviour cannot be stoppedAn unfriendly partnerPeople who do not like contacts with others, introvertsCool and unfriendly behaviour can result from the personality or from the conviction that in the business
41、 world this is appropriateDo not take it personallyCoping with an unfriendly partnersignal kindnesskeep friendly tone of voicedemonstrate calm and certaintydo not make personal remarksCoping with an unfriendly partnerConcentrate on factsdo not worry about the behaviour of the other partysolve emergi
42、ng problems quickly and finalize negotiationsManipulation - psychological warCreating stressful situation Personal attacksCyclic tacticMaking threatsCreating stressful situationIntroduction of new peopleLeaving the room by the people you were negotiating withConditions in the room light, temperature
43、, noise, etc.Personal attacksPointing incompetence and intellectual weaknessViolation of personal dignityUsing of irony and mockeryAllusions to moralityPointing out the origin Cyclic tacticArranging good and bad situationsAppointing two persons to play roles of a ?good guy” and a ?bad guy” Starting
44、from the negative phase with ?mr bad guy” and moving to the positive phase with mr ?good guy”Making threatsAs some research and practice shows this technique gives poor results in negotiations, however it is relatively often usedThe stronger the threats the more unfavorable situation for negotiation
45、sPositional warRefusal to negotiateEscalation of demands?Rigid partner”Refusal to negotiateRefusal to change the first offerPurpose - to force unilateral concessions on the other side Escalation of demandsForcing more and more concessionsMultiplication of additional conditionsDefense construct a lis
46、t of discussing and negotiating problems and following themRigid partnerAn absent person who does not want to make any consessions and accept the dealNegotiators refer to the his/her opinionDefense try to arrange the meeting with the person ho do not want to agreeUsually it is a mythical figureMachiavellianism Use any situation to get advantageControll others behaviourfollow the common sense and cool calculation if you want to be effective and powerfulReject romanticism and sentimentality Machiavellianism own goals are placed over the objectives of otherThe goal (end) justifies the means