Read the questionnaire, tick the most appropriate phrases, add the points and check your score.

INTERNATIONAL NEGOTIATIONS

SESSION 1

 

Assignment 1.

Read the following quotations. Comment on them and answer the questions.

 

«Let us never negotiate out of fear. But let us never fear to negotiate.»

(J.F.Kennedy)

«In business, you don't get what you deserve, you get what you negotiate.»

(Chester L. Karass)

«To be successful, you have to relate to people…»

(George Ross)

· Do you agree with these quotes? Explain why. Give examples from your own experience.

· Why do we negotiate? Can you think of three reasons?

 

Read the questionnaire, tick the most appropriate phrases, add the points and check your score.

 

Results or relationships?

Get the deal or build trust?

 

What kind of negotiator are you? Do you feel it's more important to have a good relationship with the other party or is it more important to win the contract? For most people, building a relationship and getting the deal are important aspects of an effective negotiation.

 

1. How important are you feeling in a negotiation?

 

a) If I reveal my true feelings, the other party will take advantage of them.

b) I don't consider the consequences my feelings can make on my opponent.

c) I hide my feelings from my opponent by using the correct body language.

 

2. What priority does building a relationship have in a negotiation?

 

a) Keeping a good relationship is more important than making somebody angry by rejecting a marginally acceptable deal.

b) A good relationship is essential in any negotiation.

c) My interests are more important than building a relationship.

 

3. When is it important to close a deal?

 

a) A marginally acceptable deal is better than no deal at all.

b) «Something for nothing» is always better than «something for something».

c) I look after my interests, but I also look after theirs, too.

 

4. How do you deal with how the other party views you?

 

a) I don't worry about rejection when negotiating.

b) I am willing to give in when a relationship is important.

c) If the other party lets me take advantage of a situation, then I do.

 

5. What role does power pay for you?

 

a) It is best to be open about true intentions.

b) If the other party is under pressure, I puss harder.

c) Power is more important than a good cause.

 

Your score:

1 a – 1; b – 3; c – 2. 2 a – 2; b – 1; c – 3. 3 a –1; b – 3; c – 2. 4 a – 3; b – 1; c – 2. 5 a – 1; b – 2; c – 3.

 

What kind of negotiator are you?

Points

You are concerned with relationships and you seek CO-operation. Your target is to win the war, even if it means losing the battle. But be careful, or you may be taken advantage of.

 

Points

You believe that a negotiated outcome can benefit both sides. You place value on both relationship and results. Remember that preparation is still key.

 

Points

You are concerned more with results than with relationships. In order for one party to win, the other party may have to lose. You prefer to take something for less than you give.

Assignment 2.

You are going to read and analyse articles A – D about different negotiating styles. Before you read, match the words from each article with their definition. Then answer the questions after the articles.

Article A

1. tactics a) be flexible

2. make compromises b) not changing your opinion or attitude

3. consistency c) the methods you use to get what you want

Negotiations are demanding and may become emotional. You may find your Russian negotiator banging his or her fist on the table or leaving the room. Accept such tactics with patience and calmness. They are designed to make it difficult for you to concentrate.

Russian negotiating teams are often made up of experienced managers whose style can be like a game of chess, with moves planned in advance. Wanting to make compromises may be seen as a sign of weakness.

Distinguish between your behaviour inside and outside the negotiations. Impatience, toughness and emotion during the negotiations should be met with calmness, patience and consistency. Outside the negotiating process you can show affection and personal sympathy.

From the Financial Times

Article B

1. speak your mind a) when you find out what the other side wants

2. place great weight on b) say what you think

3. exploratory phases c) consider very important

 

As well as being formal, negotiations are direct. German managers speak their mind. They place great on the clarity of the subject matter and get to the point quickly.

Excessive enthusiasm or compliments are rare in German business. You should give a thorough and detailed presentation, with an emphasis on objective information, such as your company's history, rather tan on clever visuals or marketing tricks.

Prepare thoroughly before the negotiation and be sure to make your position clear during the opening stage of the talks, as well as during their exploratory phases. Avoid interrupting, unless you have an urgent question about the presentation.

From the Financial Times

 

Article C

1, attach little importance to a) style of behaviour

2. protocol b) pay little attention to

3. manner c) the way things are done on official occasions

 

Communicating is a natural talent of Americans. When negotiating

partners meet, the emphasis is on small talk and smiling. There is liberal use of a sense of humour that is more direct than it is in the UK. Informality is the rule. Business partners do not use their academic titles on their business cards. Sandwiches and drinks in plastic or boxes are served during conferences.

This pleasant attitude continues in the negotiation itself. US negotiators usually attach little importance to status, title, formalities and protocol. They communicate in an informal and direct manner on a first-name basis. Their manner is relaxed and casual.

The attitude 'time is money' has more influence on business communication in the US than it does anywhere else. Developing a personal relationship with the business partner is not as important as getting results.

From the Financial Times

 

Article D

1. counterparts a) count on / depend on

2. rely on b) give your opinion

3. put your point across c) the people on the other negotiating team

 

At the start of the negotiations you might want to decide whether you need interpreters. You should have documentation available in Spanish. Business cards should carry details in Spanish and English.

During the negotiations your counterparts may interrupt each other, or even you. It is quite common in Spain for this to happen in the middle of a sentence. For several people to talk at the same time is accepted in Latin cultures, but is considered rather unusual in Norther Europe.

The discussion is likely to be lively. In negotiations, Spanish business people rely on quick thinking and spontaneous ideas rather than careful preparation. It may appear than everybody is trying to put his or her point across at once. That can make negotiations in Spain intense and lengthy, but also enjoyably creative.

From the Financial Times

Answer the following questions.

A.

In which country (Russia, Germany, the US or Spain):

1) should you start a negotiation with general conversation?

2) do negotiators show strong emotions?

3) is it common for there to be several conversations at the same time during a negotiation?

4) do negotiators focus on results rather than developing relationships?

5) do negotiators plan their tactics carefully?

6) should you not stop someone while they are talking?

7) is it usual for the atmosphere to be relaxed and friendly?

8) do negotiators prefer to think of ideas during a negotiation rather than before it starts?

9) do negotiators like to talk about business immediately?

10) should you not give the other side too much as they will not respect you?

B.

1. If you are from one of these countries in the article, do you agree with what the article says?

2. If you are from another country, which of these countries is the nearest to your own country in terms of negotiating behaviour? Why?

Assignment 3.

Useful language

 

Negotiation Phrases

Welcoming and Establishing a Rapport

· It’s my pleasure to welcome you to …

· I would like to welcome you to …

· Is this your first visit to …?

· Did you have a good journey?

Setting the Negotiation Agenda

· I would like now to begin by suggesting the following agenda.

· To start with, I think we should establish the overall procedure

· Is this okay with you?

Negotiation Phrases for Making Proposals

· We’d like to propose that …

· We propose / suggest …

· Regarding your proposal, our position is …

· How do you feel about …

Responding to Suggestions

· Maybe it would be better to …

· Perhaps a better idea would be …

· May we offer an alternative? We propose that …

· From where we stand, a better solution might be …

Agreeing – Reacting to a Negotiation Proposal

· I think we can both agree that…

· I agree with you on that point.

· I think that would be acceptable.

Negotiation Phrases for Objecting

· That’s not exactly how I look at it.

· If you look at it from my point of view…

· I have some reservations about that…

· From my perspective…

· I’m afraid we couldn’t agree to that…

Giving a Reason in Negotiations

· The reason for that is …

· This is because …

Prioritising Interests

· The most important issue for us is …

· Our intention is …

· Our main priority is …

· We might like to …

Giving Clarification in Negotiations

· If I understood you correctly …

· Are you suggesting that …

· Do you mean …

· What exactly do you mean by …?

· I’m not sure I fully understand your point.

· Could you clarify one point for me?

· Could you be more specific?

· Can we summarize your position up to this point?

· Am I right in thinking that …?

Negotiation Phrases for Compromising

· If you were prepared to …, we might be able to…

· We are ready to accept your offer; however, there would be one condition.

· Would you be willing to accept a compromise?

· In return for this, would you be willing to …?

Accepting a Negotiation Proposal

· This agreement is acceptable to us.

· I think we have reached an agreement here.

· That sounds reasonable.

· I think we have a deal.

· I believe we have an agreement.

· I can agree to that.

Negotiation Phrases for Concluding

· Let’s just summarise our agreement?

· I think you’ve covered everything.

· Let’s just confirm the details, then.

· Have I left anything out?

 

INTERNATIONAL NEGOTIATIONS

SESSION 2

 

Assignment 1.

Read the following quotations. Comment on them and answer the question.

«Failing to plan is planning to fail»

(Anonymous)

«There is no substitute for the hard work of preparation.»

(Winston Churchill)

«Fact-finding is the mother's milk of negotiation.»

(Richard Nixon)

Do you agree with these quotes? Explain why, or why not. Give examples from your own experience.

Mini-lecture

Negotiation styles

When you are negotiating with people from other cultures, it is important to be aware of their negotiating styles, that is the way people negotiate and what they consider as 'normal' behaviour. There are big differences in the way that people from different cultures conduct negotiations. In some cultures, business partners form long-term relationships. In other cultures, the relationship lasts only as long as the contract. Let us look at an attitude to small talk, time and the basis for reaching agreement in the cultures with long-term relationships and cultures with short-term relationships. In long-term relationships small talk is important for getting to know people on a personal level before starting to discuss business. In short-term relationships work is separated from private life. When discussing business, it is considered a waste of time to talk about personal matters. Speaking of attitude to time, In long-term relationships people are willing to invest a lot of personal time in relationships. Socialising outside office hours is essential. In short-term relationships apart from lunch breaks, not much time is given to socialising. In relation to the basis for reaching agreement, you won't reach an agreement unless you like and trust your business partners in long-term relationships unlike short-term relationships where people reach an agreement on the basis of strong arguments, e.g. this is the best product / price.

When to use?

When you need to act or get results quickly. Competition is critical when you are certain that something is not negotiable and immediate compliance is required.

What's the Danger?

The difficulty with people who are high compete (which a large percentage of buyers are) is that competitive styles overuse competition. This means that the other party knows exactly what behaviour to expect and can prepare more easily. In a negotiation of roughly equal power, high compete behaviour is very likely to lead to deadlock - which will get you nowhere. They may also be more interested in "winning" rather than reaching an agreement.. So if a relationship is important to you, and if your market reputation is important, then be careful to curb your competition.

Self Defense

The most important thing to remember is: Don't Cave In! Some people say that they make concessions in the face of a competitive negotiator demanding a concession - in order to create goodwill. Don't listen to these self deluders, they're bleeding profits. Appeasing competitive negotiators doesn't create goodwill - it just creates requests for more concessions. What's more, a competitive style negotiator will see you as weak, and come back for more. Restate your position firmly using strong language (not 'we'd like' or 'want', but rather: 'we require' or 'need') and never reward bullies.

When to use?

When you or your company are at fault, repairing the relationship is critical, and if you have nothing else that would benefit the other party. i.e. an olive branch or gift to rebuild bridges.
If you are in a very weak position then sometimes your best option is to give in gracefully. Think about it: if they can crush you, and they know it, what is likely to be the outcome if you resist? It may be worth (humbly) reminding them that you will both stand to lose if they put you out of business, and ask if they really want to push you out of that market. If you both intend to work together in the longer term, then refocus the negotiations on the longer term, thereby reminding the other negotiation party that their taking advantage of you now may hurt them in the future.

What's the Danger?

It is almost always a bad idea to accommodate when negotiating against high compete styles. With high compete negotiators your generosity will be seen as a sign of weakness to be taken advantage of.
Giving away value early in the negotiation can leave you with a poor hand to play in the rest of the negotiation.
Giving away value too easily too early can signal to your negotiation counterpart that you've very deep pockets, and your gift is just a taster of bigger and better gifts to come.
Warning: some of the faulty thinking that puts accommodators into negotiation damage control is thinking that because the goal is unimportant to you, it must have little value to the other party. Remember to do your homework by asking the value of your concession to the other party before making your trade or concession.

Self Defense

When someone is offering you a gift at the negotiation table, do you humbly accept their generosity? Be careful, as theirs may be a proverbial 'Greek Gift' - i.e. they may be luring you into reciprocation, obliging you to give back something of greater value in return. So keep in mind the value of the item being given - the relative value to both sides. You also need to be careful that they are not an incompetent negotiator, making big concessions that jeopardizes the viability of their business, or agreeing a deal that their managers will later veto. If they go bust because they are giving away too much, you could both end up losing.

When to use?

When the value of investing time to resolve the conflict outweighs the benefit; or if the issue under negotiation is trivial (trivial to both parties). If there is a lot of emotion in a negotiation, it's pointless pushing through and hammering it out. Better to allow people to calm down first, let the testosterone hormone leave everyone's system first so that reason and rationality can reappear. At that point an avoid style is likely the most pragmatic alternative - suggest a timeout of 15-20 minutes.
What to do when you're dragged into a negotiation unprepared? Under these circumstances, avoidance is probably the most sensible strategy. Either avoid the meeting, or avoid discussing the issues upon which you need to prepare.

What's the Danger?

Whoever has the greater urgency will usually end up with the short end of the avoidance stick. Stalling is a common sales tactics, when sales / the vendor knows that procurement needs their product or service yesterday.
Conversely a buyer may hold out until the last day of the a quarter or month, knowing that the sales person needs to meet his or her target. So be careful about what information you reveal about the urgency of your need.

When communication channels are cut off, you leave the other party to fill in the blanks. They may believe you need more time, or may think that you're no longer interested in a business relationship with them, resulting in their approaching your competition, or contemplating downsizing.

Self Defense

Set clear expectations of timing early on in your negotiations. Understand their decision making process and levels of responsibility. Having these insights can assist you in invalidating their reasons for avoiding, and will make your sharp questions more difficult to side-step. Escalation options will also be clearer to you.
If you have a good enough relationship, then agree a process on resolving differences. As John F. Kennedy was quoted as having said: "The time to repair the roof is when the sun is shining."

When to use?

When you are pushed for time and you are dealing with someone who you trust. They also need to be clear that it would not be in their best interest for them to "win" a cheap victory. Both parties win and lose - but make sure you win the right things and lose the right things.
Meeting half way reduces strain on the relationship, but usually leaves precious gold on the table.

What's the Danger?

When you use compromising as an excuse for not preparing properly. If the outcome of the negotiation is critical, then you should not compromise on things that you absolutely must have.
One of the problems with compromising is: if you make concessions within your position with no strong rationale, the other party may assume that you are going to continue to make more concessions. If you get known for being a compromise styled negotiator, look out! Your trading partners will wise up to your negotiation style and they will start to make more and more extreme opening positions. Bigger opening positions result in greater chances of deadlocks. Compromises cheat both sides out of innovative solutions.
Self Defense

Only retreat within your position when you have a solid rationale for doing so, and when you're being rewarded in another way. i.e. make a reasoned exchange. Trade across goals and interest. All too often negotiators try resolve 1 single goal at time, before moving on to the next tabled agenda item.
Stay with the problem or opportunity for longer. Don't give in so easily to the temptation of splitting differences until you've explored other alternatives.
If the other party starts with an extreme opening position, be sure to quickly bring them back to reality, or counter balance with your own extreme position. Caution: extreme positions can lead to drawn out dog fights that result in more deadlocks.

When to use?

Under most circumstances collaboration is the primary style you should use for most goals in business to business negotiations. If a relationship is important to you, and if your market reputation is important, if the other party needs to perform and not just exchange a standard product for cash, high risk (e.g. new market or new product or both), if there is a large amount of money at stake, then you are best advised to think about all the ways in which you can build a more trusting collaborative working relationship. If you need to understand the feelings and deeper interests or motivations of all negotiators, then collaboration is your best path.

What's the Danger?

Be careful not to collaborate with competitive style negotiators – unless they agree to and live up to your agreed (written or unwritten) rules of collaboration. Die hard competitive negotiators can be treated in transactional trading manner - e.g. "I'll only give you this if you give me that".

When we share information we need to make sure that we share information at the same level of detail. Too much and we could be exploited - too little and the other party can lock up like a clam.

Collaboration requires more time and needs to be at the right level. So if you're a vendor and your buyer doesn't have the authority or knowledge or won't invest the time, save your effort. Same advice goes for buyers in reverse.

Self Defense

So when might you need to defend yourself against a Collaborative negotiator? If you have decided that it's not in your interest to use a collaborative style with a negotiator, then decide on your alternative style. So a commodity supplier who suffers a great deal of competition in their market place will try to get their foot in your door. A wise procurement manager will be careful to not investing too much time, or give any time - unless there is value. Your time is short, so be careful who you collaborate with.

Remember

Before you negotiate, stop and ask yourself:

· What is my preferred style of negotiation? Once you know your style, you've taken the first step to gaining flexibility in your negotiations. There is much you can do as a member of a negotiation team, if you know your fellow team members' profiles.

· Which of these 5 styles best describes your business client or vendor negotiation relationship?

In a successful negotiation, everyone should leave the negotiating table happy with the outcome: there should not be winners and losers. The negotiators should try to reach a win-win solution. This can be achieved in a number of ways.

One way of furthering negotiations is probing (asking the right questions and listening carefully to the answers). If you want to succeed in a negotiation, find out as much as you can about the needs and concerns that underlie a party's position. Clearly, different interests generate different results. Use questions (i.e. who, what, when, where, why, how) to gather information on interests. Here are some probing questions:

· What is the situation on production at your plant at the moment?

· What sort of quantities are you looking for?

· What are we looking at in the way of discount?

· What did you have in mind regarding specification?

· What were you thinking of in terms of delivery dates?

· How important to you is the currency for payment?

Another way of furthering negotiations is a proposal (offer) and counter-proposal (counter-offers).

A proposal is an offer made by one party to the other. Proposals can be made in written and/or verbal form. They provide the basis for the negotiation and a possible settlement, i.e. the deal. A successful proposal is one that results in an agreement.

A counter-proposal offers an alternative proposal that may suit both parties. This can happen when one party refuses or does not agree with the original proposal.

Through a series of proposals (offers) and counter-proposals (counter-offers) the two sides work towards an agreement which will benefit them both.

Useful language

Here are some ways of presenting / making proposals and counter-proposals and asking for / clarifying information:

presenting / making proposals and counter-proposals	asking for / clarifying information
I/We propose …	…is correct, isn't it?
I/We suggest …	Can you tell me how…?
How about …?	Is it alright with you if …?
Would it be possible …?	Would it be possible …?
How do you feel about …?	It seems … What is your opinion?
Would / Could you consider …?	Do you suggest…?
Would / Could you accept …?	Do you mean…? / What do you mean by…?

One more way of furthering negotiations is a concession and a trade-off. In order to succeed in a negotiation the parties make concessions or trade-offs. When you offer to change your position to one that is less favourable to yourself, you make a concession. Perhaps this is in exchange for a concession from the other side, although there is no guarantee of this. Your concession may be a goodwill gesture: a concession you make hoping that the other side will see this as friendly and make a concession in return. But even in a friendly negotiation, there may be horse-trading, with each side making a series of concessions in return for concessions from the other side. If you argue about something for a long time, especially about the price of something, you haggle. A series of concessions in exchange for concessions from the other side is a series of trade-offs. If you make a concession, you may not get anything back. If you make a trade-off, you give something away and get something in return.

Assignment 2. (Test)

A. Choose the correct option to complete each sentence.

 

1. At the start of a negotiation, it can be important to establish a............ with the other side.

a) rapport b) stalemate c) guarantee

 

2. When both sides give something away in order to make a deal, they reach a.............

a) concession b) compromise c) guarantee

 

3. When one side gives something away, they make a.............

a) compromise b) breakthrough c) concession

 

4. Something which stops a negotiation going smoothly is a............

a) limit b) sticking point c) lock

 

5. A situation in a negotiation where no progress can be made is a.......

a) deadweight b) deadline c) deadlock

 

6. A............ is a creative solution which allows the negotiation to progress.

a) breakthrough b) breakout c) breakpoint

 

7. If both sides in a negotiation leave the table without a deal (empty handed), the negotiation process.............

a) breaks down b) breaks off c) breaks out

 

8. The minimum offer you are willing to accept is

known as your.............

a) opening position b) fallback position c) bottom-line position

 

9. Some negotiations may involve a time restriction or.............

a) deadlock b) deadline c) dead end

B. Which of the ideas in the tes t could contribute to the success or failure of an international negotiation?

Assignment 3.

Assignment 4.

A.Answer the following question.

How effective are these negotiating styles?

a) Playing the 'tough guy'; being persistent in stating your demand and negotiating as long and hard as possible until the other person finally gives in

b) Being flexible; being prepared to make concessions when appropriate and achieving a win-win situation, although you may not get everything you want

c) Staying 'silent'; pausing between sentences, listening more and talking less so that the other person trusts you and is more vulnerable

Case study: Ashbury Guitars

Background

The Kim Guitar Company (KGC) in Seoul, South Korea, makes electric guitars for Japanese manufacturers and distributors in Europe and the US.

A major US distributor, Ashbury Guitars, has contacted KGC about marketing a range of guitars under its own brand name for the Californian market. Ashbury Guitars is a well-established company with an up-market image. It has had no previous dealings with KGC. Ashbury’s owner, Richard Grant, plans to put three models on the market: the Ashbury SG1000 (the most expensive model), the SG500 and the SG200. The body of die guitars will have an experimental shape as well as advanced technical features.

It is now early January. KGC has agreed to manufacture the guitars for Ashbury, even though it is a very busy time of the year for them. The two companies have had some initial correspondence by e-mail and now a face-to- face meeting is required.

Several points of the contract need to be negotiated. KGC’s owner, David Kim, has flown to San Francisco to meet Richard Grant. At the meeting, the Marketing Director of each company will be present. The purpose of the meeting is to make a deal acceptable to both sides, and which could be the basis for a long-term relationship.

 

You are negotiating as either:

• The KGC team: David Kim and Marketing Director

• The Ashbury team: Richard Grant and Marketing Director

 

Read your information files. Identify your priorities and work out your strategy and tactics. Then negotiate so that you get the best deal for your company.

 

Assignment 5.

Information file: KGC

Models

You can supply three models in the first year: Ashbury SGiooo, SG500, and SG200. The SG1000 will be costly to produce because it has advanced technical features.

Quality

To reduce costs of production, you want 40% of the order to be manufactured by other Korean firms.

Quantity

You want Ashbury Guitars to place a first order of at least 2,000 guitars. You need a large order to cover the costs of setting up the production lines. Try to persuade Ashbury to buy a large number of the SGiooo model because your profit margin on this guitar is high.

Of production to Ashbury

 

SG1000 510 920

SG500 340 550

SG200 290 475

Payment

By bank transfer, as soon as the goods have been dispatched.

Delivery

30 June. If an earlier delivery is required, production costs will increase by 10% because of overtime payments to workers. Before 30 June, the factory will be fulfilling orders for other customers

Discounts

Your company policy is to offer new customers 3% off list price for a first order, and 5% for second and further orders.

Guarantee

You usually offer a guarantee of 5 years.

INTERNATIONAL NEGOTIATIONS

SESSION 3

Assignment 1. Read the following quotations. Comment on them and answer the question.

«The aim of argument, or of discussion, should not be victory, but progress»

(Joseph Joubert (1754-1824), French moralist and essayist)

«Strength lies in differences, not in similarities»

(Stephen Covey, US author and management consultant)

«If you destroy a bridge, be sure you can swim»

(African (Swahili) proverb)

«Forty for you, sixty for me. And equal partners we will be.»

(Joan Rivers, American comedian and businesswoman)

 

Do you agree with these quotes? Explain why, or why not. Give examples from your own experience.

Assignment 2.

A. Do you agree or disagree with these statements. Why/why not?

 

1 Conflict is not always a bad thing.

2 Where there is a conflict, it is best to keep things rational rather than showing your emotions.

Mini-lecture

 

A) Lying, deceiving or bluffing?

To Lewicki (1983), the primary purpose of lying in negotiation is to increase the liar's power over its opponent by using false or misleading information. These lies can take many forms from which bluffing and deceiving play an important part.

B) Threatening

Threats can be considered in three different approaches: decision making, communication and commitment.

If Threats have a tendency to increase the conflict on an individual basis and when they don't produce the immediate expected effect, they initiate counter measures and damage significantly the level of trust in the relationship.

 

In a distributive / adversarial negotiation, each side often adopts an extreme position, knowing that it will not be accepted, and then employs a combination of guile (lie), bluffing, and brinkmanship (threats, confrontation, ultimatums)in order to cede as little as possible before reaching a decision.

Although using tricks isn’t recommended, there are negotiators who:

 

■ issue threats, final offers or ultimatums: they say that the other side must accept something, with very bad consequences for them if they refuse. Brinkmanship is a type of "hard nut" approach to bargaining in which one party pushes the other party to the "brink" or edge at which the other negotiating party must either agree or walk away. Successful brinksmanship convinces the other party they have no choice but to accept the offer and there is no acceptable alternative to the proposed agreement.

■ lie and bluff: they threaten to do something that they do not intend to do, or are not able to do.Negotiators propose extreme measures, often bluff, to force the other party to chicken out and give them what they want. This tactic can be dangerous when parties are unwilling to back down and go through with the extreme measure.

 

Of course, you can always call someone’s bluff: pretend to believe them, when you know they are bluffing.

Although negotiators generally consider themselves to be very logical, many of their decisions are made without thinking them through. Sometimes tactics are used to make negotiators uncomfortable and force quick, gut reactions. Here are some common tactics:

- Demand immediate responses.

- Don’t allow breaks or time to rest.

- Make personal negative comments.

- Always refer back to concessions already made.

- Explain that the bosses just won’t agree.

- Add a demand to every concession made.

- Don’t let yourself be pressurized by these tactics. Remain calm and take your time to consider the implications before you respond.

Dealing with problems

When negotiations get stuck, and don’t progress, there are a number of things you can do to avoid stalemate.

 

· Listen to the other party’s explanations actively an respectfully.

· Avoid unnecessary confrontation. Don’t get into arguments.

· Hold back on your reactions and stay focused. Ignore attacks.

· Deal with the impasse together. Try to see the reasons behind the standstill and look for solutions.

· Avoid escalation. Show the other party that they can only win if you win, too.

· Underline common ground: the areas where agreement has been reached.

· Reassure the other side on key points that have been decided: confirm that you have not changed your mind.

· Be willing to compromise on your original objectives: be ready to accept less than you wanted in exchange for compromises from the other side.

· Identify the exact obstacles or sticking points: the problems that are causing negotiations to become difficult.

· Postpone discussions until later so that each side can reconsider its position.

Deadlocks and Mediators

 

Deadlock is a situation in which an agreement cannot be made: a situation in which ending a disagreement is impossible because neither side will give up something that it wants. It is a situation, typically one involving opposing parties, in which no progress can be made. Let me illustrate it with the following example. Every year (in Baseland) there are negotiations between the baseball players’ union and the baseball team owners about pay and conditions for the coming season. Last year, after months of negotiations, there was deadlock: the negotiations broke down. Some commentators said there was stalemate; an impasse: a situation where no progress can be made. There were irreconcilable differences between the two sides and it was impossible to reach an agreement. The baseball players went on strike.

 

The two sides agreed to bring in a mediator, someone from outside to help restart the negotiations and bring the two sides close together in a process of mediation. The person they chose was a respected retired politician. He recommended a cooling-off period where each side would take no action. The payers ended their strike for the time being.

 

Another month passed, and still there was no progress. The two sides agreed to accept an agreement imposed by an arbitrator. A judge was chosen. She looked at the claims of each side and imposed a settlement or resolution to the dispute, fixing the salaries and the working conditions of the players. In this case, arbitration had settled the dispute.

 

Using Experts

Experts can be useful in negotiations involving complex or technical issues. There are two distinct ways to effectively use experts in negotiations:

• Use an expert that is not perceived to be affiliated with any party to provide persuasive arguments and solutions for complex issues. For such an expert to be effective all parties must have confidence in the expert’s neutrality and in the usefulness of such expert’s opinions.

– Such an expert will be more effective if perceived by the other parties to be neutral

– Your delegation should recognize that no expert is truly neutral. Each expert brings his or her own biases, individual and cultural, to the negotiation.

• Use an expert as a member of your delegation’s negotiation team. Such an expert can advise the delegation on complex issues and offer creative solutions. Such an expert can quickly and effectively address technical concerns raised by the other parties if required.

– Interpreters, scientists, economists and lawyers are an example of the type of technical experts that delegations typically utilize.

– Your delegation can expect that the other delegations and the mediator will have a lawyer as part of their negotiation team.

Reference

PILPG and Baker & McKenzie

 

Agreement

Agreement can be achieved once understanding of both sides' viewpoints and interests have been considered.

It's surprising how often negotiators miss the close. Many are afraid to end the negotiations because they fear they may have missed or forgotten something. The other side often misinterprets this fear as a delay trick and believes that the first party is uninterested or wants even more. They often become confused and defensive and the agreement begins to fall apart.

Closing is a matter of instinct as well as common sense. It's necessary to look for the non-verbal signals and listen to the verbal ones. It's also important to keep your goal in mind. If you've reached it, then make the deal!

It is essential for everybody involved to keep an open mind in order to achieve an acceptable solution. Any agreement needs to be made perfectly clear so that both sides know what has been decided.

An agreement of any kind is a deal. When you reach an agreement, you can talk about clinching a deal or closing a deal.

A bargain is also an agreement reached through negotiation. People who get what they want in a negotiation are said to drive a hard bargain.

An agreement may be in the form of a contract. Contracts vary in their form and content. They can be oral and verbal, binding and legal, employment and labour, commercial and others.

Checking the deal

It’s important to check the points of an agreement to avoid misunderstandings. You could say:

· Let me just go/run over (repeat and summarize) the main points. On A, we agreed that...

· As far as В is concerned (in relation to B), we agreed...

· We still have the question of C to settle (decide and agree on). And there’s still the outstanding (remaining undecided) issue of D. We’ll send you a written proposal.

· We’ll draw up (write) a contract based on those points.

· I think that covers everything.

Negotiation Settlement

There are a number of signals that indicate that negotiations are coming to a close. This may not always mean that an agreement has been reached. In many cases, there are many rounds of negotiations. The preliminary round may uncover the major issues, while subsequent rounds may be needed to discuss and resolve them. Here are some signals of talks coming to a close:

· A difference of opinion has been significantly reduced

· One party suggests signing an agreement.

· One or both parties indicate that a period of time to pause and reflect is necessary.

Language to use in closing

· It sounds like we've found some common ground.

· I'm willing to leave things there if you are.

· Let's leave it this way for now.

· I'm willing to work with that.

· I think we both agree to these terms.

· I'm satisfied with this decision.

· I think we should get this in writing.

· I'd like to stop and think about this for a little while.

· You've given me a lot to think about/consider.

· Would you be willing to sign a contract right now?

· Let's meet again once we've had some time to think.

 

Assignment 3.

Which of these are good ways of dealing with conflict / confrontation in a negotiation?

 

1 Avoiding eye contact.

2 Smiling a lot.

3 Sitting back and appearing relaxed.

4 Stopping the discussion and coming back to it later.

5 Saying nothing for a long time.

6 Saying “I see what you mean”.

7 Finding out why the other side is unhappy.

8 Focusing on the issues, not on personalities.

9 Saying something humorous.

10 Speaking calmly and slowly.

 

 

Asking questions has two purposes: getting information and building trust. In both cases, it’s essential to be diplomatic. Therefore ask open and indirect questions rather than closed ones.

An open question is created by using a question word like how, when, why, who, etc. A closed question gives you a yes/no or I don’t know answer. Open questions give you much more information than closed questions. They will also help you to get out of an impasse or stalemate. By using open questions, you show the other party you are interested in their concerns.

An indirect question in English is polite and, therefore, helps to build trust, e.g. direct question How did you arrived at that figure? as compared to indirect question Can you tell me how you arrived at that figure?

 

Assignment 4.

A. Match the techniques (1-5) to their definitions (a-e).

1 Open questions

2 Closed questions

3 Softening phrases

4 Signalling phrases

5 Summarising

 

a) Say what you are going to do before you do it.

b) Modify language so that it does not appear too aggressive.

c) Go over the points covered to highlight when agreement is reached.

d) Gather information and explore the opposite number's views.

e) Check understanding and ask for precise information.

 

B. Match each expression to the correct technique in exercise A.

 

a) Can you offer any collateral?

b) There seems to be something wrong with your figures.

c) Let's go over what we've agreed.

d) What sort of loan are you looking for?

e) Let me clarify my last point. What I meant was, we would want to retain control of the business.

C. Read the dialogue and identify expressions that match the techniques. Then place each expression under the correct heading in the Useful language box below. (Market Leader. Upper Intermediate Business English Course Book. 3d Edition. Unit 9).

CD3TRACK 5 (B = BANK MANAGER, C = CLIENT)

B. I've looked at your business plan and I like some of your ideas for

expanding your business. Could I ask you, what other people are providing finance for you?

C. Well, two family members have offered I 00,000 Eurus for a small stake in the business. I haven't decided anything yet, and my partner is also investing some more money. We're still discussing the exact amount.

B. Have you approached any other bank, if I may ask?

C. Yes, two banks, but they turned me down.

B. Oh, sorry to hear that - these are difficult times to raise money. I'd like to make a suggestion. Why don't you revise your business plan? And especially, put in a bit more about your competitors, for example. That'd help.

C. Certainly, l can do that.

B. Good. Could l ask what sort of repayment terms you have in mind?

C. I'm pretty sure we could repay a loan - the whole amount, that is – within three years.

B. Right. That might be a bit optimistic, I'd say. Anyway, suppose we were to offer you a loan of, say, 250,000 Eurus, once you've rev bed your business plan? How would you feel about that?

C. Let me clarify what the money's for. The 250,000 would be for working capital, and to hire more staff; a finance director, marketing people, money for the extension of the factory...

B. Well, we can talk about that a little later. Your first task is to strengthen the management as we discussed earlier.

C. OK. Well, in that case, 250,000 would certainly help me to achieve some of my objectives in expanding the business.

B. Good. We seem to be getting somewhere now. Let me sum up what we've agreed so far, then we can talk about your marketing strategy.

 

Useful language

 

OPEN QUESTIONS	CLOSED QUESTIONS
Why do you need a loan?	Do you have any other backers?
What other sources of finance do you have?	Can you transfer the money by next week?
What did you have in mind?	Could you improve your credit terms?
Where does your information come from?	Will you pay our price?
SIGNALLING PHRASES	SUMMARISING
I'd like to make a proposal. I think we should...	Let's see what we've got so far.
Could I make a suggestion: why don't we...? Let's look at this another way.	Let's recap before we go on to...   So, to sum up,...
SOFTENING PHRASES
I'm sorry, we can't go that high.
We were hoping to pay a little less.
That seems very expensive

Pair A

1. Look individually at the points to consider in an international negotiation listed below and add two more.

2. Choose the five most important points from your list.

3. Talk to your partner and agree the five most important points.

4. Join up with Pair B and try to agree the five most important points from your two lists.

 

1. Keep an open mind and be flexible.

2. Propose a strict agenda and keep to it.

3. Anticipate the interests of the other side.

4. Let the other side make the first offer.

5. Be very clear and direct about what you want from the other side.

6. Pay careful attention to building a rapport.

7. Put pressure on the other side to make an agreement.

8. Pay attention to the other side’s body language.

9. Don’t change your plan during the meeting.

10. Have a deadline for getting a deal.

 

Pair B

1. Look individually at the points to consider in an international negotiation listed on the right and add two more.

2. Choose the five most important points from your list.

3. Talk to your partner and agree the five most important points.

4. Join up with Pair A and try to agree the five most important points from your two lists.

 

1. Prepare carefully before you negotiate.

2. Avoid an agenda. Let the negotiation develop naturally.

3. Ask a lot of questions to find out the position of the other side.

4. Try to disguise what you really want.

5. Be prepared to walk away without a deal.

6. Never compromise on your key points.

7. Be careful not to let the negotiation break down.

8. Summarise often points you agree on.

9. Make no concessions until the end.

10. Make sure you 'win' the negotiation and get the best possible deal.

 

In his book The Art of Winning, Harry Mills says that most negotiations have seven stages. These are listed below, but in the wrong order. Put the stages in order. What word do the initial letters of the stages spell?

· Tie up loose ends (Confirm what has been agreed. Summarise the details on paper.)

· Explore each other’s needs (Build rapport. State your opening position. Learn the other side’s position.)

· Ready yourself (Prepare your objectives, concessions and strategy. Gather information about the other side.)

· Probe with proposals (Make suggestions and find areas of agreement.)

· Close the deal (Bring the negotiation to a clear and satisfactory end.)

· Signal for movement (Signal that you are prepared to move from your original position. Respond to signals from the other side.)

· Exchange concessions (Give the other side something in return for something you need or want.)

Assignment 7 .

In his book The Pocket Negotiator, Gavin Kennedy describes two extreme styles of negotiator: Red stylists and Blue stylists.

Read the summary of the two styles. Then decide if you are:

1. A Red stylist

2. A Blue stylist

3. Somewhere between the two styles

 

Red stylist	Blue stylist
· Want something for nothing.	· Want to trade something for something.
· Try to win by showing they are stronger than the other person.	· Try to succeed by cooperation with the other person.
· See negotiations as a short-term activity.	· See negotiations as a long-term activity.
· Use tricks and pressure to get what they want.	· Do not use tricks. They think about each other’s interests.

 

 

Assignment 6.

A large foreign sportswear supplier and a local retailer have been negotiating the supply of running equipment. Look at the information and finalize the agreement using the expressions in the Useful language box.

Partner A.

You are a large foreign sportswear supplier and have been negotiating with a new client for the supply of running equipment.

Now you are meeting with your new customer to finalize the agreement. Summarize the information you have agreed on, set up an action plan, and close the negotiation.

 

Partner B.

You are a sportswear retailer and have been negotiating with a new supplier for the supply of running equipment. This is the meeting in which you hope to finalize the agreement, set up an action plan, and close the negotiation.

 

 

Item	Quantity p.a.	Quality	Price
Running shoes high	500 pcs.	leather	$ 49
Running shoes mid	300 pcs.	leather / cloth	$ 35
Running shoes low	450 pcs.	suede leather	$ 30
Running shorts black	500 pcs.	nylon / cotton	$ 15
Running shorts white	500 pcs.	pure cotton	$ 14
Running top black	1,000 pcs.	mixed fibres	$ 15
Running top white	750 pcs.	pure cotton	$ 14

 

 

Useful language

 

Guaranteeing	Expressing deadlines
I / We guarantee you that …	We should come to a decision within / by…
I / We can assure you that …	You will be hearing from us by …
I / We will do my / your best to …	The closing date for … is …
	I / We would be grateful if you could implement this by …
	We have to set a time limit of … weeks / …days to obtain the information.
	There is a deadline of …days /…months to finalize the agreement.
Summarizing	Closing discussion
(Just) to summarize …	Great! We’ve got a deal.
So far we have established …	Thank you for fruitful discussion / productive meeting.
Let me just repeat, if I may.	I / We would certainly like to intensify my / our business relations with your company.
Can I just recap on these points?	Thank you for having us.
This is where we stand.	I / We had hoped / expected to get a lot out of this meeting, and I / we did.
I would like to summarize as follows …	I /We feel exactly the same.
	Well, it has been a pleasure. Thank you for coming.
I / We think / believe we all agree here that …	That would be wonderful.
We have certainly covered a lot of ground today!	I am /We are very much looking forward to …

 

 

 

 

INTERNATIONAL NEGOTIATIONS

SESSION 1

 

Assignment 1.

Read the following quotations. Comment on them and answer the questions.

 

«Let us never negotiate out of fear. But let us never fear to negotiate.»

(J.F.Kennedy)

«In business, you don't get what you deserve, you get what you negotiate.»

(Chester L. Karass)

«To be successful, you have to relate to people…»

(George Ross)

· Do you agree with these quotes? Explain why. Give examples from your own experience.

· Why do we negotiate? Can you think of three reasons?

 

Read the questionnaire, tick the most appropriate phrases, add the points and check your score.

 

Results or relationships?

Get the deal or build trust?

 

What kind of negotiator are you? Do you feel it's more important to have a good relationship with the other party or is it more important to win the contract? For most people, building a relationship and getting the deal are important aspects of an effective negotiation.

 

1. How important are you feeling in a negotiation?

 

a) If I reveal my true feelings, the other party will take advantage of them.

b) I don't consider the consequences my feelings can make on my opponent.

c) I hide my feelings from my opponent by using the correct body language.

 

2. What priority does building a relationship have in a negotiation?

 

a) Keeping a good relationship is more important than making somebody angry by rejecting a marginally acceptable deal.

b) A good relationship is essential in any negotiation.

c) My interests are more important than building a relationship.

 

3. When is it important to close a deal?

 

a) A marginally acceptable deal is better than no deal at all.

b) «Something for nothing» is always better t