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(共27张PPT)
Chapter 3
Business Negotiation
In this chapter, you will learn the
following key points:
Basic concepts of negotiation
Preparation of business negotiation
Steps of business
Negotiation
Negotiation style, principles and strategies
Negotiation
It is rightly said that “negotiation is both an art and a science”.
The science of it requires analyzing the relative bargaining strengths of each party and the different strategic options available to each party and assessing how the other party might respond to various bargaining ploys.
The art of negotiation incorporate interpersonal skills, the ability to convince and be convinced, the ability to employ a basketful of bargaining ploys, and the wisdom to know when and how to use them. In the context of international business, the art of negotiation also includes understanding the influence of national norms, value systems, and culture on the approach and likely negotiating tactics of the other party as well as sensitivity to such factors in shaping a firm’s approach to negotiations with a foreign government.
Cultural Problems in International Business Negotiations
Important problems in international business negotiations caused by cultural differences include those pertaining to the following:
Language and non-verbal behaviors
Values
Thinking and decision making processes
Language and non-verbal behaviors
Some problems may arise when negotiators are not able to properly communicate in a common language. Even when the same language is used, problems may arise due to different meanings for the same word in different cultures or because of different connotations when used in different contexts. Cross-cultural differences in non-verbal communication are sometimes very perplexing. A particular gesture or symbol may have quite different connotations in different cultures.
Values
There are also significant cross-cultural differences in values. For example, people differ in their adherence to time, promises etc. Similarly, business ethics vary substantially. Culture can also have a significant impact on by whom and how decisions are made.
Thinking and decision making processes
Research has identified at least three fundamental aspects of decision making that differ significantly by culture. Decision by consensus is characteristics of collectivist-oriented cultures such as Japanese.
Secondly, how decisions are made also varies by culture. One of the key factors that influence decisions is the role of information in the decision making process.
For example, in the United States and Sweden, managers emphasize rationality and utilize quantitative information. By contrast, French, Italian, and Argentinean managers emphasize past experience and qualitative information over quantitative data in making decisions.
Thirdly, culture also seems to play a significant role in the extent to which managers are comfortable in making decisions in uncertain environments.
For example, managers from the United States, Germany, and Scandinavia seem to have the highest tolerance, while managers from Italy, Iberia, and Japan seem to have much Lower tolerance for making decisions in circumstances of uncertainty. These differences in tolerance can have a variety of implications. For example, if managers from Germany and Iberia are trying to reach an agreement concerning a joint venture in the context of significant uncertainty, they may clash and differ in their willingness to make decisions.
3.1 Preparation for Negotiation
Information Lists for Negotiation
Macro Scope Micro Scope
Political security Accounting
Economy Tax structure
Legal environment Real estate and lease prices
Investment and trade restrictions Education
Infrastructure Personal policies
Technology Attitudes towards foreigners
Telecommunication Cultural history
Transportation Corruption
Finance
3.2 Steps of Business Negotiation
1. Inquiry
2. Offer
3. Counter-offer
4. Acceptance
5. Conclusion of sales contract (Chapter 4)
3.2 Steps of Business Negotiation
1. Inquiry
the first step of any business negotiation
to seek a supply of products/services & some relative information
could be made orally or in written forms, with / without engagement
3.2 Steps of Business Negotiation
2. Offer
A firm offer is made to a specific person or persons to express or imply a definite intention of the offeror to make a contract under clear, complete and final trade terms.
It is binding on both offeror and offeree.
3.2 Steps of Business Negotiation
2. Offer
A non-firm offer is an offer without engagement.
e.g. “this offer is subject to our final confirmation”; “the prices are subject to market change without notice”.
3.2 Steps of Business Negotiation
2. Offer
No matter orally or in written form, would be the following elements:
the name, price, quality and quantity of the goods;
the date of delivery and/or time of shipment;
the terms of payment;
the validity of the offer;
other terms (packing, discount, insurance, etc.)
3.2 Steps of Business Negotiation
3. Counter-offer (1) (2)
a reply to an offer; an acceptance contains additions, limitations or other modifications
a partial rejection of the original offer
e.g. “Accept your offer subject to the following alterations …”
3.2 Steps of Business Negotiation
4. Acceptance
Both buyers and sellers have an equal chance to close the deal, and the more proactive the decision maker is, the greater the chance of controlling the process to reach the acceptance. The ability to close a deal when it has reached its maximum level of distributing enough among all participants.
3.2 Steps of Business Negotiation
5. Conclusion of sales contract
When an offer is accepted, a written sales contract or sales confirmation is usually required to be signed between the buyer and the seller to confirm the sale and stipulate their rights and obligations respectively.
3.3 Negotiating Styles, Principles and Strategies
1. Negotiating Styles
Major personal negotiating styles:
aggressive, compliant, passive, impassive, intimidating, technical, financial, legalistic, secretive, deceptive, exploitive, stubborn, ambivalent, pragmatic, brinkmanship, arrogant, self-righteous, overwhelming, fleeting, stern, social, theft, indulgent, etc.
3.3 Negotiating Styles, Principles and Strategies
1. Negotiating Styles
Major team negotiating styles:
consensus, cowboys, platoon, divide and conquer, Jekyll and Hyde, hierarchical, horizontal, departmental, etc.
3.3 Negotiating Styles, Principles and Strategies
2. Negotiating Principles
Separate the people from the problem;
Focus on the interests behind the positions;
Consider your BATNA.
3.3 Negotiating Styles, Principles and Strategies
3. Negotiating Strategies
Forbearance;
Surprise;
Fait Accompli;
Feint;
Granting Concessions.
Thank you !

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