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Negotiation

Nature of Negotiation
Negotiation refers to a process in which two or more
entities come together to discuss common and
conflicting interests in order to reach an agreement of
mutual benefit
Win-win situation for all parties involved
A voluntary activity
The process that is influenced not just by hard facts but
by the personal values, skills, perceptions, attitude and
emotions of the parties at the bargaining table
Time bound activity
Steps in International Negotiations
Agreement
Concession
Persuasion
Information exchange & offer
Building the relationship
Strategy
Preparation
Political Legal Environment
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Patterns Of Past Success and Failure
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Preparation
Setting bargaining objective
Know the other side
Place of negotiation
Send the proper team
Developing a strategy
What question should we ask in the first session?
What questions are they likely to ask?
How will we answer these questions?
What is our opening positions?
Do we have enough factual data and information to support this position?
If not, what extra information could be available?

When you are negotiating as a team, also consider the following
questions:
Who will lead the discussion?
Who will check the understanding? (verify facts)
Who will ask what questions?
Who answers the other sides questions?
Who will work to reduce tension and show concern for people
Building the Relationship
Building the relationship means exchange of
pleasantries between the parties
Occurs at a place other than the one fixed for formal
negotiation
The duration and the relationship building vary across
cultures
US businessmen prefer getting down to formal discussion
straight away; socializing is not so important for them.
Japanese, on the other hand, believe in socializing
Exchange of Information and the First Offer
Both parties exchange information and their needs for the
agreement. Parties exchange information that is task related
Arabs Japanese Mexicans Russian
s
Americans
Information
Exchange
More focus
on
relationships
than
technologica
l details
Extensive
request for
technical
specification
s
More focus
on
relationships
than
technological
details
Great
attention
to detail
Information is
given directly &
briefly, often with
a multimedia
presentation
First offer or
Counteroffer
20 to 50%
off goal
10 to 20%
off goal

Fair for both
the parties
and close to
goal

Extreme
and
decisivel
y unfair

5 to 10% off goal

Information Exchange and First Offer Strategies
Persuasion
Persuasion is the heart of the negotiation process. At
this stage, each part tries to get the other side to agree
to its proposition
The success of persuasion depends on
How well the parties understand each others position
The ability of each to identify area of similarity and differences
The ability to create new options
The willingness to work towards a solution that allows for all
parties to experience a win-win situation
Concessions
Requires that each side relax certain demands to meet
the other partys needs
Two approaches to making concessions are in use
Sequential
Holistic
Agreement
Three steps present themselves in the agreement stage
1. Formulating an agreement
2. Ensuring implementation
3. Reviewing ones negotiating experience

How satisfied are you with the outcome?
Who was the most effective negotiator?
What actions hindered the discussion?
How well was time used?
What are you main learning points from this negotiation? What should you
differently next time?

Tips to Make Negotiation Successful
Focus on long-term relationships, not short-term
contracts
Avoid over-reliance on cultural generalization
Time is of essence
Be a good listener, not a speaker
Use interpreters
Avoid use of dirty tricks

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