Negotiations in business.docx

Negotiations in business.docx

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Negotiationsinbusiness

Negotiationsinbusiness

Negotiationsinbusiness

sometheoreticalaspects

materialsforIBstudents

prof.UGdrhab.DorotaSimpson

simpson@ug.edu.pl

Literature-basic

RogerFisher,WilliamUry,GettingtoYes:

NegotiatinganAgreementWithoutGivingIn,RandomHouse2003

RichardR.Gesteland,Cross-CultureBusinessBehaviour,HandelshojskolensForlag,Copenhagen1997

RogerFisher,DanielShapiro,BuildingAgreement:

UsingEmotionsasYouNegotiate,RandomHouse2007

Supplementaryliterature

G.RichardShell,BargainingforAdvantage:

NegotiationStrategiesforReasonablePeople,2ndEd.Penguin2006

JimThomas,NegotiatetoWin:

The21RulesforSuccessfulNegotiating,HarperBusiness,2005

G.RichardShell,TheMoralityofBargaining:

IdentityversusInterestsinNegotiationswithEvil,NegotiationsJournal,Vol.26,No4,p.453-481

RobertM.March,Su-HuaWu:

TheChineseNegotiator:

HowtoSucceedintheWorld’sLargestMarket,KodanshaInternationalLtd.,2007

Program

1.Introduction–theessenceofnegotiations

Definitions

Theessenceofnegotiations

Reasonsfornegotiations

Program

2.Phasesofnegotiations

Preparations-acquisitionofinformation,selectingmembersofthenegotiatingteam,choiceofthevenue,BATNA

Openingofnegotiations

Proposals

Concessionsandbids

Conclusionsofthenegotiationsandsigningthecontract

Program

3.Characteristicsofthenegotiationteam

Selectionofteammembers

Rolesinthenegotiationteam:

Leader

Minutessecretary

Listener

Critic

Controller

Program

4.Differentstylesofnegotiations-rivalryorcooperation

Win-win

Lose–lose

Win-lose

Program

5.Difficultsituationsinnegotiations

Difficultpartner

Tricksandmanipulations

Psychologicalandpositionalwar

Machiavellianism

Program

6.Conflictsinnegotiations

Determinantsofconflict

Courseofconflicts

Conflictresolution

Program

7.Negotiationsininternationalbusiness-students’homework

Culturaldifferencesandtheirimpactonthenegotiationprocess

Gesteland’sandHofstede’smodels

1.Introduction–theessenceofnegotiations

Definitions

Reasonsfornegotiations

Negotiationscanbedescribedasatwo-waycommunicationprocesswhichaimstoreachagreementwhenoneofthepartiesdisagreewiththeopinionorsolutionproposedbytheotherparty.

Definitions

Negotiationsareaboutcooperativeproblemsolvingratherthanconfrontationbetweenadversaries

Definitions

Negotiationisawayofmutualcommunicationinordertosolvetheproblem/conflictandcometoanagreementbytheparties

Definitions

Itistheprocessofsubmittingbids（offers）and/orconcessionsbythepartiesconcernedtoworkoutacommonpositioninasituationofdivergentinterests

Definitions

Negotiationsareawayofagreement,containingelementsofcooperationandcompetition

Definitions

Negotiationsaretheprocessofexchangingoffersuntiltheagreementwillbereached–thepurposeistosetacommonpointof6><#00aa00'>viewandadjustactivitytoit

Bothpartieshavetobeactivelyinvolvedtoreachtheagreement

Definitions

Negotiationsareaboutmutualsearchingthesolutionsatisfyinginvolvedparties

Theessenceofnegotiations

Althoughbothpartieshavecommonintereststheystartnegotiationsfromdifferentpositions

Theessenceofnegotiations

Partieshavedifferentviewsongoalsandmethodsfortheirimplementation

itisthemainbarriertogetanagreementbynegotiatingparties

Theessenceofnegotiations

Usuallythepurposeofbusinessnegotiationsistoexchangeresources

Everypartyshouldbereadytoacceptcompromisesolutions

Everypartyshouldhaveacertainmarginofindependenceinrelationtothenegotiationpartner

Reasonsfornegotiations

gainingbenefitsbybothparties

Unilateralbenefitsmeanviolence,blackmail,persuasionratherthannegotiations

Thenegotiationsprocess

Preparations

Opening

Consessions

Closing

Processofnegotiationsconsistsofphases,eventsandactivities

Itisnotface-tofaceconversations

Itrequiresacertainamountofhardwork

2.Phasesofnegotiations

Preparation–collectinginformation

Openingofnegotiations

Proposal-concessionsandoffers

Closing-Conclusionsofthenegotiationsandsigningthecontract

Preparation

acquisitionofinformation,selectingmembersofthenegotiatingteam,choiceofthevenue

identifyingissuesandfieldsofnegotiations

collectinginformation

Preparation

needsanalysisbothusandourpartners

identifyinggoalsofpartiesinvolvedinthenegotiationprocess

detrminingZOPA–ZoneofPossibleAgreement

determiningBATNA–BestAlternativetoaNegotiatedAgreement

Preparation

Preparationistheheartofnegotiations

thesituationisdynamic

weandourbusinesspartnersarechanging–needs,wantsandinterests

preparationmustalwaysbetakenanddonewithaspecialcare

ZOPA

ZoneofPossibleAgreement

Itistherangeinwhichtheagreementsatisfiesbothparties

ItisimpossibletodetermineZOPAaccuratelyifwedonotknowotherparty’sZOPA

Thebasicthingistounderstendtheyhaveitandpredictitslevel

ZOPA

?

?

BlueSkyandBottomLine”

?

?

BlueSky”–youridealsituation

youaskandyougetit

Blueskyshouldberealistic

IfitistoohighourbusinesspartnerscanfindamorerealisticpartyBATNA

ifitistoolowwecanloose

ZOPA

?

?

BottomLine”–yourpartycannotgobelowit

theleastamountpossiblefortheproposalofourbusinesspartners

BATNA

BestAlternativetoaNegotiatedAgreement

Itisthealternativeactionwhenthefinalproposalofourpartnersisnotacceptable–belowourbottomline

Searchingnewbusinesspartner

Lookingforsubstituteproducts

Exercise1:

determineZOPA

Yourcompanywantstobuyahouseforitsrepresentative

YourBlueSkyis550000PLN

YourBottomLineis600000PLN

Seller’sBlueSkyis620000PLN

Seller’sBottomLine570000PLN

FindZOPA

Five?

?

Ws”ofpreparation

What

Who

Why

Where

When

Whatisthesituation?

Assessmentthesituation

Assessenthowmuchresearchhastobeundertaken

Thegreaterriskthemoreresearchhastobeundertaken

Youhavetofindoutyourbusinesspartner’sculture,decision-makingprocessetc.

Whoisinvolved?

Whoareyourbusinesspartnersdirectlyinvolvedinthenetotiationprocess

Theircommunicationandsocialstyle

Thedecision-makingstyleoftheindividualsandtheteam

Whoisthecoredecison-maker

Whoinformallyinfluencesindividualsor/andgroup

Whyareyounegotiating?

Whatareyougoingtoachieveforyourcompany?

Whatareyougoingachieveforyourdepartmentandyourmanager?

Whatareyougoingtoachieveonbothbusinessandpersonallevel?

Wheretonegotiate?

Youcannegotiatevirtuallywebconferences）,onthetelephoneorface-to-face

Locationandthemeansofcommunicationarekeyelementstobeconsideredduringtheprocessofpreparation

Whentonegotiate?

Itdependsonwhetheryouarethecoredecision-makerorateamparticipant

Trytoavoidimprovisednegotiations

Impropmtunegotiationcanbeatacticalplaytoforceaquickandearlydecisionwithoutenoughinformation

Internationalnegotiationsdemandcheckingreligiousandnationalholidays

Who-recruitinganegotiationteam

Negotiators’profile:

negotiatingabilitiesandskills

personalitytraits

knowledgeofnegatiatingissues–law,commercial,technological,etc.

abilitytoworkinateam–innerbalance,trust,flexibility

Rolesinthenegotiatingteam

Leader

Recorder

Listener

Critic

Controller

Characteristicsofaleader

Canmakedecisions

Competentintermsof:

negotiatingissues

intellectual（precisethinkinginstressfulsituations,selectionofoptimalsolutions,etc.）

emotional（calmness,tact,trust,understanding）

Recorder

Recordingallfindingsduringnegotiations

Recordingdatapresentedbybothparties

Cooperationwiththeleaderonthemainissuesanddataarisinginthecourseofnegotiations,etc.

Listener

He/shedoesnotparticipateactivelyinthenegotiations

He/sheobservesnegotiatorsbehaiours,inparticulartheotherparty

Registrationthemostimportantandsignificantstatementsandopinions

Registrationsmethodsofexpression

Critic

Observingtheprogressofnegotiations

Observationofindividualteammembersintermsofcarryingouttheir

Reviewingthevariousstagesofnegotiation

Assistanceinimprovingtheassignedtasks

Controller

Apersonofahighstandingandahighposition

Evaluatetheactivitiesandprogressofthenegotiatingteam

Sometimesdeliberatelyintroducetensiontothenegotiatingteam

Exercise2

Buyingthehousefortherep.ofthecompanyinPolandconsiderthe5?

?

Ws”:

Whatisthesituation?

Whoisinvlved?

Whyareyoubuyingit?

Wherewillthenegotiationstakeplace?

Whenwillthenegotiationstakeplace?

Openingofnegotiations

Establishingcontacts:

Viatraditionalmail

Viae-mail

Viatelephone

Directmeeting

Collectinginformation

Duringthepreparationprocess

Duringindirectanddirectcontacts

Non-verbalcommunication–gestures,behaviour,wayofmoving,facialexpression,appearance（clothing,hearstyle）

Thefirstimpression

Kindness,smile

Collectinginformation

Presentationoftheteammembers

Communicationprocess

Senderofthemessagemessageandthewayofcommunicationrecipient

Collectinginformation

Identificationofthecompetencesoftheoppositeteam

Identificationofthemostimportantpersonintheopositeteam

Askingquestions–openandclosedquestions

Activelistening

Paraphrase

Proposals,concessionsandoffers

Openingpositions

Negotiationsstrategies-avoidance,concessions,rivalry,cooperation,compromise

Arguments

Copingwithdifficultsituations

Negotiationsstyles

Propos