chapter-1-Bussiness-Negotiation.ppt

Business English Chen RuxinWhat is Business?Business is the production,distribution,and sale of goods and services for a profit.Types of Companycompany(BrE)/corporation(AmE)firmenterprisetownship enterprisestate-owned enterpriseprivately-owned enterprisewholly-owned enterpriseforeign capital enterpriseSino-foreign joint venturemultinational corporationgroup corporationlimited companyparent companysubsidiary/affiliate companyshareholding companylisted/quoted companypartnershipindustrial corporationThe BoardCEOSales DepartmentMarketing Department Administration DepartmentResearch DepartmentHuman Resources DepartmentTechnology&ServiceFinancial DepartmentThe Common Organization of a CompanyChapter Chapter 0ne 0ne Bussiness Bussiness NegotiationNegotiation1.Some Basic Concept of Negotiation 1.2 The Importance of Business Negotiation 1.1 The concept of negotiation1.1 The concept of negotiationA negotiation is a process of communication between parties to manage conflicts in order to come to an agreement,solve a problem or make arrangements.Negotiation is a basic means of getting what you want from others.It is back-forth communication designed to reach an agreement when you and the other side have some interests that are shared and others that are opposed.It is a common human activity as well as a process that people undertake everyday to manage their relationships such as a buyer and a seller,a husband and wife,children and parents.The stakes in some of these negotiations are not very high;people neednt have to prepare for the process and the outcome.However,for a business negotiation,it is a series of dealings between the sellers/exporter and the buyers/importer in order to reach an agreement on price,payment,quality,and other terms of conditions of a sale.The whole process of negotiation is based on the premise that both parties are interdependent,that is to say,one side cannot get what he/she wants without taking the other into consideration.The internal structure of negotiation is:Determine interests and issues Design and offer options Introduce criteria to evaluate options Estimate reservation points Explore alternatives to agreement Reach an agreement On the whole,we can find that business negotiation is a crucial step in business trade.So having a better understanding and practice in dealing with the problems in business negotiation is of great significance to the trading parties.1.2 The Importance of Bussiness Negotiation Negotiation plays a basic part in conclusion of a contract and has direct influence on the conclusion and implementation of a contract,and also has a great bearing on the economic interest of the parties concerned.2 The Forms of Business Negotiation There are two forms of business negotiation:1.Oral form (face to face talk)2.written form (correspondence)quality,quantity,packing,shipment,payment,insurance,inspection,claims,arbitration and force majeure,etc.3 The Overall Framework of International Business Negotiation In general,an overall framework of international business negotiation covers the following aspects:Background Factors:objectives,environment,markets position,third parties and negotiations Atmosphere:the perceived“milieu”around the interaction The Process of Negotiation:pre-negotiation,face-to-face negotiation and post-negotiation.4 Features of International Business Negotiation In international business negotiations,price is usually the key point because it directly concerns the economic benefits to both sides.Both sides seek a desired result.To get the expected result or achieve a certain purpose,the negotiators,should calculate fully and decide three different targets:1)the best target;2)the intermediate target;3)the acceptable target.5 Basic Rules of International Business NegotiationInterdependence A seller cannot exist unless he has a buyer,which determines this relationship between them.Concealment and OpennessDifferent Negotiation Situations Both parties must change as required of them by situations,if either of them fails to find out which type of negotiation is necessary in a particular situation,the odds are he will fail.Bargaining Mix and CreativityProposal ExchangeWinner of Loser Concealment and Openness In many business negotiations,both parties may conceal their real intentions and goals to better their chances of getting the best deal possible.As this is an open secret,smooth communication and good mutual understanding will to some degree become difficult,which does easily lead to misunderstanding.To achieve more satisfactory results,both parties will have to decide how open and honest they should be about personal preferences and needs,and to what extent they should trust the other Company LogoBargaining Mix and Creativityv How to make both“sides”meet in negotiations without causing much loss to either,which may bring both out of the win-lose mix and help accomplish their objectives,requires creativity.And the discovery of this is based on the environment where negotiators feel cooperative and dedicated to seeking the best solution possible instead of meeting but one sides Company LogoProposal Exchangev The heart of negotiation is the exchange of offers and proposals.In a“good faith”negotiation,an offer is made out to be accepted or returned with a counter-offer.There is an unstated assumption in negotiation that both sides will show their exchange of offers to the process of finding a solution by making concessions to the other sides offer.And through the process of offer and counter-offer a point is reached on which both sides will agree.To be successful,a negotiator needs to be able to understand the events that are taking place during the exchange of offers,to know how to use them to advantage,to keep the other side from using them to the negotiators Company LogoWinner of Loser In the process of business negotiation,if both parties try to reach an agreement that maximizes their outcome,it may lead either party to be concerned about only with his ends and ignore the needs of other side.Such a situation will most probably create problems.So the cardinal rules for a successful negotiator to remember are that:His/Her reputation，and effort to maintain that reputation by means of their negotiating behavior.The General Procedure of International Negotiation Most negotiation occurs in relationships that will be maintained over a long period of time.The settlements that are satisfactory and durable are the ones that meet the needs of both Company Logo6.The General Procedure of International Negotiation 1.Preparing Stage General works prepared for negotiation:v-Assessment of the situation and the peoplev-Agenda v-Concession strategiesv-Facts to confirm during the negotiation v-Manipulation of the Negotiation Situationv-Develop Strategies and Tacticsv-Pre-negotiation CCompany LogoThe General Grocedure of International Negotiation 2.Contacting and Materially Negotiable Stage Non-Task SoundingTask-Related Exchange of InformationPersuasionConcession and AgreementAn Example of Concession and AgreementLets Meet Each Other Half WayMr.Greene thinks TCLs price is too high to accept.He insists on the reduction of the price.Li:When we say that our price policies are adjustable,we have a minimum requirement in the quantity of the order.If you order 1,000 sets this time for each of the two products;we are ready to reduce our price by 2%to 3%.Mr.Greene :When I say your prices are much too high,I dont mean yours are higher only 2 or 3%,yours are at least 10%to 15%higher according to our market research.By the way,our order is large enough;the number of the desktops and laptops combined has well exceeded 1,000 sets.An Example of Concession and AgreementLi:Then you mean we are to reduce at least 10%,right?If we do so,we are going to lose our capital.Mr.Greene :The units price of your computer for desktop is 100 dollars higher than that of South Koreas,for the laptops 150 dollars.It is hard for us to accept the price.Li:Then what you mean is that we will have to make a reduction of 100 dollars in our unit price of desktops,and 150 dollars in laptops respectively,right?Thats almost impossible,on our part.Lets Meet Each Other Half WayMr.Greene :To be frank with you,we can get a better offer from other suppliers.I mean the prices are lower.If you insist on your present price,we have to accept the other offers.Still we dont really want our efforts to have a zero-sum end.Just lets try again to see what we can possibly do to meet each other halfway.Li :I still dont know how the business between us can be concluded.As we know that if we sell our goods at such prices you have expected,we are sure to lose money.It doesnt mean however we can make no concession on the prices,in order to get the business and promote sales volume in overseas market;our suggestion is we can reduce 50 dollars on desktops,75 dollars on laptops.This is our rock bottom price;we cant afford to make more reductions.Lets Meet Each Other Half WayMr.Greene :For the sake of business,I can accept the prices of your desktops,though I know there is a gap of 50 dollars in the unit price of them in comparison with that of other suppliers,no more bargain for me on that item.Now,can I make a bid for the laptops in return,then?Li :Yes,how much can you bid for?Lets Meet Each Other Half WayMr.Greene :Mr.Greene :You said that you can reduce 75 dollars in the unit price of laptops.Lets meet each other halfway,say 90 dollars for laptops.In this way,both sides make concessions,as expected,so the gaps will be closed,and business will be done.I sure hope you can accept the price I bid.Li:Li:Mr.Greene,you are quite handy and experienced in bargaining,you do have your own way of talking people,me as well into agreeing with your prices.For the business and friendship as well,I accept your prices.Mr.Greene :Mr.Greene :I m very glad youve come to an agreement on prices,so business will be closed at this price in order to set the ball rolling.Li:Li:You are right.I hope we can both get something out of it.返回返回The General Grocedure of International Negotiation 3.Agreement Concluding and Executing Stage Once the seller and the buyer reach to an agreement,it is time to consider what follows the negotiation.The main area will be the worded clauses in contract which one side may draw up and the other side may give his amendment on what he thinks it is more proper for both parties.It is difficult for us to make general recommendations regarding contracts.Many American executives of even the largest firms have been satisfied with a“compromise”contract when strong,longstanding personal relationships are involved.But each case is different.It is important that you and your firm push for the kind of contract you feel is necessary.Also,your legal counsel should be consulted on this issue.7 Communication Skills for Negotiations Some essential elements of effective communications for business negotiators are:Communicating across Cultures Skills:(1)Fuzzy wording (2)Listening More,Talking Less (3)Asking question (4)Conditional Questions (5)Preparing Questions (6)Putting It All Together (7)Conclusions8 Types of Negotiation StylesNegotiations differ in different countries.If we can know the characteristics in other countries,we can be easier to succeed in negotiating.Here well give four typical types of negotiation styles.Japanese Negotiation Style The Japanese are well prepared,particularly from the point of view of familiarity with the culture of the people with whom they are dealing The purchasers role is predominant.Vendors must be fully aware of this fact and adapt their behavior accordingly.Although at the heart they are very sensitive and emotional,they seek to conceal their true emotions as far as possible.Although at the heart they are very sensitive and emotional,they seek to conceal their true emotions as far as possible.Japanese Negotiation Style Japanese people are very long-term oriented Like most Asians,the Japanese tend to prefer an agreement based on trust to a written contract.The empathy of Japanese people may be very high:the interpersonal sensitivity of Japanese people and their sincere interest in foreign cultures and people may make them friendly hosts at business lunches or dinners.American negotiation StyleThe American style is oriented towards several major aspects,namely individualism,with the emphasis on ability,competence,professionalism,decision-making and explicit communication.As a consequence American negotiators usually possess the following qualities:seriousness,pragmatism and accuracy in writing clauses.In the negotiation process,Americans often consider that expertise or responsibility in a given area.American negotiation Style Professionalism is a quality that is very widely recognized in Americans.In their failure to take sufficient account of the culture of other parties,the Americans,like the French,are an“ethnocentric-missionary”people.A great deal of attention is(pragmatically)paid to precise issues to be debated,to facts and evidence,to an attitude oriented towards matter-of-fact discussions and to a tight negotiation time schedule.A strong positive emphasis is placed on frankness and sincerity Equality is between purchasers and vendor,and“let the best man win”.The Americans are supposed to be informal in everyday life.Americans tend to be short-term oriented.British Negotiation Style Together with the French,the British are those who have been most affected by their tradition of diplomatic negotiation.The British Empire and the influence of the United Kingdom have affected the British style.It is characterized by the following:A“soft-well”approach is essential.British coolness is not an empty phrase.An air of confidence,restraint and calm is essential for any negotiators in the position of seller.They must never be seen to be pushy in negotiation.The English have the reputation of being less motivated by money than the Americans;with the relative decline of Great Britain,they are more inclined towards their free time;companies are often full of administrative personnel.This situation has a tendency to slow down the decision-making process significantly.British Negotiation Style Although seemingly closest to the Americans,the British are not necessarily those who resemble them the most in the field of business practice.They are usually more contextual in communication and indirect;hence a willingness to try to interpret the British position in business negotiation is essential.Language-related issues(the style of writing clauses,for instance)are treated very differently by the British and the Americans.Whereas US people easily accept a somewhat simplified“international English”that will be used for drafting agreements,the British,like the French,take pride in correct language,and are sensitive to style for styles sake.French Negotiation Style The French are said to be somewhat difficult to negotiate with.They tend to be i