negotiation process

NEGOTIATION PROCESS

Negotiation and CommunicationCommunication has no determinate

beginning or endHuman communication travels through a

variety of signals, not just words, and depends on the CONTEXT for its meaning

Context means the degree to which the communicator and listener share a common background of knowledge and experience

Communication depends on the competence of the communicators

Negotiation and CommunicationThe dimension of communication assume particular

importance in the cross cultural contextTo communicate with someone from a different

culture, one must learn not only the language but also the rules regarding how the language is used in different context and situations

Culture influences hand gestures, tones of speech, clothing and so on

A negotiator must understand the barriers so that effective communication can take place with some one from a different culture

Negotiation and CommunicationThe more we consider our views and

experiences to be absolute and universal, the less prepared we are to deal with people who have different background

Faulty attributions to others’ action or behavior and stereotyping can also cause barriers to cross cultural communications

Stereotyping can be a powerful barrier in cross cultural communication globally

Negotiation and CommunicationMexican PerceptionAmericans are:

ReservedRush/Time ConsciousRealistic/HardheadedTeam workerQuality-consciousUnemotionalSerious/Business LikeSelf-controlled

Taiwanese PerceptionAmericans are:

Friendly/OutgoingRelaxed/EasygoingOptimisticIndependentOutput-OrientedEmotionalFun-loving/JokingSelf-indulgent

CROSS CULTURAL

NEGOTIATIONS

RELATIONSHIP

BUILDING

EXCHANGE OF TASK

REALATED INFN

PERSUASION

CONCESSION

AG

MT

US-Japanese Negotiation

US-Japanese NegotiationHIGH

LOW

IMP

OR

TA

NC

E

1

2

34

12

34

TIME

1 Building Relationship

2 Information Exchange

3 Influence Bidding

4 Conclusion and Contract

Americans Japanese

ZONE OF ACCEPTANCE

A’s Zone of Acceptance

B’s Zone of Acceptance

AG

RE

EM

EN

T

MANAGING NEGOTIATIONS – Unequal Powers

MANAGING NEGOTIATIONS

Foreign Investor

Host Country

Time

Bargaining Power

Managing Negotiations- Equal Powers

Managing Negotiation – Equal Powers

Time

Bargaining Power

Host Country

Foreign Investor

Steps in Negotiation

PREPARE

DISCUSS

SIGNAL

PROPOSE

OFFER

BARGAIN

CLOSE

PREPARINGHave you decided

your objectives?Have you prioritized

them?Are they realistic?What are your

opponents objectives?Do you have any

information regarding your opponents attitudes, personality, assumptions etc?

Is your strategy simple and flexible?

In a group negotiation, have each members tasks been clearly defined?

Always try to avoid interrupting, talking too much, using sarcasm and threats.

Practice listening, summarizing

II - DISCUSSION

III- SIGNALLING IV - PROPOSING

Is your signal generating some movement?

What signals have you made?

If your signals have been ignored, have you tried rewording them?

Are you listening attentively for your opponents’ signals?

What is the language you are using to convey your proposal?

Have you itemized your proposal?

While receiving a proposal ensure that you do not interrupt it.

V- OFFER VI- BARGAINING

Before making an offer review your opponents and your own objectives

How can your offer meet all/some of your opponents inhibitions/objectives?

Have you considered all the possible variables in your offer?

Everything must be conditional

Decide what you require in exchange for your concessions?

Keep all unsettled issues linked?

VII- CLOSING & AGREEING

Decide where you intend to stop trading

What type of close are you going to use?

Always list the agreement in detail.

If the agreement is oral, always send a written note to your opponent, as soon as possible after the meeting.

Principles of NegotiationNegotiation is about bargaining to reach a

mutually agreeable outcome. Thus your endeavor should be a win-win outcome for both the parties.

Never neglect your preparation and you must have a clear plan. It is also advisable that you select the right starting point.

All the participants of the negotiation must regard each other as equals as mutual respect is essential to both the conduct and the outcome of negotiation.

Always keep in mind that negotiation is not a debate but a discussion. Therefore, each person must ‘fight his corner’ without trying to over-dominate or show one-upmanship.

Principles of NegotiationPatience is a key characteristics of a good

negotiation, thus take your time and do not rush into decision making. Delay is much better than poor outcome.

Empathy is another vital characteristics, therefore see things from other’s point of view objectively.

State clearly your objectives and take a feedback as to whether the other person has clearly understood your objectives or not.

Avoid confrontation and avoid getting into a corner you cannot get out of. When you have to disagree, do it carefully. When you have to make concessions, make them one at a time, unwillingly.

Principles of NegotiationAim high, and settle as high as possible.

Know when to drop the whole thing rather than agree to a totally inappropriate deal.

Maintain you stamina.Never underestimate people.End positively. Neither party will get exactly

what they want, but the deal should be agreeable.

Communications in negotiationNegotiation requires you to be a very good

communicator.If the objective of communication is Win-Win

Situation, then you should show empathy with the other person.

If we consider empathy and overall projections (ie how you come over to others by your tone, language etc), we can have four kinds of communications in negotiation.

HIGH PROJECTION

LOW PROJECTION

HIGH EMPATH

Y

LOW EMPATH

Y

IDEAL/

ASSERTIVE

WEAK/NON

PERSUASION

HIGH

PRESSURE

LITTLE IN

TEREST