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1、1International Business Negotiation2 Chapter One Summary of International Business Negotiation3Teaching ObjectivesAfter studying this module, you should be able to: Understand negotiation;Concepts and features of business negotiation;Concepts, features and principles of international business negoti

2、ation;Classifications of international business negotiation;4Negotiation is like fighting!WinLoseHi!Hi!OpeningFightingEndingU come on!U come on!5Negotiation business negotiation International Business NegotiationEnding 4123Contents61.1. Negotiation 1.1.1. What is “Negotiation”? 1.Negotiation is a di

3、alogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interest. 7 It is a process of communication between parties to manage conflicts in order for them to come to an agreement,

4、solve a problem or make arrangements.82.Negotiations must satisfy at least the following conditions:(1)The outcome of negotiation is a result of mutual giving and taking. One-sided concession or compromise can not be called a successful negotiation.9(2)Negotiations happen due to the existence of con

5、flicts, however, no negotiations can proceed smoothly and come to a satisfactory solution without collaboration between the participants. 10(3)In spite of unequal strength and power on the side of one party, it should not be viewed as a success if the other party can not excise veto right to the res

6、ult of the negotiation, which is a show of equal right of the parties.111.1.2 Characteristics of negotiation(1)Every negotiation involves two or more than two parties.(2)The objective of a negotiation must be definite.(3)Negotiation must be conducted on an equal basis.(4)A consensus must be built on

7、 the basis of mutual concession.(5)Negotiation involves exchange of ideas, communication, persuation, compromise, and such like.121.1.3 Conditions for successful negotiation(1)Identifiable parties who are willing to participate. (2)Interdependence. (3)Readiness to negotiate. (4)Means of influence or

8、 leverage. (5)Agreement on some issues and interests. 13(6)Will to settle. (7)Unpredictability of outcome.(8)A sense of urgency and deadline. (9)No major psychological barriers to settlement. (10)Issues must be negotiable. 14(11)The people must have the authority to decide. (12)The agreement must be

9、 reasonable and implementable. (13)External factors favorable to settlement. (14)Resources to negotiate. 15 1.2 Definition and characteristics of business negotiation 1.2.1 Definition of Business Negotiation Business, or commercial activities, shall mean exchange of all tangible and intangible asset

10、s or trading things. However, not any buying or selling act can be business behavior. Business behavior has its specific meaning. It is an economic activity authorized by law, founded on social division of labor and contented on provide goods or services.16 Business negotiation is a process of confe

11、rring in which the participants of business activities communicate, discuss, and adjust their views, settle differences and finally reach a mutually acceptable agreement in order to close a deal or achieve a proposed financial goal.171.2.2Characteristics of Business Negotiation(1)The objective of bu

12、siness negotiation is to obtain financial interest. (2)The core of business negotiation is price.(3) Its principle is equality and mutual benefit.(4)Items of contract should keep strictly accurate and rigorous.181.3 International Business Negotiation1.3.1Definition of International Business Negotiat

13、ion International business negotiation refers to the business negotiation that takes place between the interest groups from different countries or regions. It is an important activity frequently involved in foreign trade and other economic exchange, serving a critical approach and method for these i

14、nterest groups or individuals to confer together to reach an agreement or settle the issues of their interest conflicts191.3.2 Characteristics of International Business Negotiation (1) Strong political. (2)Of international commercial law as a criterion. (3)Should adhere to the principle of equality

15、and mutual benefit. (4)The negotiations are difficult. 201.3.3 Forms of International Business Negotiation(1) Classified by formsa. One-to-one negotiationb. Multilateral negotiation(2) Classification by negotiation sitea. Host venue b. Guest venue c. The third partys venue 21(3)Classification by att

16、itudes of two parties a. Soft negotiationsb. Hard negotiations c. Principled negotiation (4)Classification by ways of communicationa. Oral negotiationb. Written negotiation22(5)Classification by negotiation objecta. Product trade negotiationb. Technology trade negotiationc. Service trade negotiation

17、(6) Classification by the order of negotiators discuss problemsa. Horizontal Negotiationb. Vertical negotiation231.4 Principles of international business negotiation(1)Equality and mutual benefit principle(2) Keep it flexible and fluid(3) Sincere cooperation(4) Act in strict accordance with the law2

18、4 Win-win negotiation Win-lose negotiation Independent NegotiationB. What are the types?Each party thinks only about its own interests.I. Preparation opponent party partya shared objectivework togethermutual benefits25Task Video Time. I. PreparationC. How to prepare?Pre-ViewingViewingPost-ViewingTo

19、the contents26ObjectivesStrategiesRolesAgendaI. Checklist for PreparationWhat are the main areas?What are likely to be sticking points?what concessions can we give?Who is responsible for what?What special skill do individuals have?What do we know about the other team?Who is taking notes and to ask q

20、uestions?What is the agenda?What is best order to discuss it?What is the best we can get?What is the worst we can get?What is our bottom line?Post-Viewing27II. OpeningCreateAGood NegotiationAtmosphereIntroducing rolesIntroducing purposeSetting agendaSetting timing28Principles in setting an agenda:Fu

21、lly prepare.Dont miss anything important.Consider carefully the order of agenda. Dont agree the agenda set by the other party without fully consideration.Study the agenda proposed by the other side to make sure nothing is omitted on purpose. 29III. Managing ConflictsConflictsPersonal offenceComplete

22、 breakdownStress from higher levelsNegative effect on the dealHandling conflictsDiscuss sth elseOffer a conditional concessionEmphasize the lost to both side if failAdjourn to think and reflectSummarize progress30Practicing Handling ConflictsThe problem is that we have never offered such a low price

23、 that you want.discusssth else?31There are number of problems on the table. It seems that we still have a long way to go before the agreement.Summarizeprogress and areas ofagreementPracticing Handling Conflicts32 We are your regular buyers, but the discount you offered to us is the same with all the

24、 other buyers including those new ones. I dont think its fair for us and therefore we demand a 5% discount.offer conditionalconcessionPracticing Handling Conflicts33 The investment in the area of information technology is very essential to the development of a company. The upgrading of the system ha

25、s just been started and in my opinion it would be disastrous if we cut the budget.suggestadjourn tothink and reflectPracticing Handling Conflicts34 The price you are asking is rather high, much higher than what we expected.Emphasize the loss to both sides if no contract is signedPracticing Handling

26、Conflicts35Negotiation Simulation 1Scenario A: A few weeks ago, you bought a bike in a small store near your college. It IS cheap buying , but the quality is not guaranteed. You found the kickstand was broken after a few days of use. You checked carefully and realized that it was the quality problem

27、. Now, you decide to go back to the store and complain. The store keeper is selling bikes to 2 customers when you arrive.Scenario B: You run a bike store near the college. Business is hard for a small store like yours recently. Today, a customer will come back to you and complain for the broken kick

28、stand of the bike he just bought from you a few days ago. When he comes in, you have several new customers in the store. College boyStore Owner36insideoutsideconfidencefinance知己篇當(dāng)局者迷也。正確評估自己。戰(zhàn)略一:知己知彼(知己篇)patiencesincerityskillsothers37GIVEWANTMUSTMust:非要不可的Want:可要可不要,拿來交換Give:可以拿來與對方建立共識的Different n

29、eeds38戰(zhàn)略一:知己知彼(知彼篇) 知彼篇與人謀事,則須-知其習(xí)性,以引導(dǎo)之;明其目的,以勸誘之;諳其弱點,以威嚇之;察其優(yōu)勢,以鉗制之。 -培根談判論Get to know their needs Get to know their rights 1239HomeworkWrite a plan for your performance of negotiating 40Thanks!41International Business Negotiation42 Chapter2 Need Theory and Game Theory43Teaching Objectives After

30、studying this module, you should be able to know: 1.What is need theory?2.How to apply need theory to international business negotiation?3.Game theory and negotiation44Need theoryGame theory12 3Contents452.1Need theory Need theory explains the forces that drive, motivate, and even control much of wh

31、at we do. Abraham Maslow determined that there is an innate instinct metric that guides how people respond, fight or negotiate. His theory of the hierarchy of needs is the basis of this metric. 462.1.1 Maslows hierarchy of needs47Hierarchy(1)Physiological needs(2)Safety needs(3)Love and belonging(4)

32、Esteem(5)Self-actualization482.1.2the need theory and negotiation(1)Survival needs and negotiation(2)Security needs and negotiation(3)Social needs and negotiation (4)Ego needs and negotiation(5)Self-actualization needs and negotiation492.1.3 Enlightment from the need theory Negotiators should learn

33、to use the Maslow Need-Theory Model as a situational thermostat. Judging how the other person reacts to offers or proposals will reveal how close to making the deal too painful for the other person to accept. You cannot expect the other person to be hurt so badly they will lose a base commodity like

34、 money by agreeing. Similarly, if you can find ways to satisfy needs high on the others personal hierarchy, you may be able to make them sacrifice financially to gain that satisfaction. 502.2 Game Theory2.2.1 The prisoners dilemmaThe prisoners dilemma is a canonical example of a game, analyzed in ga

35、me theory that shows why two individuals might not cooperate, even if it appears that it is in their best interest to do so. It was originally framed by Merrill Flood and Melvin Dresher working at RAND in 1950. 512.2.2Strategy for the classic prisoners dilemmaThe best deterministic strategy was foun

36、d to be tit for tat, which Anatol Rapoport developed and entered into the tournament .52We must remember the golden rule when it comes to business competition, as taught by the prisoners dilemma: Acting in ones self interest does not always serve ones self interest.53Thanks!54International Business

37、Negotiation55 Chapter3 Preparation for International Business Negotiation56Teaching Objectives After studying this module, you should be able to know: 1.Information collection in international business negotiation2. Team members of negotiation group3. How to make negotiation schedule?57Establishing

38、objectivesCollecting Information Negotiation agenda Forming the Negotiation Team 412 3Contents5Choice of Negotiation Venues 6 Simulated Negotiations 58Guide Every negotiation requires preparation .The foundation for success in negotiating is the planning that takes place prior to the actual interact

39、ion process. Thorough preparation is the most important prerequisite to effective negotiation. Neither experience, bargaining skill, nor persuasion on the part of the negotiator can compensate for the absence of preparation.593.1 Establishing objectives 3.1.1 Decide on Priority Interests and Rank Th

40、em Each party should determine the priorities of their interests. Negotiation is, after all, a matter of both parties conceding and reaching a solution. The key to interest-based concessions is to trade items of less importance in order to secure items of more importance. 603.1.2 Key elements of neg

41、otiation objectives The key elements of negotiation objectives are:a. Who can contribute to and who will be affected by this negotiation?bWhat are the maximum and minimum targets we will seek?cWhen must we conclude this negotiafion and when would we like to conclude?61 dWhere is the best place for u

42、s to negotiate? eWhy has the buyer selected us to negotiate with,does this suggest any bargaining strengths for our side? fHow will are we to make concessions and how will we seek counter-concessions from the other party?623.1.3 Target levels(1)The highest target,or the maximum expectation or top ta

43、rget(2)The desirable target (3) The acceptable target (4)The bottom target633.2 Collecting Information3.2.1. What is information?Information has the power to reduce risks . The more we know about a situation, the more certain we are about possible outcomes. The more certainty we possess, the less ri

44、sks we face in making decisions and planning in the negotiations.643.2.2 Main contents of negotiation information collection(1)Qualification and credit status (2)Negotiation representatives (3)Market research(4) Local laws and regulations(5)Information on financial credit653.2.3 Where to collect inf

45、ormation International organizations. Governments. Service organizations Directories and newsletters. On-line service. 6633 Negotiation agenda Negotiation Agenda refers to the arrangement for the timing and site choice of the negotiation, and issues discussed. The agenda is usually prepared by the h

46、ost party or discussed by both parties in advance,which can be segmented into open agenda and restricted agenda sometimes673.3.1Scheduling of the negotiationNegotiation agenda should list when the negotiation is conducted, how long it lasts and what issues are discussed in each session. Whether the

47、scheduling is proper and reasonable is also a part of negotiation strategies. 683.3.2 Negotiation site Negotiation sites are usually chosen by the hosting party and then informed to the visiting team, or one party proposes several plans for the other team or teams to choose. They are usually a negot

48、iation hall,meeting room,managers office of the host company 693.3.3Negotiation issues Negotiation issues refer to the various problems that each side has proposed and planned to confer in the negotiationBoth sides can have communications beforehand to identify negotiation issues;or each side propos

49、es different issues and then has a discussion together 703.3.4 Open agenda and restricted agendaOpen agendaRestricted agenda 713.4 Forming the Negotiation Team3.4.1Size of the negotiation teamWhat then is a commendable size for a negotiation team?Bill Scott suggests that the number is probably four.

50、 The main reasons for this number include: Size of group. Control of team. Range of expertise. Changing membership.72342 The staffing of the negotiation team(1)OrganizationaI structure of the team Leading personnel BusinessCommercial personnel Professional and technical personnel Financial personnel

51、73Legal personnelInterpretersSecretaries74343 Collaboration and support from the outside members(1)Related personnel in other functional departments(2)Administrative personneI753.4.4 The importance of team solidarity if success is to be attained, unified effort should be made because of the rivalry

52、nature of international negotiations. While team members will have varying levels of authority and responsibility, all directions must come from the chief negotiator. 7635 Choice of Negotiation Venues 3.5.1. Host venue Host venues can be one partys own country, own city or own office building or any

53、 other places where the party hosts the negotiation.773.5.2. Guest venue When negotiations take place at counterpart s country, city or office buildings, they are conducted at guest venues. 3.5.3 The third partys venue The negotiation is held neither in the host partys places nor in the guest partys

54、 locality, but rather in the third partys place which is directly or indirectly related with the two parties. 783.5.4 Decorations of the negotiation sites (1)Setting of rectangular tables (2)Setting of square tables (3)Setting of round tables (4)Other facilities and equipment7936 Simulated Negotiati

55、ons361Necessity of simulated negotiations Key focus of simulated negotiations: (1)Check whether the negotiation plan is thorough and feasible or not (2)Train and improve the negotiatorsability to meet the contingency80362 Contents of simulated negotiationsThe contents of the simulated negotiation sh

56、ould be the same as the formal negotiationOf coursein order to find more problems,we can segment the contents into more detailed ones and have an argument about each subitem one by one;we can also choose some difficult parts for simulated negotiation 81363 Forms of simulated negotiations (1)Group si

57、mulated negotiation (2)One-to-many simulated negotiations82Thanks!83International Business Negotiation84 Chapter4 Opening of International Business Negotiation85Teaching Objectives After studying this module, you should be able to know: 1Impacts of different negotiating atmospheres on negotiations2S

58、teps to open an international business negotiation3Factors we should pay attention to in the opening statements4Common strategies for opening an international business negotiations86Creating a Right Negotiation AtmosphereOpening Steps and strategies1 Contents287Guide After gathering and sorting outi

59、ng the information as well as establishing the negotiation plan in the previous period,the international negotiation has formally begun! Just as the old saying goes,“Well begun is half done” Negotiation opening refers to the behavior of greeting,introducing,stating ones positions and exploring the c

60、ounterparts intention or position,in order to influence and manipulate the process of negotiation so that they can pave the way to an advantageous position in the negotiation8841 Creating a Right Negotiation Atmosphere4.1.1 The function of negotiation atmosphereDifferent negotiation atmospheres have

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