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Topic2:

PreparationforInternationalBusinessNegotiationInternationalBusinessNegotiationByZeningSongLearningObjectivesUponcompletionofthischapter,youwillbeabletolearnhowtoassessyourselfandyourcounterpartsinpreparationofnegotiation;knowthesituationalparametersthatinfluencenegotiation;learntheparticularitiesofdifferentnegotiationscenariosandprecautionsforpreparation;knowthetoolsfornegotiationpreparation.2LessonPlanPart1PreparationforInternationalBusinessNegotiationPart2CaseStudy:AcquisitionNegotiationBetweenChinaLCCompanyandDWCoffeeGrowerandExporterinEthiopia1.1KnowYourselfSetYourTargetDevelopYourBATNADetermineYourReservationPricePrepareMulti-issueProposalsofEqualValue51.2KnowYourCounterpartsTheStrengthandReputationoftheCounterpartyTheInterestsandBATNAoftheCounterpartyTheirRelationshipwithYouTheNegotiators52.SituationalParameters

PoliticalBackgroundLegalBackgroundCulturalBackground62.2LegalBackground

Negotiationsshouldalsoabidebythefollowinglegalprinciples:Thenegotiationsshouldobservenationallawsandsafeguardnationalsovereignty.Thenegotiatorsareequal,thenegotiationprocessshouldbedemocratic,andtheoutcomeshouldbenefitallthenegotiatingpartiesThenegotiationsshouldfollowinternationalpractices.72.3CulturalBackground

Negotiatorsshouldstudytheculturalbackgroundsoftheircounterpartsbeforenegotiations:VerbalandNon-verbalCommunicationHigh-contextandLow-contextCulturesCustomsandTaboos83.TypesofNegotiation

One-on-onevs.Team-basedNegotiationBilateralvs.MultilateralNegotiationHome-courtvs.Guest-courtNegotiationFormalvs.InformalNegotiationOne-shotvs.Long-termNegotiationTransactionalvs.Dispute-settlementNegotiationIn-personvs.AgencyNegotiation94.OtherFactorsAffectingNegotiations

NegotiatingPowerTimeInformalMeetingsandReceptionArrangementFormalvs.InformalNegotiation104.1NegotiatingPower

Negotiatingpowerreferstotheabilityofanegotiatortoinfluencethebehavioroftheotherparty.

Thelesspowerfulpartycanprepareforthenegotiationinthreeways:StrengthenitspowerWeakentheirreplaceabilityofitsopponentControlthenegotiationprocessasmuchaspossible114.2Time

Timeisaverycrucialfactoraffectingnegotiations.DonotsetspecificdeadlinesforyoursideduringpreparationTrytoknowtheotherparty’sdeadlineinadvance124.3InformalMeetingsandReceptionArrangement

Informalmeetingsandbusinessreceptionsbeforeanegotiationcanhelpbothpartiesbuildtrust,establishrelationshipandsetapositivetoneforthenegotiation.Choosethetimeandplaceforthenegotiationandmakeduearrangement.135.NegotiationPreparationTools

Thompson’sPreparationWorksheetSevenElementsWorksheet145.1Thompson’sPreparationWorksheet

15Self-AssessmentAssessmentoftheOtherPartySituationAssessment?WhatdoIwant?(Setatarget)?Whatismyalternativetoreachingagreementinthissituation??Determineyourreservationpoint?Beawareoffocalpoints?Beawareofsunkcosts?Donotconfusethetargetpointwithyourreservationpoint?Identifytheissuesinthenegotiation?Identifythealternativesforeachissue?Identifyequivalentmulti-issueproposals?Assessyourriskpropensity?Whoaretheotherparties??Arethepartiesmonolithic??Counterparties’interestsandposition?Counterparties’BATNA??Isthenegotiationoneshot,longterm,orrepetitive??Dothenegotiationsinvolvescarceresources,ideologies,orboth??Isthenegotiationoneofnecessityoropportunity??Isthenegotiationatransactionordisputesituation??Arelinkageeffectspresent??Isagreementrequired?Isitlegaltonegotiate?Isratificationrequired??Aretimeconstraintsorothertimerelatedcostsinvolved??Arecontractsofficialorunofficial??Wheredothenegotiationstakeplace??Arenegotiationspublicorprivate??Isthird-partyinterventionapossibility??Whatconventionsguidetheprocessofnegotiation??Donegotiationsinvolvemorethanoneoffer??Donegotiatorscommunicateexplicitlyortacitly??Isthereapowerdifferentialbetweenparties??Isprecedentimportant?Source:LeighThompson,TheMindandHeartofTheNegotiator5.2SevenElementsWorksheet

16PartiesandIssuesAlternativesInterestsOptionsWhoarethepartiesinthenegotiation?(Listallindividualsororganizationsrelevanttotheoutcomeofthenegotiation)Whatissuesareinvolvedinthenegotiation?Whatareouralternatives?Whatarethealternativesoftheotherparty?*Considerhowtoimproveourbestalternative.Whatareourinterests?Whataretheinterestsoftheotherparty?*Prioritizeinterests,anddistinguishbetweendifferentinterests,opposinginterests,andcommoninterests.Whatarethepossibleoptions?LegitimacyCommunicationRelationshipCommitmentWhatstandardsorcriteriawouldhelpusevaluateouroptions?Whenthereisnoobjectivestandard,howcanweestablishone?*Think:Whatwouldbringasenseoffairnesstothenegotiationprocess?

Whatarethemainquestionswewanttocheckwiththeotherparty?Whatmessagesdowewanttoconveytotheotherparty?*Think:Whatandhowshallwecommunicate?Whatisthecurrentrelationshipbetweenthenegotiatingparties?(B)Whatkindofrelationshipdoyouwanttoestablishbetweenthetwonegotiatingparties?Howcanwechangetherelationshipbetweenthetwopartiesfrom(A)to(B)inthisnegotiation?*Note:Separatepeoplefromproblem.Whatissuesneedtobediscussedbeforecommitment?Whatkindofcommitmentarewewilling/empoweredtomakeinthisnegotiation?Source:"Negotiation"byBrucePattoninMichaelL.MoffittandRobertC.Bordone,edsTheHandbookofDisputeResolutionProgramonNegotiation,Jossey-Bass,2005LessonPlanPart1PreparationforInternationalBusinessNegotiationPart2CaseStudy:AcquisitionNegotiationBetweenChinaLCCompanyandDWCoffeeGrowerandExporterinEthiopiaCaseStudyNow,let’slearnnegotiationpreparationthroughacasestudy--theacquisitionnegotiationbetweenChinaLCCompanyandanEthiopiancoffeeprocessingplant.18ChinaLCCompanyDW,EthiopiaCaseStudyPleasereadthecasebackground,anddiscuss:AsthenegotiatoroftheChineseside,pleaseprepareforthenegotiation,usingthenegotiationpreparationtoolsintroducedinthischapter(e.g.,“Thompson’sPreparationWorksheet”or“SevenElementsWorksheet”).19CaseStudyPleaseread“process,strategiesandagreetmentreaching”,anddiscuss:Whatdoyouthinka

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