Chapter 2 Proper Behaviors in International Business Negotiation The golden six steps to make your negotiation fruitful!

Questions in focus 1. What are the famous six steps for the process of almost all negotiations? 2.How to set your strategies? 3.How to build understanding? 4.How to break deadlocks and push for agreement? 5.How to formulate agreements?

Key Steps for negotiation Preparation Developing a strategy Getting started Building understanding Bargaining Closing

Step 1 Preparing for negotiation Setting bargaining objectives Assessing the other side’s case Assessing relative strengths and weakness

(1)Setting bargaining objectives How to set objectives 1 A top line objective-the best achievable outcome. 2 A bottom line objective-the lowest,still acceptable,outcome. 3 A target objective-what you realistically expect to settle for.

How to define your bargaining range In defining your BATNA, ask yourself: 1 How far can I go? When should I stop negotiation? 2 What will happen if I stop negotiating? 3 Do I need the other party for implementing my solution? 4 Do they need me?

(2)Assessing the other side’s case To plan your negotiation, you may have to make assumptions about the other side’s likely reactions to your demands Key stages: 1 Try to establish what the other part’s claims are and what they are seeking to achieve 2 Probe whether specific problems or concerns lie behind their questions or claims 3 Exchange factual data in advance of negotiations 4 Consider what facts and arguments the other party is likely to use in support of their claim 5 Consider the possible existence of a hidden agenda

(3)Assessing relative strengths and weaknesses Strength is the power or influence you can exercise over the actions of the other party What kinds of power are there? Decision-making authority Superior knowledge of the issues in dispute Superior financial resources More time to settle the case The moral strength of the actual case The determination of persistence of the negotiator Better preparation More experience in negotiating

Key points for preparing negotiation Identify the real issues in dispute Ask yourself Determine your walk-away position Examine what sources of power you possess Assess your strategy for the first meeting If you are negotiating as a team,consider the following: Decide clearly who will be the spokesperson during the discussion Determine the roles of the other team members