1. OKBIT22 Managing International Relations
4. International business negotiations: Planning the negotiations

2. Lesson 3 in a Nutshell Defining negotiations
Different negotiations situations
Business negotiations characteristics
Stages of a negotiation process
Principled negotiations
Framework for international business negotiations
Successful negotiator
Preparing for negotiations

3. Developing a Structure for Effective Negotiation
1. Preparing
2. Setting the Scene
3. Opening up a Negotiation
4. Exploring Positions
5. Finding a Common Ground
6. Building a Movement
7. Reaching Agreement
8. Following Up

4. 1. Preparing for Negotiations
To fail to prepare, is to prepare to fail
Preparing includes:
Doing background research “homework”
Planning objectives – a Vision
Planning a Strategy
Planning your Tactics

5. 1. In This Stage You Should…
Prepare yourself and your team
Know the other party
Know the big picture
Identify objectives
Prioritize objectives
Create options
Select fair standards
Examine alternatives
Select your strategy, tactics, and countertactics
Develop a solid and approved team negotiation plan

6. 1. A Little Bit of Research is Needed
The other person - Knowing your opponent and the power the other party has
The history - Avoiding trouble
The context - Understanding a bigger picture
The environment/culture - How do they do things over there?

7. Things to Know About the Other Party
Buyer and Seller
What is the organization’s overall business strategy?
What is its reputation?
What is its current company business environment?
Who is the lead negotiator?
Who are the primary decision makers?
What are their key objectives?
What are their overall contract objectives?
What are their personal objectives?
Who or what influences the decision makers?
What internal organization barrier do they face?
Seller Only
When does the buyer need our products or services?
How much money does the buyer have to spend?
Where does the buyer want our products and services delivered?
What benefits will our products and services provide?
What is our company’s past experiences with this buyer?
Reference Text: Contract Negotiations, by Gregory A. Garrett, CCH, Inc. (2005), pg. 63.

8. 1. Preparing to Negotiate
Recognize your preferred negotiating style
Diagnose distributive, integrative, and mixed-motive negotiations
Frame, plan, and strategize for the negotiation

9. 1. Preferred Negotiating Styles
Cooperative
Collaboration
(Problem solving)
Accommodation
(Yielding)
Concern
for other
Compromise
Competition
(Contending)
Avoid
(Inaction)
Uncooperative
Style
Assertive
Unassertive
Diagnose
Concern
for self
Plan

10. 1. Preferred Negotiating Styles
There is no “right” negotiating style
Each style is appropriate and inappropriate at different times and situations

11. 1. The Dual-Concerns Model
Is the substantive outcome
important to you?
Yes No
Collaboration
(Problem solving)
Accommodation
(Yielding)
Yes
Is the relational outcome important to you?
Compromise No
Competition
(Contending)
Avoid
(Inaction)

12. 1. Competitive Style Appropriate when:
Unpopular course of action is needed
Speedy decision is needed
Unfavorable decision by the other party very costly to you
You are in a power position and your relationship with the other party is not important
Inappropriate when:
Both parties are equally powerful
Relationship is important to you
Speedy decision isn’t necessary
Issue is complex

13. 1. Accommodative Style Appropriate when:
Preserving relationship is important
You anticipate reciprocation later
Issue is more important to other party
You have less power
You believe you might be wrong
Inappropriate when:
Issue is important to you
You believe that you are right
The other party is wrong or unethical

14. 1. Collaborative Style Appropriate when: Inappropriate when:
Issues are complex
One party alone cannot solve the problem
Time is available for problem solving
Other parties’ commitment is necessary for implementation
Inappropriate when:
Task or problem is simple
Speedy decision is required
Other parties are unconcerned about outcome
Other parties do not have problem-solving skills

15. 1. Compromising Style Appropriate when:
Goals of parties are mutually exclusive; consensus cannot be reached
Parties are equally powerful
Temporary solution to a complex problem needed
Integrating or dominating styles failed
Inappropriate when:
One party is more powerful
Problem is complex, but an integrative solution can be found through problem solving

16. 1. Avoiding Style Appropriate when: Issue is trivial
Potential dysfunctional effect of confronting the other party outweighs benefits of resolution
Cooling off period is needed
Inappropriate when:
Issue is important to you
It is your responsibility to make the decision
Prompt attention to the problem is needed and the parties are unwilling to defer

17. 1. Distributive and Integrative Negotiations
Distributive Negotiations
Win-lose
Fixed pie to be divided
Integrative Negotiations (Principled negotiations)
Win-win
Pie can be expanded
Style
Diagnose
Plan

18. 1. Frame, Plan & Strategize for the Negotiation
Frame the problem
Define your goals
Develop a strategy
to achieve those goals
Style
Diagnose
Develop a plan to
execute that strategy
Plan

19. 1. Planning a Strategy
Planning the strategy will help you to develop your objectives and produce an overall plan for negotiation
Set objectives
Ideal position
Realistic position
Fallback position (bottom line)

20. 1. Planning a Strategy - Preparing your Case
Key areas to cover:
Identify the main arguments
Work out their strengths and weakness
Identify potential sticking points
Anticipate the other party's position
Work out what concessions you can offer (to achieve movement)

21. 1. Planning Tactics Key areas to plan: Timing Method Location
Sequence of issues
Controlling the release of information
Getting movement
Reaching Agreement

22. 1. Strategies and Tactics in International Business Negotiations

23. Developing a Structure for Effective Negotiation
1. Preparing
2. Setting the Scene
3. Opening up a Negotiation
4. Exploring Positions
5. Finding a Common Ground
6. Building a Movement
7. Reaching Agreement
8. Following Up

24. 2. Setting the Scene Personal Introductions Purpose of the meeting
Time allowed for the meeting
Relevant background information
Meeting agenda
Decision making process and authority levels
Constraints and boundaries - areas that are not up for discussion

25. 3. Opening up the Negotiation
Decide who will state the position first
How much information are you going to disclose when you present your position?

26. DO Listen well Use open questions
Check that you understand the other person's position
Summarize
Withhold judgment

27. DON´T Interrupt Immediately put down the other person's position
Reveal all your negotiating currency
Answer questions too specifically

28. OKBIT22 Managing International Relations
5. International business negotiations: Conducting the negotiations

29. Developing a Structure for Effective Negotiation
1. Preparing
2. Setting the Scene
3. Opening up a Negotiation
4. Exploring Positions
5. Finding a Common ground
6. Building a Movement
7. Reaching Agreement
8. Following Up

30. Conduct Determine who has authority Prepare the facility Use an agenda
Introduce the team
Set the right tone
Exchange information
Focus on objectives
Use strategy, tactics, and countertactics
Make counteroffers
Document the agreement or know when to walk away

31. 4. Exploring Positions
Spend some time exploring the position to identify common ground and sticking points i.e.
Have you got enough information?
What information have you discovered?

32. DO Focus on the topic or problem not the person
Concentrate on issues, not positions
Listen for common ground and possible sticking points
Ask probing and clarifying questions
Observe the other person's body language
Summarize and check understanding
Make notes
Probing=εντιμότητα

33. DON´T
Interrupt
Talk too much or allow the other person to talk too much
Be tempted to present counter agreements
Start to become entrenched in your position
Think in terms of “right” and “wrong” (it is more helpful to think in terms of difference)

34. 5. Finding Common Ground
Keep positive attitude and make positive statements
Don’t allow yourself to become negative if there seems to be little common ground
Do not put pressure on the other person to agree if there is no common ground

35. DO Make a note of the common ground
Keep a positive attitude and make positive statements

36. DON´T
Allow yourself to become negative if there seems to be little common ground
Put pressure on the other person to agree

37. 5. Identify Sticking Points
Summarize where sticking points seem to be
Explore them in more detail and attempt to resolve or minimize them

38. DO Make a note of the sticking points
Keep a positive attitude and make positive statements
Deal with any conflict in a constructive way

39. DON´T
Allow yourself to become negative if there seems to be a lot of sticking points
Don’t sweep the sticking points under the carpet
Blame the other person if they won't budge

40. 5. Deploying Effective Negotiating Behavior
Behave effectively

41. USE Effective listening Summarizing Effective questioning skills
Stress control

42. AVOID Irritators Counterproposals Defend and attack spirals
Argument dilution

43. 6. Moving towards Agreement
Movement Phase

44. 6. Movement Phase What concessions do you want to offer?
Are you happy with the concessions the other person is offering?
Other opportunities for movement?

45. DO Aim for a win/win outcome Summarize as you proceed
Be open about your motives and intentions
Give reasons before making a proposal or a decision
Anticipate counter arguments
Ask questions

46. DO (cont.) Keep focused on the main theme
Gain questions: “If you…then we…”
Build on common ground

47. DON´T Make threats or use sarcasm
Use irritating phrases, such as: “I am sure you will want to accept my extremely generous offer”
Become defensive or attack the other person
Insult the other person
Force decisions prematurely

48. Developing a Structure for Effective Negotiation
1. Preparing
2. Setting the Scene
3. Opening up a Negotiation
4. Exploring Positions
5. Finding a Common Ground
6. Building a Movement
7. Reaching Agreement
8. Following Up

49. 7. Reaching Agreement
Reaching Agreement is often the most overlooked stage in the negotiating process

50. 7. Reaching Agreement
Do all parties share the same understanding of the proposed agreement?
Do people need time to consider?

51. DO Record all decisions in writing
Give people time to consider acceptance
Check that all parties are committed to the decision / agreement reached
Make sure that all parties agree with the next steps to be taken

52. DON´T Rush decisions before everyone has stated that they agree
Leave any actions to be followed up open-ended
Gloat=xairekaka

53. 7. Recording Agreements
Make a record of the decisions that are reached
Make a note of who will take an action and by when next to each decision
Send a copy of the decisions reached to all parties within 24 hours of the conclusion of the negotiation

54. 7. Recording Agreements (cont.)
Allow a fixed period of time for amendments
If there is a disagreement you may need to re-open the negotiation
Inform other people who need to know about the outcome of the negotiation as soon as the decisions have been ratified

55. 7. Document the Negotiation and Form the Contract
Prepare the negotiation memorandum
Send the memorandum to the other party
Offer to write the contract
Prepare the contract
Prepare negotiation results summary
Obtain required reviews and approvals
Send the contracts to the other party for signature
Provide copies of the contract to affected organizations
Document lessons learned
Prepare the contract administration plan

56. Developing a Structure for Effective Negotiation
1. Preparing
2. Setting the scene
3. Opening up a negotiation
4. Exploring Positions
5. Finding a common ground
6. Building a movement
7. Reaching Agreement
8. Following Up

57. 8. Following Up the Negotiation
Follow up to check that all the agreed actions have been taken

58. DO
Send a note to all parties, summarizing the agreements reached and reminding of the next steps
Carry out all your agreed action by the agreed deadline
Inform all relevant parties about the conclusions reached
Send a letter of thanks to those involved in the negotiation

59. DON´T
Forget 