PREPARING TO NEGOTIATE

Exercise 1. What considerations are important in preparing to negotiate?

Suggest as many as you can. Write down your ideas.

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Exercise 2. John Rix is an expert on negotiation. Read what he suggests, then compare your ideas with the ideas of John.

?Before negotiations begin, preparing and planning are very important.

a) Get as much information as possible about the situation. If dealing with people from another culture, find out about its etiquette and negotiating styles: the way people negotiate what they consider to be acceptable and unacceptable behaviour, and so on. (See ?Culture Page?).

b) Work out your initial bargaining position: what are your needs and objectives (the things that you want to achieve)? Decide your priorities (the most important objectives).

c) Try to estimate the needs and objectives of the other side.

d) Prepare a fallback position: conditions that you will accept if your original objectives are not met.

e) Perhaps you are in a position to influence the choice of venue: the place where you are going to meet. If so, would you prefer to:

Ø be on your own ground/on home ground (in your own offices)?

Ø go to see the other side on their ground (in their offices)?

Ø meet on neutral ground, for example in a hotel?

f) If you are negotiating as part of a negotiating team, consult your colleagues about points a) to e), and allocate roles and responsibilities.?

Exercise 3. Read the text in which a Management Communications Consultant, Diana Ferry, talks about preparing for a negotiation.

Mark the seven points below in the order in which she mentions them.

I would have to say that one needs to be very prepared. I mean to know what you want from a negotiation, what?s your purpose, your aims and objectives. Without clear aims, you can?t have clear thinking, so aims are vital, to have a clear purpose. What do you want? A contract? You want a firm agreement ? or just to find out a few things?

Then, you have to know what the minimum deal is. Decide what is the least ? the lowest offer you can accept for a deal ?an agreement.

Then you have to know where you can give way ? or make concessions. So fixing concessions ? and targets ? is important. Without that you end up agreeing to

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something and later thinking ?Oh no that?s a bad deal!? = or you miss out on what seemed a bad deal at the time but was in fact not bad anyway.

Another area ? is to know your strengths and your weaknesses. If we take the classic marketing SWOT analysis ? you have to understand your own strengths and weaknesses as well as the opportunities and threats or dangers that exist outside, from competitors for example.

So, know the market, know your strengths know about prices and other possibilities. If you do this, you can see the negotiation in its proper context.

Then you need to prepare all support information. Figures, numbers, pictures, whatever. It could be anything ?but the most important thing is that you can support what you say. It helps you to be clear.

Next, the team Hs to be well prepared, well managed. If it?s a team you have, everyone needs a clear role, clear responsibilities ?to have roles.

Finally, your opening remarks. Prepare what to say. Begin in general terms what you hope to achieve ? the general intention, what you?re looking for. The opening statement sets up the right atmosphere, the right expectations; it helps things to be clear between the two sides.

Exercise 4. Match each of the four aspects of good preparation on the left with why they are important on the right. If in doubt, check your answer by reading the text again.

WRITING.

Exercise 5. As a Management Communications Consultant, write the Recommendations section of a report outlining your practical suggestions on how to train staff for successful negotiation. (Write your recommendations on how to train the staff to be successful in a negotiation).

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Part 3. MAKING AN OPENING STATEMENT.

Exercise 1. Most formal negotiations begin with an opening statement from each side. What do you think an opening statement should include? Write down your ideas.

Exercise 2. Read the conversation between a small Singaporean software company called LP Associates and a possible partner, Kee Ltd. You will read part of an opening statement from Stella Wang, the Production Manager at LP Associates.

Tick (*) four of the eight statements given below the text which best represent what she says.

Well, thank you for coming here today. As you know, we have a busy agenda. May I begin by outlining some basic thoughts that we have on this meeting? First of all, we see it very much as a first meeting, a preliminary negotiation to identify areas in which we can perhaps work together on certain products- prototype products ? that we have developed. There are two, possibly three, ways in which we might go forward. I?d like to summarise these under three headings. First, development projects, second license agreements. The third is the possibility of some kind of consultancy relationship. Is everyone happy if I say a few words about these to begin with? Right, well. First of all, joint development projects. This is ?

1. LP Associates want to reach a final agreement in this negotiation.

2. These are preliminary talks.

3. The two parties want to resolve a conflict.

4. They want to agree on a name for the joint venture.

5. LP Associates would like to consider joint product development.

6. They would also consider license agreements.

7. LP Associates want to agree a complete sale of their ideas.

8. They want to consider working on a consultancy basis.

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DISCUSSION.

Exercise 3. Compare Stella Wang?s opening statement with the suggestions you made at the beginning of this section.

a) What did she include that you also suggested?

b) What other things did she include?

Practice 1.

Exercise 4. Suggest phrases for each of the following at the start of a negotiation.

a) Welcome the other side.

b) Develop small talk (trip, weather).

c) Mention plans for lunch ? make your visitors feel welcome (see city centre/local restaurant).

d) Suggest you start talking about the main subject of your meeting.

e) Introduce a colleague (Luke Fox, Marketing Department).

f) Explain general aim or purpose of the meeting (preliminary/exploratory).

g) Say what your side wants from the meeting (establish beginnings of a partnership /learn about supply systems /price variations and supply costs)

Exercise 5. Try to bring together many of the phrases above in a single opening statement.

Practice 2.

Exercise 6. Choose one of the following situations to prepare an opening statement in a negotiation. Remember to include welcoming remarks and some general comments on your expectations for a successful meeting and an agreement which leads to a lasting partnership.

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Situation 1.

Your company, Ultra Compo, is meeting representatives of OHTA Inc. from Tokyo. OHTA Inc. wants to set up an agency in your country to distribute its electronic components.

Objective.

Exploratory talks to:

a) know more about the products;

b) find out about OHTA?s existing international distribution network;

c) discuss in general the terms under which the two companies could cooperate.

Independent objective: to internationalise your own company?s activity and extend your product range.

Situation 2.

You are interested in buying some land in a suburb of Lima in Peru, where you want to establish a distribution warehouse to serve the Andean region of Latin America. You have a meeting with the lawyers acting for the landowner, PuertosCallao S.A., a port authority in Lima.

Objective.

Exploratory talks to find out:

a) more about the land, its exact location relative to the port, airport, city centre, etc.;

b) the cost of a land;

c) the present condition of the land ? existing buildings, etc.

Independent objective: to secure the land on the lowest possible terms, either by buying it now for cash, or getting a deal spreading costs over a longer term at low interest, or leasing the land.

UNIT 13.

GETTING WHAT YOU WANT.

There are some steps to develop negotiating skills and to reach an agreement of equal benefit to both sides. (reading for extra information and further discussion in the classroom)

Step 1 ? Prepare yourself

As with many business situations, good preparation will help to reduce your stress levels. Don?t think that preparation time is wasted time. Begin by working out your objectives, and making sure they are specific, achievable and measurable. It is also important to have a clear idea of what you are expecting from the other party.

Be sure your expectations are realistic and that their results are easy to assess. It?s a good idea to write down objectives, ordered by priority. One way to do this is to classify them as ?must achieve?, ?intend to achieve?, and ?like to achieve?.

Ahead of any negotiation, gather as much information as possible about the subject under discussion. The person with the most information usually does better in negotiations.

Step 2 ? Discuss and explore options

At the beginning of a meeting, each party needs to explore the other?s needs and make tentative opening offers. Remember that these need to be realistic or it?s unlikely that the discussion will progress to a successful conclusion for everyone.

If both parties cooperate, you can make progress; however, if one side adopts a competitive approach and the other does not, problems may arise. You need then to analyse the other party?s reaction to what is said.

An opening statement is a good way of covering the main issues at stake for each party, and allows the discussion to develop naturally. At this stage, the issues are just discussed and not yet negotiated. What you are trying to do is develop a relationship with the other person, so ask him or her to help you identify their needs and help to keep things moving.

TOP TIP

Ask ?open-ended? questions that the person can reply to fully rather than ?closed? questions to which he or she can only say ?yes? or ?no?.

Step 3 ? Make a proposal

Once both parties have had a chance to assess the other?s position, proposals and suggestions can be made and received. Remember that you need to trade things and not just concede them. The following phrase is available: ?If you (give to or do something for us) then we?ll (give to or do something for you).

Look for an opportunity to trade things that are cheap for you to give but of value to the party, in return for things which are valuable to your business.

Step 4 Start the bargaining

After discussing each other?s requirements and exchanging information, the bargaining can start. Generally speaking, the more you ask for, the more you get, while you?ll concede less if you don?t offer as much at the beginning.

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If conflict arises when the bargaining starts, explain that the opening position is just an opening position and therefore not necessarily the one that will be adopted at the end of the negotiation.

An agreement can only be reached when both parties find an acceptable point somewhere between their individual starting positions.

When you make an offer, be very clear about what is on the table. Avoid using words such as ?approximately? or ?about? as an experienced negotiator will spot on opportunity to raise the stakes quite dramatically. For example, if you can only offer $600 for something, say so, or before you know it you?ll be being pressed into agreeing to go up to $700.

Similarly, when the other party makes their offer, make sure you find out exactly what it comprises. Ask for clarification if there?s anything you?ve sure about and check that the offer matches all the criteria that you noted down during the preparation stages as being on your list of requirements.

Date: 2016-06-12; view: 1022