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Business Negotiation Lesson 2 Chapter 1Slide 1One of the most important things to remember in business is to never make enemies. You dont have to love everyone, but if you dislike someone make sure you dont show it. Your enemy today may be your boss tomorrow. Slide 2The basic principles of negotiation are:- communication, negotiable issues, common interests, give and take, trust and to be a good listener.Slide 3The most successful negotiation ends with a win-win solution. Both parties must feel as though they have gained something. Both parties must negotiate towards a mutual gain.Slide 4Before negotiations begin, both parties should know the following six details:- why, who with, what, where, when and how they negotiate.Slide 5Negotiation is a process of exchanging information between two sides and both sides try to understand each others points of view. Both parties know that they have common and conflicting objectives, so they try to find a way to achieve a common and helpful objective that will be acceptable to them both.Slide 6In summary: common interests must be sought. Negotiation is not a game. In a successful negotiation, everyone wins something.Slide 7Success isnt winning everything its winning enough.Slide 8In negotiation, both equality and mutual benefit are very important. Both parties are equal in status. They have equal rights and obligations. Remember that in a successful negotiation, each party must gain something or there is no reason for the other party to participate. Both parties should prepare well for the negotiation and be ready to satisfy the other partys needs on an equal basis.Slide 9Through negotiation, both parties are seeking an arrangement of a business situation. The purpose of this is to seek a win-win situation instead of a win-lose one. It is through sincere cooperation that this result can be made.Slide 10Sincerity is very important for a negotiators style. Develop trust between the two parties. Treat others as you want to be treated, this will promote the negotiation and get successful results.Slide 11Keep it flexible and fluid. Do not be too rigid in what you want to give, and in what you want to take. All negotiations are a process of constant thinking, exchanging information and continuous giving. Before negotiation try and work out what the other party might be thinking, what their needs may be and what their tactics might be. Slide 12During negotiation, it is very easy for conflicts to happen. It may be that one side wants to take more than what they give. When this happens, either side may break out of the relationship. This is a lose-lose situation. It is in both parties interests to find ways to minimize their conflict to achieve a win-win situation.Slide 13Most business negotiations take place between suppliers and purchasers (sellers and buyers). A supplier cannot exist unless he has a purchaser. Slide 14Of course in negotiations both parties want to give as little as possible, and to take as much as possible, gaining as much profit as possible in the process. So during negotiations both parties usually give only a little at a time.Slide 15Both parties must be flexible and make changes during negotiation as required by the situation.Slide 16Negotiators need to be cooperative and dedicated, to find the best solution possible, instead of just being concerned with their own needs.Slide 17In negotiation, both sides must try to reach an agreement that maximizes their own outcome. This may lead either side to be concerned only with their own gain and ignore the needs of the other party. Remember that most business relationships last for a long period of time, so it is beneficial for both parties to gain a win-win situation and continue the business relationship.Slide 18The three stages of negotiation are:- pre-negotiation, during negotiation and post-negotiation.Slide 19The pre-negotiation stage begins from the first contact between the two sides. This is when they show interest in doing business with each other. During this stage the gathering of information will determine the success or failure of the negotiation. The information to be gathered by either party should include:- the market, policies, regulations and financial background. Slide 20The second stage of negotiation (during negotiation) has five phases through which it must proceed. They are:- exploration (finding out what the other party want), bidding (giving), bargaining, agreeing and making it official (contract).Slide 21The third stage is post-negotiation. At this stage, all the terms have been agreed upon and the contract is being drawn up, ready to be signed.Business Negotiation Lesson 4 Chapter 2Slide 1Title page - Today we are working on chapter 2.Slide 2Proper Behaviour in Business Negotiation. People always make assumptions before negotiation and try to guess what the other party are assuming. Assumptions may be true or false, they need to be verified. Listening, talking, inquiring and observing are very important for a successful negotiation. Slide 3Hidden Assumptions. We sometimes place ourselves at a great disadvantage with hidden assumptions about what other peoples motivations and actions might be. Dont assume you know everything about your opponents.Slide 4Listening. Listening carefully to the words spoken by the other party is very important. You must understand what the needs of the other party are. Paying attention to phrasing (the vocabulary they use), their choice of expressions, the mannerisms of speech and the tone of voice they are using. All of these elements give you clues to the needs of what the other party wants.Slide 5The barrier of listening. Some topics are rather difficult and hard to comprehend, do not get distracted, stay focussed. If necessary ask the speaker to repeat something that you have missed or do not fully understand. When you are taking notes, concentrate on the concepts and principles first and then if you have time, write down the facts. Slide 6Active listening. When someone is making a point or presenting an opinion, do not interrupt until they have finished speaking. Then you can ask them to repeat any parts that you didnt understand.Slide 7Negotiation language. You should only communicate the points needed, to encourage the action your party desires.Your party should be informative, to support only the details necessary to make your offer clear. Keep your sentences simple. Your presentation should be fair and consider both the pros and the cons. Your presentation should be cooperative and friendly, not argumentative or hostile. It should emphasize the positive points, not the negative points.Slide 8Aspects to be aware of. Listeners judge you by how you talk. Your speaking voice is one of the first impressions people have of you. A person may be characterized as friendly if his or her voice sounds warm and well modulated. If someone has a flat monotonous voice they will be judged as dull and boring. Do not talk too fast or you will give the impression that you are nervous and not confident.Slide 9Asking questions. In an appropriate situation you should ask the other party “What do you want from this negotiation? What are your expectations? What would you like to accomplish?” Be quiet after asking a question, encourage others to talk as much as possible so you can gain more information. When you ask questions, make sure you listen to the answers.Slide 10Answering questions. Always give yourself time to think about the question being asked. Never answer until you clearly understand what is being asked. Do not be embarrassed to ask them to explain the meaning of their question. Before negotiations begin, anticipate what questions may be asked, so that you can plan your answers before the negotiation.Slide 11Observing. Besides listening to the other party in an attempt to learn their desires and needs, you must also closely observe their gestures. Body language and gestures are very important. Our entire bodies, including our head, arms, hands, fingers and even our posture can convey a message.Slide 12Eye contact. A person who looks away a lot while listening to you is showing that they are not happy with with you or what you are saying.Slide 13The mouth. When you meet or greet someone, you should do so with a warm, genuine smile. Slide 14Hands. What you do with your hands is a very significant form of body language. Your handshake reveals clues to what you really think of someone. A firm handshake gives the impression of confidence and seriousness. The weak handshake has no energy at all and suggests a lack of confidence, interest and warmth. If the other party puts both of his/her hands on the table and he/she leans forward, it means they are confident and ready to get down to business.Slide 15The nose. Touching the nose or slowly rubbing it usually means someone has doubt in what they are saying and maybe it could indicate that this person is lying. Slide 16The legs. A person whose legs are crossed, and who is leaning away from you is probably very competitive. If someone has their legs crossed and their arms crossed they will be difficult opponent. If the person has their legs crossed and they are swinging the top leg it means that they are probably bored with your ideas and opinions.If someone likes you or your ideas they will lean forward slightly in a relaxed manner with a slightly curved back. Slide 17The Feet. A person whose toes are turned towards each other (pigeon toed) or tucked under the chair is very timid or scared.Business Negotiation Lesson 6 Chapter 4Slide 1Title Page Today we will work on chapter 4.Slide 2Preparing for Negotiation. A successful negotiation is determined by its preparation. Thinking beforehand about who you are going to meet, what is going to be discussed, and what will be the best approach is very important. Good preparation has an impact on the opening stages of a negotiation, which sets the tone for the rest of the meetings.Slide 3Scheduling the first meetings. The first impression each side makes will most likely have a major effect on the style, progress and eventual outcome of the negotiations. Scheduling the first round of meetings is an important task for both sides and should be handled in a manner that preserves the professionalism of all the attendees. Arrive to the meeting promptly and be prepared to get right to work.Slide 4Setting the agenda. From a communication point of view, the process of structuring and controlling a negotiation focuses on the importance of setting an agenda and a procedure for the meeting. The agenda includes the order of the issues to negotiate and its main negotiation methods like what to negotiate first, what others to negotiate later and what is the final goal to attain etc. Slide 5Negotiating Agenda. An agenda pay be presented by one side or prepared by both parties, or each side may prepare a general agenda and a detailed agenda. The general agenda is presented to the other side, and the detailed agenda is for your own use. Attention should be given to the various issues to be discussed so that strategies can be developed. The issues might be listed so that the major ones are discussed first. This will prevent wasting time on minor issues and to make sure of leaving sufficient time to discuss the major ones.Slide 6Preparing for negotiation. Do your homework. Successful negotiation results are directly related to its smooth implementation and will bring enormous results.Slide 7Establishing Objectives. The objective is the prerequisite of a negotiation. Under the guidance of clear, specific, impersonal and feasible objectives could the negotiation be in a positive position. Key elements of negotiation objectives are:- Who can contribute to this negotiation, who will be affected by this negotiation, what are the maximum and minimum targets to seek. Minimum targets means the targets or benefits we would never give up, in other words there is no room for bargaining. Maximum targets are the targets or benefits we could think of giving up under critical conditions.Slide 8Key elements of negotiation objectives (cont.) When would we like to conclude the negotiation, where is the best place for the negotiation, why has the other party chosen us to negotiate with, what concessions are we willing to make and what concessions will the other party be likely to make.Making the objective of a negotiation rigid might cause the negotiation to breakdown. An alternative method of formulating objectives might be to keep them fluid so that the expectations can change with the circumstances of the negotiation.Slide 9Issues and positions. Any information upon which there is disagreement can be organised into the negotiation issues. Issues are the things on which one side takes an affirmative position and the other side takes a negative position. Issues should be realistic. It is important that we should try to negotiate problems rather than our demands. Our demands are only a one-solution approach to the problems. There may be other solutions. It is said that your bargaining position should conceal (hide) as well as reveal (show), and as negotiations continue, concessions alternate from each side.Slide 10Meeting places. Should you conduct the negotiation in your office, or should you go to the other partys home ground? The general rule is that you perform better on your own home ground. A negotiator on home ground is more assertive and more confident. In contrast a negotiator that is a guest on the other partys home ground may feel subordinate.The fairest for both parties is to meet on neutral territory where no one will have the psychological edge.Slide 11Opening the meeting. Good negotiating atmosphere is better to be formed at the very beginning of the negotiations. Therefore, both parties should seize the occasion of the first meeting when doing self-introduction or being introduced. Try to behave gracefully and speak clearly to make the impression of being kind, natural and honest.Exercises from bookBusiness Negotiation Lesson 9 Chapter 5Slide 1Title Page Chapter 5Slide 2The Bargaining Process. The pattern of bidding and bargaining is seen by many people to be the core of the negotiation process. Almost all the negotiations have something to do with bidding and bargaining. The bargaining process is normally very intense. Both sides are trying to move to their own advantage. Or if it is not possible to cut the cake so that both parties get what they want, then they bargain in such a way that the dissatisfaction will be equally shared between them.Slide 3Bidding. The opening bid (price) needs to be the highest because:- our first bid influences others in their valuation of our offer, a high bid gives room for manoeuvre during the later bargaining stages, the opening bid has a real influence on the final settlement level. The more we ask, the more we will achieve.Slide 4Bidding (cont.). You must be able to justify your original bid, you should not only seek to gain as much as possible but you also take the other party into consideration. Putting forward a bid that unrealistic and cannot be defended will damage the negotiation process. If we cannot defend our bid when challenged we will lose face and credibility.Slide 5The Highest Realistic Bid. The highest defensible bid is not set in concrete. It is a figure that is relevant to the particular circumstances. If the opposing party is pushing for their advantage, then for our advantage we must push for the highest price. If we have a lot of competition, we must tailor our opening bid to the level at which it at least enables us to be invited to continue negotiations.Slide 6Content of Bid. The content of the bid usually needs to cover a range of issues:- the price, how badly the product is needed, the amount of product needed, product credibility, credit terms (payment of goods), competition in the market. The parts of the opening bid in a commercial negotiation will not only be price, but a combination of :- price, delivery, payment terms, quality specification etc.Slide 7Presentation Tactics. In the bidding presentation of the negotiation process, there are three guidelines to the way in which a bid should be presented:- firmly, clearly and without comment. The bid should be put firmly, seriously and without hesitations. It needs to be understood clearly so that the other party recognises precisely what is being asked. In the process of negotiation, its better to have the quotation typed on paper, to ensure the clarity of the bid and to show the other party a sense of seriousness and legitimation.Slide 8Responding Tactics. Both sides at this time are trying to move the negotiation to a more favourable direction to their own side. Its quite necessary to do some homework, researching the other side before responding to the bid.The competent negotiator should make sure they understand what the other party is bidding, should have an idea how to satisfy the other party and at the same time try and figure out what the other partys expectations are. The competent negotiator should summarise his/her understanding of the bid as a check on the effectiveness of communication between the two parties.Slide 9Bargaining. In this stage of the negotiation it is very important not to give the other party too much too soon. Bargaining should be to your advantage, however you must also make a fair deal
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