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BusinessNegotiationEnglish Objectives 1 Introducethestudentstothemainprinciplesofbusinessnegotiation 2 Thestudentsgetfamiliarwiththetypesofnegotiation 3 Adetailedstudyofonenegotiationmethod principlednegotiation 4 CaseStudy5 Simulatednegotiations Chapter1 PrinciplesofBusinessNegotiation Whatisnegotiation theprocessweusetosatisfyourneedswhensomeoneelsecontrolswhatwewant RobertMaddux Wheneverpeopleexchangeideaswiththeintentionofchangingrelationships whenevertheyconferforagreement thentheyarenegotiating GerardI Nierenberg Definitions theabilitytodealwithbusinessaffairs toarrangebydiscussionthesettlementoftheterms toreachagreementsthroughtreatiesandcompromise totravelthroughchallengingterritory Consultation bargaining mediation arbitration andlitigation 2 Whendopeoplenegotiate wheretogofordinner whichmovietowatch howtosplithouseholdchores etc whethertobuyacomputer whotohavethefirstapple Practice Pleasecheckoffthefollowingsituationsthatrepresentnegotiations Purchasingacomputeratadepartmentstore Decidingwiththefamilywheretogofortheweekend Biddingforasecond handedcar Decidinghowthehousewillbecleanedup Borrowingamusicalinstrumentfromafriend Selectingacontractortobuildanewkitchen Decidingwhethertostaylateatworktofinishupaproject 8 Gettinganextensiononyourunfinishedassignments 9 Makingup orrebuildingarelationshipwithsomeoneyoulove 10 Decidingonadateforthenextmeetingwithyourcustomer 11 Gettingachildtogotobed 12 PickingasuccessorfortheCEOofacompanywhereyouareontheboard 3 Typesofnegotiation CompetitivestyleAccommodativestyleAvoidancestyleCompromisingstyleCollaborativestyleVengefulstyleSelf inflictingstyleVengefulandself inflictingstyle Typesofnegotiation Competitivestyle Totrytogainallthereistogain Accommodativestyle Tobewillingtoyieldallthereistoyield Avoidancestyle Totrytostayoutofnegotiation Typesofnegotiation 4 Compromisingstyle Totrytosplitthedifferenceorfindanintermediatepointaccordingtosomeprinciple 5 Collaborativestyle Totrytofindthemaximumpossiblegainforbothparties bycarefulexplorationoftheinterestsofallparties andoftenbyenlargingthepie Typesofnegotiation 6 Vengefulstyle Totrytoharmtheother 7 Self inflictingstyle Toactsoastoharmoneself 8 Vengefulandself inflictingstyle Totrytoharmtheotherandalsooneself 4 PrincipleofCollaborativenegotiation Problem solvingnegotiationConsensus buildingnegotiationInterest basednegotiationWin winnegotiationMutualgainsnegotiation etc Theassumptions ThenegotiationpartieshavebothdiverseandcommoninterestsThecommoninterestsarevaluedandsought Thenegotiationprocessescanresultinbothpartiesgainingsomething Thenegotiatingarenaiscontrolledbyenlightenedself interest Interdependenceisrecognizedandenhanced Limitedresourcesdoexist buttheycanusuallybeexpandedthroughcooperationandcreativity Thegoalisamutuallyagreeablesolutionthatisfairtoallpartiesandeffectiveforthecommunity group Disadvantages Pressureanindividualtocompromiseandaccommodateinwaysnotinhisinterest Avoidconfrontationalstrategies whichcanbehelpfulattimes Increasevulnerabilitytodeceptionandmanipulationbyacompetitiveopponent Makeithardtoestablishdefiniteaspirationlevelsandbottomlines Requiresubstantialskillandknowledgeoftheprocess Requirestrongconfidenceinone sperceptionsregardingtheinterestsandneedsoftheotherside 5 Principlednegotiation PIOC People Separatethepeoplefromtheproblem Interests Focusoninterests notpositions interestsalwaysunderliepositions Options Inventoptionsformutualgains Criteria Insistonusingobjectivecriteria Separatethepeoplefromtheproblem Techniques Establishanaccurateperception Cultivateappropriateemotions Strivebettercommunication Focusoninterests notpositions Methods identifytheself interests discussinterestswiththeotherparty Inventoptionsformutualgains Brainstorming4obstacles PrematurejudgmentSearchingforthesingleanswerTheassumptionofafixedpieThinkingthat solvingtheirproblemistheirproblem Stepsforovercomingtheobstacles Separatingtheactofinventingoptionsfromtheactofjudgingthem Runabrainstormingsession Beforebrainstorming Defineyourpurpose whatyouwouldliketoachieveatthemeeting Chooseafewparticipants 5 8people Changetheenvironment distinguishingthesessionfromregulardiscussion Designaninformalatmosphere adrink atavacationlodgeetc Chooseafacilitator tokeepthemeetingontrack Duringbrainstorming Seattheparticipantssidebysidefacingtheproblem Clarifythegroundrules includingtheno criticismrule Brainstorm Recordtheideasinfullview Afterbrainstorming Checkthemostpromisingideas Exploreimprovementsforpromisingideas Setupatimetoevaluateideasandmakeadecision Considerbrainstormingwiththeotherside itcanbeveryvaluable Stepsforovercomingtheobstacles B Developasmanyoptionsaspossiblebeforechoosingone Adoptthefourtypesofthinking Identifyingaproblem Analyzingtheproblem Consideringwhattobedone Comingupwithsomespecificandworkablesuggestionsforaction Lookattheproblemthroughtheeyesofdifferentexperts Developdifferentversionsofagreement Changethescopeofaproposedagreement Stepsforovercomingtheobstacles C SearchformutualgainsIdentifysharedinterests Dovetaildifferinginterests D Findwaystohelpmaketheotherparty sdecisioneasy Insistonusingobjectivecriteria 1 Guidelinesforobjectivecriteria Independentofwillsofallparties Legitimateandpractical Acceptabletoallparties 2 Afairproceduralstandard3 Discussthemwiththeotherparty Threebasicpoints A Frameeachissueasajointsearchforobjectivecriteria B Reasonandbeopentoreasonastowhichstandardsaremostappropriateandhowtheyshouldbeapplied C Neveryieldtopressure onlytoprinciple CaseStudy Inonenegotiationintheearly1980s aChinesemanufacturerwaslockedinadisputewithanAmericanimporteroverhowmanymodelsofthebicycleshiscompanywouldproduce TheAmericanimporterwantedfourdifferentmodelstogiveitscustomersgreaterselection TheChinesecompanywantedtoproduceonlytwomodels tokeepmanufacturingcostsdown CaseStudy ThepositionoftheChinesecompanywasthatitwouldproduceonlytwomodels whiletheunderlyinginterestwastokeepmanufacturingcostsdown ThepositionoftheAmericanimporterwasthatitwantedfourmodels whileitsunderlyinginterestwastoincreaseitsprofitsbysellingmorebicycles Aslongasthenegotiatorsfocusedonthesepositions thedisputecouldberesolvedonlythroughconcessionsbyoneorbothsides Solution Butaninterest orientedexaminationofthedisputeleadstothequestion HowcanthehighercostofmanufacturingfourmodelsbeallocatedbetweentheAmericanimporterandtheChinesemanufacturer Inthisexample thepartieswereabletodeviseaformulathatincreasedtheunitcostofdifferentmodelstoreflecttheChinesemanufacturer sincreasedmanufacturingcost Solution TheinterestsoftheChinesemanufacturerwereachievedbythesolution profitperunitremainedconstant TheinterestsoftheAmericanimporterwerealsomet itsoldmoreunitsathigherprices whichmorethanoffsettheincreasedmanufacturingcost Questions Whattypeofnegotiationapproachwasappliedtothenegotiation WhatprinciplewasusedtosolvetheconflictbetweentheChinesemanufacturerandtheAmericanimporter Simulatednegotiation1
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