《商务谈判课件（英文）》Lecture 5

1、Lecture 5 Closing the negotiation After the preparation, bidding and bargaining comes the closing period of negotiation. To reach an agreement the parties have to experience the two phases of making the deal and formally signing the contract. Through the bargaining process, both parties are graduall

2、y agreeing on some points and they are trying to make the deal from their own perspective. Once the agreement is settled, the contracts have to be written out and the economic contract should be signed in a formal way. I. Closing the deal 1. Who makes the decision 2. When is it time to close 3. Verb

3、al indications and Non-verbal indications of closing4. Tactics towards agreement5. What to be negotiated6. Tips on contract signing 1. Who makes the decision The difference between a successful and an unsuccessful negotiator is the ability to close a deal when it has reached its maximum level of dis

4、tributing “enough” among all participants. The deal is best closed when the agenda has been exhausted.Buyers usually have the say as to when a deal will be closed, but they can be encouraged to do so by savvy sellers. This is why every sales force in the world has its “closing specialist” whose job

5、is to convince the buyer that “enough” has been had and its time to transact the deal.2. When is it time to close Have all points of the agenda been discussed?Have the technical aspects of the deal been reviewed?Have the local and international laws applicable to the deal been researched?Are all act

6、ive parties to the deal logistically capable of performing their functions?Do all parties recognize the short and long-term consequences of the deal?Are all parties in agreement as to the language and terms of the deal?Do all the parties to the deal trust each other?Do all potential signatories have

7、 the requisite authority to act on their companys behalf?To determine if its time for closure, here are some questions to ask either directly or indirectly:3. Verbal indications and Non-verbal indications of closingVerbal indications that closing is possible can take the form of:We seem to have reac

8、hed an agreement.That seems to be that, then.We are satisfied, how about you?Is there anything else that needs to be discussed?Conditional closing if there is only one point left under discussion might take the form of:Our final offer on this is .That should be taken to mean that if the other party

9、agrees to that offer, closing is possible.Non-verbal indications of possible closing include observing the other party smiling or nodding their heads, or even just relaxing. These signs may, however be misleading; if one side feels that it has lost a point in the negotiations and the other side is a

10、ll smiles, it may indicate satisfaction at having won the point.But if one side is satisfied and the other side shows signs of satisfaction, then both sides agree.Verbal indications that closing is still not possible might take the form of:Perhaps we should meet again on this point.We seem unable to

11、 come to some agreement here.I dont think we can agree on this point.4. Tactics towards agreementRecessingSetting deadlinesFull disclosure1.4.1 Recessing 休会By recessing we mean taking a short break during which each party moves out of the negotiation forum to reconsider the progress of the negotiati

12、on, and to reconsider its own position; or breaking off until a later session.Recessing is potentially a very influential device. Disciplined use can make it a device that helps us towards profitable cooperation.At what time should we use our recess? At the end of a phase in the negotiations.a. when

13、 exploration is completed, before the start of the bidding;b. after bids have been tabled, before getting down to bargaining andc. if possible at the time when the shape of settlement becomes clear. Before issue identification. It is strongly advocated to open negotiations in a manner designed to br

14、eed co-operation to mutual advantage. But this strategy needs to be checked before becoming too deeply embodied. If in doubt, take a recess.When nearing an impasse. As long as we aim towards agreement, such a recess can be used to look for means together to tackle the problem that is facing the part

15、ies in their negotiation.Team maintenance needs. When the member of the party need to review their effectiveness as a team.Breaking a trough(低谷期). When concentration has lapsed and needs regenerating What is the recommended procedure to get a recess?(1). State the need for a recess. (2). Summarize a

16、nd look forward.(3). Agree on the duration of recess.(4). Avoid fresh issues.During the recess, the main items for consideration by a party will be obvious discussions about how to handle the next stage, calculations on matters that have been discussed, reviews of the teams performance, or fresh pla

17、ns for the rest of the negotiation. Steps that are taken to open a negotiation after the recess(1). A few moments of ice-breaking, as we again attune our wavelengths.(2). Re-state the progress made on agreed plan.(3). Confirm rest of agreed plan or suggest/agree changes to it.(4). Re-opening stateme

18、nts, defining positions and interests as they are now perceived and paving the way to further creative development.1.4.2 Setting deadlines 规定最后期限Defining the time by which a negotiation meeting must have finished (I am booked on the 11:40 plane), or the deadline for a series of negotiations (Im inst

19、ructed to offer this to ABC Company if we cannot agree before 14 March). These are seen as threats. They can cause resentment and counter-aggression. However, if the deadline is agreed upon by the two parties (not simply imposed by one of them) then the atmosphere becomes more collaborative. Contras

20、t the first quotation above and the following: It would be a great help to me if we were able to conclude this meeting in time to catch the 11:40 plane. Would it be all right with you if we aim to move at that speed?There are positive implications for setting a deadline for the negotiations. The set

21、ting of a deadline helps to concentrate the mind, the energy, the effort, and the speed of achievement.There is, however, a negative influence if either party feels a deadline has been imposed too early.1.4.3 Full disclosure 摊牌Literally, this means complete readiness to give to the other party all o

22、nes information. In practice, there will always be some elements people are unwilling to disclose and some other elements they are unable to disclose. We therefore have to interpret “full disclosure” as meaning the disclosure of 90 percent of what we perceive. There are some negotiations whose chara

23、cter is strongly inclined towards openness and frankness. This pattern of behavior can be highly productive, inducing the other party to respond and cooperate. “Full disclosure” then becomes an advantage, providing that it is used in conjunction with all the skills of negotiation towards agreement.

24、It is, of course, a fatal disadvantage when “full disclosure” is offered to others whose sole interest lies in their own advantage.The straightforward statement that one cannot offer the full price asked, or cannot afford to wait the full delivery time, if true, is constructive. It is an element of

25、full disclosure and it enables the parties together to concentrate on the problem and to search for solutions.5. What to be negotiatedThe closing negotiations will focus on outstanding issues. Unwillingness to close may mean that negotiations over one clause or more have not been resolved in a mutua

26、lly satisfactory manner. In such an event, means will have to be found to resolve the matter and usually that means finding a compromise.Two ways of compromiseWithin a clauseCompromises may be found within a clause, such as if there is a difference in price levels between the two parties, the compro

27、mise may be to halve the difference and agree on that price. LinkageIn other cases, the compromise may need to be found among one or more clauses and that may mean reopening a clause that was previously agreed. This technique, also called linkage requires reviewing the entire transaction to see whet

28、her a compromise can be found. If such a compromise is possible, the linkage should be made clear to both sides so as to establish the looked-for compromise.Phrases that signal a linkage can take the form of:Maybe we could look at some of the issues again .Perhaps we can work out something that will

29、 help resolve the difficulty.Here is what we can do .5.1 Delay in closingOne party or the other may want to delay closing if it is clear that the terms cannot be met. If, however, it becomes apparent that there is a delay, then the delaying party will probably use a tactic such as stating there is a

30、n objection to something in the contract. At that point, the following questions should be asked:Is the objection a valid objection or is it a tactic to cover something else?What other opportunities are available to the other side if the deal does not close?Can any other opportunities the other side

31、 may have be countered with equal or better offers?ExampleA contract called for the start of construction thirty days after signing the contract. The contractor became aware that the construction equipment needed to start construction was delayed on another project so that he would not be able to me

32、et the start date. He delayed signing until threatened with loss of the contract.If closure is delayed, the parties will realize that one outcome of failure to close may result in starting new negotiations or canceling the deal. Negotiations of a contract can be extended and costly so that in genera

33、l, provided all negotiations have taken place in good faith, there will be reluctance to delay closure.An owner is not obliged to make payments for any work that is done prior to the signing of the contract and so contractors will usually not start until the contract is signed. However, there may be

34、 reasons why a contractor will take a risk and start work on a project before the contract is closed, if thereby, he can complete the project early and then undertake a second project for which he is tendering.Example:A contractor tendered for two sequential but potentially overlapping contracts. Co

35、nfident that the first contract was ready to be signed, he moved his equipment on site and began work. He was very happy when the second contract was also awarded to him. The owner of the first contract then delayed signing and the contractor was suddenly faced with stopping work or working for no p

36、ay. If he stopped work, he would default on the second contract, but if he continued work he faced a possible financial loss. He continued to work and was able to negotiate a price for the work done before signing.5.2 Risks of miscalculationIf delays are evident, it is possible to use strategies to

37、force the issue. However, there are dangers because a miscalculation in the process can lead to unwanted results.Example: management & laborThe Union of Postal workers entered into negotiations with management for a new labor contract. The Union had obtained a mandate to strike if negotiations prove

38、d unsuccessful and no new labor contract was signed by a certain date and time. Negotiations were held up when management refused to meet the Unions demands. The Union refused to compromise thinking that the psychological pressure of the possible strike would force management to agree to the Union s

39、 demands. Management did not agree, and so the Union went on strike.When the Union, responding to the pressures of its members who were suffering financially from the strike, subsequently requested a return to the bargaining table, management was able to demand concessions from the Union before nego

40、tiations started again. While the Post Office suffered financial losses as a result of the stoppage of work, Union members lost the benefits of wages during the strike. Both sides lost because of a miscalculation in the negotiating process. Had the contract as offered before the strike been signed,

41、both sides would have profited.If too much pressure is brought to bear and action follows in an attempt to speed up negotiations, both sides face the problem of deciding on the timing when to return to the negotiating table and who should initiate the request to do so. The first party that requests

42、a return to the table may be perceived by the other as returning with a weakened negotiating position. One tactic is for one side to issue a public statement that they, of course, welcome a resumption of talks. The other side can then choose to respond or ignore the offer.5.3 The negotiating teamThe

43、 members of previous negotiations will generally comprise the closing negotiating team with possibly one or two additional people who are very senior in the negotiating organizations management. Extensive changes in personnel can signal to the other party that there has been a significant change in

44、attitude.Team members will have to have patience and fortitude if the negotiations take long, Personal frustrations or judgments about either the pace of negotiations or the contents or matters still to be resolved can not be allowed to surface in any way. To allow any member of the team to express

45、a negative view will quickly terminate the negotiations and any hope of agreement.Example:A large national airline faced with bankruptcy, was negotiating with an offshore financial source (see also case history). After long and difficult negotiations, all matters except one, had been successfully ne

46、gotiated. What remained to be agreed were matters relating to employee contribution to the Airlines pension fund. In frustration, one of the employees representatives reportedly stated tell Mr. X to take his demands back to where he came from . Negotiations immediately stopped there, and the airline

47、 was forced to start negotiations with a few financier.Sometimes intuition or gut feel may provide the clue to a compromise but such intuition is the preserve of the senior person at the table (even if that person is not the direct negotiator). That person should be able to take the lead on a partic

48、ular point in the negotiations if that point is the deal-maker and comes at the point after which the closing can take place.6. Tips on contract signing When both sides have reached an agreement on the main items, it should have a written form of a contract or an agreement.A contract is a written ag

49、reement between the two trading sides in order to itemize the right and obligations of both parties. Once signed, it has legal force. Therefore we should pay close attention to the signing of contract, discuss every item quite seriously and in a very detailed way. The following are some tips on sign

50、ing a contract. 1.6.1 who will take the task of making the draft?After the two sides reach an agreement on the main items of the trading comes the drafting of the contract period. There is the problem of who will take the task of making the draft. Generally speaking, the side that makes the draft wi

51、ll be in a positive position of the whole deal, so the focus should be more on the side who makes the draft. If one side cannot control making draft; they should at least be involved with the other side for this process. 1.6.2 Examination of the qualification of the contract signer and its trading i

52、tems, scope and process Contract signers qualityA disqualified contract signer is surely a problem to the negotiation. It means the contract he signed is invalid. Therefore a thorough examination should be done to the contract signer. Find out whether the other side is eligible to do this deal, see

53、his business license, know his business operating range and check his capabilities of undertaking business activities.Law and government policyThe trading items, scope and its process should be within the law and the allowance of the government policy.The signing of the contract should also answer f

54、or the law. To ensure the validity of the contract it must go through legitimate format and perfect procedures. All the contracts that need specific procedures or the approval of a governing body must be reported for approval and the corresponding procedures need to be carried out for the contract t

55、o get signed.1.6.3 The contract signing ceremony For some important negotiation, especially international business negotiation, the location of the contract signing is important. The reason is that the signing site of the contract can normally decide which countrys laws are adopted to settle the dis

56、putes. According to international convention, the courthouse or arbitration organization could make the adjudication or arbitration based on the law of the country where the contract is signed should any dispute arise.1.6.4 Contract articles must be rigid and thoroughFor the sake of effective implem

57、entation of the contract, it is a must to give thorough stipulation of the main articles concerning the trading process or damages are very likely to occur. In real practice there are many such cases of the damages caused by ambiguous contract articles. For example, a restaurant signed a contract wi

58、th a vegetable company. The contract includes only a few words, specifically, “Chinese cabbages of 20 000 kilograms”. Finally at the time of delivery, it turned out that half of the cabbages rotted during transportation. In this case, the buyer has to suffer all the damages because there is not a si

59、ngle word mentioned concerning the quality of goods in the contract.The basic principlesAt the beginning, it is important to recognize that one will not be able to cover every gap and fill all the loopholes in the contract provisions. The reason is simple: one does not know them all. While one can t

60、ry to plug each gap, the one that is missed will be the one that is later disputed and renegotiated.One may not be able to create the perfect contract, but nevertheless draft the contract provisions as clearly as possible, The more definitive the terms, the fewer the disputes. Use very precise langu