Mastering International Negotiations: Strategies, Behaviour, and Language
- 2. Activity Agree on 10 characteristics / traits of a good negotiator Characteristics of a good negotiator 1 2 3 4 5 6 7 8 9 10
- 3. Quote Henry Kissinger once said – “Always negotiate allowing the other side to feel they´ve won.”
- 4. Content and Process in Negotiations
- 5. 5 Content vs Process in negotiations Content Process The What The How 1. The variables of the negotiation 2. The agenda items 3. The bargaining and bidding 4. The problems being solved 5. The decisions being made 6. The agreements 1. The way you negotiate 2. How relations are maintained 3. The atmosphere of the negotiation 4. The language style of the negotiation 5. The non-verbal communication 6. The empathy in a negotiation
- 7. The importance of ethos, pathos and logos in a negotiation Ethos Pathos Logos • Represents your credibility • Are you trustworthy? • Are you the appropriate person to negotiate with? • Do you have decision making power? • Do you have experience in negotiating? • Represents emotions / feelings • Establishing rapport with your counterpart is important • The relationship with your counterpart is important • The atmosphere during the negotiation is fundamental to a positive outcome • Creativity is used to find solutions • Facts and figures are necessary • relevant information is essential • Logic is necessary • Argumentation is key • The use of case studies is common • The use of logos will help to convince your counterpart
- 9. High Contex vs Low Context Cultures in Negotiating High Context Low Context Need to get to know the other party Must have a good relationship Value personal relationships They are usually non-confrontational Negotiations are slow Pathos is important ZOPA - significant difference Very little relationship building Get straight down to business Teams must have expert knowledge Logos and ethos are important High reliance on written communication Contracts are important and detailed ZOPA is usually very narrow China Brazil Japan Bangladesh India Arabian Countries USA Canada Scandinavian countries Germany Netherlands Poland 9
- 10. Communicating US Netherlands Finland Spain France Brazil Italy Singapore Iran China Japan Australia Germany Denmark Poland UK Mexico India Kenya Korea Canada Argentina Venezuela Chile Russia Saudi Arabia Indonesia LOW-CONTEXT HIGH-CONTEXT ….................................................................................................................................................... Low-Context Good communication is precise, simple, and clear. Messages are expressed and understood at face value. Repetition is appreciated if it helps clarify the communication. High-Context Good communication is sophisticated, nuanced, and layered. Messages are both spoken and read between the lines. Messages are often implied but not plainly expressed.
- 11. Monochronic Cultures Polychronic cultures Time is a commodity / “Time is money” Time is flexible - They are not usually punctual Agendas, timeframes, deadlines are very important Taking time to build relationships is important Punctuality is very important They are not dependent upon agendas They don´t ¨waste¨ time building relationships They like to do multiple things at a time They don´t like interruptions They can change plans easily They adhere to rules They have long business lunches They like to get straight down to business People are their primary concern Chronemics North American anthropologist Edward T. Hall
- 12. The Four Stages of Negotiation Preparation Exchanging information Bargaining Closing and commitmen t
- 14. Negotiating Principles Be Prepared: the better you Know your alternatives (BATNA) and understand your walk-away Price (ZOPA), the more likely you are to get a good result Build Connection: negotiate in person and build rapport with your counterpart before you talk Price Look for Win-Win: always strive for mutually satisfactory agreement where your counterpart is also happy with the outcome Follow-up: after verbal agreement, make sure to follow-up in writing and build commitment to the deal Remember that a negotiation is only over when the deal is completed
- 15. Negotiating terms defined 1/6 Counterpart / Party The outcome of the negotiation
- 16. Negotiating terms defined 2/6 The four stages of negotiation Preparation Exchanging information Bargaining Closing and commitment The four posible outcomes of a negotiation (negotiation strategy matrix)
- 17. Negotiation strategy matrix You win They win You lose They lose You win They lose You lose They win
- 18. Negotiating terms defined 3/6 The five primary negotiating strategies compete withdraw collaborate avoid compromise
- 19. Negotiating terms defined 4/6 The importance of an AGENDA in negotiations To bargain Making your first offer / bid Anchoring in a negotiation Establishing rapport with your counterpart
- 20. Negotiating terms defined 5/6 a safeguard a quid-pro-quo a concession a gesture establishing common ground tit-for-tat strategies
- 21. Negotiating terms defined 6/6 To bluff A sticking point To adjourn A stalemate
- 22. The importance of POWER in Negotiations Alternative Power (aka BATNA) Legitimacy Power (aka Credibility Power) Track Record or Performance Power Financial Power Referral Power Title Power Expert Power Time (aka Deadline) Power Emotional Power Coercive Power
- 23. The importance of questions when negotiating To get information To give information To get someone ´s attention To buy time or stall To lead or mold thinking To determine the other party ´s position
- 24. The six primary variables in negotiations Price Volume Payment terms Delivery Specification Contract period
- 25. Are You a Blue or Red Negotiator?
- 26. Negotiating Behaviour Gavin Kennedy in The New Negotiating Edge describes three types of behaviour we can display or encounter when in a negotiating scenario. Red behaviour Blue behaviour Purple behaviour
- 27. Typical red behaviour attitudes • They are aggressively competitive and non-cooperative • They dominate their counterparts • Always seeking to win • For them, all deals are “one-offs” • Relationships are not important after the negotiation process has ended • They always want the best for themselves • They have no concern for their counterparts • They use gamesmanship in negotiations • They use brinkmanship in negotiations • They coerce their counterparts
- 28. Typical blue behaviour attitudes • They are co-operative even with aggressive counterparts • They like to succeed • They “play it straight” • They don´t like using manipulation • They are willing to split the difference in a negotiation • They generally trust their counterparts • They are of a generous nature • They like to collaborate • They think both parties should come out of the negotiation happy • They think relationships in negotiations are important
- 29. Typical purple behaviour attitudes • They have good intentions • They look to solve the problems of both parties for a positive outcome • Give me some of what I want and I´ll give you some of what you want • Negotiations are a two-way-exchange • They use tit-for-tat strategies • They use open communication • They have good listening skills • You know where you stand with a purple negotiator • They place emphasis on common ground during a negotiation • They demonstrate patience during the negotiation process
- 30. • Meet in the middle • Split the difference
- 31. The five prime negotiating strategies Competing Collaborating Compromising Avoiding Accommodating
- 32. Answers
- 33. Competing • You are a highly results-driven, focused and assertive negotiator who can often become aggressive • You thrive in a negotiation situation as you enjoy the opportunity to win • You have a strategic mind - therefore you don't get phased by your opposition • Being right matters more to you than preserving relationships
- 34. Collaborate • You are an open and honest negotiator who understands the concerns and interests of the other party • You enjoy negotiations especially if it involves finding creative solutions to mutually satisfy both parties • You often turn simple situations into more complicated ones by overthinking and exploring many alternatives
- 35. Compromise • Your main concern while negotiating is finding middle ground and doing what's fair for both parties • You would rather compromise and settle with less than anticipated in order to satisfy the other party's needs • You may rush negotiations and make concessions too quickly which can lead to a loss
- 36. Avoid • You really don't like negotiations • You try to avoid any conflict by any means possible, maybe by passing the responsibility to another member of your team or staying quiet • You find negotiations intimidating and would be susceptible to threats, therefore you would rather work behind the scenes
- 37. Accommodate • Your main concern while negotiating is preserving relationships • You like to connect on a personal level, and you would be put out if the other party wasn't interested in also building relationships • It matters to you what the other party thinks of you
- 38. I want to sell… Think of something you want to sell What price are you asking?
- 39. Making a first offer – the three types of positions Ideal position Realistic position Fallback position
- 40. ZOPA zone of possible agreement
- 41. What would you do if the negotiation was unsuccessful? If you didn´t come to an agreement?
- 42. I want to sell… • Air conditioning unit (second-hand) €2000 €1500 €1400 Ideal – Realistic – - Fallback position- Concessions: – technical service – warranty – electricity for a year
- 43. Question • When in a negotiation scenario – how often do you know your counterpart ´s settlement range at the start of the negotiation?
- 44. Making a first offer – the three types of positions Ideal position Realistic position Fallback position
- 45. ZOPA – The zone of possible agreement The ZOPA describes the conditions between two parties where an agreement can be met which both parties can agree to Within this zone, an agreement is possible Outside of the zone, no amount of negotiation will yield an agreement
- 46. ZOPA Zone Of Possible Agreement Ideal Realistic Fallback Your ZOPA €60 €35 €40
- 47. What would be the ZOPA in this scenario? You are looking to buy a supply of raw materials – your maximum Budget is €500,000 At the same time, the seller (who has not disclosed their amount to you) is looking to sell the raw materials for at least €400,000 If you are offered the raw materials at a price beyond €500,000 you simply walk away If the seller is offered a deal less than €400,000 they simply walk away
- 48. Seller: minimum of €400,000 ZOPA: €400,000 - €500,000 Buyer: maximum of €500,000
- 49. The Winner´s Curse You make your first offer Your counterpart accepts immediately How do you feel?
- 50. BATNA explained 1 Best alternative to a negotiated agreement In contrast to your fallback position – a BATNA is not interested in the objectives of a negotiation It is concerned with determining the course of action if an agreement is not reached within a certain frame As a gauge (measure) against which an agreement is measured – it prohibits a negotiator from accepting an unfavourable agreement or one that is not in their best interests because it provides a better option outside of the negotiation
- 51. BATNA explained BATNA is the course of action that will be taken by a party if the negotiation fails and an agreement cannot be reached BATNA is not the same as the (fallback position / reservation point / walkaway point) BATNA is the bottom line in order to protect you from giving too much and receiving too little
- 52. BATNA explained BATNA is an acronym popularised by Roger Fisher and William Ury which stands for 'Best Alternative to a Negotiated Agreement’. BATNA answers the question: 'What would you do if you weren't able to agree a deal with your negotiation counterpart?’ Try to analyze the ZOPA but don´t reveal your BATNA
- 53. LAFO Your last and final offer - it goes something like “This is my final offer” Question: Why is LAFO a risky tactic? Lose face
- 54. Once you state your LAFO - if your counterpart does not accept – then you have two choices; • 1) walk away from the deal • 2) backtrack on your LAFO and risk losing face
- 55. 55 Distributive Positional Bargaining Behaviour Negotiators are adversaries Goal is victory Demand concessions Anchoring Mislead, use ploys Apply pressure Look for win for you alone (win-lose)
- 56. 56 Integrative Bargaining Behaviour Negotiators are joint problem-solvers Goal is wise decision Work together to determine who gets what Focus on interests, not positions Be open about interests, use fair principles Consider multiple answers Look for win-win opportunities
- 57. A few negotiating scenarios
- 58. Decide if the answer is TRUE or FALSE
- 59. 1 After a job interview, HR calls to offer you the job. They offer a salary that is 15% higher than you are currently making and say that the perks are generous. They don´t have time to negotiate the terms right now, but they want to know if you are going to accept. Since you really want the job, you should say yes now and discuss the details tomorrow.
- 60. The correct answer is… FALSE Don´t say yes too soon. If the company wants you, executives will wait a day for an answer. But once you accept an offer, they have little incentive to negotiate. Instead, say something like: “This is wonderful news, but I´d like to talk more about the details of the offer before I make a decision. What time is good for you tomorrow?”
- 61. 2 You are about to meet your boss to negotiate for a promotion and a pay rise. You have put together a strong pitch, and have practiced it many times, but you are still a little worried and nervous. In the hour before the meeting, the best thing to do is review your supporting materials one more time to make sure they are fresh in your mind so you feel calm and confident.
- 62. The correct answer is… FALSE If you are well-prepared, going over and over the details of your argument could make you even more nervous. Instead, find ways to get int a good mood before the negotiation. Go for a yoga class or a lunchtime workout, talk to a friend who makes you laugh, listen to music on your headphones – basically just do whatever makes you feel relaxed and upbeat.
- 63. 3 You want to switch to a division in your company where you would have more to contribute and the work would make better use of your skills and competences. A friend recommends that you lay out your case in a detailed e-mail. Instead, you decide to negotiate face-to-face – you think this will produce better results.
- 64. The correct answer is… TRUE If you put your entire proposal in an e-mail, your bosses may accept or reject it in its entirety. A face-to-face negotiation gives you more flexibility, allowing you to respond to the other person´s reactions, offer more information when you sense it is needed, or even change strategy partway through. You can also factor in non-verbal signals, such as body posture and facial expressions.
- 65. 4 An employer makes you a job offer and asks you to name the salary you want. Your prospective boss agrees to your figure immediately – so you go home and celebrate. Not only did you get the position – you also aced the negotiation. Right!
- 66. The correct answer is … FALSE If you get what you want in the first round of a negotiation, you almost certainly didn´t ask for enough. Aiming high and hearing NO doesn´t mean you ´ve miscalculated, either. Rejecting your first request may just be an opening gambit by a skilled negotiator. Try pushing back: “If you can´t give me what I asked for, how close can you come?” Or find out why the other negotiator said no – perhaps you can remove the deadlock.
- 68. 68 1 In the four stages of negotiation, which is the first stage? 1. Bargaining 2. Closing and commitment 3. Preparation 4. Exchanging information
- 69. 69 1 In the four stages of negotiation, which is the first stage? 1. Bargaining 2. Closing and commitment 3. Preparation 4. Exchanging information
- 70. 70 2 Which of the following is the first step of the negotiation? 1. agreeing on the procedure 2. establishing an agenda 3. establishing rapport 4. exploring needs
- 71. 71 2 Which of the following is the first step of the negotiation? 1. agreeing on the procedure 2. establishing an agenda 3. establishing rapport 4. exploring needs
- 72. 72 3 The person/s you negotiate with are referred to as your; 1. rival 2. opponent 3. enemy 4. counterpart
- 73. 73 3 The person/s you negotiate with are referred to as your; 1. rival 2. opponent 3. enemy 4. counterpart
- 74. 74 4. Which DOES NOT constitute PROCESS in a negotiation? 1. The agenda items 2. The atmosphere of the negotiation 3. The way you negotiate 4. How relations are maintained
- 75. 75 4. Which DOES NOT constitute PROCESS in a negotiation? 1. The agenda items 2. The atmosphere of the negotiation 3. The way you negotiate 4. How relations are maintained
- 76. 76 5. Which IS NOT a trait of a Monochronic Culture? 1. Punctuality is very important 2. They can change plans easily 3. They don´t like interruptions 4. Time is a commodity
- 77. 77 5. Which IS NOT a trait of a Monochronic Culture? 1. Punctuality is very important 2. They can change plans easily 3. They don´t like interruptions 4. Time is a commodity
- 78. 78 6. The definition of sticking point is; 1. An important point to be negotiated 2. A point that is constantly being discussed 3. Something that is hindering the progress of the negotiation
- 79. 79 6. The definition of sticking point is; 1. An important point to be negotiated 2. A point that is constantly being discussed 3. Something that is hindering the progress of the negotiation
- 80. 80 7. Which bests describes tit-for-tat strategies; 1. Respond in an aggressive way to an action by your counterpart 2. Respond in a reciprocal way to an action by your counterpart 3. Respond in a positive way to an action by your counterpart 4. None of the above
- 81. 81 7. Which bests describes tit-for-tat strategies; 1. Respond in an aggressive way to an action by your counterpart 2. Respond in a reciprocal way to an action by your counterpart 3. Respond in a positive way to an action by your counterpart 4. None of the above
- 82. 82 8 What does BATNA stand for? 1. Best Alternative to a Negotiated Argument 2. Basic Alternative to a Negotiated Agreement 3. Best Alternative to a Negotiated Agreement
- 83. 83 8 What does BATNA stand for? 1. Best Alternative to a Negotiated Argument 2. Basic Alternative to a Negotiated Agreement 3. Best Alternative to a Negotiated Agreement
- 84. 84 9. Which IS NOT a trait of a Polychronic Culture? 1. People are their primary concern 2. They are not dependant upon agendas 3. They like to get straight down to business 4. Taking time to build relationships is important
- 85. 85 9. Which IS NOT a trait of a Polychronic Culture? 1. People are their primary concern 2. They are not dependant upon agendas 3. They like to get straight down to business 4. Taking time to build relationships is important
- 86. 86 10. What is another definition for fall-back position? 1. Maximum starting price 2. Minimum starting price 3. Bottom line
- 87. 87 10. What is another definition for fall-back position? 1. Maximum starting price 2. Minimum starting price 3. Bottom line
- 88. 88 11. What does ZOPA stand for? 1. Zone of possible argument 2. Zone of plausible agreement 3. Zone of possible agreement
- 89. 89 11. What does ZOPA stand for? 1. Zone of possible argument 2. Zone of plausible agreement 3. Zone of possible agreement
- 90. 90 12. Which of the following is NOT considered a variable in a negotiation? 1. price 2. payment terms 3. emotion 4. volume
- 91. 91 12. Which of the following is NOT considered a variable in a negotiation? 1. price 2. payment terms 3. emotion 4. volume
- 92. 92 13. The Winner´s curse is; 1. when your counterpart´s first offer is too high 2. when your counterpart refuses your final offer 3. when your counterpart accepts your first offer 4. when your counterpart refuses your first offer
- 93. 93 13. The Winner´s curse is; 1. when your counterpart´s first offer is too high 2. when your counterpart refuses your final offer 3. when your counterpart accepts your first offer 4. when your counterpart refuses your first offer
- 94. 94 14. The term “anchoring” in a negotiation refers to; 1. not giving away your fall-back position 2. giving away the least amount of information as possible 3. not giving away concessions 4. failing to be flexible from your initial offer
- 95. 95 14. The term “anchoring” in a negotiation refers to; 1. not giving away your fall-back position 2. giving away the least amount of information as possible 3. not giving away concessions 4. failing to be flexible from your opening offer
- 96. 96 15. “Safeguard” refers to; 1. a contingency plan your counterpart will offer should anything go wrong 2. a written document that guarantees prompt delivery of goods 3. a promise that your counterpart will do what they have agreed 4. all of the above
- 97. 97 15. “Safeguard” refers to; 1. a contingency plan your counterpart will offer should anything go wrong 2. a written document that guarantees prompt delivery of goods 3. a promise that your counterpart will do what they have agreed 4. all of the above
- 98. 98 16. What is the term reach a stalemate mean? 1. When you reach an agreement 2. When the relationship fails in a negotiation 3. When you are not happy with the outcome 4. A situation in which no progress can be made
- 99. 99 16. What is the term reach a stalemate mean? 1. When you reach an agreement 2. When the relationship fails in a negotiation 3. When you are not happy with the outcome 4. A situation in which no progress can be made
- 100. 100 17. What is the best thing to do if both parties are in a stalemate? 1. Terminate the negotiation 2. Change the negotiating team 3. Give in 4. Adjourn and reassess the situation
- 101. 101 17. What is the best thing to do if both parties are in a stalemate? 1. Terminate the negotiation 2. Change the negotiating team 3. Give in 4. Adjourn and reassess the situation
- 102. 102 18. If a negotiation isn’t going to achieve your original aim, what can you do? 1. give up and let the other person win 2. back out of the negotiation and make no decision 3. select the best alternative option: the BATNA 4. negotiate harder and be more ruthless
- 103. 103 18. If a negotiation isn’t going to achieve your original aim, what can you do? 1. give up and let the other person win 2. back out of the negotiation and make no decision 3. select the best alternative option: the BATNA 4. negotiate harder and be more ruthless
- 104. 104 19. A negotiator who is assertive and uncooperative, is referred to as; 1. competing 2. accommodating 3. collaborative 4. compromising
- 105. 105 19. A negotiator who is assertive and uncooperative, is referred to as; 1. competing 2. accommodating 3. collaborative 4. compromising
- 106. 106 20. A typical trait of red behaviour in negotiation is; 1. doesn´t use manipulation 2. has good intentions 3. always seeking the best for themselves 4. shows empathy
- 107. 107 20. A typical trait of red behaviour in negotiation is; 1. doesn´t use manipulation 2. has good intentions 3. always seeking the best for themselves 4. shows empathy
- 108. 108 21. A typical trait of purple behaviour in negotiation is; 1. Uses manipulation 2. Thinks all deals are “one-offs” 3. Think that negotiations are a two-way-exchange 4. Likes to bluff
- 109. 109 21. A typical trait of purple behaviour in negotiation is; 1. Uses manipulation 2. Thinks all deals are “one-offs” 3. Think that negotiations are a two-way-exchange 4. Likes to bluff
- 110. 110 22. According to Gavin Kennedy, which colour represents the most effective negotiator? 1. blue 2. red 3. purple
- 111. 111 22. According to Gavin Kennedy, which colour represents the most effective negotiator? 1. blue 2. red 3. purple
- 112. Distributive Bargaining (AKA Positional Bargaining) VS Integrative Bargaining (AKA Interest based negotiating)
- 113. Distributive Bargaining Usually entails a single issue to be negotiated The single issue often involves price and frequently relates to the bargaining process Also referred to as WIN – LOSE or Fixed Pie because one party gains at the expense of the other party Fixed pie (There is a limited amount to be distributed)
- 114. Integrative Bargaining Often referred to as WIN – WIN Typically entails two or more issues to be negotiated RELATIONSHIP is usually more important More complex issues are negotiated than with Distributive Negotiation Involves an agreement process that better integrates the aims and the goals of all the parties concerned Use of creative and collaborative problem solving