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1、Practice for International Business Negotiation Chongqing University of Science and Technology Contents Chapter 1 Introductions to International Business Negotiation Chapter 2 Compostion,Classifiction and Basic Procedure of International Business Negotiation Chapter 3 Preparation for International B
2、usiness Negotiation Chapter 4 Opening for International Business Negotiation Chapter 5 Consultation for International Business Negotiation Chapter 6 Closing of International Business Negotiation Chapter 7 Negotiation Styles in Different Countries Chapter 1Introductions to International Business Nego
3、tiation* Objective nature of negotiation definition of business negotiation and international business negotiation characteristics of international business negotiation contents of international business negotiation principle of international business negotiation main theories of international busin
4、ess negotiation*I.Brief Introduction Negotiation is a common practice.Negotiation is a behavior in which people change their relationships,exchange opinions.Negotiation refers to the process of the exchange of information and consultation on agreements based on certain needs, with a view to coordina
5、te and win or maintain their own interests.*II.Definition and Characteristics1.Definition It is a process in which international business activities are conducted by business participants from different countries or regions in order to reach a certain transaction and negotiate with each other throug
6、h information exchange.* 2.Characteristics (1)Commonality between general business negotiation and international business negotiation objective is to obtain financial interests. core is price. terms of contract should be accurate and prudent. (2)Unique feature Internationality cross-culturality comp
7、lexity policy fators difficulty*III.Contentsinternational trade in goods negotiationinternational technology trade negotiation permit trading international cooperative production technical advisory service international engineering contacting BOT franchiseinternational compensation trade negotiation
8、international financial leasing business negotiation*IV.Main Principleequality and mutual benefittrust Deterrence-based trust knowledge-based trust indentification-based trustwin-winseeking common ground while putting aside differencesflexibilityinterest allocation*V.Main Theroy1.game theory it stud
9、ies the rational choice between rational opponents in order to maximize their own interests and minimize losses. the use of game theory is one of the important strategies in business negotiation. zero-sum game negotiation and non-zero game negotiation. elements including participants, strategy space
10、, game order and game information.*2.negotiation strength theoryl John Winkler:the basis for the negotiation skills and the basis for success are the negotiation strength.The use of skills has a very close relations with the growth and decline of negotiation strength.l negotiation strength means the
11、 comprehensive potential enery possessed by the negotiator relatve to the counter-party.l main factors influence strength:the importance of the transaction,the endurance of time,power and the number of competitors.*3.negotiation need theoryuGerand Nierenberg: it based on the theory of Maslows hierar
12、chy needs.uthe need is the basis and motiviation of the negotiation.uneeds for negotiation including physiological need,safety need, social needs, esteem needs,and self-actualization needs. Chapter 2Composition,Classification and Basic Procedure of International Business Negotiation* Objective compo
13、nents of international business negotiation apply various components types of international business negotiation apply different types of international business negotiation under different situations basic procedure of international business negotiation different negotiation modes*I.Componentsunegot
14、iating subject natural person or a group it represent the interests of the negotiators, an organization, a region or a country. it consists of the subject of behavior and the subject of relationship.unegotiating object it combines the negotiating issues and various material elements. basic condition
15、s should be met:commonality,talkability and legitimacy*uOther elements negotiation information negotiation environmentpolitical environmenteconomic environmentlegal environmentreligious beliefs, social customs, cultural background negotiation time negotiation place negotiation result*soft-typed nego
16、tiation,hard-typed negotiation, principle-based negotiation soft-typed:to aviod conflicts and contradictions in the negotiation,and ready to make concessions in order to reach an agreement. hard-typed:it regards negotiation as a willpower competition which emphasize their own position and refuse to
17、make any concessions. principle-based:it regards the counter-party as partners rather than enemies which advocating common interests, giving up their own postions.*III.Basice Procedure of International Business Negotiationpreparationopeningbargainingcontract signing*1.Preparation information collect
18、ion counter-party,project uses, market conditions,related laws preparation for negotiation team size,structure, division of labor, cooperation and support of external personnel formulation for business nagotiation plan goals(ideal,acceptable,minimum),agenda,strategy, division of labor other preparat
19、ion selection and arrangement of negotiation place simulated negotiation*2.opening greeting and expression of each partys attitude. it involves the establishment of a negotiating atmosphere,including positive and friendly,cold and antagonistic. to arouse the interest of counter-party,attract counter
20、-partys attention.*3.bargaining substantive negotiation phase. inquriy transaction conditions like price, quality,quantity,packaging, payment methods,specifications offer firm offer non-firm offer counter-offer acceptance agreement of confirmation contract signing sales contract, sales confirmation*
21、IV.Different Negotiation Modes of International Business Negotiationtraditional position negotiation modemodern rational negotiation modePRAM negotiation mode*1.traditional position negotiation modeone party can make concessions, the agreement can be reached.both parties make concessions doesnt belo
22、ng to this mode.entire negotiation process is simple but slower; requirements for the negotiators is not high. it means you lose and I win. it suitable for one-time transaction.*2.modern rational negotation mode one party is not only know their own needs, but strive to seek for counter-partys needs.
23、 both parties can find common ground and maximize their benefits. it requires high quality negotiators and cost too much. it is win-win concept under harmonious negotiating atmosphere. it is an idealized mode which result is not easy to achieve.*3.PRAM negotiation mode(1) four steps: formulating a n
24、egotiation plan establishing friendly relations reach an acceptable agreement agreement implementation and relation maintainance(2) prerequisitesnegotiation is consultation not competition.relationship between two parties is cooperative not hostile.interpersonal relation is the basis.not only focus
25、on immediate interest,but the long-term interest. Chapter 3Preparation for International Business Negotiation* Objective staffing and structure of negotiation team applythe division and collaboration of negotiators within a team the quality that negotiators should have different methods to collect i
26、nformation contents of information contents of negotiation plan ways to make negotiation plan other issues before negotiation the importance of simulated negotiation*I.Preparation for Negotiation Team1.staffing of negotiation teamthe difficulty of negotiationsthe number of counter-partythe number of
27、 related departments 3-4 negotiators in a team is suitable. the division of labor in team should be clear, knowledge complementarity and personality complementarity.*2.division and collaboration of negotaiton teams personnelp division of labora.techincal personnelb.business personnelc.legal personne
28、ld.finance personnele.translator*p collaborationa.chief negotiator and assitant negotiatorsb.on-site personnel and off-site personnelc.different personalities negotiators 3.selection of the personnel ppersonal qualitiesa.temperament and personalityb.psychological qualityc.political qualityd.team spi
29、rite.physical qualityp basic knowledge of negotiatorsa.foundamental knowledge economics, folklore,ethology, geography, psychologyb.professional knowledge product performance,maintenance services,cost accounting, WTO rules, international trade practicepcomprehensive capabilities *II.Preparation for I
30、nformation1.channels for information collection directsellers offer or buyers inquiryinvestigation or researchregistration certificate,balance sheet,product catalogue indirectmediastatisticsoverseas agenciesinsiders*2.methods for information collectionn obtaining primary datafield surveyobservationb
31、usiness spiesn obtaining secondary datainterview expert adviser questionnairepurchase information*3.contents for information collectionn market infromation consumers demand information domestic and foreign markets distribution information product sales information product competition information pro
32、duct sales channels informationn counter-partys information types of merchants credit standing*n science and technologh informationn policies and regulations informationpolitical situations contents of negotiation rulestariff policiesimport&export quotas and licenseforeign exchange control policiesn
33、 finance informationconvertible currencies,exchange rateregulations on L/C insuance, negotiation,D/P or collection4.sorting and analysis of information*III.Formulation for Business Negotiation Plan Contents of negotiation plan:utheme and goalsunegotiation deadlineuarrangement for negotiation agendau
34、selection of negotiation strategy*1.theme and goalsn negotiation themepracticalityrationalitylegalityn negotiation goalsprimary goal(minimum goal)secondary goal(acceptable goal)tertiary goal(ideal goal)*2.negotiation deadlineit means the period from the preparation phase to the final phase.it depend
35、s on the adequacy of negotiation time.it can be long or short, but must be flexible.3.arrangment for negotiation agendanegotiation timenegotiators physical and emotional situationstiming of negotiationcounter-partys situation*negotiation topics determinationnegotiation contentsnegotiation itemsnegot
36、iation orderthe time each party will occupygeneral agenda and detailed agendageneral agendaoverall time and period time for negotiationcentral issues and order for discussionarrangement for various personnelnegotiation place and entertainmentdetailed agenda it is only for your own strategies used in
37、 negotiation.*4.selection of negotiation strategy following factors should be considered:strength of two partiesnegotiation goals of both parties and main speakers personalityprevious relations between both partiesadvantages of both partiesthe importance of negotiationtime constraints for negotiatio
38、n*IV.Other Preparation Items1.determination of negotiation location office it is extremely beneficial for the host reception room or conference roomadvantages and disadvantages are balaced for both parties.it can accommodate more negotiators.2. preparation for negotiation site room for negotiation r
39、oom for private discussion room for having rest3. arrangement for negotiating table and seating negotiating table horizontal tablevertical table negotiating seating*VI.Business Etiquette1.negotiation seat arrangement upper positionguest lower positionhost right side is respected one2. reception etiq
40、uette greeting guiding3. accommodation hotel catering4. visting tour to aviod military restricted areas, secret production areas* Chapter 4Opening for International Business Negotiation* Objective main contents for the opening create negotiating atmosphere different types of negotiating atmosphere c
41、ontents of assessment work different types of strategies for the openingI.Main Works in the Opening Phase1.creating negotiating atmosphere grasping key opportunity first impression is very important using neutra topics establishing an honest, credible and cooperative image making full use of off-sit
42、e informal contact proper organization2.types of opening negotiation atmosphere high-profile enthusiastic,positive and active emotional aggression praise humor question teasing low-profile serious,negative,cold emotional aggression silence fatigue tactics accusation natural stable,no need to creat p
43、ay attention to behavior and ettiquette answer questions positively3.Mapping work the strength of the counter-party history,social influence,captial accumulation investment status,technical equipment variety,quality and quantity of product the needs and sincerity of the counter-party the situation o
44、f counter-partys negotiation team identity,status,traits,hobbies experience,ability,authority,strengths and weaknesses the principle the counter-party adhere toII.Steps in the Opening phase1.dissemination of the agenda2.exchange opinions purpose plan pace personality3.opening statementsstating your
45、own understanding for the problemspresenting on your own intereststating conditions that you can make concessionsstating your own postionIII.Negotiation strategies for the opening1.factors that influence creating an atmosphere relationship between both parties relationship among individuals negotiat
46、ing power of mon negotiation strategylistening and observingconsultative opening strategy consulting, affirming feeling of consistency reserved opening strategy not making a thorough and exact answer to creating a mystery and attract the counter-party it applies to a low-profile atmosphere and a nat
47、ural atmosphere candid opening strategy to open up your own situation and views it suitable for parties with long-term business relations to consider various factors, like your own identity,relation with counter-party, negotiating situations offensive opening strategy to express the strong posture t
48、hrough language or behavior. it only applies to the situation that the counter-party is creating a low-profile atmosphere which is unfavorable to you. it may bring negotiation into a deadlock. picky opening strategy to blame for counter-partys mistake or error to creat a low-profile atmosphere to fo
49、rce the counter-party to make concessionsIV.The Business Etiquette1.proper attireFrance and Japan: dark suitsU.S. and Sweden:sweatshirts, casual clothesprevailing dress code: conservative men:dark suits,wihte or striped shirts, balck lace-up shoes women:professional suits or skirts, white shirts, fl
50、esh-colored stockings, light makeup2.appropriate introduction introduce host to the guest introduce the low status to the high one3.handshake greetingsat the first meeting and farewellorder: the host,high status,older,female first stretch out 4.exchange of business cardsat the first meetingtwo langu