UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC

1. UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC INTERNATIONAL NEGOTIATION – UCL – JANUARY, 2014 lecturer Milan Oresky

2. To identify a problem for business negotiators and a comparison with a different group of people.The problem is that business negotiators don’t prepare enough before a negotiation. The comparison is with professional sports people. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 4. Developing negotiation skills 1 Preparing to negotiate 2 Relationship-building 3 Establishing a procedure 4 The proposal stage The importance of personalities and relationships. Difference: the first is speaking to you as the person who chooses to negotiate, and focuses on whether you like the other person, while the second focuses on whether the person who chooses to negotiate likes you. If you do follow an agenda explicitly, there is a written agenda which you use as the basis of your meeting. If you follow an agenda implicitly, there may be no written agenda, but you still have a plan in your mind which you work through. The key decision is whether to speak first.The advice is to summarise the other party’s proposal rather than respond immediately.

3. Questioning should be well-practised, thorough and appropriate.The benefits are that you will get information and you will stimulate an open exchange ofviews. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Ask probing questions and then listen. Developing negotiation skills 5 Questioning techniques 6 Exploring interests 7 The bargaining zone 8 Powers of persuasion To find out what BATNA stands for, what you can do if your BATNAis good and what happens when it is bad - Best Alternative To a Negotiated Agreement. If it is good, you can demand more from theother party. If it is bad, you become highly motivated to create value. The more persuasive people use a series of techniques, which they either useinstinctively or have learned and practised.In a way, yes, they do have an invisible power, but this can be learned.

4. Try to see the situation objectively.Evaluatetheconflictcalmly. Thinkconstructively. Look for a mutually satisfactory way to resolve the problem. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Developing negotiation skills 9 Handling breakdowns 10 Closing the deal To find two risks in closing a negotiation. Losinggainsyou’veacquired. Not acquiring all that you could have gained.

5. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Business Negotiation… ,but … We negotiate since the beginning of the Human Race Everybody is a Negotiator: - at home - among friends - at work - with ourselves… Can we learn to negotiate? Can we be trained to negotiate? or Are we born for that and know how to do it by heart? During the last century negotiations became a Science

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7. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Negotiations is: Dialogue between two or more parties, with the intent of coming to a mutually agreed solution, because each party has something the other wants. Communication process between two or more people in which they consider alternatives to arrive to mutually agreeable solutions or mutually satisfactory objectives.

8. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Negotiation involves the art and scienceof drawing up deals that create lasting value, David A. Lax and James K. Sebenius Negotiation is the process by which people deal witht their differences, Harvard Business School, Roger Fisher Let us never negotiate out of fear, but let us never fear to negotiate, John F. Kennedy

9. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Characteristics of Good Negotiator - General understanding: open minded strong personality charm knowledgeable articulate experienced motivated patience assertiveness staying detached flexible understand the other side persuasive quick etc.

10. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Characteristics of Good Negotiator - Expert opinion preparation and planning skills knowledge of the subject matter being negotiated ability to think clearly and rapidly under pressure and uncertainty ability to perceive and exploit power communication skills listening skills judgment and general intelligence analytical skills ability to persuade others patience decisiveness charisma: charming personality considers lots of options

11. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 LAW ENFORCEMENT NEGOTIATOR PIN aware of the process and style of the other person is flexible thinks and talks about possible areas of agreement etc.

12. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Commercial negotiators(attorneys, real estate brokers,retail sales people) emphasize: analytical ability self-esteem patience = see negotiations as a problem or case solving affair Industrial negotiators(engineers, project managers, IT developers) emphasize: knowledge of the product ability to investigate and consider options ability to accommodate interests of others = consider negotiations as a quest for reaching objectives

13. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Types of negotiations Distributive negotiation Integrative negotiation Most business negotiations combine elements of both types

14. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Other types of negotiations Multiphase negotiation; Implemented over time in different phases Example: architectural design contract Multiparty negotiation;Number of parties with different positions involved. Example: international organizations like UN, WTO, OPEC etc. In Multiparty Negotiation coalitions and alliances are formed : Natural coalitions Single issue coalitions

15. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Distributive negotiation Parties compete over the fixed sum or value. The key question is who will get the biggest part of the pie? A gain of one side is made at the expense of the other. The Seller’s goal is to negotiate as highprice as possible, the Buyer’s goal is tonegotiate as low price as possible. This isknown as Win-Lose or Zero-sum negotiation. Thus, the deal is simple, no need forcreativity. Neither party is interested inlong term relations. They take and defendtheir positions.

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17. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Positional bargaining (2) • Hard style of bargaining dominates a soft one • If the hard style bargainer insists on concessions while soft bargainer avoids confrontation, the negotiation ends in favor of the hard bargainer • The negotiation will produce an agreement, although it may not be a wise one • Arguing over positions endangers an ongoing relationship and is inefficient • In multiparty negotiations positional bargaining is even worse

18. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Integrative negotiation • Integrative negotiations tend to occur when the deal involves manyfinancial and non-financial terms • Parties cooperate to achieve maximum benefit by integrating theirinterests into an agreement • This is also known as Win-Win negotiation. Both sides try “to makethe pie bigger” • There are many items and issues to be negotiated ant the goal of eachside is to create as much value as possible for itself and the other side

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21. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 The Answer to Negotiator’s dillema: respond accordingly The tit-for-tat strategy is the solution. This process involves starting out with acooperative approach: responding to competitive moves with a competitive moveand responding to a cooperative move with a cooperative move. In real world there is no purely Distributive, Integrative as well as Multiphase or Multiparty negotiations. Every individual Negotiator decides upon his/her style to which extent he/she wants or needs to be Cooperative or Competing

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26. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Negotiation styles (2) Competitor Negotiators that exhibit this style are results- oriented, self-confident, assertive, are focused primarily on the main goals, have a tendency to impose their views upon the other party, and in the extreme can become aggressive and dominating. This style is high in Assertiveness and low in Cooperativeness Avoider Negotiators that use this style are passive, prefer to avoid conflict, make attempts to withdraw from the situation or pass responsibility onto another party, and fail to show adequate concern or make an honest attempt to get to a solution. This style is both low in Assertiveness and low in Cooperativeness

27. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 3. Collaborator Negotiators of this style use open and honest communication, focus on finding creative solutions that mutually satisfy both parties, are open to exploring new and novel solutions, and suggest many alternatives for consideration. This style is both high in Assertiveness and high in Cooperativeness 4. Accommodator Negotiators that exhibit this style make attempts to maintain relationships with the other party, smooth over conflicts, downplay differences, and are most concerned with satisfying the needs of the other party. This style is low in Assertiveness but high in Cooperativeness

28. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Negotiation styles 5. Compromiser – Problem solver Negotiators of this style aim to find the middle ground, come with different alternatives, often split the difference between positions, frequently engage in give and take trade-offs, and accept moderate satisfaction of both parties’ needs. This style is both moderate in Assertiveness and moderate in Cooperativeness

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