The General Review of International Business Negotiation

1. The General Review ofInternational Business Negotiation I: Terminology (术语) of Negotiation II: Understanding the Framework of IBN III: Psychology in negotiation IV: Case study: (items & necessity)

2. The definition of international business negotiation • Business negotiation is a common human activity as well as a complex process in which every party involved in a business activity talks to each other, exchanges one’s views of point with the objective of satisfying one’s own needs, reaching a final agreement and carrying it out through continuous and conscious efforts.

3. Features of business negotiation(1-4) • 1) Negotiation is at the heart of every transaction and it comes down to the interaction between two sides with a common goal (profits) but divergent method. • 2) These methods must be negotiated to the satisfaction of both parties. It can be very trying process with confrontation and concession. • 3) Both parties share open information. • 4) Both sides try to understand each other’s point of view.

4. Features of businessnegotiation(5-8) • 5) Both parties know they have common and conflicting objectives, so they try to find a way to achieve common and complementary objectives acceptable to them both. • 6) The purpose of negotiation is to redistribute the potential profit. • 7) Everything is negotiable. No “take it or leave”. • 8) It is known as the “zero-sum game”.

5. Why negotiations occur? • 1) to create something new that neither party could do on his/her own, or (---human relationship, esp. social conflicts) • 2) to resolve a problem or dispute between the parties (---social, business differences, competitions and conflicts).

6. The basic principles of negotiation • 1) Equality principle • equality & mutual benefit: in law status, in rights and obligations • 2) Sincere cooperation • making concession, a win-win result, keeps his words and trustworthy • 3) Keep it flexible & fluid • flexibility and consistency: strategies, tactics，techniques

7. Correct understanding of negotiation(3 issues) • I: Conflict • II: Key aspects of negotiation • III: Tips for successful international negotiation mission

8. I: Conflict ---Definitions • Conflict may be defined as a “sharp disagreement or opposition, as of interests, ideas, etc.” and includes “the perceived divergence of interest, or a belief that the parties’ current aspirations cannot be achieved simultaneously.”(Pruitt & Rubin, 1986, p4) • Conflict results from “the interaction of interdependent people who perceived incompatible goals and interference from each other in achieving those goals.”(Hocker & Wilmot, 1985)

9. Conflict ---the levels • Conflict exists everywhere. One way to classify conflict is by level, and four levels of conflict are commonly identified. (Roy J. Lewicki et al, 1985. Negotiation. p17-18. McGraw Hill) • 1) Intrapersonal or intrapsychic conflict • 2) Interpersonal conflict • 3) Intragroup conflict • 4) Intergroup conflict

10. Conflict---Dysfunctions • Most people initially think that conflict is bad or dysfunctional. This has 2 aspects: 1) conflict is an indication that sth. is wrong or needed fixed, and 2) it creates largely destructive consequences or destructive images • 1) Competitive process • 2) Misperception & bias • 3) Emotionality • 4) Decreased communication • 5) Blurred issues • 6) Rigid 死板的 commitments • 7) Magnified different, minimized similarities • 8) Escalation (放大，增大) of the conflict After Deutch(1973) and many others

11. Conflict---Functions • In fact conflict can be productive.The objective is to learn how to manage it so that the destructive elements are controlled while the productive aspects are enjoyed. • 1) Discussing conflict makes organizational members more aware and able to cope with problems • 2) Conflict promises organizational change and adaptation • 3) Conflict strengthens relationships and heightens morale • 4) Conflict promotes awareness of self and others • 5) Conflict enhances personal development • 6) Conflict encourages psychological development • 7) Conflict can be stimulating and fun ---After Dean Tjosvold (1988)

12. III: Tips for successful international negotiation mission • 1)A small delegation is more manageable than a large one. • 2)Delegation leader should be a high ranking and recognized public figure. • 3)Bring along a qualified interpreter on your trip. If you cannot afford one, then make sure you have one waiting overseas.

13. Major Contents of international Business Negotiation 1<price 2<payment terms 3<package & shipment 4<quality 5<service 6<training 7<insurance …and many other issues.

14. Objectives of International Business Negotiation Courses 1<mastering knowledge about basic principles of IBN, have an insight into mistakes often happened at a high price, and know how to avoid them 2<training mutual motivation skills and effective communication strategies 3<understanding your opponent’s special feeling, standard of value and belief, adjust yourself to suit the real case

15. Why some people are afraid of negotiation?(Case study) 1<Cultural differences 2<Needs of negotiating parties 3<Negotiating skills 4<International variables 5<Localization 6<Time is vital

16. 1<Cultural differences You’ve already stayed in Tokyo, Japan for 4 days, and you are there to have a negotiation on the issue of a joint venture in the field of industrial manufacturing. The host treated you well. But in the 3 previous meetings, there were nothing about the point. You’ve got stress/pressure from your company. And furthermore, you can only stay in Japan for another several days. You should---

17. observe the local standard/rules, endure the postpones • decide to inquire when talking about the issue the next meeting • ask your representatives/agents there to step in and offer help

18. 2<Needs of negotiating parties • You’re in Moscow and working out a draft contract for the computer software of your company. What do you think will be the tough issue to negotiate?

19. price • standards for operation • delivery

20. 3<Negotiating skills • You’re going to sign an agreement. Right now, your German partner informs you that he will buy your communication equipment if you give another 8% discount. You should---

21. 4<International variables • A certain Indonesia official makes you known that if you can help his son enter Chinese University and help to build a swimming pool for his family. Your sales business there would be possible. Your best solution is---

22. a. Inform him politely that you’d like to help but it’s beyond your responsibility. Then tell him the deal will be beneficial for both of you. • b. Help to satisfy the needs of entering a Chinese university but as for the construction of a swimming pool, you’ll contact the lawyer of your company. • c. Take immediate action to contact Beijing University and prepare for the construction materials, then sign the contract.

23. 5<Localization • You’re in the delicate office of your partner in Saudi Arabia. This is your first meeting, talking about supply with a special steel tube. He inquires about your trip to Saudi Arabia. You should reply and then politely ask Qs like---

24. local civilization • family and wife • opinions about the situation in the middle East • time to deliver products

25. 6<Time is vital • You’ve got a full list of traveling agenda. In the following cities, which one/ones will you plan to attend meeting on time? • Baghdad • London • Cairo • Ottawa