UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC

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

2. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 6. Negotiation Tactics How to control negotiations Controlling the environment (discussed earlier): arrangements, drafts, seating Setting the agenda (discussed earlier): imposing agenda that you prefer Controlling the course of negotiation: using questions and expressing emotions

3. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Types of questions in negotiations Open questions: designed to get more information and require explicit answers Probing questions: more specific sort of open questions which require detailed explanation Closed questions: requires short answers of “yes” or “no” type

4. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014

5. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Open questions and phrases (2) Examples: What do you think about our proposal? Please tell us more about the strong sides of your proposed payment terms Could you elaborate a bit more on the delivery terms? Would you be so kind to explain your idea about the solution to this problem? Correct me if I’m wrong The most important thing for me that everything is done correctly and fairly We would like to settle it in accordance with best common practice and experience Can I ask a few questions to see if my understanding and information are correct?

6. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Open questions and phrases (3) “Let the doors stay open” examples: Let us say that we agree with that proposal, what would be your suggested way to proceed? Is there any other information you feel I should have at this time? Whys is that so important to you? Let me get back to you on this later Please help me understand the purpose of your request/offer

7. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Probing questions When you say “approximately”, what do you mean by that? What else would that entail? How specifically would that work? If we meet your requirements what exactly would be your offer to us? If speaking more specifically, what do you mean by saying…? You said that your offer is… It seems that your current positions is…

8. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Closed questions Do you agree? Are you saying we could by-pass that? Is that always the case? Am I correct? Do you want me to close the issue? Are you happy with this? Should we proceed further?

9. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Expressing and sharing emotions (1) Speak about your emotions during negotiation process. Use it to create constructive and controllable environment. Examples: We had a good start. That makes me optimistic! We are doing not very well this time. Are your of the sameopinion? What are the reasons your think? I feel exhausted by this issue. Should we change for somethingbetter? I am so happy we agreed on this. It makes me think we willmove easier now. Don’t you think so? Should we break for a coffee? I think we deserved it both! Letsdiscuss it informally…

10. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Expressing and sharing emotions (2) React immediately to what is unacceptable or undesirable foryou: take the control back. Examples: Sorry to interrupt you, but I can’t understand the reasoning behind it I feel uncomfortable: I can’t see enough logic behind thesearguments I am an open person and I should tell you my opinion about what Ijust heard This made us a bit nervous. Could we go back and look to thesituation from a different perspective It makes me feel bad if we can’t agree on it. Let us try to focus on itlater and finish our agenda

11. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Controlling the course of negotiation Right questions help you control the overall situation of negotiation Quick reaction and responsiveness enables you to take over the control of situation

12. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Negotiation tactics Negotiation tactics are purposely used or preliminaryplanned behavior, directed to achieve the main goalsof negotiations. They are directed to: Reinforce negotiating power Gain some initial supremacy in negotiation Collect not disclosable information Make the other side emotionally disbalanced Take control over the negotiation process

13. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Main negotiation tactics used I. To check the opponent resistance point / reservation price/ maximum price II. Aggressive III. To gain positional advantage IV. To gain quantitative advantage (not equal exchange) V. To disbalance opponents emotionally There are separate group of tactics, so called DIRTY or UNFAIR tactics often used in negotiations as well

14. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Main negotiation tactics (1) I. To check the opponent resistance point /reservationprice/ maximum price: 1. Small steps By adding a small improvements (step by step) to the first offer you arereaching the maximum price of the other side they are willing to pay 2. Best offer for the budget you have Offerto disclose your budget/ maximum price: “How much you canspend? We have the most suitable offer for you” 3. Extreme position (Low ball/High ball) Initial offer received is done in the manner and under conditions to beunacceptable for the other side in order to provoke disclosure of theother side real intentions (resistance point)

15. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Main negotiation tactics (2) II. Aggressive 1. First and Final offer (Ultimatum) Requirement to accept the first offer (or second) otherwise negotiationswill be stopped 2. Threat of termination Requirement to accept offer or conditions under threatening to terminatenegotiations 3. “Best” offer (Take it or leave it)Explicit pressure not to enter into negotiations. Statement that the bestoffer is done and there is nothing more to add to it. 4. Attacks Attacking you personally or attacking your company or your country .“Tell me, why I usually enter into some problems when we have a meeting orI’m coming to your country?”

16. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Main negotiation tactics (3) III. To gain positional advantage (1) 1. Hand over (“Hot potato”) To handover your problem to the other side. “I have the amount Abut would like to have the thing B. Tell me, what I have to do?” 2. Misleading (Snow ball) Concentration on some not really important issues, overloading theopponents with too much information 3. Wrong target Over evaluation of an argument or issue done on purpose to gain concessionin return. Not important concession is traded-off after hard bargaining 4. Higher authority Agreed issues or received offers have to be approved by the higher managementoffer is done and there is nothing more to add to it.

17. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Main negotiation tactics (4) III. To gain positional advantage (2) 5. Good cop/ Bad cop Deal with more sympathetic opponent while the other is absent orexcluded from negotiations 6. Reluctance Showing to the opponents that you are not interested or indifferentto negotiated subject 7. The Squeeze Telling the other side that he or she has to do better in order to make the other side to give concessions without getting something back. “Seems tobe that you are not eager to work on it. We’ve done a number ofconcessions and waiting for your adequate move”

18. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Main negotiation tactics (5) IV. To gain quantitative advantage (not equal exchange): 1. Split the difference The split difference between initial proposals “has to be approved” by oneside’s higher authority . You set and split the lower difference again 2. Demand for reciprocity Requirement to reciprocate by giving a concession or offer to notimportant concessions made or offer given by the requesting side 3. Additional requirements Not important requirements and arguments are exchanged for animportant concessions. “If you can ‘t deliver the goods in 2 weeks than weneed additional discount of 2% to cover our stock management costs” 4. Narrowing Starting from easy to agree issues and narrowing the disagreement to themost important one. “If we did all these, can’t we agree on this one?”

19. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Main negotiation tactics (6) V. To disbalance opponents emotionally Lost concentration (“Bus station”) Permanently changing the environment trough the course of negotiations:changing negotiating team members, inviting numerous experts, changing meeting places/rooms, stopping – starting negotiations because of different“technical” reasons etc. Overreaction Not adequate emotional reaction to offers, concessions or arguments ofopponents. “ You have to imagine me saying it to my boss. How I shouldexplain such your offer to him?” Clarification Permanently asking for clarification or additional substantiation ofposition/argument/offer in order to minimize opponent explanatory powerand increase the chance of his mistakes

20. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Main negotiation tactics (7) V. To disbalance opponents emotionally 4. Bad conditions Disadvantageous seating arrangements (uncomfortable chairs, opposite thewindows etc.), very early/late meetings, noisy/disturbing environment etc. 5. Changing the agenda Skipping some issues, jumping back and forth through agenda of the meeting, including not agreed points to the agenda 6. Overload Overloading the other side with unnecessary, not important information,(statistics, reports, presentations, site visits etc.) or hide piece of importantinformation in disproportional amount of non important one . Send informationon Friday afternoon requiring an answer on Monday morning etc.

21. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Unfair or ‘’dirty’’ tactics in negotiations (1) Misleading/lying: Wrong information/ facts: “This car belonged to an old lady who kept it all the time in her garage. It’s almostbran new...’’ Limited authority: “Last time we agreed on the issue but our boss does not want to give in on this question..’’ Too easy to be true: Your opponents taking the obligations too easy (they even do not plan to fulfill theirduties) and require a real concessions from you in return

22. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Unfair or ‘’dirty’’ tactics in negotiations (2) Psychological pressure: Stress full environment: Uncomfortable chairs, small and noisy room, too dark or blinded by the light etc. Personal attacks, embarrassment, remarks: Remarks : ‘’please speak louder, we can’t catch a thing…’’, ‘’your documentssubmitted were a mess..’’, ‘’ information was outdated and unprofessionally prepared.’’ ‘’bad hotel reserved…’’ etc’. , Threatening: ‘’We tell about it to your boss, shareholders, clients, journalists’’,‘’ We will go to your competitors, main rivals etc.’’ Corruption: Usually the weakest member of your team, who has some‘’history’’ or relations with your opponents, receives“an interesting offer ‘’

23. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Unfair or ‘’dirty’’ tactics in negotiations (3) Positional pressure: Refusal to negotiate: For subjective reasons, like not met dates for drafts or samples submission etc., your opponents are refusing to start negotiations ‘’Spiraling’’ – the same requirements again “Sorry, we agreed last time, but we can’t accept it in full. This time because of...’’ Playing with time: “Only when you meet these conditions, we are able togo further..’’ Unreal demands: Opponent’s position is based on the terms you objectively can’t meet:‘’If you can not do it in red color, we sent you the sample,We can not pay this price..’’. You required to make more concessionsbecause you are ‘’failing to meet the agreed contract terms ‘’

24. INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 4 Ways to Defend Ignore them Ignore the pressure, don’t play according to their ‘’rude’’ tactics Acknowledgement In a friendly manner, without any signs of anger inform your opponents that you understand their applied tactics Request to stop Make a firm and short statement asking opponents to stop their tactics. Explain that it is counter productive and they will be responsible for the failure of the negotiations and future of the mutual business relations Termination of the negotiations The most extreme way if others are used. In a calm manner inform the opponents that due to their destructive behaviour and attitude you terminate the meeting. Stay constructive and short, reconfirming that what’s happening is their fault