《商务谈判课件（英文）》Lecture 4

1、Lecture 4The Bargaining ProcessContents 1. Time for exploration 2. Topic for exploration 3. Purpose for explorationStage 1ExplorationStage 2BiddingStage 3BargainingStage 4Settling & Ratifying1. Curb exchange2. The last profit 3. Congratulations for both parties4. Handling agreement cautiously1. Tact

2、ics of the choice of bid2. Tactics of the presentation of bid3. Who should be the first to make a bid?4. Tactics of responsiveness1. Psychological diathesis of the negotiator in bargaining2. Distributive bargaining & Integrative bargaining3. The moves we must make in bargaining4. Tactics of making c

3、oncessions5. Breaking an impasse4.1 Exploration (开局试探)1. Time for exploration2. Topic for exploration 3. Purpose for explorationExploration4.1.1 Time for explorationNegotiators in some countries always discuss topics other than business at the negotiation table, but not for long. It is usually moved

4、 to the specific business at hand after 5 to 10 minutes. It usually takes 5-10 minutes in the United States. But this is not the case in Japan: the goals of the non-task sounding are identical, but the time spent is much longer.4.1.2 Topic for explorationYou may choose the following as a topic:A com

5、pletely irrelevant topic: the weather, sports news, entertainment news, world news, social news, personal interests and experiencesA humorous story to create friendly and harmonious atmosphereIntroductory remarks showing general principles of negotiationIt is important to learn how to communicate wi

6、th your clients by learning about their backgrounds and interests. If your counterparts backgrounds have much in common with yours, communication between you can be more efficient. Engineers can use technical jargon when talking to other engineers; golfers can use golfing analogies; family men and w

7、omen can compare the cash drain of a fledgling business unit to putting kids through college.4.1.3 Purpose for explorationIt is used to size up ones clients.During these initial stages of conversation, you also make judgments about the people with whom you will be dealing. Can he be trusted? Will he

8、 be reliable? How much power does he have in his organization? Such assessments are made before business discussions even begin. Lets watch4.2 BiddingTactics of the choice of bid1 Tactics of the presentation of bid2Who should be the first to make a bid?3 Tactics of responsiveness4Only after non-task

9、 sounding (exploration) is complete, when acquaintance has been established, should business be introduced. It is advisable to let your counterpart signal when the task-related exchange of information should start. Usually, such signals will be given after tea or coffee has been served and may inclu

10、de a statement such as,“Can you tell me more about your company?” or “Tell me, what has brought you to the United States”?4.2.1 Tactics of the choice of bidIt is believed that the best guide to biding decisions is the commercial judgment of experienced commercial people. Commercial people have a wea

11、lth of experience and an intuitive sense of the ongoing market possibilities.Negotiating to our advantage, the guideline is to start with the highest defensible bid. (For buyers, the corresponding phrase is of course “lowest defensible offer”. 1. The opening bid needs to be “the highest”Because:The

12、opening bid sets a limit beyond which we cannot desire. Once made, we cannot normally put in a higher bid at a later stage.Our first bid influences others in their valuation of our offer.A high bid gives scope for manoeuvre during the later bargaining phases.The opening bid has real influence on the

13、 final settlement level. The higher we set the more we shall achieve.2. The opening bid must be defensible. Bidding is not simply the business of one side of either the seller or the buyer, the bidding side should not only seek to his own advantage but also take the acceptable possibility of the oth

14、er side into consideration. If broken away from the highest price that is acceptable for the other side, its just a one-sided “beautiful dream”. Therefore, putting forward a bid that cannot be defended will damage the negotiation process. It is found to be offensive by the other party. And if we can

15、not defend that bid when challenged in subsequent bargaining, we lose face and credibility. As a result well be forced into retreat.3. It is not an absolute figure It is a figure that is relevant to particular circumstances.It is specifically a figure that relates to the way in which others are oper

16、ating. If they are pressing to their advantage, then for our advantage we must press with a very high bid. If we face a lot of competition, then we must tailor our opening bid to the level at which it at least enables us to be invited to continue the negotiations.4. The content of the bid needs to c

17、over a range of issues. The price is one of them. Price in itself is very complicated issue. There are many factors influencing price like: the subjective valuation of the product by the customerhow intricate the product is how badly the product is needed the amount of the product neededthe ability

18、of the buyer to sell to the third party the selling time (good price in the peak season)product credibility different ways of payment the competitive price of the rivals, etc.The components of the opening bid in a commercial negotiation will not simply be price, but a combination of price, delivery,

19、 payment terms, quality specification and many other items.4.2.2 Tactics of the presentation of bidIn the bidding presentation of the negotiation process, there are three guidelines to the way in which a bid should be presented: firmlyclearlywithout comment 1. The opening bid needs to be put firmly,

20、 seriously and without reservations or hesitations.At the time when both parties are sensing and judging from each others words and facial expressions to inferring the other partys intention, every hesitation or reservation presented in either partys bid will raise the attacking confidence of the ot

21、her party. The conviction of a conscientious negotiation party is very important.2. It needs to be understood clearly so that the other party recognizes precisely what is being asked. In the process of the negotiation, its better to have the quotation typed on paper and to ensure the clarity and nic

22、ety of the bid, to show the other party a sense of seriousness and legitimation. 3. It should be put without comment as possible as it can. There is no need to comment since the other party can be expected to raise questions on matters that concern it. And voluntary comment before other party makes

23、the request simply makes them aware that we are concerned about issues that they might never have considered. So the more you comment or explain the less favorable condition youll be. 4.2.3 Who should be the first to make a bid? Advantages Disadvantages1. the bidding carries a durable influence thro

24、ughout the subsequent negotiation or bargaining and to confine the bargaining into a special frame of the first bid so as to reach a more favorable agreement. 2. To some extent first bid is more influential than responsive bid.1. When a party hears another partys opening bid, they can then make some

25、 final adjustment in their own thinking. 2. Others may try to concentrate on attacking our bid, trying to drive us down and down without giving us any information about their own position. This is something we must resist. Most people take the first bid to be a good idea. Case Analysis123To sum upAs

26、 a matter of fact, its not necessarily that to bid first will either on the upper hand or in the passive position. It is always possible for those who bid first or after to gain or lose.What really counts is the role that played by either sides economic force, negotiation capacity, knowledge scale,

27、negotiation tactics and some comprehensive factors.4.2.4 Tactics of responsivenessFirst party should at this stage fully aware that he has put a bid, and he has a perfect right to know what the other party is prepared to offer in return. In general, the other side will not respond by accepting but t

28、o react in this or that way. Thus both parties are entering into a bargaining period. 4.3 Bargaining 磋商 2. Distributive bargaining & Integrative bargaining 3. The moves we must make in bargaining 4. Tactics of making concessions 5. Breaking an impasse 1. Psychological diathesis of the negotiator in

29、bargaining4.3.1 Psychological diathesis of the negotiator in bargaining1. Negotiator should have good psychological diathesis in the process of bargaining.2. Customers psychology should also be satisfied in the process of bargaining.4.3.2 Distributive bargaining & Integrative bargaining1. Distributi

30、ve bargaining 两分法磋商，输赢磋商，零和磋商It is also termed zero-sum, competitive, or win-lose bargaining, referring to a negotiation conducted between two parties over one issue. Features of distributive bargainingFour strategies of distributive bargainingPoints you need pay attention to(1) Features of distribu

31、tive bargaining:First, the goals of one party are conflicting with those of the opponent, and the issue discussed is usually centered around money. ExampleSecond, each party tries to get most out of the deal grab the value from the other party. Third, distributive bargaining is mainly found in one-s

32、hot deal (一锤子买卖). This is because both parties believe that the resources are fixed and limited, and ones gain is achieved at the expense of the others loss, thus creating a win-lose confronting situation. The bottom line from two parties determines the possibility of the business.Both of them may n

33、ot know each other before. During which time the relationship factor is ignored, both of them do not care about the future relationship between them, nor do they care about the possibility of trading in the future.nextParticular examples of this kind of negotiation can be found in markets of selling

34、 houses or commodities.In the sale of a house, the seller would like to sell the house at its highest price, the higher the better; while the buyer would like to pay the lowest price, the lower the better. Apparently the goal of the seller is to sell something at a higher price, while that of the bu

35、yer is to press the price down. (2) Four strategies of distributive bargaining:The purpose of distributive bargaining is to maximize ones value so as to reach an agreement in ones favor. The buyer has four strategies to choose from:a. To push for a settlement close to the sellers resistance point;b.

36、 To persuade the seller to change his/her resistance point;c. To get the seller to reduce his/her resistance point so as to create a positive settlement range if a negative settlement range exists;d. To get the other party to think that he/she has got the best possible deal.In applying the strategie

37、s, a party will try his best to discover the opponents resistance point（抗拒点）;influence the other partys perception about their estimates, their price strategies, and get them to change their resistance point through information exchange, reasoning, extreme offers, etc. Specifically speaking, a party

38、 can reduce any resistance points by giving extreme offers and get the other party to rethink his/her original estimate by stressing the value of something and pointing out their errors in their proposal, etc.(3) Points you need pay attention to:During a distributive bargaining, one has to pay atten

39、tion to the following points:work out ones best first offer;do not leak any information to the opponent;try to know more about ones opponent;do not give extreme egrative bargaining 一体化磋商，合作磋商，双赢磋商It is also termed collaborative, interest-based or win-win bargaining. To reach an agreement

40、 on mutual benefits, both parties lay emphases on common goals. They share information openly between them, they try to understand the positions, needs and interests of each party. They even work out solutions to a problem together.Strategies and tactics for principled negotiations are used in integ

41、rative bargaining. They are described more fully in the book named Getting to Yes by Roger Fisher and other authors. These ideas lay emphases on four components, namely separate the people from the problem 把人和事分开 focus on interests instead of positions 利益谈判而非立场谈判 invent options for mutual gains 为共同利

42、益献计献策 insist on using objective criteria 坚持以客观标准为本 (1) Separate the people from the problemIt is better to solve the people problem first, for the real cause of the problem lies in peoples perception and understanding of that matter, which is influenced by ones prejudice, or by the perspective from

43、which one looks at a problem.Treat the representative from any company or even from any country as a human being first. Understand his/her feelings, emotions, personal background information. Allow him/her to leak out his/her burst when he/she is under pressure or when a person is playing emotional

44、tricks on purpose.Dont fight back even if one is chosen as a target, or attacked by the other party with improper language.Later on the two sides should find out the real troubles, face the problems as if they were in a team, and work out solutions to them together.(2) Focus on interests instead of

45、positionsA classic example once cited by many people to illustrate what interest negotiation is.ExampleTwo girls from a family want to have the only whole orange left. How to solve it? The mother asked them, privately why they wanted it. The younger sister said she wanted to drink the orange juice,

46、while the elder sister wanted to make pudding with the peel. Therefore the mother let the younger sister to drink the juice first and then gave the peel to the elder sister to bake cakes. This way each of them has gained the most, making the cake of interests even bigger.This example shows that befo

47、re a problem is resolved, it must first be defined, then settled with each point of view in mind. It can be concluded that essential problems in negotiations are centered around interests rather than positions. The problems lie in the conflicts concerning demands or desires. Conflicts in interests u

48、nderlie problems in positioning.Substantive interests 实质利益Process interests 过程利益Three kinds of interestsAccording to the book The Manager as Negotiator, from the angle of contents, interests can be divided into three kinds:Relationship interests 关系利益a. Substantive interests refer to the interests re

49、lated with money such as price, or the substance itself such as importing certain goods, say, TV sets. It plays its function in two aspects. First it satisfies peoples need intrinsically（从本质上(讲)）, second something gained during a negotiation is not only satisfying to the person, but also serves as a

50、 means in realizing ones long-term goal. For example, if a Chinese company has signed an agreement with a German company on importing advanced equipment, the machines will meet the demand of the Chinese side for upgrading the equipment, so that in the future they can increase productivity and enhanc

51、e competitiveness of the company.b. Process interests are concerned with the way disputes are settled. During a negotiation, two kinds of persons exist. When there is a conflict, one party may act as a hard liner, pursuing hardball tactics such as threats, aggressive behavior, etc. The other type of

52、 people when faced with conflicts, lays emphasis on having some say（发言权） on an issue.Gaining a say in a negotiation is regarded as very important as recognizing a role, and also shows that their opinion should be given enough attention in similar situations in the future.c. Relationship interests me

53、an that both parties cherish their current relationship very much, so that neither of them will take any actions which will endanger their relationship. The present relationship helps them to reach an agreement which meets their current needs, and the relationship will bring them more benefits in th

54、e future.From a standard point of view, there existd. Interests in principles 原则利益These principles are related with fairness, rightness, acceptance, and ethics. In other words, to solve the present problem, a similar case should be found out as a precedent, or a standard should be set through discus

55、sions. People value the case and the standard, for they can serve as a guide in settling the current problem, and they can be applied into similar situations in the future. Therefore some people would like to hold tightly to these principles in order to take them as guides for future favorable outco

56、mes in negotiations.e. Complementary interests 互补利益. For instance, a visitor coming from Shanghai wants to rent an apartment in Chaoyang District, Beijing, and will look for a landlord who rents accommodation. Complementary, mutually beneficial interests exist between the landlord and the seeker of

57、the flat and such complementary interests form a basis for negotiations. Complementary relationships in interests serve as inducements to reach a good agreement. Many business negotiations fall into this category.To sum upTo reach an agreement on mutual benefits, it is important to seek shared inter

58、ests among many possibly conflicting ones. Finding the conjunction point of common interests, and seeking common points while reserving differences are helpful to conduct smooth negotiations.CaseThe principle of finding common grounds while reserving differences(求同存异) was put forward by Chinese form

59、er Premier Zhou Enlai at an Asian-African Conference in Bandung（万隆）, Indonesia. At the conference, he also suggested setting the Five Principles of mutual respect, being sovereignty and territorial integrity 互相尊重领土主权mutual non-aggression 互不侵犯non-interference in each other s internal affairs 互不干涉内政eq

60、uality and mutual benefit 平等互惠and peaceful coexistence 和平共处Its a base for establishing friendly, cooperative relations between countries of different social systems. The idea of seeking common ground while reserving differences guided the participants to seek common interests and put aside differenc