FUNDAMENTAL CONCEPTS IN BUSINESS NEGOTIATION · discuss about negotiation power, differences in...
Transcript of FUNDAMENTAL CONCEPTS IN BUSINESS NEGOTIATION · discuss about negotiation power, differences in...
FUNDAMENTAL CONCEPTS IN
BUSINESS NEGOTIATION
Associate Professor Tomislav Galović, PhD
Faculty of Economics and Business in Rijeka
© All rights reserved
LEARNING OUTCOMES
• Upon completion of the course, the student will be
able to:
1. Specify and define the basic concepts and elements of the
business negotiation process, identify the of negotiation sub-
processes, recognize the context of negotiations and
determine relationships in negotiation and define, compare
and differentiate the principles and techniques of business
negotiation
2. Identify the basic characteristics of the negotiation situation
and identify obstacles in negotiation and negotiating skills,
discuss about negotiation power, differences in negotiation
skills and be able to predict use power in business negotiations
and classify, properly define and implement business
negotiations strategies
LEARNING OBJECTIVES
• Differ business negotiation and internationalnegotiation;
• Identify fundamental elements of businessnegotiation;
• Define fundamental stages of businessnegotiation;
• Specify business negotiation parties andtheir obbligations;
Let’s indetify the meaning
Business negotiation includesinteractional process of communicationwhere one side has something that otherside wants and upside-down
International negotiation includes interactional process of communication where one stranger has something that other stranger wants and upside-down
Negotiation
Business
Negotiation
Business
manners
International
Negotiation
Business
manners
Cultural
customs
National, subnational, local levelRegional, international,
intercontinental/ global level
International
negotiation
1 2 3
Interests
Options
Standards
People
Alternative (BATNA)
BUSINESS NEGOTIATION
WORKSHOPS
WHEN DID WE START WITH NEGOTIATIONS?
With the first breath of air....
• Each and every one of us have started with
negotiations with the first breath of air. We
negotiated with people around us telling them that
we need safety, food, warmth and what we offer in
return is a sweet little baby.
• While growing up,we have become experienced
negotiators
• Everyday, (consciously or unconsciously) we
negotiate with other people (over the phone, on
the bus, talking to friends, parents, colleagues) but
also with ourself (I will have breakfast, I will not, I will
get up, I will not, I will do this, I will not).
Who are the best negotiators?
Children...
• Children-the best negotiators
• They do not have feelings of responsability and
guilt, unlike their parents and due to that they
triumph in negotiations
• But they are loosing that while growing up, because
other people are not so emotionaly attached to
them
PARTICIPANTS OF NEGOTIATION PROCESS
Leader of negotiating team
• Organizes and coordinates negotiating team
• In real negotiations,he is the one who determines the assignments and decides which team member,when and how will perform.
LEADER OF NEGOTIATING TEAM
CHARACTERISTICS OF NEGOTIATING TEAM LEADER:
• tolerance
• Ability of listening to other team members
• Respects opinions of all team members
• Must not impose authority
• Encourage individuals to present different opinions
NEGOTIATING TEAM
• There are 3 levels of negotiating: negotiating within a team,negotiating with the management,negotiating with other side
• “Team spirit” – create common goals,support each other
• Joint preparation
NEGOTIATING
PREPARATION
• Informations,organization, people, communication, personal and other people´s interests
• Define variables of negotiations eg. Price, terms of payment, discounts, help with financing, delivery etc.
• Negotiation when the goal is achieving better results of negotiation
• Make a list of all client´s demands before the begining of negotiations
• Set high goals“Be realistic- search for impossible”
PREPARATION
• Important principal: COMPROMISE FOR
COMPROMISE BUT TACTICALLY! (if...than...)
• Establish the best position,the worst and
acceptable middle for variable!
• Example:VARIABLE BEST ACCEPTABLE WORST PRICE OF
COMPROMISE
Discount Eithout
discount
2% for 2 tons
4% for 4 tons
5% for 4
tons
3% per
ton
PLANNING
• Finding solutions
• Defining the most important questions
• Criteria for deciding on options
DISCUSSION
• Communication, approach to solution, understanding of each other, team work
• Aim high
• Find out demands from partners
• Have in mind offer as a whole
• Search for changing elements
(variables)
• Have in mind communication,perception and presentation
TEAM GOALS
GOALS:
• Find goals and priorities which you want to
achieve
STRATEGY:
• Find the way toward achieving goals
• Choose strategy which you will use
TACTICS:
• Usual trics: reference about competition, ,80/20, reference about quantities, Good boy-bad boy, take it or leave it etc.
DO NOT FORGET
HAVE IN MIND CHANGING ELEMENTS!
DO NOT FORGET
DO NOT MAKE EMOTIONAL AND RASHLY DECISIONS!
DO NOT FORGET
STAY NEUTRAL,WHILE INTERLOCUTOR IS TALKING!
What we have learned?
• What is difference between businessnegotiation and international negotiation;
• What are fundamental elements of businessnegotiation;
• How to approach fundamental stages ofbusiness negotiation;
• Who are business negotiation parties andtheir obbligations.
Good luck!
Questions?