Chapter3 Negotiation lubrication谈判润滑剂 I. Target decision设定谈判目标 Il. Collecting information收集情报 I. Staffing negotiation teams组建谈判小组 IV. Choice of negotiation venues选择谈判地点 Every negotiation requires The preparatory work function sense. as lubrication on either or an ad hoc basis Preparation is an integral and fund amental part of a negotiation, which prepares parties with information critical to negotiation, equips participants with weapons necessary for bargaining and builds up negotiators A most important cause for in international negotiation is insufficient preparation and information Negotiation preparation begins when people related with negotiation have to make decision on the following issues 1)Objectives and targets to be 2) Macro and micro information to be researched 3)Negotiation team members to be 4)Locations where negotiations to be TARGET DECISION设定谈判目标 Target decision has two components: preference of interests and target levels 1. Preference of interest The first important task to be done at preparatory stage is for negotiators to decide which interests to be fulfilled first and which to be obtained at the cost f Discussion in this regard facilitates negotiators to make their target d ecision
Chapter 3 Negotiation lubrication 谈判润滑剂 I. Target decision 设定谈判目标 II. Collecting information 收集情报 III. Staffing negotiation teams 组建谈判小组 IV. Choice of negotiation venues 选择谈判地点 Every negotiation requires . The preparatory work functions, in a sense, as lubrication on either or an ad hoc basis. Preparation is an integral and fundamental part of a negotiation, which prepares parties with information critical to negotiation, equips participants with weapons necessary for bargaining and builds up negotiators’ . A most important cause for in international negotiation is insufficient preparation and information. Negotiation preparation begins when people related with negotiation have to make decision on the following issues: 1) Objectives and targets to be ; 2) Macro and micro information to be researched; 3) Negotiation team members to be ; 4) Locations where negotiations to be . TARGET DECISION 设定谈判目标 Target decision has two components: preference of interests and target levels. 1. Preference of interests The first important task to be done at preparatory stage is for negotiators to decide which interests to be fulfilled first and which to be obtained at the cost of . Discussion in this regard facilitates negotiators to make their target decision
When the interests of negotiating parties are of simple nature and related with single issue the target decision can be made. Otherwise it will be d ifficult to decide. Here are two examples to illustrate the point 1) When the focus of negotiation is price, while for the buyer he would try his best to make a deal at the 2) When the issue concerns extend ing a loan, under the cond ition that there is no repay ment risk, then at least two points will be considered by both borrower and lender. which are d If the lender pursues higher interest rate he would have to make concession on maturity of the loan, and also take the risk of having his ey being tied up for On the contrary, the borrower has to make a choice between time Interest rate The target decision in this regard is expected to be difficult since a oint has to be located among several things The difficulty lies in how much of these will be attained at the ost of others Very often, the result will be found out with the progress of negotiation 2. Target levels In addition to interest preference decision, negotiators, in view of negotiation strategy, will set at least three objective levels, which are __tar garget and targe The desirable target is what negotiators wish to attain but in real ity reach It serves two purposes in negotiations: setting a goal for negotiators to strive for and leaving room for In negotiations The acceptable target is what negotiators make all efforts to achieve. If negotiators take advantage of their power and strength, and manage the negotiations skillfully, the acceptable target and very often can be aine The bottom target is what negotiators will defend and safeguard with all Unless the bottom target is met, the negotiators would block d iscussion and announce of negotiations Setting a bottom line is for one purpose to a"walk away point", and for the second purpose to maintain a psychological if the efforts for fulfilling the first and the second targets end up in failure. More importantly, the
When the interests of negotiating parties are of simple nature and related with single issue the target decision can be made. Otherwise it will be difficult to decide. Here are two examples to illustrate the point: 1) When the focus of negotiation is price, while for the buyer he would try his best to make a deal at the possible price. 2) When the issue concerns extending a loan, under the condition that there is no repayment risk, then at least two points will be considered by both borrower and lender, which are and . If the lender pursues higher interest rate he would have to make concession on maturity of the loan, and also take the risk of having his money being tied up for a time. On the contrary, the borrower has to make a choice between time and interest rate. The target decision in this regard is expected to be difficult since a ______ point has to be located among several things. The difficulty lies in how much of these will be attained at the cost of others. Very often, the result will be found out with the progress of negotiation. 2. Target levels In addition to interest preference decision, negotiators, in view of negotiation strategy, will set at least three objective levels, which are target, ______garget and target. The desirable target is what negotiators wish to attain but in reality reach. It serves two purposes in negotiations: setting a goal for negotiators to strive for and leaving room for in negotiations. The acceptable target is what negotiators make all efforts to achieve. If negotiators take advantage of their power and strength, and manage the negotiations skillfully, the acceptable target is and very often can be gained. The bottom target is what negotiators will defend and safeguard with all their . Unless the bottom target is met, the negotiators would block _______discussion and announce of negotiations. Setting a bottom line is for one purpose to a “walk away point”, and for the second purpose to maintain a psychological if the efforts for fulfilling the first and the second targets end up in failure. More importantly, the
negotiators are sure of their points by setting the bottom target COLLECTING INFORMATION收集情报 1. What is inform Information has the power to reduce The more we know about a situation, the more certain we are about possible outcomes. The more certainty we possess, the less we face in making decisions and planning in the negotiations Information essentially has two valuable applications in negotiations: problem and strategic Information can reveal possible solutions to the problem and prevent mistakes. In strategic planning, it reduces the uncertainty of an unknown future It is all necessary for negotiators to acquire as much information as needed although it is actually impossible to collect information beca boundless nature Differences in culture. consumer tastes. market demands. d ifferent environments abroad, different labor rules, distribution systems, the different availabil ity of media or advertising regulations may be entirely different from those in the market 2. Where to collect informat There are two kinds of information macro information and micro information Macro information: a s data on population, tariff information, non-tariff measures, foreign export/import data, data on government trade policy, general trade flows among countries, world industrial and agricultural production etc Micro information: specific to the relative activities and events market, local standards, specification, distribution system, competitive activ ities materials on specific industries in a country, their growth prospects etc It is both economical and reliable if negotiators learn and identify the information from other sources and make good use of them International organizations. Some international organizations provide useful data for researchers. The typical one is the United Nations'Statistical Yearbook which contains intemational trade data on products and provides information on exports and mports Governments. Governments in most countries publish national and international economic data, addressing either macro or micro issues or offering specific data services of both macro information and micro information. Such
negotiators are sure of their points by setting the bottom target. COLLECTING INFORMATION 收集情报 1. What is information? Information has the power to reduce . The more we know about a situation, the more certain we are about possible outcomes. The more certainty we possess, the less we face in making decisions and planning in the negotiations. Information essentially has two valuable applications in negotiations: problem _______ and strategic . Information can reveal possible solutions to the problem and prevent _____ mistakes. In strategic planning, it reduces the uncertainty of an unknown future. It is all necessary for negotiators to acquire as much information as needed, although it is actually impossible to collect information because of its boundless nature. Differences in culture, consumer tastes, market demands, different environments abroad, different labor rules, distribution systems, the different availability of media, or advertising regulations may be entirely different from those in the market. 2. Where to collect information There are two kinds of information: macro information and micro information. Macro information: a ’s data on population, tariff information, non-tariff measures, foreign export/import data, data on government trade policy, general trade flows among countries, world industrial and agricultural production etc. Micro information: specific to the relative activities and events--- of market, local standards, specification, distribution system, competitive activities, materials on specific industries in a country, their growth prospects etc. It is both economical and reliable if negotiators learn and identify the information from other sources and make good use of them. International organizations. Some international organizations provide useful data for researchers. The typical one is the United Nations’ Statistical Yearbook which contains international trade data on products and provides information on exports and imports. Governments. Governments in most countries publish national and international economic data, addressing either macro or micro issues or offering specific data services of both macro information and micro information. Such
information is often available at the government websites Service organizations A wide variety of service organizations including banks accounting firms, freight forwarders, airlines, international trade consultants, research firms, and publishing houses provide specialized information on their special fields Their information concentrates on business practices, legislative or regulatory requirements, and political stability, as well as trade and financial data. going directly to these service organizations for what you need is often sufficient and moneysaving Directories and newsletters. A large number of industry directories are available on local, national, and international levels. The directories primarily serve to identify firms and to provide very general background information, such as the name of the chief executive officer, the level of capital ization of the firm, the location, the address and telephone number, and some description of the firms products On-line service. One swift way to get at needed information and analysis in the sea of information is to make use of on -line service. with electronic information services. search results can be obtained within minutes When going international, a negotiator is exposed to an environment Many of the assumptions on which people conduct their activities may not hold true internationally. They have learnt that doing business in different countries and with different people is not at all an easy task a qualified negotiator must have a good understanding of his counterparts countrys economic as well as political situations as the whole. In add ition, he must understand pertinent/relevant issues in order to avoid violating local laws The following illustrations give a glimpse of the setback in international business activities due to lack of such knowledge ase A Chinese engineering company in Gabon dismissed quite a number of local workers after it had completed the framework of a construction, which gave rise to a strike lasting for 40 days. Th ny had to hold a tough negotiation with the local workers who demanded a large sum of subsid ies in line with the labor law of the country Only by this time was the company aware of their ignorance of the local law and
information is often available at the government websites. Service organizations A wide variety of service organizations including banks, accounting firms, freight forwarders, airlines, international trade consultants, research firms, and publishing houses provide specialized information on their special fields. Their information concentrates on business practices, legislative or regulatory requirements, and political stability, as well as trade and financial data. Going directly to these service organizations for what you need is often sufficient and moneysaving. Directories and newsletters. A large number of industry directories are available on local, national, and international levels. The directories primarily serve to identify firms and to provide very general background information, such as the name of the chief executive officer, the level of capitalization of the firm, the location, the address and telephone number, and some description of the firm’s products. On-line service. One swift way to get at needed information and analysis in the sea of information is to make use of on-line service. With electronic information services, search results can be obtained within minutes. 3. Local laws and regulations When going international, a negotiator is exposed to an environment. Many of the assumptions on which people conduct their activities may not hold true internationally. They have learnt that doing business in different countries and with different people is not at all an easy task. A qualified negotiator must have a good understanding of his counterpart’s country’s economic as well as political situations as the whole. In addition, he must understand pertinent/relevant issues in order to avoid violating local laws. The following illustrations give a glimpse of the setback in international business activities due to lack of such knowledge. Case A Chinese engineering company in Gabon dismissed quite a number of local workers after it had completed the framework of a construction, which gave rise to a strike lasting for 40 days. The company had to hold a tough negotiation with the local workers, who demanded a large sum of subsidies in line with the labor law of the country. Only by this time was the company aware of their ignorance of the local law and
heavy losses thus happened The company was informed that, according to Gabon's labor laborer automatically turns into a permanent laborer if he keeps the without being fired. As a permanent laborer, he is entitled to family subsidies(e or two wives and three kids), transportation fee and unemployment subsid ies The result of the negotiation was obv ious the company had to pay a large sum of subsid ies which were not included in the bud get 4. Information on financial cred it Financial credit means information on the three C's: character, capacity and capital----tl hi po sition Some Chinese companies do not take investigation on their trade partners financial position seriously and thus induce great losses to their companies A company in Suzhou hoped to tab into the market of South Africa. Out of consideration of cautiousness, they sent a mission to the country for field surver The meeting with the general manager was arranged in a well-lighted and carefully furnished room in a superb office mansion. The mission was received at the gate of the elevator and immediately led to the meeting room by a smiling lad The general manger, having an expensive cigar between his fingers and wearing confident expression in his face, introduced his company and his way of management in a detailed and enthusiastic manner The introduction and the whole atmosphere convinced the mission of their partners financial strength and so as soon as they returned back to China, they sent the first batch of goods worth more than $1 million to their"rich"partner, but they did not receive anything in return Only some time later did they find out what they saw in the room was a carefully arranged" trap” The fatty general manager was an inv ited local actor and the receptionist lad was the real manager, and the well furnished and decorated meeting room was leased for this special purpose Market research is always an ind ispensable part of wO Marketing research should begin with consumers'consumption desires and needs, their present demand and demand, preference to what
heavy losses thus happened. The company was informed that, according to Gabon’s labor law, a casual laborer automatically turns into a permanent laborer if he keeps the job for a week without being fired. As a permanent laborer, he is entitled to family subsidies (enough for two wives and three kids), transportation fee and unemployment subsidies. The result of the negotiation was obvious the company had to pay a large sum of subsidies which were not included in the budget. 4. Information on financial credit Financial credit means information on the three C’s: character, capacity and capital----the of the counterpart, his to repay, and the soundness of his_____ position. Some Chinese companies do not take investigation on their trade partners’ financial position seriously and thus induce great losses to their companies. Case A company in Suzhou hoped to tab into the market of South Africa. Out of consideration of cautiousness, they sent a mission to the country for field survey. The meeting with the general manager was arranged in a well-lighted and carefully furnished room in a superb office mansion. The mission was received at the gate of the elevator and immediately led to the meeting room by a smiling lady. The general manger, having an expensive cigar between his fingers and wearing confident expression in his face, introduced his company and his way of management in a detailed and enthusiastic manner. The introduction and the whole atmosphere convinced the mission of their partner’s financial strength and so as soon as they returned back to China, they sent the first batch of goods worth more than $1 million to their “rich” partner, but they did not receive anything in return. Only some time later did they find out what they saw in the room was a carefully arranged “trap”: The fatty general manager was an invited local actor and the receptionist lady was the real manager, and the well furnished and decorated meeting room was leased for this special purpose. 5. Market survey Market research is always an indispensable part of work. Marketing research should begin with consumers’ consumption , desires and needs, their present demand and demand, preference to what