Unit 6 Negotiation Procedure + opening stage

Unit6NegotiationProcedure1.CollectingInfo2.FormingtheNegotiationTeam3.PlanningforInternationalBusinessNegotiation4.OpeningofInternationalBusinessNegotiation5.Bargainingprocess6.CloseadealNegotiationProcedure1.CollectingInfoa)Qualificationandcreditstatusb)Negotiationrepresentativesc)Marketquotationsd)Lawsandcultures2.FormingtheNegotiationTeama)Sizeofthenegotiationteamb)Staffingthenegotiationteamc)Cooperationbetweenmembersd)SolicitingthecoordinationandsupportfromtheoutsidemembersReview3.PlanningforInternationalBusinessNegotiationa)Negotiationtargets(highest,acceptable,lowest)b)Negotiationagenda(timing,site,issues)c)Negotiationstrategies(factorsinvolvedindecidingstrategies)I.Willthenegotiationtakeplaceatthehostcourt,theguestcourtoraneutralground?II.Whataretheadvantagesorstrengthseachpartyhas?III.Whichpartywillbeaffectedmoregreatlybytheoutcomeofthenegotiation?IV.Whatarethestrengthsofthecounterpartandthecharacteroftheirchiefnegotiator?V.Whichpartywillbeaffectedmoregreatlybythelengthoftimeofnegotiation?VI.Isitnecessarytobuilduplong-termcooperativerelationship?•Theopeningusuallyhastoundergothefollowingthreesteps:1.Offeringthemeetingagendatoeveryrepresentative2.Exchangeideasontheagendaandrelatedquestions3.ThechiefrepresentativefromeachpartymakingstatementsrespectivelyOpeningsteps•CaseⅦTheAGcompanyfromKoreawasinvitedtotheSiemensCompanyofGermanytohaveanegotiationabouttherailtransportationcontrollingsystemandequipment.InthewideandbrightnegotiationroomintheSiemensHeadquarters,representativesfrombothpartiestookseatssuccessively.1.Aftertheprologuefullofwitsandhumor,theexecutivesecretaryhandedoutthenegotiationagendatoeveryrepresentativepresent.2.Thenbothpartiesexchangedideasabouttheagenda.TheKoreanrepresentativessuggestedaddingtwotopicswithtechtestingandtheGermanpartyagreed.3.Duringthefollowingperiod,thechiefrepresentativesfrombothpartiesmadethestatementsaboutthemeaningsofthetechnologytransfer,howtoassuretheirbenefits,therankinglevelsofthetech,internationaldemandsandsupply,pricesofsimilartechnologytransfersaswellasthehinderstheywouldpossiblymeetinthetradeoftheitemrespectively.InthecourseofGermanrepresentative’sstatement,theKoreanrepresentativeslistenedcarefullyandputdownthekeypoints,alsooccasionallyaskingthemeaningsofseveraltermsandsomedetailedparametersoftechnologicalfeatures.Administerthemeetingagenda•Contents:1.Schedulesofthemeetings(timearrangement)2.Thesubjectsofthemeetings(issuesorproblems)3.Profilesoftherepresentatives•Functions:1.Assuretheappropriateprogress2.Saverecordingtime3.Makerepresentativesmoreconcentrateonlisteningtothestatementsoftheotherparty4.HaveaclearpictureofthekeypointsBackgroundinfoforCaseⅧ&Ⅸ•AsIndiaisontheroadtoaneconomicsuperpowerrapidlyithasbecomethetargetcountrywherevariousglobalcomputerandsoftwarecompaniescometoinvestinestablishingfactories.Bangalore,acityinSouthIndia,hasattractedalargenumberofglobalfirst-classITcompaniesforitsconvenienttransportation,talentedpeopleandhumaneenvironment,soitiscalled“IndianSiliconValley”.However,in2004,thiscity,withapopulationofover6.8million,onlyhad2700guestroomsandsuitesinitshotels,1/16ofthehotelroomsinTokyowithapopulationof12.7minJapan.Inadequatehotelroomsandtheincreasinghotelfeesmadeit“themostexpensivecityinhotelfees”and90%ofitsguestroomsareoccupiedtheyearround.Exchangeideas:CaseⅧ•Inordertoscrambletheextremelyscarcehotelroomresources,morethan100multi-nationalcompaniesincludingtheAmericanIBMCompanyhavesignedacontractof“Prioritytouse1,500to2,000room-dayseveryyear”.IBMhasaroutinenegotiationwiththehotel.IBMwouldalwaysproposeayearlyroomuselistandsegmentitintothechangesoftheroomuseeverymonthwiththeaspirationthatthehotelwouldsatisfyitsneed.Rep.fromthehotelemphasizesthattheyhavetoassurethenumberoftheguestroomsrequestedbyotherhundredsofclients.SoitisdifficulttomeettheneedofIBM.However,theyneedtosignacontracttoclarifythereasonableroomnumbersandpricerise:1.Quotaisusedupornot,IBMmustpayallthebills2.Ifthenumberexceedsthestipulatednumber,nofavorableprice3.Ifunderthestipulatednumber,limitthequotaintheyearthatfollowsExchangeideas•Representativesfrombothpartiesmayaswellexchangeideasontheagendaproposedbyonepartyandreachagreementonthe:1.Goal(reasonsorpurpose,benefits)2.Subject3.schedule•Theexchangeoftheideascannotonlycomplementandimprovetheagendaofthenegotiation,butalsocanavoidtheunfairnesscausedbytheon-sideddecisionOpeningstatements•Toclarifytheviewpoints,createadvantageousatmosphereforthepartyandexplorethereactionoftheotherparty.•CaseⅨWhatarethekeypointstobenegotiated?•IBMCompanyemphasizedtothehotelthatitwasquiteimportanttomakesurethatallIBMexecutivesandtechnicianstoIndiaontheirbusinesstriphaveroomstostayatanytime,foritwasvitaltothecorporateoperationasitwouldaffectthedevelopmentofIBMinBangalore.•Rep.fromthehotelstatedthattheypaidmuchattentiontoIBMcompanyandhopedtodevelopalong-termrelationshipwithit,buttheycouldonlyuseannualquotaandpricelevertoallocatethequota.Contentsofopeningstatements1.Yourparty’sunderstandingoftheproblems2.Theinterestsyourpartyhopestoobtain3.Thepartsyouar