ContentsSupplemnentary ReadingReading 1NegotiationforBusinessOwnersReading 2Pre-negotiation Homework (1)Reading 3Pre-negotiation Homework (2)Reading 4NegotiationStylesReading5HowtoNegotiate:TheStrategiesReading 6The Negotiation ProcessReading7Seven Major Pitfalls toAvoid When NegotiatingReading 8Emotionand Nonverbal CommunicationinNegotiationReading 9TheBehavior of SkilledNegotiatorsReading 10Stress-free NegotiationsReading 11CulturalDifferencesinBusinessNegotiationsReading 12ClosingYour BusinessNegotiationsChinese Versions of the Dialogues in Section 2Keys
Contents Supplementary Reading Reading 1 Negotiation for Business Owners Reading 2 Pre-negotiation Homework (1) Reading 3 Pre-negotiation Homework (2) Reading 4 Negotiation Styles Reading 5 How to Negotiate: The Strategies Reading 6 The Negotiation Process Reading 7 Seven Major Pitfalls to Avoid When Negotiating Reading 8 Emotion and Nonverbal Communication in Negotiation Reading 9 The Behavior of Skilled Negotiators Reading 10 Stress-free Negotiations Reading 11 Cultural Differences in Business Negotiations Reading 12 Closing Your Business Negotiations Chinese Versions of the Dialogues in Section 2 Keys
SupplementaryReadingReadinglNegotiationforBusinessOwnersBusinessowners'abilitytonegotiateskillfullyisimportantbecausetypicallywhethertheyrealizeitornot,they spendhours everyweek negotiating with subordinates,suppliers,lenders,significantothers,children,parents,in-laws,cardealers,andothers.Decidinghowmuchtopayanewofficemanagerorwheretogotolunchwitha client involvesnegotiation.Theofficemanagermaychoosetoacceptlessmoneyif1oopercentofhealthbenefitsarepaid,whileaclientmayagreetogoforMexicanfoodifChinesefoodwill bethechoiceon thenext occasion.Even though all business owners are experiencednegotiators,they may not be skillednegotiators.Beinga skillful negotiator requires patienceattentiveness,flexibility.andawarenessofpersonalnegotiationstyle,issuesanddetailsofthecase,aswell asthegoalsandobjectives oftheotherparty.Negotiationcanbedescribedasnonviolentcommunicationbetweentwoormorepartieswhomayhaveconflictingand common interests inan attempttoreachanagreementthatmeetsthegoalsof oneorboth parties. In simple terms, negotiation is a process for getting something you want.Manypeople are afraid tonegotiate because ofall the stereotypes associated with negotiation.Althoughbusinessownersspenduptohalftheirtimeatworknegotiating,manystillfeeluncomfortablewiththeprocess.Somefearthattheymaycomeacrosstotheotherpartyasimpolite,pushy,unfair,orevencheap.One common misconception about negotiation is that good negotiators use tactics similar to thestereotypicaldeceitful,connivingused carsalesman.Being agoodnegotiatordoesnotmeanyouhavetoresorttobeingaslick,smoothtalker.Contrary to popular belief, negotiating should not be compared to a game or a war in which both partiesentertheprocesswiththegoalofwinningandcrushingtheotherparty'sspirit.Theendresult ofwaroragameisthatonepartycomes outastheclearwinnerandtheotherastheabsoluteloser.Upon completionofasuccessful negotiation, incontrast,bothparties shouldfeel thattheyhavewon something.Anotherreasonbusinessownersfeeluncomfortablenegotiatingisbecausetheyfeeltheyhavetomaketrade-offsbetweengettingalongwiththeothersideandgettingwhattheywant.Itisnotuncommonforbusinessownerstofeelthattheyhavetoeithergiveintotheotherside'sdemandsorplayhardball inorderto avoid conflict,damaging theirfuture relationship,orbeingtaken advantage ofby the otherpartyMany people feel more relaxed when they find out that they will be negotiating with a woman becausethey assume that women are not as aggressive as their male counterparts and, therefore,cannotbe aseffective as negotiators.This is another common misconception.While women tend to be moreconcernedwith preserving relationships and men with arriving at an agreementas quickly as possible,thisis notalwaysthecase.Somemenarepatientandaremoreinterested inachievingadealthatmeetstheneedsofallpartieswhilesomewomenprefertoenterthenegotiationwithacompetitivedrivetowinWhether you arenegotiating with women ormen,you should alwaysdo your homework.Learn asmuch
Supplementary Reading Reading 1 Negotiation for Business Owners Business owners’ ability to negotiate skillfully is important because typically, whether they realize it or not, they spend hours every week negotiating with subordinates, suppliers, lenders, significant others, children, parents, in-laws, car dealers, and others. Deciding how much to pay a new office manager or where to go to lunch with a client involves negotiation. The office manager may choose to accept less money if 100 percent of health benefits are paid, while a client may agree to go for Mexican foo d if Chinese food will be the choice on the next occasion. Even though all business owners are experienced negotiators, they may not be skilled negotiators. Being a skillful negotiator requires patience, attentiveness, flexibility, and awareness of personal negotiation style, issues and details of the case, as well as the goals and objectives of the other party. Negotiation can be described as nonviolent communication between two or more parties who may have conflicting and common interests in an attempt to reach an agreement that meets the goals of one or both parties. In simple terms, negotiation is a process for getting something you want. Many people are afraid to negotiate because of all the stereotypes associated with negotiation. Although business owners spend up to half their time at work negotiating, many still feel uncomfortable with the process. Some fear that they may come across to the other party as impolite, pushy, unfair, or even cheap. One common misconception about negotiation is that good negotiators use tactics similar to the stereotypical deceitful, conniving used car salesman. Being a good negotiator does not mean you have to resort to being a slick, smooth talker. Contrary to popular belief, negotiating should not be compared to a game or a war in which both parties enter the process with the goal of winning and crushing the other party’s spirit. The end result of war or a game is that one party comes out as the clear winner and the other as the absolute loser. Upon completion of a successful negotiation, in contrast, both parties should feel that they have won something. Another reason business owners feel uncomfortable negotiating is because they feel they have to make trade-offs between getting along with the other side and getting what they want. It is not uncommon for business owners to feel that they have to either give in to the other side’s demands or play hardball in order to avoid conflict, damaging their future relationship, or being taken advantage of by the other party. Many people feel more relaxed when they find out that they will be negotiating with a woman because they assume that women are not as aggressive as their male counterparts and, therefore, cannot be as effective as negotiators. This is another common misconception. While women tend to be more concerned with preserving relationships and men with arriving at an agreement as quickly as possible, this is not always the case. Some men are patient and are more interested in achieving a deal that meets the needs of all parties while some women prefer to enter the negotiation with a competitive drive to win. Whether you are negotiating with women or men, you should always do your homework. Learn as much
as you can about the members of the other team, develop a relationship with them and, if necessary.alteryournegotiationstylesothatitresonateswiththeotherteam'spersonalityNegotiationis like neithera gamenora war.It is about cooperation and signing an agreementthatmakesbothpartiesfeelthattheyhavebeensuccessful.Theprimarygoalofeffectivenegotiationshouldbetoachievea dealthat bothparties can live with andthataccomplishesyourgoalswithout makingthe otherpartywalkawayfromthedealorharmingavaluablerelationship.Basically,thewholepointofnegotiatingwith someone isto get something better than whatyouwouldget withoutnegotiating.Reading2Pre-negotiation Homework (1)Tobe a successful negotiator,it is imperativethatyoudoyourhomework.Itis suggested thatyou spendabouthalfthetimeyouspendnegotiatingonpreparingforthenegotiation.Ideal MeetingLocation.Onceyouhaveestablishedarelationshipwithsomeoneorhavenegotiatedwith that party before,you mayfeel comfortablenegotiating overthe telephone.Otherwise,conductingthemeetinginpersonwouldbebetterthanoverthephonebecauseitwill giveyoutheopportunitytoobservetheotherperson'sbodylanguageandmaintaineyecontact.If you decide to meet in person, offer to meet at your office if possible. Not only will you feel morecomfortable inyour office,but you also will beable to get quicker approval from senior people (ifnecessary);and itgives youthe home advantage.Themainadvantage of meeting at theother side'sofficesisthatyou canwithhold informationuntilyoureturntoyouroffice.Of course,ifneitherpartyiswillingtoagreetomeetateitheroffice,youcanalways meetat aneutral location.EvaluateYourNegotiation Style.Beforeyou can improveyournegotiation styleyou should think aboutevaluating your current style and your personality.Thinking about the last few negotiations youparticipatedin,whattacticsdoyouthink were successful?in whatareasdoyouthinkyoucouldimprove?Wouldyousayyouused hardorsoftbargainingtechniques?Didyoutendtobedirector indirectinyournegotiationdealings?What would you say are your hot buttons?If you think about howyou react indifferent situations and what your turn-ons and turnoffs are, you will be better prepared to handle yourselfprofessionally while maintaining your composureduringyournext negotiation.And this canbe anadvantagewhendealingwithpeoplewhosetempersgetthebestof them.EstablishYourGoals and Objectives.You needto determineyour primarygoal and objectives-thatis,whatyouwanttogetoutofthenegotiation.Yourprimarygoalshouldberealisticandaccessible.Let'ssayyourmaingoalistohirea newofficemanager.It is unrealistictoassumethatyouwillbeabletohirean officemanageratsoperyearand no benefits.Youshould expandyourmaingoalto includeotherobjectives.Forexample,you would liketohire a newofficemanagerandpay $4,000permonthand75percent of health and dental insurance, offer 10 days of vacation and 5 days of sick time for the first year,andmatchupto3percentofsalaryinthecompany's401(k)plan
as you can about the members of the other team, develop a relationship with them and, if necessary, alter your negotiation style so that it resonates with the other team’s personality. Negotiation is like neither a game nor a war. It is about cooperation and signing an agreement that makes both parties feel that they have been successful. The primary goal of effective negotiation should be to achieve a deal that both parties can live with and that accomplishes your goals without making the other party walk away from the deal or harming a valuable relationship. Basically, the whole point of negotiating with someone is to get something better than what you would get without negotiating. Reading 2 Pre-negotiation Homework (1) To be a successful negotiator, it is imperative that you do your homework. It is suggested that you spend about half the time you spend negotiating on preparing for the negotiation. Ideal Meeting Location. Once you have established a relationship with someone or have negotiated with that party before, you may feel comfortable negotiating over the telephone. Otherwise, conducting the meeting in person would be better than over the phone because it will give you the opportunity to observe the other person’s body language and maintain eye contact. If you decide to meet in person, offer to meet at your office if possible. Not only will you feel more comfortable in your office, but you also will be able to get quicker approval from senior people (if necessary); and it gives you the home advantage. The main advantage of meeting at the other side’s offices is that you can withhold information until you return to your office. Of course, if neither party is willing to agree to meet at either office, you can always meet at a neutral location. Evaluate Your Negotiation Style.Before you can improve your negotiation style, you should think about evaluating your current style and your personality. Thinking about the last few negotiations you participated in, what tactics do you think were successful? In what areas do you think you could improve? Would you say you used hard or soft bargaining techniques? Did you tend to be direct or indirect in your negotiation dealings? What would you say are your hot buttons? If you think about how you react in different situations and what your turn-ons and turnoffs are, you will be better prepared to handle yourself professionally while maintaining your composure during your next negotiation. And this can be an advantage when dealing with people whose tempers get the best of them. Establish Your Goals and Objectives. You need to determine your primary goal and objectives—that is, what you want to get out of the negotiation. Your primary goal should be realistic and accessible. Let’s say your main goal is to hire a new office manager. It is unrealistic to assume that you will be able to hire an office manager at $0 per year and no benefits. You should expand your main goal to include other objectives. For example, you would like to hire a new office manager and pay $4,000 per month and 75 percent of health and dental insurance, offer 10 days of vacation and 5 days of sick time for the first year, and match up to 3 percent of salary in the company’s 401(k) plan
ResearchtheOtherTeam'sMembersandPersonalities.Onceyouhaveestablishedyourgoalsandobjectives andthoseof the otherparty,thenextstepinpreparingfor negotiation isgatheringas muchinformationasyou can abouttheopposingparty'spersonalities.If youdonothavearelationshipwiththemalready,begintoestablishonebysettingupameetingortwopriortothenegotiation.Perhapsyoucanmeetinformallyoverlunchoneafternoon.ifyouareunabletomeetwithyourcounterpartspriortothe negotiation,consider calling their assistants to find outmore informationregarding how to make themcomfortable during the negotiation. Ask their assistants what they like to eat and drink so that you canhavethingspreparedatthetimeofthenegotiation.Alsothink abouthowyouwill gettheirattentionatthestartofthenegotiationmeeting.Whatdoyouhaveincommonwiththem?PerhapsyoubothliketohikeandyoucandiscusstrailsyouhavehikedrecentlyWhatdothey liketodoforfun?Ifthey liketoplaytennis,youcanaskaboutthelastgametheyplayedor how well they played.Or you could bring up the latest professional tennis tournamentthat you recentysaw on television.This is a great way to get their attention before you begin negotiating.Do you think the other side uses a hard or soft bargaining strategy? Can you trust them? How long dotheyanticipatetheprocesswill take?Doyouknowanyoneacquaintedwitha memberoftheoppositeteam who can give you some information about them?What makes them tick? Are they impatient?Demanding?Howlongdotheyanticipatethisprocesstotake?Themoreyouknowabout the people on theother side, themore preparedyou willbe forthe negotiation.Andthemorepreparedyouare,themoreconfidentyouwill bebecauseyouwillknowwhattoexpect.Make a List of Assumptions.Skilled negotiators realize that people sometimes have mistakenassumptionsthattheybelievetobefacts.Whennegotiatingwithanotherpartyforthefirsttime,wehavetomakecertainassumptionsastowhatsomeoftheirbodylanguage,expressions,orphrasesmeanAskforclarification!Don'tassumeanything.Makea listofassumptionstobringtothenegotiationandclarifyanypointsthatareunclearoruncertain.GatherFacts and Conduct Research.Thenext step involvesgathering as much information as youcan abouthe subjectof thenegotiation.Let'ssaythatyouowna pizzarestaurantandyouarenegotiatingpriceswiththelandlordwhoownsthebuildinginwhichyouoperateyourrestaurant.Topersuadetheothersidethatyouareaskingforsomethingthatisreasonable,youneedtoprovidesupportingdataFor example, if you would like to renew your lease at the same price you paid the previous year, youwouldneedtoprovewhy it wouldbeunfair of yourlandlord to increaseyour rent.Researchregardingreal estate prices in similar buildings located in the surrounding area of your restaurant,restaurantoccupancyratesinyourcity,thenumberofnewrestaurantopeningsinthepastyearinyourcity,andtheaverageincrease inrent inyourcitywouldbesometopicsworthresearchingpriortothenegotiation.Youcan find this type of information on the Internet, by asking forassistance at your local community library.byspeakingtoalocal real estateleasingagent,orbymeetingwithotherbuildingowners inyour area.You may also want to find out about what the current issues are in the real estate industry. Another wayto getthe latest news and informationregardingtherealestate industryis to read tradepublications orvisit theweb sites ofrealestatetradeassociationsforcurrentarticles
Research the Other Team’s Members and Personalities. Once you have established your goals and objectives and those of the other party, the next step in preparing for negotiation is gathering as much information as you can about the opposing party’s personalities. If you do not have a relationship with them already, begin to establish one by setting up a meeting or two prior to the negotiation. Perhaps you can meet informally over lunch one afternoon. If you are unable to meet with your counterparts prior to the negotiation, consider calling their assistants to find out more information regarding how to m ake them comfortable during the negotiation. Ask their assistants what they like to eat and drink so that you can have things prepared at the time of the negotiation. Also think about how you will get their attention at the start of the negotiation meeting. What do you have in common with them? Perhaps you both like to hike and you can discuss trails you have hiked recently. What do they like to do for fun? If they like to play tennis, you can ask about the last game they played or how well they played. Or you could bring up the latest professional tennis tournament that you recently saw on television. This is a great way to get their attention before you begin negotiating. Do you think the other side uses a hard or soft bargaining strategy? Can you trust them? How long do they anticipate the process will take? Do you know anyone acquainted with a member of the opposite team who can give you some information about them? What makes them tick? Are they impatient? Demanding? How long do they anticipate this process to take? The more you know about the people on the other side, the more prepared you will be for the negotiation. And the more prepared you are, the more confident you will be because you will know what to expect. Make a List of Assumptions. Skilled negotiators realize that people sometimes have mistaken assumptions that they believe to be facts. When negotiating with another party for the first time, we have to make certain assumptions as to what some of their body language, expressions, or phrases mean. Ask for clarification! Don’t assume anything. Make a list of assumptions to bring to the negotiation and clarify any points that are unclear or uncertain. Gather Facts and Conduct Research. The next step involves gathering as much information as you can about the subject of the negotiation. Let’s say that you own a pizza restaurant and you are negotiating prices with the landlord who owns the building in which you operate your restaurant. To persuade the other side that you are asking for something that is reasonable, you need to provide supporting data. For example, if you would like to renew your lease at the same price you paid the previous year, you would need to prove why it would be unfair of your landlord to increase your rent. Research regarding real estate prices in similar buildings located in the surrounding area of your restaurant, restaurant occupancy rates in your city, the number of new restaurant openings in the past year in your city, and the average increase in rent in your city would be some topics worth researching prior to the negotiation. You can find this type of information on the Internet, by asking for assistance at your local community library, by speaking to a local real estate leasing agent, or by meeting with other building owners in your area. You may also want to find out about what the current issues are in the real estate industry. Another way to get the latest news and information regarding the real estate industry is to read trade publications or visit the web sites of real estate trade associations for current articles
Reading3Pre-negotiationHomework(2)FocusontheOtherSide's InterestsratherThanStatedPositions.Itis almostalways inyourbestinteresttofindawin-winsolutionforbothparties,tocompleteanegotiationknowingthatbothsidesaresatisfiedwiththeresults.Iftheotherpartyisdissatisfied,itcanhavenegativeconsequencesforyou.Forexample,if a customer feelshewas cheated,youwill loseher as a customerandperhapsfuturecustomers because ofhernegative comments.Ifanewhire feels cheated out ofa better salary,hemayquithis jobinafewmonthswhenhefindssomethingelsethatpaysmoreafteryoujustinvestedtimeandmoney in training him.Leaving the other side feeling disgruntled,cheated,or deceived destroysrelationships, which could be risky for your business.The next step in preparing for negotiation is to imagine that you havetonegotiateforthe other sideanddevelopalistofquestionsyoushouldaskthem.Putyourselfintheirshoesanddotheirhomework.Whatquestionswilltheyaskyourteam?Bepreparedtoanswerthem.Althoughitseemslikethemostimportantquestiontoasktheothersideiswhattheywant,RogerFisherstatesthatthereis anotherevenmore crucial questionthatlooks attheunderlying interests ofthe otherparty. Why do they want what they want? Walk a mile in their shoes and determine what you thinkmotivatestheirstatedpositionsYou may already befamiliar with this story,but imagine that one of your coworkers, Lisa, finds a bag of30orangesonsaleata localgrocerystore.Sheneedsonly10of themsoshebringstheremaining20orangestotheofficetosharewithanyonewhowantsthem.BothKarenandAnnadecidetheywantthemAfter negotiating for a few minutes, they decide to each take home 10 oranges.However, if theyhadfocusedontheir interests(onewants just thepeelsand the otherwants onlythejuice)insteadoftheirstatedpositions(wantingtheoranges),theywouldhavebeenableto sharethe20orangesandachievetheirgoals.Karenwantedtheorangessoshecouldsqueezefreshorangejuiceinher juicer.Annawanted theoranges so shecouldgratetheorangepeelsforanorangemuffinrecipe.Sinceneithersideaskedtheopposingsidewhyshewantedtheoranges,bothKarenandAnnahadtomakeatriptothesupermarket.Anna'srecipecalledfortherindsof20orangesandKarenneededenoughjuice for herfamily of five for breakfast, which also requiredthe juice from20 oranges. If they had focusedon interests,theywouldnoteachhavehadtomakeatriptothegrocerystore,andthepeels ofKaren'sorangesandtheorange juicefromAnna'sorangeswouldnothavebeenwasted.Don'tassumethateveryparty'sinterestsandmotivationsrevolvearoundmoney.Let'sassumethatyouownasmallmarketingresearchfirmandarelookingforanewprojectmanager.Youhavecompletedtheinterviews andare intheprocessof negotiatinganofferwithaprospectivecandidate.Whenyouofferhim a salary of s50.000 a year, he states that he thinks you should offer him $55,000.When you ask himwhyhethinkshe deserves s5,ooo morethan youoffered him,you realizethat money isnot what ismotivating him. He feels he should get anextra s5,oooin returnfor settling for the title of project manager.Hehas 10years of projectmanagementexperienceand thinks he shouldhave thetitleof project directorinstead of project manager.He is considering applyingtoanexecutiveMBAeveningprogramat the local
Reading 3 Pre-negotiation Homework (2) Focus on the Other Side’s Interests rather Than Stated Positions. It is almost always in your best interest to find a win-win solution for both parties, to complete a negotiation knowing that both sides are satisfied with the results. If the other party is dissatisfied, it can have negative consequences for you. For example, if a customer feels he was cheated, you will lose her as a customer and perhaps future customers because of her negative comments. If a new hire feels cheated out of a better salary, he may quit his job in a few months when he finds something else that pays more after you just invested time and money in training him. Leaving the other side feeling disgruntled, cheated, or deceived destroys relationships, which could be risky for your business. The next step in preparing for negotiation is to imagine that you have to negotiate for the other side and develop a list of questions you should ask them. Put yourself in their shoes and do their homework. What questions will they ask your team? Be prepared to answer them. Although it seems like the most important question to ask the other side is what they want, Roger Fisher states that there is another even more crucial question that looks at the underlying interests of the other party. Why do they want what they want? Walk a mile in their shoes and determine what you think motivates their stated positions. You may already be familiar with this story, but imagine that one of your coworkers, Lisa, finds a bag of 30 oranges on sale at a local grocery store. She needs only 10 of them so she brings the remaining 20 oranges to the office to share with anyone who wants them. Both Karen and Anna decide they want them. After negotiating for a few minutes, they decide to each take home 10 oranges. However, if they had focused on their interests (one wants just the peels and the other wants only the juice) instead of their stated positions (wanting the oranges), they would have been able to share the 20 oranges and achieve their goals. Karen wanted the oranges so she could squeeze fresh orange juice in her juicer. Anna wanted the oranges so she could grate the orange peels for an orange muffin recipe. Since neither side asked the opposing side why she wanted the oranges, both Karen and Anna had to make a trip to the supermarket. Anna’s recipe called for the rinds of 20 oranges and Karen needed enough juice for her family of five for breakfast, which also required the juice from 20 oranges. If they had focused on interests, they would not each have had to make a trip to the grocery store, and the peels of Karen’s oranges and the orange juice from Anna’s oranges would not have been wasted. Don’t assume that every party’s interests and motivations revolve around money. Let’s assume that you own a small marketing research firm and are looking for a new project manager. You have completed the interviews and are in the process of negotiating an offer with a prospective candidate. When you offer him a salary of $50,000 a year, he states that he thinks you should offer him $55,000. When you ask him why he thinks he deserves $5,000 more than you offered him, you realize that money is not what is motivating him. He feels he should get an extra $5,000 in return for settling for the title of project manager. He has 10 years of project management experience and thinks he should have the title of project director instead of project manager. He is considering applying to an executive MBA evening program at the local