CHAPTER 5: PREPARING TO NEGOTIATE
CHAPTER 6: NEGOTIATION PROCESS
International Business Negotiation, Barry Maude (Bloomsbury Academic, 2020, 2 nd edition)
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THE NEGOTIATION PROCESS
This model was built from diverse client experiences at organizations around
the globe since 1993.
PREPARE. Researching information, analyzing data and leverage,
identifying interests, relationship you want to build.
EXCHANGE. First engagement with the other side during a
negotiation. It is crucial for building trust, sharing information and
exploring options before positions are taken.
BARGAIN. Concessions and trade-offs (give and take). Make and
manage concessions to satisfy both parties while creating and
capturing lasting value.
CONCLUDE. The point in the process when you reach an agreement.
Verify that the other side has the capacity to follow-through with their
commitments and to put the agreement in writing.
EXECUTE. Implementation of the agreement. This stage can also
lead to new negotiation opportunities.
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PRE-NEGOTIATION ACTIVITIES
INFORMATION GATHERING PART OF TABLE 5.2 PAGE 74
1. Collect primary data and consult with others in your organisation and others as
appropriate and possible
2. Collect secondary data – e.g. government and trade publications, annual reports,
internet searches
3. Obtain data on market conditions, future trends and how they may affect each party
4. Understand the other party or parties and their agenda and priorities
5. Obtain information about competitive alternatives the other party may be pursuing
6. Review history of the relationship between the parties from all sources
7. Review the previous negotiating strategies used by both parties
8. Assess the other side’s decision-making limits
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PREPARE: PLANNING ACTIVITIES
1) Set negotiation goals 7) Create an agenda for negotiation
2) Define your negotiation interests 8) Assess the goals and interests of
the other party
3) Define issues to be discussed
9) Create a ‘Negotiation Team’ and
4) Define the bargaining mix ( what is assign each member responsibilities
on the table and what is not) and roles to play)
5) Set limit levels on issues (i.e. 10) Outline the role of the Negotiation
optimistic, realistic, pessimistic) Team Leader
6) Develop your BATNA (best 11) Consult with others regarding your
alternative to a negotiated plan / strategy
agreement)
12) Logistics matters – seating
arrangement, food, drink, location,
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room availability
PREPARE: PROCEDURAL
ARRANGEMENTS
The following must all be agreed in advance of the
negotiations
The language in which negotiations will be conducted
The ground rules and basic procedures for negotiating
sessions
The accommodation and seating arrangement
Preparation and agreement of the negotiating agenda
Timescales and duration of negotiating sessions
Timescale and duration of the whole process
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PRE-NEGOTIATION ACTIVITIES
STRATEGY DEVELOPMENT TABLE 5.2 CONT’D PAGE 75
1. Develop team strategy (who will speak, who will introduce demands,
concessions, solutions)
2. Develop trade-off strategy on the issues (what you will give for what in
return)
3. Devise collaborative strategies (cooperative ideas and options)
4. Devise competitive attacking strategies (options and choices to be
highly aggressive)
5. Devise competitive defending strategies (options and choices to
defend against attacks)
6. Devise concession strategy – e.g. slow but planned concessions 6to
PRE-NEGOTIATION ACTIVITIES
PREPARATION ACTIVITIES TABLE 5.2 CONT’D PAGE 75
1) Role Play
2) Script the formal opening statement
3) Prepare ‘Open Ended’ Questions for the other party which will
require them to provide answers
4) Prepare for anticipated questions to your group from the other
party
5) Prepare visual and other aids (i.e. charts, graphs, brochures,
presentation aids)
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SETTING GOALS AND SUB GOALS
PAGES 75-76
Develop negotiating goals that are clearly defined, prioritized
and realistic.
Find out what the opponent’s goals and priorities are likely to
be so that you can develop appropriate offers and demands.
Use a combination of competitive and cooperative strategies
to achieve your goals, with cooperative strategies prevailing
towards the end of the negotiation
Break difficult goals down into sub goals
Direct negotiating activities towards achieving the overall
goal
Never lose sight of the overall goals and achievements
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required and demanded
FINDING THE “BATNA”
“ The Best Alternative to a Negotiated Agreement”
An alternative or different course of action to take
if negotiations fail and an agreement cannot be
reached. What is your best outside option?
The BATNA provides a negotiation bottom line –
the minimum amount required for a deal to be
acceptable.
Protects the negotiator from accepting
unfavorable terms
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DEVELOP YOUR BATNA
Thoroughly exploring your options in case of a failed
agreement can significantly strengthen your position.
Alternatives don't just appear — you often need to create
them.
Generating possible BATNAs requires three distinct operations:
1. Creating a list of possible actions to take if no agreement is reached.
2. Improving the most promising ideas and turning them into practical
alternatives.
3. Temporarily picking the alternative that seems the most promising.
Consider the other side’s BATNA.
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Source: Fisher, Roger. Getting to Yes: Negotiating
RESERVATION POINT
The reservation point is the least favourable
point at which one will accept a negotiated
agreement.
• for a seller this means the least amount
(minimum) or bottom line they would be
prepared to accept.
• for a buyer it would mean the most (maximum)
or bottom line that they would be prepared to
pay.
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DEFINING THE ZONE OF POSSIBLE AGREEMENT (ZOPA)
UNDERSTANDING EACH OTHERS’ INTERESTS OFTEN LEADS TO JOINT PROBLEM SOLVING AND AN INTEGRATIVE AGREEMENT
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MANIPULATING COMPONENTS OF STRUCTURE
TO IMPROVE NEGOTIATING OUTCOMES
Bring more parties into the negotiation
Drop parties from participating
Adding additional issues
By manipulating negotiation structure, the ‘ZONE’
of possible agreement can be expanded, and a
negotiated agreement made more likely
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