Unit 4
Opening of International
Business Negotiation
Business negotiations are conducted in the following four phases:
the preparation phase
the opening phases
the bargaining phase
and the closing phase
In the four phases, the negotiating parties claim values, create values and finally overcome barriers to arrangement in which the two sides try to maximize their own interests by resolving their conflicts.
1. Creating a right negotiation atmosphere
The international business negotiation atmosphere refers to the atmosphere and the surroundings that one or both parties create before the negotiation gets a start, which can reflect the frankness, national characteristics, cultural attributes, style choice and psychological implications of one party or both parties.
The function of negotiation Atmosphere
Different negotiation atmospheres have different impacts on the negotiations.
High-spirit atmosphere
Refers to the situation in which the negotiation is animated as both parties are positive and enthusiastic, and are optimistic about the prospect of the negotiation, and generate pleasant elements as the leading factors.
Usually when our party gets the upper hand and hopes to reach the agreement with the other party, high-spirit climate ought to be created.
(2) Low-spirit atmosphere
It is the one that is serious, depressing and downcast, and it is the situation where the negotiators are in low spirit, having an indifferent attitude with unpleasant factors in a leading role.
Usually when we still have the bargaining ability and counters but can not secure an absolute advantageous position and we have to exert some pressure on the other party, we can attempt to create a low-spirit atmosphere.
(3) Natural atmosphere
In a natural atmosphere, negotiation is neither animated nor oppressive. Both parties are in a natural and steady mood and have peach of mind when they take party in the negotiation..
This kind of atmosphere will be of great help to convey accurate and trustworthy information.
When we know little about our negotiation partners, natural atmosphere is suitable for both parties to start the conversation.
In most cases, we should create an advantageous atmosphere before or in the opening of the negotiation so as to direct the negotiation and manipulate the other negotiation rivals. If a harmonious atmosphere is set up, both parties will have easygoing communication and discussion; if one or both parties let off steam and blame each other, it will cast a shadow on the negotiation.
However, under the counterpart’s manifestation of friendly, courteous or cold manners in the initial meeting, we ought to be keen to catch some delicate change in behaviors as well, for it can possibly imply a sudden change in the situation.
Negotiation atmosphere
Positive and friendly
Brief and straightforward
Sedate and reserved
Dilatory and protracted
Tense and contradictory
Cold and perfunctory
Factors Influencing the Opening
(1) The behavior of the negotiators
☆ Facial expressions
☆ Temperament
☆ Grace
Grace refers to the external display of one’s quality, knowledge and cultivation. Grace can be reflected from the following aspects:
a. Appearance and manners.
b. Speech and deportment.
c. State of mind.
d. Personal hygiene.
(2) Negotiation environment
☆ Choice of sites
☆ Arrangement of the seats
☆ Media and public opinions
(3) Prologue and opening remarks
2. Opening steps
The opening usually has to undergo the following three steps:
Offering the meeting agenda to every representative
Exchange ideas on the agenda and related questions
The chief representative from each party making statements respectively
Administer the meeting agenda
Contents:
Schedules of the meetings (time arrangement)
The subjects of the meetings (issues or problems)
Profiles of the representatives
Functions:
Assure the appropriate progress
Save recording time
Make representatives more concentrate on listening to the statements of the other party
Have a clear picture of the key points
Exchange ideas
Representatives from both parties may as well exchange ideas on the agenda proposed by one party and reach agreement on the:
Goal (reasons or purpose, benefits)
Subject
schedule
The exchange of the ideas can not only complement and improve the agenda of the negotiation, but also can avoid the unfairness caused by the on-sided decision.
Opening statements
To clarify the viewpoints, create advantageous atmosphere for the party and explore the reaction of the other party.
1. Contents of opening statements:
Your party’s understanding of the problems
The interests your party hopes to obtain
The parts you are willing to discuss (potential concession)
Benefits you have brought in the previous cooperation
Possible opportunities and obstacle
(2) Methods for delivering opening statements
A varied choice of statement methods can create a varied atmosphere for the negotiation.
(3) Proper reactions when one party listens to the statements of the other party
When the other party makes statements, our party should do the following things:
Form a clear picture of the rival’s opinion and ask them questions to clarify every point that we are not clear;
Try to take notes while listening to them, and write down their arguments but do not argue, attack or question them immediately;
We should be good at summarizing the points of the other party and make the key points of the negotiation stand out;
Don’t ask any aggressive questions when they are making the statements;
Give a summing-up speech at the end to review and show your concern for the interests of all the relevant parties; propose a highly feasible and thorough solution to make the negotiation prospect expectant.
Opening strategies
Opening strategies are the measures that negotiators take to gain an upper hand in the opening phase so as to in turn secure their control over the negotiation elements.
What advantages could be obtained?
Control the pace and direction of the negotiation as well as affect the results of the negotiation
Five Opening Strategies
Resonant opening 一致式开局策略
Frank opening 坦诚式开局策略
Evasive opening 推托式开局策略
Nitpicking opening 挑剔式开局策略
Offensive opening 进攻式开局策略
Resonant opening
Also called one-paragraph opening strategy. At the beginning, the negotiators use an “assertive” tone to build up a kind of “resonance” in order that both parties can go to a further step under its direction.
Can be used with the aim of creating conditions for the other party to agree with us.
Case Ⅰ
1972年2月，美国总统尼克松访华，中美双方将要展开一场具有重大历史意义的国际谈判。为了创造一种融洽和谐的谈判环境和气氛，中国方面在周恩来总理的亲自领导下，对谈判过程中的各种环境都做了精心而又周密的准备和安排，甚至对宴会上要演奏的中美两国民间乐曲都进行了精心的挑选。在欢迎尼克松一行的国宴上，当军乐队熟练地演奏起由周总理亲自选定的《美丽的亚美利加》时，尼克松总统简直听呆了，他绝没有想到能在中国的北京听到他如此熟悉的乐曲，因为，这是他平生最喜爱的并且指定在他的就职典礼上演奏的家乡乐曲。敬酒时，他特地到乐队前表示感谢，此时，国宴达到了高潮，而一种融洽而热烈的气氛也同时感染了美国客人。
一个小小的精心安排，赢得了和谐融洽的谈判气氛，这不能不说是一种高超的谈判艺术。美国总统杰弗逊曾经针对谈判环境说过这样一句意味深长的话：“在不舒适的环境下，人们可能会违背本意，言不由衷。”英国政界领袖欧内斯特•贝文则说，根据他平生参加的各种会谈的经验，他发现，在舒适明朗、色彩悦目的房间内举行的会谈，大多比较成功。
Case Ⅱ
日本首相田中角荣上个世纪70年代为恢复中日邦交正常化到达北京，他怀着等待中日间最高首脑会谈的紧张心情，在迎宾馆休息。迎宾馆内气温舒适，田中角荣的心情也十分舒畅，与随从的陪同人员谈笑风生。他的秘书早饭茂三仔细看了一下房间的温度计，是“度”。这一田中角荣习惯的“度”使得他心情舒畅，也为谈判的顺利进行创造了条件。
What do you learn from these two case?
Conferring Approach, Inquiring Approach and Complementing Approach
Conferring approach （商议）suggests that we ask for ideas and approve of the counterpart's proposals. (not to make feel flattered but that we understand and share their ideas)
Inquiring approach （询问）is to design your answer in the form of question to induce your counterpart to move toward the goal that you have set. “What do you think about the idea that we put the price terms aside and come back later? ”
Complementing approach （补充）encourages you to avail yourself of the opportunity to add your own opinions to that of the other party.
Frank opening
Refers to the way in which we convey our opinions to the other party frankly so as make a breakthrough in the negotiation.
It is usually used between regular clients because it can save lots of courtesies and time, and we can put forward our opinions and requirements directly, which may also make your partners trust us more.
Lesson from the Case
Frank opening also applies to the party with weak negotiation power. When we are quite clear about each other’s strengths and weakness, frankly revealing our weaknesses to the other party can help us gain the understanding and leave a good impression on the other party if we demonstrate our sincerity in this way.
Evasive opening
Also referred to as reserved opening. At the beginning we do not answer some key questions raised by the other party explicitly but reserve the information, so that the other party will generate a feeling of mystery and follow our plan.
Lesson from the Case
The Chinese side succeeded in that the strategy was not blindly applied. First, their products were indeed of good quality and the three buyers were convinced and were eager to buy them; Second, they imposed pressure on the “big fish” by talking to the small ones first, make him worry about the source of goods. It is in this way, the quantity and price rise significantly.
Prerequisites（先决条件） for us to use reserved opening strategy
We are quite confident about our competitiveness.
We should be good at deploying resources.
We should not disobey the game principles of international business negotiation, . we should be trustworthy and should not convey false information.
Nitpicking opening
Refers to the way in which at the very early beginning of the negotiation, we blame the other party for their bad manners, diplomatic and cultural mistakes severely so as to bring a sense of guilt to them and to create tension, to confuse them, to suppress their requests and to force the other party to make compromises and concessions.
Offensive opening
Not to blame our counterpart for their faults but to express our firm attitude through well prepared speech or behavior so as to gain the awe from the rival and force them to start the negotiation in accordance with our intention.
As offensive opening will get the negotiation trapped in a competitive, nervous and tense atmosphere from the beginning, hurt the other party easily and affect the ongoing of the negotiation, it should not be used casually ad carelessly.
Relationship and opening strategies
If we have repeat business and are in harmony with our partners for many years…
frank opening
If we have general relationships with our partners…
resonant opening
If the previous cooperation was not smooth…
faultfinding opening
Powers and opening strategies
If two side are evenly matched in power or strength…
resonance opening can be used to eliminate the alertness or vigilance of the other party
If we are powerful and in a strong position…
offensive opening with a combination of flexibility and yielding can be attempted to play down the high expectation of the other party
If we are relatively weak and not powerful…
frank opening to invoke the other party’s understanding of our situation
Situational Dialogues
1 Prologue 开场白
A: I would like to present our comments in the following order. First all of, I will outline the characteristics of our product. Next, I plan to show you how successful it is in Japan. Then, I will touch on its general price level and competitive products, which I am sure you are interested in. I intend to close with our observations of the potential market in your country. Now, if it is all right with you, let me start with my explanation of the product.
B: Thank you. That sounds like a very thorough presentation. If I may add one more request, could you briefly describe the patent situation in this country?
A: I would be delighted to do so. When I present my views on the competitive products, I will refer to the patent situation. Are there any other questions or requests?
B: No, thank you. Please proceed with your presentation.
2. Focusing on the Problem
A: Let’s talk about your drawn work items. How about the supply position?
B: For most of the articles in the catalog, we have a good supply.
A: Here’s our inquiry list. You’ll find the required items, specifications and quantities all here.
B: Thanks. I’ll look into it and let you have our firm offers tomorrow.
A: As you know, the market has become very competitive.
B: You’ll find our prices very favorable.
3. Statement
A: Our products are available in various models and sizes. Here is our latest catalog, which shows most of our products. To improve the working efficiency and lessen the intensity of labor, we have improved our design to conform to the world market. This is the one we newly developed.
B: I’m not sure how this works.
A: OK. I can give you a quick demonstration or you can watch our video introduction of the product.
B: Good. Is there any superiority of your products?
A: Yes, compared with competing products, ours is smaller and lighter yet it is most advanced, reliable and user-friendly. The company executes ISO9000 in management and quality is guaranteed. What’s more, if you use this machine, it not only save time but your productivity will increase by 20%.
B: That’s impressive. Thank you for your introduction.
Task:
Your company is going to introduce a new foreign product in your country. Talk together for about 2 minutes about some the things that are important for the product promotion and decide which three would be the most important. Here are some ideas to help you.
Price of the product (2) Packaging
(3) Advertising (4) Offer of free samples
(5) Time of the year (6) Promotional gifts
(7) Consider competitor’s product (8) News conference
Thank You!
