Negotiation process:

preparation, opening,
deployment and completion
Course 10
I. Preparing the negotiation
II. Opening negotiations
III. Negotiation’s progress
IV. Closing negotiations
I. Preparing the negotiation
You can even improvise better if you prepare better!
• The context
Situat
• The parties Where are we starting from?
ion
diagn
osis

• Your own objectives

Objec • Your partner’s possible objectives Where do we want to be?
tives

• General orientation: approach, alternatives, major decisions

Strate • Specific measures: fixing negotiation positions, action plans How do we prepare?
gy

• The team
Reso
urces • The mandate
and
What is the process going to look like?
organ
• The logistics
izatio
n
 What information can you gather about the opposite party?
Company
Company mission Financial
organization and
1. Situation diagnosis

and vision performance

management

Reputation in relation to clients, suppliers, Company size,

employees, public institutions, financial presence on the
institutions. market, market share.

Negotiation team: members, role of each member, mandate,

experience, negotiation style, reputation, connections.
 External factors impacting the
negotiation
Legal and • Trade policy regulations (trade conditions between countries), possible restrictions between countries,
state intervention in business relations.
• Fiscal policy, financial restrictions (that may impact business transactions, investments).
economic • Inflation rate, unemployment, exchange rate volatility
• Legal practice in case of disputes.
environment
1. Situation diagnosis

• Any other regulations that may impact the business.

• Market size, market segment, market share, the capacity of the business relationship
•
Business •
•
Competitors
Suppliers, clients
Available distribution channels, networks
environment •
•
Logistics
Available appropriate advertising channels

• Cultural differences between teams and even inside teams

• International experience of negotiators
Cultural • What cultural differences would mostly impact business? What time should you assign to
negotiation and decision making? Where should you establish the meetings, protocol, how
environment important are personal relations (should you find someone to introduce you, should you bring a
symbolic gift?)
Your own objectives
2. Establishing the objectives

General objectives Specific objectives

• What type of contract • Volume, quality, price, delivery terms,

would you sign: payment and financing terms, possible risks,
distribution, sales, insurance conditions, possible litigations,
promotion, export, IRR
consulting, etc.

Classify your objectives on scenarios: best outcome, acceptable outcome, unacceptable

outcome.
The other party’s objectives
- You have to try to ‘guess’ the other party’s objectives in
correspondence to your objectives.
2. Establishing the objectives

- See where you are on common ground and where there are
differences.
Yes:
- Prepare to
Accept or
Are the differences significant? - Rejectt

No
Negotiate

Are there any personal objectives as well? Are they according or contradictory to the company’s
objectives?
Outlining the strategy
The strategy will be outlined according to:
- The parties’ objectives, including setting these objectives among the
company priorities.
- Negotiators’ personality and negotiation style, their expertise, power
- The legal, business and cultural environment
3. The strategy

- The available time.

The strategy will include:
- The terms to be negotiated
- The sequence of the terms to be negotiated (sequential or integrated
negotiation)
- The approach
- A set of techniques and tactics that would be available
Methods for establishing the strategy:
- Brainstorming
- Debate
- Simulations.
Outlining the strategy
I. Decide how many points are on the negotiation list
- One point (ex: the price) Distributive strategy
- Several points Integrative strategy

II. The negotiation mix:

3. The strategy

- Establish a range for each point: what is the minimum level, the
maximum one and the realistic level
- BATNA
- Priorities among points
- Connections between points
- Best solutions that would mix certain points
- Points which can be used as compromises.
The team
- Choosing team members according to the objectives
- Assigning roles among team members according to: their position in the company,
4. Resources and organization

their expertise, their personality and negotiation style.

- Establishing a set of techniques to be used by each member (ex: good guy, bad
guy)
-The
Establishing
roles: limits for each member: the mandate
- The nice guy: shows sympathy and understanding towards the opponents
needs, acts in a spirit of cooperation
- The bad guy: acts on a position of force, argues against any arguments,
threats, bluffs, disagrees even to proposal coming from its own team.
- The inflexible guy: insists upon a strict limitation to the announced
objectives and agenda, check the conformation to the rules, might slow
down the negotiation.
- The observer: displays an objective attitude to the negotiation, suggest
methods and solutions to unlock the tensions, emphasizes the errors.
 The leader of the negotiation team:
- Knows the whole negotiation mandate
4. Resources and organization

- Leads the negotiations and directs the team actions.

- Is responsible for a unitary application of the strategy and objectives,
- Must have authority among team members (especially important
when the strategy should be changed during the talks).

The mandate contains:

- The position that each member should adopt for each point in negotiation
(the clauses of the future contract)
- the range within it is possible to negotiate for each point.
The negotiation file contains:
- Technical file: technical parameters, products quality, tolerance, guarantee.
- Commercial file: quantity, price, payment and delivery conditions.
- Financial file: data regarding the budget of the project, financing sources, partner’s
solvability.
II. Opening the negotiation
First impressions are formed; the initial attitude is very important!

What happens in the opening part/what role does this part have?
- The working climate is created (it can be a climate that stimulates communication or
not)
- You can get to know your partner
- The agenda and the working procedure is established: the entire time frame, what
topics shall be discussed, the proposed order.
- The partners can make the first proposals: you can display certain objectives and find
out about the objectives of the opposite party.

What advantages are there to being the party that establishes the agenda
and hosts the meetings?
First contacts
Relationship building
- establishes a climate of trust
- people are first introduced: you exchange business cards, you explain your role in the company, your role in the
negotiation (as much as you can expose).
- according to the cultural background: general personal information can be/not be discussed, gifts may or may not
be exchanged, discuss your experience in the country you are visiting, general impressions.
Etiquette
- manners, politeness, professional outfit, punctuality
- customs and gestures: who says hello first, forms of salute, gestures (shaking hands, bowing, nodding), who sits
down first, etc.
Non-verbal language:
- optimal physical distance to the partner,
- face expression: serious, focused on the discussion, eye contact.
Business cards:
- should be translated in the partners language
- should contain all the contact data: name, position, company name, address, telephone (should contain the
country prefix), e-mail, web-site.
III. Negotiation’s progress

Counter-
Arguments
arguments

Compromise
(understanding)
Argumentation
- Supporting the position on some points under debate
- it is a process that takes place in three phases: presentation of the thesis; its explanation;
demonstrating its validity. In the commercial negotiation, this is translated into the structuring on three
levels of the bidder's argument:
a) presentation of the thesis: statement of the characteristics of the offer (eg. the technical and
commercial characteristics of a product);
b) explanation: highlighting the advantages of the offer (each feature seen from the perspective
utility / benefits for the partner);
c) demonstration: evidence to support the above (eg documentation, samples, demonstrations, etc.).
Therefore, the arguments are not "recited", but "constructed", highlighted; explanations are provided
in relation to the client's expectations and the issuer's disposition (say what the partner wants to hear);
it does not only present the characteristics of the product, but also the advantages or benefits that it
provides to the other party).
An important premise of effective argumentation is the negotiator's ability to explain, to make his
position known and understood. In the process of explanation several techniques are used: definition
(of a notion), description (of a problem); comparison; analogy; exemplification.
Techniques used in argumentation
- using as many examples as you can: satisfied clients, opinions of specialists, authorities, norms in the practice,
statistics.
- underlining certain key aspects that you are presenting
- repeating certain key-words
- checking your opponent’s level of attention and comprehension
- comforting your opponent: building arguments upon what he/she understands and agrees upon.
- engaging the opponent in the conversation: asking the right questions (open or closed), your opponent starts
taking part in building your arguments.
- encourage testing of the product, explain all possible applications of the product.
Nestorian technique:
Progressive technique: Regressive technique: - Start with a strong argument to retain
- Starting with the weakest arguments - Starting with the strongest arguments attention, continue with arguments
and ending with the strongest and ending with the weakest which consolidate the first one and
- Recommended in important contracts - When the decision should be taken ending with another set of strong
- When time is abundant quickly arguments to close the deal.
- When partners haven’t previously - In cultures where time is a rare resource - Needs a long available time
- When partners have cooperated before - Is used between circumspect partners,
know each-other
belonging to different cultures.
Objections
Objections are of several kinds:
- insincere, used to test the partner, or to gain an advantage in negotiations, to make the other explain, justify;
- sincere, but unfounded, when the person who issues them lacks information or has misunderstood the advanced argument,
- sincere and well-founded, respectively the substantive objections, which have the greatest weight in negotiations.

Phrasing objections:
- categorical objection: "no", "I do not agree", "definitely not“
- justified categorical objection: “no because…”, “in not any case, because…” etc .;
- the recourse to values: no because the law says… / commercial customs / traditions, etc. do not allow”;
- expressing surprise: “you can't say that!”; "not true!";
- minimization: “it's not like that!”; "On the whole, the advantages are insignificant";
- partial acceptance (real or simulated): “yes, but…”; “Overall I agree, but in terms of…”);
- dodge: “we can’t think about this point”; "The issue is beyond us";
- blocking the argument: “I interrupt you, because…”; "Thank you for your sincerity, but…";
- the questions: “do you really think that this argument can be proved?”, “What do you mean by advantage in use?”;
- non-verbal objections: mime, gestures of disapproval, intense silence, etc. when presenting and explaining the
argument.
Dealing with objections
Strategies are adapted in relation to the nature of their objections, namely:
- ignoring or minimizing, when it comes to insincere objections;
- informing and explaining, when it comes to sincere but unfounded objections;
- acceptance and compensation, when it comes to substantive, sincere and well-founded objections.
Tactics:
Eliminating the drama
- is a way of accepting (partial) observation, minimizing its importance. The formula “yes, and…” is
practiced, which implies the acceptance of the observation and its reformulation from another angle, which
allows a less disadvantageous or even favorable interpretation. (You are right to claim this and if we think
about the results so far, we believe… ”). A related tactic is that of the “boomerang turning the objection
into an argument (“It is not a weak point, but an advantage, because, if we consider…”).
Selection involves choosing a few from a series of observations to be counter-arguments, namely those
that do not pose particular problems.
For the same purpose, the recording technique is used, when the objections are conscientiously noted,
telling the partner that all will be dealt with in due time. Another category of tactics are those that can be
used both to raise objections and to deal with the objections of the partner: questions, diversion, testimony.
Dealing with objections
Tactics:
Questions
- will be used to address objections when you want to stop critical arguments ("I didn't get it right: your restraint. Can
you explain your point of view to us?").
The diversion is also based on questions: to alleviate or remove an objection, you ask questions to which the partner is
obliged to answer “yes” (“…but, do you agree that this issue cannot question all the agreements we have reached so
far?”)
The testimony is based on recourse to authority or precedent ("In the contract I recently signed with company x, this
issue proved, in the end, unimportant").
In the case of a substantive observation, its treatment is done through a three-step approach: first, the observation is
legitimized (“We understand your point of view…”); then the observation is answered by a professional argumentation
(sober statement of facts, data, presentation of studies, references, certificates, etc., performing a demonstration);
checking the effect of the answer ("Did we manage to answer the question you raised?").
Interruptions play an important role in the negotiation process; the negotiator must know when it is good to take a
break, how to do it and when to start negotiations again.
Breaks can be of several types: breaks made to give the partner the opportunity to express his point of view; rhetorical
pauses, used for tactical reasons, usually to emphasize the words that follow; strategic breaks, when the partner is
expected to react to an advanced proposal or initiative; response breaks, when the negotiator needs or claims he needs
time to react.
Concessions and compromises
The concession is the unilateral disclaimer made by one of the parties of one or more of the positions
held in order to create the conditions for an agreement.
In the practice of negotiations, concessions may be based on real interests of the respective partner or
may represent only the waiver of some formal claims, in the latter case, they represent a simple "ploy".
Compromise means the partial withdrawal of each partner from the announced positions.
It can also be achieved by exchanging concessions on the object of the transaction. The purpose of the
compromise is to unblock negotiations or pave the way for agreement of will or finalize the agreement.
Rhythm of making concessions
-beginning with a high displayed position, the maintenance, with small concessions, of this position as
much as possible and the sudden decrease of the exigencies towards the end of the negotiation
- concession for concession – insuring permanent compensation
- starting with a position close to the realistic one (or breaking point) and granting minimum
concessions only in the finalization phase of negotiations
- the debut with a high position and the rapid and important decrease of the level in order to obtain the
agreement as soon as possible.
Other rules/recommendations regarding concessions
Avoid making concessions under the following conditions:
- unilateral, without receiving anything in return;
- before it is needed;
- only because you were convinced of the arguments and are in good faith;
- giving up a position declared to be major, relatively easily.
Attribute a certain value for each concession you can make – to ask for an equivalent compensation
Announce that you are making a concession – the opponent understand that it is his turn to make one
too.
Rather make small and numerous concessions as opposed to few and high concessions.
Control the rhythm; the rhythm of making concessions should be similar between parties.

Negotiate until the last minute!

Techniques to solve deadlocks
Relational deadlock
- launching a constructive and attractive proposal (without leaving the mandate), presented under an attractive form
by presenting the potential benefits for partners; appeal to the wishes of the interlocutor (“we are ready to do
everything possible to respond to your requests ”), to his imaginary (“ suppose that… ”), to his affectivity (“do you
feel that… ”);
- adopting a conciliatory attitude by giving up prejudices (critical review of your own position)
- refusing to escalate tension,
- easing the situation by exploiting the need to relax the interlocutor (a well-placed anecdote, a timely joke, etc.)
In the case of an open conflict
(if there has been an exchange of harsh remarks, looks like an imminent rupture of dialogue), the final compromise of
the negotiation can be avoided by the tactic of postponing the debate of the controversial point, used, however, in a
cooperative perspective, by emphasizing the importance of maintaining business ties, willingness to compromise, etc.
Real differences in opinions
- keep some concessions that you would make only in such a limit situations
- breaks and postponements
- changing the teams or team members, using a mediator
IV. Closing negotiations
1. Initiating the process
◊ ascertaining the partner's availability for concluding the agreement;
◊ sending a signal of availability for contracting, after which an acceptance signal is received.
2. Stimulating the closing of the agreement
◊ presentation of the points upon which you agreed and revealing the degree to which the parties approached the
finalization;
◊ offering additional mutual concessions for the achievement of the full agreement;
◊ the use of tactics to speed up and finalize the agreement.
3. Making the agreement
◊ concluding the negotiations.
◊ discussing the draft contract;
◊ granting a term for its revision in view of its adoption.
4. Strengthening the agreement
◊ reviewing the agreement
◊ highlighting the benefits obtained by both partners following the negotiation;
◊ providing services for the proper implementation of the agreement.
1. Initiating the process
- when the opportunity for completion appears,
- when the partner signals the availability for accepting the offer
- These are verbal signals (positive assessments, questions showing interest in the
offer, requesting additional benefits, etc.) or non-verbal (relaxation, open gestures,
etc.).
2. Stimulating the closing of the agreement
- the closing can occur naturally or you might want to rush it
- you can use the verbal and non-verbal signals that show you are ready to settle:
verbal signals (statements or questions showing a projection of a future partnership
in the business; giving up an important objection; requesting information directly
related to the business development), non-verbal signals (rather relaxed attitude,
even friendly, wide gestures, expression of acceptance).
- the spirit is rather cooperative
Tactics which stimulate the conclusion:

The method of concentrating arguments - ideas already used during the negotiation are resumed and new ideas
and proposals are launched, advantageous for the partner. Arguments are presented gradually until a point of
maximum persuasion that could trigger the decision.

The balance sheet method repeating the points agreed upon as well as disagreements showing that the first ones
prevail.

The surprise method - sudden change of position in the negotiation declaring that the purpose is to reach an
agreement; it can mean offering unexpected concessions or evoking new arguments, which radically change the
relationship established between the parties.

The resignation strategy - sends the message that the negotiator has reconciled with the factual situation, has given
up the fight, but he actually retains control over the situation.

The disclaimer method is another form of the previous one; this time the resignation is associated with a
renunciation of the negotiation, as being without object; is used when the partner considers to have succeeded. The
perspective of his loss will make him accept a negotiation on new terms.

The last resort tactic - including additional elements, to your own benefit, in the already reached agreement or by an
advantageous interpretation of some elements of the agreement. The counteracting of this tactic is done by the clear
refusal of any non-negotiated extension, explicit or implicit, of the agreement.
 Homework
Imagine you have completed the investment of new and modern tennis court complex
in Bucharest. You intend to try to convince the ATP/WTA to entrust you with
organization of an important tennis event/tournament.

1. How would you prepare for this negotiation? Where would you schedule the
meeting(s)?
2. Who would you include in your negotiation team (the roles) and why?