BUSINESS NEGOTIATIONS

 How often do people negotiate?

 What kind of things do they negotiate?
 How often do people negotiate in English?
 Do people usually agree terms and conditions over the phone, in person, or in writing? Which do you find easiest /
most difficult? Why?

Negotiation is a dialogue between two or more people or parties intended to reach an understanding, resolve points of
difference, to gain advantage for an individual or collective, or to craft outcomes to satisfy various interests. Negotiating involves
an element of trade or bargaining – an exchange of one valuable resource for another to enable both parties to achieve a
satisfactory outcome. Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among
nations and in personal situations such as marriage, divorce, parenting, and everyday life.
In the world of business, negotiating skills are used for a variety of reasons, such as to negotiate a salary or a promotion,
to secure a sale, to form a new partnership etc. In business people negotiate with both suppliers and customers. They also
negotiate within their organizations, for example with colleagues and team members. If people negotiate (with each other), they
talk in order to reach an agreement which is to their mutual advantage (good for them both).

Phases of negotiation
Nearly all negotiations are characterized by 4 phases: preparation, opening, bargaining and closing. In large scale
negotiations each of these phases are tackled sequentially. However, in smaller scale negotiations it is quite common for these
phases to merge.
Preparation involves information gathering – knowing the state of the market, being aware of the supply and demand
status, being aware of any current or imminent discounts and special offers and so on. Lack of preparation in a negotiation almost
always sets a person up for failure. First and foremost, each party must clearly define their own goals and objectives. Secondly,
each party must anticipate the goals of the opposition. Finally, each party must come up with various alternatives to their main
objectives.
The opening phase of a negotiation involves both sides presenting their starting positions to one another. It usually
represents the single most important opportunity to influence the other side.
In the bargaining phase your aim is to narrow the gap between the two initial positions and to persuade the other side
that your case is so strong that they must accept less than they had planned. In order to do this you should use clearly thought out,
planned and logical debate.
The closing phase of a negotiation represents the opportunity to capitalize on all of the work done in the earlier phases.

Approaches to negotiating
If you ask a group to call out the words they associate with the word “negotiation”, many of the answers they call out
will have an aspect of competition, some will have the flavor of a fight or war. Many of the negotiations seem to have an
aggressive element to them. It’s competitive approach to negotiating.
There is another way. Instead of looking at a negotiation as two opposing parties, needing to fight their way towards a
compromise, look at it as two people or groups, each with a problem which needs to be solved. When you use a problem-
solving approach to negotiating, you are prepared to negotiate, but your approach will help to achieve a solution as satisfactory as
possible to both parties. The key points about the problem-solving approach are:
- a collaborative rather than a competitive climate is created;
- you look on it as a problem to be solved rather than a battle to be won;
- you aim to get both parties working together to solve the problem;
- a WIN-WIN outcome is achieved.
Taking a problem-solving approach doesn’t mean that you have to be soft with it. It means that you need to know what
your desired outcome is and what your motivation behind that outcome might be, but you can be as tough as you like in trying to
achieve a solution to the problem. A solution to the problem will mean that you have achieved if not all, then quite a lot of what
you want.
Three different outcomes
The three different outcomes that can result from negotiations can be expressed in simple terms: WIN-WIN, WIN-LOSE,
LOSE-LOSE.
WIN-WIN (collaborative negotiation)
In a successful negotiation everyone should leave the negotiating table happy with the outcome: there shouldn’t be
winners and losers. The negotiators should try to reach a WIN-WIN solution; an agreement of equal benefit to both sides. This
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suggests that both sides get what they want. In reality it probably means that both sides feel satisfied with the outcome of the
meeting. No one feels robbed or swindled.
WIN-LOSE (competitive negotiation)
Its goal is for one party to win and the other to lose; if there is a winner, then by definition there has to be a loser. In
negotiations this is often the approach that people take. “Our case is fair and their case is unfair so right is on our side and we are
not giving up until they give us what we want.” Dishonest practices, such as lying, manipulation, intimidation, and bribery are
often used in this type of negotiation.
LOSE-LOSE
If both parties are determined not to let the other one win, they can both end up not achieving their objective. It can often
happen when both parties go in a WIN-LOSE approach and narrow desired outcomes, both determined not to give way. “If we
can’t get what we want we are going to make jolly sure that they don’t get what they want either” or “She is obviously not going
to give me what I want, so I am going to make it as painful and expensive as possible for her.”

Getting to WIN-WIN
There are a number of points which can help you to develop a WIN-WIN approach:
 Separate the personality from the problem; deal with issues, not personalities.
 Widen you horizons. (Don’t assume there is only one solution.)
 Look for a solution, not a battle. (Thus everyone has a better chance of achieving more of what they need.)
 Set it up to be constructive.
 Resolve previous conflicts ahead of time.
 Commit to listening more than speaking.
 Develop a common goal.
 Discuss a common enemy.
 Take opponent’s views/needs into careful consideration.

Negotiating styles

Remember that negotiating styles differ not only from person to person, but also across cultures. There are many factors
which may influence how your partner behaves, so be prepared for situations which might not by typical in your country. For
example, when meeting business partners from Britain or the USA, negotiations normally allow time for small talk at the
beginning. Even in formal meetings or negotiations, it is felt that relationship-building can ensure a successful outcome.
Differences may also occur from industry to industry. IT people are usually much more relaxed in their clothing and
behavior than, for example, bankers, and this will probably be reflected in their negotiating style.
When negotiating with partners from other cultures, do your homework. Get acquainted with the customs, manners and
conventions as well as some of the dos and don’ts.

ACTIVITIES

1. Audio-based activity: NEGOTIATION SKILLS

In a successful negotiation everyone wins. The objective should be ……………….. , not ……………….. .
Negotiation is something that we do all the time not only in ……………….. but also in our social lives. This is one area
where your ……………….. is seriously tested and how you respond to the situation reflects on what kind of personality you are.
Negotiation means developing an ability to resolve ……………….. and ……………….. . Effective negotiation involves
a willingness to work with other people and to reach its ……………….. that everyone are comfortable with.
Your ……………….. are often shared by how well you are able to manage and ……………….. the conflicts. If a
conflict is managed effectively, then a relationship can be maintained. If the conflict is not handled very well, the ………………..
may weaken your relationship with ……………….. , family and friends.
Negotiation need not always be between two ……………….. . It may be between several people of different groups.
Disagreements are bound to happen because of ……………….. in people’s opinion, values and ……………….. . Many common
situations can become ……………….. of disagreements. The key to effective negotiation is clear ……………….. which involves
three important skills: ………………... , ………………... , ……………….. .
Understanding: There is no point in talking over the ………………… without understanding the required
………………... . A negotiation is most effective when people are able to clearly understand, ……………….. and discuss the
sources of disagreement.

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 Speaking: You cannot have one skill work without the other. You cannot have a good understanding without good
speaking or listening. Negotiation should begin with a clear concise ……………….. of the problem. Shared concerns rather than
individual issues should be the ……………….. of the negotiation. The negotiation process will be most effective when people
take time to think through what they have to ……………….. with.
Listening: Listening is an ……………….. process rather than ……………….. . Encouraging the other ………………..
to speak, share thoughts and ……………….. , marinating eye ……………….. shows that you are interested in understanding
what he/she has to say. Active listening assures the other person that he/she is heard, accepted and ……………….. . The ability to
listen actively supports an ……………….. negotiation.
The negotiation is more ……………….. when all sides:
 Recognize the ……………….. of the situation.
 ……………….. actively.
 Display respect, ……………….. and acceptance.
 Work together to develop a ……………….. .
Be unconditionally ……………….. . Approach a negotiation with this: “I accept you as an equal negotiating
……………….. . I respect your ……………….. to differ. I will be receptive. Some criticize my ……………….. as being too
soft. But negotiating by these ……………….. is a sign of strength.” (written by R. Fisher)

1) What should be the objective of a successful negotiation?

2) What ability is developed in the negotiating process?
3) What does effective negotiation involve?
4) How does managing a conflict influence a relationship?
5) Why do disagreements in negotiations happen?
6) What is the key to effective negotiation? What skills does it involve?
7) What should be understood at the beginning of the negotiations?
8) What should negotiation begin with?
9) What should be the focus of the negotiation?
10) What kind of process is listening?
11) How can you demonstrate that you are interested in what another person is saying?
12) When is the negotiation more successful?
13) How should you accept your negotiating partner?
14) What is the main idea of this text?

2. Listening: Bargaining and reaching a compromise

Bargaining is when one side makes a suggestion and the other either accepts it or suggests an alternative which both sides can
accept. A compromise is an agreement which gives neither side everything it originally wanted.

a. Listen to an informal negotiation between two colleagues at work. Notice the structure of the conversation.
1) What is the problem?
2) What is the result of the conversation?

Request Response – counter suggestion Agreement

b. Listen to a negotiation between two people who are trying to reach agreement on the cost of some machinery.
1) What does the first speaker want?
2) What would the second speaker prefer?
3) What is the compromise agreement?

c. Listen again and complete the sentences.

Suggestion: We ………………………………….. €550 per unit …
Response: Well, …………………………………..
New suggestion: Perhaps ………………………………….. the cost of delivery …
Response: Delivery and training? I …………………………………..
New suggestion: But ………………………………….. the delivery if ………………………………….. is €550.
Agreement: OK …………………………………..

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 3. Interview with Eric Perrot
A. Read the first part of the interview in which Eric talks about the key to a successful negotiation and summarize
what he says about: a. price; b. winning or losing a negotiation; c. short- and long-term aims.

Interviewer: What do you think the key to a successful negotiation is?

Eric: Well, first of all, to understand the buyer’s expectations and to be as well prepared as possible.
Interviewer: Mm… Prepared in what sense?
Eric: Well, obviously you have to know exactly what is and isn’t negotiable. You have to know how far you can go to reach a
compromise, or overcome an objection.
Interviewer: Oh, I see.
Eric: Never forget that a customer will always try to beat you down on price. So you need to know what your final figure is, and
must never ever make a deal which is against the interests of the firm, for the sake of getting an order.
Interviewer: I see. So, what’s your immediate aim when you are negotiating with a client?
Eric: In the short term, the ideal outcome is to walk away with an order – not at any price, but one that both sides will be satisfied
with.
Interviewer: But doesn’t there have to be a winner and a loser?
Eric: That’s the worst kind of deal if you want to develop a longer-term relationship. Your customers will never forgive you if
they feel they’ve been treated badly. It’s not like talking someone you’ll never see again into buying a car.
Interviewer: I see. So what is your longer-term aim then?
Eric: Simply to make the transition from supplier to partner. When you’ve dealt with the same person for a while you can trust
each other and work together well. You can do business more quickly too. For instance, the other day, I negotiated a one-million-
euro contract in less than four minutes.
Interviewer: But what happens if the person changes, you know, someone else takes over?
Eric: You have to start all over again. Most big companies will insist on changing or rotating the buyer. They don’t want the
relationship between the supplier and buyer to get too cosy.

B. Read the second part of the interview and answer the questions.
Interviewer: So, what skills do you think a good negotiator or salesperson needs?
Eric: Well, first and foremost, you need to be a good listener. You also need to be a bit of a psychologist to gain an insight into
the type of person you are dealing with. And you need to recognize the ‘buy signs’ when you see them so you can take the
initiative and close a deal.
Interviewer: You haven’t mentioned being persuasive. Why’s that?
Eric: Well, it’s the facts and figures of the overall proposal which have to be persuasive, not you. If what’s on the table will meet
their needs, then they’ll go for it.
Interviewer: Right. And you’ve talked about types of customers. Now tell me Eric, what kind do you find the most difficult to
deal with?
Eric: The quiet ones, the ones who don’t speak. They can be very hard work, particularly when you are meeting them for the first
time. If there is no dialogue it’s hard to build a rapport and reach an agreement.
Interviewer: Mm, so how do you get round that?
Eric: Well, I leave doors open.
Interviewer: Doors open?
Eric: Yes. I don’t tell them the whole story. I leave out information, or put some obvious holes in my presentation, which will get
them to ask a question I can answer and build on.
Interviewer: I see. And what about aggressive customers?
Eric: They are easy. Usually, when people come over as aggressive, it’s because they feel insecure. They’re terrified of losing
face. So I give them recognition and reassurance, and make them think that they are the boss. Things go better after that.
Interviewer: And you never get angry or upset yourself?
Eric: Absolutely not. Losing your temper or bursting into tears are signs of weakness. Confrontation gets you nowhere. It’s always
much better to settle one’s differences in a calm and civilized way.

1) According to Eric, what qualities should a good negotiator have?

2) How important is the ability to be persuasive?
3) What two types of customer does he discuss?
4) Which type is more difficult to deal with, and why?
5) What techniques does he suggest?
6) How controlled does he stay?
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 4. Negotiators are sometimes described as Red or Blue stylists. Read the information below. Which description does
Eric fit best? What do you think happens when Red and Blue stylists meet?

Red stylists Blue stylists

 want something for nothing  regard negotiations in the longer-term
 see each negotiation as a separate contest  succeed through co-operation
 believe you win by dominating your opponent  address each party’s interests
 enjoy manipulative tricks and bluffs  will only trade smth. for smth.

The following comments were made during negotiations. Which colour stylist is more likely to have made them?
1) “This is a once-only offer; take it or leave it.”
2) “We’re happy to discuss a discount if we can work something out.”
3) “I want you to agree to this now, as a sign of your good faith.”
4) “I can fully understand that you don’t want to leave yourself vulnerable to price rises.”
5) “How do you think we can best work together in the future?”

5. Case study.
- How would you characterize the two approaches described below?
- What outcomes are they likely to lead to?
- What approach to negotiations would you choose and why?

Elizabeth and her father run a building business. Here is what she told about her father’s approach to negotiating: “He
always tries to get the most he possibly can out of the other party. He takes a very aggressive approach and tries to give away as
little as possible while pinning down the person to a deal which gives him what he wants, but sometimes means that they end up
with a pretty raw deal. It’s counterproductive really, because you usually end up dealing with the same person more than once.
The second time you meet them, they are much less cooperative and more wary about doing business with you. I tell him that he
ought to try taking a less aggressive approach, but he won’t listen – he thinks you have to be tough to negotiate successfully.”

6. Tips for successful negotiations. Study the tips below. Add two tips of your own.
1) Build a relationship with your partner.
2) Consider the intercultural aspects when dealing with people from other countries.
3) Be flexible: look for alternative solutions.
4) Be prepared to compromise (within company guidelines).
5) Look for a win-win solution.
6) Use active listening strategies.
7) Speak clearly and simply.
8) Ask questions to find out what your partner is looking for.
9) …………………………………………………………………………
10) …………………………………………………………………………

7. Reading. Valerie Grant, a Human Resources Manager, is giving an interview to a business magazine. She is
talking about body language. Read the interview and decide if the statements below are true or false.

The business of body language

Interviewer: Why do you think that body language is important in business? Do you think it matters?
Grant: It certainly does. The way we communicate with other people depends on a lot of things – not just what we say. We give
off messages through body language all the time, and it’s important to know about the signals that you’re giving off. Now, many
people have no idea of what they’re saying through their body language, but in a business context it’s important, because a lot
business depends on creating the right image and developing good relationships.
Interviewer: So what sort of things should you do, say, when you meet someone for the first time? Can you give us an example?
Grant: You need to be aware of the need for personal space when standing and talking to someone. Now, by personal space, I
mean the distance between you and the person you are talking to. Often people feel uncomfortable if you are standing too close to
them, and this can affect communication.
Interviewer: So what is the right distance?

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Grant: It’s hard to say what the right distance is. You can’t really say that it’s one and a half meters or something, because it
depends on the situation. At a party for example, it’s OK to stand quite close to people, but at something more formal, like a
business meeting, you need to stand further away.
Interviewer: And is it the same in every country?
Grant: Absolutely not, no. In some southern European countries, like Spain for example, people don’t mind if you stand quite
close. But if you are in England, you find that British people need a lot more space. If you stand too close to them they start
walking away from you. Same for the Americans, too, actually.
Interviewer: So that’s something you have to think about and learn, depending on the country you’re in?
Grant: Yes, and there can be differences within a country too, for example between the north and the south or between cities and
the countryside. In general, people who don’t live in cities need more personal space than people who do.
Interviewer: Is there any way that you can use body language to your advantage?
Grant: Certainly. If you’re having a meeting, it’s often a good idea to look at the way the other person is sitting. Think about
where their arms are, what they are looking at, and then take up a similar position yourself. This is what we call mirroring, and it
makes the other person feel more comfortable – and again, that all helps with communication.

1) Most people realize what signals they give off with their own body language.
2) Understanding body language is important in business.
3) Some people dislike others standing close to them.
4) The best standing distance is one and a half meters.
5) The right amount of personal space varies with the situation.
6) British people need more personal space than the Americans.
7) People from the country need more personal space than people in cities.
8) Copying the way someone is sitting can help with communication.

EXERCISES

1. Fill in the blanks.

break off accept needs negotiators skills learn

uncomfortable continue salary to form negotiation business

One of the most important ……………………. anyone can hold in daily life is the ability to negotiate. In general terms,
a ……………………. is a resolution of conflict. We enter negotiations to start or ……………………. a relationship and resolve
an issue. Even before we ……………………. our first jobs, or begin our careers, we all ……………………. how to negotiate.
Some people are naturally stronger ……………………. and are capable of getting their ……………………. met more easily than
others. Without the ability to negotiate, people ……………………. relationships, quit jobs, or deliberately avoid conflict and
……………………. situations.
In the world of ……………………. , negotiating skills are used for a variety of reasons, such as to negotiate a
……………………. or a promotion, to secure a sale, or ……………………. a new partnership.

2. Complete the gaps in each sentence to make a word which will fit the context, as in the example.
E. g.: He will do anything to avoid a conf……. . (confrontation)
1) I found his reasons extremely pers…………… .
2) The union has made an important conc…….. on overtime pay.
3) Management says that the issue is not nego……… .
4) I’m sure we can reach a comp………. if both sides are prepared to give and take.
5) We are ready to listen to your revised prop…….. .

3. Choose the right variant.

1) It took over five hours of negotiating for the parties to come to a ……………. .
a. hostility b. bottom-line c. consensus d. indecisive
2) It was a ……………. decision to settle our differences out of court.
a. flexible b. mutual c. unrealistic d. victorious
3) One ……………. that always works is to ask your counterpart to speak first.
a. tactic b. bargain c. resistance d. tension
4) We would have more ……………. if we had some more recent statistics to use.

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 a. haggling b. concession c. impulse d. leverage
5) They were ……………. to our proposal until we made our last demand.
a. hostility b. receptive c. resistance d. tension
6) We were ……………. over prices all afternoon.
a. misleading b. conflict c. dispute d. haggling
7) I wasn’t expecting our opponents to ……………. so quickly.
a. amplify b. yield c. counterproposal d. arbitration
8) When I ……………. the client about their promise, they agreed to honour it.
a. log-rolled b. entitled c. confronted d. confronted
9) If that is your only ……………. I would be happy to concede.
a. pressure b. objective c. victory d. cooperation
10) Within ten minutes the negotiations had already ended in a ……………. .
a. deadlock b. counterpart c. collective d. bottom-line

4. Complete the sentences with the words on the right.

1) The offer is …………… . It’s similar to offers from other companies. duration
2) The …………… of the contract is two years. fee
3) If you want 24-hour delivery, you’ll need to pay an additional …………… . competitive
4) We’ll send an …………… report for you to read before making a final decision. discount
5) The price is a little high. Is it possible to arrange a 3% …………… ? interim
6) Terms and …………… are the specific parts of a contract agreed by all parties. calculation
7) I need to do a …………… to find out how much we actually have to pay. conditions

5. A. Look at these ways to agree or disagree with someone. Put an A next to the ones which mean agreement and a
D next to those which mean disagreement.

a) I see it a little differently. f) I really can’t agree with that.

b) I share your views completely. g) Yes, I’m absolutely in favour of that option.
c) That may well be right, but … h) I agree.
d) We could go along with that. i) Normally we could accept that, but in this case …
e) Up to a point we could accept that, but … j) Unfortunately, I can’t agree with you here.

B. Now use these expressions to respond to the following statements. Note that sometimes more than one answer is
possible.
1) A: This is going to be a very big order so it’s important we get everything right.
B: …....... . We’ll do the calculations and get back to you.
2) A: I think it’s important we look at the big picture. Hopefully we can create a win-win situation.
B: …....... . It really is best for both of us if we can establish a successful long-term relationship.
3) A: I’m sure you’ll see that the increased price is not such a big issue.
B: …....... . The overall price is the most important point for us.
4) A: Let me see if I’ve understood. You would actually prefer to pay higher prices if we can guarantee the delivery times?
B: …....... . If we can be sure that deliveries are always on time, then we can pass on some extra costs to our clients.
5) A: You know, this is the standard practice here in Japan.
B: …....... , but in this case we think that the size of our order should convince you to change your standard practice.

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 Meetings: Listening and helping understanding

1. Alan Ram is a communications consultant who has worked with a number of leading European companies. Alan
is talking about meetings to Konstantin Iudin, a Russian businessman. Which of the tips does Alan recommend?
□ Try to understand “chunks” of language, not listen for every word.
□ Translate things “in your head”.
□ Use an electronic dictionary.
□ Keep good eye contact with other participants.
□ Show you follow and understand.
□ Paraphrase what people say to check your understanding.
□ Ask for repetition.
□ Ask the other person to write everything down during the meeting.
□ Write notes.
□ Ask for minutes of the meeting.

Paraphrasing = summarizing in a few words what you have heard

So what you mean is … / Do you mean … ? / So is that … ? / So, in other words …

2. Listen again and write down the phrases Konstantin uses to show he understands what Alan says. Also write
down the phrases Alan suggests using.

Konstantin:

Alan:

3. Listen to the second part of the conversation. Alan suggests ten ways for Konstantin to help people to understand
him in a meeting. Complete the phrases below.
1) Be …………………………
2) Speak …………………………
3) Maintain …………………………
4) Use …………………………
5) Keep to the point.
6) Use ………………………… sentences (KISS).
7) ………………………… your main points.
8) Use sequencing language:
9) Check …………………………
10) Provide ………………………… or notes where appropriate.

REMEMBER!
When listening in a meeting, always: When speaking in a meeting, always:
 try to understand chunks of language  prepare well
 avoid translating in your head – work in English  use visual supports and handouts
 use active listening  speak clearly and slowly
 ask for repetition and summarize the message you  keep eye contact
have understood  keep to the point
 use sequencing words, summarize and check that
people understand you