国际商务谈判课后答案

Key to Exercises from Chapter 1 to chapter 15

Introduction to Negotiations

Case one: The price of the rug

Negotiation is the means by which people deal with their differences. Whether those differences involve the purchase of a rug, a contract dispute, the terms of a sale, or a peace accord between warring nations, resolutions are typically sought through negotiations. To negotiate is to seek mutual agreement through dialogue. Since almost everything is negotiable, there are so many negotiations taking place anywhere and anytime. Although you may not be involved in high-level international negotiations, most of you will have to negotiate with colleagues, bosses, customers, and suppliers at some stage in your career. In the above case, the couple negotiate with the seller about the price of the rug. Negotiating effectively promises some of the biggest prizes of all communication skills. The wife wants the particular rug no matter what the price is. In such a situation, the husband becomes totally subverted（坏事的）since he wants to lower the price. The same scenario can occur frequently in our life. To avoid this, every couple should have a frank discussion about their differences prior to entering into negotiations. At a minimum, it will give you a positive feeling about the process. Most important, you can reduce or eliminate the surprise that may emerge as you negotiate.

Case two: H uman resource manager

We can understand that negotiation is a means by which people involved solve their differing aims and objectives in a nonviolent and humanly acceptable manner. In this case, the boss has authority, but he did not force Li Tian to stay on the job. The boss manipulated the situation in a soft way: instead of demonstrating his authority by denying his request—an authoritarian approach that he knew would alienate Li Tian—he set up a situation that would give him the desired results without dictating the outcome. The boss was creative in the approach. They struck a deal which was acceptable to both sides: If Li Tian could find a replacement to do his job, the boss would make the switch. At last the boss' strategy worked.

Chapter 1 Preparation for Negotiation Exercises

I. Identify the following statements as TRUE or FALSE.

1.T

2. T

3. F

4. F

5. T

2.

6. F

7. F

8. F

9. T 10. F

.

II. Discussion

1. Students should identify:

(1). Information on Related Environmental Factors

(2) Knowing the Opponent

(3 ) Knowing competitors

(4) Knowing oneself

2.For example (students will find their own examples, but should identify:

A toy, cost 50 yuan

ideal target 90 yuan

bottom line: 60 yuan

acceptable price between 60 yuan to 90 yuan

3.Students should identify:

?Avoidance, Competition, Accommodation , Compromise, and Collaboration

?Avoidance is non-negotiation.

?Competition is also known as distributive or win-lose strategy.

?Accommodation is “I lose you win” policy.

?Compromise is a combination of competition and accommodation, two distributive strategies.

?Collaboration is also called integrative, or win-win strategy.

?

III. Role Play

Within this case, the position of Chinese side is producing 3 types of furniture, its underlying interest is to keep the cost down. While the American company's position is 5 types, its interest is to make more profits. This problem can be solved from the interest angle so that win-win results can be achieved. Conversely, if it is solved from the positional angle, one party has to make concessions, so that the result is only in one party's favor.

They can make a plan stating that the per unit price of furniture remains unchanged, the increased cost of making the extra 2 models of furniture can be spread on to the new products, shown through its higher prices, and finally pass onto the final consumers. Since Chinese furniture enjoys

a ready market there, the American company can make more profits by selling more goods, and

the Chinese side's interest is also protected, thus achieving a win-win result.

IV. Case studies:

Case one: Sino- Japanese negotiations

1.What factor played an important role in concluding the deal at the figure given by the

Chinese side ?

2.

Preparation played an important role in concluding the deal at the figure given by the Chinese side.

Before the negotiation, the Chinese side devoted much energy to preparation including doing market research, gathering information. During the negotiation, they still kept a close look at the changing market, therefore they had a card up their sleeve from the beginning to the end of the negotiations that laid a foundation for further discussions, during which, a series of tactics were wisely used.

1.What tactics did the Japanese side use in the first round of negotiation?

2.

The Japanese side used a tactic of ballon d'essai by making an offer at 10 million Japanese yen.

Their purposes are two fold: if the Chinese side did not know the international market, they can take it as a basis, a starting point for their bargaining, then they can surely make large profits. If the Chinese side won't accept it, they can justify themselves.

3. Why did the Japanese side turn to introduction of their products?

By talking about performance, and high quality of their products, they wanted to justify their first offer in a round about way.

4. What tactics did the Chinese side use in responding to their introduction of the product ?

Ask while knowing the answer.

They meant to show that the Chinese side know quite clearly about the market, that the Japanese are not the only supplier, and that the Chinese side has the right to make a choice.

5. How do you look at the result of the negotiation to both parties?

To both parties the result of the negotiation is a win-win negotiation. The success of this negotiation reflects both cooperation and competition between the two sides. The Chinese side reached the goal of importing quality equipment with limited foreign exchange only after two rounds of talks. The Japanese side apparently sold goods at a price lower than the price of sales sold to other countries. But their profits were not reduced because of the short transportation

distance, and their costs of transportation and risks were reduced. They adjusted their objective in good time, and chose to conclude the deal rather than leave this opportunity to rivals.

Case two: Negotiating a better package when you start work

You need to do your research before entering the negotiation so that you're supported by accurate, current information. This means familiarizing yourself with the company itself, as well as the range of salary and benefit options that are being offered. You may be able to tinker with the combination of benefits, if not the salary itself. Don't assume you'll be offered more than your former salary, especially if you're competing with someone who is equally qualified but willing to work for less. If the salary offered is less than you had hoped for, you can discuss the benefits package and make provision for an early salary review.

Case three: preparing a negotiation brief

To make a negotiation brief, you can do as follows:

The negotiating objective: You should define the negotiating objective in terms of the major issues to be discussed.

Acceptable terms: You should state the minimum acceptable level for each of the major items. Since you are the seller, your brief may state the minimum acceptable level about the following major issues:

●Price: It is usually the key point because it directly concerns the economic benefits on both sides. The brief should state maximum reduction in profit.

●Terms of payment: The buyer’s terms of payment can be accepted subject to commercial overheads（管理费用，经常费用）remaining unchanged.

●Delivery: Shorter delivery can be accepted on the condition that risk contingency is secured.

Time period: You'd better state the time period in which the negotiation should be conducted. The negotiating team should be given as much time as possible to complete the negotiations in order to avoid undue time pressure. In some circumstances, time limits can be imposed.

Negotiators: You should identify the team leader and other members of the negotiating team, such as the names and job titles of the team members.

Communicating system: You should set up the lines of communication and the reporting system. It should state who is responsible for reporting to management and how.

The following is a negotiation brief in Chinese for your reference:

关于引进福特汽车公司矿用汽车的谈判方案

2000年前我公司曾经使用福特汽车公司的矿用汽车，经试用性能良好，为适应我矿山技术改造的需要，打算通过谈判再次引进福特汽车公司矿用汽车及有关部件的生产技术。

福特汽车公司代表一行5人于4月8日应邀来京洽谈。

具体内容：

1.谈判主题：以适当价格谈成100台矿用汽车，及有关部件生产技术的引进。

2.

3.目标设定

1.技术要求：

1.矿用汽车车架运行1500h(小时)不开裂。

2.在气温为40°C条件下，矿用汽车发动机停止运转8小时以

上接入220电源后，发动机能在30分钟内启动。

3.矿用汽车的出动率达85％以上。

2.试用期考核指标：

1.一台矿用汽车试用10个月以上（包括一个严寒的冬天）

2.出动率达85％以上。

3.车辆运行375h，行程31250km.

……

1.技术转让内容和技术转让深度：

1.利用购买100台车为筹码，以及福特汽车公司计划进一步进

入中国矿用汽车市场的心理，要求福特汽车公司无偿地提供车架、厢斗、举升缸、总装调试等技术。

2.技术文件包括：图纸、工艺卡片、技术标准、外购件、零件

目录手册、专用安装、维修手册等。

2.价格：

最优目标：每台单价为7万美元

可接受目标：每台单价为8万美元

最低目标：每台单价为8.5万美元

商品价格系CIF价，包括成本、美国国内费用（运杂费、商检费、报关费、保险、其他费用等。

小组成员在心里上要做好充分准备，争取最优目标价格成交，不能急于求成；与此同时，在非常困难的情况下，也要坚持不能超过上限达成协议。

1.日程安排：

第1天（4月9日）：

9:00迎接美方人员

9:00—10:00参观本企业。

10:00—11:00观看本企业已有矿用汽车使用情况、技术人员在旁边介绍。

11:00—12:30带美方人员吃粤菜并且进行交流。

下午3:00—4:00，美方主谈系英国裔，利用英国人下午三四点喝下午茶习惯进行初步谈判，准备一些点心和茶。

第2天（4月10日）：

9:00—11:00 带美方人员参观市区文化景点。

下午3：00－6：00 就车架、厢斗、举长缸、转向缸、总装调试等技术附件展开谈判。

第3天（4月11日）：

9:00—11:00商订合同条文。

下午3：00－6：00价格洽谈。

第４天（4月1２日）：

9:00—11:00签订协议。握手祝贺谈判成功，拍照留念。

11:00—12:30设宴招待，谈判圆满成功。

1.谈判地点

第一天、第二天的谈判安排在公司八楼小会议室。不设置谈判桌，大家随便坐在一起，营造一个英国人下午三到四点喝下午茶的气氛，主要考虑到美方主谈系英裔。

第三天、第四天的谈判安排在华天饭店的二楼咖啡厅，设置谈判桌。

５. 谈判的方法及策略：

（1）谈判方法：

在谈判过程中，在确定谈判各阶段所涉及的主要问题后，在每阶段的谈判中，把拟谈判的议题全部横向展开，多项议题同时讨论，对本方有利的问题加以讨论，而对已方有弊的问题，我方应尽量回避。在立场上可以软硬兼施。

（2）谈判策略：

① 突出优势。对对方立场、观点都有初步的认知后，再将自己在此次谈判事项中所占有的优、

劣势及对方的优、劣势，进行严密周详的列举，尤其要将我方优势，不管大小新旧，应全盘列出，以作为谈判人员的谈判筹码。而我方劣势，当然也要注意，以免仓促迎敌，被对方攻得体无完肤。

② 模拟演习。就是将各种可能发生的状况，预先模拟，以免实际遭遇时人慌马乱，难以主控

战局。在了解优、劣后，就要假想各种可能发生的状况，预先策划行动方案。小至谈判座位的摆放都要详加模拟。

③ 底线界清。在谈判前，务必要把我方的底线界清：可让什么? 要让多少?如何让?何时让?

为何要让? 先行理清，心中有数。否则，若对方咄咄逼人，我方束手无策任由对方宰割，那就失去了谈判的本意。

④ 了解对手。谈判前，了解对方的可能策略及谈判对手的个性特质，对谈判的圆满完成将有

莫大助益。如果谈判对手喜欢打球，不妨在会谈前寒暄，着意提及，将对方的戒备敌意先行缓和，若有时间，更可邀约一起运动，以培养宽松的谈判气氛。须知在这时球场就是另一张谈判桌，有助谈判达成。

⑤ 随机应变。谈判桌上需随机应变。如出现对手突有神来一笔，超出我方假设状况，我方人

员一定要会随机应变，见招拆招。实在无法招架，手忙脚乱时，先施缓兵之计，再图谋对策，以免断了自己的后路。

⑥ 埋下契机。双方若不能达成相当程度的圆满结果，谈判面临破裂之际，也无需逞一时口舌

之快，伤了双方和气。买卖不成仁义在，双方好聚好散，好为下回谈判圆满埋下契机。

６. 谈判的风险及效果预测：

（1）谈判风险：

① 对方可能会在谈判中凭其优势地位不肯在价格上让步，我方必须利用福特汽车公司计划进

一步进入中国矿用汽车市场的心理，发挥自身优势，迫使其做出让步。

② 谈判中对手可能会对我方采取各种手段和策略，让我方陷入困境，对此我方必须保持头脑

清醒，发挥好耐心的优势，冷静而灵活地调整谈判策略。

（2）谈判效果预测：双方以合理的条件取得谈判的成功，实现双赢，能够友好地结束谈判，获得成功，实现长期友好合作。

７. 谈判预算费用

A、车费：1000 元

B、住宿费：2000元

C、饮食费：3800 元

D、通

讯费：200 元E、旅游礼品费用：5000 元

合计：12000 元

1.谈判小组分工

主谈：张××, 为我方谈判小组总代表，并负责向总经理汇报谈判工作。

副主谈：李××，为主谈提供建议，或视机而谈。同时负责征询公司其他部门专家的意见。

成员：王××，负责谈判纪律及法律方面的条款。

成员：周××，负责技术方面的条款。

成员：赵××，负责分析对方动向、意图及价格方面的条款。

成员：罗××，负责翻译。

矿用汽车引进小组

2007年3月26日

Chapter 2 Negotiation Teams Exercises

I. Identify the following statements as TRUE or FALSE.

1.T 2 . T 3. F 4. T 5. F

2.

6. F

7. T

8. F

9. F 10. F

II. Discussion

The purpose of this discussion is to get students to recognize their own personalities and talents as well as those of their classmates. It will help them to make good selections for team members when the entire group has input into identifying the individuals with the proper skills for each role. III. Role Plays

Make sure the students come to an agreement. There is no point in being an excellent “good” or “bad” cop if you cannot reach a negotiated settlement.

IV. Case Studies

Case one: planning the seating and role arrangements

Multiple solutions are possible. The key is to balance the team with young and old, male and female, while still assigning people to the proper roles based on their personalities.

Case two: The composition of American negotiating team

Cross-cultural negotiation requires very detailed preparation on cultural differences. Many negotiations failed not because of lack of common ground but rather because of ignorance of cultural differences. Superior Chinese values are: modesty, patience, respect for hierarchy, pride (no losing face), loyalty and tradition etc. All these show that in negotiations, there is something more important than the purely substantive matters for the Chinese—–the relationship. As a result, decisions have a long term orientation. Negotiations in China are important social events used to foster relationships. The Chinese generally negotiate in an unhurried manner. They usually open proceedings with a discussion of general principles of mutual interests. They do not like the western eagerness to sign a contract and this typically means that you will be dealing with people who place values and principles above money and expediency. There are two distinct phases of negotiating business deals in China—–the technical and the commercial phases. There are usually two negotiating teams. The technical phase comes first and is very detailed. This is a stage where you need to send someone representative and competent in technical issues. To the Chinese, a contract is a commercial agreement, not a legal document and should be based on friendship and goodwill. In this context, a lawyer would not be the most appropriate resource to conduct the negotiation. In China, whenever unexpected circumstances arise, they are typically sorted out through the strong relationship bonds that exist. China is a one-leader oriented culture and Chinese expect exactly the same approach from foreigners. During negotiation, a team of negotiators is welcomed but the Chinese will look for the leader with authority to make decisions. It is definitely advisable to bring your technical experts to the negotiation table. Like in any negotiation you need to be sure that both substantial and relationship issues are considered in terms of negotiation goals. While composing your negotiation team, choose delegates who are competent in building relationships, creating and claiming value.

Case three: Team members do not get on well together

A common question in business negotiation when determining whether someone will be a success

is,“Can they cut the muster（符合要求）?”. Members of a negotiating group are master tailors preparing to stitch together a successful negotiation. In this case, we should avoid arranging the unfriendly persons in one negotiating team because in such circumstances, their quarrel only brings up problems but never offers solutions, and the counterparts will make use of the dissension （意见不同, 纠纷, 争执）within the team. So they cannot be involved in the same group. A successful negotiating team needs those who can get on well with each other.

Chapter 3 Negotiation and Bargaining Exercises

I. Identify the following statements as TRUE or FALSE.

1. F

2. T

3. F

4. T 5 . T

2.

6. F

7. F

8. F

9. T 10. T

II. Form Groups and Discuss

1.Principled negotiations represent a higher level of negotiation strategy and tactics. They

include focusing on interest, not position; separating the people from the problem; inventing options for mutual gains; and insisting on using objective criteria. They can apply to negotiations involving various situations like politics, diplomacy, trade, management, even everyday conflicts.

The principles help negotiators jump out of the set pattern of positional bargaining, instead help them to deal with complicated problems freely.

2.

3.American famous psychologist Maslow's hierarchy of human needs theory serves as a

theory of negotiations. Based on which, Gerard I. Nierenberg——an American famous negotiation expert points out that needs and satisfaction of the opponent's needs serve as the basis of a negotiation.

4.

5.ABC company wants to import a set of production line from Japan in order to increase

productivity.

6.

To buy a set of production line from Japan is the position of ABC company

In order to increase productivity is the interest of the company.

III. Role Play

Besides paying an annual salary of RMB 100,000, the company agrees to meet other conditions, including providing an apartment free, free medical treatment, helping his child to study in Beijing, and appointing him as one of the engineers in charge of a new project.

IV. Case Studies

Case one :Driving a bargain

1.Why did both the German and the Chinese sides emphasize their own advantages?

Because each of them adopted the tactic of forestalling their opponent by a show of strength. The German side wanted to use its experience to influence the Chinese side psychologically, hoping that the Chinese side would defer to them. The Chinese side pushed the advantages of a host country in order to gain an equal position from which to negotiate with the opponent.

2.Why did the Chinese side oppose the name of the joint venture given by the German

side?

Because the name firstly suggested denied the equal entity position of the two parties, instead Chike became a subsidiary of Baier.

3. On the whole, in what spirit or with what principle did the negotiations come to a successful

agreement to mutual benefits?

The principles used are seeking common points while reserving differences and friendly negotiations.

1.What are the experiences reflected through the negotiations?

2.

First, the two parties prepared well, reflected by their understanding of a feasibility study, and by forming a capable negotiation team. During the opening stages, they dealt well with the degree of competition and cooperation, conducting the negotiations on an equal footing. During the bargaining stages, both parties competed and compromised, finding satisfactory solutions whenever they came across issues related with each other's interests. Finally at the closing stage, they did well in drafting the contract, preventing further disputes from arising.

Case two: The unit price

The rule of thumb in this situation is to let your counterpart offer to split the difference. If you make the offer, your counterpart knows you are willing to accept the lower price. A good solution is to state, “We are only twenty dollars apart. What should we do?” If the buyer offers to split the difference, you know she is willing to accept $190. With this new information, you, as the

seller, could counter, “You have just stated that you are willing to take $185. I am willing to give you $195. That makes us only $10 apart. Why don't we split the difference and do the deal for $190?”

Case three: Special pricing

The hurdle can be overcome. Victor is able to raise a second possibility: to provide the Chinese with some new equipment at a cost he thought they would appreciate. In return, the Chinese agree to help him out with his regulatory mandate and agree to the pricing of the deal as originally stated. This satisfies Victor's own pricing problems and seals the relationship of special friendship between his company and the Chinese, and looks on his possible chips as needs-satisfiers. Nowadays, many American business persons have come to see the importance of relationship in Chinese negotiation and adapt their style accordingly.

Case four : Phrases sometimes heard

Here are some key points to handle these scenarios:

Don't believe everything you see and hear.

Part of a good salesperson's skill is to learn to read people and situations very quickly. However, when it gets down to negotiating, you have to take everything you see and hear with a grain of salt. Buyers are good negotiators, and thus they are good actors. You may be the only person who has what they need, but everything they do and say, from body language to the words they use, will be designed to lead you to believe that unless they get an extra 10% off or discount, they're going with the competition. Be skeptical. Be suspicious. Test, probe, and see what happens.

Don't offer your bottom line early in the negotiation.

How many times have you been asked to “give me your best price”? And have you ever given your best price only to discover that the buyer still wanted more? You have to play the game. It's expected. If you could drop your price by 10%, start out with 0%, or 2%, or 4%. Leave yourself room to negotiate some more. Who knows—- you may get it for a 2% reduction. You might have to go all the way to 10%, but often you won’t. A little stubbornness（倔强, 顽强）pays big dividends.

Get something in return for your added value.

Before you make concession, think about your options. You could throw it in as part of the package and try to build goodwill. Or you could take a deep breath and try something like, “That's a difficult problem that will require some effort on our part, but it's doable.” In the second case, you've told the buyer you definitely could do it, but you have not yet agreed to do it. You may not be able to get him to pay extra for it, but you may be able to use it as a bargaining chip in resisting price concessions. Which way you choose to go will depend on who your customer is and on the situation. However, you do have options.

Sell and negotiate simultaneously.

Think of selling and negotiating as two sides of the same coin. This is particularly true in your earliest contacts with the buyer. The face the buyer sees is that of a salesperson demonstrating features and benefits. The hidden face is that of a negotiator probing and seeking out information like price, terms, quality, delivery, etc. that may be invaluable later and have to be negotiated.

Be patient.

Finally, and most important, be patient. Sales are a high energy, fast moving business. Patience is one commodity that is in relatively short supply, but if you're impatient in a negotiation, you'll lose your shirt. Take the time that you need, don't rush to give in, don't show your anxiety, stay cool and don't panic. Negotiation is a process and a game. Use the process and play the game.

You'll be astonished at the difference that it makes!

Chapter 4 Strategy and Tactics Exercises

I. Identify the following statements as TRUE or FALSE.

1. F

2. T

3. T

4. F

5. F

2.

6. T

7. T

8. T

9. F 10. T

II. Discussion

See if the students know of any tactics that were not mentioned in the chapter.

III. Role Play

Make sure that the students bargain to an agreement. The whole exercise is mute if they do not come to a settlement.

IV. Case Studies

Case one: A last minute decision

If the deal sounds interesting you should suggest that you continue to negotiate. Do not give into his threat or ultimatum. His tactic is designed to make you panic and not think carefully about your decision. If he refuses to give you more time to examine the details of the offer you should get on the plane and leave. He would not present the offer in such a way unless it gave him a big benefit to do so.

Case two: Is that your best offer

A great way to practice our negotiation skills is to simply get in the habit of asking salespeople,“Is That Your Best Offer?”We would be amazed how many times they will lower their price or throw in an extra benefit in response to this simple question.

In this case, the salesperson is honest and does the right thing. The effective counter to this tactic is to build up the value of the benefits that the product or service has to support the price. The salesperson could respond, “That is our best price on this model, but if you do not need DVD for your compact disc drive, we can sell you that model over there for four hundred Yuan less. Which would be better for you?”

Case three: The bully

The conventional wisdom is to confront a bully and, if necessary, drive toward a showdown（直接公开的解决争端, 摊牌）. The end result is usually either that the bully “backs off” or there’s a battle, which—win or lose—can lead to an increase in the amount of respect you gain from your peers and, in some cases, from the bully.

The disadvantageous aspect of this approach is that you risk taking a beating（完全击败）—all in the name of respect!

The dynamics of the negotiating table, of course, are different from those in other arenas. Specifically, if you confront the verbal bully with rhetorical fireworks of your own, it can quickly escalate（增强、升级）from mano-a-mano（息事宁人，以和为贵）into a verbal free-for-all （全面战争）, with everybody getting into the act.

But let’s say it doesn’t embroil（陷入，卷入纠纷）you and others in a verbal brawl（吵架）. Let’s say you and your adversary are allowed to “duke it out（用拳头打个输赢）” by yourselves. Even if you win, you still lose. Why? Because in all likelihood, in the process of subduing him, you have turned the negotiation into a zero-sum game. You have crushed your opponent's ego. Admittedly some negotiating battles can be won through this approach, but my experience is that many more negotiating wars are lost.

Reasoning privately with a negotiating counterpart is often a good strategy, as it can pave the way for a meeting of the minds on many issues. Unfortunately, bullies, by definition, are not particularly amenable（顺从的, 服从劝导的）to this form of persuasion. In fact, they are typically

bullies because they subordinate（使居次要地位）the role of reason to emotion in the negotiating process. In this respect they are like children who, not getting their way, resort to a tantrum（勃然大怒）as a way of intimidating their parents into capitulation（投降）.

Although parents may be able to ignore their kids’ tantrums, there’s not a lot of upside（优势）to ignoring verbal abuse that emerges in a negotiation. Unless checked fairly early, it can create a sour climate for later discussions and render your initiatives useless. Hence, time outs are likely to prolong the problem rather than solve it.

Let me make a distinction here between verbal abuse and displays of emotion. It's not uncommon for people to “vent（发泄愤怒）” during difficult negotiations. These are generally spontaneous outbursts that reflect frustration over an inability to effectively communicate a position or a visceral dislike of the opposition’s stance. They are a natural byproduct of the tension that normally accompanies honest, but deeply-held differences of opinions.

Verbal abuse, however, tends to be more calculated, more negative and more destructive than emotional outbursts. In short, it must be dealt with if there's going to be any progress at all.

With these thoughts in mind, I opened a confidential line of communication with my antagonist's （对手）boss, requesting his presence at all future sessions until a deal could be finalized. Fortunately, the boss’ presence had the desired impact. The bully curtailed his tirades. We were able to focus on the issues, sort out and simplify the complications and drive toward a mutually-satisfactory agreement.

Remember:When a bully confronts you, don't be sucked in by his belligerence. Find a way to neutralize him without diminishing your own position—or destroying his fragile ego—and you'll have mastered an important negotiating technique.

Case four: You'll be sorry.

The key element in the case is moving a counterpart toward an unpleasant outcome, then threatening to push.

When both sides in a negotiation have a great deal to lose if the negotiation fails and a great deal to win if it succeeds, the You'll Be Sorry tactic can be useful. One counterpart pushes the other right up to the edge of some terrible outcome, then threatens to push.

If a counterpart uses You'll Be Sorry against you and you believe that your counterpart has the power to back up the threat, you have two choices: You can accept the consequences, or you can decide what is most important to you and use the Trade-Off（折衷）Concession to negotiate other deal points.

Case five: Keep silent.

When your counterpart is a talker and you want to learn as much as you can about the product, service, or counterpart without making any type of commitment, saying nothing and letting your counterpart do all the talking may be the best tactic. If you do not say anything, there is nothing for the other person to counter.

The most effective counter for the salesperson would be Asking an Open-Ended Question like “How do you plan on utilizing our product?” Or “What features about this product are most important to you?” Both these questions force the buyer to dialogue. Without dialogue, it is difficult to build a relationship based on mutual respect.

Chapter 5 Closing the Negotiation Exercises

The focus of this chapter is to get the students familiar with the considerations and trade offs that affect closing a contract.

Exercise answers:

I. Identify the following statements as TRUE or FALSE.

1. F

2. F

3. T

4. F

5. F

2.

6. F

7. F

8. F

9. F 10. T

II . Discussion

Students should refer to the materials in the chapter where the signs are discussed.

III. Role Play

Role Play 1

The Chinese company is correct in maintaining that religion should not be brought into the negotiations. If the American company refuses to back off on this requirement, the Chinese company has an internal dilemma which may be resolved if the Chinese company in return demands a concession such as an increase in the ultimate share distribution or a shortening of the period during which majority ownership moves from the American to the Chinese company.

Conversely, the American company can offer to withdraw its demand if the Chinese company gives a concession such as lengthening the period before ownership changes.

Role Play 2

This case revolves around the notion of who blinks first or, which company will be the first to break the deadlock. It is probable that the buyer wants a concession to enter the Asian market while the Chinese company would not refuse an offer to be introduced to other markets, whether in Europe or elsewhere. Teams should do some research based on populations, currency exchange rates and prices to determine what can be put on the table. Note teams should be considered successful if they agree to include an article or clause which binds each party to discuss an agreement to introduce the other party to other new markets.

Role Play 3

The seller has no legal recourse to recover any costs incurred prior to the signing of the contract. However, the buyer, by going to another supplier, will be vulnerable to claims of negotiating in bad faith for which legal recourse may be possible. The seller can weigh the loss of the contract and the write off costs incurred against the costs of agreeing to some or all outstanding matters under negotiation on condition that the costs incurred be repaid. The buyer may well agree to that.

IV. Case Studies

Case One : Air Canada

This is a real case and students should search the internet to find out more details. It was reported that a union representative at the negotiations made a totally inappropriate remark at the negotiating table, and students should be encouraged to find it.

The remark in question was reported as: “He (referring to Mr. Li) can take his proposal back to Hong Kong”.

1. Should this have been under negotiation in the closing stages of reaching an agreement?

The key phrase in the case study which informs the students that the negotiations were in the closing stages presented is:

“to walk away if unions did not agree to more concessio ns”.

2. What should Air Canada have done?

The requirement that the unions make more concessions suggests that unions have to agree to take some action, but the unions are not part of the negotiations. Any concessions that the unions have to make are a matter for negotiation between the unions and Air Canada.

Labour Unions in most western countries including Canada, have contractual agreements with companies under which they will provide labour. There is no obligation on the part of the Unions to change those signed agreements, although faced with possible liquidation of the company, the unions might have been more accommodating. It is possible, but the case does not show that the unions had already made concessions but were not prepared to go any further. Given this situation, there was little Air Canada could do at this point.

3. What are the strengths and weaknesses of the negotiating parties ?

Air Canada's negotiating position was weak because failure of these talks meant either the

company would have to close, or the company would have to find another investor. A new

investor might offer to invest in the company under conditions less favourable than Trinity Time.

Again, students should be encouraged to search the internet to find out what happened. Air

Canada did find a new investor.

Air Canada's position was further weakened because they were faced with negotiations on two

sides. On the one side, they wanted the investment from Trinity Time, but the conditions Trinity

Time require meant that Air Canada also had to get agreement from its labour unions, and the

labour unions were not agreeable to further concessions.

Trinity Time's position was strong. Their only weakness was that they might, in the end, not be

able to invest. The case, as shown, does not give details of the investment proposal, so we do not

know whether or not Trinity Time had more lucrative investment opportunities open.

Case two: Closing a negotiation

Special statements of indicating the close of the negotiation are: “Just before we finish, could we go over the main points of the agreement?”, “I suggest we meet again. How about this time tomorrow?” Similar expressions are: “I think we can call it a day. Let's stop there.” “That brings us to the end o f…” “Let's go over the main points again.” “Can I just run over the main points?” “I'm sure we would all agree that we have had a successful meeting.”

Case three: Making a counter-proposal

When the draft contract is made, and you find some problems, you need to take a counterproposal.

In the above negotiation Alex makes a counterproposal based on the following steps:

Step 1: Study the draft carefully and try to find out if there is any mistake or problem. The purpose of doing this is to make concessions on minor points and hold on your own view on the important

ones in the next negotiation.

Step 2: Make full preparation for argument and reasons. You have to make sure whether the argument or the reasons are persuasive or not. You should also note that the counterproposal should be made at the beginning of the negotiation. Otherwise, it is unfair to the other party.

Step 3: Make a compromise proposal. If the other party won't accept your argument, you can use a compromise proposal to keep the ball rolling.

Chapter 6 Negotiating for Trade Exercises

The focus of this chapter is to get the students familiar with the considerations and trade–offs that affect price negotiations.

Exercise answers:

I. Identify the following statements as TRUE or FALSE.

1. F

2. F

3. T

4. F

5. T

2.

6. F

7. T

8. F

9. F 10. T

II. Discussion

1.Students should identify the factors of : costs of production, terms of delivery, market

prices, and profit considerations.

2.

3.Students should consider factors such as competitiveness, market penetration, and a

desire to complete a successful negotiation.

4.

5.Students should identify such matters as quality of product, favorable financing terms,

favorable terms of delivery, promise of future contracts.

6.

7.

III. Role Play 1

The focus should be that the Chinese company should do the calculation to show that it is advantageous to negotiate alternative delivery conditions. Basically, the buyer wants airfreight CPT but may be persuaded to accept CPT surface. The students should be able to reproduce a table as follows:

Direct Seattle Via Vancouver Buyer's Offer Difference Cost of unit$1.00$1.00$0

Transport$0.20$0.05$0.15

Total Cost$1.20$1.10$0.109.1% Total Cost$1.05$1.10($0.05)(4.7%)

The change in transportation costs now allows the Chinese company to offer to share the

difference in costs if the buyer will agree to airfreight in Vancouver with road transportation rather

than airfreight to Seattle.

Role Play 2

The focus here is for the students to recognize that the seller can offer to save the buyer the cost of

building an expensive warehouse. Assuming the buyer equally spaces his purchases over a period

of five years, the net present value of the price in excess of the buyer's price will be of 20,000

units at 300 RMB each is 27 million RMB and a warehouse will cost 100 RMB, for a total net

present value cost of 127 million RMB. If, on the other hand, the seller offers to transport the

components by air every week, the net present value of the airfreight costs over five years would

be about $70 million RMB for a total cost of 99 million RMB or a saving of 30 million RMB. 90

million RMB over five years equates to about 300 RMB per unit. A deal can be struck simply on

economic terms, but the Chinese manufacturer still has the patented technology and can use this to

drive the price down even further by offering to share the technology.

IV. Case studies

Case one: Energy saving electronic lamps

The mini–negotiation goes well because the two parties exchange their opinions and positions

effectively and the negotiation covers the following basic particulars of an international business,

so agreement can be reached.

(1) Commodity: Triangle Brand Energy Saving Electronic Lamps

(2) Quantities: 5,000 pieces of Art. No. TR-3U-A 110V 5W & Art. No. TR- A110V 7W each.

(3) Prices:

Seller: To make an offer as follows:

Article Nos.Quantities Unit price

TR-3U-A 110V 5W5,000 pieces USD 3.00/piece CIF Sydney

TR-3U-A 110V 7W5,000 pieces USD 3.50/piece CIF Sydney

Buyer: To make a counter-offer as follows:

Article Nos.Quantities Unit price

TR-3U-A 110V 5W5,000 pieces USD 2.50/piece CIF Sydney

TR-3U-A 110V 7W5,000 pieces USD 3.00/piece CIF Sydney

Agreement: To set the price at the buyer's counter-offer

(4) Payment Terms: By irrevocable sight L/C to be opened 30 days before the time of shipment

(5) Time of Shipment: In December

Case two: Toy cars

Students to identify the possible factors described in the chapter that should be included in their deliberations.

Case three: Unreasonable discount

As the seller, you have as many responses to requests for unreasonable discounts as the buyer has reasons for asking for the discount. Before we make recommendations as to how you should respond, let's spend a brief moment in the customer's shoes. So why do you think they have asked for an unreasonable discount? Are they “trying their luck” and testing your knowledge or resolve to see what they can get away with? It's a well known tactic in negotiation to open with an extreme position. Do they really know the real market value of your goods or services? Perhaps they have not yet shopped around and are blissfully ignorant of the real value. If this is the case, a good place to start is with a question. Ask why they have asked for such a large discount. If they can't substantiate（证明某事有根据）it, the issue evaporates before your eyes. If they quote one of your competitors’ prices, then you will need to substantiate their claim and compare your own offering (We are assuming you know how you compare to your competitors). Let’s further analyze the unreasonable discount. Why would they try such a tactic or ploy on you? “Extreme Offers” are designed to lower expectations through shocking you. Even though they may not get the extreme price they have opened with, they may still end up succeeding at chipping away at your margin and walking away with a lower price than you would have given them without this ploy. They do risk offending or even outraging you, resulting in the sale being lost altogether. So as with many tactics, they are taking a risk. When faced with tactics, separate the person from their behavior. If you are surprised, feel free to show your surprise. If you feel like laughing, then laugh (do let them know that you are laughing at their offer and not at them). Natural authentic behavior can diffuse the situation and facilitate a deal. Let the other side know that their expectations need to be adjusted, and quote other deals as precedents to inform and persuade them over to your price.