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Basic Business Negotiation Practices
1. General Discussion
Definition of Business Negotiation: It is the process where buyers and sellers engage in discussions to facilitate a transaction, or to resolve disputes and obtain economic benefits.
Characteristics: Extensiveness, Transactional nature, Profitability, Price-related aspects.
Principles: Voluntary principle, Equality principle, Mutual benefit principle, Consensus-seeking principle, Efficiency principle, Legitimacy principle.
Criteria for Success/Failure in Business Negotiations: Economic interests, Negotiation costs, Social benefits.
2. Types, Elements, and Motivations in Business Negotiations
By Number: Bilateral negotiations, Multilateral negotiations.
By Number of Participants: Small group negotiation, Team negotiation, Individual negotiation.
By Location: Home-field negotiation, Away negotiation, Third-party location negotiation.
By Type of Transaction Object: Contract terms negotiation, Goods trading negotiation, Technology trading negotiation, Labor contract negotiation, "Three Comings and One Compensation" negotiation, Lease negotiation, Infringement and breach compensation negotiation.
By Transaction Position: Buyer negotiation, Seller negotiation, Agent negotiation.
By Attitude and Method: Soft negotiation, Hard negotiation, Principled negotiation.
By Department: Official negotiation, Private negotiation, Semi-official negotiation.
By Communication Method: Verbal negotiation, Written negotiation.
By Content and Goal Relationship: Substantive negotiation, Non-substantive negotiation.
By National Boundary: Domestic negotiation, International negotiation.
By Legal Binding Power of Outcome: Formal negotiation, Informal negotiation.
Motivations for Business Negotiations: Pursuit of consensus, Seeking cooperation, Pursuing interests.
Elements of Business Negotiations: Parties involved, Topics, Methods.
Methods can be analyzed from psychological trends: 1. Conventional style, 2. Inductive style, 3. Circuitous style, 4. Impact style.
Analysis from communication methods: 1. Preemptive style, 2. Reactive style, 3. Equal style.
Analysis from relative strength of parties: 1. Advantageous negotiation skills, 2. Disadvantageous negotiation skills, 3. Balanced negotiation skills.
Constraints: Natural constraints, Economic constraints, Political constraints, Cultural constraints, Organizational constraints.
3. Thinking, Psychology, and Ethics in Business Negotiations
Thinking patterns shift from closed to open, from single to diverse, from static to dynamic.
Thinking methods in negotiations: Comparison, imagery, and generalization, Deduction and induction, Analysis and synthesis.
Artistic thinking methods: Divergent thinking, Dynamic thinking, Diverse thinking, Forward-thinking.
Fallacies in negotiation thinking: Switching topics, Treating relative as absolute, Using appearances instead of substance.
Psychological characteristics in business negotiations: Implicitness of psychology, Relative stability, Individual differences.
Significance of controlling business negotiation psychology: Helps cultivate good psychological qualities in negotiators, Helps understand opponents' psychology and implement psychological inducements, Helps appropriately express and disguise one's own psychology, Helps create a negotiation atmosphere.
Psychological needs in negotiations: Physiological needs, Security and assurance needs, Love and belonging needs, Respect needs, Self-actualization needs.
Strategic psychology in negotiations: Strategies where negotiators comply with the other party's needs, Strategies where negotiators make the other party comply with their own needs, Strategies where negotiators satisfy both their own and the other party's needs, Strategies where negotiators violate their own needs, Strategies where negotiators disregard the other party's needs, Strategies where negotiators disregard both their own and the other party's needs.
Negotiation psychological taboos: Individual negotiation psychological taboos: Avoid haste, Avoid superficiality, Avoid narrow-mindedness, Avoid vulgarity, Avoid weakness, Avoid greed.
Professional negotiation psychological taboos: Avoid blind negotiation, Self-underestimation, Inability to break through, Emotional decision-making, Focus only on oneself, Hypothetical self-restraint, Carelessness, Loss of patience.
Psychological qualities successful negotiators should possess: High sense of purpose and responsibility, Resilient willpower, Sincere negotiation attitude towards others, Good psychological adjustment abilities.
Theoretical characteristics in the negotiation process: Strive to reach conditions satisfactory to both parties, Maintain negotiation theory, Be willing to argue, Be willing to pressurize, Speak persuasively, Show hardship, Talk about shadows, Threaten subtly, Be ready to counterattack.
4. Contents of Business Negotiations
Main contents of goods trading negotiations: Quality conditions: 1. Trading by specifications, grades, or standards, 2. Trading by manuals, 3. Trading by brand names or trademarks, 4. Trading by samples, 5. Trading by product site name. Packaging conditions, Price conditions: 1. Fixed price, 2. Temporarily unfixed price, 3. Partially fixed price, partially unfixed price, 4. Provisional price, 5. Sliding price, F.O.B. port of shipment, C.F.R. port of destination, Cost Insurance Freight (C.I.F.).
Delivery conditions: Mode of transportation, Delivery time, Port of shipment and destination, Whether partial shipments and transshipments are allowed.
Payment conditions: Remittance, Collection, Letter of Credit, Choice of payment currency.
Inspection and claims conditions.
Force majeure conditions.
Arbitration conditions.
Procedures in goods trading negotiations: Inquiry, Offer, Counteroffer, Acceptance, Signing of contracts.
Contents of technical goods negotiations.
Characteristics of technology: Knowledge-based, Existence as a commodity attribute, Teachability, Development and holding risks.
Characteristics of international technology trade: Monopoly of ownership, Information asymmetry, Uncertainty of transaction price, Effectiveness of technology value.
Subject matter of technology trade: Patent rights, Trademark rights, Copyrights, Proprietary technology.
Formation of technology prices: Costs of technology development, Technology transfer fees, Technology service fees, Opportunity cost, Sharing of additional profits.
Factors influencing technology prices: Maturity level of technology, Lifecycle of technology, Status of technology transfer, Own conditions of technology buyer, Degree of monopoly by seller over technology, Method of technology transfer, Payment method.
5. Organization and Management of Modern Business Negotiation Personnel
Moral qualities: Teamwork spirit, Loyalty to duty concept, Equality and mutual benefit concept, Proper behavior, Respect for others.
Psychological qualities: Human temperament: 1. Sanguine, 2. Choleric, 3. Melancholic, 4. Phlegmatic.
Psychological quality requirements: Unique perspective, Optimism, Emotional stability, Have a winning determination, perseverance, and endurance.
Professional qualities: Rich knowledge, Broad comprehensive knowledge, Strong specialized knowledge, Flexible, Humorous, High-level eloquence and language expression ability, High interpersonal relationship handling ability.
Cultivation of business negotiation personnel's qualities: Diligent study, Strengthen theoretical cultivation, Effortful exercise, Brave to practice, Make oneself mature: Characteristics of self-extension, Enthusiasm for others, Features of practical enlightenment, Characteristics of self-objectification, Unified value concepts.
Composition and optimal model of business negotiation team: Work efficiency of negotiation teams, Effective management span, Required professional knowledge scope, Collaboration and rotation of team members to ensure reasonable scale.
Division of labor: Main negotiator, Supporting negotiator, Recorder, Translator.
Selection of team leader: Possess talent, Unique working style, Rich negotiation experience.
Management of negotiators' behaviors: Adhere to democratic centralism principle, Adhere to no overstepping authority principle, Adhere to division of responsibilities and unified action principle, Adhere to single-line contact execution principle.
6. Business Negotiation Preparation
Investigation of negotiation environment: Political situation, Religious beliefs, Legal system, Trade practices, Social customs, Financial and banking conditions.
Weather factors.
Investigation of negotiation counterparts: Investigation of customer identity, Investigation of counterpart's creditworthiness, Understanding the authority of counterpart's negotiators.
Understanding the negotiation timeframe of the counterpart, Understanding other circumstances of the counterpart's negotiators.
Self-awareness of negotiators: Establishment of negotiation confidence, Recognition of one's own needs.
Channels for background investigation information in business negotiations: Printed media, Broadcast media, Statistical data, Various meetings, Specialized institutions, Informed individuals.
Methods for background investigation: Interview method, Questionnaire method, Literature method, Electronic media collection method, Observation method, Experimental method.
Principles for background investigation: Reliability, Comprehensiveness, Comparability, Targeted approach, Long-term approach.
Organizational preparation for business negotiations: Qualities structure of negotiation personnel generally divided into three levels: Core layer - Recognition; Middle layer - Learning; Peripheral layer - Talent.
Recognition: Temperament and personality, Psychological qualities: 1. Confidence, 2. Self-control, 3. Respect, 4. Honesty.
Thought awareness: Political thought quality, Credit awareness, Cooperation awareness, Team awareness, Efficiency awareness.
Learning: Knowledge structure: 1. Business knowledge, 2. Technical knowledge, 3. Humanistic knowledge.
Talent: Social skills, Expression skills, Organizational skills, Adaptability skills, Innovation skills.
Principles for composition of negotiation organization: Knowledge complementarity, Personality harmony, Clear division of labor.
Requirements for business negotiation plans: Rationality of planning: 1. Reasonable can only be absolutely reasonable, and cannot be relatively reasonable, 2. "Reasonable" is a concept that should be grasped from a rational perspective, 3. Reasonable is acceptable to both negotiating parties.
Applicability of planning, Flexibility of planning.
Content of the plan: Goal setting: 1. Minimum goal, 2. Acceptable goal, 3. Highest aspiration goal, Arrangement of negotiation strategies, Arrangement of negotiation agenda: 1. Time arrangement, Determination of negotiation topics, Contents of general agenda and detailed agenda.
7. Process of Business Negotiations
Creation of opening atmosphere: Polite, respectful atmosphere, Natural, relaxed atmosphere, Friendly cooperative atmosphere, Proactive advancement atmosphere.
Business negotiation opening strategies: Consultative opening strategy, Candid opening strategy, Cautious opening strategy, Aggressive opening strategy.
Business negotiation discussion principles: Atmosphere control principle, Sequential logic principle, Rhythm control principle, Communication persuasion principle.
Compromise principles and requirements in business negotiations: Protect overall interests, Clarify concession conditions, Choose the right time for concessions, Determine appropriate concession range, Do not promise to make concessions equal to the other party’s, Use skill in concessions, Do not easily concede to the other party, Test effects after each concession.
Concession implementation strategies: No harm to oneself strategy, Attack for attack strategy, Hard-line concession strategy, Frank concession strategy, Prudent concession strategy.
Causes of negotiation deadlock: Disputes over attitudes and viewpoints, Facing coercion resistance, Obstacles in information communication, Errors in negotiators' behavior, Interference from incidental factors.
Strategies and skills to break deadlocks:
Avoid disagreements, Shift issues, Respect subjects, Focus on interests, Multiple options, Select alternatives, Respect the other party, Effective retreat, Cool off mediation, Temporary breaks, Stand firm, Reasonably insist, Go all-in, Burn bridges.
Determination of the end of business negotiations: Examine remaining discrepancies in transaction conditions, Examine whether the counterpart's transaction conditions have entered the buyer's closing line, Evaluate whether both parties have entirely or basically agreed on transaction conditions, and also reached a consensus on how to technically handle individual issues, which can determine the arrival of the conclusion.
Judging from the time of negotiation: Both parties agreed upon negotiation time, Single party limited negotiation time, Gradually changing negotiation time.
Judging from negotiation strategies: Final stance strategy, Compromise strategy, Overall condition exchange strategy.
Possible outcomes of business negotiations: Achieve transactions and improve relationships, Reach agreements but relationships remain unchanged, Achieve transactions but relationships deteriorate, Fail to close deals but improve relationships, Fail to close deals and relationships remain unchanged, Fail to close deals but relationships deteriorate.
Ways to conclude business negotiations: Closing deals, Termination: 1. Term termination, 2. Non-term termination, Breakdown: 1. Friendly breakdown termination, 2. Stalemate breakdown termination.
Nine, Factors constituting business negotiation strategies: Content of strategies, Purpose of strategies, Methods of strategies, Key points of strategies.
Characteristics of business negotiation strategies: Targeted, Pre-planned, Timely, Opportunistic, Concealed, Artistic, Comprehensive.
Equal position negotiation strategies: Laying bricks to attract jade, Avoiding arguments, Secret maneuvers.
Passive position negotiation strategies: Silence, Endurance, Listening more, Circumvention.
Active position negotiation strategies: Bitter before sweet, Winning through competition.
Strategies against "hardline" negotiation styles: Securing commitments, Combining soft and hard tactics, Overcoming hardness with softness, Creating competition.
Strategies against "non-cooperative" negotiation styles: Appeal strategies, Improvement strategies, Deadlock creation strategies, "Stirring" strategies, "Thorny ground" strategies, Unpredictable strategies.
Strategies against "tricky" negotiation styles: Counter-strategy tactics, Responding to abuse of authority tactics, Responding to price inflation tactics, Responding to renegotiation after facts are established tactics, Feigned madness tactics, Tactical positioning tactics.
Strategies against "cooperative" negotiation styles: Negotiation deadline strategies, Hypothetical condition strategies, Moderate openness strategies, Private contact strategies, Lubrication strategies, Warm-up strategies.
Strategies against "emotional" negotiation counterparts: Weak-to-strong strategies, Flattery strategies, Maintaining an offensive attitude while not losing etiquette, Proposing numerous detailed questions and delaying discussion time.
Strategies against "stubborn" negotiation counterparts: Meeting strategies, Sending out trial balloons, Precedent strategies, Defensive-offensive strategies.
Strategies against "vain" negotiation counterparts: Initiating conversations with familiar topics, Indirect information transmission, Face-saving strategies, Restrictive strategies.
Bargaining strategies: Testing the waters strategy, Quotation strategies: 1. Quotation starting point strategy, 2. Quotation timing strategy, 3. Quotation difference strategy, 5. Quotation comparison strategy, 6. Quotation segmentation strategy.
Price increase and decrease tactics.
Price concession strategies.
Final offer.
Other negotiation strategies: Psychological warfare: 1. Satisfaction, 2. Informal negotiation, 3. Feast with hidden motives, 4. Sympathy technique, 5. Offering choice rights.
Mushroom warfare: Exhaustion tactics, Standing still, Shield tactics, Wasting time, Rotation tactics.
Shadow warfare: Straw man tactics, Empty city tactics, Pretend to give up to gain, Divert attention tactics, Trojan horse tactics.
Strong attack tactics: Sharp verbal exchanges, Ultimatum tactics, Pretending madness tactics, Maximum estimation tactics, Absolute statement tactics.
Whale swallowing tactics: Squeezing toothpaste tactics, Linked tactics, Adding pots and pans tactics, Stingy tactics, Steady progress tactics.
General warfare: Comparison shopping tactics, First and second lines tactics, Good cop/bad cop tactics, Breaking down into smaller parts tactics, Venue effect tactics.
Peripheral warfare: Bluffing tactics, Double agent tactics, Mediation tactics, Hospitality tactics, Screening tactics.
Decisive battle: Smoothing oil tactics, Compromise coordination tactics, Sandwich tactics, Fishing tactics, Upgrading negotiation tactics.
Ten, Business Negotiation Communication
Language communication: Overcome speaking fear, Prepare language before negotiation, Carefully design the opening statement, Express mutual interests using appropriate language, Collect useful information online, Confidence can be shown through tone of voice.
Maintain composure and win similarly.
Use firm language to wear down the will of negotiation counterparts.
Language used at the end of negotiations.
Eleven, Business Negotiation Skills
Dealing with deadlocks: Find mediators, Change discussion methods, Express specific clauses appropriately, Appropriate concessions, Resolve awkward situations humorously, Deliberately deny previous views to get agreement from the other side, Emphasize results already achieved, Stress significant consequences of deadlock, Issue final ultimatums.
Pressure application can use the following methods: Retreat to advance, Small concessions for big gains, Control the other party.
Resisting pressure: Counter-question tactics, Delay tactics, Roundabout tactics, Third-party tactics.
Statement techniques: Use pleasant language when making statements.
Consider the other party's feelings when making statements, Be concise, accurate, and organized, Keep speeches closely tied to the theme.
Questioning techniques: Choice-type questions, Direct questions, Candid questioning, Clarifying questioning, Indirect questioning, Questions that stimulate thinking.
Persuasion techniques: Pressure and counter-pressure, Compromise handling.
How to seize opportunities: Judge based on knowledge, Proceed step-by-step, Wear down the opponent's will.
Opportunities that can be utilized: Utilize happy moments, Utilize moments when the other party makes mistakes, Utilize moments based on the other party's identity, Utilize time pressure methods.
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