Game Principles of

International Business Negotiation

Chapter 2

Game Principles ofInternational Business Negotiation

Key Points

1. Game principles of negotiation

2. The Intention of equality and voluntary

3. Negotiation Strategies of seeking common ground while maintaining differences

4. Eight crucial elements which influence the negotiation

Game Principles ofInternational Business Negotiation

2.1 Equal and Voluntary Participation

2.2 Credibility First

2.3 Mutual Reciprocity and Mutual Benefits

2.4 Maximizing Commonalities and Minimizing

Differences

2.5 Speak on Good Grounds

2.6 Separate the People from the Problem

2.1 Equal and Voluntary Participation

2.1.1 All parties, big or small, should be equal2.1.2 Veto power embodies equality2.1.3 Respect embodies equality2.1.4 Voluntary agreement embodies equality

2.2 Credibility First

2.2.1 Understanding derives from credibility

and trustworthiness

2.2.2 Credibility enhances trustworthiness

2.2.3 Be aware of the level of the counterpart’s

credibility

2.3 Mutual Reciprocity and Mutual Benefits

2.3.1 Interests first, position second

2.3.2 Bargaining over position, a taboo in

negotiation

(1) Violating the equal negotiation game principle

(2) Sabotaging the harmonious atmosphere

(3) Hiding a snake in the grass

2.4 Maximizing Commonalities and Minimizing Differences

2.4.1 Seeking common goals

2.4.2 Abandon minor points

2.4.3 Compromise is the mother of success

2.5 Speak on Good Grounds

2.5.1 Facts speak louder than words

2.5.2 Using objective criteria

(1) It should have objectivity independent from the subjective will of all parties

(2) It should be legitimate and operable

(3) It should be authoritative and scientific

2.6 Separate the People from the Problem

2.6.1 The relationship between the negotiators and the negotiation2.6.2 Specific methods of separating the people from the problem (1) See the situation from the other side’s point of view(2) Present more objective information and avoid

blaming the other side(3) React tactfully to emotional outbursts(4) Help them save face and do not hurt them

emotionally

The Eight- Word

NO TRICKSN– needO– optionsT– timeR– relationshipsI– investmentC– credibilityK– knowledgeS– skills

Excercises1. Fill blanks with proper words:BATNA, concession, bargining, position, compromise, offers, standing point, dealock, discuss, agreement

A negotiation is a way of reaching an agreement by means of discussion and ( ). Each side has something the other wants and both sides are trying to reach an agreement. Negotiators bargain with each other as they make ( ) (“We will … if you …?”) and ask for ( ) (“If we …, will you …?”). Negotiators don’t enter a negotiation expecting to get everything they want, they know they’ll have to ( ). If they don’t, there will be ( ) and the negotiation will break down. The purpose of every negotiation is to reach an agreement. Usually both sides are meeting because they have something to ( ). In a sales negotiation, the seller wants to sell the goods or services and the buyer wants to buy them. In a pay negotiation, the employer wants the workers to work and the workers want to work. Both sides want to reach an ( ), but they have different ( ). A long, important negotiation is conducted differently from a smaller, less important one, but most negotiations include these stages:

1 Preparation: Both sides decide what they want, and prioritize their wants. They anticipate the other side’s ( ) and decide what concessions they can make.

2 Proposal: Each side explains its proposal:”Our proposal is …” 3 Debate: The sides discuss the proposals: “Can you explain why …?” 4 Bargaining: The sides make or ask for concessions: “If we agree to …, are you

prepared to …?” 5 Closing: The sides reach an agreement: “Do we have a deal then?”

2. Please answer the following questions.

What is “the Eight-Word Maxim” of business negotiation? Could you explain briefly?

What are the principles of international business negotiation? Strict equality is not exsisting, then how could equality embody

in negotiation? Could you give an example showing the importance of credibilit

y in business? What are taboos in negotiation when we bargain over positions? In the negotiation concerning China’s entry into the WTO, how

was “maximizing commonality and minimizing differences” principle embodied?

How could we separate the people from the problem in negotiation?