1. 4 – Negotiation basics Lars Monrad-Krohn BIO-051 2009 10/29/2009 1 LMK: Negotiations, basic for BIO-051 2009 from IN-DBL 2001, revised
2. Basis for negotiations One or both parties seek to gain something from the other, and this is not the same for both parties Trading in one form or another Example: Negotiations for a delivery Payment terms Terms and Conditions of delivery Warranty Terms of Service Repeated-acquisition conditions Publication of trade and terms, Promotional Use Etc. 10/29/2009 2 LMK: Negotiations, basic for BIO-051 2009 from IN-DBL 2001, revised
3. Wish-profile There are many aspects of a trade, as above, also within each category. Exercise: Set up the list of all aspects of a "payment-condition“ Time, form,currency, interest when late, bonus for early payment, etc Since each party’s wish-profile is different, the desire for every aspect differ between the parties and give grounds for a good match The first phase of a negotiation is to map Partner's desire profile 10/29/2009 3 LMK: Negotiations, basic for BIO-051 2009 from IN-DBL 2001, revised
4. Win-win (not the monopoly of Microsoft) Achieved when both parties get an optimal fit of his desire profile Here are liquidity at a very high value for A (occuring often for expanding businesses) B has just this month needs to show the best income accounting. Exercise: Create clauses to reflect this in a purchase of a web-publishing system of trade to 1mill NOK 10/29/2009 4 LMK: Negotiations, basic for BIO-051 2009 from IN-DBL 2001, revised
5. Preliminary work How long time for negotiations do both parties have, what are the wishes? (is part of the profile) What people are and should be involved before the signing?, Are there more steps for making a decision and getting the signature? Does the potentialcustomer do parallel negotiations with other suppliers? 10/29/2009 5 LMK: Negotiations, basic for BIO-051 2009 from IN-DBL 2001, revised
6. Preparation before the negotiation Be sure to have least as many participants in the negotiations as your partner, (even if they only bysiders, looking earnest at the other side of the table) Discuss the desired result and the agenda for the meeting (try to gain acceptance for a meeting schedule) Go through your own profile, and planinitiativesfor each participant on your side 10/29/2009 6 LMK: Negotiations, basic for BIO-051 2009 from IN-DBL 2001, revised
7. Completion of negotiations Be precise, friendly, win trust, be professional and targeted Listen extremely well to what they say, and think of what may lie behind……….. (their business situation, organizational state, some state of pressure etc.) Keep the times and respect your partner Please note that you will get to know the other people, as people with responsibilities and tasks, And get to understand the other the company's situation Ask openly about the counterparty's profile priorities, (when you have become familiar and buildt some trust) 10/29/2009 7 LMK: Negotiations, basic for BIO-051 2009 from IN-DBL 2001, revised
8. Three phases of a negotiation range Opening phase: Get to know the other party, their people, establish the basis and make this stick (the belief that this negotiation is going to be good (if you are a seller)) Working phase: Clarify mutual profiles so far as is appropriate Create alternative formulations for each profile-line The final phase: Make a final decision and the signing of the agreement: Ways of speeding up the signature: Give some more .... Because ... .. If signed by some date ... Threats: You Must have the signature before this date ... To be able to do this .... 10/29/2009 8 LMK: Negotiations, basic for BIO-051 2009 from IN-DBL 2001, revised
9. Tactics "Salami": Take the individual items, one at a time and lock in agreement.( "It is of course we agree!") “Defense in depth": "I (We) can not take any decisions here, I must get it approved by my boss" (As of course does not approve, before they feel that situation is fully exploited) “Pleasant Boss" or "No-Yes dynamics": The other party Makes Very difficult negotiations for a long time before the boss comes (your party have almost given up), and behaves extremely friendly, pleasant and understanding, which gets you quickly to go with the more than thought in the joy of getting on with the negotiations. 10/29/2009 9 LMK: Negotiations, basic for BIO-051 2009 from IN-DBL 2001, revised
10. Counter tactics Tactic "Salami" "defense in depth" "No-Yes dynamics" Counter -tactic Defer agreement “defence in depth" The same technique (may be hinted from the start) Keep the head “cold” “defence in depth" 10/29/2009 10 LMK: Negotiations, basic for BIO-051 2009 from IN-DBL 2001, revised
11. Further reading Recent negotiation readings have more questions to consider: Negotiation climate Unfriendly, hostile Big player versus small player Win-win oriented Forced negotiations Negotiations “schools” Harvard method (win-win) Power play 10/29/2009 11 LMK: Negotiations, basic for BIO-051 2009 from IN-DBL 2001, revised
