Negotiation

Objective: Students understand how to prepare in negotiation

A. Presentation

What do you understand by the term 'negotiation'? In pairs, work out a

short definition.

1. Listen to the recording of a conversation between two friends. Identify:

a) the first suggestion
b) the counter suggestion
c) the agreement.

2. Here is a representation of the typical structure of a negotiation.

Compare this with the conversation you have just listened to.
Suggestion

Counter Suggestion

Agreement

………

In pairs, suggest a short business conversation with the above structure.

B. Practice
Preparation for a negotiation

What considerations arc important in preparing to negotiate? In pairs, suggest as many

as you can.
1. Listen to the recording in which a Management Communications Consultant,
Diana Ferry, talks about preparing for a negotiation. Mark the seven points below
in the order in which she mentions them. The first is already marked as an
example.

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Identify your minimum requirements. ❑
Prepare your opening statement. ❑
Decide what concessions you could make. ❑
Know your own strengths and weaknesses. ❑
Know your role as part of a team. ❑
Prepare your negotiating position - know your aims and objectives. ❑
Prepare any figures, any calculation and any support materials you may need. ❑

Making an opening statement

Most formal negotiations begin with an opening statement from each side.
What do you think an opening statement should include?
1. Listen to a recording of part of a meeting between a small Singaporean
software company called LP Associates and a possible partner, Kee Ltd .,
in a joint venture. You will hear part of an opening statement from Stella
Wang, the Production Manager at LP Associates. Tick ( ✓) four of the
eight statements below which best represent what she says.
LP Associates want to reach a final agreement in this negotiation. ❑
These are preliminary talks. ❑
The two parties want to resolve a conflict. ❑
They want to agree on a name for the joint venture. ❑
LP Associates would like to consider joint product development. ❑
They would also consider licence agreements. ❑
LP Associates want to agree a complete sale of their ideas. ❑
They want to consider working on a consultancy basis. ❑

2. Listen again. Complete the following phrases from Stella's opening statement.
a) Well, thank you
……………………………………………………………………………
b) May I begin by
…………………………………………………………………………
c) First of all, we see it very much as a first meeting, a …………………………… to
…………….. in which we can perhaps ...............................
d) There are two, possibly three, ways in which we
………………………………………..
e) Id like to …………………………….. these under three headings.

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 3. Compare Stella Wang's opening statement with the suggestions you made at the
beginning of this section.
What did she include that you also suggested?
What other things did she include?

Bargaining and making concessions

1. Listen to a recording of part of a negotiation between Arco, a German -

owned manufacturing company in Ireland, and an Irish research company
called Central Auto Systems, CAS. Twelve months ago Arco and CAS
agreed a joint development programme to manufacture an engine
designed by CAS. However, Arco has recently carried out a major
restructuring of its activities. The company has decided not to proceed
with the joint venture for the new engine.
The negotiation is about ending the joint venture and agreeing
compensation for CAS. In the extract, you hear Dietmar Tӧpfer
and Erich Rinalder of Arco talking to Celi a Spencer of CAS.
Listen once and mark the following as true (T) or False (F):

a) The reversal of rights is linked to the compensation agreement. ❑

b) Dietmar Tӧpfer thinks Arco's work on the fuel system must be considered.❑
c) It will be difficult for CAS to find a new partner. ❑

2. Listen again. Identify examples of language used to link

agreement on one issue to agreement on a different issue.
Complete the spaces in the sentences below:
a) We want compensation to ……………………….. our work
………………………………….
b) Yes, we …………………………. to that, ………………………………. We can
accept your compeLsation demands.
c) So, we need to ………………………… the question of rights to
compensation.
d) The problem is that ……………………………………….. revert all rights, we
………………….. keep the compensation within

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Accepting and confirming
An essential requirement in negotiating is to be absolutely clear what
the other party is proposing and to state clearly what is being agreed.
Inevitably, this involves a degree of repetition and paraphrasing. In the
recording you are going to hear there are examples of this kind of
repetition.
1. Before listening to another part of the negotiation between Arco and
CAS, recap what was being discussed in the first extract,
In this next extract, Dietmar Tӧpfer and Erich Rinalder of Arco and
Celia Spencer of CAS are discussing compensation to CAS, and a
royalty payment to Arco on future production of the engine. Identify:
a) why compensation is important to GAS
b) the final agreement reached.

2. Listen again. As you listen, write in the missing words.

a) GAS accepting the principle of royalty:

We …………………………………………………. a royalty, because once
we’re paying a royalty we’ve got an income to support it
b) Arco insisting on a 10 % royalty and agreeing payment
of two years’ compensation:
Well,
………………………………………………………………………………
……………. a 10 % royalty …………………….. that – the years’
compensation.
c) CAS accepting this:
Okay, in principle
…………………………………………………………………….. 10 %
……………………..compensation based on two years’ projected sales.
d) Arco confirming what the parties have agreed :
Yes, okay. So confirmation, to
………………………………………………………………………….. we are
agreeing ………. we agree a two years sales forecast compensation.

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Dealing with conflict
1. Listen to a recording of five different statements. All of these are
ways of dealing with conflict. Match each statement with one of the
following strategies.
a) Adjust to think and reflect. ❑
b) Summarise progress and areas of agreement. ❑
c) Leave the problem, discuss something else, come back later to
the problem. ❑
d) Emphasise the loss to both sides of not reaching agreement. ❑
e) Offer a conditional concession. ❑

Rejecting

1. Group Image, a commercial photographic company, is planning to buy new

processing equipment. For two days they have been negotiating with
Photolab Ltd., a supplier of photographic processing equipment. Photolab
have made an offer.
Listen to a recording of a final summing up from Peter Cawood of Photolab Ltd.
and three alternative responses from Group Image.
• Comment on each response.
• Decide which is the most appropriate.
• Give reasons for your decision.

2. Complete the following phrases with suitable words. If in doubt, listen again to
the last two responses in Exercise 1 above.
a) Thank you for your proposals, but …………………………. very
………………………………………..
b) We do not ……………………………………….. at this stage to
………………………………………………. your offer.
c) Obviously, we have ……………………………………………… it very
carefully.
d) We are not entirely …………………………………………… that the technical
advantages ………………………. the high C o s t .
e) We hope you'll ……………………………………… us again with future
offers.
f) I think we are ……………………………………….. to give you a Formal
……………………………….. today, but we will
…………………………………….. to you and tell you of our
……………………………………….. in a day or two. Then we'll
…………………………………………. what the next step should be. So, thank
you very much.

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 3. Match a phrase on the left with a phrase on the right which could be used
in a similar situation.
a) Not just now. I'm afraid not.
b) Not really. Not at the moment.
c) I shouldn't think so. I'm afraid we just couldn't do that.
d) I'm sorry but that's not realistic. I doubt it.

Ending the negotiation

1. The words below offer a clear indication of the result of a negotiation.

Work with a partner and decide which of these words would indicate a
positive outcome and which a negative outcome.

unfortunately another time no agreement

not ready fruitful partnership problems
very good satisfactory sorry useful

now listen to the recording to check your answers!

2. Listen again to the five extracts from the end of negotiation. Complete the grid
below.
Extract Agreement reached Next step

1.