In today’s global and cross-cultural marketplace, influencing skills and negotiation strategies play a critical role in securing successful business deals, ensuring informed decision making and managing interdependent relationships. Although people negotiate all the time in a globally interdependent environment, it is still an invaluable asset understanding the psychology and strategy of effective negotiating.

■Preparation Phase

The pre-negotiation stage starts from the first contact between the two sides whose interest in doing business with each other is shown. From this stage on, both sides begin to understand each other’s needs, declare values and evaluate the benefits of entering the process of this negotiation. This stage is usually more important than the formal negotiations in the international business relationship. Social and informal relationships between negotiators, trust and confidence in each other are of great help. Both sides also start to form their strategy for face-to-face negotiating as well as try to foresee and take precautions against possible events. To be fully prepared before negotiations, negotiators will have to take into consideration the following aspects: the negotiation team, gathering of information, and the negotiation brief.

◆ Choose Your Team

Keep your team as small as possible. There are several reasons to keep your negotiation small. Primarily, communication is a source of strength within any organization. The negotiation team must be able to seek the input of the team quickly, and large groups are difficult to handle. Secondly, the negotiation team must be able to react promptly as counterparts bring new issues to the table. Keeping the negotiation team small makes it possible and convenient to make timely adjustments to the negotiation plan and to disseminate that information quickly.

Remember that not everyone is cut out to be a negotiator when you select team members. Negotiators must possess a wide variety of social, technical, communication skills and ethics.

Negotiation is a team sport. It requires specialized skills, communication ability, team spirit and gamesmanship found in any professional sporting even. Choose members who can foresee the areas covered by the negotiations and have the technical expertise to deal with the problems if you want to keep the negotiating effective. But it is unlikely that any single team member will embody all of the talents necessary to achieve the organization’s strategy. The organization must choose a cross-section of technical skills and personal attributes that will create a compact and efficient team. One team member’s weakness must be offset by another’s strengths. Technical knowledge must be accompanied by the ability to communicate and apply that knowledge. Putting a team together is similar to assembling a jigsaw puzzle: there is no success unless all of the pieces fit.

◆ Gather Information

Once the negotiation team has been organized, the first and the most important step in preparing for a specific negotiation is gathering information. It is common to learn as much as possible about a potential client or partner before negotiation begin. Various kinds of information are necessary: technical, finance, policy, market, even the background of a particular executive. The next step is to analyze the various data so as to seize up the probable goal and preferences of your counterpart.

Obtaining Information. It should be clearly understood that if you and your associates step off the plane with no personal or professional perspectives on your counterpart, you are to expect little success once the meeting begins. In addition to formal sources of information, informal sources should be consulted. Other organizations that have dealt with your counterpart might be valuable sources of information.

More important, the gathering of information includes that of market, science and technology, policy and regulations, etc. Factors related to the foreign country, such as its infrastructure, climate and geography, economic and physical resources, will also affect the way in which the work can be performed and the program of implementation. And they will also affect the cost and the success or failure of the negotiation.

Analyzing Information. With so much information at hand, it is advisable to do a feasibility study before the negotiation. A feasibility study can provide technical, economic and commercial bases for decision-making. It should define and analyze the critical elements with alternative approaches. A satisfactory feasibility study must analyze all the basic components and implications. Any shortfall will limit the utility of the study. A feasibility study is not an end in itself, but a means to arrive at a decision whether to go for the business or not.

◆ The Negotiating Brief

The negotiation brief consists of the instructions given to the team leader by the management, it varies from a short informal memorandum to a lengthy formal paper. But a simple and short one means a smaller risk of misunderstanding and a greater chance to follow the instructions.

The brief should:

◇Define the negotiating objective in terms of the major issues to be discussed.

◇State the minimum acceptable level for each of the major items.

◇State the time period within which the negotiation should be concluded.

◇Identify the team leader and other members of the negotiating team, such as the names and job titles of the team members.

◇Set up the lines of communication and the reporting system.

While the negotiating brief consists of the instructions given to the team leader by management, the negotiation team develops the negotiating plan. The plan should define the initial strategy, state the measures or tactics that may possibly be adopted, decide on the location for the negotiations, and ensure that appropriate administrative arrangements are made. The plan provides discipline and organization that can be critical to a team’s success.

■Negotiation Techniques

There are two basic strategies: offensive and defensive. To be specific, which approach to be adopted depends to a large extent on whether the negotiator is occupying a buying or a selling role. Offensive strategy is used to take the initiative while defensive strategy is to observe and wait until opportunities come and necessary measures should be taken. Usually the party with the greatest sense of need will make the initial contact. Appearing too needy can make the deal unattractive even before it is on the table. Conversely, approaching a deal in a take-or-leave-it manner may only attract the most desperate partners, or none at all. So as soon as the strategy is set, tactics can be decided on to achieve your goal.

◆ Offensive Tactics

Ask Questions. There are four kinds of questions: probing, specific, attacking, and yes/no questions. Probing questions are difficult to answer because they are phrased in general terms. They are intended to gain information for one party to secure the weak point in the opponent’s proposal before a major attack. Specific questions are designed to force an admission based on the information gained from the probing questions and data that are already known.

Tit for Tat. It is an effective tactic in business negotiations. Sometimes you need to be hard-shelled to make your opponent give up. In most cases, this technique can serve to push the negotiation forward if the negotiator deals with it appropriately. It can usually fool the opponent into making concessions and closing the deal.

Feign a Blow to the East and Attack in the West. One party will over emphasize the apparent importance to their securing a particular point when their real objective is the exact opposite. Some negotiators are suspicious of any proposal made by their counterparts.

Use of Commitments (excuse). The use of commitments, e.g. national laws and regulations, standard negotiating procedures of the company, instructions from a superior, previous precedents, etc., is needed to persuade the opponent of the truth of the statements the party makes. It is a major offensive negotiating tactic that both sides will use. When the commitments are of different levels, the higher one normally prevails.

Uncover the Counterpart’s Interests and “the right answer”. Negotiating about interests is a better way to conduct negotiation. When two parties have conflicts of interests, which are pretty difficult to resolve, they may try the “right answer” strategy: 1) agree the state of deadlock; 2) step out of the role of negotiators; 3) study the problem objectively; 4) seek the right answer; 5) agree on the right answer; 6) return to the role of negotiators to see if the right answer offer acceptable solutions.

Search for Contextual Irregularities or discrepancies. Keep in mind that the person who understands the context best will probably “win” the negotiation. A contextual irregularity is some factor in the negotiation that arouses suspicion or appears to be incorrect, given the overall context of the transaction. “Discrepancy” specifically refers to inconsistencies associated with the prices or numbers in a seller’s proposal. In other words, it is a method of challenging the validity of a proposal. In some cases, a careful analysis of these elements will reveal errors suggesting that the proposal may be unsound. Thus, you make the other party unreasonable and have advantageous stance.

Be Aggressive. Aggressive negotiators attack frontally and generally. They use the other party’s belief in their own strength against them.

Present Arguments. In negotiation, a party often feels the need to show the other side that they know exactly where the other’s real interests lie and will not compromise theirs. The valid reasons must be put into some kind of an order. Each point should be stronger than the one before until the argument reaches its climax, i.e. it ends with the strongest point that the other party will find most convincing.

The Best Alternative. This is often used in tender business. After a receiver receives a number of offers, he/she decides which company has made the most attractive offer and then negotiates with the other companies with a view to improving his/her best alternative. Once he can not improve it further, he/she begins negotiation with his/her first choice.

Promise. One party indicates its intention to provide a reinforced outcome that it anticipates the counterpart will consider pleasant, positive or rewarding. E.g., “If you can deliver the equipment by May 1st, we will make another order right away.”

◆ Defensive Tactics

Minimal Response and Feigned Misunderstanding. The most effective defensive tactic in negotiation is to say just enough to compel the other side to go on talking. The more they talk, the more they will reveal, the more they will feel compelled to reveal in order to be persuasive, and the nearer they will come to exposing their genuine motives and the real level of their bottom line negotiating objective.

Side-stepping. If not wanting to answer opponent’s questions directly, one party may seek to get by the issue.

Counter-question. If the opponent uses questions as offensive tactics, the party’s correct response is to counter-question, which are designed to compel the opponent to limit the scope of his/her enquiry and to reveal more of his/her own position.

Silence is Golden. If one party is highly emotional, approaches in a threatening way or is extremely demanding, keeping quiet can be very unsettling to them. Most people are troubled by silence in the midst of a heated discussion. Sometimes it can’t be treated as an attack. It has happened on many occasions that when met with silence, people modify their previous statements to make them more palatable. Moreover, the job of a good negotiator is to listen to and understand what others are saying. It is an important element in the crucial tool called Active Listening which has some interesting consequences: The listener may actually get a clearer picture of the other party’s ideas, and the discipline of focusing on other opinions can also give the listener the chance to reflect on the process and strategy.

The “Yes-but” Technique. If the negotiator does not want to sound offensive when he/she is facing a question that he/she wishes to answer in the negative, he/she may use the technique of “yes-but”. The affirmative part of the answer should appear to align the negotiator with his/her opponent, and so establish the negotiator as someone who is cooperative and appreciative of the viewpoint of the other side. The negative part is intended to identify some of the reasons that prevent the negotiator from doing what the other side would like him/her to do.

Straw Issues. In negotiating terminology, it is of no value to one party in itself. It is raised with the intention to be lost, Thus providing the opportunity for the party to secure a genuine concession from the opponent in return. Securing a particular concession from the opponent requires giving the opponent something in exchange. By including one or more straw issues in the initial demands, the party ensures that it has “something in the bank” to act as compensation for the opponent’s abandoning or modifying the initial demands. The party must view the problem through the eyes of their opponent in deciding what to select as a straw issue.

Exposing Dirty Tricks. It is quite common that the negotiators may find their counterparts playing dirty tricks. First, you must recognize that what is happening is in fact signs of dirty tricks. Second, you must show your counterparts that you understand the game by exposing it.

To Be Social. Negotiators of this tactic offer fun, friendship, and favorable connections. Hosts who practice this tactic can be exceptionally persuasive for visitors a long way from home. The social niceties must be observed in every culture, but be way when they cross the line into manipulation.

To Concede a Point on the agenda. The ability conceding a point on the agenda (of little value or importance), while giving every appearance of concern about their loss, is part of every successful negotiator’s bag of tricks.

To Reveal no Bargaining Position at all. Once negotiation gets under way, positioning occurs fairly rapidly. This is an important first step in the negotiating process. Choosing this method is an effective way of eliminating the sham (fake) element and of positioning the buyer for an effective attack. It is usually initiated by requiring the seller to submit a written proposal. If the proposal is submitted by a salesperson, the buyer should request time to consider it, suggesting that the salesperson might like to call back in a few days. The buyer should begin his/her preparation by carefully analyzing and evaluation the seller’s proposal. Since it is fairly common for sellers to build a sham element into their proposal, there is nothing to stop the buyer from doing precisely the same thing. If this happens, both parties put themselves in a defensive position by setting out their ideal bargaining position.