Negotiation Process

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1. Describe and discuss the five stages of the negotiation process.

The negotiation process progresses through the stages of preparation, relationship building, exchange of task-related information, persuasion, and concessions and agreement. First, in preparation for negotiations the managers must conduct significant research about the item(s) to be negotiated. They must understand the individual(s) they will enter into the discussions and develop an in depth understanding of the cultural differences in negotiating styles. Managers must also understand their own styles and then determine how their style differs from the standards in other countries. Profiling a negotiator(s) who has been successful in the region about to be entered for discussion will provide an opportunity to add the finishing touches to the manager’s preparation. Failure to conduct full and proper preparation may result in wasted time and energy. Even if technical data has been extensively researched, negotiations may still be lost due to cross cultural misunderstandings. Second, is the process of relationship building. In many countries this is an important first step in negotiations. This often takes the form of social events, tours and ceremonies, along with light conversation. In some cases the entire first meeting is just for relationship building. In some countries the reason this is so important is that deals and contracts are based on trust and personal relationships as apposed to legal or institutional controls. Negotiators from the United States usually want to get down to business, wasting no time, and making progress as soon as possible. This approach can be disastrous if the foreign negotiators want to take enough time to build trust as a basis for negotiating contracts. The negotiators from Mexico and China allow plenty of time in their schedule for such relationship building with bargaining partners. Third, is the process of exchanging task-related information. Each side...
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