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Chapter one Introduction and Overview of International Business Negotiation What is negotiation Negotiation is a bargaining situation in which two or more parties have a common interest to cooperate, but at the same time have conflicting interests over exactly how to share. A case: Ann owns a house which she wants to sell at $100,000, while Peter wants to buy the house at $80,000. Common interest: Ann wants to sell a house while Peter wants to buy Conflicting interest: Ann’ s price is 100,000 while Peter’s price is $80,000 What will be the possible price at which both Ann and Peter may agree? $80,000 $100,000 It is usually difficult and costly to reach an agreement. Forms of business negotiation: In oral form: Face-to-face conversation, on the phone In written form: e-mails, faxes, letters, etc. Vocabulary 2. purchase v. to buy 4. bargain v. to talk about the conditions of sale, agreement, or contract 10. agenda n. 16. offer 18. counterpart 19. concession 22. retreat 23. alternative 25. tactic 27. arbitration 34. initial 35. compensation 1. negotiation is at the heart of every transaction. There is no business without negotiation 2. the details of the contract must be negotiated to the satisfaction of both parties. a very trying process with confrontation and concession 3. both parties share open information. To say and to listen 4. both parties try to understand each other’s point of view. To understand 5. both parties try to find a way to achieve common and complementary objectives acceptable to them both. Both parties should get something 6. Everything is negotiable. It all depends on the expertise of the negotiators. To be patient and flexible 7. international business negotiation is sometimes known as the zero-sum game. Zero-sum game means one side’s gains are directly the other side’s losses. The basic principles of business negotiation 1. equality principle In a successful negotiatio
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