In the modern business world a lot of contracts are concluded every day Imagine that you are a businessman, the head of American city. And you decided to conclude a contract with Danish company for the procurement of the goods and the associated services for the replacement of water-pipes in your city. Imagine that tomorrow there will be the negotiations under the new joint project. Both parties bring the resources into it. There will be a conversation on shares of the property and authority. And it is painful. It is necessary to build the bridge between coast of interests.
Where there should the border pass? It is impossible to do without concessions. But what concessions to make? And when to make them? Whom to address for advice? Any tender and negotiations are connected with concessions. And where the concessions are, there is a place for “IF”. If not to concede to the opponent or the partner we shall have war and all of its charm. If to concede, it will be unpleasant to experience the defeat. The question is how to concede without losses and defeats? A problem is not easy.
But still there are ways of it s solving. The concession assumes, that you wait for nothing in exchange. You have conceded, and that is all. To make a concession means to permit something willingly or reluctantly, to refuse something, to sacrifice. Concessions can be different: In what cases there can be a question on a concession? when you want to refuse something before it will be taken away; when you want to reduce losses; when you want to show force, i.e. to prove, that you presume to make concessions; when you understand, that the opposite party is right and deserves a concession; when you want to show sincerity of intentions; when you do not see an output from impasse, except for concsession; when you aspire to push the negotiations; – when you want to receive the greater, having conceded in small.
Objectives: 1a. Negotiation (def.): a form of decision making in which two or more parties talk with on another in an effort to resolve their opposing interests (p. 3). Bargaining: describes competitive, win-lose situations Negotiation: refers to win-win situations A process that transforms over time due to mutual adjustment 1b. Key elements of a negotiation process: Interdependence, mutual ...
Concessions can be procedural, in essence and psychological. But there is one more kind of concessions, which should be seized to raise your professionalism. These concessions are called ” Eye for eye ” . Their ideology is simple: ” we shall make that if you in exchange make this “. This kind of concessions is expedient under following conditions: when you want to find the compromise; when you want to find a way out of impasse; when you want to develop constructive variants of the decision; when you want to find ways to sweeten a pill; when you want to achieve the end of the certain stage; when you put the obviously manipulative purposes. One of the most useful questions at negotiating and the conclusion of the contract is the question ” What if?.. “.
In fact under the Murphy’s law everything unpleasant, that should take place, will take place. It is necessary to set as much questions beginning with these two words, as necessary for confidence that you have not missed anything important. For example, you want to use the leased lorry for transportation in sand of Kara Kum. You should ask: What if the lorry break not on my fault and there are no spare parts for repair? What if the lorry is stolen, and I cannot execute the contracts? What if the stealing of the lorry will be the consequence of carelessness at a parking? What if the local residents break the lorry because of national hostility? What if I break a booth casually at a turn, and local authorities take away the lorry as indemnification? What if the lorry that has no license for moving from the country to the country, will move border? What if you are not the lawful owner? What if I cannot return the lorry in time? What if I, using the lorry in the illegal purposes, is caught by police? Of course in our case with Denmark and the Contract of pulling the pipes we will not have to use all of these questions but in more difficult situations with another less developed countries they are rather proper.
Price ceilings are usually government policies and limits that intend to save consumers from being charged too high a price. This generally means to limit and control how high a price for a product can go. If price ceilings are not present, the suppliers will set prices extremely high for necessities which then become too expensive to be affordable. Suppliers know that no matter what, the items ...
If you agree to makeconcessions you should define: what these concessions are , under what conditions you will make them, that you would like to receive in return, during, inwhat moment you will offer them. Also you should remember that it should be nothing given free-of-charge For any your concessions, on which you were compelled by the partner, put forward the offers what you would like to have in exchange. The short word “if” should go before all offers and concessions: If you make purchase, I shall lower the price on X %; If you reduce the price for 20 % I shall make purchase; If you refuse the control over a place, we shall agree with your schedule; If you send the messenger, I shall transfer the plans today; If you sign the contract right now, I shall accept your prices; If you pay today we shall send you the goods tomorrow.
The first (conditional) part of a phrase will show your partner the price of a concession. The second part (containing) will show what he will receive at this price. At any negotiations you should achieve discounts, offering a substantiation for them: 1. Delivery and installation (what discount will be if you bring the goods yourself).
2. A guarantee on defects in materials and assembly (what will be the price if you will refuse the rights for it . Be sure, that they have included the charges connected with alteration and elimination of defects in the price).
3. Payment now or later (if there is an installment plan of payments what discount you will have paying cash now as you give them an opportunity to use your money).
4. New or as new (if I shall take the goods from a show-window or in bad packing, or slightly beaten and scratched what discount I will have).
5. The price for scope of a party (if I take much what discount I will have).
6. Passing purchase (I buy a suit if to it you will add a tie or if I take a table and chairs what discount I will have).
7. The connected services (if I clean all dust after loading the goods what discount I may expect).
8. The cumulative account (what discount I may expect if I take obligations to work only with you).
Price elasticity of demand is defined as how demand changes as a result of a change in price. It can be said that if a reduction in price leads to an increase in demand then demand is relatively elastic. Elasticity is usually negative. There is an alternative scenario where demand will increase as price does so too. This happens only in the case of Giff en goods, where elasticity is positive. The ...
9. The price of the concession count up not on a commodity unit (it can be insignificant), and on all the party. The price is not the only point to discuss at negotiations. You should discuss: First, the conditions of delivery: the quantity of possible delivery of the goods, what discounts on the delivery of large parties, who will pay for delivery and the insurance; if the goods are shipped to the container who bears the responsibility at damages, what is used as packing, if it is steady against water, rodents and so forth, whether there is an opportunity to specify own trademark, who bears the responsibility for storage of an insurance stock, what is the minimal size of a party, who and how can trace the delivery of the goods. Secondly, the account of risk: who pays the insurance sum, what the insurance includes, who pays for replacement, who defines force-majeur circumstances, who provides quality assurance, what costs should be covered with insurance compensation, who will pay local taxes and other payments. Thirdly, the account of factors of time: when the goods should be sent, what is the period of force of the contract, what latest allowable term of delivery, in what order parts of the contract will be carried out, whether it is possible to change date of the finishing.
Fourthly, the specification of delivered products: what parameters of the goods are crucial, whether deviations from the standard are possible without damage to quality, whether there is a double operating time of the trebled price, what discount will be if to reduce as much as possible the number of established parameters, what characteristics are attractive, and what are necessary. Reference: Bartol, K.M. & Martin, D.C. & Tein, M, & Mathews, G. Management: A Pacific Rim focus, McGraw Hill, 1998 (2nd Ed Robbins, S. P., Bergman, R., Stagg, I., Coulter, M., (2000), Management 2nd edition, Prentice Hall, Sydney Fleche, Anne. Conducting negotiations :Alabama P, 1997..