Art of Negotiation
Chapter 03. Types of Negotiation
In order to achieve goals you have not achieved
before you have to become someone you haven’t been before. — Jim Rohn
There are two types of negotiation.
Each has a different purpose and potential outcome.
In practice, however,
many negotiators confuse these types of negotiations,
leading to worse results than
when they clearly understood what they wanted and were doing.
The first type (Type I) is what I call the “one-time” type.
In this case, you only intend to negotiate
or trade with the other party once.
Each party enters into a negotiation
with the sole objective of obtaining the highest
or lowest price with the best offer.
In Type I,
you are in a confrontational position with your opponent.
The opponent’s goal is to offer the lowest price
if they are a buyer
or the highest when they are a seller.
Your partner is not your friend.
No matter how friendly,
polite, and courteous he is during the negotiation,
he only thinks of his own benefits or rewards.
he does not care about you and your rights.
In this type of negotiation,
you must be calm,
You have the right to use any possible trick
or trick to get the best deal possible.
After the transaction is over,
you need to assume that you will no longer see
or contact the other party.
It doesn’t matter if that person likes you,
respects you or wants to be your friend or not.
Your first priority is to get the best deal.
In the following chapters,
you will learn more about a range of strategies
and tactics that can be used to increase your chances of success
with this type of negotiation.
The second type of negotiation (Type II) is long-term negotiation.
This type of negotiation takes place
when you are about to enter into a complex agreement
that needs to be carried out over a long period of time.
In this case,
due to the nature of the product,
service, contract or arrangement being discussed,
you may end up working with the same person
for months or years.
Thirty years ago,
when I started producing video
and audio learning programs
with a producer/distributor in Chicago,
I appreciated the company’s willingness to promote my program,
both at home and abroad.
I am delighted that the company has offered me a contract
that contains fair terms in line with industry regulations.
After 30 years,
I still work with this company today
and have close relationships with key people there,
from the president to the staff.
Over the decades,
the market has changed,
people come and go,
more products are launched,
become popular and eventually disappear.
But throughout that process,
my relationships with key figures
in the industry have remained close,
Because I have always viewed this relationship
as a long-term commitment,
as a result,
I have had the best
and most successful work opportunities in my life.
I started using this tactic many years ago
and recommend it to thousands of businesses and executives.
They used this tactic and were pleased with the results.
Let’s start by understanding the difference
between a standard Western contract and a Chinese contract.
In the West,
much of the time spent negotiating is spent crafting a precise contract.
“The first party will do this and the second party will do that…”
This contract then becomes the basis
for the entire business relationship.
Each party is supposed to fulfill its obligations as declared,
detailed by each item in the contract.
Any deviation from the agreed terms can break the agreement,
lead to compensation,
where I spend a considerable amount of time each year,
the terms and conditions of an agreement are negotiated,
and agreed upon.
They are then written down,
revised and officially signed by both parties.
In the West,
this is considered the closing step of a discussion or negotiation.
But in China,
this is just the beginning of all negotiations
The Chinese write down everything
that can be considered or predicted.
But it is well understood that,
during the implementation of the agreement,
and situations will arise.
This new information and circumstances will force the contract
to be revised to ensure fairness
and reasonableness for both parties.
Every time I negotiate with a partner
(and I have deals with clients in more than 6 countries),
we often end up with complex deals
that have multiple terms
and value in the thousands of USD in just a few pages.
Right from the start,
I used to say,
“Let’s sign a Chinese-style contract.
In this type of contract,
you and I will agree on the basic terms
and conditions of the work
with which we will cooperate.
But I want both sides pleasure.
Whenever there are changes,
we will sit down together,
renegotiate additional and revised terms and conditions
until both parties are satisfied.”
We are glad that we have never had any disagreement
or any dispute regarding these “China contracts”.
In all cases,
we are open,
friendly and focused on maximizing the benefits of each party.
You must expect great things of yourself
before you can do them. – Michael Jordan