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.

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No concessions

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.

In addition,

he does not care about you and your rights.

In this type of negotiation,

you must be calm,

rigid,

and resolute.

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.

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Long-term 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

or organization

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,

sincere, courteous,

and professional.

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.

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China contract

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,

even litigation.

In China,

where I spend a considerable amount of time each year,

the terms and conditions of an agreement are negotiated,

discussed,

and agreed upon.

They are then written down,

reviewed,

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

and discussions.

The Chinese write down everything

that can be considered or predicted.

But it is well understood that,

during the implementation of the agreement,

new information

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