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Negotiation - Lesson 4 - The Stages and Language of Formal Negotiation - Part 2
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Introduction

Lesson 3 in this series introduced the early and middle stages of formal negotiation and language needed to engage in them. This lesson will introduce language needed for the middle and final stages of formal negotiation.


The Middle and Final Stages of Formal Negotiation

The middle and end of negotiations often include the following features:

Summarizing the proposal / details
Making concessions and compromises
Discussion of conditions / problems / concerns
Finding solutions to problems / concerns
Acceptance / refusal of proposal
Ending the negotiation / handshaking


Several of these features may occur more than once at different times and in different order as can be seen in the next part of the video. Watch the video until 1:36 and notice these features and the formality of the language used.

(Video@ Australia Plus https://www.youtube.com/watch?v=05uFs8qVCcI - YouTube.com)

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This negotiation contains many features typically found in the latter part of a formal ‘win-win’ negotiation. Now complete the summary in Task 1 to develop a stronger understanding of these features.

Task 1: Complete the following summary of the negotiation shown in the video. Use the word in the box below.

shake
conditions		 benefits
tentative		 summarizes
principle		 consider
solutions		 deal
flexible
The video shows that the party which makes the offer usually 1)summarizes their proposal by highlighting its fairness and the 2)benefits to both parties. Rather than accepting the offer immediately, the opposing party states that they may 3)consider the offer with ‘some conditions’. These 4)conditions and other problems and concerns are discussed in detail. At this stage, both parties try to be as 5)flexible as possible in finding 6)solutions to the problems to ensure an agreement is reached. Each concern is discussed in detail until solutions are found. After issues are resolved and conditions are met, the parties reach an agreement in 7)principle , which means it is 8)tentative and that further discussion and agreement on minor points is needed. At this point, key participants in the negotiation 9)shake hands and in some cultures celebrate the success of the 10)deal with a glass of champagne.

Language Used in the Middle and Final Stages of Formal Negotiations

Task 2: Matching. Drag and drop the sentences on the right to the appropriate stage on the left.

Task 3: Vocabulary matching. Drag and drop the definitions on the right to the appropriate vocabulary item number on the left.

Other Phrases Used in Mid and Late Stages of Formal Negotiation

Task 4: Write the appropriate number of each stage of negotiation next to the phrases below. (Write only one number for each phrase.)

Mid-Late Stages of Negotiation
1. SUMMARIZING THE PROPOSAL / DETAILS
2. MAKING CONCESSIONS AND COMPROMISES
3. DISCUSSION OF CONDITIONS / PROBLEMS / CONCERNS
4. FINDING SOLUTIONS TO PROBLEMS / CONCERNS
5. ACCEPTANCE / REFUSAL OF PROPOSAL
6. ENDING THE NEGOTIATION

1. 5  Then, I believe we have reached an agreement.
2.6  It’s been a pleasure discussing this with you. We look forward to our new venture together.
3.4  Perhaps one solution would be a partial offset against sales.
4.3  One condition we have is that we would need to set up a system of deferred payment.
5.5  We’re happy to accept this agreement.
6.1  We have agreed to hedge against currency in both directions to allow us to stockpile merchandise, reduce our capital outlay with a deferred payment and a partial offset against sales.
7.3  One concern we have with your proposal is…
8.2  In return for this, would you be willing to...?
9.5  I'm afraid your offer doesn't go far enough so we must decline.
10.1  Now, let’s just take a moment to review what we’ve discussed.
11.4  We could resolve this issue if you could accept a system of deferred payment.
12.5  I'm sorry, but we must respectfully decline your offer.
13.2  Would you be willing to accept a compromise?
14.6  We truly look forward to working with you in the future.
15.5  Unfortunately, we must decline your offer for the following reasons.
16.6  Well then, it’s time to make a toast to our future success.

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There is a great deal of variety in the language that can be used in different stages of formal negotiations. Complete Task 5 to learn a wider variety of expressions.

Task 5: Complete the chart below by writing (or copying and pasting) the appropriate heading that best describes the language in each column. Choose headings from the following box.

HEADINGS
  • ENDING THE NEGOTIATION
  • ACCEPTANCE / REFUSAL OF PROPOSAL
  • FINDING SOLUTIONS TO PROBLEMS / CONCERNS
  • SUMMARISING THE PROPOSAL / DETAILS
  • DISCUSSION OF CONDITIONS / PROBLEMS / CONCERNS
  • MAKING CONCESSIONS AND COMPROMISES

(1)(2)(3)(4) (5) (6)
SUMMARISING THE PROPOSAL / DETAILS MAKING CONCESSIONS AND COMPROMISES DISCUSSION OF CONDITIONS / PROBLEMS / CONCERNS FINDING SOLUTIONS TO PROBLEMS / CONCERNS ACCEPTANCE / REFUSAL OF PROPOSAL ENDING THE NEGOTIATION
Let’s review what we have discussed so far.We’d be willing to accept a partial offset against your sales.This agreement is subject to board approval.Perhaps we can resolve this issue with a partial offset against your sales. As the terms are favourable, it seems we have an agreement. It’s been a pleasure doing business with you.
To review, you would be willing to consider hedging against currency fluctuations…We are open to accepting a lower price in return for. a larger order.If you can promise delivery in six weeks, we could place a substantial order.One way to alleviate your concern is to hedge against currency fluctuation… As there are no other issues to discuss, I believe we have reached an agreement in principle. It’s unfortunate we were unable to reach an agreement. We wish you the best.
Shall we make sure that we agree on the figures that we have discussed so far?As we are willing to compromise on price, we hope you will order a larger number of units.One complication is the terms of payment. We would need you to accept a deferred pay…One possibility is to offer you a partial offset against our sales. I’m afraid we cannot reach an agreement at this time as we are too far apart on several key issues. We look forward to hearing from you again soon to discuss the finer points of the agreement.
In principal, we agree that you would help minimize outlay with a deferred payment…. If you order 5000 units, we could offer you a 15% discount on the price. We would need to get board approval on this before we can proceed. It may be possible for us to offer you free delivery for the first 3 months to help reduce your initial outlay. I’m afraid we cannot accept that price or several of the other terms you have presented. Despite our impasse, we enjoyed your proposal and hope to work together again.

Vocabulary Practice

Task 6: Study the chart above for 5 minutes then complete the gap fill exercise. Try not to refer to the chart while completing the exercise.

Summarizing the proposal / details

  1. Shall we make sure that we agree on the figures that we have discussed so far?
  2. To reviewsummarize what we have discussed, you would be willing to consider hedging against currency fluctuations in both directions.
  3. In principle , we have agreed that you would help us minimize our capital outlay with a deferred payment and a partial offset against sales.

Making concessions and compromises

  1. We’d be willing to accept a partial offset against your sales.
  2. As we are willing to compromise on price, we hope you will order a larger number of units.
  3. We are openwilling to accepting a lower price in return for a larger order.

Discussion of conditions / problems / concerns

  1. We would need to get board approvalapproval on this before we can proceed.
  2. This agreement is subject to board approval.
  3. One complication is the terms of payment. We would need you to accept a deferred payment.

Finding solutions to problems / concerns

  1. One way to alleviateaddress your concern is to hedge against currency fluctuation in both directions.
  2. Perhaps we can resolveaddress this issue with a partial offset against your sales.
  3. One possibility is to offer you a partial offset against your sales.

Acceptance / refusal of proposal

  1. I’m afraid we cannot accept that price or several of the other terms you have presented.
  2. As there are no other issues on the table, I believe we have reached an agreement in principle.
  3. As the terms are favourablefavorablebeneficial to both parties, it seems we’ve reached an agreement.

Ending the negotiation / handshaking / toasting

  1. It’s unfortunate that we were unable to reach an agreement at this time. We wish you all the best.
  2. Despite our failureinability to reach an agreement, we enjoyed hearing your proposal and hope that we can find a way to work together in the future.
  3. We look forwardfavorable to hearing from you again soon to further discuss the finer points of the agreement.
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Tip!

Notice the difference between 1st and 2nd conditional in negotiations:

Remember: both 1st and 2nd conditional sentences and questions are commonly used in negotiations.

More Practice Using 2nd Conditional for Negotiation

Task 7: Complete the 2nd conditional sentences and questions below with appropriate forms of the words in brackets.

  1. We would need (need) to get board approval before moving forward.
  2. Would you accept (accept) payment in arrears if we purchased (purchase) 15,000 units?
  3. If you would be willing (be willing) to pay cash, we could offer (can offer) you a 10% discount.
  4. Would you be willing (be willing) to consider a system of deferred payment?
  5. We would be (be) open to accepting a deferred payment system.
  6. We would like (like) to offer you a 2-year contract if you could start (can start) immediately.
  7. That price is higher than we would normally pay (pay).
  8. Would you consider (consider) hedging against currency fluctuation if we guaranteed (guarantee) purchase of 10,000 units?
  9. Perhaps we could resolve (can resolve) this issue if we were to offer (be offer) you a partial offset against your sales.
  10. If you were to order (be order) 5000 units in advance, we could deliver (can deliver) within 3 days.
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Tip!

Remember: The 2nd conditional is often used in formal negotiations because it is less direct and more polite.

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In negotiations, questions are very often answered with other questions because each party wants to learn more about the needs and situation of the other party and because they do not want to pay too much or commit to anything too quickly. Answering a question with another question is a commonly found feature in negotiations and is a skill that requires practice.

To understand the next task, study the following vocabulary items:

lead time = the time it takes for a product to be delivered after it is ordered
to pay in arrears = payment made after a service is provided
instalment = a payment in settlement of a debt
to waive = to ignore; give up; to put aside; dismiss something

Task 8: Vocabulary matching. Drag and drop the questions on the right to the appropriate questions on the left.

Task 9: Formulating questions used in negotiation. Unscramble the words below to form questions commonly used in negotiations.

  1. sort of / what / figure / were / thinking / you / of / ?
    Answer:
    What sort of figure were you thinking of?
    Please answer the question.
  2. hoping / discount / ? / were / what / of / for / kind / you
    Answer:
    What kind of discount were you hoping for?
    Please answer the question.
  3. of / volume / what / about / ? / talking / sort / we / are
    Answer:
    What sort of volume are we talking about?
    Please answer the question.
  4. terms / credit / sort / are / ? / offering / what / of / you
    Answer:
    What sort of credit terms are you offering?
    Please answer the question.
  5. time / frame / of / sort / what / we / are / at / looking / ? /
    Answer:
    What sort of time frame are we looking at?
    Please answer the question.
  6. deadline / realistic / how / is / you / ? / for / this
    Answer:
    How realistic is this deadline for you?
    Please answer the question.
  7. well / this / needs / your / how / ? / does / meet
    Answer:
    How well does this meet your needs?
    Please answer the question.
  8. does / exactly / what / guarantee / ? / your / cover
    Answer:
    What exactly does your guarantee cover?
    Please answer the question.
  9. able / when / you / instalment / ? / pay / are / first / to / the
    Answer:
    When are you able to pay the first instalment?
    Please answer the question.
  10. insurance / cover / ? / what / does / the / exactly
    Answer:
    What exactly does the insurance cover?
    Please answer the question.
  11. prepared / much / to / reduce / ? / price / the / how / are / you
    Answer:
    How much are you prepared to reduce the price?
    Please answer the question.
  12. maintenance / price / is / ? / in / included / the
    Answer:
    Is maintenance included in the price?
    Please answer the question.

What was covered in Lesson 4? Take the summary quiz!

Task 10: What did you learn about the stages and language of formal negotiation?

 YesNo
1. During negotiations, it is common to periodically summarize what has been discussed and agreed to.
2. An agreement reached ‘in principle’ means that there is a tentative agreement but the details still need to be discussed and agreed.
3. It is uncommon to ask the other party to accept conditions when trying to reach an agreement.
4. Subject to board approval means the agreement needs to be authorized by the company’s governors.
5. A partial offset against sales is a kind of loan.
6. An impasse means the negotiations are stuck because the parties are in disagreement over key issues.
7. To alleviate one’s concern means to deepen a person’s concern.
8. It is common for both parties to cooperate in finding solutions to problems that may interfere with reaching an agreement.
9. A concession means giving something up in order to reach an agreement.
10. Tied to the US dollar means that a country’s currency is linked to the American dollar to maintain a steady exchange rate and stable trade relations.
11. Making compromises and concessions are uncommon features of formal negotiations.
12. Good negotiators try to receive something every time they make a concession.
13. Make a toast means to make a short speech (usually about success, prosperity, good health, etc.) while lifting a glass of wine or champagne.
14. It is common to ask for concessions and compromises with sentences such as: ‘If you… …then we can….’
15. Deferred payment means early payment.
16. Good negotiators never answer a question with a question.
17. 1st and 2nd conditional sentences are commonly used in negotiations.
(Correct answers are highlighted in yellow)

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