Successful Negotiations - part 6

Successful Negotiations Answers Listening Questions 1) The basic source of disagreement between Maxine and Peter is price – Maxine will not sell business for less than €15 million; Peter “can’t do better than,” that is, can’t offer more than €11.5 million. 2) Maxine says that the market is going nowhere but up – that is, continuing to expand – and she says that she’s got “tremendous value here – good people, good products, and a solid business plan.” 3) Due diligence refers to doing careful research before a big purchase or other major life decision. Language Review A. Useful Language Clarifying positions 1. If I understand the position correctly, you are looking for better credit terms, am I correct? 2. As we see it, this is the position at the moment: 3. How do you see our objectives? 4. Can I just summarize our positions as I see them? Evaluating the position Positive 5. Despite a couple points of minor disagreement, the arrangement under discussion obviously has a lot to offer both sides. 6. Though there are still a couple of loose ends to tie up, we feel overwhelmingly positive about the compromise that we’ve reached. 7. This is a good offer – no doubt about it. Negative 8. Honestly, this offer leaves a lot to be desired, in our point of view. 9. We’ve looked at the figures closely, and I can’t say that we currently have a very high appraisal of this deal. 10.At this point, I think it’s really tough to see where the value is for our side. B. Giving Reasons 1. Let me explain why we have reached this conclusion. 2. I also have to take into account many other factors. 3. There are several aspects to this situation. 4. I would just like to briefly run through seven points that explain our position on this. Online Activities – Flash Quizzes (click above to open) ! 2009 All rights reserved: www.businessenglishpod.com 56 businessenglishpod Online Activities: MP3 Podcast: BEP 406 – Declining an Offer while Maintaining Goodwill This episode will focus on declining an offer and what to do when someone declines. It is part of an ongoing series on negotiation skills. Negotiations don’t always go according to plan. Disagreement is part of life. But to build lasting relationships, coping with failure is even more important than celebrating success. So in this show, we’ll examine a deal that does not get completed. We’ll look at making a final offer as well as expressing dissatisfaction and regret. We’ll focus on maintaining goodwill even when talks break down. Peter is the owner of mobile phone ringtone and game provider, Textacular. He is in discussions with Maxine about buying her company, Gamester. Eventually, Peter wants to sell his business to a larger, regional service provider for a profit, so he is attempting to roll up or buy other small companies to increase the value of his business. But Maxine wants €15 million for her business, and Peter isn’t prepared to pay that much. As you listen, pay attention to how Peter makes a final offer, how Maxine declines it, and how they both work to maintain goodwill. Listening Questions 1) What are Maxine’s reasons for staying firm on price? 2) What does Peter say to justify not being able to pay more? 3) How does Maxine leave open the possibility for future cooperation? ! 2009 All rights reserved: www.businessenglishpod.com 57 Successful Negotiations Vocabulary To take into account: To consider. “We need to take into account volatility in the market.” Redundancies in sth.: (Often useless) repetition or overlap. (Can also refer to lay offs – To make s/o redundant means to fire him or her.) “A merger is possible, but there are a lot of redundancies in our business model, so it’s going to be necessary to make cuts.” To factor in sth.: To consider or include sth. in your thinking. “We should factor in the price of oil when we draw up our business plan.” Volatility in sth.: Volatility refers to quick or unexpected changes in price and values, for example in stock prices, in a market, or in a industry. “Such high volatility in the market can make it difficult and risky to put a value on a company.” Synergies (in sth.): Ways in which the whole is greater than the sum of the parts (1 + 1 is greater than 2). “Experienced negotiators search for synergies in order to make a deal that creates value for all sides.” To outweigh sth.: To be more important than sth. “At this point in our growth, the need for steady development outweighs the need to take risks.” To run the numbers (on sth.): To make the calculations. “We ran the numbers on the merger, and we think their stock price is way overvalued.” The way a deal is structured: Detailed arrangements of a business transaction, including, for example, credit terms, payment period, timing, and so on. “The way a deal is structured is sometimes more important than the price being offered.” There’s no two ways about it: There’s no alternative interpretation, no different way of looking at it. “There’s no two ways about it – we’ve reached an impasse.” To resolve differences: To solve encountered blockage early on, differences.” problems or overcome disagreement. “We but later we were able to resolve our To reach an impasse: To encounter an obstacle or blockage. “We couldn’t agree on price, so we reached an impasse there.” To be too rich for someone’s blood: To be too expensive for someone. “I’m sorry – I can’t pay that much. It’s too rich for my blood.” ! 2009 All rights reserved: www.businessenglishpod.com 58 businessenglishpod Dialog [Part 1 of the dialog from BEP 405] Maxine: So in short, we’ve thought about it a lot, and we really can’t budge from our position. Peter: So if I’m getting you right, you won’t be willing to part with Gamester for less than 15 million, right? Maxine: Yes, that’s an absolute minimum. Let me go over my reasons again. Peter: Go ahead. Maxine: For one, this market is going nowhere but up. Peter: Yes, I take your point. Maxine: For another, we’ve got tremendous value here – you’ve seen the figures: good people, good products, and a solid business plan. ------------------------------- Peter: I’ve done months of due diligence, and I’m convinced of the value of a merger. Maxine: I know you are, but we need a fair price for our business. Peter: On my side, though, we must take into account redundancies in our business operations and factor in the volatility in the market. Maxine: As you know, we think the synergies will outweigh all that. Peter: Yes, but we’ve run the numbers, and, depending on how the deal is structured, I can’t do better than €11.5 million. Maxine: Well, there’s no two ways about it. That doesn’t give us much more to talk about. Peter: Well, I’m really sorry to hear you put it that way. I was really hoping we would resolve our differences. Maxine: Yes, but, anyhow, I think we should explore other possibilities for working together. Peter: Absolutely. I look forward to it. Debrief Although Peter and Maxine disagree, they end the discussion in a cordial, or friendly, manner: The possibility remains open for future cooperation. Let’s look closely at the language they use. The dialog starts off with Peter giving his reasons for not being able to pay Maxine’s price of €15 million. Peter: On my side, though, we must take into account redundancies in our business operations and factor in the volatility in the market. Maxine: As you know, we think the synergies will outweigh all that. To take into account and to factor in both mean to consider. Peter says he must “take into account” redundancies in their business operations, in other words, ! 2009 All rights reserved: www.businessenglishpod.com 59 Successful Negotiations areas of repetition or overlap. Likewise, he must “factor in” volatility in the market. Volatility refers to quick or unexpected changes in price and values, for example in stock prices or in an industry. High volatility can make it difficult or risky to put a value on a company. Maxine has a different evaluation from Peter, however: She believes synergies in their operations will outweigh – or be more important than – all the factors Peter has mentioned. To review, synergy refers to a situation in which the whole is greater than the sum of the parts, in other words, a situation in which 1 + 1 is greater than 2. How does Peter reply to Maxine? He makes his best offer. Let’s listen again. Peter: Yes, but we’ve run the numbers, and, depending on how the deal is structured, I can’t do better than €11.5 million. Peter has “run the numbers,” or analyzed the financial information. Depending on how the “deal is structured,” – which refers to credit terms, payment period, and so on – he “can’t do better than €11.5 million”. That is his final offer. Listen to some other example phrases for making a final offer. ! That’s already just about as far as we can move on this issue. ! We’ve already made many concessions, so we need to hold firm at this point. ! If we bend any further, we just won’t be making any money on this deal. ! The only way we’re going to reach agreement is by taking a win-win approach. ! That’s our final offer. Maxine has also reached a point where she cannot make any more concessions. She makes this clear by expressing her dissatisfaction with Peter’s offer. Maxine: Well, there’s no two ways about it. That doesn’t give us much more to talk about. “There’s no two ways about it” means there’s no other way to look at it – no way forward. Sometimes it’s important to express that we are not satisfied with a proposal. In some situations, being clear about your feelings may actually help overcome blockage. What are some other ways to express dissatisfaction? ! Unless your side takes a different approach, at this point I just don’t see any clear way forward. ! Face it. We’re wasting our time. ! Frankly, we’re not satisfied with the offer on the table. ! We seem to have reached an impasse. ! That figure is just too rich for our blood. ! 2009 All rights reserved: www.businessenglishpod.com 60 ... - tailieumienphi.vn