negotiations are only applied to significant issues ？
In fact, Negotiation is a basic human activity as well as process people undertake every day to manage their relationships
There was a great discrepancy between the two corporations’ negotiating power. Matsushita was a small and developing company while Philip was already a giant in the world of electric production. Matsushita depended heavily on Philip to have the technology it needed urgently. So from very beginning, Philip was demanding and pressing ahead. It required 7% of Matsushita’s sales volume as payment for technical assistance, and the loyalty of $550,000 for the patent transaction must be paid in lamp sum. The other provisions were also favorable to Philip, for example, the penalty for breach of contract on Matsushita side was strict and severe but the punitive clause for Philip’s violation was obscure and indistinct.
Stakes
1. to get what is desired, both parties have to pay for the gaining . 2.Negotiation will have to compare and balance the relation between the current interests and long term interests or underlying desire in order to make decision on satisfying long term interests at the cost of current interests or the other way round.
Case study
Read the case following, talk about that why was Matsushita Willing to take huge risks and Sacrificed the present interests? How did Konosuke Matsushita Consider during the negotiation with Philip?
3. The fair of negotiation---The weaker party must excise veto right to the result of the negotiation, which is show of equal right of the parties.
The characteristics of business negotiations:
definition
Negotiation A negotiation is a process of communication between parties to manage conflicts in order for then to come to an agreement, solve a problem or make arrangements.
The relationship of negotiations Conflicts and stakes:
Conflict give rise to negotiations. the conflict is caused due to clash of stakes or interests held by each pict is a dispute, disagreement or argument between two or more interdependent parties who have different and common interests.
Conflict
1.The purpose is to obtain economic benefits. 2.Negotiation in value as the center. 3.The outcome of business negotiation ---Contract
Key terminology
Stakes Stakes are the value of the benefit that may be gained or lost ,and costs that may be incurred or avoided. Stakes interests
Through hard negotiation, Matsushita was able to cut the payment for technical assistant from 7% to 4.5%;however, Philip resolutely refused to make any concession on patent payment. Konosuki faced a great challenge, which put him in a dilemma. Giving his consent and signing the agreement would mean great risk to him and the whole company because in early 50s,the total asset of the company was 500 million Japanese yen.$550,000 loyalty would be equal to 200 million yen, which was nearly half of the company ‘s property. In case any unpredictable event happened, it would mean bankruptcy to the company. However, the company would miss a valuable opportunity and a good partner if he turned down the demand and saw the failure of the negotiation.
In the 1950’s,Matsushita Corporation embarked on a business expansion, which required advanced technology to make the expansion possible. Philip Corporation at that time had already enjoyed the fame as a world celebrated electric producer with the most advanced technology and financial strength. Matsushita decided to seek alliance with Philip. Against such background, Matsushita started the negotiation with Philip on technical transfer.
MATSUSHITA ELECTRIC CRPORATION
After the World War Ⅱ,Japan＇s economy experienced a period of rapid development ,which was viewed by international society as a miracle. Among fast growing enterprises during the post war economic expansion , the success of Matsushita Electric Corporation was a typical example. Matsushita Corporation was founded in March 1918. The corporation has grown from a small family enterprise to a well known and one of the world largest electric producers. The corporation owns its success to its founder, Konosuke Matsushita, whose management philosophy and sound decision led the negotiation between Matsushita Electric Corporation and Philip Corporation.
activities satisfy the following conditions can be labelled as negotiation 。