In the next part of the lesson, we're going to build on what we heard in the interview. We will look at stages in the process and guidelines for a successful win-win negotiation where both sides feel they got what they wanted. The sides are also called parties. We use both terms in this lesson. In both formal and informal negotiations, the steps and guidelines are similar. All negotiations may go more quickly and some steps may not be as important, but in general, all these steps are part of the process. The first step is very important to a successful negotiation. First, you and your team need to think through what you want. You need to know what your interests are. Your interests are your basic concerns, things that are the foundation of your negotiation.

For example, say you just got offered a job and now you're negotiating with someone from the company that wants to hire you. You want a job that's remain interest. And your priorities might be a high salary or maybe four weeks of vacation every year. Those are your priorities. You should also think about what concessions you will make. What are you willing to give up? If you're negotiating a contract and they only offer two weeks vacation instead of four, would you accept that? That's a concession. We'll talk more about concessions later. Finally, you should think about your strengths and weaknesses. Where do you have an advantage? For example, maybe you have a special qualification that the company is interested in, like maybe speaking English really well. That's a strength. But maybe you don't have much job experience. That can be a weakness.

Doing a little homework about the other side is also important. If possible, you want to find out who you'll be negotiating with. Is it a team of 10 or just one person? What's their title or role? How experienced are they? Are they the real decision makers? Have you ever heard people say information is power? In a negotiation, that is definitely true. If you're negotiating your salary, you need to know what companies are paying people with your background. If you're looking for a new car, you need to know what other companies are selling the same car for. And if you're doing business with someone from a different culture, do a little research to find out about the other culture, and especially about any differences in negotiating styles, we'll talk about that a little later in this lesson.

The next stage is the discussion stage. In this stage, both sides start by stating their interests. Informal negotiations, they would prepare a statement of interests. Both parties also explain what they want to get out of the meeting. It's important to focus on what goals and objectives both parties share. In both formal and informal negotiations, building a relationship may be important. In some cultures, the stage is much more important than in others. This helps develop a feeling of trust in the other person. This relationship building can start with something as simple as small talk, or just asking a person about themselves, for example, about their work or their interests. This is very common in the U.S., but it's not common in all cultures.

During a negotiation, it's important to listen to the other side. In this way, both parties will find common ground, shared interests, and maybe shared goals. Both parties will more fully understand the other's position. And it's possible that by listening, one of you might discover unexpected information that would help lead to an agreement. Finally, this way of showing respect will help to build a stronger relationship. So let's just review the steps we just talked about. First, prepare. Know about yourself and know about the other team. Second, discuss. Build your relationship as you look for common ground.

Before we go on, I'd like you to listen to the beginning of two informal negotiations on the phone. You remember Trey from Module 1. He needs to arrange for a parking lot. He's done his preparation. First, he figured out his budget. He wants to spend no more than $1,000 plus $200 for an attendant. Trey has also done a little research on two possible parking lots. He knows that there is one parking lot that's big enough for his event. He also knows that it's never full. The second lot is smaller and not as close as the first lot. He's contacted both companies by email and a set up meetings by phone. The first phone call is with the owner of the larger lot which he prefers. Watch the video and think about these questions. Which conversation do you think is going to lead to a successful negotiation? Why? Which one may not be successful? Why do you think that? What do you think? What do you think? What do you think?