negotiation skill

Negotiation Skill

The word "negotiation" originated from the Latin expression, "negotiatus", which means "to carry on business".

“A give-and-take decision-making process involving interdependent parties with different preferences.”

Negotiating is the process of communicating back and forth, for the purpose of reaching a joint agreement about differing needs or ideas.

It is a collection of behaviours that involves communication, sales, marketing, psychology, sociology, assertiveness and conflict resolution.

A negotiator may be a buyer or seller, a customer or supplier, a boss or employee, a business partner, a diplomat or a civil servant. On a more personal level negotiation takes place between spouse’s friends, parents or children.

Defined :

Where Do We Use This Skill?

Family and personal

“Where should we go for dinner?”“Can I borrow the car?”

Academic research

“Fund my project.”“Publish my paper.”

Business ventures

“I want a raise.”“Invest in my company.”“Pay me a license fee or I’ll sue you.”

Everything is negotiated

Features Of Negotiation• Minimum two parties

• Predetermined goals

• Expecting an outcome

• Resolution and Consensus

• Parties willing to modify their positions

• Parties should understand the purpose of negotiation

Types Of Negotiation In Organizations

Managerial Negotiations

Day-to-day:1. Different levels of Management2. In between colleagues3. Trade unions4. Legal advisers

Examples:1. Negotiation for pay, terms and working conditions.2. Description of the job and fixation of responsibility.3. Increasing productivity


Commercial Negotiations1. Management2. Suppliers3. Government4. Customers5. Trade unions6. Legal advisors7. Public

Examples:1. Striking a contract with the customer.2. Negotiations for the price and quality of goods to be purchased.3. Negotiations with financial institutions as regarding the availability of capital


Legal Negotiations1.Government2.Management3.Customers

Examples:1. Adhering to the laws of the local and national government.

Prepare

Negotiate

Close

Perform &

Evaluate

NegotiationProcess

Preliminary Question:1. Should I negotiate?2. Is this a position-based or

interest-based negotiation?3. Am I trying to resolve a dispute

or make a deal?4. How should I analyze a

negotiation?5. Is this a cross-cultural

negotiation?6. How should I handle ethical

issues?7. Should I use an agent to

negotiate for me?

1. Should I Negotiate? Prepare

• Ashan Mudir buying a big screen TV• Lost of research on different models and

dealer's costs.• Visited several dealers• Combines price of TV with installation,

satellite dish, etc.• Obtained price concession by

mentioning competitor's offer.• Saved $120. A successful negotiation?

1. Should I Negotiate? Prepare

In making a decision about whether to negotiate, consider your feelings about negotiation as well as the potential risks and rewards.

If you don't know where you are going, you may end up somewhere else.

2. Position or Interest Prepare

Interest-based Bargaining / Win-win Bargaining

Integrative bargaining in which parties collaborate to find a “win-win" solution to their dispute.

This strategy focuses on developing mutually beneficial agreements based on the interests of the disputants.

Interests include the needs, desires, concerns, and fears important to each side.


Interest based Bargaining

Positional bargaining is one that involves holding on to a

fixed idea, or position, ofwhat you want and arguing for it and it alone, regardless of any underlying interests.


Position based Interest based

Distributive Integrative

Competitive Cooperative

Win / Lose Win / Win

Zero Sum Non-Zero Sum

Adversarial Problem Solving

Position based Interest based

Calming Value Creating Value

3. Dispute Resolution or Deal Prepare


4:00 am: Students began forming a line (freezing weather) to purchase basketball tickets.

7:00 am: Other students formed a second line nearby and demanded that students in the first line move to the back of their line.

What processes could be used to resolve this dispute?


4:00 am: Students began forming a line (freezing weather) to purchase basketball tickets.

7:00 am: Other students formed a second line nearby and demanded that students in the first line move to the back of their line.

What processes could be used to resolve this dispute?

Power Litigation Arbitration Mediation Negotiation Avoidance

6 Types of Dispute Resolution


Resolving Dispute options:

Power Use power to force the other side to do what we want.

Rights Let a third party (a judge or arbitrator) decide who is right.

Avoidance Withdraw from the dispute and let the other party have what they want.

Interest Try to negotiate an agreement based on our need..

4. Analyzing Negotiation Prepare


Key Questions


Risk of Stretch Goal


Possible Answer

BestAlternativeToNegotiatedAgreement

BATNA

Why BATNA Matter

BATNAs tell you when to accept and when to reject an agreement.

When a proposal is better than your BATNA: ACCEPT IT

When a proposal is worse than your BATNA: REJECT IT

Your “BATNA “ is the only standard which can protect you both from accepting terms that are too unfavourable and from rejecting terms it would be in your interest to accept.” In the simplest terms, if the proposed agreement is better than your “BATNA”, then you should accept it. If the agreement is not better than your “BATNA” , then you should reopen negotiations.

Determining Your BATNABATNAs are not always readily apparent. Fisher and Ury outline a simple process for determining your BATNA:• develop a list of actions you might conceivably take if

no agreement is reached;

• improve some of the more promising ideas and convert them into practical options; and

• select, tentatively, the one option that seems best.


Other Perspective


ZOPA (Zone of Potential Agreement)

Case: Dispute Resolution

Using Decision Tree Analysis

5. Cross-Cultural Negotiation Prepare

Analyze Your Interest Analyze Other Side's InterestsEvery Culture

NegotiatingStyle

Values and Beliefs

Other Side'sInterest

YourInterests

5. Cross-Cultural Negotiation Prepare

Culture can influence negotiation.

But: Many variations with in a culture.

Therefore: be sensitive to culture but don't stereotype

6. Handling Ethical Issues Prepare

Legal Ethical


Legal

FraudFalse Representation of material fact

Fiduciary DutyHigh duty of trust and loyalty

UnconscionabilityViolates principles of good conscience


Ethical

Organizational Standards

MentorSomeone you admire

Personal StandardsGut Test

Newspaper TestFamily Test

Golden Rule


Mentor


Gut Test


Family & Newspaper


Except Economical Rational,

Why would you reject the part of split?

Accommodating Collaborating

DominatingAvoiding

Compromising

Negotiating Style

7. Should I use Agents Prepare

• Is the agent a better negotiator?

• Does the agent have more experience in negotiating the issues.?

• Does the negotiation involve a technical matter that requires the expertise of an agent?

• How much time do I have to invest in a negotiation?

• What is my relationship with other side?

Issues In Negotiation

The Role of Mood & Personality Traits in Negotiation;

Positive moods positively affect negotiations

Traits do not appear to have a significantly direct effect on the outcomes of either bargaining or negotiating processes (except extraversion, which is bad for negotiation effectiveness)

Gender Differences In Negotiations;Women negotiate no differently from men, although men apparently negotiate slightly better outcomes.

Men and women with similar power bases use the same negotiating styles.

Women’s attitudes toward negotiation and their success as negotiators are less favorable than men’s.

Thank You

Negotiation means getting the best of your opponent. ~ Marvin Gaye

negotiation skill

Education