negotiation skill session 1

Selling & Negotiation SkillsMMS Semester I

Sameer PhanseMarketing & Information Technology Consultant

CIMR2010

Session 1

07:50

Sameer Phanse Marketing & Information Technology Consultant 1

07:50 2

What's ours is ours….and what's yours is negotiable!

Soviet outlook toward Negotiations during the Cold War with the West

Sameer Phanse Marketing & Information Technology Consultant

What's ours is of course ours! What you say was yours, is rightfully ours,

so, where is the question of Negotiations?The Chinese Negotiation attitude – Sameer Phanse (2010)

07:50 Sameer Phanse Marketing & Information Technology Consultant 3

Objectives - Session 1 Introduction

Topic Importance Evaluation Scheme Student Representative

Negotiation examples – A Quiz Why Negotiate? Management Students and Negotiation Skills The “Skills” in Negotiation Skills Why the increasing stress on Negotiations? Accomplished Negotiators vis a vis Average Negotiators The Conflict Management Grid Conflict Continuum and the place of Negotiation


Objectives - Session 1 Negotiation Pre-Conditions When not to Negotiate! Negotiations – Myths and Truths Home Work

Groups of 5 to 6 students Students to read up on a real life Negotiation situation Discussion in Session 2 if possible

Sources of Power Negotiations, Mediations and Arbitrations Types of Negotiations The Negotiator’s Dilemma


Term Paper Term Paper

Individual students to research and prepare a Term Paper Topic

The on-going Government of India (GOI) and Research in Motion (RIM) negotiations

Provide in brief, all relevant background information about the situation at hand

Analyze the implications for all the stakeholders involved Develop Negotiation Strategies for

GOI and RIM

Paper Specifications At least 5 to 6 single side typed A4 size page lengths

Submission Through the student representative To reach the college office on or before 27th November 2010


Introduction Introduction

Topic Importance Life-Skill

Professional Life Personal Life Ubiquitous mechanism

Business Politics Society

A way of Conflict Management Culmination of Sales

Evaluation Scheme Active Class Participation/Interaction – 10% Case Study/Term Paper/Project/Quiz/Presentation - 30% End Semester Examination - 60%

Student Representative to report to me for all future co-ordination


Negotiation examples – A Quiz

Negotiation examples – A Quiz Which of these situations represents a negotiation?

Buying a rug in a West African market Soliciting a new source of venture capital Trying to capture/kill a terrorist in an encounter Chatting with someone you do not know on the Internet Meeting your potential in-laws for the first time Giving or receiving commendation and criticism Deciding whether to stay late at work to finish up a project Making up, or rebuilding a relationship with someone you love Picking a successor for the CEO of a company where you are on

the board Getting a child to go to bed Getting into a class or training program with limited enrollment Laying off or firing someone


Negotiation examples – A Quiz

Discussing the outsourcing of a business function with the manager of the function

Soliciting a sponsorship from a major corporate for your College Seminar Soliciting bids for the new advertising campaign for your company Saying good-by to someone you will not see for a long time Finding an advisor, or a mentor, or a counselor Discussing with a recruiter the salary and benefits you feel you deserve Trying to get back to sleep when something is worrying you Getting an extension on a paper or a project Apologizing to someone whose property you unknowingly damaged Accepting a bribe Turning down a bribe Getting another country to lower a trade barrier Struggling to stay on a diet or exercise plan or give up smoking

All interactions personal or professional where there are two or more points of view are Negotiations

07:50

Power, Negotiation, Persuasion & Force

Sameer Phanse Marketing & Information Technology Consultant 9

Outcome possible by Persuasion?

Goal Achieved?

UsePersuasion

Outcome possible by

Negotiation?

Goal Achieved?

UseNegotiation

Outcome possible by

EthicalPower?

Goal Achieved?

UseEthicalPower

Outcome possible & justified by

Force?

Goal Achieved?

UseForce

YES

NO

YES

NO

YES

NO

YES

NO

YES

NO

YES

NO

YES

NO

YES

NO

End


Management Students and Negotiation Skills

Job Interview

New Job

Career

Negotiations

Negotiations

Negotiations

NegotiationsJob/Entrepreneurship

Negotiations

SurvivalSkills

(Within Organization)

ThriveSkills

(External)e.g.Sales


Management Students and Negotiation Skills

MANAGEMENTTRAINEE

Resources

GeneralExpectations

ExternalCommunities

WorkExpectations

Internal Communities

Boss 2

Boss 1

Peers

CustomersBoss’sPeers

OtherEmployees

Subordinates

SeniorManagement


Negotiations Criticality Why the increasing stress on Negotiations?

Escalating Multidimensionality of Deals More Sophisticated Buying Fraternity Price focused competitive behaviour Customer Lifetime Value Concept Internal Negotiations and Boundary Spanner Stresses Global trend towards selling “Value and Solutions”, in

contrast to “Price and Product” Escalating Competition Increasing Cost pressures

Resource Crunch Inflation


Negotiations Criticality Why the increasing stress on Negotiations?

Escalating Multidimensionality of Deals Price

Variations Schemes Offers Financing Alternatives

Products Multi Components/Combinations

E.g. Mobiles Allied Services

Pure Services Agreements

Intricate Service Level Agreements (SLAs) Legal Aspects Licensing arrangements Intellectual Property considerations Statutory norms and disclosures ….and so on


The Talented Negotiator Skilled Negotiators

Consider wider range of outcomes More attention to common

ground Better anticipation of long-term

interest domains Decide upper/lower “bounds” for

settlement No rigid issue discussion priority Use neutral phrases (signals)

when making offers Take time to respond to offers Position defense is based on few

arguments Objectively evaluate past deals for

future learning

Average Negotiators Consider narrow range of outcomes Lesser attention to common

interests Poor anticipation of long-term

interest domains Decide upper/lower “points” for

settlement Rigid issue discussion priority Use qualifying phrases (signals)

when making offers Make counter-offers

instantaneously Position defense is based on a

multitude of justifications

No such review of past negotiation processes


The Conflict Management Grid

Accommodation

Relationship

Self-interest

Competition

Collaboration

Avoidance


The Conflict Continuum

Avoidance

Avoid the Conflict

Assertion

Negotiate

Aggression

Mediate ArbitrateOr

PursueGrievance

Fight orWage War

Litigate

Denial or Escape

Needs &Interest

Rights Power

The Coleman Raider Conflict Resolution Continuum Adapted from Deutsch & Coleman (2000)

If your General Strategy is …

..….then the Method you will use …..

…. and your Focus will be on …..

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Negotiation Pre-Conditions

Sameer PhanseMarketing & IT Consultant

YESIS THE ISSUENEGOTIABLE?

MINIMAL MUTUAL TRUST?

YES

WILL TOGIVE

AND TAKE?

YES

START

NO

Negotiation

Negotiation

NO

Negotiation NO

Negotiation


Negotiation – A definition The greatest misunderstanding about the

negotiation process is that it is adversarial in nature. In actuality, it is not designed for those with a trial and debate mentality. It is a problem solving process in which each party may look across the table and regard its counterparts as [potential] advocates.

Colosi

“……when two individuals exchange messages, an interaction I refer to as negotiation”. Paul Byers (1985)


Negotiation – A Definition Negotiation is a process whereby two or more

persons or groups strive to reach agreement on issues or courses of action where there is some degree of difference in interest, goals, values or beliefsThe job of the negotiator is

To build credibility with the "other side," Find some common ground (shared interests), Learn the opposing position, and Share information that will persuade the "other side" to

agree to an outcome


Why Negotiate? What is gained through conflict negotiation?

Crystallize important issues Generate superior, more creative solutions Reach mutually acceptable agreements that

Meet your key interests and Those of your counterpart(s)

Strengthen your working relationship with your counterpart(s) Even as you honestly and respectfully negotiate your

differences


Why Negotiate?When disagreements are denied, avoided, or

compromised away, they can: Bleed energy from essential activities and issues Affect morale Polarize groups and individuals and, Ultimately, make future cooperation or collaboration

impossible Induce careless and undesirable behavior Harm or demolish working relationships


Negotiate when not to! When not to Negotiate

When time is of essence The need for speed may hurt your ability to think clearly and cause you to

miscalculate the result of your concession When your Best Alternative to Negotiated Agreement (BATNA) is extremely

weak When your BATNA is superior to their highest offer When Negotiating can send the wrong signal When other non-price interests may get compromised When negotiating is culturally inadvisable When you are in a situation that could cause you severe financial or

personal risk When the other party asks for something you cannot sustain because it’s

illegal or morally and ethically improper When your counterpart seems untrustworthy When you’re not all set

A failure to analyze your positions, issues, and strategies will mar your ability to reach a favourable result


Negotiations – Myths and Truths

Negotiations – Myths and Truths To comprehend how negotiation functions and what

information, skills and abilities are important, one must first debunk certain misleading notions about Negotiations

Which of the following are statements are factual and which are hearsay? Good Negotiators are born Experience is a great Teacher Good Negotiators take risks Good Negotiators make concessions Good Negotiators never lie Good Negotiators look for common interests Everyone is a Good Negotiator

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Negotiation Merits Mutually settled solution (No external party

necessary) No intervention/approval of third parties need be

solicited The resolution being mutually agreed has greater

chance of being successful Since both parties “own” the solution there is

greater commitment from both sides An authentic solution is likely since innermost

feelings and emotions are exposed By the very nature of the process, any hidden

agendas can get crystallizedSameer Phanse

Marketing & Information Technology Consultant

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Negotiation Demerits Time Consuming Costly Requires both parties to be willing to negotiate Some parties may be at a disadvantage because

of asymmetries in Negotiation Skills Information Resources Authority Power Influence



Sources of Power Sources of power wield great negotiation potential

within organisations Typical Features of Managerial Power hubs

Holding formal authority Controlling scarce assets Possessing information Possessing unique proficiency Exhibiting the ability to manage ambiguity Commanding influential Networks Belonging to the prevailing organizational culture


Negotiations, Mediations and Arbitrations

Arbitration:Non-voluntary,Interested partieshave the least control

Negotiation:Voluntary,Participants controlthe process &outcome

Mediation:Neutral third party helpsparticipants reachvoluntary agreement

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Types of Negotiations

Sameer Phanse Marketing & IT Consultant

Negotiation Types (All in the Mind!)Based on

How the Parties Perceive the Value of the subject of the Negotiation

One-dimensional (or few parameters) or Limited definition Multi-dimensional interpretation or Expansive definition

The basic attitude of the involved parties Self-Interest Relationship Orientation

Number of Parties Involved Issues in Focus Phases of Interactions

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Types Based on Value perception and Party attitudes

Distributive Negotiations Integrative Negotiations

Based on number of Parties, issues and Phases Range from One-on-one, single Issue, single sitting to Multi-

party, multi-issue, multi-phase

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Distributive Negotiation Here the Perception of the Value is

One-dimensional (or few parameters) The basic attitude of the involved parties is

Self-Interest A Negotiation characterized by competition over the

allocation of a fixed amount of value The aim of the parties is to gain as much as possible at the

expense of the other A gain by one side is made at the expense of the other Minimum/camouflaged information exchange Example

A Manufacturer – Vendor transaction in which the only value-proposition is the price of the supplied material

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Integrative Negotiation Multi-dimensional interpretation of the value in question

Here the Perception of the Value is spelled out in a Multi-dimensional manner or an unrestrained way

Efforts are made by parties to re-interpret the value proposition so as to augment its worth and utility to all involved parties

The basic attitude of the involved parties is Relationship or Alliance oriented

A Negotiation in which the parties collaborate to optimize gains by integrating their interests into an agreement

Sufficient and transparent information sharing The aims of the parties are to

Generate value and Gain as much as possible, in a mutually approved way

Example A Manufacturer – Vendor relationship in which the

value-proposition is a set of variables including the price, quality, delivery period, payment terms and conditions and so on as well as the relationship between the two firms

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One-on-one, Single Issue, Single sitting The typical everyday negotiation situation The most simplistic, but not necessarily the easiest

negotiation form Multi-party, multi-issue, multi-phase

Professional and Commercial negotiations will usually fall in this typology

In Multi-party negotiations, The challenges are to

Anticipate, Identify and Leverage the natural and situational coalitions that develop

It is imperative to Identify the pivotal decision makers and power centers and Initiate a rapport building dialogue with these important entities

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The Multiple Sittings Need a

Patient, Professional and Focused approach

The flip side is that the early phases can be capitalized to develop A working relationship and Foster mutual trust

The Multitude of Issues must be objectively Examined, Prioritized, and Consciously manipulated on the negotiation chess-board to control

the parties and the course of the negotiations Game theory based Software Simulations are available to guide

decision makers in complex situations. However decision makers are loathe to suspend their own judgments for machine based suggestions

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Negotiation Reality In real life, few commercial negotiations are

strictly distributive or integrativeMost are a mix of both, containing opportunities

for collaboration, but coming to a head with vigorous competition for a share of the worth

Integrative negotiations are more prominent today because of The realization of the benefits of long-haul business

alliances Emergence of Joint Ventures Successful business enhancing mechanisms such as

outsourcing

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Types of Negotiations“You have to believe that it’s in your interest to

look for ways to benefit your negotiating counterpart. Your goal is not to hurt them, but to help them at a little cost to yourself-and have them help you at a little cost to them. The more creative you are at coming up with things that are good for both of you, the happier both of you will be.” Michael Gordon, Negotiation Expert, (1999)


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The Negotiator’s Dilemma


The Negotiator’s DilemmaA Negotiator always has a starting issue

Should she go in for an aggressive bargaining stance? ( Distributive style) or

An inclusive, co-operative manner of negotiation? (Integrative style)

DistributiveNegotiation

IntegrativeNegotiation

Win / Lose Lose / Win

Self

Win / Win

OpponentSelfor

OR

Opp

Self

Oppo

nent


The “Skills” in Negotiation Skills

The Logical order of Learning Knowledge Skills Techniques

Other Critical Factors Attitude Experience

Negotiation is a vast sea where learning doesn’t end even for the veterans This Course will help you to gather basic information about Negotiation and

some of the skills which go with it Reflection on the learning and application in actual life are critical to quickly

internalize the teachings Its more important to understand the “Why” of Negotiations (or any subject

for that matter) than just the “How to” Just learning the gimmicks and tricks of the trade whether Selling or negotiation

wont take you too far If you understand the concepts (Why?), you can apply them successfully to almost

any situation What worked for someone in a certain situation may not necessarily work for you


End of Session 1

Thank You!

negotiation skill session 1

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