NEGOTIATION SKILLS Suwarn Kumar Singh Sudip Tripathee Session outline Concept of negotiation 4 step frame work for negotiation Take away exercise Negotiation Negotiation is about getting the best possible deal in the best possible way. To confer or discuss with another with a view toward reaching an agreement Negotiation Process Framework 4 key question in preparing for negotiation Q.1 Should I negotiate? Case 1 Someone who decides to negotiate, should determine whether one should negotiate or not. When the professor arrived home, his wife asked how much time did he spent in his negotiation? Is his time worth that amount? We should analyze the cost-benefit of negotiation. Q.2 Is this position based or interest based negotiation? Generally, we engage in positional negotiation High price-low price fight Dividing a pizza for our kids Both the kids want the pizza. How can it be resolved? It can be resolved by asking one to cut the pizza and other to choose It leaves both parties happy Instead of asking what position you want, we should ask why you want that. For pizza example, one may like the base other may like the topping. Types of negotiation How can I enlarge the pizza when I am selling my car? Is it easy? But the key take away is, try to know the interest of the party, but at the end, you should be ready for the positional negotiation to get the larger share of the pie Q. 3 Am I negotiating to resolve dispute or deal making There are six different processes to handle these kind of disputes. Can you list them? Dispute resolving processes Power: students could begin with fighting, pushing Litigation: very similar to arbitration. Arbitration is simply a private form of litigation Arbitration: bring in third party and have right to decide the dispute Mediation: is a negotiation assisted by third party Negotiation: used for both deal making and dispute resolution Avoidance: one line of student might say, you win, we will move to back of the line Q.4 How should I analyze the negotiation? What would be the strategies you would use in going for negotiation? We need a framework i.e. where actually we want to be What can be the ZOPA? Zone of potential agreement Step 2: Negotiate We need to focus on three important aspect: get to know the other side understand your power use psychological tools and avoid traps Get to know other side: To know people from other culture is difficult E.g. Americans are time oriented, however, Asians try to know the other party Informal talks are always significant before negotiation Using power in negotiation What is your power during negotiation? Generally believed that information is the main source of power in the negotiation Ask question, harvest information and use that information to analyze your position and interest. More time should be spent in listening German vs. Chinese negotiators: Chinese asks 3 times more questions than German. They harvest more information and analyze them during negotiators. What can be that one specific piece of question during the negotiation? Other sides BATNA. Your BATNA gives you power and others side gives them power. Will you tell the other side what your BATNA is? (Y/N) Best answer is : it depends!!!! If your BATNA is weak, if you are negotiating from weak position, then you dont tell them your BATNA. But if you are in a strong position, then you should reveal your BATNA. Assume that you are a supplier for a FORD motors. How can you use this model? Physical work out Arm Wrestle with someone else for 10 seconds and you will receive a point every time you push others hand towards table. Score as many points as possible within 10 seconds This is the problem of mythical fixed pie assumption. Step 3: Creating a Contract Contract: Agreement enforceable by law. When did the contract took place in above example? Step 4: End game- contract performance and evaluation Dispute prevention is very important. If there are no disputes, the negotiation gets done with the contract. In negotiation process, we dont get a feedback. In order to evaluate our actual negotiation skill, we will carry out our negotiation play and receive a feedback from the other side. Do you expect someone come up to you after the negotiation and sit with you and tell you, you have done a great negotiation but it would have been could if you could do this? Take- Away Exercise 33 34