Negotiation Skills Updated

Negotiation Skills

Information Technology Institute

Soft Skills Unit

Ministry of Communications and Information Technology

Information Technology Institute

Table of Contents

What is negotiation? Why negotiate ? Negotiation Process How to achieve an effective negotiation Setting your Negotiation Strategy Haggling Bargaining Distributive Vs Integrative Negotiation Issues in Negotiation

What is Negotiation ?

The process of conferring to arrive at an agreement between different parties, each with their own interests and preferences.

The process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them.

Why Negotiate ?

To reach an agreement

To beat the opposition

To compromise

To settle an argument

To make a point

The Negotiation Process

The negotiation process The most crucial variable in determining the

outcome of negotiations.

The five stages in the negotiation process are:1. Planning and preparing2. Relationship building between negotiating parties3. Information exchange4. Persuasion attempts5. Concessions/ Agreement

The Negotiation Process—cont’d

Planning and preparation

Advance planning and analysis

Background research Gathering of relevant

information Don’t ASSUME

Planning of strategies and tactics

Setting objectives Predetermining possible

concessionsStage 1

Planning and PreparationStage 1

Planning and Preparation

The Negotiation Process cont’d

Relationship building between negotiation parties Developing trust Developing personal

rapport Establishing long-

term association Stage 2Relationship Building

Stage 2Relationship Building

Stage 1Planning and Preparation



Information exchange

Learning about the needs and demands of the other set of negotiators

Acquiring and exchanging other information





Stage 3Information exchange



Persuasion attempts

Mixture of approaches Assertive and

straightforward Warnings or

threats Calculated delays







Stage 4Persuasion Attempts



Concessions/ Agreement

Permit each party to win something of value

Some use normative appeals such as “it’s your obligation”









Stage 5Concessions/Agreement

Stage 5Concessions/Agreement

How to Achieve an Effective Negotiation

• Positions• People Involved• Maintaining/ Increasing Competition (Win/Lose Focus)

• Interests• Problem/Issue• Decreasing/Leasing Competition(Collaborative Focus)

Setting your Negotiation Strategy Decide on your ‘Walk-Away Point’

Select your deal-making strategy

Auction

Sticker Price

Sticker price plus or minus a bit

Haggling

Bargaining

Haggling Haggling involves arguing about a well-

defined object.

In haggling you don’t have to worry about a long-term relationship.

Haggling—(Cont’d)

Rules of Haggling

Rule 1: Set yourself a really challenging objective

Rule 2: Make what you want a KISS

Rule 3: Haggling is a Game

Rule 4: You don’t have to be reasonable


Rules of Haggling

Rule 5: Bluffing is part of the game, just don’t get caught

Rule 6: A bit of overreacting never hurts

Rule 7: Use every bit of leverage you have

Rule 8: Never Reveal your budget


Rules of Haggling

Rule 9: Make Smaller & Smaller concessions

Rule 10: Silence is a great Tactic

Rule 11: Work on maintaining an on-going auction

Rule 12: Timing is crucial

Haggling—(Cont’d)Rules of Haggling

Rule 13: You can always renegotiate after you close the deal

Rule 14: Don’t get emotionally attached to the object of haggling

Rule 15: Never get angry

Rule 16: Be ready to ‘flash the cash’

Rule 17: Nibbling is OK

Bargaining Bargaining ensures a long-relationship with

your opponent.

In Bargaining, Never give something for Nothing

Think Win/Win: Enlarge the pie for all to have a share

Ensure that everything that has been agreed on is recorded

Bargaining—cont’d

Perceptions are the only reality

Offer your Opponents alternatives

Plan your cues & listen carefully for cues from your opponents

Use Rational arguments that support your cause

Be flexible


Bargaining Tactics

Reciprocity

Silence

Good Cop/ Bad Cop

Third Party Mandate


Bargaining Tactics

Bluffing

Ultimata, threats & Walk-outs

Time-out

Use breaks & informal Sessions


Handling Deadlocks

Throw out lots of options Ask a lot of (open) questions Issue an Ultimatum (BAFO)

“This is my Best & Final Offer, Take it or Leave it”

Invite your Opponent to give their BAFO Capitulate Walk Away Agree to Sleep on it


Bargaining Strategies

Distributive Bargaining

Integrative Bargaining

Bargaining—cont’dDistributive Bargaining

Operates under zero-sum condition.

Negotiates over who gets what share of fixed pie.

Settlement range

Party A’s target point

Party B’s resistancepoint

Party A’s resistancepoint

Party B’s target point

Party A’s aspiration range Party B’s aspiration range

Bargaining—cont’dIntegrative Bargaining

Operates under the assumption that there exists one or more settlements that can create a win-win solution.

To achieve more integrative outcomes Bargain in teams will reach more integrative

agreements than bargain individually. Put more issues on the table Compromise may be your worst enemy in

negotiating a win-win agreement.

Distributive Versus Integrative Bargaining

Bargaining Characteristic



Information sharing

Low (sharing information will only allow other party to take advantage)

High (sharing information will allow each party to find ways to satisfy interests of each party)

Duration Short term Long term

Distributive Versus Integrative Bargaining Cont’d

Bargaining Characteristic



Goal Get as much of the pie

Expand the pie so that both parties are satisfied

Motivation Win-Lose Win-Win

Focus Positions “I can’t go beyond this point on this issue.”

Interests “ Can you explain why this issue is so important to you?”

interests Opposed Congruent

Issues in Negotiation

The role of mood and personality traits in negotiation

Gender differences in negotiations

Cultural differences in negotiations

Third-party negotiations

Issues in NegotiationMood and Personality Traits in Negotiation

Moods matter in negotiation

Can you predict an opponent’s negotiating tactics if you know something about her/his personality?

A big ego can also affect negotiations.

Issues in Negotiation Gender Differences in Negotiations

Do men and women negotiate differently? And does gender affect negotiation outcomes?

Managerial women are usually less satisfied with their negotiation performance, no matter how good their outcome can be.

Issues in Negotiation Culture Differences in Negotiations

Negotiating styles clearly vary across national cultures. French like conflict Chinese and Japanese negotiate to develop a relationship. Americans are known for their impatience and their desire

to be liked.

The culture context of the negotiation significantly influences Preparation for bargaining The relative emphasis on task versus interpersonal

relationship The tactics used Possible Venues for negotiation.

Issues in Negotiation Third-party Negotiations

Occasionally individual or group representatives reach a stalemate and are unable to resolve their differences through direct negotiations.

There are four basic third-party roles: Mediator Arbitrator Conciliator Consultant

Issues in NegotiationThird-party Negotiations -- A Mediator

A mediator is a neutral third party who facilitates a negotiated solution by using Reasoning Persuasion Suggestions for alternatives

Mediators are widely used in labor-management negotiations.

The settlement rate is approximately 60% with the negotiator satisfaction at about 75%.

Mediator is most effective under moderate levels of conflict.

Issues in NegotiationThird-party Negotiations-- An Arbitrator

An Arbitrator is a third party with the authority to dictate an agreement. Arbitration can be voluntary or compulsory.

The authority of the arbitrator varies according to the rules set by the negotiators.

The big plus of arbitration over mediation is that it always results in a settlement.

Issues in Negotiation Third-party Negotiations--A Conciliator

A conciliator is a trusted third party who provides an informal communication link between the negotiator and the opponent.

Conciliation is used extensively in international, labor, family, and community disputes.

In practice, conciliators typically act as more than mere communication conduits. They engage in fact-finding interpreting messages, and persuading disputants to develop agreements.

Issues in Negotiation Third-party Negotiations--A Consultant

A consultant is a skilled and impartial third party who attempts to facilitate problem solving through communication and analysis, aided by a knowledge of a conflict management.

The consultant’s role is not to settle the issues, but, rather, to improve relations between conflicting parties so that they can reach a settlement themselves.

This approach has a longer-term focus to build new and positive perceptions and attitudes between the conflicting parties.

Negotiation—Non-Verbal Cues

The Folded Hands show Defensiveness & opposition

She is now open to your ideas

Know when to make your Offer


Hand-to-face gesture

Legs tightly crossed

Arm Crossing the body

I don’t like what you’re saying!

I disagree!I’m holding back Negative Feelings!

Direct Eye-Contact

Hand on Chin

Making a Decision!


Hands Clenched in raised position

Hands Clenched in Center Position

Hands Clenched in Lower Position

Frustration Gesture during negotiation

Negotiation—Non-Verbal Cues Cont’d

The mouth Cover

The nose touch

The eye Rub The ear grab

Lying Cues

Negotiation—Non-Verbal Cues Cont’d

The Neck Scratch

The collar PullFinger in the mouth

Lying Cues--cont’d

Conflict

An application on Negotiation

Table of Content

What is conflict ? The conflict process Conflict-Management techniques

What is Conflict ?

A process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something that the first party cares about.

The Conflict Process

Stage I: Potential opposition or incompatibility The presence of conditions that creates

opportunities for conflict to arise. These conditions need not lead directly to conflict

but one of these conditions is necessary if conflict is to surface.

Stage I

Antecedent Conditions• Communication• Structure• Personal Variables

The Conflict Process cont’d

Stage II: Cognition and Personalization It is important because it’s where conflict issues

tend to be defined. Emotions play a major role in shaping perceptions.

Stage I Stage II


Perceived ConflictPerceived Conflict

Felt Conflict

Felt Conflict


Stage III: Intentions Intentions are decisions to act in a given way.

Competing

Avoiding

Compromising

Collaborating

Accommodating

Cooperative

Assert

iven

ess

Ass

ert

ive

Unass

ert

ive

UncooperativeCooperativeness

Dimensions of Conflict-Handling Intentions


The five conflict-handling intentions can be identified: Competing (assertive and uncooperative) Collaborating ( assertive and cooperative) Avoiding ( unassertive and uncooperative) Accommodating ( unassertive and cooperative) Compromising ( midrange on both assertiveness and

cooperativeness)

Conflict-handling intensions•Competing•Collaborating•Compromising•Avoiding•Accommodating

Stage I Stage II Stage II



Felt Conflict

Felt Conflict


Stage IV: Behavior It is where conflicts become visible. It includes the statements, actions, and reactions

made by the conflicting parties.





Felt Conflict

Felt Conflict

Overt Conflict•Party’s behavior•Other’s reaction

Stage IV


Stage V: Outcomes The action-reaction interplay between the

conflicting parties results in consequences. Outcomes may be functional or dysfunctional





Felt Conflict

Felt Conflict

Overt Conflict•Party’s behavior•Other’s reaction

Stage IVIncreased

group performanc

e

Decreased group

Performance

Conflict-Management Techniques

Problem solving Superordinate goals Expansion of resources Avoidance Smoothing Compromise Authoritative command Altering the human

variable Altering the structure

variables

Conflict-management is the use of resolution and stimulation techniques to achieve the desired level of conflict.Conflict-Resolution Techniques Conflict-Stimulation

Techniques Communication Restructuring the

organization Appointing a devil’s

advocate

Conflict-Management Techniques – Cont’d

Conflict-Resolution Techniques

Problem Solving is face to face meeting of the conflicting parties for the purpose of identifying the problem and resolving it through open discussion.

Superordinate goals is creating a shared goal that can not be attained without the cooperation of each of the conflicting parties.

Expansion of resources is when a conflict is caused by the scarcity of a resource, expansion of the resource can create a win-win solution













Avoidance is the withdrawal from, or suppression of the conflict.

Smoothing is playing down differences while emphasizing common interests between the conflicting parties.

Compromise is when each party to the conflict gives up something of value.






Conflict-Management Techniques – Cont’d Conflict-Resolution Techniques






Authoritative Command is when management uses its formal authority to resolve the conflict and then communicates its desires to the parties involved.

Altering the human variables is using behavioral change techniques such as human relation training to alter attitudes and behaviors that cause conflict.

Altering the structure variables is changing the formal organization structure and the interaction patterns of conflicting parties through job redesign, transfers, creation of coordinating positions,…etc.






Conflict-Management Techniques – Cont’d Conflict-Resolution Techniques





Conflict-Stimulation Techniques

Communication using ambiguous or threatening messages to increase conflict levels.

Brining in outsiders by adding employees to a group whose backgrounds, values, attitudes, or managerial styles differ from those of present members.

Restructuring the organization by realigning work groups, altering rules and regulations, increasing interdependence, and making similar structural changes to disrupt the status quo.

Appointing a devil’s advocate by designing a critic to purposely argue against the majority positions held by the group.













Conflict-Management Techniques – Cont’d Conflict-Stimulation Techniques





Thanks

Any Questions?

Economy & Finance

Negotiation Skills Updated