Negotiation skills PPT along with Slideshow audio description note.

NEGOTIATION SKILLS

Presented By:

TARINI- 41002

SACHIN- 41001

CABM Pantnagar 2010-12 Sachin&Tarini 1

CONTENTS

What is Negotiation?

Features of Negotiation

Why Negotiate ?

Types of Negotiation

Distributive Vs Integrative Negotiation

Negotiation Process

BATNA

Bargaining Zone Model of Negotiation

Negotiating Behavior

Issues in Negotiation

Third party Negotiations

How to achieve an Effective Negotiation

Negotiation TipsCABM Pantnagar 2010-12 Sachin&Tarini

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Where do use this skill?

Everything is negotiated.

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.”

CABM Pantnagar 2010-12 Sachin&Tarini

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WHAT IS NEGOTIATION ?

The word "negotiation" originated from the Latin

expression, "negotiatus", which means "to carry

on business".

The process of conferring to arrive at an

agreement between different parties, each with

their own interests and preferences.

“A give-and-take decision-making process

involving interdependent parties with different

preferences.”CABM Pantnagar 2010-12 Sachin&Tarini

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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


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Why do we NEGOTIATE ?

To reach an agreement

To beat the opposition

To compromise

To settle an argument

To make a point


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TYPES OF NEGOTIATION

Distributive Negotiation

Integrative Negotiation


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1st Type: Distributive

Negotiation

Parties compete over the distribution of a fixed sum of

value. The key question in a distributed negotiation is,

“Who will claim the most value?” A gain by one side

is made at the expanse of other.

The Seller’s goal is to negotiate as high a price as

possible; the Buyer’s goal is to negotiate as low a price

as possible.

Thus, the deal is confined: there are not much

opportunities for creativity or for enlarging the scope of

the negotiation. [is it required?]CABM Pantnagar 2010-12 Sachin&Tarini

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2nd Type: Integrative

Negotiation In Integrative Negotiation, parties cooperate to achieve

maximize benefits by integrating their interests into anagreement. This is also known as a win-win negotiation.

The key questions is: “How can the resource best beutilized?”

Integrative negotiations tend to occur in followingsituations:

– Structuring of complex long-term StrategicRelationships or other collaborations.

– When the deal involves many financial and non-financial terms.

In an integrative negotiation,, there are many items andissues to be negotiated, and the goal of each side is to“create” as much value as possible for itself and theother side. [This much eloboration is requiered or not]


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DISTRIBUTIVE VERSUS

INTEGRATIVE NEGOTIATIONS

Characteristic Distributive Integrative

Outcome Win-lose Win-win

Motivation Individual gain Joint and individual

gain

Interests OpposedDifferent but not

always Opposite

Relationship Short-term Longer or Short-term

Issues involved Single Multiple

Ability to make

trade-offsNot Flexible Flexible

Solution Not creative Creative CABM Pantnagar 2010-12 Sachin&Tarini

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NEGOTIATION PROCESS

PREPARATION

INFORMATION SHARING

BARGAINING

FINALIZING THE DEAL


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BATNA

BATNA is an acronym for:

Best

Alternative

To

a

Negotiated

AgreementCABM Pantnagar 2010-12 Sachin&Tarini

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Why BATNAs 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


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BATNA

“Best Alternative to a Negotiated Agreement”

Develop your BATNA

- List your alternatives

- Evaluate your alternatives

- Establish your best as your BATNA

Strengthen your BATNA

Consider their BATNA

Have a Reservation Point – the least you will accept

List their alternatives – their BATNA


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NEGOTIATION STRATEGY

BARGAINING EMOTION

COMPROMISE LOGICALLY

INFLUENC

E

INT

ITU

TIO

N

[Abili

ty t

o m

odify o

thers

]

By: “Kenneth Berrin”

Low

High

Low High


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Bargaining Zone Model of

Negotiation

Your initial

point

Your target

point

Area of

potential

agreement

Opponent’s

initial pointOpponent’s

target point

Your

resistance

point

Opponent’s

resistance

point


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EXAMPLE


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NEGOTIATING BEHAVIOUR

Gavin Kennedy describes 3 types of

behaviour that we can display and encounter

when in a negotiating situation.

RED BLUE PURPLE


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RED Behaviour

Manipulation

Aggressive

Intimidation

Exploitation

Always seeking the best for you

No concern for person you are negotiating with

Taking

People behave in this manner when they fear exploitation by the other party, but by behaving this way to protect themselves, they provoke the behaviour they are trying to avoid.


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BLUE Behaviour

Win win approach

Cooperation

Trusting

Pacifying

Relational

Giving

Kennedy talks of a ‘behavioural dilemma’, do you cooperate (blue) or

defect (red)?

Can you trust the other person? And to what extent? Trusting someone

involves risk, on the one hand being too trusting is naïve and on the other,

not trusting at all can create deceitful behaviour.

The answer is to merge blue and red behaviour into purple.CABM Pantnagar 2010-12 Sachin&Tarini

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PURPLE Behaviour

Give me some of what I want (red)

I’ll give you some of what you want (blue)

Deal with people as they are not how you think they are

Good intentions

Two way exchange

Purple behaviour incites purple behaviour

Tit for tat strategies

Open

People know where they stand

Determination to solve problems by both sets of criteria of the merits of the case and/or the terms of a negotiated exchange

To the red behaviourist the message is loud and clear, ‘You will get nothing from me unless and until I get something from you’.


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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.


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THIRD-PARTY

NEGOTIATIONS

1. Investigation

2. Mediation

3. Conciliation

4. Arbitration

5. Adjucation


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EFFECTIVE NEGOTIATION

Successful relationships are built on

communication and trust.

Lack of trust leads to “win-lose” or “lose-lose”

result.

Negotiation is one way of creating trust – or

deciding whether trust is justified.

Example: “The Negotiator’s Dilemma” a classic

risk strategy game CABM Pantnagar 2010-12 Sachin&Tarini

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The Negotiator’s Delemma


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B Cooperates B Competes

A Cooperates good outcome A has terrible outcome,

B has great outcome

A Competes A has great outcome,

B has terrible outcome

Both have mediocre

outcome

NEGOTIATION TIPS

1) Do not underestimate your power.

2) Do not assume that other party knows your weaknesses.

3) Don’t be intimidated by status.

4) Don’t be intimidated by statistics, precedents, principles, or regulations.

5) Most negotiation will require some concession making.

6) It is a mistake to assume you know what the other party wants.

7) Never accept the 1st offer.

8) Don’t fear to negotiate.CABM Pantnagar 2010-12 Sachin&Tarini

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SKILLS FOR EFFECTIVE

NEGOTIATION Preparation and planning skill

Knowledge of the subject

Ability to think clearly and rapidly under pressure and uncertainty

Ability to express thoughts verbally

Listening skill

Judgement and general intelligence

Integrity

Ability to persuade others

Patience

Decisiveness

Ability to win respect and confidence of opponent

General problem-solving and analytical skills

Self-control, especially of emotions and their visibility

Insight into others’ feelings

Persistence and determination

Ability to perceive and exploit available power to achieve objective

Insight into hidden needs and reactions of own and opponent’s organization CABM Pantnagar 2010-12 Sachin&Tarini

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SKILLS FOR EFFECTIVE

NEGOTIATION Ability to lead and control members of own team or group

Previous negotiating experience

Personal sense of security

Open-mindedness (tolerance of other viewpoints)

Competitiveness (desire to compete and win)

Skill in communicating and co-ordinating various objectives within own organisation

Debating ability (skill in parrying questions and answers across the table)

Willingness to risk being disliked

Ability to act out skilfully a variety of negotiating roles or postures

Status or rank in organisation

Tolerance to ambiguity and uncertainty

Skill in communicating by signs, gestures and silence (non-verbal language)

Compromising and trusting temperament

Attractive personality and sense of humour (degree to which people enjoy being with the person)

Willingness to take somewhat above-average business or career risks

Willingness to employ force, threat or bluff

Learn to flinch.

Maintain your walk away power

Have a Purple attitude CABM Pantnagar 2010-12 Sachin&Tarini

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THANK

YOU


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PREPARATION

1. Firstly understand what it is you want?

2. What do you think your opponent wants?

3. What would happen if you didn’t do a deal?

4. Do you know your stakeholders?

5. Do you know who the decision maker is? Are you negotiating with them? If not what affect does that have?

6. Are there concessions you can build into the negotiation?

7. Know your product / service inside out? What standards are there in the market place?

8. Know your price points?

9. What issues do you think you’ll need to overcome?

10. Prioritize!

11. Practice!


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INFORMATION SHARING

1. Company activities and market position

2. Opinion on entry points

3. What elements are clearly off the table or not

up for discussion and why

4. Opponents attitude and commitment

5. Motivational factors (“I want this price

because…”)

6. Stakeholders and importantly decision makers

7. Problems, issues or risk

8. An order/structure for proceedingsCABM Pantnagar 2010-12 Sachin&Tarini

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BARGAINING

Bargaining has two basic parts

– Debating

– Proposing


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DEBATING

To be successful in negotiation you must build relationships and trust

You need to avoid the following- Point scoring – “Your company is always late with deliveries so

I’m not paying that!”

Insults – “If you insist on that price you must be stupid”

Provocation – “Keep talking like that and see where it gets you!”

Threats – “You just wait until your other customers hear about this”

Instead try- Building a relationship – It will make your negotiation much

easier

Sticking to an agreed agenda – This will help avoid destructive discussions.

Share information and ask questions – What do you want –what do they want

Try and be positive and listen – What do they want and why –look for areas of win/win or easy compromise.


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PROPOSING

When proposing your offer consider Consider both your entry and exit – This could

include all or some of your wants, and your opponents entry and exit points

Consider how you will phrase your proposal

Consider what will motivate your opponent into making the deal

Consider the likely response – Think about the “if I do that then they will do that”

Are there alternative proposals? – Once an initial response has been made are you happy or do you need to offer up something new.

Remember the key thing is to propose – don’t argue and try and remain realistic, and invite a response from your opponent.


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FINALIZING THE DEAL

So when closing the deal consider

Do you have what you want?

Do they have what they want?

Can you signify to your opponent that if certain terms were met the deal could be done.

Do you both understand the potential non deal by not closing or reaching agreement?

Document the agreement quickly and share it with your opponent and get agreement on the details of the deal.

Do not offer further concessions!

Agree the measures that will be applied to record fulfilment of the deal.


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Negotiation skills PPT along with Slideshow audio description note.

Business

Transcript of Negotiation skills PPT along with Slideshow audio description note.