cinflict management & negotiation

Copy right A B Prasad

•Copy right A B Prasad

CONFLICT ARE FUNCTIONAL

• All conflicts are not unproductive

• Conflicts can be useful, constructive and positive

• In fact, a relationship with frequent conflicts may be healthier than one with no observable conflict

CONFLICT ARE FUNCTIONAL

• Conflict can promote innovation, creativity and development of new ideas, which make organizational growth possible.

• If it is handled well, conflict can be productive leading to deeper understanding, mutual respect and closeness

• The reality is all the major reforms and changes occur as a consequence of conflict

BASICALLY CONFLICT IS AN

ISSUE OF PERCEPTION

3 MAIN COMPONENTS TO CONFLICT

• PERCIEVED INCOMPATIBITY OF INTERESTS

• SOME INTERDEPENDENCE OF THE PARTIES/GROUPS

• SOME FORM OF INTERACTION

INTERPERSONAL RELATIONS

NEGOTIATION

•Copy right A B Prasad

NEGOTIATION SKILLS

• Negotiation- Introduction

• Negotiation style – Self assessment

• The Negotiation process

• Soft skills

• Negotiation strategies

• Negotiation tactics


INTRODUCTION

• Recollect two instances when you were involved in negotiation at home

• Recollect two instances when you were involved in negotiation in every day life

• Recollect two instances when you were involved in negotiation at work


Introduction

• World is a giant negotiating table• Everybody negotiates all the time -Traffic cop poised to write Challan -With children over a deadline to come home -With a store reluctant to agree to exchange an item -With a potential employer over a salary package

• For some it seems easy• For some it is a source of conflict to be

resisted and avoided


WHAT IS NEGOTIATION?

NEGOTIATION CAN BE DEFINED AS A PROCESS IN WHICH TWO OR MORE PARTIES EXCHANGE GOODS OR SERVICES AND ATTEMPT TO AGREE ON THE EXCHANGE RATE FOR THEM

-J.A.WALL,Jr.,


WHAT IS NEGOTIATION?

Negotiation is a process by which two parties communicate with each other in order to reach an outcome on which they mutually agree


WE DONOT GET WHAT WE WANT IN THIS LIFE, WE GET WHAT WE NEGOTIATE - Garg Karaas


NEGOTAITION IS A PROCESS IN WHICH TWO OR MORE PARTIES SEEK TO DECIDE AN ISSUE JOINTLY SO THAT BOTH COME OUT BETTER THAN THEY WOULD WITHOUT NEGOTIATING


Negotiation requires the management of three tensions with in a system

• Creating value v/s Distributing value

• Assertion v/s Empathy

• Principals v/s Agents


Creating value

• Creating value focuses on developing mutually beneficial agreements

• It is based on the interests of the disputing parties

• Interests include the needs, desires, concerns and fears of both parties

• These are the reasons for a conflict


Creating value contd…

• It results in creating joint value or enlarging the pie

• This is possible when multiple issues are involved

• To make tradeoffs to satisfy both parties


Distributing value

• Competitive negotiation strategy

• Distribute fixed resources

• Parties believe that the pie cannot be expanded


Assertion v/s Empathy

• Assertiveness is ability to express one’s own needs

• Empathy is understanding other’s needs

• Not necessary to agree or sympathize

• Reduces needless defensiveness and escalation


Principals v/s Agents

• Direct negotiation between two principals

• Negotiating on behalf of others

• Radical shift is required to conduct negotiation


3 Crucial variables in Negotiation

• Power: Muscle or Mind

• Time: Your pace or Mine

• Information


POWER

• Power is ability to get things done

• Power is a neutral force

• You have to perceive that you have power

• We all have power

• Understand and use it effectively


Time

• Time and tide waits for none

• Time affects the negotiation process

• We choose doing things at the last moment

• The 80/20 time principle


INFORMATION

• Information is the heart of negotiation

• Negotiation is not an event but a process

• Time plays a crucial role in gathering information

• Negotiating parties conceal their time and interests

• Information is power

• Gather enough informationCopy right A B Prasad

ACTIVITY-MAXIMISING PROFITS

The Situation so farThree branches of IOB have sent representatives to a 3

way negotiation. The representatives have learnt that there are benefits in working together.

If all the groups reach an agreement, benefits totaling 121 crore will be split among teams according to the agreement

If only two of the teams reach an agreement, the total benefits to split will be less than 121 crore and the excluded team will be left with nothing


MAXIMISING PROFITS

-If branch “A” and “B” work together they will amass a profit of 118 crore.

-If branch “A” and “C” collaborate they make a profit of 84 crore.

-If branch “B” and “C” work together they will attain a profit of 50 crore

-Any team works alone they get nothing


INSTRUCTIONS

-There will be 3 rounds of negotiation at the end of which an agreement has to be reached between teams.

-Only one representative from each team will be present at the negotiating table

-Each round of negotiation is for 5 minutes

-Before each round, groups can have 5 minutes to discuss.

-The objective is to attain maximum profit

-Each group has to write down the expected profit they would like to gain before starting first negotiation.


NEGOTIATION STYLES

-SELF ASSESSMENT

NEGOTIATING STYLES

1.Distributive bargaining

• Win-lose exercise

• The sole purpose is to maximize his own outcomes

• This is known as assertiveness


2.MUTUAL GAIN BARGAINING

• Mutual problem solving exercise

• Open communication, trust and mutual respect

• Focuses on fulfilling mutual interests

• This is known as cooperativeness


Competition Collaboration (win-loose) (Win-win)

COMPROMISE

Avoidance Accommodation(Loose-loose) (Loose-win)

Cooperativeness (Mutual gain bargaining)

HIGH

LOW HIGH

DISTRIBUTIVE

NEGOTIATING STYLES


ASSERTIVENESS

1.COMPETING

• Result oriented

• Self confident and assertive

• Focused on bottom-line

• Tendency to impose their views

• Extreme can become aggressive and domineering

• High on assertiveness and low on cooperativeness


2.AVOIDING

• Passive

• Prefer to avoid conflict

• Make attempts to withdraw

• Pass responsibility on other party

• Fail to make an honest attempt to get a solution

• Low in assertiveness and cooperativeness


3.COLLABORATING

• Open and honest communication

• Focus on creative solutions

• Satisfy both parties

• New and novel solutions

• Suggests many alternatives for consideration

• High on assertiveness and cooperativeness


4. ACCOMMODATING

• Attempts to maintain relationships

• Smooth over conflicts

• Down plays differences

• Concerned with satisfying needs of others

• Low in assertiveness and high on cooperativeness


5.COMPROMISING

• Find middle ground

• Split the differences between positions

• Engage in give and take tradeoffs

• Moderate satisfaction of both parties

• Moderate in assertiveness and cooperativeness


THE NEGOTIATION PROCESS

• Negotiations are complex and drawn-out processes

• Each is unique• Broad range of factors• Institutionalized procedures• Number of parties and representatives• The scope of issues• Broader framework of negotiations


STEPS IN NEGOTIATION PROCESS

1. PREPARATION AND PLANNING

2. DEFINITION OF GROUND RULES

3. CLARIFICATION AND JUSTIFICATION

4. BARGAINING AND PROBLEM SOLVING

5. CLOSURE AND IMPLEMENTATION


1.PREPARATION AND PLANNING

• Do the homework

• Nature of the conflict

• The history up to negotiation

• People involved

• Their perception of conflict

• Your goals of negotiation

• Keep your attention focused


1.Preparation and planning contd…

• Assessment of goals of others• What they are likely to ask• Intangible and hidden interests• Gather information to support your position• Develop a strategy• Determine other side’s best• BATNA (Best alternative to a negotiated

settlement)


2.DEFINITION OF GROUND RULES

• Who will do the negotiation?

• Where will it takes place

• Time constraints if any

• To what issues the negotiation is limited

• Specific procedures if any, in case impasse is reached


3.CLARIFICATION AND JUSTIFICATION

• Exchange of initial positions

• Clarification and justification for demands

• Need not be confrontational

• Opportunity for educating and informing

• Provide documentation to support your position


4.BARGAINING AND PROBLEM SOLVING

• Give and take to reach an agreement

• Concessions need to be made by both


5.CLOSURE AND IMPLEMENTATION

• Formalizing the agreement.

• Develop procedures for implementation and monitoring.

• Hammering out specifics in a formal contract


BATNA

• Best alternative to a negotiated agreement

• Coined by Roger Fischer and Williams in 1981

• Critical to negotiations

• It is the standard to protect from accepting unfavorable terms and rejecting favorable terms


BATNA contd…

• If the proposed agreement is better than BATNA accept it

• BATNA increases your negotiating power

• Know when the opponent is desperate

• Perception matters

• BATNA may not be readily apparent


BATNA contd…

• Develop a list of actions if agreement is not reached

• Improve promising ideas

• Select one best option


ZOPA

• Zone of possible agreement

• If there is a potential agreement that benefits both sides


Preparing for a successful negotiation

Think through the following points before starting negotiation

1.Goals

2.Trading

3.Alternatives

4.The relationship

5.Expected outcomes

6.The consequences

7.Power

8.Possible solutions


The Three dimensions of NegotiationFOCUS COMMON BARRIERS APPROACH

Tactics(People and processes)

Interpersonal issuesPoor communication‘Hard ball’ attitudes

Act ‘At the table’ to improve interpersonal processes & tactics

Deal design(value & substance)

Lack of feasible or desirable agreements

Go back to the ‘drawing Board’ to design deals that unlock value that lasts

Setup(Scope & sequence)

Parties, issues, BATNA & other elements don’t support a viable process or valuable agreement

Make moves ‘Away from the table’ to create a more favorable scope and sequence


SOFT SKILLS

• Empathy

• Active listening

• Persuasion

• Trust


Empathy

• Ability to recognize, perceive and directly feel the emotions of another

• Ability to ‘put oneself into another’s shoes’

• Facilitates communication and understanding


ACTIVE LISTENING

• Listening and responding to another person

• Improves mutual understanding and trust

• Reduces tension

• Creates safe environment

• Helps uncover “Hidden” information

• Helps in clarifying thoughtsCopy right A B Prasad

PERSUASION

• It’s a form of influence

• Guiding people to adopt an idea, attitude or action

• Rational and symbolic approach

• Not always logical

• Strategy of problem solving based on ‘appeals’ rather than force


TRUST

• Relationship of reliance

• Need not involve belief in the good character or morals of others

• Persons engaged in criminal activity may trust each other


POSITIONAL BARGAINING V/S INTEGRATIVE BARGAININGPOSITIONAL BARGAINING

INTEGRATIVE BARGAINING

Disputants are adversaries Disputants are joint problem solvers

Goal is victory Goal is wise decision

Demand concessions Work together to determine who gets what

Dig into position Focus on interests, not positions

Mislead, use tricks Be open about interests, use fair principles

Insist on your position Insist on objective criteria. Consider multiple answers

Apply pressure Yield to principle, not pressure

Look for win for you alone Look for win-win opportunities


POSITIONAL BRGAINING

• Holding on to a fixed idea or position• Underlying interests are not in focus• This is the first strategy people adopt• Mechanical splinting of difference • Less constructive and less efficient• Less likely to result in win-win• You vs. me approach• May result in bad feelings


Advantages of positional bargaining

• Consideration of all interests is unnecessary and counter productive

• Issues are universal

• Interests are specific

• Negotiate on specifics and go for compromise


PRINCIPLED NEGOTIATION

• Interest based negotiation

• Based on 4 principles 1.Separate the people from problems

2.Focus on interests, not positions

3.Invent options for mutual gain

4.Insist on objective criteria • People problems involve perception, emotions

and communication


Negotiation Tactics

• BE FLEXIBLE

• KEEP EVERY ONE INFORMED - DO NOT GET CAUGHT ON THE WRONG FOOT IF SOMETHING GOES WRONG IN YOUR BRANCH/OFFICE

• IF A DEADLOCK ARISES- DO NOT END ABRUPTLY- SUGGEST


Golden rules of negotiation

• Never give a concession, trade it reluctantly (do not give anything for nothing)

• Enhance and Reduce every concession: enhance if you are giving concession; reduce if you are being given


Enhance your concession means:

• I am doing this only for you• Refer to the need that your concession will solve• Refer to History (Old demand…..)• Clarify that you may be in trouble for giving this

concession• Stress the cost of concession citing examples• Stress that you have agreed for the sake of

nourishing relationships


Reduce their concession means:

• Do it carefully• Do not overplay• Do not antagonize• Acknowledge their concession, but reduce it• Treat them as given• Deny any real value• Underplay the expressions


Body language during negotiation

• Should not be energetic nor passive but expressive

• Eye contact should be direct• Posture should be upright• Facial expression should be pleasant


In case of aggressiveness by the other side…..

Do not lose your nerve, keep calm and follow these• Use silence, silence speaks more at times-- let

the opposite party come with more information during silence

• Listen,listen and listen more• Let them complete what they want to say• Keep thinking• Keep the best till the last• Do not hang-upon deadlines


NEVER END ABRUPTLY……...

• FIX DEADLINE FOR CONCLUDING NEGOTIATIONS WHICH PUT PRESSURE ON THE OTHER SIDE

• CAREFUL AND PLANNED THREATS AND ULTIMATUM ALSO WORKS

• FALSE SUMMING UP TO CREATE PRESSURE TO CLOSE THE NEGOTIATION “OK, WE HAVE NOT AGREED ON ANYTHING. LET US SUM UP………”

• BARGAINING IS MULTIFACETED AND THE BEST WAY TO SUCCEED


CLOSING (LANDING OF THE PLANE)

• DO NOT CLOSE ABRUPTLY, OUT OF FEAR OR ANGER

• GIVE LAST MINUTE CONCESSIONS AND CLINCH THE DEAL

• DO NOT DEFER SIGNING THE DEAL

• GET LEGAL MAN INVOLVED IN DRAFTING THE DEAL


NEGOTIATION IS TO BE SEEN NEGOTIATION IS TO BE SEEN AS AN OPPORTUNITY AND NOT AS AN OPPORTUNITY AND NOT

THREAT AS IT LEADS TO THREAT AS IT LEADS TO BETTER UNDERSTANDINGBETTER UNDERSTANDING


Negotiation Skills• “Let us never negotiate out of fear, but

let us never fear to negotiate.” -JOHN F.KENNEDY

• “Never give in, never give in, never, never, never- in nothing great or small, large or petty- never give in except to convictions of honor and good sense.”

- WINSTON CHURCHILL


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