ibn - negotiation structure

7/29/2019 IBN - Negotiation Structure

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Negotiation Structure

Different Stages of Negotiation

The Negotiation Process Power Dynamics

Dynamics of Agency-ConstituencyRelationship

Negotiations for resolving Impasses and

Disputes


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The Basic Principles

Negotiation is a voluntary activity

Desire to change status quo with a belief that anagreement is possible

Acceptance by both parties that an agreement isrequired and that the outcome can beimplemented

The time element is important in negotiations

Successful outcome is what both parties desire Progress is impacted by values, skills, perceptions

and attitudes of both parties


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Managing the Negotiation Process(in

the different stages, resolving dispute)

Negotiations should not involve use of heavy tactics inorder to have effective long term agreements

Success in negotiation involves determination of thebest means of persuasion and the ability to utilise

them at the appropriate time Appropriate planning for the different phases of

negotiation is required, the need to recognise the stageof the negotiating process

Negotiations should be avoided if there is lack ofrequired authority, lack of time or required experienceto prepare effectively, unreasonable demands


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Managing the Negotiation Process

It is not desirable to have a preset mindset whileentering negotiations

Knowledge of the final negotiating authority andeffective utilisation of power is essential

Clarity of the goals of negotiation and not a generaloutcome is required

It is important not to lose control of factors whichappear unimportant but impact outcome

Matters at time appear to be deadlocked but there aresolutions which can still be achieved on perseverance


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Preparation involves identifying the issues and also therange of objectives for each issue

An appropriate strategy and style has to be developed

Each party has to initially make a presentation of their

demands etc An understanding has to be build up in which each party

justifies its position and also weigh the positions of otherparty / parties

The Bargaining round is where each party tries to get

concessions The close of negotiations is either with agreement being

reached or a termination short of agreement


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Preparation for negotiation also involves ensuring clarity ofthe objectives, and assessing the other partys case

Attention has to be also paid to the assessment of relative

strengths and weaknesses In setting objectives it is important to establish the

following:

The best outcome, the lowest acceptable outcome and arealistic target that could be an outcome


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BATNA

BATNA best alternative to no agreement shouldbe defined so as to ensure realistic targetobjectives

In defining BATNA, issues like the point wherenegotiations can be stopped and the situationthereafter, the position of the other party shouldbe examined

Clarity on goals and firmness in the negotiation is

required BATNA and bargaining objectives should not be

altered unless underlying assumption changes


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BATNA

The goals and interests of the other party shouldbe understood and the point at which they willend negotiations

The relationship and previous history are alsoimportant factors

The competitors who would benefit ifnegotiations are unsuccessful

The advantages that we have on the competitorsand they have over us

The affect of the competitors on our goals andtactics in the negotiation


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Negotiating Styles

Controlling: Quick, decisive action is required andthe issue is important

We are sure of our position, advantage of co-operative behaviour would be taken

Collaborating: Issues are important and cannotbe compromised

Different points of view have to be integrated andcommitment to make solution work is required

An important relationship has to be build up andmaintained


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Negotiating Styles

Avoiding: Issues are unimportant, there are minimalchances of achieving objectives

Negotiation can lead to aggravation which wouldoutweigh any possible benefit

Time is required to collect the required information Accommodating: A reasonable appearance seems

advantageous and credits can be build up for thefuture, it is apparent that we are not factually correct

Compromising: When the outcome is the onlyalternative to no solution, the relationship isimportant, temporary solutions to complex matters isrequired


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Negotiators Checklist IBN

( IBN International Business Negotiations)

The location of the negotiation and the possible timeschedule together with duration

The time frame in which the negotiating team should

reach the location and ensuring schedules are madeavailable to the other party

The locations where the various rounds of negotiationwould take place

The language of negotiation and appointment ofinterpreters

The language of the contract and briefing ofinterpreters on certain essential points


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Negotiators Checklist - IBN

The composition of the negotiating team,identifying the spokesperson

Confirmation of the negotiating teams ability andexperience with regard to the subject matter

The specific authority of the team should beclearly defined with regard to the objectives ofthe negotiation

Specific responsibilities have to be allocated toeach member of the team and the strategy forthe negotiations has to be finalised


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Clarity has to be there as to whether negotiationsare being held with the organisation that candeliver

Also are negotiations being held with the correctdepartment and people

Also if any other party or Governmentrepresentative is required to be present at thenegotiations

The standing of the other party and its reliabilityshould also be examined


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The compilation of required information about theother company, country before negotiations takesplace

Information about the members of the other team is

also required Necessity of hiring local consultants and experts should

also be examined and their requirement for attendingthe negotiations

Necessary documents and information should be sentto the other party

An agenda with specific items agreed to by the otherparty has to be put in place


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The process of introduction of the teams has

to be completed with clarity as to the specific

roles of each team member

Required time for introductions etc has to be

provided so as to ease the process of

negotiation

It is important that both teams should have

clarity as to their authority for taking decisions


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Sufficient information has to be exchanged, climate ofunderstanding can be build by careful listening andappropriately framed questions

Knowledge of culture is important and its affect on thecommunication process, ideological factors are alsoimportant

The principal issues have to be listed in order of importanceand an appropriate strategy is required with respect toeach issue

The appropriate time for submitting the draft agreement asa basis for negotiation should be decided. Also theresponse if the other party puts out its draft agreement


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Other commercial factors like foreign exchange risks, exchangecontrols, countertrades etc and their implications on the deal haveto be clearly understood

An adequate written record is required and also what

communications have to be made with the other party after everynegotiating cycle

The required follow up must be defined and responsibilities fixed asto who will do the follow up

Options for attaining goals and interests must be examined

We must be sure that we understand the other partys goals andobjectives and vice-versa

An adequate dispute resolution process must be part of thenegotiations outcome


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Once the negotiations are completed, there has to bean assurance that the deal will last

Future trends and events which may affect theagreement should be kept in view

The agreements should be so structured so as to avoidfuture uncertainties

The deal should be balanced and useful to both parties

An appropriate strategy has to be put in place for

effective implementation of the signed contract/negotiation document


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Power tools for global negotiations

Power is not inherently good or bad

Care has to be ensured to use it properly in

order to avoid loss of control or damage

Power is the means by which a state,

organisation or person attains a desired end in

its relationship with its counterparts

It is important in negotiations for attaining

desired goals


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Power can be on account of physical or capitalresources or even an original idea or a reputation forfair play

Power has a perceptual dimension.

Each party has its own set of lenses and at times theymay reduce objectivity leading to miscalculation

Classical example is of Khrushchev who viewedKennedy as a weak inexperienced leader

Russia had to back down in the Cuban missile crisisand remove missiles set up in Cuba


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Skilful use of negotiation tools can reduce powerdifferences at the negotiating table

An apparently less powerful party in international

negotiations is not always in a disadvantageousposition

Negotiation is related to specific issues andinterests and is not always impacted by each

partys aggregate resources Canadas negotiation with USA in the Free Trade

Agreement etc is one of such examples


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In Conclusion

International negotiations should pay special attention to thefollowing factors:

Modern day business deals even after signing of contracts needcontinuous attention

Negotiators have to master complete details with regard to

countries, culture, people etc A global negotiator is a good listener and constantly processes

information

Agreements must be structured to protect against futureuncertainties

A continuous review of all matters related to negotiation activity isessential in the present global environment.

Dialogue is a powerful mode of communication and effective inresolving disputes

ibn - negotiation structure

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