manhattan elite prep notice negotiation decision chapter 5.5 8

Negotiation and Decision Making 44

www.manhattaneliteprep.com ©Manhattan Elite Prep

5.5 Negotiate Over the Phone Though it’s been around longer than email, it will be wise to pay special attention to phone deals too. The main difficulty with making a deal over the phone is that it is harder to build the relationship and it is easier to say no without being flexible. It’s easier to hang up the phone than walk out away from the meeting. There is a sense of urgency and rigidness to being on the phone that does not exist at an in-person meeting. However, you first need to assess whether you perform better in a negotiation over the phone or in-person and in what types of situations. It is highly possible that you might be the person who can be tougher and less personable on the phone than at the table. In order to achieve the best results out of a phone negotiation, you need to consider the following: • Think thoroughly about your bargaining zone, in particular, your BATNA • Be prepared with a list of priorities and potential concessions • Be prepared to ask a lot of open-ended questions that will give you more information about

the opposition • Stay in control of the logistics and the discussion agenda • Be polite in tone and language. Consider smiling while speaking, which improves your

tone. • Paraphrase or recap promptly to reiterate the major points made previously, especially the

favorable concessions the opposition has made for you • Take extensive notes to ensure backup for any post-call disagreements. • After the conversation, send a written follow-up note • Don’t rush to a decision



5.6 Negotiate Via Email Statistics show that face-to-face negotiations typically have a 91% success rate and the agreements are most often mutually beneficial. Negotiating over the phone usually results in an agreement with a noticeable disparity in distributed benefits. Negotiating via email usually results in a less than 50% success rate. The overall tone and attitude espoused in an email is very much subject to the reader’s interpretation. Though at the moment email is not the most successful of negotiation methods, email represents an increasingly prominent method of negotiation. Email deserves some special attention in terms of the ways in which such negotiation differs from other forms. Probably of greatest importance is the recognition of where email fails to offer the possibilities of one-on-one negotiation. Pitfalls of Email • Greater likelihood of miscommunication and passing blame • Greater likelihood of less honesty • Harder to brainstorm real-time and develop creative solutions

Ways of Improve Email Negotiation • Have an in-person meeting or a call before engaging in email conversation. • Be aware of the purpose of your email negotiation session. • Always remember to build rapport. Don’t forget about a simple opening greeting and sign-

off. Share something informal to sprinkle in the personal touch. • Try to work on major issues in person or over the phone and leave less complicated aspects

and execution details to email exchanges • Always be sensitive. Interpret messages with caution and care. Clarify any ambiguities

immediately. • As soon as conflict arises, schedule a call or face-to-face meeting to re-establish common

ground. With time and added technology email communication will improve. However, at the moment it is important to be wary of treating the virtual meeting as if it were an in-person one.



5.7 Build a Negotiation Team Who should lead the team? There are a few options for you to choose the right leader in a negotiation: - Who knows your goals best - Who is the most senior participant - Who knows the other side best - Who is the most effective negotiator

Prioritize those qualities based on the objective and situation of each particular negotiation. Choose the person who has the highest caliber and most knowledge about the other party and the product/service being negotiated over. Who should do what? It may be a good idea to assign the team members’ roles based on the other party. If you would like to start a meeting with good faith, avoid coming to the table with a greater number of individual than the other party. Try to be equally matched in numbers and roles. Who should plan the strategy? All team members should take part in planning, with varying degrees. How should you seat your group? In an integrative negotiation, seating your party on one side of the table and the other party on the other side should be avoided, unless a strict party division is preferred and/or ease of communicating between members sitting next to each other is very important. What are useful nonverbal ways to communicate to team members? There are a number of methods from scratching one’s head to tapping one’s pen. Non-verbal signs should include ways to indicate that another team member should stop talking, finish up, and hand over the discussion to someone else. The signs should be clearly agreed upon prior to negotiations.



5.8 Establish Strategic Partnerships If you are in charge of establishing strategic alliance with a partner, you can consider the following advice: - In the initial stage, focus on building trust and rapport. - Leave the lawyers out. Keep the negotiations at the business level. - Make sure the power is rather balanced from both sides with decision makers of similar

level. - Empower the right people to play different roles in the negotiation. - Leave the CEOs out. Bring them in when there is a snag or when it is close to completion. - Manage expectations in stages. Put them in writing. - Define alliance benchmarks clearly with some milestone numbers or tangible results.

Begin the negotiation with a question and answer session in which each party is made fully aware of the expectation, goals and plans of the other party. Instead of a lengthy due diligence request list, the partnership discussion will be more strategic than specific in nature. The following is a list of possible questions to include: What is your strategic direction? What are your future growth plans? What are your expectations from our end to make this alliance successful? What can a potential partner bring to add most value to your organization at this point? Other topics that ought to be covered in this forum include: structure of union, financial terms, execution team, resources committed, technology required, and various alternatives if the partnership does work out as planned. At the close of negotiations it is important to have concrete actionable plans to execute all the steps and reinforce shared visions and strategies.



5.9 Negotiate with Customers When you negotiate with potential or actual customers over products you seek to sell them, there is little room for negotiation when they have little need for your item. So be aware of their needs first. • Try to find out when they will make their decision and whether or not that works for you.

• Try to find out whether they have the resources with which to purchase the product.

• Try to find out if purchasing from your company is an option at all.

• Figure out whether their proposal works for you.



Chapter 6 Communication in Negotiation In negotiation it is helpful to be aware of methods and tendencies of communication at each stage of the game. Each stage possesses its own traps, which are valuable and informative as one proceeds in negotiation.

6.1 Three Main Stages Stage 1 Initially negotiators sit down to discuss past talks, conflicts and agreements with the other party, then they are ready to begin anew, with altered strategy, new schedules and plans. In this environment, negotiators are especially attuned to certain communicative qualities. Perception/observation affects attitude toward the other party in terms of physical qualities, expression and language use. - Negotiators on the collaborative end of the spectrum seek out what is similar - Negotiators on the competitive end of the spectrum seek out what is different

There are several ways in which communication at this stage can be challenging, and many of those challenges are mental ones. Awareness of early pitfalls in communication may prevent them from lingering into the second and third stages of negotiations and causing undesired results. Common Pitfalls include:

1) The drawing of stereotypical conclusions without a basis in reality 2) Extremely positive or negative initial impressions 3) Errors in framing issues or the failure to reframe

4) Selective presentation or consideration- Seeing certain preferred aspects of the other

party 5) Imposing your own ideas, paradigms onto others 6) Denying realities and stubbornly believing in existing perceptions about others or

yourself



Stage 2 In the second communicative stage, negotiators get down to business. They dictate terms and make offers and concessions, and must seek to listen and respond appropriately throughout the entire stage. This stage has four general elements. 1) Offers will be made, rejected, rephrased, added to, and edited. 2) A framework is developed. It involves an initial diagnosis of the issues, the creation of platforms on either side of the table, the development of the terms (rules & criteria) by which the conversation will be conducted, and the filling in of specific details. 3) Listening is a key aspect of any conversation. Sometimes we forget that careful active listening is key to developing relationships as well as the asking of questions to gain clarification. In addition to active listening, role reversal is another method of improving your understanding of the other party. 4) Language, an aspect of all communication, is especially important during the detailed drafting of offers and terms of discussion. Questions should be phrased in methods appropriate to your goals, with language that serves your objectives. It would, for example, be important to ask questions in respectful and friendly tone, or pose offers politely and modestly to those with whom you seek an improved relationship.



Stage 3 During the final negotiation stage, there are many tendencies to avoid. After initial stages, negotiators tend to relax, let down their guard, jump too quickly, and lack a willingness to reevaluate when needed. The following pitfalls should be avoided at this stage: • Jumping to conclusions

• Self-assurance – Too strong a trust in one’s own rightness

• A lack of flexibility

• A lack of good record keeping

• A lack of awareness of the opinions of the entire group

• Not working out problems or discrepancies in full

Inevitably during this stage one party or the other draws up a contract. If your party writes the agreement, this is generally an advantage. However, if you do not, be sure to conduct a careful analysis of the agreement, both of its overarching message and of its details.



6.2 Active Listening When we think of effective communication, we often focus too much on the way we speak and what we are saying, therefore, overlooking a fundamental element of communication – listening. In countless business interactions, you will need to listen with purpose. Listening will help you gather data about problems in order to find solutions. Understanding the point of a view of a subordinate or client is essential in order to carry on negotiations. Three Traits of an Active Listener 1) Shows genuine interest in what the speaker is communicating.

Tips to communicate your interest: § Maintain good eye contact. Look into the other person’s eyes often, though not all

of the time. § Indicate attentiveness with alert facial expressions § Nod encouragingly occasionally § Use vocalizations such and “uh huh” and “yes” to encourage the speaker to

continue 2) Tries to see from the perspective of the speaker Tips to develop this approach:

§ Do not interrupt, finish the sentence of or rush the speaker § Try to suppress your initial reactions and to hear and understand the speaker’s

entire point of view and supporting arguments 3) Make an effort to get in-depth information from the speaker

Tips to achieve this objective: § When the speaker pauses, ask open-ended questions § Clarify the speaker’s thoughts and feelings § Minimize interruptions



Reflective Responses In the process of actively listening, also use reflective response techniques to elicit a full sense of the speaker’s thoughts and feelings. Reflective response techniques include: • Restate what you believe the speaker has said to check for the accuracy of your

understanding - Example: “You seem to feel anxious because you couldn’t finish the assignment.”

• Respond to the speaker, do not lead the dialog - Let the speaker’s thoughts and feeling be the guide in your conversation • Focus on underlying emotions rather than content - Example: Ask a question like “So do you resent your subordinate for challenging you?”

rather than “How often do you clash with him/her?” When to respond reflectively vs. directly When you need to: - Ascertain the other person’s true feelings and thoughts - Sense that the other person is still uncertain about his/her own true feelings - Develop more in-depth understanding of the other person’s true feelings and leading reasons

Once you feel you have a firm grasp of the person’s perspective and emotions, you can more effectively switch for more directive stances, as you often times need to argue, advise, confront or persuade in a negotiation. Active listening is often the first stage of interaction. To develop your active listening abilities, you must practice. Over time these skills will be integrated into your everyday tools of communication.



6.3 Nonverbal communication Effective communication also requires that we understand the importance of nonverbal behavior. We must also think about nonverbal communication in a cultural context. Nonverbal behaviors such as eye contact, facial movements, and use of personal space vary from one culture to another. Factors of nonverbal communication: 1) Eye Contact – The eyes can indicate thought process. 2) Facial Expression – Useful for indicating our clarity or confusion over the content of a message 3) Space – How close we sit or stand next to someone is normally determined by social and cultural norms Special Notes on Perception of Space Research suggests that there are four major zones of personal space which carry meaningful importance in cross-cultural communication. The categorizations below exclude various factors such as availability of the space, the type of settings, the emotion of the surroundings, etc. Though, this does not factor in the varying natures of different cultures.

• Intimate zone (for close relationships) - less than 18 inches (about 0.5 meter)

• Personal zone (for friends) - 18 inches to 4 feet (0.5 to 1.2 meters)

• Social zone (for work) - 4 feet to 10-12 feet (1.2 to 3+ meters)

• Public zone (for formal interaction) – 10-12 feet and greater (3+ meters and more) More detail regarding different perceptions of space among different cultures can be found in the chapter on Cultural Sensitivity & Etiquette.



6.4 Planning Your Meeting Meetings are the most common way for a group of people to work together, discuss, negotiate and accomplish goals. The business world depends on the smooth running of meetings. Moderating or facilitating meetings can be a stressful experience. But when the meeting goes well and the group feels good about what it accomplished, the role of facilitator can be a very satisfying one. In the beginning stage of planning your meeting, ask yourself these five questions:

1) Is there a purpose to the meeting? 2) Who should attend the meeting? 3) What should we discuss? 4) How we should record our ideas? 5) Where should the meeting be held?

When thinking about the second question of who should attend the meeting, consider the following:

§ How many participants? § What type of group do you want? § Who needs to be there? § How much background or new information do they need?

Goals and Purpose for Meeting Every meeting has its own agenda, but there are general purposes for all.

§ Identifying problems § Solving problems § Brainstorming ideas § Gathering information § Organizing § Decision making § Completing § Planning for implementation

When groups meet, individuals must put aside some of their individual needs. Also, competing needs are usually inherent in meetings. Most meetings can not be conducted in perfect settings and time can not stand still.

A good moderator tries to find a balance for these competing needs:

§ Maximize speed vs. maximize input § End on time vs. take time needed to be thoughtful and creative § Prioritize task by emphasizing a fast decision vs. prioritize process by promoting

discussion and inclusion § Be individually accountable; resist “groupthink” vs. be mutually accountable:

move with the group § Work with limited perspective and resources vs. work with diverse perspectives

and resources



Setting the Agenda

1) Specify the purpose and each participant’s role - Who will serve as minutes writer? - Who will serve as timer?

2) Schedule agenda items 3) Explain each agenda item 4) Decide on the discussion format 5) Decide on a decision-making technique

- Will executive or expert decisions be made? - Will the group use majority vote or consensus?

6) Distribute the agenda in advance Opening the Meeting The opening introduction should set the tone of the meeting. Remind participants of their roles right from the start. Involving people in the operations of the meetings will elicit more progress. Use icebreakers with new groups. Watch how people arrange themselves. Make sure that they can see each other. During the Meeting As a moderator of a meeting, show an active interest in understanding others. When others see your enthusiasm, they will join in active participation. Hear the differences between issues and motives and try to distinguish between logical and emotional conduct. Be aware of others’ body language while also maintaining eye contact with others. Nonverbal interaction is as important as verbal communication during a meeting. Nod and use other facial expressions to encourage others or show that you are in agreement. Exercise good posture to make yourself look alert and open to participation. Ending the Meeting

§ Know when to end § Summarize the meeting § Confirm the summary § End on a positive note § Follow-up to ensure implementation



Chapter 7 Authority in Negotiation Power is a multifaceted tool of negotiation. Through traditionally you may be inclined to think that the ruthless business man is a champion negotiator, it may also be that the friendly, kind and talkative guy has an influence that is equally compelling and powerful. Negotiators employ their authority or power as a method of gaining the upper hand in negotiation, achieving their stated goals, and guarding their interests. Some negotiators even in the planning stages strategize based on their power resources in order to achieve their objectives. In general, those endeavoring to increase their authority do so for two reasons:

1) To heighten their preexisting dominance. This method can be linked to competitive or distributive negotiation.

2) To get on equal footing with the other party. This method has links to collaborative or

integrative negotiation.



7.1 The Origins of Authority Power emanates from various sources. It is helpful to understand the origin of different forms of authority in order to strategize both in terms of the type of power your party possesses as well as the type of power the other party holds. Type A: Command of Resources -A form of power emanating from the possession of resources that the other party lacks, or at least lacks in great quantities. These include financial resources, goods, work force, special service capacity, machinery, or if a final decision is less urgent for you, that too may embody a resource. Type B: Granted Authority Often bestowed externally, it is power arising from position, past performance or reputation. Such is the power of the high ranking or acclaimed executive as well as a politician. Type C: Position in the Network -A power that comes from an individual or group role or location in a system This type of power comes from a particular position related to a particular matter which allows that individual or department to gain the upper hand. It adds visibility. Type D: Specialized Knowledge -A form of power emanating from the possession of knowledge that the other party lacks This expression includes the knowledge one party has and shares as well as the knowledge one party has and withholds. Also an expert or specialist in a particular field has a certain power in their very expertise. Such power could potentially be used to manipulate or control a situation. Type E: Likeability and Expression -Intangible personal qualities that make people interested in, listen to, become attracted by, and ultimately more eager to appease



7.2 Use Power for Influence The strategies below are helpful when a group already possesses quality power that makes it a useful strategy. Legitimacy, for example, should not be employed by those without status. It is useful to develop an awareness of one’s own power sources and how to employ them to your advantage in negotiation. Persuasion - when a party employs argumentation, factual reports to change and influence minds Legitimacy - when a party employs status as a bargaining tool Exchange - when a party employs the tools of compromise to gain an upper hand, requiring the other party to put up some of his/her resources Consultation - when a party employs outsiders in negotiation in order to further their goals, integrity and information Developing Coalitions - when a party gains adherents (powerful individuals or groups) to its side, thus compelling greater compliance by the other party Use of Pressure, Coercion - when a party uses threatening language, accusations or fear to further their power. This, it should be noted, is rarely successful. Friendliness - when a party employs loyalty, kindness or a variety of gentler virtues in order to achieve their goals Praise or Reinforcement - when a party employs compliments Assertiveness - when a party employs precise and detailed language in an effort to achieve their goals Inspiration - when a party employs pleasing or moving language, symbols and phrases that inspire an emotional response in the other party



Chapter 8 Multi-Party Negotiations Multi-party negotiations are far more complicated than two-party negotiations. They involve varied histories of interactions not only between your party and each other party, but amongst other parties as well. With multiple parties, a negotiation requires a much greater amount of additional homework and is highly influenced by group politics and behaviors. - It is more difficult to prepare for and truly requires more background information and an

even clearer spelling out of terms, conditions and needs. Other pressures you may be unaware of may exist among other parties.

- The way in which discussions are organized becomes increasingly essential to control. - When disagreements do arise, discussion or arguments will be waged amongst a limited

group or two parties while others will watch, generating increased pressure, judgment, and potentially a tendency to be increasingly inflexible.



In the face of such challenges, multiparty negotiation requires the following: • All parties should be aware of the cost of not achieving an agreement.

• All parties should establish acceptable voting rules ensuring that the ultimate decision will

be based on a pre-approved method. These rules should be subject to impartial observation or supervision.

• It is sometimes more feasible in initial multiparty negotiation to gain agreement on a

direction, a path, methods, and group goals rather than working towards a definitive or complete decision.

• All parties should agree to a program for continued talks if there are any breakdowns.

• All parties should agree to appropriate method of administering the negotiation process.

This includes the selection of an impartial moderator, the assurance that all parties have the floor during negotiation, especially the weaker ones, and the establishment of broad terms by which discussion occurs.

A discussion should employ terms similar to the following:

- Openness to Differing Opinions

- Pre-Negotiation Preparation

- Ways to Express Strong Feelings Effectively

- Timeframe for Non-Critical Discussion, Brainstorming, And Evaluation Of

Brainstormed Ideas

- Completion of a preliminary survey that will guide the moderator in later talks

manhattan elite prep notice negotiation decision chapter 5.5 8

Technology