negotiation skills ppt along with slideshow audio description note
TRANSCRIPT
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.”
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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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