train the gap course module 5. negotiation...train the gap course (for rural women entrepreneurs) 5...

TRAIN THE GAP COURSE

MODULE 5. NEGOTIATION

PROYECTO TRAIN THE GAP 2015-1-ES01-KA204-016117

Train the Gap Course (for rural women entrepreneurs) 3

TABLE OF CONTENTS

INTRODUCTION TO THE MODULE ..................................................................................................................... 5

CONTENTS OF COMPETENCE .......................................................................................................................... 6 BRIEF INTRODUCTION OF NEGOTIATION ......................................................................................................... 7

NEGOTIATIONS METHODOLOGY .................................................................................................................... 9

CASES OF COMPETENCE APPLICATION .......................................................................................................... 13

PREPARATION FOR NEGOTIATION ................................................................................................................. 16

GROUP GAME OF NEGOTIATION ................................................................................................................. 17

ONE-ON-ONE GAME .................................................................................................................................... 18

ASSESSMENT OF COMPETENCES ................................................................................................................... 19

REFERENCES ............................................................................................................................................... 23


Introduction to the module

Objective of this module: a person having completed this training could gain or/and

develop negotiation knowledge, skills and values. Alongside he/she would form open

approach and respect to a different attitude, positive initiatives and constructive

dialogue, value dispositions. MODULE 5

The module provides possibility to gain or/and develop the following negotiation

abilities:

• To listen to the negotiation partners,

• To analyse the information on the partner of negotiation;

• To discuss and analyse the offers of partners in constructive way by comparing

them,

• To choose from the different alternatives by evaluating their advantages and

shortages,

• To formulate clear and understandable offers,

• To change and adjust flexibly the contents of the business idea or suggestion

and it‘s conditions,

• To evaluate financial costs of offer.

Duration of the module: 24 hours

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Contents of competence

NEGOTIATION

KNOWLEDGE

Applying a number of strategies and tools to implement an effective negotiation process.

SKILLS

! Developing a line of reasoned arguments.

! Getting your points across in a calm, but assertive manner,

! Using positive language and emphasising positive aspects of nay argument.

! Listening to the needs of the other party.

! Using open, encouraging body langauge.

! Handling objections to your arguments,

! Knowing whne to compromise, making concession for argument.

VALUES AND ATTITUDES

Learner will be able to negotiation skillfully in tough situations with both internal and

external groups.


Brief introduction of negotiation

What are negotiation skills?

Negotiation is a very important aspect for any entrepreneur. Negotiation refers to a

discussion that helps in reaching an agreement. Negotiation starts right from the time

we wake up in the morning until we sleep at night. As far as business is concerned,

negotiation is observed even while asking for leave from your manager. Thus,

negotiation takes place every time we communicate. So, we negotiate with our boss,

subordinates, family, friends, and we also engage in self-negotiation. Negotiation tends

to take place practically all the time.

When it comes to both communication and negotiation, majority of the entrepreneurs

think that they are good communicators but not good negotiators. Negotiation is a skill

that every entrepreneur needs to develop and so has to devote considerable amount of

time too.

Negotiation is a voluntary process.

There are two types of negotiations:

1 type - Distributive negotiation or win-lose negotiation: Distributive negotiations are

generally single issue negotiations. For example, negotiation with respect to price while

purchasing a product. Here, negotiation can be as hard as possible. This is also called

win-lose negotiation, as whatever one party wins the other party loses. Integrated

negotiation or win-win: In integrated negotiations, more than one issue is discussed.

Integrated negotiation also involves a relationship irrespective of short-term or long-

term relationship

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2 type - Negotiation is defined as a discussion among individuals, each one trying to

present his best idea to come to a conclusion benefiting all. An individual gains nothing

out of conflict and misunderstanding; instead it leads to stress and anxiety. It is always

advisable to compromise to the best extent possible and try to find out an alternative

which satisfies all. Negotiation is a method by which people settle differences. It is a

process by which compromise or agreement is reached while avoiding argument and

dispute. In any disagreement, individuals understandably aim to achieve the best

possible outcome for their position (or perhaps an organisation they represent).

However, the principles of fairness, seeking mutual benefit and maintaining a

relationship are the keys to a successful negotiation process.


Negotiations methodology

Stages of Negotiation

In order to achieve a desirable outcome, it may be useful to follow a structured

approach to negotiation. For example, in a work situation a meeting may need to be

arranged in which all parties involved can come together.

The process of negotiation includes the following stages: Preparation, Discussion,

Clarification of goals, Negotiate towards a Win-Win outcome, Agreement,

Implementation of a course of action.

1. Preparation. Before any negotiation takes place, a decision needs to be taken as to

when and where a meeting will take place to discuss the problem and who will

attend. Setting a limited time-scale can also be helpful to prevent the disagreement

continuing. This stage involves ensuring all the pertinent facts of the situation are

known in order to clarify your own position. In the work example above, this would

include knowing the ‘rules’ of your organisation, to whom help is given, when help is

not felt appropriate and the grounds for such refusals.Your organisation may well have

policies to which you can refer in preparation for the negotiation. Undertaking

preparation before discussing the disagreement will help to avoid further conflict and

unnecessarily wasting time during the meeting.

2. Discussion. During this stage, individuals or members of each side put forward the

case as they see it, i.e. their understanding of the situation. Key skills during this stage

include questioning, listening and clarifying. Sometimes it is helpful to take notes during

the discussion stage to record all points put forward in case there is need for further

clarification. It is extremely important to listen, as when disagreement takes place it is

easy to make the mistake of saying too much and listening too little. Each side should

have an equal opportunity to present their case.

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3. Clarifying Goals. From the discussion, the goals, interests and viewpoints of both

sides of the disagreement need to be clarified. It is helpful to list these factors in order

of priority. Through this clarification it is often possible to identify or establish some

common ground. Clarification is an essential part of the negotiation process, without it

misunderstandings are likely to occur which may cause problems and barriers to

reaching a beneficial outcome.

4. Negotiate Towards a Win-Win Outcome This stage focuses on what is termed a

'win-win' outcome where both sides feel they have gained something positive through

the process of negotiation and both sides feel their point of view has been taken into

consideration.A win-win outcome is usually the best result. Although this may not

always be possible, through negotiation, it should be the ultimate goal. Suggestions of

alternative strategies and compromises need to be considered at this

point. Compromises are often positive alternatives which can often achieve greater

benefit for all concerned compared to holding to the original positions.

5. Agreement. Agreement can be achieved once understanding of both sides’

viewpoints and interests have been considered. It is essential to for everybody involved

to keep an open mind in order to achieve an acceptable solution. Any agreement

needs to be made perfectly clear so that both sides know what has been decided.

6. Implementing a Course of Action. From the agreement, a course of action has to

be implemented to carry through the decision.

Characteristics of the Negotiations development

An individual before starting with the negotiation must be very clear with the agenda

(topic) of the negotiation. Ask yourself - why this negotiation? What is the objective of

the negotiation? One must be well informed. Try to find out more about the competitor’s

products or services.

Before any important deal, do make it a habit to go through as many details as you

can. The second party might ask you anything, you must be well prepared to clear all


their doubts and convince them. Negotiations are important for the development of the

characteristics of the negotiating:

• React sensibly -A good negotiator must react sensibly. He should never lose

his temper or over react. If you are unhappy with the deal, show your

displeasure. Don’t keep things to yourself or assume that the others will

understand it on their own. One has to voice his opinions. Make the other

person realize that you are not satisfied with the deal and it must be revised.

Show your unhappiness to others.

• If your boss assigns you a project you are not very comfortable with, show your

displeasure to your boss in a polite way and ask for something else. But make

sure you are not rude otherwise your job might be at risk.

• Patience - One needs to be patient enough for a good negotiation. It is not

always that the other person will accept your suggestions in the first attempt

itself. You need to convince him and it needs patience. Never be in a hurry to

close the deal.

• Confident - One needs to be confident enough for an effective negotiation. You

might need something but never show your desperation to anyone. They will

take undue advantage of your helplessness. Take care of your facial

expressions. Never be nervous in front of the second party. Don’t start

• Be dignified - One should maintain the decorum of the place and should not

stoop to any level for getting the best deal. Present your ideas in a dignified

way. Remember it is just a discussion, not a battle field. Avoid shouting or using

derogatory statements against anyone. If you are not satisfied with the deal, its

better to quit rather than fighting and using abusive languages.

• Be very clear in your communication - Stay firm on your quotes and do not

change statements quite often. Don’t play with words or try to confuse others.

One needs to be straightforward from the very beginning.

• Be a good listener - Don’t jump to conclusions; instead listen to what the other

party offers. Understand his situation well. It’s okay to think about your personal

interests but don’t be mad for it. If the deal is not benefiting the other party, he

will obviously not accept it, don’t be after his life. If you don’t listen to others,

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they would obviously not respond to you. When a customer goes to purchase

something, he must not forget that the store owner also has to earn his profits.

The store owner should also understand the customer’s needs and pocket.

Negotiation depends on mutual understanding.

• Be reasonable -Don’t quote anything just for the sake of it. Be reasonable.

Don’t quote imaginary or unusually high figures. Don’t ask for anything you

yourself know is not possible. It will just be wastage of time and no one would

benefit out of it.

Nobody is born with good negotiation skills. Be tactful and patient. Understand the

second party well - his needs, expectations and find out a solution beneficial to both the

parties. You need time to acquire them and you will need to get those negotiation skills.


Cases of competence application

Negotiating is a part of everyday life, but in business it's absolutely critical to your

success. Poor negotiation can cripple a company just as quickly as losing key

customers. While most negotiating strategies seem like common sense, it's not

uncommon for people to get caught up in the emotion of the moment and ignore their

basic instincts. Emotion, luck and magic have no place in a successful negotiation. It

takes an iron gut, homework, street smarts and unblinking discipline. These keys will

unlock your ability to get the best deal possible under any circumstances.

While experienced negotiators sometimes refer to their methods as the "negotiating

game," it's really a misnomer for a process in which the stakes are often extremely

high. Check your ego at the door and keep your eye on the big picture at all times. This

is all about business.

Preparation is Key. Know about the party you're negotiating with so you can capitalize

on your strengths and the party's weaknesses. If the other party is very experienced,

that means he also has a history that could contain useful information. If possible, talk

to business associates who have dealt with this person before. Many negotiators

develop patterns and certain styles that you may be able to use to your advantage.

If you are a buyer, make sure you are thoroughly familiar with the product or service

that will be the subject of the negotiation. If the other party senses you are weak on

such details, you may be a prime target for a bluff or another technique designed to

create anxiety and uncertainty. Psychology plays a crucial role in your ability to make

the most of the other party's lack of preparation and anticipate their next move.

Most negotiators have a price target or goal in mind before they start. It should be

based on realistic expectations considering all the constraints that will undoubtedly

surface. These may include budget limits, direction from management, pressure to

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make sales goals, and a myriad of other external forces. During the course of the

negotiation, the goal may change based on changes in scope and other unforeseen

actions by either party. While your ultimate goal should be realistic, this should not

constrain your first offer or counteroffer.

Before you start the negotiation, ensure that the other party is fully empowered to make

binding commitments. You don't want to find yourself in a position where you believe

you've struck a deal, only to discover that your agreement must be approved by

someone higher in the chain of command.

Have a strategy. There are basic principles that apply to every negotiation. The first

offer is usually the most important and the benchmark by which all subsequent offers

will be judged and compared. You'll never get what you don't ask for, so make your first

offer bold and aggressive. The asking price is just that, and will typically include a pad

or margin to give away during negotiations. You want to take all of that and hopefully

more, so start lower than the seller expects. Don't worry about insulting the other party.

As long as your offer is not ridiculous, the other side will continue the negotiations in

hopes of settling at a better number.

As a buyer, do not disclose your budget or other limitations in your negotiating position.

A favorite ploy of salesmen is to reshuffle the product specifications, schedule and

other parameters in order to sell you an inferior product to fit your budget. You want the

best product you can get for the money you have to spend, so employ an approach

that maintains the possibility of spending less than you had originally planned.

Always have something to give away without hurting your negotiating position. If you're

submitting a price proposal to a buyer, consider inserting decoys and red herrings for

the other party to find. For example, if you are bidding a project, consider including

some nice-to-have items that aren't critical to the success of the project. You could also

include spare parts that may or may not be needed in the end. If the buyer takes those

items out to reduce the overall cost, you haven't lost anything but it may help the buyer

reach his price target. Such distractions will help to divert the other party from attacking

the meat of your proposal. Employing this strategy must be viewed in the context and


in consideration of what other bidders may be doing. If you know that the only way to

win the bid is to provide a barebones cost, then this strategy may not be appropriate.

Watch for clues such as body movement, speech patterns and reactions to what you

say. Be prepared to suspend or cancel negotiations if you feel things are getting

nowhere or the other party seems stuck in their position. Indicate your reluctance to

continue under those conditions and make the other side wonder if you are ever

coming back. If they are on the hook to cut a deal, they will feel the pressure to move.

Be patient even if the other party isn't. This can be difficult for those with a passion for

instant gratification, but the last thing you want is for the other party to think you're

under the gun to finish quickly.

From a contractual standpoint, a counteroffer automatically rejects all previous offers.

Once an offer is made, you should expect an acceptance or rejection of your offer, or a

counteroffer that keeps the negotiation open. If your offer is rejected and you are asked

to submit a new and better offer, do not fall into that trap. That would be tantamount to

negotiating with yourself, and you should never do this. If the last offer on the table is

yours, always insist on a counteroffer to force the other party to move his/her position

before you make another offer.

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Preparation for negotiation

Situation:

Think of a highly probable situation of negotiation in implementing and developing your

business idea (for example, negotiating with a bank on getting the loan, with the

supplier of raw materials, with the agent retail trade intermediator providing access to

the needed market, etc.).

The goal of the task:

Æ Prepare your business proposal for the negotiation partner by considering it‘s potential interests and benefits.

Æ Imagine possible negotiation position and requirements of negotiation partners. Æ Prepare your arguments based by evidence of facts (e.g. market prices,

material prices, availability of financial resources , etc.) to respond to these requirements of negotiation partner.


Group game of negotiation

Situation:

Set-up two groups consisting of 3-4 participants each representing two different small

social enterprises: countryside tourism enterprise and the small company providing

public catering services.

The goal of the task:

Agreement on cooperation seeking to serve the needs of the international tourists.

The teams shoould first present their business ideas and the needs in cooperation with

partner. In the next step they should discuss the requirements and conditions of

cooperation and to devise the draft of the cooperation contract.

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One-on-one game

Price negotiation.

Situation: farmer negotiates with the representative of a local market store the price

and conditions of selling of the products produced by the farm: e.g.: milk products,

vegetables, fruits, honey, meet products, etc.

The goal of the game: to attain the optimal agreement of cooperation between a

farmer and market store.

The negotiation process should entail the following objects: price, quality

requirements, quantity, delivery time, setting of accounts.

The players should use the arguments concerning the sales market situation, their

business potential, existing competition, market of raw materials, labour costs.


Assessment of competences

Each task is accompanied by the list of criteria for self-assessment of acquired

competence together with the range of assessment. Both criteria and the range should

be defined by the developers of module referring to the contents of task and targeted

skills.

Performance evaluation process, how things went:

• Was the module available in time? • Was material interesting? • Was the teacher punctual? • Was he available outside lectures? • Was his oral delivery clear? • Was his pace appropriate? • Did he involve his listeners? • Did he/she used reflection and feedback?

What are my knowledge in the development of business negotiations

Criteria of self-assessment

Range of self- assessment

Perfect Good Satisfactory Non-satisfactory

Attentiveness and active listening

Negotiation basic rules / Levels

Negotiation method and techniques

Negotiation preparation and adjustment of business offers

Negotiation and potential risk in business

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What are my negotiation skills development?




Ability to raise the interest of negotiation partners

Ability to listen to the negotiating partners

Ability to comment negotiating partners

the ability to collect and analyze information about business opportunities: portfolio of orders and contracts, financial capacities, human resources, technological capacities, market situation and competitors, network of suppliers.

To collect the information on the partner of negotiation from the different sources: Internet and media, by talking to business partners and different institutions and stakeholders.

To analyse the collected information by grouping it, selecting the most important and relevent data.

To present own business to the partners of negotiation by using different techniques: oral presentation face-to face by using Power Point, oral presentation in the video conference and by phone, preparation of the written presentation.

To develop attractive contents and design of business presentation in the different formats.

To prepare clear and sound business offers by outlining the most important





parts and providing the information in well structured and quickly undertsandable way.

To change and adjust the contents of the business idea or offer (item characteristics, prices, sales conditions, delivery terms etc.) referring to the evaluation of the business situation, capacities and potential of suggested offers.

To calculate the overal financial costs of suggesting the business offer or accepting the suggested business offer by estimating direct and indirect costs (materials, salaries, interest rates, currency exchanges, intermediation costs, subcontracting, taxes, transport costs, insurance, etc.). To evaluate the risk of business idea or offer to development of won business by comparing the available capacities, provided benefit and potential, as well as estimating the probability and impact of the risk.

To choose from the different alternatives by evaluating their advantages and shortages.

To identify the usage of manipulative negotiation tactics.

To prepare and apply the set of measures and techniques to neutralize the effects of manipulative negotiation tactics.

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What are my negotiation vallue development?




Openness, patience, respect to communication partners, ability to focus attention.

Analytical skills, commmunication skills, systemic thinking.

Communication skills, fairness, respect to others, persuasiveness.

Open mindedness, wide and out-of-the box thinking, empathy, quick reaction, positive attitude to change.

Analytical skills, numerical skills, decision making skills.

Attentiveness, openness of speach and expression of thoughts, assertiveness in seeking for truth and justice.


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REFERENCES

Derybų tikslas – gauti daugiau negu turime dabar. http://www.verslasnaujai.lt/derybu-tikslas-

gauti-daugiau-negu-turime-dabar/2553

https://lt.wikipedia.org/wiki/Derybos

http://ecosim.lt/zaidimai/ecosim-daniel

http://old2.verslilietuva.lt/uploads/file/Derybu%20klausimai.pdf

http://www.skillsyouneed.com/ips/decision-making.html#ixzz4WaoeY2YS

http://www.skillsyouneed.com/ips/decision-making.html#ixzz4WaoNIbPj

http://www.skillsyouneed.com/ips/decision-making-problem-solving.html#ixzz4Walstpvg

Derybų samprata ir derybų vengimas. http://meta.dizi.lt/programs/preview/derybu-samprata-

ir-derybu-vengimas-b60b0347f422a6025780a433ecb191c2

Babcock, L, & Laschever S. Women Don’t Ask: Negotiation and the Gender

Divide.Princeton, NJ: Princeton University Press, 2003.

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Business Publishing, 2002.

Dawson, R.Secrets of Power Negotiating: Inside Secrets from a Master Negotiator.Franklin

Lakes, NJ: Career Press, 2001.

Hodge, Sh. Global Smarts: The Art of Communicating and Deal Making Anywhere in the

World.New York: John Wiley & Sons, Inc., 2000.

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Levine, St.The Book of Agreement: 10 Essential Elements for Getting the Results You

Want.San Francisco: Berrett-Koehler Publishers, Inc., 2002.

Macenka, M. J. Inside the Minds: Leading Deal Makers: Leading VC’s and Lawyers Share

Their Knowledge on Negotiations, Leveraging Your Position and the Art of Deal Making.

Boston: Aspatore Books, 2001.

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Patterson, K, Grenny, J., Ron McMillan, Al Switzler, & Stephen R. Covey.Critical

Conversations: Tools for Talking When Stakes Are High.New York: McGraw-

Hill/Contemporary Books, 2002.

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