3.32M

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management english

english

Negotiation skills. Basics

Objective
Explain What is Negotiation
Explain the Basic Principles of
Negotiation
Describe the Benefits of Negotiation
Explain the Types of Negotiation
Strategies
Explain
the Stages of the Negotiation
Process the Concepts of a Win-Win
Describe
Negotiation
Explain
the Various Styles of
Negotiation
Explain
What is BATNA
Describe Strategies for Developing
Negotiation
Skills of Third Party
Explain the Types
Explain the PROBE Technique for
Negotiating
Describe the Negotiations in
Organizations
List
the Issues in Negotiation
List the Characteristics of a Good
Negotiator
List the Tips for Effective Negotiation

3.

Introduction
Globus Inc. is a leading
IT giant. Peter Looney
is a Project Manager in
Globus Inc. He is
responsible for
meeting the clients for
every new software
development project
that comes to Globus.

4.

Introduction
Maxwell
Telecommunications, a
leading Telecom
Service company
recently came to
Globus to have new
SAP based database
software to be
developed for them.

5.

Introduction
Peter carefully
reviewed and analyzed
Maxwell’s
requirements and
came up with a Project
Plan.

6.

Introduction
Now, the only thing
that Peter needed to
go ahead with starting
the project and
develop the software
was the client’s
approval of the Project
Plan.

7.

Introduction
Peter held a meeting
with the clients to
discuss the Project
Plan and gain overall
approval for the terms
and conditions of the
Project.

8.

Introduction
The client was in a
hurry to get the
software. Peter tried to
negotiate upon
broader deadlines but
due to client’s
pressure, he ultimately
agreed to finish the
project as per their
requested deadlines.

9.

Introduction
When the project was
under progress, Peter
and his team realized
that the deadlines that
he had agreed upon
are nearly impossible
to meet.

10.

Introduction
Peter and his team
were not able to
complete the project
as was promised to the
client due to which
Globus had to pay
some penalty for late
delivery.

11.

Introduction
Also, the client added
new requirements that
had to be incorporated
in the software.
However, Peter had
not negotiated about
the terms with the
client for any further
enhancements or
features being added
to the software.

12.

Introduction
Hence, Globus had to
incur a loss in the
project because the
scope of work had
increased but the
terms of the project
had not been
negotiated well.

13.

Introduction
Also, Peter’s team was
forced to work 7-days,
even from home to try
to complete the
project.

14.

Introduction
Why do you think
Peter’s team had to
suffer? Why did Globus
have to incur a loss in
this Project?

15.

Introduction
Yes, all this happened
because Peter had not
initially negotiated
well with the client
about the deadlines
and the scope of work.

16.

Introduction
If Peter had clearly
negotiated the terms
of the project with the
client and negotiated
realistic deadlines,
Globus would not have
needed to pay any
penalty.

17.

Introduction
Also, if Peter had
negotiated the scope
of work in detail with
the client, then Globus
would not have to
incur any loss in this
project.

18.

Introduction
Thus, you can see that
‘negotiation skills’ are
a must for anyone to
succeed when dealing
with people.
LLeett uuss le
leaarrnn aabboouutt
‘N
‘Neeggootitiaatitioon Sk
n Skilillsls’’ iinn
ddeettaaiil.l.

19.

20.

What is Negotiation?
Negotiation is a discussion between two
parties to find out the solution and for
the purpose of reaching a joint
agreement about differing needs or
opinions.
It involves using the art of ‘persuasion’
to get others to understand and agree
with your viewpoint. It works best when
an individual has a win-win attitude.

21.

What is Negotiation?
The key skills that are involved in a
successful negotiation are that of good
communication skills, sales and
marketing skills, good psychological
analytical skills, sociology skills,
assertiveness and conflict resolution
skills.
Therefore, negotiations may take place
between various kinds of different
people such as between a customer and
seller, a boss and employee, two
business partners, a diplomat or a civil
servant and a foreign diplomat, between
spouses, between friends and between
parents and children.

22.

Need for Negotiation
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23.

Need for Negotiation
ent
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ery
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24.

25.

Basic Principles of Negotiation
There are a few common basic principles that apply to all types of negotiations
and in all situations. Some of the basic principles of negotiation are as follows:
TThheerree aare a
re allw
waayyss aatt
lleeaasstt ‘‘ttw
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26.

Basic Principles of Negotiation
There are a few common basic principles that apply to all types of negotiations
and in all situations. Some of the basic principles of negotiation are as follows:
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eneraall bbeelilieef, th
f, thaatt
ppaarrtitieess do c
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r
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othheerr ppart
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artyy
anggee..

27.

Basic Principles of Negotiation
There are a few common basic principles that apply to all types of negotiations
and in all situations. Some of the basic principles of negotiation are as follows:
hhaatt iinn
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t
a
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r
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IItt iiss iim
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egotitiaatitioonn pproc
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otiatitioonn pprrooces
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inkk..

28.

The Art of Negotiation
Negotiation is an art; you can get
beter and beter with it.
If you feel that you don’t have an
innate talent for negotiations,
don’t be disappointed because
these skills can be honed and
developed with the proper
training and practice.
People who always speak good
things may feel that they are good
negotiators, but that is not always
the case. Negotiation is all about
understanding what you want and
what the other person wants, and
then coming up with a win-win
scenario.

29.

The Art of Negotiation
Negotiation happens everywhere
– it’s omnipresent. You may have
to negotiate over anything – right
from the deadlines of a project to
which person will do what chores
at home.
In the real world, it is sometimes
difficult to ascertain whether your
negotiation is good or bad. You
may think that you are a good
negotiator, but in reality, it may be
just the opposite.
Even before you negotiate, you
will have to know what can be
negotiated and what cannot be
negotiated.

30.

31.

Benefits of Negotiation
The following are some of the benefits of negotiations:
Good negotiations
help you to gain
better control in
business as well as
personal situations.
They help you to
identify and understand
you’re as well as the
other parties’ interests
and also understand the
differences between
both.
It helps to reach
a ‘Win-Win’
Solution, which
is mutually
beneficial to all
the parties
involved in a
negotiation.
Good
negotiations also
help to improve
interpersonal
relationships.

32.

Benefits of Negotiation
The following are some of the benefits of negotiations:
They help to
develop and
maintain an overall
harmonious and
thriving
interpersonal
environment.
It is one of the
easiest and
quickest ways to
solve conflicts
and
disagreements.
Negotiations
help to reduces
stress and
frustration
among two
conflicting
individuals.
Negotiations help to
reach an agreement in
cases where a deadend may be reached if
a consensus is not
established between
two differing needs,
wants or opinions.

33.

34.

Types of Negotiation Strategies
There are two main types of negotiation strategies which are as follows:
e
Distributiv
n
Negotiatio
Integrati
ve
Negotia
tion
Let’s look at each in detail.

35.

Distributive Negotiation
‘Distributive Negotiation’ is also known
as ‘Positional’ or ‘Competitive’ or ‘Fixed
Pie’ or ‘Win-Lose’ Negotiation. It is a
type or style of negotiation in which the
parties compete for the distribution of a
fixed amount of value.
The involved parties in a ‘distributive
negotiation’ have a ‘win-lose’ attitude
towards reaching the goal and is based
on an atempt to divide up a fixed pie or
amount of resources for oneself.
‘Distributive Negotiation’ involves
holding on to a fixed idea, or position, of
what you want and arguing for it and it
alone, regardless of any underlying
interests.
e
Distributiv
n
Negotiatio

36.

Distributive Negotiation
‘Distributive Negotiation’ is also known
as ‘Positional’ or ‘Competitive’ or ‘Fixed
istributive
D
Pie’ or ‘Win-Lose’ Negotiation. It is a
ation
ti
o
g
e
N
type or style of negotiation in which the
parties compete for the distribution of a
fixed amount of value.
The involved parties in aT‘distributive
he main focus in
such a type of ne
negotiation’ have a ‘win-lose’
gotiation
strategattitude
y is on achieving
immediate goals
towards reaching the goal
or and
, with litle
no reisgbased
ard for building fu
ture relationship
on an atempt to divide G
up
pie
or
enaefixed
s.
rally, n
o new creative so
lu
tion is reached in
amount of resources forsu
oneself.
ch negotiations a
s the parties spe
‘Distributive Negotiation’
nd least possible
timinvolves
e and energy in re
solving the conf
holding on to a fixed idea,
position,
of
ict. The
outcorom
e of the negotiati
on is reached by
what you want and arguing
it
presefor
ntaittioand
n of fixed solutio
ns and a decision
alone, regardless of anychunderlying
oice is made quic
or
k
ly
.
interests.

37.

Integrative Negotiation
‘Integrative Negotiation’ is also known
as ‘Interest-based’ or ‘Cooperative’ or
‘Win-Win’ or ‘Non-zero Sum’
Negotiation. It is a type or style of
negotiation in which the parties
cooperate to achieve a satisfactory
result for both. The involved parties in
an ‘integrative negotiation’ have a ‘winwin’ attitude towards reaching the goal
and atempt to strive not just for their
own outcomes, but for favorable
outcomes for both sides.
‘Integrative Negotiation’ involves
reaching an agreement keeping into
consideration both the parties’ interests
which includes the needs, desires,
concerns, and fears important to each
side.

38.

Integrative Negotiation
Roll your mouse over
‘Integrative Negotiation’
is also known
the icon, to learn
as ‘Interest-based’more.
or ‘Cooperative’ or
‘Win-Win’ or ‘Non-zero Sum’
Negotiation. It is a type or style of
negotiation in which the parties
to achieve a satisfactory
The main focooperate
cus in such a typ
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f negotiaparties
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and atempt to strive not just for their
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39.

Tip
hat
t
s
l
l
i
l sk
a
i
c
or:
u
t
r
c
a
t
ti
s
ego
mo
n
e
t
h
a
t
gre
are
a
g
e
n
i
llow to becom e
o
f
e
Th
ibl
ou
x
y
e
p
f
l
e
d
can h open an ical
e
th
• B ways be e thize
lls
l
a
i
A
p
k
s
m
l
ys e od socia
a
w
l
• A velop go ntuitions
e
i
• D llow your
o
• F assertive
e
• B

40.

Distributive vs. Integrative Negotiation
The given table shows the comparison between Distributive Negotiation and
Integrative Negotiation.
Distributive Negotiation
Integrative Negotiation
It involves discussion of only one issue at a
time.
It involves discussion of several issues at a
time.
Involved parties have a ‘Win-Lose’ attitude
towards reaching the negotiation outcome.
Involved parties have a ‘Win-Win’ attitude
towards reaching the negotiation outcome.
Each party wants to use the negotiation to
maximize its own share of ‘fixed pie’.
Each party wants to use the negotiation to
‘expand its own share of the pie’ by creating
and claiming value.
It is an approach usually used in one-time
relationship between two people.
It is an approach usually used in a continuing
relationship between two people.
The involved parties keep their respective
interests hidden.
The involved parties share their respective
interests with the other party.
Each party expresses a strong position for
each issue.
Each party expresses and try to come up with
as many options as possible per issue to
maximize mutual gains.

41.

Distributive vs. Integrative Negotiation
The given table shows the comparison between Distributive Negotiation and
Integrative Negotiation.
Distributive Negotiation
Integrative Negotiation
The involved parties keep information hidden. The involved parties share information with
each other and try to get to the root cause of
the ‘why’ of the existence of the issue.
The involved parties are adversaries.
The involved parties are joint problemsolvers.
The aim of such negotiation is ‘winning’.
The aim of such negotiation is ‘making a wise
decision’.
The main focus of involved parties is on their
‘stance or position’.
The main focus of involved parties is on their
‘goals and objectives’.
The involved parties use pressure to get what The involved parties do not use pressure but
they want.
strive to get what they want through
principles.

42.

MCQ
Q. Distributive Negotiation is also
commonly known as ___________.
Click on the
radio button
to select the
correct
answer!

43.

MCQ
Q.
Negotiation is also
GGoooDistributive
d
od!! TThhaatt''ssknown
RRiigghhttas
commonly
!! ___________.
CCoorrrreecctt Ans
Answ
weerr::
DDiissttrrib
ibuutitivvee NNeeggotia
otiatitioonn iis
s aalslsoo ccomm
kknnoow
wnn aass ‘‘PPoossiti
itioonnaall NNeeggootiati ommoonnllyy
tiatioonn’.’.
e to
r
e
h
k
c
i
l
C
!
continue

44.

MCQ
Q.
Negotiation is also
TThhaaDistributive
tt''ss N
Noott Q
uuiittee RRias
Qknown
commonly
tt!!
igghh___________.
CCoorrrreecctt Ans
Answ
weerr::
DDiissttrrib
ibuutitivvee NNeeggotia
otiatitioonn isis aalso
kknnoow
lso co mm
wnn aass ‘‘PPoossiti
moonnllyy
itioonnaall NNeeggootiati com
tiatioonn’.’.
e to
r
e
h
k
c
i
l
C
!
continue

45.

46.

Stages of the Negotiation Process
The following are the stages of any negotiation process:
1
2
3
4
5
Let us look at each in detail.

47.

Meeting
1
Meeting:
The first stage of the negotiation
process is the negotiation
meeting.
The meeting can be in an informal
or formal setting.
When there are two parties
meeting, the venue, date and time
are decided first.
The meeting begins with
introductions.

48.

Inquiry
2
Inquiry:
The second stage of the
negotiation process is the stage of
inquiry.
During the inquiry stage, both
parties exchange information and
discuss their concerns.
The main objective of this stage is
to ascertain the strengths and
weaknesses, needs, wants, desires
and issues.

49.

Bargaining
3
Bargaining:
The third stage of the negotiation
process is that of bargaining.
During the bargaining stage, both
parties make offers and tradeoffs.
At this stage, both the parties
consider all the possible options
available to find a middle path
between their differences.

50.

Closure
4
Closure:
This stage occurs after both the
parties have looked at all the
options closely.
During the closure stage, both
parties restate their positions and
confirm their tradeoffs they are
willing to negotiate.

51.

Acceptance
5
Acceptance:
The final stage of the negotiation
process is acceptance.
During the acceptance stage, both
parties would either decide to
suspend negotiations or they may
reach an agreement.

52.

Real Life Example
Let us now look at a
real life example to
understand the stages
of the negotiation
process.

53.

Real Life Example
You have seen in the
introduction scenario
how Peter Looney, a
Project Manager at
Globus Inc. failed to
negotiate well with the
Maxwell client due to
which Peter’s team had
to suffer and also his
company had to incur
a loss in the Project.

54.

Real Life Example
Yes, all this happened
because Peter had not
initially negotiated
well with the client
about the deadlines
and the scope of work.

55.

Real Life Example
Stage 1: Meeting
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
To negotiate well with the client, the first
thing that Peter should do is to prepare
well for the meeting. Peter could go
through the Project Plans of similar
projects that Globus had handled in the
past, talk to and seek guidance from his
superiors and put all the data and
information that he gets related to the
project at one place.

56.

Real Life Example
Stage 1: Meeting
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
To negotiate well with the client, the first
thing that Peter should do is to prepare
Peter should also
makmeeting.
well for the
go
e a list ofPeter
all thcould
e queries that
he has to clear w
h thProject
throughitthe
similar
e client,Plans
thingof
s that he can
agree to and can
projectsnothat
handled in the
t agGlobus
ree to whad
ith th
e client etc.
past, talk to and seek guidance from
his
Also, at the meeti
ngand
superiors
data and
Peteput
r shall
outhe
ld co
me across to the
client as a cool, c
onfidethat
information
he
gets
related
nt and profession to the
al person.
project at one place.

57.

Real Life Example
Stage 2: Inquiry
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
During the inquiry stage, Peter should
exchange information with the client and
discuss their concerns, scope of work,
deadlines, future enhancements etc.

58.

Real Life Example
Stage 2: Inquiry
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
At this stage, Pete
r should find out
the client’s
requiremeDuring
nts, hothe
inquiry
should
w, w
hich anstage,
d whePeter
n
c
a
n
these requexchange
he fulfi
l
irementsinformation
with the client
and
and any othe
r terms and
conditionsdiscuss
that mtheir
of work,
ay noconcerns,
t be agreescope
able to Globus.
deadlines, future enhancements etc.

59.

Real Life Example
Stage 3: Bargaining
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
At this stage, Peter should now agree to
terms that are completely acceptable and
offer options and tradeoffs for things that
are unacceptable as is stated by the client.

60.

Real Life Example
Stage 3: Bargaining
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
Peter should mak
e sure that he as
certains his
position aAt
ndthis
takestage,
agree to
s a staPeter
nd in should
agreeinnow
g
to
possible aterms
o
nly and
nd accthat
completely
acceptable
eptaare
ble d
eadlines, current
terms regaoffer
scopthat
e,
rdingoptions
future eand
things
nhatradeoffs
ncementsfor
etc.
are unacceptable as is stated by
the client.

61.

Real Life Example
Stage 4: Closure
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
At this stage, it is important that both the
client and Peter restate their positions and
confirm their tradeoffs they are willing to
negotiate.

62.

Real Life Example
Stage 4: Closure
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
So, agreement sh
ould be achieved
on the agreed
deadlines, curren
t scope, terms re
garding future
enhancements e
tc. It should be a
greethat
d upoboth
this
stage, it is important
the partieAt
n bythe
both
s th
at th
e discussed and a
grepositions
ed upon and
and Peter restate their
terms wouclient
ld now
be drafted into a
legare
al anwilling
contract bconfirm
their tradeoffs they
d bindto
ing
etween th
e two parties.
negotiate.

63.

Real Life Example
Stage 5: Acceptance
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
At this final stage of the negotiation
process, Peter should make sure that both
the parties agree to signoff the deal and
reach an agreement on the terms of the
Project.

64.

Negotiation Outcomes
The given image shows the various options of possible outcomes with respect to
the parties involved in a negotiation.
WIN
LOSE
WIN
We Both Win
I Win,
You Lose
LOSE
ME
YOU
I Lose,
You Win
We Both
Lose

65.

66.

Critical Concepts of Win-Win Negotiation
The following are the five most critical concepts that you should keep in
mind for a win-win negotiation:
Pause for
reflection
Control the
outcome
Agree on
factual
information
Let’s look at each in detail.
Search for
needs and
requirements
Clarify your
objectives in
the beginning

67.

Critical Concepts of Win-Win Negotiation
Pause for
Reflection
Control the
outcome
Agree on
factual
information
Pause for Refection
Search for
needs and
requirements
Clarify your
objectives in
the beginning
Ask the questions:
o What do you want from
this meeting?
o What resistances do you
envisage?
o What will you do to
overcome these
resistances?

68.

Critical Concepts of Win-Win Negotiation
Pause for
reflection
Control the
outcome
Agree on
factual
information
Search for needs and
requirements
Search for
needs and
requirements
Clarify your
objectives in
the beginning
Ask the questions:
o What are my needs and
requirements?
o What are the needs and
requirements of the
other party?
o What do we have in
common?
o What are the biggest
gaps?

69.

Critical Concepts of Win-Win Negotiation
Pause for
reflection
Control the
outcome
Agree on
factual
information
Clarify your objectives in the
beginning
Search for
needs and
requirements
Clarify your
objectives in
the beginning
Ask the questions:
o What are the most
important issues that
need to be discussed?
o What are the most
important issues to the
other party?
o What are the levels of
potential outcomes?

70.

Critical Concepts of Win-Win Negotiation
Pause for
reflection
Agree on factual information
Ask the questions:
o Have I examined all
arguments that I intend
to use during the
meeting?
o Which of the arguments
are assumptions?
o Which of the arguments
are facts?
Control the
outcome
Agree on
factual
information
Search for
needs and
requirements
Clarify your
objectives in
the beginning

71.

Critical Concepts of Win-Win Negotiation
Pause for
reflection
Control the outcome
Ask the questions:
o What elements of timing
can you control?
o What is the best
combination or channel?
Control the
outcome
Agree on
factual
information
Search for
needs and
requirements
Clarify your
objectives in
the beginning
Roll your mouse over
the icon, to learn more.

72.

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73.

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