Professional Documents
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Negotiation Skills
Negotiation Skills
Why Negotiation?
Negotiation is needed to resolve intra-person or inter-person conflicts / disagreements / clash of interests. Negotiation is something that we do all the time and is not only used for business purposes. The aim of negotiation is to explore the situation, and to find a solution that is acceptable to both the sides. Only man negotiates; animals do not; when faced with larger predator, they do not ask for negotiation or justice rather just run away. Negotiation is one of the most difficult jobs a person can do. It requires not only good business judgment but also a keen understanding of human nature
Negotiation Interperson Negotiatio n Unplanned Negotiatio n Integrative Negotiatio n Hard Negotiatio n Soft Negotiatio n Planned Negotiatio n Distributiv e Negotiatio n Principled Negotiatio n
Intra-person Negotiation
Hard Negotiation
Hard negotiation involves the negotiation of positions, rather than interests. It is highly competitive, seeing victory as the number one goal. Hard bargainers, see the participants as adversaries. They distrust the other side and play sneaky games to try to gain the negotiating advantage. Hard bargainers refuse to make concessions and demand onesided gains as the price of an agreement. When confronted with a softer opponent, hard bargainers almost always will win. When confronted with another hard bargainer, however, it can result in no agreement, both losing.
Soft Negotiation
Soft negotiation also involves the negotiation of positions, rather than interests. However, it treats the participants as friends, seeking agreement at almost any cost, and offering concessions easily in the interests of preserving (or creating) a good relationship with the other side. Soft bargainers trust the other side, and are open and honest about their bottom line. This leaves them vulnerable to hard bargainers who act competitivelyoffering few, if any concessions.
Principled Negotiation
1. 2. 3. Principled negotiation is the interest-based approach to negotiation. Fundamental principles of principled negotiation are: it separates the people from the problem; focuses on interests, not positions; insists on objective criteria of the solution.
Negotiation Styles
Assertive
Win / Lose Win / Win (Collaborating)
Compromise
Unasserti ve
Avoidance Uncooperative
Accommodati ng Cooperative
Usefulness
A forceful position during negotiation may be appropriate when the stakes are high and costs of indecision and compromise are non-affordable. It is useful when issues of legality and ethics are at hand. Where you do not expect to deal with people ever again, and you do not need their goodwill. When there is only one prize. At management level, this style is helping when unpopular but necessary decisions must be made. Win-lose is also a style to use when the other party has a tendency to take advantage of you.
Avoiding Style
Avoiding the conflict in certain situations need of no negotiation at all is also a negotiation. People may physically withdraw by simply leaving the scene of conflict or they can refuse to get involved by using silence, or changing the topic of conversation. Psychologically, avoiders can also deny the existence of conflict. During formal negotiation, avoiding style is exercised by paying deaf ear and / or blind eye to the conflicting stimulus.
Usefulness
Useful when: your involvement will only result in negative outcomes for you; issue is insignificant; cost of challenge / cost is quite high; there is little chance of success; relationships are more important to be maintained; to buy time and / or get other party cool down.
Accommodating Style
Accommodating style of negotiation entails giving in to the wishes of the opponent party. Like avoidance, accommodating the other party almost in one-sided way, is also a negotiation. Unlike avoiders, the accommodators enter into negotiation and give in a way that strengthens the relationships. During negotiation, giving in totally / partially may be part of strategic maneuvering.
Usefulness
When other issues are more important that need satisfying others and maintaining cooperation. When social credit is to be built for some latter issue. To minimize loss when one is already losing. When relationships are more important than the interests. Though frequent yielding is not a virtue, a yielding to a fellow in ire, a balanced yielding among spouses, or even the frequent yielding obedience of a child to a parent or teacher is a healthy move.
Compromising Style
Compromising, the most common style of conflict resolution, entails splitting the differences and reaching an acceptable middle ground solution through give-and-take whereby each party should gain something and may have to lose something. Parties under this style of negotiation, generally use techniques like trading, bargaining, smoothing over differences, and voting etc. Most of the negotiations though start with lose-win style, do end up at the compromising style.
Usefulness
It is useful: when two parties have relatively equal power and have mutually exclusive goals; when time is not available to solve problems that are complex and require a great deal of effort to sort out all the issues; to allow for a temporary solution until more time could be devoted to unravel and analyze the complexities; and when competition or collaboration fails to lead to a solution.
Illustrative Story
Two brothers had an orange. Each of them wanted to have it. Ultimately they resolved the conflict through splitting the orange into two halves, one half for the each. Elder brother ate the pulp and threw the peeling. The younger brother who did not have an innate liking for the oranges and just wanted the peeling as a recipe ingredient, used the peeling and discarded the pulp.
Your Comments
What negotiation style(s) the two brothers adopted to resolve the conflict? Offer your comments over degree of usefulness of the style(s) used in this situation.
Establish GOAL
Establish TRUST
Establish RULES
Establish TRADE
Establish ALTERNATIVES
At the Table
Negotiation Strategies Communication Skills
Negotiation Strategies
Ahmad and Hassan decided to purchase an office for their newly started business three months ago. Their first choice was an office located in a new development, and priced Rs. 500, 000 (about Rs. 25,000 above their limit). Ahmad thought they could get the price down through negotiation with the salesman Mr. Sheikh around their limit while Hassan was less optimistic in that regard.
Ahmad conducted some research on the development and learned that several of the offices including the one they liked had been on the market almost a year. Though the house they liked was their first choice, other offices were also quality offices and could be accepted as a second choice. Ahmad met the other salesman, Mr. Agha and learned that the prices of those offices were also within their limit. With this homework done, he made an appointment with Mr. Sheikh and decided to meet him alone.
Approach
Ahmad informed the salesman he really liked the office and might be sincerely interested at a lower price such as Rs. 450,000.
Strategy
LOWBALL VINEGAR-HONEY
Approach
Strategy
The salesperson sounded shocked and PINPOINT THE NEED said, That is impossible, we would It had been not even consider it. Ahmad anticipated that established that the response, and asked, seller would take If you would not accept less than the asking Rs. 450,000, what will price but not Rs. you ask? 450,000. The task then was to pinpoint how much less than
Approach
The salesperson did some figuring before he said Rs. 490,000. Ahmad was prepared for this response who tried another strategy saying, Mr. Agha has recently sold two office of similar stature for Rs. 470,000, and several others are available with him. Why would not you do the same for me?
Strategy
CHALLENGE
A strategy designed to put the other party on the defensive in an effort to win some concessions. Added to the Pinpoint, the Need strategy assists in determining what
Approach
The salesperson said, That house went cheaper, anyway perhaps I could trim the price to Rs. 485,000 but you will have to pay 20% cash down and the rest within one week. Ahmad guessed the salesman has a room to tread downward and said,
Strategy
Approach
problem but I cannot pay the rest before three weeks. It is impossible, said the salesman, our company rules do not permit it. Ahmad replied, But I cannot pay at least this much within this period of time.
Strategy
Down payment is not the FEINTING This strategy gives the impression one thing is desired whereas primary objective is really something else.
Approach
Politicians use a variation of this strategy to test receptivity by the public to something they plan to do.
Strategy
This planned action is leaked by a reliable resource to test acceptability before final action is taken.
Approach
I do not think I could make further concession, said the salesman. Ok! Let me consult my business partner since final decision will only be after our mutual consensus, said Ahmad and left the salesmans office.
Strategy
LIMITED AUTHORITY
Limited authority is an attempt to postpone the decision on a pretext to get approval from a competent authority. Whereas the real aim is to gain time for reconsideration, and / or keeping the opponent under pressure for a possible negotiation breakage.
Approach
Next day, Ahmad appeared in the salesmans office again along with Hassan, his business partner and reiterated his yesterdays position that they could not pay Rs. 485,000 at least within one week. It seems difficult to give any further concession without consulting the builder, said the salesman.
Strategy
Approach
I told you not to approach this agency, you could never conclude any deal with them, growled Hassan and stepped out of the office. You are spoiling almost a concluded deal. I offer Rs. 475,000 though I am not sure my partner will agree to it. A slight budge from your position can bring the deal back on track, murmured Ahmed to the salesman in confiding style.
Strategy
When bad guy steps out for a few minutes, the good guy offers the deal that under the circumstances seems too good to refuse. Bad guys usually comprise spouses, lawyers etc.
Approach
By the time you bring your partner back, I call to the builder for his opinion. I think it is possible to reach a deal, said the salesman while dialing a telephone number when Ahmad walked out of his office to trace his estranged business partner.
Strategy
GOOD GUY / BAD GUY
The good guy / bad guy is an internationally used strategy. One member of a team takes a hard line approach while other member is friendly and easy
Approach
After few minutes Ahmad entered the salesmans office along with Hassan.
The builder has not been around, but I have availed my own limit and reduced the price to Rs. 482,000 provided you could give us your offer in writing today with the 20% deposit.
Strategy
Approach
Ahmad sensing they were close to their goal replied, We really do like this office, but it is still more than we want to pay. Please excuse us while we discuss ways in which we might increase our offer. Would you please reevaluate your position too?
Strategy
DEFER Deferring strategy allows the negotiators time to reevaluate their positions. Deferring a decision to make
Approach
Ahmad and Hassan returned in an hour and offered Rs. 478,000.
The salesperson told them, I called the builder while you were away. He gave a little, but Rs. 478,000 just wont do.
Strategy
Approach
Strategy
However, if you would be willing to split the differences, SPLIT THE DIFFERENCE and make it Rs. 480,000, we can make a deal, providing you sign the paper and put down your 20% cash today.
Ahmad and Hassan looked towards each other and accepted with pleasure.
Communication Skills
Oral Communication Non-verbal Communication
Oral Communication
Phrase the words properly; it delivers.
Use simple language instead of complex terminology. However use frequent jargons when negotiating with your professional counterpart. Be as descriptive as possible. Avoid generalities.
Non-verbal Communicatio n
Symbolic
Feelings and emotions received from others through their body actions
Vibes
Paralanguage
How something is said instead of what is said i.e. volume, rate and rhythm, silent
Body Language
Avoiding eye contact Making excessive eye contact Fiddling with objects such as hair, pencils, or papers Crossing and uncrossing the legs Keeping legs and arms crossed
Impatient wants to cut a deal quickly Not receptive to your bargaining position
Negotiation Tips
1. 2. 3. 4. 5. 6. 7. 8. Do not underestimate your power. Do not assume that other party knows your weaknesses. Dont be intimidated by status. Dont be intimidated by statistics, precedents, principles, or regulations. Most negotiation will require some concession making. It is a mistake to assume you know what the other party wants. Never accept the 1st offer. Dont fear to negotiate.