A

REPORT
ON
NEGOTIATION SKILLS & TECHNIQUES LAB

Submitted in partial fulfilment for the award of the degree

Master of Business Administration

Chhattisgarh Swami Vivekanand Technical University, Bhilai

Submitted by,

ANJALI JAIN

MBA – Semester III

(Session 2020-2022)

Approved By, Guided by,

Dr. Apoorwa Mishra Ms. Malvika Tiwari
Head Assistant Professor
Department of Management Studies Department of Management Studies

Shri Shankaracharya Institute of Professional Management and Technology

Mujgahan, Raipur (C.G.)

 INDEX

S. No. Table of Content Page No.

1. Negotiation - Overview & Process 1
1.1 Overview of Negotiation 2
1.2 Process of Negotiation 2
2. Strategies for Effective Communication in Negotiation 4
3. Cross-cultural issues in Negotiation 7
4. Do's & Don'ts of Negotiation 10
4.1 Do’s of Negotiation 11
4.2 Don’ts of Negotiation 11
5. Ethics in Negotiation 12
Negotiation - Overview & Process

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1.1 Overview of negotiation
Negotiation is a dialogue between two or more parties with the intention of reaching a mutually
beneficial outcome or resolving a conflict. In negotiation, each party will try to persuade the
other one to agree with his or her point of view. The goal is to avoid arguments and disputes and
reach some form of compromise between parties.

Negotiations occur frequently within the workplace and may occur between coworkers,
departments or between an employee and employer. Professionals may negotiate contract terms,
project timelines, compensation and more. Negotiations are both common and important, so it’s
helpful to understand the types of negotiations you might encounter as well as how to improve
your negotiation skills.

1.2 Process of negotiation

1. Preparation and Planning.
2. Definition of Ground Rules.
3. Clarification and Justification.
4. Bargaining and Problem Solving.
5. Closure and Implementation.

Preparation and Planning

Before the start of negations, one must be aware of the conflict, the history leading to the
negotiation the people involved and their perception of the conflict expectations from the
negotiations etc.

Definition of Ground Rules

Once the planning and strategy are developed, one has to begin defining the ground rules and
procedures with the other party over the negotiation itself that will do the negotiation. Where will
it take place?

What time constraints, if any will apply? To what issues will negotiations be limited? Will there
be a specific procedure to follow in an impasse is reached? During this phase, the parties will
also exchange their initial proposals or demands.

Clarification and Justification

When initial positions have been exchanged both the parties will explain amplify, clarify, bolster
and justify their original demands. This need not be confrontational.

Rather it is an opportunity for educating and informing each other on the issues why they are
important and how each arrived at their initial demands.

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This is the point where one party might want to provide the other party with any documentation
that helps support its position.

Bargaining and Problem Solving

The essence of the negotiation process is the actual give and take in trying to hash out an
agreement, a proper bargain. It is here where concessions will undoubtedly need to be made by
both parties.

Closure and Implementation

The final step in the negotiation process is formalization the agreement that has been worked out
and developing and procedures that are necessary for implementation and monitoring.

For major negotiations – this will require hammering out the specifics in a formal contract.

Negotiation Process has five stages. In all steps of a negotiation process, the involved parties
bargain at a systematic way to decide how to allocate scarce resources and maintain each other’s
interest.

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 Strategies for Effective
Communication in Negotiation

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Regardless of the type of small business an owner may be involved in, there are always
negotiations that take place on a daily basis. These may be as simple as choosing a meeting time
and place, or they could be much more important to the overall business structure, such as
working out the details of a big contract. Business people need to be skilled in negotiation tactics
and understand how to effectively communicate during the negotiation process.

Non-Verbal

In every type of communication scenario, including during negotiations, non-verbal

communication is sometimes more important than what is actually being said. You should pay
attention to the non-verbal cues of the opposing negotiator as well as to any non-verbal cues he
may be portraying. For instance, if someone suddenly crosses his arms across his chest during
the discussion, it can indicate that he is disagreeing with what is being said. Paying attention to
non-verbal cues can help you to change your strategy.

Verbal

What is verbally being stated with the negotiation is also important. Negotiators should aim to
follow some simple rules during a negotiation, such as never raising voices, not interrupting the
other person when he is speaking and avoiding using jargon that may not be easily understood by
the other. A negotiator can easily assess the effectiveness of her verbal communication by asking
the listener to paraphrase his understanding of the exchange.

Preparation

Before a negotiation begins, you should prepare for the exchange. This includes identifying the
goal of the negotiation, brainstorming multiple solutions and determining what the main
negotiation tactic may be. In addition, you should create an outline of the main points that you
will make during the verbal exchange of the negotiation. You should also take some time to
determine which elements of the project you are willing to give up or compromise on in order to
reach a successful agreement.

Open-Ended Communication

While questions that can be answered with one word such as “yes” or “no” have their place in
effective communication and negotiations, open-ended questions can reveal much more
information. For instance, asking the person what you would have to do to negotiate this deal
today and walk away with a signed contract can reveal his objections to the deal. This tells you
exactly what you need to focus on and overcome within your presentation. After asking an open-
ended question, sit quietly and wait for an answer from the other person. Do not try to fill the
silence with further communication.

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Considerations

There are certain power plays that can be used in negotiation strategies and which can impact
effective communication during the exchange. For instance, sitting behind a big desk while the
other person is effectively exposed in just a chair is a power play that gives power to the person
behind the desk. While this may be effective in a psychological manner, it does not facilitate
effective communication. Focus on creating a win-win deal with honest and open
communication rather than tricks that can possibly provide an upper hand through intimidation.

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Cross-cultural issues in Negotiation

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International business deals not only cross borders, they also cross cultures. Culture profoundly
influences how people think, communicate, and behave. It also affects the kinds of
transactions they make and the way they negotiate them. Differences in culture between
business executives—for example, between a Chinese public sector plant manager in Shanghai
and a Canadian division head of a family company in Toronto– can create barriers that
impede or completely stymie the negotiating process.

1. Negotiating goal: Contract or relationship?

Negotiators from different cultures may tend to view the purpose of a negotiation differently. For
deal makers from some cultures, the goal of a business negotiation, first and foremost, is a signed
contract between the parties. Other cultures tend to consider that the goal of a negotiation is not a
signed contract but rather the creation of a relationship between the two sides. Although the
written contact expresses the relationship, the essence of the deal is the relationship itself.

2. Negotiating attitude: Win-Lose or Win-Win?

Because of differences in culture, personality, or both, business persons appear to approach deal
making with one of two basic attitudes: that a negotiation is either a process in which both can
gain (win-win) or a struggle in which, of necessity, one side wins and the other side loses (win-
lose). Win-win negotiators see deal making as a collaborative, problem-solving process; win-lose
negotiators views it as confrontational. As you enter negotiations, it is important to know which
type of negotiator is sitting across the table from you.

3. Personal style: Informal or formal?

Personal style concerns the way a negotiator talks to others, uses titles, dresses, speaks, and
interacts with other persons. Culture strongly influences the personal style of negotiators. A
negotiator with a formal style insists on addressing counterparts by their titles, avoids personal
anecdotes, and refrains from questions touching on the private or family life of members of the
other negotiating team. A negotiator with an informal style tries to start the discussion on a
first- name basis, quickly seeks to develop a personal, friendly relationship with the other
team, and may take off his jacket and roll up his sleeves when deal making begins in earnest.

4. Communication: Direct or indirect?

Methods of communication vary among cultures. Some emphasize direct and simple methods of
communication; others rely heavily on indirect and complex methods. The latter may use
circumlocutions, figurative forms of speech, facial expressions, gestures and other kinds of body
language. In a culture that values directness, such as the American or the Israeli, you can expect
to receive a clear and definite response to your proposals and questions. In cultures that rely on
indirect communication, such as the Japanese, reaction to your proposals may be gained by
interpreting seemingly vague comments, gestures, and other signs.

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5. Sensitivity to time: High or low?

Discussions of national negotiating styles invariably treat a particular culture’s attitudes toward
time. It is said that Germans are always punctual, Latins are habitually late, Japanese negotiate
slowly, and Americans are quick to make a deal. Commentators sometimes claim that some
cultures value time more than others, but this observation may not be an accurate
characterization of the situation. Rather, negotiators may value differently the amount of time
devoted to and measured against the goal pursued. For Americans, the deal is a signed contract
and time is money, so they want to make a deal quickly. Americans therefore try to reduce
formalities to a minimum and get down to business quickly.

6. Emotionalism: High or low?

Accounts of negotiating behavior in other cultures almost always point to a particular group’s
tendency to act emotionally. According to the stereotype, Latin Americans show their emotions
at the negotiating table, while the Japanese and many other Asians hide their feelings.

7. Form of agreement: General or specific

Whether a negotiator’s goal is a contract or a relationship, the negotiated transaction in almost

all cases will be encapsulated in some sort of written agreement. Cultural factors influence the
form of the written agreement that the parties make. Generally, Americans prefer very detailed
contracts that attempt to anticipate all possible circumstances and eventualities, no matter how
unlikely.

8. Building an agreement: Bottom up or top down?

Related to the form of the agreement is the question of whether negotiating a business deal is an
inductive or a deductive process. For Americans, negotiating a deal is basically making a series
of compromises and trade-offs on a long list of particulars. For the French, the essence is to
agree on basic principles that will guide and indeed determine the negotiation process afterward.

9. Team organization: One leader or group consensus?

In any negotiation, it is important to know how the other side is organized, who has the authority
to make commitments, and how decisions are made. Culture is one important factor that affects
how executives organize themselves to negotiate a deal.

10. Risk taking

In deal making, the negotiators’ cultures can affect the willingness of one side to take risks– to
divulge information, try new approaches, and tolerate uncertainties in a proposed course of
action. The Japanese, with their emphasis on requiring large amount of information and their
intricate group decision-making process, tend to be risk averse.

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Do's & Don'ts of Negotiation

10
Do’s of negotiation
1. Set goals: It's important to clarify your goals and desired outcomes before you begin
negotiations. If you haven't given much thought to what you hope to achieve through
negotiations, don't be surprised to walk away from the process disappointed. Set high goals,
but also be clear about the minimum outcomes you are willing to accept.

2. Define threshold:. In addition to knowing your own bottom line position, you'll want to
make a concerted effort to assess the other party's bottom line. Once you get a sense of the
threshold that they won't cross, it's easier to influence the outcomes in your direction.

3. Follow negotiation etiquette: Professional etiquette requires all parties to maintain a polite
and courteous attitude. If you want to be taken seriously, approach the negotiation process
with a willingness to compromise and to hash out a win-win outcome.

Don’ts of negotiation
• Don't avoid conflict: Conflict is an inherent part of a negotiation process. Accept the fact
that your interests are in conflict with your partner's interest so you can roll up your
sleeves and begin the hard work of identifying a solution that is acceptable to both of you.

• Don't be intimidated: Some people rely on intimidation to get their way in negotiations.
Don't allow yourself to be intimidated by someone who raises their voice or disrespects
you, but require the other party to provide substantive support for their claims, preferably
in the form of quantifiable data.

• Don't lose your cool: Negotiations can be emotional. But when you allow your emotions
to control your negotiating strategy, you relinquish power and handicap your ability to
control the outcome of the process.

For many professional negotiators, the idea of being ethical during a negotiation is a dangerous
minefield leading through an impossible feat, not meant to be accomplished. Many of these
negotiators feel that negotiation ethics create a weak negotiation because it “encourages parties
to disclose information to each other and develop a degree of trust, in contrast to the adversarial
posture of traditional positional bargaining.” This expression of trust is contrary to the hard-tactic
negotiations displayed by so many in the business world today.

The thought of mutual benefit is dissipated, while the greed for gain over another grows
rampantly. When one displays unethical behavior in negotiation settings, painful consequences
may possibly arise.

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Ethics in Negotiation

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To some people, the word negotiation has a negative connotation. Typically, these people feel
that negotiation is what a salesperson does to get them to buy his products and services. But
negotiation is not a negative thing. In fact, every one of us negotiates almost every waking hour
of every day. Whenever you communicate--whether you are trying to get your teenager to clean
his room, convince your significant other to take you out to dinner, or encourage an employee to
show up to work on time--you are negotiating. Girard Nirenberg, the author of the first formal
book on negotiation, explains it this way: "When two or more people exchange ideas with the
intent of changing the relationship in some way, they are in negotiation."

When we view negotiation from this perspective, we can see how important it is to improve our
ability to negotiate so we can be more successful in achieving our goals. What we want to ensure
is that when we do negotiate, we do so in a way that will ensure a win-win outcome--one that
meets the needs and goals of both counterparts, and makes both of them willing to come back to
the bargaining table to negotiate with each other again at a later time.

What is the role of ethics in negotiation?

The dictionary definition of ethics is: "a system of moral principles or values; the rules or
standards governing the conduct of the members of a profession; accepted principles of right or
wrong." Ethics establish the means of doing what is right, fair and honest. Why are ethics
important in a negotiation? Let's look at an example.

On April 23rd, 2003, Don Carty, the former CEO of American Airlines, ended his 20-plus-year
career when he was forced to resign over what the unions considered to be a lapse in his ethics.
While Carty was asking rank-and-file employees to take deep pay cuts to save the company, he
was also putting together a package that included $41 million in pension funding for 45
executives. If Carty had been upfront with the unions about this arrangement--perhaps explaining
that he felt these benefits were necessary to retain an executive team that could help pull
American Airlines through the crisis--the outcome may have been different. Instead, the unions
got the facts from the press and demanded Carty's resignation.

Reputation plays a vital role in every negotiation. It's much easier to achieve win-win outcomes
when you have a reputation for being fair, honest and willing to do the right thing. A counterpart
who feels you are unfair, dishonest or unwilling to do the right thing will be less willing to make
concessions or even to begin a negotiation with you in the first place. So guarding your
reputation by always acting in an ethical manner is key to successful negotiation. When making
any decision, remember this: A reputation takes years to build, and only minutes to destroy.

What is the difference between "legal" and "ethical"?

Something may be perfectly legal and still not be ethical. I recently sold a rental house to a
tenant who had lived in the home for two years. The tenant offered to buy the house for
$485,000. I felt the house was worth over $500,000, so I decided to have it appraised. I told the
tenant that if the appraisal came in at more than $500,000, he would have the option of buying
the house at the higher price. On the other hand, if the house was appraised at less than $500,000,
I would decide if I wanted to sell it at the lower price or hang onto it. The appraisal came in at

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$480,000--$5,000 less than what the tenant had offered me. I thought about not sharing this
information with the tenant, and saying something like, "$485,000 is a deal." That thought lasted
about one minute. Ethically, I felt I needed tell the tenant about the appraisal price. Then I could
decide if I wanted to sell the house for that price or keep it.

You can't be 95 percent or 99.9 percent ethical. You are either ethical or you are not. Would it
have been legal for me to keep the appraisal from the tenant? Yes. Would it have been the right
thing to do? People for whom the almighty dollar is the highest value would say yes. For me, to
withhold this information was neither right nor fair. In short, doing so might be legal, but it
would not be ethical.

The following 10 tips will ensure that you build all your negotiations on a foundation of ethics--
which will, by the way, increase your chances of achieving win-win outcomes. Ethical
negotiators don't think only about what they can "get" out of a negotiation but also about what
they can "give" to their counterpart. In this way, they take the long-term view. They know that a
counterpart who walks away from a negotiation feeling successful will be willing to come back
and negotiate again in the future.

1. Know what is not negotiable. Whenever we work with bank employees, we love to ask the
following question: "How much can you steal from this bank before you get fired?" The question
always draws a laugh because, of course, everyone knows that anyone who steals from a bank
would be fired immediately. This is simply not an area that is negotiable. Knowing what is
negotiable and what is not will make you a much more effective negotiator.

2. Be honest. In a negotiation, whenever you are ethical and honest even though it costs you
something, you gain points. If a counterpart makes an invoice error that is to your advantage and
you inform him of it, that costs you something--but it also earns you respect. A client recently
called to inform us that we had not sent an invoice for services we had performed for her. That
one telephone call let us know that this client is honest. That fact will undoubtedly affect all our
future negotiations with her.

3. Keep your promises. In your eagerness to put a deal together, you may sometimes make
promises and concessions you hadn't planned to make. You demonstrate your ethics when you
fulfill those promises long after the desire to do so has left you.

4. Have multiple options. Going into a negotiation with multiple options will help both you and
your counterpart achieve your goals. If someone proposes an option you feel is unethical, you
will be ready with another, ethical option for accomplishing the same goal. Sometimes you may
encounter negotiators who are unilateral thinkers who have only one option. With them, it's their
way or the highway. If their way is unethical in your opinion, you have only one option--to walk
away from the deal.

5. Be willing to say "no." Some negotiators are quite comfortable looking a counterpart in the
eye and saying "no" when they feel something is not right. Others worry that saying "no" seems
confrontational, even when a proposal does not seem ethical--then later they regret agreeing to
the proposal. Being willing to say "no" to something that is not right is a great strength.

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6. Be familiar with the law. Ignorance of the law is not a good excuse for unethical behavior.
When in doubt about the law governing some aspect of your negotiation, check it out.

7. Go with your gut. Recently we were in a negotiation with a company and a person in one
division of the company suggested that we not inform another division of an action we were
planning to take. One counterpart said, "This just smells bad." What he was saying was that this
deal point simply did not feel right. Telling the members of the other division what we were up
to, even though we knew they would be adamantly opposed to it, was the right thing to do.

8. Practice the concept of "no surprises." Gomer Pyle, played by the late Jim Nabors, used to
draw a laugh whenever he said, "Surprise, surprise, surprise, Sergeant Carter." What made this
line so funny was that Gomer Pyle's surprises were always negative. My wife is fond of telling
me, "If you are going to surprise me, stick it in a jewelry box and put a bow on it." Making sure
that a negotiation does not contain any negative surprises will reduce the chances of an ethical
lapse.

9. Follow the Platinum Rule. The Golden Rule tells us to treat people the way we would like to
be treated. Dr. Tony Alessandra's The Platinum Rule™ tells us to treat people the way they want
to be treated. Caring about your counterparts enough to treat them the way they want to be
treated helps build long-term relationships based on ethics and trust.

10. Be willing to walk away from a deal. When it comes to effective negotiations, remember,
some of the best deals you will ever make are the ones you did not make. All of us have
contemplated buying something from an individual, or entering into a business relationship with
a company, and just getting a gut feeling that we should say "no." So we have walked away from
the deal. Later, when we heard negative information about this individual or company, the
information reinforced the fact that we had made a great decision. In negotiations, your head
may try to rationalize deal points to make your gut feel more comfortable. Remember to go with
your gut instinct, since it does not rationalize as well as your head.

Putting these tips into use is critical to your success as a negotiator. Your reputation is at stake.
And, as some CEOs and CFOs have recently learned, your job is at stake. Practicing ethical
negotiations is not only right--it is a wise investment for your future.

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