Negotiation

12TH JANUARY 2023

Flow 2

 Definition
 Types of Negotiation
 Negotiation Style
 Elements of Negotiation
Definition of Negotiation 3

A dialogue between two or more parties with

the aim of reaching a consensus over an issue
where conflict exists

 One of the parties puts forward a position

 Parties
discuss, negotiate till an agreement is
reached
Definition of Negotiation 4

A dialogue that is supposed to create an

agreement or resolve a disagreement
Types of Negotiation 5

 Dayto Day negotiations- Including managerial

negotiations
 Done within the organization

 Team members interact with each other and

with managers in different levels in organization
structure
Types of Negotiation 6

 ForDay to Day business, internally mangers

need to allot job responsibilities, maintain a
flow of information, Direct the record keeping
and many more activities for smooth
functioning

 Requiredentering into negotiations within the

team itself
Commercial negotiations 7

 Conducted with external parties

 Driving forces, are financial gains

 Based on a, give and take relationship

Commercial negotiations 8

 Commercial negotiations successfully end up

into contracts

 Refers to foregoing of one resource to get the

other
Legal negotiations 9

 Thesenegotiations are formal and legally

binding

 They are contractual in nature and relate to

gaining legal ground
Your Negotiation style 10

A reflection of your attitude and your

personality

 Determines your ability to bridge gap between

different positions in a negotiation
 Eg Your boss wants you to work in the weekend, you
do not
Your Negotiation style 11

 We have a preferred Negotiation style or styles

but any strength overused becomes a
weakness

 Themore tense the situation, the more you

behave according to this preference
Your Negotiation style 12

 This can weaken your negotiation because

 You fail to adapt when necessary
 You forget your real interests in a negotiation and
try to win at all costs
 The less chance you have, to reach a mutually
satisfactory conclusion
 Your Negotiation style 13

Competing Collaborating

Compromisin
Assertiveness g

Avoiding Accommodating

Cooperation
Elements of a Negotiation 14

 Your Tangible proposals

 First proposal- unlikely acceptance
 Target- what you will be happy accepting
 Yourreservation- or walk away point(minimum
acceptable offer)
 BATNA
Elements of a Negotiation 15

 Tangibles in a negotiation
 Deadline

 How many meetings are needed to reach an

agreement
 Price

 Contract

 Warranty, Guarantee or maintenance agreement

with an external contractor
An Eg 16

6 projects are available to work on, A-F

 You want to work on A-D
 You most want to work on A, B- Target
 You
would accept just working on A-
Reservation point
 You decide to start with a first proposal on A-D
An Eg 17

 Your colleague would like to work on projects B, D, E &

F
 Her likely opening offer, B, D, E & F
 Her target will be B & F, as she has experience
working on these
 Her reservation point is going to be B, but since F is a
a similar file and more prestigious in terms of visibility
in the unit, you are hoping you can persuade her to
accept this instead of B
Elements of a Negotiation 18

 Anchoring- First offer

 Dangers of going first
 You can start too low- Alienates the other party
 You can start too high and give away more than you need
to
 Your negotiating counterpart can adjust his offer to his
advantage based on what information you give away with
your opening offer
Elements of a Negotiation 19

 Powerful effect of Anchoring can be reduced

by
 Knowledge

 Experience

 Use Anchoring to advantage

 Set high goals before Negotiation
 Set high demands(or low offers)
Elements of a Negotiation 20

 How to defend against ANCHORING if other person

goes first
 Make a counter offer based upon the information you would
use to construct a first offer
Elements of a Negotiation 21

 Intangible elements
 Underlying psychological factors or motivations
 Degree of trust
 Personality and behavioral preferences
 Reputation, Concerns about losing Face
 Values(Ethics)
Elements of a Negotiation 22

 Creating Leverage
 Party with the least to lose has the most Leverage
 Combining tangible and intangible elements will help

4 types of leverage
 Normative

 Positive

 Negative

 buyer
Elements of a Negotiation 23

 Normative
 Use the other party’s standards to advance your
own
 Your negotiating counterpart gives extra consideration to
those who have improved productivity from 7 to 8
translation pages daily
 You show that is your current scale
Elements of a Negotiation 24

 Positive
 Your ability to provide what your counterpart needs
 As soon as your counterpart says she wants something, it
kicks in
 You control what they want- you can grant or deny access
 Experienced players delay making offers- they don’t want to
give you leverage
 If other party says they want to swap file on financial
management for yours on risk analysis, it kicks in
Elements of a Negotiation 25

 Negative
 Yourability to make who you are negotiating with,
suffer
 Your
ability to threaten them, such as your ability to
damage their reputation
 Use sparingly
Elements of a Negotiation 26

 Buyer
 Buyerscan have more power when buying goods or
services
 Variables- Relative abundance or scarcity,
Availability of substitutes
 Relativeleverage of buyers and sellers determines
the price(not only money, but time too), and terms
of transactions and nature of relationship
 27

Thank You