NSMST1 Sep2019

Negotiation
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
Case study-2
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.
Introduction
Maxwell
Telecommunications, a
leading Telecom Service
company recently came to
Globus to have new SAP
based database software
to be developed for them.
Introduction
Peter carefully
reviewed and
analyzed Maxwell’s
requirements and
came up with a
Project Plan.
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.
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.
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.
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.
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.
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.
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.
Introduction
Also, Peter’s team

was forced to work 7-
days, even from home
to try to complete the
project.
Introduction
Why do you think

Peter’s team had to
suffer? Why did
Globus have to incur
a loss in this Project?
Introduction
Yes, all this happened

because Peter had not
initially negotiated well
with the client about the
deadlines and the scope
of work.
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.
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.
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 Skiilllsls’’ iin
n
ddeettaaiill..
Objective
• Negotiation
• Strategies
Describe
• Negotiation
• Negotiation
Explain the Types
• Negotiating
• Organizations
• Negotiator
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.
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.
Need for Negotiation
ly s a me.
e e x act i v id u al
p le a r
e r y i n d
ff e r e nt
o pe o n d ev in d i
No t w e a c h a
e r e n t l y
w a n t s,
fore , e s di ff e ed s ,
Th e re
b e h a v
e re n t n
ff e r e n ce
in ks and h a s diff b a s ic di
th
o n s and I t is t his e to me.
situ a ti s . r i s e-to -ti
a n d aim a t g ives tim
s h m
belief n people t conflict fro
e
betwe ement and i t h e ach
disag
re o -e xist w ell as
u t u ally c ional as w se
r , t o m o fess t th e
o v e , p r t h a
More t personal important ould be
a is h
other s level, it eements s
u s in es d i sa gr
b s an d
i c t
confl d.
e
resolv
Need for Negotiation
g u m ent
d to ar
a y le a o n e or
ic ts m lt i n
co n fl y r es u p p y.
cau s e hm a un h a
is b e w h ic e li n g
This n t m ent a rti e s fe
es e p lved
and r e involved o ne i n vo
f t h v e r y ent
all o e lp s e ee m
tiation h nd of agr o m eet
, ne g o gro u n da ls
n c e o n t s a
He
k a comm greemen
to see n the disa ectives.
e bj
betwe dividual o
in
their
Objective
• Negotiation
• Strategies
Describe
• Negotiation
• Negotiation
Explain the Types
• Negotiating
• Organizations
• Negotiator
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:
ti a ti
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isis aallw s
egotitiaatitioonn pproc n e g o
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Harvard Negotiation process study.
1. Separate the person from the issue.

2. Negotiate not position-focused, but interest-
oriented.
3. Develop criteria that a solution must fulfill.
4. You should have different options to choose
from
The Art of Negotiation
Negotiation is an art; you can get
better and better 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.
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.
Objective
• Negotiation
• Strategies
Describe
• Negotiation
• Negotiation
Explain the Types
• Negotiating
• Organizations
• Negotiator
Benefits of Negotiation
The following are some of the benefits of negotiations:
Good negotiations It helps to reach Good

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

It is one of the Negotiations
develop and reach an agreement in
easiest and help to reduces
maintain an overall cases where a dead-
quickest ways to stress and
harmonious and end may be reached if
solve conflicts frustration
thriving a consensus is not
and among two
interpersonal established between
disagreements. conflicting
environment. two differing needs,
individuals.
wants or opinions.
Objective
• Negotiation
• Strategies
Describe
• Negotiation
• Negotiation
Explain the Types
• Negotiating
• Organizations
• Negotiator
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.

Distributive Negotiation
• ‘Distributive Negotiation’ is also known

e
Distributiv
as ‘Positional’ or ‘Competitive’ or ‘Fixed
Pie’ or ‘Win-Lose’ Negotiation. It is a n
type or style of negotiation in which the Negotiatio
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 attempt 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.
Distributive Negotiation
• ‘Distributive Negotiation’ is also known

as ‘Positional’ or ‘Competitive’ or ‘Fixed
D istributive
Pie’ or ‘Win-Lose’ Negotiation. It is a
N eg otiation
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
negotiation’ have a ‘win-lose’ such a type of ne
strategattitude
y is on achieving gotiation
towards reaching the goal or and immediate goals,
no reisgbased
ard for building fu with little
on an attempt to divide Gup enaefixed ture relationship
rally, npie or
o new creative so s.
amount of resources forsuoneself.
ch negotiations a lu tion is reached in
• ‘Distributive Negotiation’ s the parties spen
timinvolves
e and energy in re d least possible
holding on to a fixed idea, solving the conflic
outorcom position, of
e of the negotiati t . Th e
what you want and arguing
presefor on is reached by
ntaittioand it
n of fixed solutio
alone, regardless of anychunderlying
oice is made quic ns and a decision
k ly. or
interests.
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 ‘win-
win’ attitude towards reaching the goal
and attempt 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.
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
The main focooperate to achieve a satisfactory
cus in such a type
strategy is oresult for both. Theoinvolved
n developing mu
f negotiaparties
tion in
agreementsan tually benhave
‘integrative negotiation’ eficiaal ‘win-
based on the inte
disputants. win’ attitude towards restreaching
s of the the goal
and attempt to strive not just for their
Generally, nown outcomes, but for favorable
ew creative soluti
such negotiaoutcomes for bothonsides.
s are reached in
tio n s as theNegotiation’
possible•time‘Integrative parties speninvolves
and energy in res d maximum
The outcomereaching an agreement
of the negotiatio
olvinkeeping
g the coninto
flict.
collaborationconsideration n
both the
is reparties’
ached binterests
y
between the par
win" solutionwhich ti
includes the eneeds,
s to findesires,
d a “win-
to their dispute.
concerns, and fears important to each
side.
Tip
i lls t hat
u c i al sk o r:
s t c r ti at
t h e mo a t n ego
n g are e a gre
i
llow to becom e
e fo
Th l p y ou fl ex ibl
e
can h open and ical
e th
• B ways be e thize
A l m p a l s k i lls
•
l w ays e od socia
• A velop go ntuitions
e i
• D llow your
o
• F assertive
e
• B
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 It involves discussion of several issues at a
time. time.
Involved parties have a ‘Win-Lose’ attitude Involved parties have a ‘Win-Win’ attitude
towards reaching the negotiation outcome. towards reaching the negotiation outcome.
Each party wants to use the negotiation to Each party wants to use the negotiation to
maximize its own share of ‘fixed pie’. ‘expand its own share of the pie’ by creating
and claiming value.
It is an approach usually used in one-time It is an approach usually used in a continuing
relationship between two people. relationship between two people.
The involved parties keep their respective The involved parties share their respective
interests hidden. interests with the other party.
Each party expresses a strong position for Each party expresses and try to come up with
each issue. as many options as possible per issue to
maximize mutual gains.
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 problem-
solvers.
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 The main focus of involved parties is on their
‘stance or position’. ‘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.
MCQ
Q. Distributive Negotiation is also

commonly known as ___________.
Click on the
radio button
to select the
correct
answer!
MCQ
Q.
GGoooDistributive Negotiation is also
d
od!! TThhaatt''ssknown
commonly RRiigghhttas
!! ___________.
CCoorrrreecctt Ans
Answ weerr::
DDiissttrriib
buutitivvee NNego
kknnoow egotitiaatitioonn iis als
n
wn aass ‘‘PPoossiition s alsoo com mon
tionaall NNeeggootiati comm onllyy
tiatioonn’.’.
lic k he re to
C
!
continue
MCQ
Q.
TThhaaDistributive Negotiation is also
tt''ss N
Noott Q uuiittee RRias
Qknown
commonly igghh___________.
tt!!
CCoorrrreecctt Ans
Answ weerr::
DDiissttrriibbuutive
tive NNeeggootitiaation
kknnoow wnn aass ‘‘PPoossiti tion isis aalls
soo ccoom
o
itionnaall NNeeggootiati mm
moonnllyy
tiatioonn’.’.
lic k he re to
C
!
continue

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Negotiation

Globus Inc. is a leading IT

Now, the only thing that

Peter held a meeting with

The client was in a hurry to

When the project was

Peter and his team were

Also, the client added new

Hence, Globus had to

Also, Peter’s team

Why do you think

Yes, all this happened

If Peter had clearly

Also, if Peter had

Thus, you can see that

• Negotiation is a discussion between two

• It involves using the art of ‘persuasion’

• The key skills that are involved in a

• Therefore, negotiations may take place

IItt iiss aa ggeener parttyy

n t tthhaatt iinn TThhee nneeggotia

1. Separate the person from the issue.

Good negotiations It helps to reach Good

They help to Negotiations help to

Let’s look at each in detail.

• ‘Distributive Negotiation’ is also known

• ‘Distributive Negotiation’ is also known

Q. Distributive Negotiation is also

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