Section 8

Negotiation Skills

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 Golden Rule

• Do not argue with people in the early stages of the

negotiation because it creates confrontation

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 What is Negotiation?
• Negotiation is a basic means of getting
what you want from The Other Side (TOS).
• It is back-and-forth communication
designed to reach an agreement when you
and the other side have some interests that
are shared and others that are opposed.

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 Negotiation
Negotiation is a process of
Interaction by which two or more parties who need
to be jointly involved in an outcome
They have different objectives presented as
different alternatives & positions
They use argument and persuasion to resolve their
differences in order to achieve a mutually
acceptable solution.

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 Two Types of Approach
1- Integrative (win/win) approach – stable
• Have the potential to expand the size of the
pie; win-win.

2- Distributive (win/lose approach) unstable

Parties only concerned with how a fixed pie
will be divided.

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Negotiation structural design
Mutual interests

Individual objectives
Defined positions/stances
Conflicts created
Developing alternatives &
making concessions
Mutual agreement
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 Negotiation Stages
• Stage 1: Pre- negotiation (Planning)
• Stage 2: clarifying & Learning more about TOS
• Stage 3: Bargaining & Concession-Making
• Stage 4: Reaching Agreement

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 Stage 1: Pre-negotiation (planning)
General platform:
•Determine & prioritize your objectives in relation to the
opportunities presented by the environment and the
difficulties posed by the situational factors.
•List the relevant issues that affect your opportunities and
constraints.
•Prepare a tentative list both outlining your interests and
those of the (TOS) with an accompanying list of
acceptable trade-offs.
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 Stage 1: Pre-negotiation (planning) contd.
General platform (contd.)
•Establish the level of your best first offer.
•Anticipate TOS’s reactions.
•What are your contingency plans for each possible
reaction?
•You’ll have to assemble your negotiation team at this
stage.

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 Planning steps for negotiation
• Analyze your situation

• Analyze the situation of TOS

• Set your negotiation plan

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 Planning steps for negotiation
Analyze your situation
•Define your interest (s) for this negotiation
•Conduct SWOT analysis
•Identify your possible opportunities from the planned
negotiation
– Assess your relative power

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 Planning steps for negotiation
Analyze the situation of TOS
General information
•What do you know about him & what you need to
know about him
– Needs & interests
– Personality traits
– Negotiation strategy, style & tactics
– Level of his authority
– level of influence on the DMP of his organization
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 Planning steps for negotiation
Analyze the situation of TOS
•TOS main areas of negotiation (issues)
– Identify combination of factors will he want in making
his decision:
• Cost – Price – Credit payment
• Volume – Availability - Delivery terms
• Promotional support – Training
• Brand name – Exclusive terms – After sales service

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 Planning steps for negotiation
Set your negotiation plan
•Set & prioritize your objective(s)
1- Make a list of all your objectives
2- Then put them in your order of priority
3- Then identify those that you can live without
•Define your bottom line &/or BATANA
– Bottom line: your allowed maximum or minimum stance in this
negotiation
– BATNA :Your Best Alternative To Negotiated Agreement
•Develop your negotiation strategy, style & scenario(s)

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 Planning questions:
• The Mini-max Strategy
– What is the minimum that I can accept?
– What is the maximum I can ask for without getting
laughed out of the room?
– What is the maximum I can give away?
– What is the least I can offer without getting laughed out of
the room?
• Use The L.I.M. Model:
Like to Achieve / Intend to Achieve / Must Achieve

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 Understanding and Defining Roles within
Teams
 Every negotiating team requires certain roles to be filled
 All the key roles should be represented.
 It is not essential however for every role to be filled by a single person.
 Roles in team negotiation:
 Leader
 Good guy & Bad guy
 Hard liner
 Sweeper

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Stage2: clarifying & Learning more about TOS
• Use the casual meetings with TOS to establish a more
comfortable level of interpersonal rapport, more
information about the needs and desires of TOS and
about the situation.
• Correct your initial (incorrect) assumptions in
formulating your negotiation strategies.

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Stage 3: Bargaining & Concession-Making

• Dynamic stage of negotiation

• Presenting your alternatives
• Listening actively to TOS alternatives
• Don’t bargain on positions

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Stage 3: Bargaining & Concession-Making
Dealing with concessions
•Use Principled negotiation approach:
1. Separate people from the problem.
2. Focus on interests, not positions.
3. Invent options for mutual gain.
4. Insist on using objective criteria.

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 Recommended Seating Plan for team
Negotiations Your team
Co negotiator Lead
negotiator Expert
Analyst Recorder

Recorder Analyst
Expert
Co negotiator Lead
negotiator Their team
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Comparing Buyer and Seller Price Positions
SM SM SM
Buyer’s Buyer’s Buyer’s
Opening Target Maximum
Price Price Price

$ $
SM ST SO
Seller’s Seller’s Seller’s
Minimum Target Opening
Price Price Price
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 Stage 4: Reaching Agreement
• Basic agreement over terms has been reached.

• Both sides get very close to finalize their agreement.

• The written contract is the standard way to express the

agreement.

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Conflict-Handling Behavior Modes

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 Competing Mode
Competing Collaborating
Compromising

Avoiding Accommodating

 Assertive and uncooperative

 Tend to pursue their own goals at the expense of
the other party.
 Like to be surrounded by “yes men.”
 Look for a win for themselves, a loss for the other
person.
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 Pros & Cons for Competing strategy
Pros
• It can lead to automatic victory if you have more power than
the other person.
• Takes less time.
Cons
• Competing strategy can lead to a deadlock situation if both
sides try to do it (Equal power)
• May be costly & time consuming
• The other side can become resentful.

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 Recommended situation in using
Competing strategy
• Short term goals
• Tangible objectives are more important than
intangible (price, delivery terms…)
• The issue under discussion is seen as fixed-pie. What
you gain TOS will lose
• If TOS is likely to use competing strategy

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 Avoiding Mode
Competing Collaborating

Compromising

Avoiding Accommodating

 Unassertive and uncooperative

 Do not attempt to fulfill their own needs or the
needs of others.
 In essence, they refuse to address the conflict.
 They do not strive for any agreement.

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 Pros & Cons for Avoiding strategy

Pros
• You might keep a good relation with TOS
• You will avoid losses
Cons
• Might lose a good business opportunities
• Short term strategy

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 Recommended situation in using Avoiding
strategy
• Neither outcome nor relation is important to you
• Relations & outcome will not justify costs of
negotiation (ROI)

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 Accommodating Mode
Competing Collaborating
Compromising

Avoiding Accommodating

 Unassertive but highly cooperative

 Tend to neglect their own goals in order to satisfy the
concerns of the other party.
 They may seek a win-lose agreement where they are the
losers!
 Display excessive generosity and easily yield to another’s
point of view.
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 Pros & Cons for Accommodating style
• Pros
• When you recognize that the fight isn't worth it, you
give in and the conflict is over quickly.
• You could get people to owe you a favor
(accommodating you) in the future.
• Cons
• You may lose a lot by giving up easily.
• Reputation of being a softy.
• You could lose power.
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 Recommended situation in using
Accommodating style
• Building trust or avoiding destroying already existing
trust
• Showing respect to TOS capabilities
• Keep the peace
• Build a stock of credits at the end of TOS

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 Compromising Mode
Competing Collaborating
Compromising

Avoiding Accommodating

 These people are “in the middle” in terms of

assertiveness and cooperativeness.
 Attempt to find a quick, mutually agreeable
solution that partially satisfies both parties.
 The agreement reached does not usually
maximize the satisfaction of the parties.
 Will often say “Let’s just split the difference.”
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 Pros & Cons for Compromising style
Pros
• Compromise of styles
• Adequate for most situations
• Both parties can gain something
Cons
• Difficult to start with

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 Collaborating Mode
Competing Collaborating

Compromising

Avoiding Accommodating

 Assertive and cooperative

 They seek to maximize the satisfaction of both
parties and reach a truly win-win solution.
 Collaborators have the motivation, skills, and
determination to really dig into an issue or a
problem and explore all possible solutions.
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 Pros & Cons for collaborating style
Pros
• Both sides can win.
• Personal relationships can improve, because you
both care enough to try and make each other happy.
Cons
• Collaborating can take a long time.
• If not properly applied; will be perceived weak by
people with competing style

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 Recommended situation in using
Collaborating style
• Long term goals are important
• Negotiation within the organization
• The two sides have common ground
• The issue under discussion is seen as fixed-pie.
Expand the pie
• TOS seems to appreciate collaborating strategy not
willing for competing strategy

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 Negotiation Strategies
 Importance of relationship

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 Importance of outcome
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 Note:
• One person can exhibit different modes in different
situations. For example, a buying team negotiator
who perceives that his or her position on an issue
extremely vital to the long-term welfare of the
company is correct may revert from collaborating
mode to a competing mode.
• Likewise, when potentially heavy damage could
occur from confronting an issue, that same buyer
might move to an avoiding mode.

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