Negotiating to Win Participant's Manual

8/22/2019 Negotiating to Win Participant's Manual

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Negotiating to Win (NTW)

2010 by ECC International

All rights reserved. No part of t his mater ial shall be reproduced, s tored in a ret rieval system, o r t ransmit ted by any means ,

electronic, mechanical, photocopying, recording, or otherwise, without wri tten permission from ECC International.1

Negotiating to Win

Understanding structured negotiation and ensuring certainty

1PHILIPPINES MALAYSIA SINGAPORE INDIA CHINA

W W W . E C C I N T E R N A T I O N A L . C O M

Participants Introduction

Participants kindly state the following:

Name

Areaofresponsibility

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KnowledgeaboutNegotiating

Expectations fromthe Training

House Rules

Bepunctual

Smoking is not allowed inside the Seminar Room

As much aspossible, avoid eating while sessionis going on.

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Participants are allowed to receive and make phone calls during breaks(except foremergencycases).

Please turn-off mobilephones or put it tosilentmode. Answer your callsoutsidethe Seminar room

In case of urgent matters requiring yourpresence, please do inform thefacilitator/ trainingstaffbefore leaving


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Learning Objectives

At the end of the training, participants are expected to:

Understand and appreciate the concepts of effective negotiationfrom communication styles to closing patterns

Create and maximize value in all negotiations through proven yetinnovative tactics

Be in a position to better plan / prepare and manage different /

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difficult situations

Watch your back yet build strong relationships by learning differentnegotiation styles

Be in a position to apply some critical tools to strengthen negotiationpositions

Negotiate with confidence and ensure success by focusing anddemonstrating commitment to WIN-WIN

DAY 1 Introduction and Overview

Negotiation & Its Concepts Effective C ommunication in Negotiations

The Ma jor Types of Negotiation

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The 7 C ritical Elements to Successful Negotiation

The Structured Negotiation Process

Preparation Proposal Bargaining Close

Planning for the Action

DAY 2 People and Negotiation

Types of Negotiators Understanding and Assessing Personality Profiles Handling different profiles

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Team Negotiations Concepts and Best Prac tices

Moving from Reac tive to Proactive: Taking Control ofNegotiation

Power, Persuasion and Positional Bargaining Developing Relationships Ensuring Success through Creativity


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What isNEGOTIATION?

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What is NOTNEGOTIATION?

Why Negotiate?

If the reason for negotiation is seen as 'beating' the

opposition, it is known as 'Distributive negotiation'.

Negotiation, ina business context, can beusedfor

selling,

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purchasing,

staff (e.g. contracts),

borrowing (e.g. loans) transactions,

andwith anythingelse thatyou feel are applicable forthebusiness..

Considering the outside optionscoming in the future

Dynamic multi-

threaded negotiations

Synchronized multi-

threaded negotiations

Single-threaded

negotiations

Relationship between 3 negotiation models

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Considering the impact of otherconcurrent negotiation threads

Negotiation strategies withoutoutside option


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Single-threaded negotiations

The design of an effective negotiation strategy can be dividedinto two parts:

First part is the design of a negotiation strategy given thereservation price and other inputs. This is single-threadednegotiations

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Second part is to calculate the reservation price based onthe modelof outsideoptions.

First level the buyer assumes there are no outside optionscoming in the future, and makes decisions based on theoutside options that concurrently exist with the thread under

consideration.

This is synchronized multi-threaded negotiations.

Synchronized multi-threaded negotiations

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Second level the buyer also considers the outside optionsthatmay come dynamically in the future.

When the buyer acts both reactively to the realized outsideoptions, and proactively to the possible arrivals based on

the prediction information, this is called dynamic multi-threaded negotiations.

Dynamic multi-threaded negotiations

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It builds on the synchronized multi-threaded model butintroducesuncertainty tothe threads.


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So what is really Negotiation?

To confer or concur with another orothers in order to come to terms or reach

an agreement or a end result / goal.

Negotiation means..

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To arrange or settle by discussing andmaking a mutual agreement to meet the

end result or goal.

When should you negotiate?

1. When you can enhance the deal and or create a betteragreement/outcome

Two heads are better than one

Different perspectives

Dont just go along with something to get it done

Donttakethe eas wa out

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2. When an objective is to establish a longer term relationship

Future benefits

3. Create an agreement that will last over time

4. A cultural way of doing things, a tradition in certain communities

When not to Negotiate

1. If you are not prepared

2. When you cant enhance the deal

3. When the costs and risks outweigh the potential benefits

It will take longer and cost more to negotiate than the value youreceive in the end

Significant risk that ground will be lost

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4. When the details of the deal are not clear

5. When the break even between profit and loss is very minimal andthe relationship is not evident

6. When its a new user, whose credibility is yet to be tested or seen

7. When the deal is regulated and statutory in nature i.e. BangkoSentral guidelines or Stock Traders Trading Guidelines.


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Substance goals

Outcomes that relate to content

issues.

Relationship goals

Negotiation goals and outcomes

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Outcomes t at reate to ow we

people involved in the negotiations

and any constituencies they

represent are able to work with one

another once the process is

concluded.

Interests of parties may conflict or disagree

Usually a face to face and oral process

No one person knows all the facts

Characteristics of Negotiation

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Parties expect to reach an agreement or a temporary

resolution

No hidden agenda

Failure to reach agreement may be an acceptable

solution

Factors in Negotiation

Negotiation goals Contract or Relationship

Atti tude to negot iation Win / Win or Win / Lose

Personal styles Formal or Informal

Styles of communication Direct or Indirect

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Emotionalism High or Low

Agreement form Specific or General

Agreement bui ldi ng p ress Bottom Up or Top down

Negotiation team or ganization One Leader or Consensus

Risk taking High or Low


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Effective Communication in Negotiations

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Communication is theexchange of information

between entities, which canbe people, animals or

even machines.

What is Communication?

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Information is sent out thatsomeone or something senses,

processes and interprets.

A response may be given, resulting in a back-and-forth communication.

The goal and mission of communication is to build on emotionalconnection and form a partnership with your client.

Build rapport,as opposedtoresistance

Non-verbals are 80% of the perceivedmessage

Rememberthatactions speak louder thanwords

Goals of Communication

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Suspendjudgment of theperson

Acknowledge theiremotions

Try to hear the unspoken meaning of what the person issaying.

Cue yourself to listenifyour mind starts to wander

Askquestions if you donot understand


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Untrained Listeners Trained Listeners

Tune others out, prejudges. Defer their judgment, listen forfeelings and facts

Quick to mentally criticizegrammar/speaking style

Pay attention to content

Try to talk when they should be Listen completely first, make

Typical Habits of Trained and Untrained Listeners

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Listen for facts and errors to proveothers wrong

Listen for main idea, disregardminor points

Try to reply to everything-exaggerations and errors

Avoid sidetracking and sarcasticremarks

Fake attention Give themselves internal cues tolisten

Untrained Listeners Trained Listeners

Try to do something else whilelistening

Realize listening is a fulltime job keep eye contact

Give up too soon Listen carefully, give feedback, askconfirmation

Demonstrate by emotional words, Feel their anger, but control it

Typical Habits of Trained and Untrained Listeners

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ose e r emper

Give little verbal response Make affirmative statements

Unaware of talking/listeningspeed limits mismatch

Maintain patience while listening

Are impatient to get on with it Listen for emotions.

How can I make my point in a more effectivemanner?

Principles in communicatingassertively:

Demonstrate attentive listening behavior

Demonstrate an assuring manner, communicatingcaring andstrength

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Remain as relaxedas youcan.

State clearlywhat itis that you want

State honestlyhow you feelabout the topic


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Words to Avoid Words to Use You have to I want youto Ill try, but Would youmind

Willyou Willing I am Itworks well when

Some Words to Use and Avoid

Remember to make your words and phrases sound positive.

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y on you But

Itsnot our policy. You cant. Its required.

o . Can you tell me about the difficulty

yourehaving Whatwould youlike usto do? Whatwill work best? Letmetake careofthat for you.

Words to Avoid Words to Use

Its necessary. Whats yourproblem? I cant.

I cant helpyou.

Give me a few minutes and Illcheck upon this.

I apologize forthemisinformation.

Our hands are tied by the law, but

Some Words to Use and Avoid

Remember to make your words and phrases sound positive.

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ou s ou ave All we candois Its our policyto

I dont know. Imnew here. Wehavea problem.

ere s w a can o. Lets take careofthis rightnow. Letme findout for you.

Although Im new, Ill get someonetohelp you.

How mayI helpyou? If I canthelpyou, I knowwho can.

The Ma or T es of Ne otiation

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Distributive

A negotiation in which the parties compete over the

distribution of a fixed sum of value. The key question in adistributednegotiation is Whowill claimthe mostvalue? Indistributive negotiations, a gain by one side is made at the

expense of the other.

Major types of Negotiation

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Integrative

A negotiation in which the parties cooperate to achieve

maximum benefits by integrating their interest into anagreement. These deals are about creating value andclaimingit.

Multiple Phases

The prospect of future dealing offer important advantagesforparties who aretrustworthyandwho wouldlike tofostercooperative behavior.

Multiple Parties

Major types of Negotiation

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Business andProfessional negotiations commonly involvemorethantwoparties, andcertainlymorethantwo people.

Distributive Negotiation

Win-lose, zero sum, constant sum

A peso more to one side is a peso less to the other

Carpet sale where buyer and seller have no relationship

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Wage negotiations between business owners and unionemployees

Cards are played close to your vest


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Distributive Negotiation Basics

Play your cards close to your chest

The opposite is equally true

The only thing you should ever tell

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Let them make the first offer

Be realistic

Integrative Negotiation Basics

Multiple Issues

Sharing

Problem Solving

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Bridge Building

Supportive attitudes

Integrativeagreements requirethateachpartymust:

Approach the negotiation with a willingness to trust theotherparty.

Conveya willingness toshare informationwiththe other

Gaining truly integrative agreementsrests on:

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party.

Show a willingness to ask concrete questions of theotherparty.


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Constructive behaviors

Reachingintegrative agreements depends on thenegotiatorsability to:

Separate the people fromthe problem.


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ocuson neres s ra er anpos ons.

Avoid making prematurejudgments.

Keep alternativecreationseparate fromevaluation.

J udge possible agreements on an objective set of

criteriaor standards.

Good information

Each negotiationpartymustknowwhathe/she will do if an

agreementcantbe reached.

Each art mus understand the relative im ortance o the


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other partys interests.

The 7 Critical Elements to

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Successful Negotiation


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7 Critical Elements to Successful Negotiation

1 ALTERNATIVES

2 INTERESTS

3 OPTIONS

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4 LEGITIMACY

5 COMMITMENT

6 COMMUNICATION

7 RELATIONSHIP

1. ALTERNATIVES

These are the walk-away alternatives which each party

has if agreement is notreached.

These are things that one party or another can do by

Critical elements to successful negotiation

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self-help,withoutrequiringthe agreementof the other.

In general, neitherpartyshould agree tosomething thatis worse for that party than its "BATNA" -- its Best

AlternativeTo a Negotiated Agreement.

2. INTERESTS

This is the word we use for what it is that somebody

wants.

Underlying the positions of the parties are their


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Needs,

Concerns

Desires

Hopes

Fears.


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Working Assumption: Focusing on interests rather than

positions increases our chancesofachievinga goodoutcome.

a.We tendtofocus onpositions, not interests

b.We assume thatallofour interestsare opposed

c. Focusingon interests facilitates creativeproblem-solving


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d.Considerthe following guidelines:

Whenpreparing, focus on interests

Focus the negotiation discussion on interests, notpositions

Thinkofpositionsas clues

Use leadership

3. OPTIONS

To identify the fu ll range of possibi l it ies on which the partiesmightconceivably reachagreement.

Working Assumption: It is in the interest of each party in anegotiation to try to inventoptions formutual gain.

a. The Problem


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b. "Either/or" thinkingis seductiveand destructive

c. Inventing can seemdangerous

d. Considerthefollowing guidelines Assume that the pie is expandable

Use our understanding of the relevant interests to guide ourinventing

Separate the process of inventing fromthe processof deciding

Use the Circle Chart

4. LEGITIMACY

Other things being equal, an agreement is better to theextent that each party considers it to be fair as measuredby:

externalbenchmark


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criterion or

principle beyondthe simplewill of eitherparty.

Note that such ex ternal s tandards of fai rness inc lude

international law, precedent, practice, or some principle

such as reciprocity or most-favored-nation treatment.


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5. COMMITMENT

Commitments areoralor written statements aboutwhata

partywill orwon't do.


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Itmaybemade duringthecourse ofa negotiation ormay

be embodied in an agreement reached at the end of the

negotiation.

6. COMMUNICATION

Efficient negotiation requires effective two-waycommunication.

Working Assumption: Each party to a negotiation gains


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y creating an maintainingceartwo-waycommunication.

a. Problem: Negotiations are often plagued bymisunderstanding

b. Cause: When we communicate, we focus on tellingthemwhatwethink

c. Approach: Aimfor two-waycommunication

7. RELATIONSHIP

Improved the abilitytoworking together

Note that the most impor tan t negot iat ions are with


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peop e or ns u ons w w om we ave

negotiated before and will be negotiating again.

Abilityof dealingwithdifferences


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The Structured Negotiation Process

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Critica l Steps

The Principle of Exchange

1. Preparation

2. Proposal

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3. Debate and

Bargaining

4. Closing

1. Preparation Stage

Clarify objectives and expectations

Clarify priorities

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v

Assemble the data needed

Assess the opposition


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S

M

pecific and Stated Simply

easurable and can be Monitored

Objectives and Expectations should be:

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A

R

T

tainable and Achievable

elevant and Realistic

ime-phased and Time-bound

Have a strong opening position

NEGOTIATIONFOLLOWS PLANNED

ROUTE

NEGOTIATION FOLLOWSUNPLANNED ROUTE

OPENING POSITION(STATEMENT)

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TIME WASTERARGUMENT

BUILDER

IDEALOUTCOME

ISACHIEVED

BREAKDOWNCOMPROMISE

The Objective

To create an immediate interestfor further discussionengage the prospect.

The Method

A Professionals Opening Statement

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Work through the following using pen to paper or fingers tokeyboardWhat do I sell? (answer in the fewest words possible)

VISUALIZE! THEN VERBALIZE! DONT BE VICTIMIZED!


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Maximize every word, syllable and pauseThe opening statement is not meant to close a

prospect

Avoid vagueness

Use:

Maximize, increase, row

The Opening Statement

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Minimize, reduce, decrease, eliminate Profit from Specific, specifically Save, conserve

Accumulate, acquire Prevent Fully Immediate, now

How are you today?

TheseThese phrasesphrases maymay bebe usedused atat otherother timestimes duringduring thethe

negotiationnegotiation process,process, butbut theythey havehave nono placeplace inin thethe

openingopening statementstatement

Phrases to avoid in your opening statement

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e o earn a e more a ou your usness o e ermne

Were the leading provider of

We work with several of your competitors such as...

Id like to see if there are some ways we might work together.

Is now a good time to talk?

Did I catch you at a bad time?

Assessing the Opposition

What do I have

that countersexternal

What is in the

environment thatlessens my

MYViewofthe

WORLD

Strengths-Threats Opportunities-Weaknesses

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What is in theenvironment that myopponent can use tomake me weaker?

What does myopponent have thatincreases externaldifficulties?

OPPOSITIONS

ViewoftheWORLD


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Negotiators take their own perception of realityas the key to agreement.

Negotiators assume their perceptions of realityare thesame as those of the other art .

The Fatal Pitfalls

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Negotiators recognize that the other partiesperceptions of reality are different from their own,but concludethattheyre wrong or irrelevant.

2. The Proposal Stage

Making a proposal

Responding to a proposal

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Making a Proposal Dos

Listen carefully to the other party

Leave room for maneuvering

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Make conditional offers

Probe the attitudes of the opposition


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X Make too many concessions at an early stage

X Make you opening offer so extreme that you

lose face by climbing down

Making a Proposal Don'ts

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X Answer questions directly with a simple yes orno

X Make the opposition look foolish

Responding to a Proposal

Countering typical tactics

1. Making threats

2. Offering insults

3. Bluffing

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4. Using intimidation

5. Dividing and ruling6. Using leading questions

7. Making emotional appeals

8. Testing the boundaries

TACTICS COUNTER-TACTICS

Makingthreats

Inform the other party that you cannotnegotiate under pressure/ threat and concedeonly if they can validate the merits of the case.

Countering Typical Tactics

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Offeringinsults

Relax, stay calm and do not retaliate back.Restate your position firmly and warn thatnegotiations will proceed only in a moreconstructive atmosphere.

Bluffing Call their bluff, wait for a reaction and ask forevidence to support their claims.


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Usingintimidation

Avoid being coerced as a result of lack ofconfidence. Drop your terms only if you gainconcessions in return.

Dividin and Brief members in advance and a ree on an


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ruling acceptable position. Call for an adjournmentif differences in the group signal the loss ofthe position.

Using leadingquestions Avoid responding if you do not know the

agenda behind the question.


Makingemotionalappeals

Constantly affirm your commitment. Test thevalidity of manipulative questions to lead theopposition back to the issue at hand.


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Testing theboundaries

Everyone should know exactly what you areagreeing on. Write the worded statement to

bind the parties to the issues.

Dealing with unhelpful

behavior of the otherparty

3. The Debate and Bargaining Stage

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Knowing your roles

Using conflict to your

advantage


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Dealing with unhelpful behaviorof the other party?

1. The Confused Ne otiator

The Debate and Bargaining Stage

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2. The Indecisive Negotiator

3. The Aggressive Negotiator

4. The Emotional Negotiator

OPPOSITION

TYPE

STRATEGY

Confused Visual aid avalanche; Sentence clearing; Step-by-step approach.

Indecisive Reiteration avalanche; Review, adjourn and meetat another time; Present the same ideas in a fresh

The Faces of the Other Party

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manner.

Aggressive Reiteration avalanche; Keep calm and avoidhurting words/ violent tone; Emphasize thataggression is not your style; Adjourn until tempercools.

Emotional Do not overtly challenge the motives; Allow theperson to finish until he/ she tires then use theoppositions last salvo to introduce your own.

Knowing your roles:

1. The Leader

The Debate and Bargaining Stage

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. uy

3. The Bad Guy

4. The Hard L iner

5. The Sweeper


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The Faces of your Team

ROLES RESPONSIBILITIES

Leader Most senior/ with the most expertise. Leading the team andmaking most of the important decisions.

Good Guy The bait. Expresses sympathy for the agenda of theopposition to create a false sense of security.

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Bad Guy The dam. Stopping the negotiations when needed.Undermining the arguments of the opposition and

intimidating the opponents.

Hard Liner The short circuit. Delays progress through stalling tactics.Records progress and keeps the team on track.

Sweeper The gatekeeper. Brings the team out of a deadlock. Pointsout inconsistencies in the opponents arguments.

Integrating Roles

STYLES INDICATORS

Avoider RUN AWAY! You completely withdraw from conflict as if itdoes not exist.

Accommodator I GIVE UP, LETS DO IT YOUR WAY! You put aside yourgoals and basically give in, although inside you are frustrated

Conflict Management Styles

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and angry.

Forcer MY WAY, OR THE HIGHWAY! You force your point until theother party eventually gives in.

Compromiser MEET YOU IN THE MIDDLE! You give up something and sodoes the other party, but neither one is satisfied.

Collaborator LETS DO IT TOGETHER! You and your investor worktogether to find a solution that satisfies both of you.

4. The Closing Stage

Offering concessions that areagreeable to all parties

Splitting the difference betweenall parties

Giving the other party a choicebetween two acceptable

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Introducing new incentives at alater stage

Introducing new ideas/ facts atlater stage

Suggesting adjournment when astalemate occurs


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Analyze your right to close

ASK

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eize opportunities to close

Know the techniques for closing

A nalyze Your Right To Close

Askyourself ifyou have earnedthe right to close.

Have you positioned yourself as a partner to yourcustomer?

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problems?

Have you made a thorough presentation, and presentedtheappropriate benefits?

Have youansweredand handled objections?

Seize opportunities to close

Watch for buying clues

Cost

Financing

Timing

Payments

Administration

Tests

Conversion

Validation

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References

Demonstration

Installation

Trial Run

Training

Pilot Program

Servicing

Specific measurements

Credit

Logistics

Terms


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Know the techniques for closing

Ask the right closing question, the right way, at the

right time.

Practice the techniques, until they become second

nature to you.

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1. Expertise on the subject.

2. Personal commitment to the subject.

3. Personal commitment to the other party.

The Judgment Areas

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4. Honest/trustworthy character.

5. Dynamism and energy.

6. Institution/company represented.

Planning a negotiation requires extensive preparation and,depending on the complexity of the situation, rehearsals. Areas thatthe negotiator (or negotiation team) needs to concentrate on are:

Establishing a proactive negotiation strategy through thoroughplanning and preparation; win - win strategy

Understanding what issues or concerns (all parties) need to be

Planning for the Action: Effective Preparation

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Understanding human behavioral and communication styles

How to establish bargaining tactics

Resolving deadlocks and impasses

How to gather information prior to and during the negotiation

Individual and team negotiation strategies

Negotiating during the project with both internal and externalproject members, including day-to-day working relationships


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Integrated Negotiation Process

This is a unique combination framework that puts together the best of

many other approaches to negotiation.

Prepare Know what you want. Understand them

Open Put your case. Hear theirs

Ar ue Su ort our case. Ex ose theirs

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Explore Seek understanding and possibility

Signal Indicate your readiness to work together

Package Assemble potential trades

Close Reach final agreement

Sustain Make sure what is agreed happens

DAY 2 People and Negotiation

Types of Negotiators Understanding and Assessing Personality Profiles Handling different profiles

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Team Negotiations Concepts and Best Prac tices

Moving from Reactive to Proactive: Taking Control of

Negotiation Power, Persuasion and Positional Bargaining Developing Relationships Ensuring Success through Creativity

People and Negotiation

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3 Types of Negotiators

There are three different types of negotiators as compared to thethree different kinds of businesspeople:

Sharks

Believe inscarcity.

Carp

Like sharks, carp believe in scarcity; but

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unlike sharks, carp believe that in anegotiation, they can never be thewinners.

Dolphins

Have the ability to successfully adapt toanysituationtheyencounter.

The Sharks

Their perception is that in all negotiations, there mustbe winnersandlosers.

To ensure that they wont be the losers, sharks move in for thekill,striving toget as much as they can in every case, regardlessof the cost.

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,off.

It is difficult to negotiate with sharks because they lack the abilitytouse creativestrategies.

They are unable to try anything different or learn from theirmistakes. Their attitude of scarcity dictates their actions andreactions.

The Carp

Carp do not like any type of confrontation, so their

normal response in negotiating is to give in or get out.

People who always get out and avoid negotiations

become cut offandisolated.

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The give in strategy is even worse--people who

constantly give in eventually have nothing left, and are

eaten alive.


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The Dolphins

The dolphin illustrate the ideal negotiator because of the animalshighintelligence andability to learnfromexperience.

When dolphins do not get what they want, they quickly andprecisely alter their behaviors in sometimes ingenious ways inpursuitofwhattheyareafter.

If one strategy is unsuccessful, dolphins respond with other

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possibilities. They learn from their mistakes and the mistakes ofothers.

Dolphins believe in both potential scarcity and potential

abundance.

Dolphins know that the win/win strategy is ideal in negotiation,therearetimes when theywill deliberatelyusea win/lose strategy.

The Dolphin Like Negotiator

In negotiation,dolphins have four keycharacteristics:

1.Theyplay an infinite rather thana finite game.

2.They avoidunnecessaryconflictbycooperating as long as theother partydoes likewise.

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3.They respond promptly to a mean move by retaliating

properly.

4.Whilequicktoretaliate, dolphinsarealsoquicktoforgive.

Team Negotiations Concepts and

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Team Negotiations: Four Key Concepts

BATNA(Best Alternative To a Negotiation Agreement)

Reservation Price

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ZOPA

(Zone Of Possible Agreement)

Value Creation through Trades

Best Alternative to a Negotiated Agreement (BATNA)

Typical example: negotiate or go to court

Improving your situation

Know your BATNA!

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Improve your BATNA

Identify the other sides BATNA Weaken the other partys BATNA

BATNA: yours and theirs, know them

Identify value creation opportunities

Determine negotiation authority level

Preparing for a Negotiation using BATNA

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Understand the people and their culture

Prepare for flexibility

Show fairness in your position

Alter the process in your favor


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The least favorable point at which one will accept a deal

The walk-away

Example: you are looking for larger office space. You set

Reservation Price

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your BATNA at $20/SF and your Reservation Price at$30/SF

Zone of Possible Agreement (ZOPA)

The difference between the sellers reservation price andthe buyers reservation price

What happens if positions below are reversed?

ZOPA

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ZOPA$250k $275k

BuyersReservation

Price

SellersReservationPrice

Trade things you value less to the other party

Examples:

For a supplier the greater value may be not price but an

Value Creation through Trades

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For a customer, extended warranty versus price

For an employee, working at home versus salary


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Power, Persuasion andPositional Barga ining

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Understanding sources and effec tively using power

The use of power in Negotiation

Parity in Power

Interpersonal Power

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Reward Power

Coercive Power Expert Power

Referent Power

Parity in Power

In negotiation, parity of power is the perception that

the other side possesses the ability to counter anyformof power.

Parity in power refers to balance in power

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ep oymen .

Parity in power is a key factor in the behaviour of asuccessful negotiator.


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Interpersonal Power

LEGITIMATE POWER

Derived fromtheability to influencebecauseofposition.

Sometimes one party will use legitimate power as a tactic

against anotherparty by:

bringing in someone who has the influence to make

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important decisions, and who has credibility with the other

partyor by

assigning a lotof legitimate power to an individual/s within

opposing partiesso as to usetheneed for powerand status

that exists in all individuals to get major concessions from

them.

REWARD POWER

Reward power is used toback uplegitimate powerbythe useof:

Non-verbal rewards, e.g.,

Givingindividuals in the otherparty morespace atthe table

Interpersonal Power

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Nodding o the head toindicateapproval and acceptance

Eye contacttoindicateattention

Open and non-aggressive gestures to indicate acceptance

andrespect.

Rewards could also take the form of verbal promises of

financialbenefits tobegained byestablishing a relationship.

COERCIVE POWER

Coercive power is theopposite ofreward power.

It is the ability of the power holder to take something away

fromthetargetpersonor

Interpersonal Power

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topunishthe targetfornon-compliance witha request.


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EXPERT POWER

A person who possesses expertise that is highly valued hasexpertpower.

An individual may possess expertise on technical,

administrative, or personalmatters.

Are methods by which a negotiator can establish an expert in

Interpersonal Power

97

the eyes o theother party b :

Citingfactsand figures

Namedropping'

Citing examples of detailed experiences gained in well-known institutions

Being known through the press or through other people, or

through writing articles in well-known journals (by beingvisible)

REFERENT POWER

Based onthe charisma oftheperson.

Charisma is a term used to describe the magnetic personalities

ofsomepoliticians,entertainers andsports figures.

Interpersonal Power

98

Referent (or personal) power is basedon the target's attraction

to the power holder - liking, perceived similarity, admiration,

desiretobeclosetoor friendlywith the powerholder.

1. Law of Reciprocity

2. Law of Commitment and

Consistency

3. Law of L ik ing

The Six Laws of Persuasion Overview

99

4. Law of Scarcity

5. Law of Authori ty

6. Law of Social Proof


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1. Law of Reciprocity

Humanbeings, ingeneral, tryto repay in kindwhat anotherperson has providedtothem.

If someone gives you something you want, you willreciprocate because younowfeelobligated.

Using theLaw of Persuasion

100

Limited disclosure/confession of the real reason for anegotiation stance can provoke a concession from theother party.

Concessions ingeneral followthis tit-for-tatrule

the low er the value of the concession on your part, of course, the better

2. Law of Commitment and Consistency

Make a commitment to a cause orproduct, however small,itthenbecomes easier tobe convinced toincrease it.


Getting the othe person in saying yes, yes immediately

101

occurs when one party asks the other side to make anumber of smalldecisions that lead to only one obvious

conclusion: toacceptthe generalconcession. You could employthis principle byasking a potential client

if he/shevalues qualityin yourproductorservice.

3. Law of Liking

Establ ish rapport by demonstrat ing how simi lar they areto their potential buyers.


This law is oftenseen inthestrategy ofgoodcop,bad cop.

102

You need to identify with and trust thegoodteam member,so you may find yourself agreeing to the other teamsconcessionsand goals insteadofyourown.


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4. Law of Scarcity

If you are not sure you want to buysomething, the minute itbecomes the last one available you tend to have secondthoughts.

To you. This indicates that others are purchasing it, and youmight not be able to get another one quickly, or atall, if youdecide you wantit later.

103


The more time you spend with a salesperson, the morecommitment he or she has to make the deal. If you areunder no time pressure and the other side is, you have theupperhand.

5. Law of Authority

This is the law that uses celebrity endorsements or experttestimonials.


Ex erts sa our roduct is the best.

104

But who are these experts?

What are their qualifications to make these claims?

Do they have a vested interest in selling the companysproducts or services?

In addition, use this Law to establish your own credentials/credibility early in the negotiation.

6. Law of Social Proof

Part of the reason you laugh along anyway in spite of yourannoyance lies in how you decide what is socially correctbehavior.


105

This law works when you draw on testimonials fromsatisfied customers or clients (unscripted ones are best) toencourage new prospects to buy your services andproducts.

The law also can be used to convince your supervisors orstaff that their counterparts in other divisions or companiesarefollowing similarsuggestions toyours.


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1. Be clear, inyourown mind,about exactly what you're after.

2. Do your homework, so that you are fully prepared to discuss

everyaspectand respond toevery questionandcomment.

3. Be persistent.Don'texpect to "win" thefirsttime.Yourfirst job is

justto start the other person thinking.

Positional Bargaining

106

4. Make friends with the person with whomyouare bargaining.Put

your bargain in terms of his or her needs, advantages, and

benefits.

5. Keepyoursense ofhumor.

Developing Relationships

107

Negotiation Relationships

Businesses have evolved andchanged in how they conductbusiness.

Lower levels of management and

108

responsibilityandauthority.

There has been evolutionarychange in interaction to achievemore cohesive and durablepartnerships.


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There are 3 reasons for this change in behaviour

1. Taking future

considerations into

account

109

2. Give some - get some

in return

3. Creating trust moves

us fur ther ahead

Ensuring Success through C reativity

110

The 7 Principles of Negotiation

1. Creating a Win-Win situation

2. Listening skil ls

3. Creativity

111

.

5. Research

6. Confidence is the key to asuccessful negotiation

7. Knowing when to Walk Away


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1. Creating a Win-Win situation

When you approach a negotiation with the right attitude, ittakes the pressureoff of bothparties. Therightattitude is tocreatea win-win situation.

112

Remem e t at, If one part y is onl y i n he process for themselves, a resolut ion wi l l be di ff icul t to come by.

2. Listening skills

Your ab il it y to ask the r ight ques tions, and l is ten to theanswers, is your #1 most important negotiating skil l.

A skilled negotiator enters a negotiation with a questioningmindset.

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Learn what your customer needs, wants, what makes themsuccessful, andhow you cansell to them.

3. Creativity

This relates tocreative problemsolving.

When you're approaching a negotiation as a win-winsituation and you're listening to the needs of the otherparty, creative problem solving can help design a solution

114

thatmeets everyone's needs.

Neg ot iat ion i s abo ut m ore th an winning the highestcontract.


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4. Patience

Many negotiations takestime.

Creating a solution that works for both businesses can takeseveral drafts, have to be approved byseveral parties, andquite honestly many businesses aren't accustomed to win-win negotiations so they may take some time to adjust to

115

theconcept.

Give them (customers) the time they need because whenyou show you're willing to be patient and that you'reinvested in their interests too, they'll be willing to work withyou today and ten years fromnow.

5. Research

Take the time to learn all you can about the businessyou're negotiating with and you'll be one step ahead tounderstanding

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Concerns, and

How youcan work together to come upwith a mutuallybeneficial solution.

6. Confidence is the key to a successful

negotiation

If you show fear, the person or company you're

negotiating with canperceive thatas power overyou

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service.


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7. Knowing when to Walk Away

All negotiations donot result in a win-win situation.

Sometimes it's better to walk away but more importantly it isbettertobeprepared towalk away.

118

power away.

Go into a negotiation with a positive attitude and a desire tomake itwork; however keep the awareness that itmaynot inyour backpocket.

119

Negotiating to Win Participant's Manual

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