Negotiation Skill
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Transcript of Negotiation Skill
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Negotiation Skill
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The word "negotiation" originated from the Latin expression, "negotiatus", which means "to carry on business".
“A give-and-take decision-making process involving interdependent parties with different preferences.”
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Negotiating is the process of communicating back and forth, for the purpose of reaching a joint agreement about differing needs or ideas.
It is a collection of behaviours that involves communication, sales, marketing, psychology, sociology, assertiveness and conflict resolution.
A negotiator may be a buyer or seller, a customer or supplier, a boss or employee, a business partner, a diplomat or a civil servant. On a more personal level negotiation takes place between spouse’s friends, parents or children.
Defined :
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Where Do We Use This Skill?
Family and personal
“Where should we go for dinner?”“Can I borrow the car?”
Academic research
“Fund my project.”“Publish my paper.”
Business ventures
“I want a raise.”“Invest in my company.”“Pay me a license fee or I’ll sue you.”
Everything is negotiated
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Features Of Negotiation• Minimum two parties
• Predetermined goals
• Expecting an outcome
• Resolution and Consensus
• Parties willing to modify their positions
• Parties should understand the purpose of negotiation
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Types Of Negotiation In Organizations
Managerial Negotiations
Day-to-day:1. Different levels of Management2. In between colleagues3. Trade unions4. Legal advisers
Examples:1. Negotiation for pay, terms and working conditions.2. Description of the job and fixation of responsibility.3. Increasing productivity
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Types Of Negotiation In Organizations
Commercial Negotiations1. Management2. Suppliers3. Government4. Customers5. Trade unions6. Legal advisors7. Public
Examples:1. Striking a contract with the customer.2. Negotiations for the price and quality of goods to be purchased.3. Negotiations with financial institutions as regarding the availability of capital
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Types Of Negotiation In Organizations
Legal Negotiations1.Government2.Management3.Customers
Examples:1. Adhering to the laws of the local and national government.
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Prepare
Negotiate
Close
Perform &
Evaluate
NegotiationProcess
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Preliminary Question:1. Should I negotiate?2. Is this a position-based or
interest-based negotiation?3. Am I trying to resolve a dispute
or make a deal?4. How should I analyze a
negotiation?5. Is this a cross-cultural
negotiation?6. How should I handle ethical
issues?7. Should I use an agent to
negotiate for me?
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1. Should I Negotiate? Prepare
• Ashan Mudir buying a big screen TV• Lost of research on different models and
dealer's costs.• Visited several dealers• Combines price of TV with installation,
satellite dish, etc.• Obtained price concession by
mentioning competitor's offer.• Saved $120. A successful negotiation?
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1. Should I Negotiate? Prepare
In making a decision about whether to negotiate, consider your feelings about negotiation as well as the potential risks and rewards.
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If you don't know where you are going, you may end up somewhere else.
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2. Position or Interest Prepare
Interest-based Bargaining / Win-win Bargaining
Integrative bargaining in which parties collaborate to find a “win-win" solution to their dispute.
This strategy focuses on developing mutually beneficial agreements based on the interests of the disputants.
Interests include the needs, desires, concerns, and fears important to each side.
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2. Position or Interest Prepare
Interest based Bargaining
Positional bargaining is one that involves holding on to a
fixed idea, or position, ofwhat you want and arguing for it and it alone, regardless of any underlying interests.
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2. Position or Interest Prepare
Position based Interest based
Distributive Integrative
Competitive Cooperative
Win / Lose Win / Win
Zero Sum Non-Zero Sum
Adversarial Problem Solving
Position based Interest based
Calming Value Creating Value
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3. Dispute Resolution or Deal Prepare
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3. Dispute Resolution or Deal Prepare
4:00 am: Students began forming a line (freezing weather) to purchase basketball tickets.
7:00 am: Other students formed a second line nearby and demanded that students in the first line move to the back of their line.
What processes could be used to resolve this dispute?
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3. Dispute Resolution or Deal Prepare
4:00 am: Students began forming a line (freezing weather) to purchase basketball tickets.
7:00 am: Other students formed a second line nearby and demanded that students in the first line move to the back of their line.
What processes could be used to resolve this dispute?
Power Litigation Arbitration Mediation Negotiation Avoidance
6 Types of Dispute Resolution
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3. Dispute Resolution or Deal Prepare
Resolving Dispute options:
Power Use power to force the other side to do what we want.
Rights Let a third party (a judge or arbitrator) decide who is right.
Avoidance Withdraw from the dispute and let the other party have what they want.
Interest Try to negotiate an agreement based on our need..
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4. Analyzing Negotiation Prepare
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4. Analyzing Negotiation Prepare
Key Questions
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4. Analyzing Negotiation Prepare
Risk of Stretch Goal
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4. Analyzing Negotiation Prepare
Possible Answer
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BestAlternativeToNegotiatedAgreement
BATNA
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Why BATNA Matter
BATNAs tell you when to accept and when to reject an agreement.
When a proposal is better than your BATNA: ACCEPT IT
When a proposal is worse than your BATNA: REJECT IT
Your “BATNA “ is the only standard which can protect you both from accepting terms that are too unfavourable and from rejecting terms it would be in your interest to accept.” In the simplest terms, if the proposed agreement is better than your “BATNA”, then you should accept it. If the agreement is not better than your “BATNA” , then you should reopen negotiations.
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Determining Your BATNABATNAs are not always readily apparent. Fisher and Ury outline a simple process for determining your BATNA:• develop a list of actions you might conceivably take if
no agreement is reached;
• improve some of the more promising ideas and convert them into practical options; and
• select, tentatively, the one option that seems best.
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4. Analyzing Negotiation Prepare
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4. Analyzing Negotiation Prepare
Other Perspective
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4. Analyzing Negotiation Prepare
ZOPA (Zone of Potential Agreement)
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Case: Dispute Resolution
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Using Decision Tree Analysis
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5. Cross-Cultural Negotiation Prepare
Analyze Your Interest Analyze Other Side's InterestsEvery Culture
NegotiatingStyle
Values and Beliefs
Other Side'sInterest
YourInterests
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5. Cross-Cultural Negotiation Prepare
Culture can influence negotiation.
But: Many variations with in a culture.
Therefore: be sensitive to culture but don't stereotype
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6. Handling Ethical Issues Prepare
Legal Ethical
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6. Handling Ethical Issues Prepare
Legal
FraudFalse Representation of material fact
Fiduciary DutyHigh duty of trust and loyalty
UnconscionabilityViolates principles of good conscience
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6. Handling Ethical Issues Prepare
Ethical
Organizational Standards
MentorSomeone you admire
Personal StandardsGut Test
Newspaper TestFamily Test
Golden Rule
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6. Handling Ethical Issues Prepare
Mentor
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6. Handling Ethical Issues Prepare
Gut Test
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6. Handling Ethical Issues Prepare
Family & Newspaper
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6. Handling Ethical Issues Prepare
Except Economical Rational,
Why would you reject the part of split?
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Accommodating Collaborating
DominatingAvoiding
Compromising
Negotiating Style
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7. Should I use Agents Prepare
• Is the agent a better negotiator?
• Does the agent have more experience in negotiating the issues.?
• Does the negotiation involve a technical matter that requires the expertise of an agent?
• How much time do I have to invest in a negotiation?
• What is my relationship with other side?
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Issues In Negotiation
The Role of Mood & Personality Traits in Negotiation;
Positive moods positively affect negotiations
Traits do not appear to have a significantly direct effect on the outcomes of either bargaining or negotiating processes (except extraversion, which is bad for negotiation effectiveness)
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Gender Differences In Negotiations;Women negotiate no differently from men, although men apparently negotiate slightly better outcomes.
Men and women with similar power bases use the same negotiating styles.
Women’s attitudes toward negotiation and their success as negotiators are less favorable than men’s.
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Thank You
Negotiation means getting the best of your opponent. ~ Marvin Gaye