Negotiation skills
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Transcript of Negotiation skills
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Negotiation Skills
Abhijith R
Negotiation
The word "negotiation" originated from the Latin expression, "negotiatus", which means "to carry
on business".
The process of conferring to arrive at an agreement between different parties, each
with their own interests and preferences.
“A give-and-take decision-making process involving interdependent parties with different
preferences.”
Definition
“Negotiating is the process of communicating
back and forth, for the purpose of reaching a
joint agreement about differing needs or
ideas.”
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
Why Do We Negotiate?
To reach an agreement
To beat the opposition
To compromise
To settle an argument
To make a point
Types Of Negotiation
Distributive Negotiation
Integrative Negotiation
Distributive Negotiation
Parties compete over the distribution of a fixed sum of value. The key question in a distributed negotiation is, “Who will claim the most value?” A gain by one side is made at the expanse of other.
The Seller’s goal is to negotiate as high a price as possible; the Buyer’s goal is to negotiate as low a price as possible.
Integrative Negotiation
In Integrative Negotiation, parties cooperate to achieve maximize benefits by integrating their interests into an agreement. This is also known as a win-win negotiation.
In an integrative negotiation,, there are many items and issues to be negotiated, and the goal of each side is to “create” as much value as possible for itself and the other side.
Distributive Versus Integrative Negotiation
TypeDistributive Negotiation Integrative Negotiation
Outcome Win-Lose Win-Win
Motivation Individual Gain Joint & Individual Gain
Interests Opposed Different. But not always opposite.
Relationship Short-term Long-term
Issues involved Single Multiple
Solution Not Creative Creative
Negotiation Process
Preparation
Information Sharing
Bargaining
Finalizing The Deal
Basic Principles Common To All Forms Of Negotiation
There are minimum 2 parties involved in the negotiation process. There exists some common interest, either in the subject matter of the negotiation or in the negotiating context, that puts or keeps the parties in contact.
Though the parties have the same degree of interest, they initially start with different opinions and objectives which hinders the outcome in general.
In the beginning, parties consider that negotiation is a better way of trying to solve their differences.
Each party is under an impression that there is a possibility of persuading the other party to modify their original position, as initially parties feel that they shall maintain their opening position and persuade the other to change.
During the process, the ideal outcome proves unattainable but parties retain their hope of an acceptable final agreement.
Each party has some influence or power – real or assumed – over the other’s ability to act.
The process of negotiation is that of interaction between people – usually this is direct and verbal interchange.
Characteristics Of An Effective Negotiator
He should be a good learner and observer.
Should know the body language of the people at the negotiation process.
Should be open and flexible and yet firm.
Exercise great patience, coolness and maturity.
Should possess leadership qualities.
Should control emotions and not show his weaknesses.
Should bargain from the position of strength.
Should know and anticipate the pros and cons of his each move and its repercussions.
Should know how to create the momentum for the negotiations and must know when to exit and where to exit by closing the talks successfully.
Should build trust and confidence.
Should be confident and optimist.
Should have clear cut goals and objectives.
If necessary, he should provide a face saving formula for his counter party.
Should be able to grasp the situation from many dimensions.
Should know human psychology and face reading
Should not be a doubting Thomas.
Should be a patient listener.
Should plan and prepare thoroughly with relevant data and information to avoid
blank mind in the process.
Should radiate energy and enthusiasm and must be in a position to empathize with his opponents.
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Types Of Negotiation In Organizations
Managerial Negotiations
Types PartiesInvolved
Examples
Day-to-day/ Managerial
Negotiations
1. Different levels of Management
2. In between colleagues
3. Trade unions
4. Legal advisers
1. Negotiation for pay, terms and
working conditions.
2. Description of the job and fixation of
responsibility.
3. Increasing productivity.
Commercial Negotiations
Types PartiesInvolved
Examples
Commercial Negotiation
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1.Management 2.Suppliers
3.Government 4.Customers
5.Trade unions 6.Legal advisors
7.Public
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
Legal Negotiations
Types PartiesInvolved
Examples
Legal Negotiations
1. Government
2. Management
3. Customers
1. Adhering to the laws of the local
and national government.
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10 Techniques for Better Negotiation
1) Prepare, prepare, prepare
2) Pay attention to timing
3) Leave behind your ego.
4) Ramp up your listening skills.
5) If you don't ask, you don't get
6. Anticipate compromise
7. Offer and expect commitment
8. Don't absorb their problems
9. Stick to your principles
10.Close with confirmation.