Negotiation Strategies.pptx

7/21/2019 Negotiation Strategies.pptx

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NEGOTIATION STRATEGIES

STYLES

SELLING & NEGOTIATION

SKILLS


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NEGOTI TION STR TEGIES

Strategyis the overall approach for conducting the

negotiation.

Tacticsare particular actions used to implement a

strategy.


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NEGOTI TION STR TEGIES

Whereas a strategyprovides the overall approach used

throughout the negotiation, a tacticis particular action

used at a specific time during the negotiation to serve a

more limited role or purpose.


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NEGOTI TION OUTCOMES


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THE DU L CONCERNS MODEL

How much concern does the actor have forachieving the substantive outcomes at stake in thisnegotiation?

(substantive goals)

How much concern does the negotiator have for thecurrent and future quality of the relationship with

the other party?(relationship goals)

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Negotiation Styles

Assertive

Unassertiv

e

Uncooperative Cooperative

Lose/ Lose

(Avoidance)

Win / Lose

(Competitive)

Lose/ Win

(Accommodating)

Win / Win

(Collaborating)

Compromise


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Win Lose Style

The win-lose is the most common style of distributive negotiationwherein a person pursues his or her own wishes at the expense of

other party.

Under this style negotiation is viewed as a game to be won.

Losing may be taken as failure, weakness, and a loss of status.

When engaged in this style, the parties may use different tactics to

win like: persuasion, argument, power, or even threat.


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Usefulness

A forceful position during negotiation may be appropriate when thestakes are high and costs of indecision and compromise are non-affordable.

It is useful when issues of legality and ethics are at hand.

Where you do not expect to deal with people ever again, and you do

not need their goodwill.

When there is only one prize.

At management level, this style is helpful when unpopular butnecessary decisions must be made.

Win-lose is also a style to use when the other party has a tendencyto take advantage of you.


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Avoiding Style

Avoiding the conflict in certain situationsneed of no negotiation

at allis also a negotiation.

People may physically withdraw by simply leaving the scene of

conflict or they can refuse to get involved by using silence, orchanging the topic of conversation.

Psychologically, avoiders can also deny the existence of conflict.

During formal negotiation, avoiding style is exercised by payingdeaf ear and / or blind eye to the conflicting stimulus.


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Usefulness

Useful when:

your involvement will only result in negative outcomes for you;

issue is insignificant;

cost of challenge / cost is quite high;

there is little chance of success;

relationships are more important to be maintained;

to buy time and / or get other party cool down.


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Accommodating Style

Accommodating style of negotiation entails giving in to the wishes

of the opponent party.

Like avoidance, accommodating the other party almost in one-

sided way, is also a negotiation.

Unlike avoiders, the accommodators enter into negotiation and

give in a way that strengthens the relationships.

During negotiation, giving in totally / partially may be part ofstrategic maneuvering.


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Usefulness

When other issues are more important that need satisfying others

and maintaining cooperation.

When social credit is to be built for some latter issue.

To minimize loss when one is already losing.

When relationships are more important than the interests.

Though frequent yielding is not a virtue, a yielding to a fellow in

ire, a balanced yielding among spouses, or even the frequent

yielding obedience of a child to a parent or teacher is a healthy

move.


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Compromising Style

Compromising, the most common style of conflict resolution,

entails splitting the differences and reaching an acceptable middle

ground solution through give-and-take whereby each party should

gain something and may have to lose something.

Parties under this style of negotiation, generally use techniques

like trading, bargaining, smoothing over differences, and voting

etc.

Most of the negotiations though start with lose-win style, do endup at the compromising style.


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Usefulness

It is useful:

when two parties have relatively equal power and havemutually exclusive goals;

when time is not available to solve problems that are complexand require a great deal of effort to sort out all the issues;

to allow for a temporary solution until more time could bedevoted to unravel and analyze the complexities; and

when competition or collaboration fails to lead to a solution.


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Collaborating (Win-Win) Style

Collaborating is based on a willingness to accept other partys

needs while asserting your own needs as well.

It assumes that there is some reasonable chance that a solution can

be found to satisfy both parties in conflict without losing much.

Such solution, most of the time, is not possible but a collaborator

believes that it is worth trying to find that.


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Negotiation Strategies

Amar and Hari decided to purchase an office for their newly

started business three months ago. Their first choice was an office

located in a new development, and priced Rs. 500, 000 (about Rs.

25,000 above their limit). Amar thought they could get the price

down through negotiation with the salesman Mr. Shah around theirlimit while Hari was less optimistic in that regard.


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Negotiation Strategies

Amar and Hari decided to purchase an office for their newly

started business three months ago. Their first choice was an office

located in a new development, and priced Rs. 500, 000 (about Rs.

25,000 above their limit). Amar thought they could get the price

down through negotiation with the salesman Mr. Shah around theirlimit while Hari was less optimistic in that regard.


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Amar conducted some research on the development and learned that

several of the offices including the one they liked had been on the

market almost a year. Though the house they liked was their first

choice, other offices were also quality offices and could be

accepted as a second choice. Amar met the other salesman, Mr.Agha and learned that the prices of those offices were also within

their limit. With this homework done, he made an appointment

with Mr. Shah and decided to meet him alone.


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Amar informed the

salesman he really liked

the office and might besincerely interested at a

lower price such as Rs.

450,000.

LOWBALL

He was going for thelowest possible price.

Approach Strategy

VINEGAR-HONEY


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Approach Strategy

The salesperson sounded

shocked and said, That isimpossible, we would not

even consider it.Amar

anticipated that response,

and asked, If you would

not accept Rs. 450,000,

what will you ask?

PINPOINT THE NEED

It had been established

that the seller would takeless than the asking price

but not Rs. 450,000. The

task then was to pinpointhow much less than Rs.

450,000?


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Approach Strategy

The salesperson did somefiguring before he said Rs.

490,000.Amar was prepared

for this response who tried

another strategy saying, Mr.Agha has recently sold two

office of similar stature for

Rs. 470,000, and several

others are available with him.

Why would not you do the

same for me?

A strategy designed to put the

other party on the defensive

in an effort to win someconcessions. Added to the

Pinpoint, the Need strategy

assists in determining what

the seller will actually take.

CHALLENGE


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Approach Strategy

The salesperson said,That house went

cheaper, anyway perhaps I

could trim the price to Rs.485,000 but you will have

to pay 20% cash down

and the rest within one

week.Amar guessed the

salesman has a room to

tread downward and said,


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Approach Strategy

Down payment is notthe problem but I cannot

pay the rest before three

weeks. It is impossible,

said the salesman, our

company rules do not

permit it.Amar replied,

But I cannot pay at leastthis much within this

period of time.

FEINTING

This strategy gives the

impression one thing is

desired whereas primary

objective is really

something else.


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Approach Strategy

Politicians use a variationof this strategy to test

receptivity by the public to

something they plan to do.

This planned action is

leaked by a reliable

resource to testacceptability before

final action is taken.


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Approach Strategy

I do not think I could make

further concession, said the

salesman. Ok! Let me consult

my business partner since finaldecision will only be after our

mutual consensus, saidAmar

and left the salesmans office.

LIMITED AUTHORITY

Limited authority is an

attempt to postpone the

decision on a pretext to getapproval from a competent

authority. Whereas the real

aim is to gain time for

reconsideration, and / orkeeping the opponent under

pressure for a possible

negotiation breakage.


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Approach Strategy

Next day, Amar appeared inthe salesmans office again

along with Hari, his business

partner and reiterated his

yesterdays position that theycould not pay Rs. 485,000 at

least within one week. It

seems difficult to give any

further concession without

consulting the builder, said

the salesman.


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Approach Strategy

I told you not to approach thisagency, you could never conclude any

deal with them, growled Hari and

stepped out of the office.

You are spoiling an almostconcluded deal. I offer Rs.475,000

though I am not sure my partner will

agree to it. A slight budge from your

position can bring the deal back on

track, murmured Ahmed to the

salesman in confiding style.


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Approach Strategy

By the time you bringyour partner back, I call to

the builder for his

opinion. I think it ispossible to reach a deal,

said the salesman while

dialing a telephone

number when Amar

walked out of his office to

trace his estranged

business partner.

GOOD GUY / BAD GUY

The good guy / bad guy

is an internationally

used strategy. One

member of a team takes

a hard line approach

while other member isfriendly and easy to

deal with.


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Approach Strategy

When bad guy steps out

for a few minutes, the

good guy offers the deal

that under the

circumstances seems too

good to refuse. Bad guys

usually comprise spouses,lawyers etc.


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Approach Strategy

After few minutes Amar enteredthe salesmans office along with

Hari.

The builder has not been around,but I have availed my own limit

and reduced the price to Rs.

482,000 provided you could give

us your offer in writing today with

the 20% deposit.


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Approach Strategy

Amar sensing they wereclose to their goal replied,

We really do like this

office, but it is still more

than we want to pay.

Please excuse us while we

discuss ways in which we

might increase our offer.Would you please

reevaluate your position

too?

DEFER

Deferring strategy

allows the negotiatorstime to reevaluate

their positions.

Deferring a decisionto make often proves

that patience pays.


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Approach Strategy

Amar and Hari returned inan hour and offered Rs.

478,000.

The salesperson told them,I called the builder while

you were away. He gave a

little, but Rs. 478,000 justwont do.


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Approach Strategy

However, if you would bewilling to split the

differences, and make it

Rs. 480,000, we can make

a deal, providing you sign

the paper and put down

your 20% cash today.

SPLIT THE DIFFERENCE

Amar and Hari looked

towards each other and

t d ith l

Negotiation Strategies.pptx

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