Negotiation skills

NEGOTIATION SKILLS

BY
PROF. RAHUL JADHAV &
PROF. PRASHANT CHAUDHARY
SINHGAD SCHOOL OF BUSINESS STUDIES, PUNE
For
VISHWAKARMA PUBLICATIONS (www.vpindia.co.in)

NEGOTIATION

Prof. Rahul Jadhav & Prof. Prashant
Chaudhary, Vishwakarma Publications

Characterized by two or more interdependent parties who have a
conflict of interest, and who choose to address that conflict by
striving to reach an agreement through a process of mutual
adjustment of each party’s demand and concessions.
Behavioral definition of NegotiationThe process by which we search for the terms to what we want from
somebody who wants something from us.


Negotiation is……
 A dialogue or discussion between two or more people or
parties, intended to reach an understanding, resolve point of
difference, and/or gain advantage in outcome of dialogue, to
produce an agreement upon courses of action, to bargain for
individual or collective advantage, to craft outcomes to satisfy
various interests of two opponents involved in negotiation
process.
 Process of exchanging offers and counter offers- “exchange of
concessions” - for arriving at a compromise by which both
parties reach to an agreed positions and outcomes.

Characteristics of a good negotiator- Expert Opinion
 Meticulous preparation and planning skills.
 Expert in forming perceived positive opinion.
 Knowledge of the subject matter being negotiated.
 Ability to analyze properly, think clearly and rapidly under pressure and in the
situation of uncertainty.
 Ability to perceive and exploit power.
 Professional communication & soft skills.
 Good listening skills.
 Should possess ability to judge the situation with general intelligence.
 Analytical skills with convincing power.
 Ability to estimate & evaluate various options with multidimensional thinking!


NEW NEGOTIATING EDGE
(NEGOTIATION STYLES)

• Red Style
• Blue Style
• Purple Style


RED STYLE
They believe manipulation is normal and they behave as
they believe
Main attitudes:
 Aggressive
 Intimidatory
 Manipulatory


BLUE STYLE
Looking for both winning of two sides.
Main attitudes:
 Cooperative
 Trusting
 Conciliatory


PURPLE STYLE
Win-Win Approach
“Give me some of what (red style),I will give you what
you want (blue style)”
“Taking while giving”
“It is a two way exchange”


Types of Negotiation
•

Distributive
NegotiationOpponents compete over the fixed
sum or value. The key question is who
will win the bigger part of the pie. A
gain of one party is made at the
expense of the other.

•

Integrative negotiation- The word
integrative implies some cooperation
and hence often involves a higher
degree of trust and the forming of
mutually beneficial long term
relationship. It can also involve
creative problem-solving that aims to
achieve mutual trust and gains. For the
same reason it is also called winwin negotiation.


Negotiation Styles


Five major conceptual instruments of negotiation
• BATNA –

Best Alternative to Negotiated Agreement

• Reservation price: Walk away price
• ZOPA –

Zone of Possible Agreement

• Value creation through trade-offs
• Real & perceived Negotiating power


Pyramid of Time-Power-Information
Interestingly enough the most
important is not the Power
itself but how it is perceived.
Power in some sense is similar
to beauty that lies in the eye of
the beholder.
Another way to put it is, if you
are perceived in the position of
Power, you have it.


Negotiation Process


Preparation for negotiation - The checklist
Answer the following before getting into a negotiation:
 Why we entering into the negotiation?
 What are our objective?
 Who will we be negotiating with?
 When will suit us best to hold the negotiations?
 What should be our choice of style?
 How high should we pitch our initial demands?
 What order should we set for offering our concessions & what else might we be
prepared to include?
 Who do we need to include in our team? What will their respective roles be?
 How much time will we need to reserve?
 What assumptions have we made in our planning?


Negotiation is about the resolution of conflicts, usually by the
exchange of concessions.


Identify the decision maker from the opposing team.



Formalize your objectives in terms of priorities.



Establish what their objectives & priorities might be.


Aim high
 Consider all the variables in the other side’s case & estimate the probable cost to
them if they concede any of those to you.
 Finally value the benefits of the other side’s variables to you.
 If both sides are to move from their starting position by trading concessions, the
initial offer you open with- must be more favorable to you than where you hope to
settle eventually.
 Otherwise you will be having nothing to exchange.
 Hence in setting out your opening gambit, you need to include a negotiating margin
& aim high.

Exploring information- by Probing
The more you explore, the less the other side will be able or get opportunity
to explore your case or position and hence more you will be able to control
the course of the discussion.
In the due course of probing, try to obtain the full shopping list of
items/issues they want to negotiate.


Deadlock– Breaking and Overcoming the impasse
 Deadlock is one of the most counterproductive and undesirable of all the
situations and conclusions of negotiation that can result in the breakdown.
 The negotiators should always be alert for its possibilities and try to avoid it.
 The only exception is where the negotiator use deadlock as a tactic to galvanize
the opponent to take the favourable action.
Breaking the deadlockA) Try to avoid the immovable positions.
B) Bridging the GAP


Arguments- Soldiers of negotiation Army


Summarize
•

Closing

An excellent negotiation practice/tactic is
to:
1) Summarize from time to time, what
your discussion has covered.
2)

Probe ambiguities before they
become misunderstandings.

•

It also gives time for new ideas & reappraisal of old ones.

•

• Golden Rule - Goal commitment not
only agreement.
• Use a pause in your speech prior to
making any offer- between the lines.
• If you can meet, accept or deliver the
following conditions 1…, 2…, 3…,
n…, we will be prepared to consider
offering the following: 1…, 2…,
and 3…, n….. Our reason for doing
so is a…, b…, c…, …z…

This acts as a recess.

Difficult People
Difficult people exist everywhere.
They come in every variety and no
workplace is without them. How
difficult a person is for you to deal
with, depends on your self-esteem,
your self-confidence and your
professional skills and courage.
It’s far better to address the
difficult person while you can
maintain
some
objectivity,
patience and emotional control.

Types of Difficult People The “Sherman Tank”
 The “Exploder”
 The “Complainer”
 The "Clam"
 The “Wet Blanket”
 The “Know-It-All”
 The “Staller”


Dealing with Opposition
• Idea OpponentAn idea opponent is one
who disagrees on a
particular issue or
alternative on the basis of
rational and logical facts.

• Visceral OpponentVisceral opponent is an
emotional adversary, who
not only disagrees with
your point of view, but also
as a human being.


Ethics in negotiation
• Ethics is a system of moral principles or values.
• Typically, these people feel that negotiation is what a salesperson
does to get them to buy or try to push off his/her products and
services. But this is not the reality. In fact, every one of us negotiates
in almost all walks of our day to day life.
• There are 9 tips will ensure that you build all your negotiations on the
foundation of ethics--which will, by the way, increase your possibility
of achieving win-win outcomes


Think this was helpful?? Learn more. Pick up a copy of the book and sharpen your skills
on Selling
and negotiation.

Book is available at: http://vpindia.co.in/library_store/Selling-and-Negotiation-Skills

Priced at - Rs 180/-

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Negotiation skills

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