Your SlideShare is downloading. ×
Negotiating Skills
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Negotiating Skills

21,880
views

Published on

Negotiating Skills -- http://www.presentationsexpert.com

Negotiating Skills -- http://www.presentationsexpert.com

Published in: Technology, Business

14 Comments
51 Likes
Statistics
Notes
No Downloads
Views
Total Views
21,880
On Slideshare
0
From Embeds
0
Number of Embeds
7
Actions
Shares
0
Downloads
4,131
Comments
14
Likes
51
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • Day-to-day / Managerial Negotiations Such types of negotiations are done within the organization and are related to the internal problems in the organization. It is in regards to the working relationship between the groups of employees. Usually, the manager needs to interact with the members at different levels in the organization structure. For conducting the day-to-day business, internally, the superior needs to allot job responsibilities, maintain a flow of information, direct the record keeping and many more activities for smooth functioning. All this requires entering into negotiations with the parties internal to the organization.
  • Commercial Negotiations Such types of negotiations are conducted with external parties. The driving forces behind such negotiations are usually financial gains. They are based on a give-and-take relationship. Commercial negotiations successfully end up into contracts. It relates to foregoing of one resource to get the other.
  • Legal Negotiations These negotiations are usually formal and legally binding. Disputes over precedents can become as significant as the main issue. They are also contractual in nature and relate to gaining legal ground.
  • This type of manager must learn to be more collaborative. Autocratic managers have a tendency to miss seeing the big picture. When these types of managers fail to negotiate effectively, the results of their efforts often suffer. While autocratic types may believe they are skilled negotiators, they often are not because they lack the ability to listen and to empathize.
  • Since negotiation often implies conflict (something these types of managers avoid at all costs), it is critical for them to take responsibility for forcing a certain amount of compromise. This is the only way they will be able to lead others effectively.
  • Highly Brill Leisure Center has hired you to help them with their marketing decision making. Perform a SWOT analysis on Highly Brill Leisure Center, based upon the following issues: 1.The Center is located within a two-minute walk of the main bus station, and is a fifteen-minute ride away from the local railway station. 2.There is a competition standard swimming pool; although it has no wave machines or whirlpool equipment as do competing local facilities. 3.It is located next to one of the largest shopping centers in Britain. 4.It is one of the oldest centers in the area and needs some cosmetic attention. 5.Due to an increase in disposable income over the last six years, local residents have more money to spend on leisure activities. 6.There has been a substantial decrease in the birth rate over the last ten years. 7.In general people are living longer and there are more local residents aged over fifty-five now than ever before. 8.After a heated argument with the manager of a competing leisure center, the leader of a respected local scuba club is looking for a new venue. 9.The local authority is considering privatizing all local leisure centers by the year 2000. 10.Press releases have just been issued to confirm that Highly Brill Leisure Center is the first center in the area to be awarded quality assurance standard BS EN ISO 9002. 11.A private joke between staff states that if you want a day-off from work that you should order a curry from the Center's canteen, which has never made a profit. 12.The Center has been offered the latest sporting craze. 13.Highly Brill Leisure Center has received a grant to fit special ramps and changing rooms to accommodate the local disabled. 14.It is widely acknowledged that Highly Brill has the best-trained and most respected staff of all of the centres in the locality
  • In such a case, what are the community's options for trying to resolve this situation? *They could possibly sue the business based on stipulations of the Clean Water Act. *They could contact the Environmental Protection Agency and see what sort of authority that agency has over such a situation. *They could lobby the state legislature to develop and implement more stringent regulations on polluting factories. *The community could wage a public education campaign and inform citizens of the problem. Such education could lead voters to support more environmentally minded candidates in the future who would support new laws to correct problems like this one. In weighing these various alternatives to see which is "best," the community members must consider a variety of factors. *Which is most affordable and feasible? *Which will have the most impact in the shortest amount of time? *If they succeed in closing down the plant, how many people will lose their jobs?
  • Negotiation activity_charity
  • Established rapport and common goals? Probed for understanding of beliefs, goals, win-win options, and hidden stakeholder motivators? Paraphrased for confirmation/affirmation? Analysed outcomes and risks? Summarized what was agreed on, and next steps? If stalled, returned to a fundamental that was agree on? Built on this common ground? Avoided emotional responses (even if insulted)? Considered interim options (or postponement) if undesirable outcome was imminent, or key info missing?
  • SWOT analysis to be done on a case study. Case study :: Assessing Losses Caused by Vandalism "The rents for houses in the city area are too high," said Ramesh Chatterji to his friend Vinod Mehra. To avoid paying high rent, Chatterji had taken a house almost on the outskirts of the city. "How is the rent for the house in which you are presently residing?" asked his friend Mehra. "There is hardly any difference from what is charged in the city area. Even though it is little less than the rent charged in the city, it is compensated by the amount of money spent on commuting," said Chatterji. Chatterji was working as a senior financial analyst at Badla Finance Consultancy, situated in Navi Mumbai. The company was flying high on its recent achievements. The organization had recently helped a leading private commercial bank recover from a financial disaster. The bank was able to recover by implementing the suggestions given by the team at Badla Finance Consultancy. Chatterji was a part of the team involved in developing a solution for the bank. Due to his valuable contribution to the team, he was recently promoted as senior financial analyst. "Considering the rent I am to pay, I feel that it is high time I built a house of my own," said Chatterji. "I will obviously agree with you as you are a financial consultant and would be sure to know what is best for you," said Mehra. A few months after this conversation, Chatterji began constructing his house. Though he faced a lot of hardship in the process, he was happy with the outcome. On an auspicious day, he arranged the Gruhapravesam ceremony and invited all his near and dear ones for the function The function went well. At the end of the function, Mehra called Chatterji aside and asked him whether he had insured the house. "I realize that this is not the right time to discuss insurance, but I feel that you should insure your house against possible losses," said Mehra. "Yes, you are right, Vinod," replied Chatterji. "The same thought had occurred to me some time back. But, to tell you the truth, I could not spare the time to go and talk to the insurance people and get my house insured," continued Chatterji. "But better late than never," said Mehra. Chatterji agreed and said he would get his house insured soon. After a few days, Chatterji got his house insured against losses. He was happy that he was now able to save on rent. His good days were, however, short-lived. One day, disaster struck and his house was completely destroyed in communal riots. The Gujarat riots were at their peak at that time. The disturbance had spread to the neighboring states too and Maharashtra, being one of them, was affected by it. On that fateful day, the miscreants broke open the doors and looted the property and damaged the house. Fortunately, on that particular day Chatterji and his entire family had gone out of station. The next day, when they returned home, they were shocked to see the destruction caused to the house. Chatterji asked his neighbors about the cause of the damage. They explained what had happened during his absence. Immediately, he got in touch with the insurance office as well as his friend Mehra. Both Mehra and the claims adjuster arrived at Chatterji's place at the same time. The claims adjuster went round the house assessing the damage. Chatterji was in a bad mood and didn't feel like talking to anyone. "This is the time when your active participation is required in helping the claims adjuster in evaluating your property," consoled Mehra. "How did it happen?" asked the claims adjuster. "Some miscreants broke in and damaged the property and they later damaged the house as well," said Chatterji. Mehra intervened and informed the claims adjuster that Chatterji had already intimated the police and they had registered the case. He also said that the police were unable to stop the destruction because a large number of people had broken into the house. So they had simply become silent spectators. "What is the estimated damage that has been caused?" Mehra asked the claims adjuster. "The loss to the house itself will amount to around rupees two lakh," replied the claims adjuster. "But that is too little," shouted Chatterji. "I have spent nearly twenty five thousand rupees for the entrance door alone." "It is made of teak wood," added Mehra. "I am not bothered about the amount you have spent on the door," replied the claims adjuster. He continued, "I am more bothered about the cost of the property at the time of loss." "This is sheer injustice by you to the customer," replied Mehra.
  • Prepare, prepare, prepare. Enter a negotiation without proper preparation and you've already lost. Start with yourself. Make sure you are clear on what you really want out of the arrangement. Research the other side to better understand their needs as well as their strengths and weaknesses. Enlist help from experts, such as an accountant, attorney or tech guru. Pay attention to timing. Timing is important in any negotiation. Sure, you must know what to ask for. But be sensitive to when you ask for it. There are times to press ahead, and times to wait. When you are looking your best is the time to press for what you want. But beware of pushing too hard and poisoning any long-term relationship. Leave behind your ego. The best negotiators either don't care or don't show they care about who gets credit for a successful deal. Their talent is in making the other side feel like the final agreement was all their idea. Ramp up your listening skills. The best negotiators are often quiet listeners who patiently let others have the floor while they make their case. They never interrupt. Encourage the other side to talk first. That helps set up one of negotiation's oldest maxims: Whoever mentions numbers first, loses. While that's not always true, it's generally better to sit tight and let the other side go first. Even if they don't mention numbers, it gives you a chance to ask what they are thinking. If you don't ask, you don't get. Another tenet of negotiating is "Go high, or go home." As part of your preparation, define your highest justifiable price. As long as you can argue convincingly, don't be afraid to aim high. But no ultimatums, please. Take-it-or-leave-it offers are usually out of place.
  • Anticipate compromise. You should expect to make concessions and plan what they might be. Of course, the other side is thinking the same, so never take their first offer. Even if it's better than you'd hoped for, practice your best look of disappointment and politely decline. You never know what else you can get. Offer and expect commitment. The glue that keeps deals from unraveling is an unshakable commitment to deliver. You should offer this comfort level to others. Likewise, avoid deals where the other side does not demonstrate commitment. Don't absorb their problems. In most negotiations, you will hear all of the other side's problems and reasons they can't give you what you want. They want their problems to become yours, but don't let them. Instead, deal with each as they come up and try to solve them. If their "budget" is too low, for example, maybe there are other places that money could come from. Stick to your principles. As an individual and a business owner, you likely have a set of guiding principles — values that you just won't compromise. If you find negotiations crossing those boundaries, it might be a deal you can live without. Close with confirmation. At the close of any meeting — even if no final deal is struck — recap the points covered and any areas of agreement. Make sure everyone confirms. Follow-up with appropriate letters or emails. Do not leave behind loose ends.
  • Transcript

    • 1.  
    • 2.
      • 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.
    • 3.
      • Title comes from remarks made by participants at some of my negotiation workshops
        • “ that’s the opposite of what I do”
        • “ I know I should do that, but I find myself doing exactly the opposite”
        • “ Its counter-intuitive”
      • What are people saying ?
        • They recognise the prudence of a particular strategy
        • But they find it difficult to implement it
        • Their natural inclination is to do the opposite of what they recognise is the prudent strategy
    • 4.
      • What are
        • some of the intuitive things we do in a negotiation
        • the counter-intuitive thing we might consider as an alternative ?
      Automatic gear Shift into manual Focus on Positions Focus on interests Dive into the negotiation Defer the negotiation to a time of our own choosing, gather information first When our proposals are rejected, justify and defend them Ask why our proposal doesn’t work, and gather information When a proposal is made to us that is unacceptable, rejection Instead of rejecting, ask why their proposal is important, and gather information
    • 5.
      • 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.
    • 6.
      • 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.
    • 7.
      • 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.
    • 8.
      • 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.
    • 9.
      • 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.
    • 10.
      • 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
    • 11.
      • Should not be a doubting Thomas.
      • 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.
      • Should be a patient listener.
    • 12.
      • what negotiation means and the various forms it can take
      • that negotiating, in the fullest sense, means forging long-term relationships
      • the role that the individual personalities play in negotiating
      • that you must take a variety of approaches to negotiation, since no single set of principles will suffice in all circumstances
    • 13.  
    • 14.  
    • 15. Types Parties Involved Examples   Day-to-day/ Managerial Negotiations
      • Different levels of Management
      • In between colleagues
      • Trade unions
      • Legal advisers
      • Negotiation for pay, terms and working conditions.
      • Description of the job and fixation of responsibility.
      • Increasing productivity.
    • 16. Types Parties Involved Examples Commercial Negotiations
      • Management
      • Suppliers
      • Government
      • Customers
      • Trade unions
      • Legal advisors
      • Public
      • Striking a contract with the customer.
      • Negotiations for the price and quality of goods to be purchased.
      • Negotiations with financial institutions as regarding the availability of capital
    • 17. Types Parties Involved Examples   Legal Negotiations
      • Government
      • Management
      • Customers
      • Adhering to the laws of the local and national government.
    • 18.  
    • 19.
      • Depending on a scale of disagreement, the level of preparation might be appropriate for conducting the successful negotiation.
      • For a small disagreements, excessive preparation could be counter-productive because it do takes time which is better focused in reaching the team goals.
    • 20.
      • If the major disagreement needed to be resolved, preparing thoroughly for that is required, and worthwhile.
      • Think through following points before you could start negotiating.
        • Goals: What you want to get out from the negotiation? What do you expect from the other person?
    • 21.
      • Trading:
        • What you and the other person have which you can trade?
        • What do you and the other person have so that the other wants it?
        • What might you both be prepared to give away?
    • 22.
      • Alternatives:
        • If you do not reach the agreement with him/her, what alternatives you have?
        • Are these things good or bad alternatives?
        • How much it matters if you do not reach the agreement?
        • Will the failure to reach the agreement cut out future opportunities?
        • What alternatives may the other person have?
    • 23.
      • The relationship:
        • What is a history of relationship?
        • Can or should this history impact negotiation?
        • Will there be any of the hidden issues that might influence negotiation?
        • How you will handle these?
    • 24.
      • Expected outcomes:
        • What outcome would people be expecting from the negotiation?
        • What was the outcome in the past, and what precedents been set?
    • 25.
      • The consequences:
        • What are the consequences of winning or losing this negotiation by you?
        • What are the consequences of winning or loosing by the other person?
    • 26.
      • Power:
        • Who has the power in the relationship?
        • Who do controls the resources?
        • Who stands to lose most if agreement is not been reached?
        • What power does other person have to deliver which you do hope for?
    • 27.
      • Possible solutions: Based on all considerations, what possible compromises might be there?
    • 28.
      • Good negotiators are the people who understand
        • how to build key relationships
        • how to identify what people need
        • how to give them what they need and
        • how to get what they want in return, all in a way that seems effortless.
    • 29.
      • Autocratic managers typically hold the view that they are going to get what they want when they interact with subordinates, because their inherent authority precludes the need to negotiate.
      • These managers do not realize that, in the process of handing out orders, they are engaged in a kind of one-sided negotiation that can antagonize others, with the result that the tasks they wish to see completed may be carried out improperly or not at all.
    • 30.
      • The Accommodating manager is more concerned with what others want than with their own needs.
      • In order to avoid conflict, they do not negotiate at all and often end up overriding their own interests.
    • 31.  
    • 32. BATNA The B est A lternative T o a N egotiated A greement; the lowest acceptable value (outcome) to an individual for a negotiated agreement.
    • 33.
      • 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.
    • 34.
      • BATNAs 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.
    • 35.  
    • 36.
      • A community discovers that its water is being polluted by the discharges of a nearby factory.
      • Community leaders first attempt to negotiate a cleanup plan with the company, but the business refuses to voluntarily agree on a plan of action that the community is satisfied with.
    • 37.
      • 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)
    • 38.
      • 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.
    • 39.
      • Once parties establish a BATNA, they must then compare the costs and benefits of the BATNA to all of the settlement options on the table.
      • Ask, "What's it going to cost you if you don't?"
    • 40.  
    • 41.
      • Most of the negotiation literature focuses on two strategies, although they call them by different names. 
      • One strategy is interest-based(or integrative, or cooperative) bargaining, while the other is positional (or distributive or competitive) bargaining.
    • 42.
      • 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.
    • 43.
      • Positional bargaining is one that involves holding on to a fixed idea, or position, of what you want and arguing for it and it alone, regardless of any underlying interests.
    • 44.  
    • 45.  
    • 46. Roles : Rita , a 15 year old girl. The Observer becomes Rita’s parent . Others are Observers to record use/abuse of “win/win” techniques. Background : Rita is calling home from a payphone on Hwy 401 to tell her parent she is hitch-hiking to Hollywood to be a movie star. She has no money, is a little afraid, and secretly wants to go to drama school. The parent is worried about Rita being out after curfew. Parent picks up the ‘phone, and has 3 minutes to effect a “win-win” approach before the payphone times out.
    • 47. Background : Suresh has a Programmer off sick, and wants to negotiate two weeks of Kunal’s time to work on the Company’s most important project immediately, because Kunal is the best programmer, and knows the tasks. Delays may affect everyone’s bonus. Kunal’s Manager is concerned the loss of Kunal will mean he will not be able to complete tasks on another project their department is committed to deliver (requiring one week of work in the next 3 weeks), because Suresh has a reputation of over-utilizing resources (and padding their schedule contingency). Other commitments will also need juggling.
    • 48. Background: Raima is not using the car this weekend, but is concerned the good friend is a fast driver. The friend is generous, and has done Raima several favours for Raima, including a recent birthday gift. Time : 3 minutes
    • 49.
      • When quick, decisive action is vital (in emergencies); on important issues.
      • Where unpopular actions need implementing (in cost cutting, enforcing unpopular rules, discipline).
      • On issues vital to the organization’s welfare.
      • When you know you’re right.
      • Against people who take advantage of noncompetitive behavior.
    • 50.
      • To find an integrative solution when both sets of concerns are too important to be compromised.
      • When your objective is to learn.
      • To merge insights from people with different perspectives.
      • To gain commitment by incorporating concerns into a consensus.
      • To work through feelings that have interfered with a relationship.
    • 51.
      • When an issue is trivial, or more important issues are pressing.
      • When you perceive no chance of satisfying your concerns.
      • When potential disruption outweighs the benefits of resolution.
      • To let people cool down and regain perspective.
      • When gathering information supersedes immediate decision.
      • When others can resolve the conflict effectively.
      • When issues seem tangential or symptomatic of other issues.
    • 52.
      • When you find you’re wrong and to allow a better position to be heard.
      • To learn, and to show your reasonableness.
      • When issues are more important to others than to yourself and to satisfy others and maintain cooperation.
      • To build social credits for later issues.
      • To minimize loss when outmatched and losing.
      • When harmony and stability are especially important.
      • To allow employees to develop by learning from mistakes.
    • 53.
      • When goals are important but not worth the effort of potential disruption of more assertive approaches.
      • When opponents with equal power are committed to mutually exclusive goals.
      • To achieve temporary settlements to complex issues.
      • To arrive at expedient solutions under time pressure.
      • As a backup when collaboration or competition is unsuccessful.
    • 54.  
    • 55.
      • Behaviour
      • Motivation: Analytic-autonomizing, Assertive-directing, Altruistic-nurturing, Flexible-cohering
      • Personal strengths
      • Personal weaknesses
    • 56.  
    • 57.
      • Prepare, prepare, prepare
      • Pay attention to timing
      • Leave behind your ego.
      • Ramp up your listening skills.
      • If you don't ask, you don't get
    • 58.
      • Anticipate compromise
      • Offer and expect commitment
      • Don't absorb their problems
      • Stick to your principles
      • Close with confirmation.
    • 59.  
    • 60.
      • Speak more quietly than them.
      • Have more space in between your words than them.
      • If they interrupt, pause for a few seconds after they finish.
      • Be critical of foul language.
      • Do not rise to a bait if they attack or blame you.
      • Ignore all threats. 
    • 61.
      • Emotional Challenges
      • Anger/exasperation
      • Insulted
      • Guilt
      • False flattery
      • Recommended Response
      • Allow venting. Probe for why
      • What wouldn’t be insulting?
      • Focus on issues
      • Re-focus
      • Tips :
      • Don’t lose your cool .
      • Try to defuse with acknowledgement, empathy, patience, impartiality.
      • Consider dealing with less emotional issues first
      • Know your own “Hot Buttons”
      • Practice
    • 62. Exercise: List the last 3 times you felt someone pressed your “Hot Button”. Subject discussed Who pushed your buttons? Why did you feel manipulated? Next time I will…..
    • 63.  

    ×