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Investigative negotiation
1. A PRESENTATION ON INVESTIGATIVE NEGOTIATION BY:- DEEPAK KUMAR MANISH SINGH NORANG LAL SUMIT LATHER 12/16/2010
2. OVERVIEW OF NEGOTIATION Negotiating is the art of reaching an agreement by resolving differences through creativity. Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution. There are four types of negotiation:- Investigate::: What do you want? What does the other side need? Decide on style What are the consequences of each choice. 12/16/2010
3. CONTD… Presentation::: Prepare other side’s case Present the reasons for your side better Planning sheet Issues involved Realistic, possible, worst Bargaining::: When in doubt, ask questions! Open questions Reflective questions Agreement::: Arrangements should be neutral and comfortable Pay attention to what others say Screen out all visual distractions Ask open ended questions Listen to responses Proactive vs. reactive behavior 12/16/2010
4. INVESTIGATIVE NEGOTIATION 12/16/2010 Concept of Investigative negotiation is recommended by Deepak Malhotra and Max H. Bazerman. According to this to be an effective negotiator focus less on selling your position on the issue at hand. Instead , pose questions to uncover information about the other party’s constraints, interests, and priorities. Armed with that data, you will expand agreement options and you will forge far more successful deals. Investigative negotiation is an art of finding the reasons behind any uncompleted deal and to make it complete by investigating further for the reasons to go for successful deal.
5. 12/16/2010 FIVE PRINCIPLES OF INVESTIGATIVE NEGOTIATION There are following five principles of investigative negotiation: 1. Don’t just discuss what your counterparts want, find out why they want? 2. Seek to understand and mitigate the other side’s constraints. 3. Interpret demands as opportunities. 4. Create common ground with adversaries. 5. Continue to investigate even after the deal appears to be lost.
6. 12/16/2010 PRINCIPLE 1: Don’t just discuss what your counterparts want, find out why they want? Ask why the other side wants what it wants. Don’t just discuss what your counterpartswant; find out why they want it. By asking thisquestion, you uncover a wider range of options for crafting a mutually satisfying deal.
7. 12/16/2010 PRINCIPLE 2: Seek to understand and mitigate the other side’s constraints Don’t view the other side’s constraints as ”their” problem. The two sides can help mitigate each other’s constraints. Mitigate the other party’s constraints. Collaborating on solutions to other parties’concerns can prevent their problems frombecoming your problems once a deal isimplemented.
8. 12/16/2010 Example: After a manufacturer had negotiated anorder with a parts supplier that specifieddelivery within three months, the supplierseemed uneasy about the delivery deadline. Realizing that a delivery delay wouldcost her company $1 million, the manufacturer offered to accept a potential delay ifthe supplier dropped his price by thatamount. He refused. She asked, “Why can’tyou cheaply manufacture theparts in threemonths?” He said: “We can—but we can’tcheaply ship the order to arrive on time.” The manufacturer had favorable terms witha shipping company and offered to have itdeliver the parts in 2.5 months. The supplieragreed to pay shipping costs and drop hisprice by $.5 million.
9. 12/16/2010 PRINCIPLE 3: Interpret demands as opportunities. Interpret demands as opportunities. Consider what seemingly unreasonable demands suggest about the other party’sneeds and interests. Do not adopt a defensive mindset What can we learn from the other side’s insistence on this issue? What does the demand indicate about the other party’s needs and interests? How can the information be used to create and capture value?
10. 12/16/2010 Example: A builder and developer were negotiating acontract. When the developer demandedthe builder pay large penalties if the project fell behind schedule, the builder speculatedthat the developer might value early completion. He proposed paying even higher penalties if the project was delayed butsuggested the developer pay him a bonus if he finished ahead of schedule. They sealed the deal.
11. 12/16/2010 PRINCIPLE 4: Create common ground with adversaries. Don’t assume that your industry competitorsare always adversaries. Consider them as potential allies innegotiations with a commonthird party. It is possible to cooperate and compete with others simultaneously.
12. 12/16/2010 Example: Two pharmaceutical companies wanted tobuy eggs from a supplier. One needed80,000 eggs; the other, 70,000. But the supplier had only 100,000 eggs. Through discussion, the companies realized their needswerecomplementary. One needed eggwhites; the other, yolks. They split the costof the eggs, each taking what they needed.
13. 12/16/2010 PRINCIPLE 5: Continue to investigate even after the deal appears to be lost. Investigate even if the deal seems lost. Newinformation may help you save a seeminglyunsuccessful negotiation. Sometimes the deal can be revived. In other cases, important information that will help in future negotiations can be acquired. More info can be acquired about the customer’s future needs, the interests and concerns of similar customers or the strategies of other players in the industry.
14. 12/16/2010 Example: A manufacturing CEO learned a prospecthad decided to purchase from a competitor. She asked the prospect’s VP why. Hesaid the competitor, despite charging more,included product features he valued. Shehad assumed he cared mostly about priceso had originally offered a barebones lowcost deal. She revised her offer to give himthe best price and competition-beatingfeatures. Her prospect accepted.
