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  • 1. Negotiation
  • 2. Negotiation
    • Negotiation is a process in which groups with conflicting interests meet together to make offers, counteroffers, and concessions to each other in an effort to resolve their differences.
    • 3. Third-party negotiator is an outsider skilled in handling bargaining and negotiation.
    Mediator - a neutral third party who tries to help parties in conflict reconcile their differences.
    Arbiter - a third party who has the authority to impose a solution to a dispute.
  • 4. Characteristics of Negotiation
    An explicit and deliberate event
    Takes place between the representatives of the parties concerned
    The process which intends to settle the disputes and differences between parties involved
    Outcome of negotiation is dependent on the relative power relationship between the parties involved
  • 5. Importance of Negotiation
    Dynamic nature of business
    Information age
  • 6. Pre-conditions for Negotiations
    Two or more parties which have either conflict or disagreement
    Perceived conflict of needs, positions and interests
    Interdependence so that the outcome must be satisfying to all parties
    Agreement must be required to be reached within reasonable time so that it becomes beneficial to both parties
    The success of negotiation depends on the facts that the issue is negotiable; the negotiators are not only taking but giving also; trust between negotiating parties; fear that failure may lead to crisis
  • 7. Assumptions in Negotiation
    It is a process of give and take with no room for threat and coercion
    People come for negotiation believing that the other group can be persuaded
    Equal status of the parties during negotiation
    Fairness in the process of negotiation
    Negotiation is more beneficial for resolving differences compared to other methods
  • 8. Planning for negotiation
  • 9. Three stages of negotiation plan
    Pre-negotiation planning
    During negotiation behaviour
    Post-negotiation understanding
  • 10. Pre-negotiation Planning
    It requires consideration of following factors
    Know yourself
    Know the adversary
    Specify your goals and objectives
    Develop arguments and alternatives
    Agenda/ procedures
  • 11. Behaviour during negotiation
    Opening move
    Frequency and size of proposal (Negotiation Dance)
    Influence mechanisms (referent power and expert power)
  • 12. Post-negotiation understanding
    Implementation plan
    Role responsibilities
    Review teams
  • 13. Strategies and tactics of negotiation
  • 14. Bargaining Strategies
  • 15. Distributive versus Integrative Bargaining
  • 16. Distributive Negotiation
    Tactics used in distributive negotiation are:
    Snow job (giving long list of issues for discussion)
    Temper tantrums
    Limited authority
  • 17. Staking Out the Bargaining Zone
  • 18. Bargaining Zone and Negotiation Dance
    Principles for slicing the pie
    Assess your Best Alternative to Negotiated Agreement (BATNA) and improve it
    Determine your reservation point but do not reveal it
    Reach the other party’s BATNA and estimate their reservation point
    Set high aspirations but that are realistic
    Make the first offer if you are prepared
    Immediately re-anchor if the other party offers first
    Plan your concessions
    Pattern of concessions
    Magnitude of concessions
    Timing of concessions
    Use an objective-appearing rationale to support your offers
    Appeal to norms of fairness
  • 19. Wise – pie - slicing
    Qualities to live by while slicing the pie
  • 20. Integrative Negotiation
    Pitfalls in integrative negotiation
    No fixed pie, can be expanded to the maximum advantage of all parties
    Focus may shift from issue to position, ego and face saving
    Overconfidence in one’s own position may lead to neglecting the need of other people
  • 21. Beliefs conducive to integrative bargaining
    Belief in availability of a mutually acceptable solution
    Belief in cooperation rather than competition
    Belief that everyone is of equal value and status
    Belief in the view expressed by others
    Belief that differences in opinion are helpful
    Belief in the trustworthiness of the other member
    Belief that other party can compete but chooses to cooperate
  • 22. Steps in Integrative Negotiation Process
    Identify and define the problem
    Define the problem in the way mutually acceptable to both sides
    Understand the problems
    State problem with eye towards practicality and comprehensiveness
    State the problem as a goal and identify obstacles to attaining the goal
    De-personalise the problem
    Bring interests and needs to the surface
    Separate the problem definition from the search from solutions
    Generate alternative solutions to the problem
    Expand the pie
    Use non-specific compensation
    Cut the costs for compliance
    Find a bridge solution
    Generating alternative solutions
  • 23. Contd.
    Evaluate and select alternatives
    Narrow the range of solution options
    Evaluate solutions on the basis of quality, standards, and acceptability
    Agree to the criteria in advance for evaluating options
    Use sub groups to evaluate complex options
  • 24. Win-win negotiation is not:
    Even split
    Feeling good
    Building a relationship
  • 25. The Negotiation Process
  • 26. Common mistakes to be avoided
    Inadequate Preparation
    Ignoring the give/get principle
    Use of intimidating behavior.
    Loss of temper.
    Talking too much, listening too little, and remaining indifferent to body language.
    Arguing instead of influencing.
    Ignoring conflict.
  • 27. Third-Party Negotiations
  • 28. Third-Party Negotiations (cont’d)