Negotiation

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Negotiation

  1. 1. Negotiation“Let us never negotiate outof fear, but let us never fearto negotiate.” ACHLA TYAGI 1
  2. 2. Negotiation• Negotiation: It is a decision making process among interdependent parties who do not share identical preferences. It is through negotiation that the parties will decide what each will give & take in their relationship/s.• “It is a face-to-face decision making process between parties concerning a specific issues.” ACHLA TYAGI 2
  3. 3. Negotiation• Features of Negotiation: There are a minimum of two parties present. Both parties have predetermined goals. Some of the predetermined goals are not shared by both the parties. There is an expectation of outcome. Both parties believe that the outcome of negotiation may be satisfactory. ACHLA TYAGI 3
  4. 4. Negotiation Both the parties are willing to modify their positions. The parties’ incompatible positions might make modification of position difficult. The parties understand the purpose of negotiation. ACHLA TYAGI 4
  5. 5. Negotiation• Objectives of Negotiation: Understand what negotiations are all about. Select a strategy to negotiate effectively. Learn the range of negotiation approaches & their results based on your interaction/s. Plan for negotiation session. Use communication techniques to avert potential conflicts. Practice your general negotiation technique. ACHLA TYAGI 5
  6. 6. Negotiation Negotiation – Remember two elements are essential:1.Reasonableness2.Flexibility ACHLA TYAGI 6
  7. 7. Negotiation• The basic components: Preparation Objectivity Strategy Technique. ACHLA TYAGI 7
  8. 8. Negotiation• Identification of issues – Factors to consider: The Facts The Problem The Result The Reason ACHLA TYAGI 8
  9. 9. Negotiation• Types of Negotiation: On the basis of stability aspect of negotiated settlement, the negotiation processes have been divided into two categories:1.Integrative Approach (Win-Win Strategy)2.Distributive approach (Win-Loose Strategy/ Zero-Sum Strategy) ACHLA TYAGI 9
  10. 10. Negotiation• Principles to Integrative Approach:1. Separate people from problem2. Focus on interest, not positions.3. Invent options for mutual gains.4. Insist on using objective criteria. ACHLA TYAGI 10
  11. 11. Negotiation• Principles to Distributive approach:1.I want it all.2.Time wrap3.Good cop – bad cop4.Ultimatum ACHLA TYAGI 11
  12. 12. Negotiation• The five elements of Negotiation:1.The parties & their interests.2.Interdependency3.Common Goals4.Flexibility5.Decision – making ability/authority ACHLA TYAGI 12
  13. 13. Negotiation• Need of developing Negotiating Skills: Following are the key concern areas that are needed to be focused while one begins to build these negotiating skills –1. Negotiations are rarely pure win-lose or win-win propositions2. Negotiations takes place under conditions of ambiguity & uncertainty.3. Most negotiations involve existing or potential sources of conflict that impede reaching an agreement. ACHLA TYAGI 13
  14. 14. Negotiation4. Negotiations are chaotic & seldom pass sequentially through distinct phases such as pre-negotiation, deal structuring, detailed bargaining & agreement.5. Most negotiations are linked to other negotiations.6. Negotiation process comes in, stops & restarts.7. Most complex negotiations takes place between agents of groups & not the group themselves.8. Complex negotiations often involves a team approach.9. Negotiating skills can be learned. ACHLA TYAGI 14
  15. 15. Bargaining StylesPeople have different organizing styles –varying from relatively stable topersonality driven clusters of behaviorand their reaction/s. These styles, whenfollowed in a set pattern leads to theformation of certain specific modelsknown as models of negotiation. ACHLA TYAGI 15
  16. 16. Dual Concern Model• This was proposed by Dean G. Pruitt, Jeffery Z. Rubin & Sung Hee Kin. This model explains how one’s behavior while bargaining or during conflict, is influenced by two concerns:1.The desire to satisfy oneself.2.The desire to satisfy the other party. ACHLA TYAGI 16
  17. 17. Dual Concern Model The bargaining styles associated with Dual Concern Model stems from two personality dimensions:1. Assertiveness2. Co-operation These two concerns yield five negotiating styles: i. Avoiding ii. Accommodating iii. Compromising iv. Competing v. Collaborating ACHLA TYAGI 17
  18. 18. Five Factor Model• This is also known as Big-5 Personality Dimension, presented by Zhenzhong Ma. He sought to determine whether personality factors could predict an individual’s bargaining style & whether one’s bargaining style adequately predicts bargaining behavior? The dimensions of personality are also referred to as OCEAN Approach. ACHLA TYAGI 18
  19. 19. PRAM Model• Ross & Long developed the PRAM Model to put win-win approach into practice. This model guides the negotiator through four steps of:1.Planning for Agreement2.Building Relationship/s3.Reaching Agreement/s4.Maintaining Relationship/s ACHLA TYAGI 19
  20. 20. The Negotiation Process The process of negotiation has following 4 stages:• Stage I: Preparation• Stage II: Opening Session• Stage III: Bargaining• Stage IV: Settlement ACHLA TYAGI 20
  21. 21. The Negotiation Process• Stage I: Preparation Identify all the issues Set priorities Develop supportive arguments ACHLA TYAGI 21
  22. 22. The Negotiation Process• Stage II: Opening Session Ground Rules Framework for Success Initial Offers Posturing ACHLA TYAGI 22
  23. 23. The Negotiation Process• Stage III: Bargaining Single Issue Negotiation Multiple Issue Negotiation ACHLA TYAGI 23
  24. 24. The Negotiation Process• Stage IV: Settlement Impasse Third Party Intervention The Closing ACHLA TYAGI 24
  25. 25. The Negotiators/ Agents Negotiation/s can take place between two individuals who are representing their own interests such as: Individual & his lawyer who are representing negotiating deal. Between a group of people engaged in decision making process. Between parties representing interest other than their own as is typically found in a business transaction between a company & its suppliers. ACHLA TYAGI 25
  26. 26. Types of Negotiators/ AgentsBroadly we classify the negotiators as:1.Independent Agents2.Non – Independent Agents ACHLA TYAGI 26
  27. 27. The Challenge Bargaining is a process that includes:1.Gathering general information2.Learning the priorities of the other side in a specific negotiation3.Assessing the strengths & weakness of their own positions. ACHLA TYAGI 27
  28. 28. The Challenge(cont..) The challenge in being an agent of the principal party who is not into negotiation, is to make sure the principal party is aware of how the negotiation process is progressing. If the principal party is not a direct part of that process, the agent must discuss the information gathered at the negotiating table & get direction from the principal party on how to proceed. ACHLA TYAGI 28

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