Effective Negotiation


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Effective Negotiation

  1. 1. Effective Negotiation<br />Presented by : Bijoy Viswanadhan<br />04 Mar 2010<br />bijoyev@yahoo.com<br />Ref: You Can Negotiate Anything- Herb Cohen<br />
  2. 2. Negotiation is a Life Skill<br />Everybody negotiates all of the time. <br />It helps people reach decisions jointly in a civilized way<br />You can get what you want if you recognize that each person is unique and needs can be reconciled ...<br />Most needs can be fulfilled by the way you act and behave. Mutual satisfaction should be your goal and the means of achievement|<br />
  3. 3. Three Crucial Elements<br />1. Information: Need to know each parties well to have an effective negotiation<br />2. Time: Time constrains always put both the end under pressure<br />3. Power: This comes thru more of a perception. <br />Negotiation is often a series of episodes, which means that considering your counterpart as a partner or a collaborator is the foundation of trusting, fruitful, and ongoing negotiation. <br />“How the game is played matters more than who wins.”<br />
  4. 4. Negotiating Requires Multiple Steps<br />Knowing:<br />What you really want, why and how badly you want or need it, and at what point you're willing to walk away without getting it. <br />Know what the other party wants and why it's important to them. <br />How much do they need or want what you have to offer?<br />What would make them really happy?<br />Are they being honest & sincere?<br /> This is vital information if you're going to craft a creative resolution that will satisfy everyone.<br />
  5. 5. Elements make Negotiation worthwhile<br />Should be comfortable negotiating on the situation<br />Negotiation should have more chances of meeting the needs<br />Negotiation should be worth enough to meet the expenditure of energy and time spent for it.<br />
  6. 6. Five Levels of Communication<br />Facts – what someone sees, hears, touches, & perceives the facts to be.<br />Thoughts – what their thoughts about the facts are.<br />Emotions – how they feel because of their thoughts about the facts.<br />Meaning/Importance – why it’s important to them.<br />Actions/Expectations – what they want.<br />
  7. 7. Power, an influencing factorcan be a positive force <br />If a seller know the buyer is having a huge purchase power, all the pricing negotiation with that buyer will go on a very flexible manner to such buyer, irrespective of what selling policy that seller is having. <br />
  8. 8. <ul><li>Capacity or ability to get things done, to exercise control over people, events, situations, oneself
  9. 9. Within a reason, you can get whatever you want, if you aware of your options, if you test your assumptions, if you take shrewdly calculated risks based on solid information, and you believe you have power
  10. 10. You have more power sources at your fingertips than you realize</li></ul>Power<br />
  11. 11. Power continued..<br />Power of competition- never enter a negotiation without options.<br />Power of legitimacy- printed boards, sign boards, etc.,Legitimacy can be questioned and challenged. Use the power of legitimacy when its advantageous for you to do so and challenge that power when its advantageous for you to do so.<br />The Power of risk taking<br />Calculated risk, incremental risks, Be rational, not impulsive. Never take a risk out of pride, impatience or a desire to get it over with<br />
  12. 12. Power continued..<br />Power of commitment<br />Always get the commitment of others in any undertaking. Have them take a piece of action so it’s their action as well as yours. Involvement begets commitment, Commitment begets power.<br />Power of expertise<br />We don’t question the Tax accountants, physicians, auto mechanics, plumbers, scientists<br />Power of knowledge of needs<br />If you can establish a reasonable guess about what someone’s needs are you can predict, with remarkable certainty, what will happen in any interaction<br />
  13. 13. Power continued..<br /><ul><li>The power of investment
  14. 14. Try and make the other person invest his time, money and energy into the negotiation.
  15. 15. If you have something difficult to negotiate – an emotional issue, or a concrete item such as price, cost , interest rate or salary – cope with it at the end of a negotiation, after the other side has made a hefty expenditure of energy and a substantial time investment.
  16. 16. The Power of rewarding and Punishing
  17. 17. Don’t transform yourself into a paper tiger. In a competitive situation don’t eliminate options and reduce the other side’s stress. Let them wonder until you have received what your are shooting for. In geopolitics the perception that you are willing to take risks and exercise power may prevent opportunism by a potential aggressor.</li></li></ul><li>Power Cont’d....<br />The Power of Identification<br />You will maximise your negotiating ability if you get others to identify with you. <br />More often than people care to admit, identification (whether with or against) plays a significant role in negotiations and decision making. That’s why behaving decently and trying to help others is the equivalent of having a canteen of water in the Gobi Desert. (our Politicians)<br />The Power of precedent<br />Workers in US got 7% pay hike, Canadian autoworkers using the US example, demanded for the same 7% hike and they got it.<br />
  18. 18. Time<br /><ul><li>Since we cannot control time is not possible, we must examine how effectively time for the negotiations process.
  19. 19. Japanese example of how they won over Cohen by killing time and knowing his return date and time.
  20. 20. Always ask yourself what will happen if I go beyond the deadline? What is the certainty of the detriment or penalty? What is the extent of the punishment? In short how great is the risk I am taking?</li></li></ul><li>4 important things – Time Management<br /><ul><li>Since most concession, behaviour and settlement will occur at or even beyond the deadline, be patient. True strength lies in ability to sustain the tension. Remain calm but keep alert for the favourable moments to act. Patience pays.
  21. 21. Never reveal your deadline but know others deadlines and act accordingly.
  22. 22. The “other side” cool and serene as they appear always have a deadline.
  23. 23. You cannot achieve a best outcomes quickly, you can achieve it only slowly and perseveringly . As you approach the deadline shift of power occur, presenting a creative solutions and even a turn around by the other side.</li></li></ul><li>Information<br /><ul><li>Information is power, better information leads to stronger negotiations.
  24. 24. Un intentional cues-in which behaviour or words transmit an inadvertent message
  25. 25. Verbal cues- in which voice intonation or emphasis sends a message that seems to contradict the words being spoken
  26. 26. Behavioural cues- which are language of the body as displayed in posture, facial expressions, eye contact, and hand gestures.</li></li></ul><li>Styles of Negotiating<br />Collaborative Win-Win<br />Negotiating for Mutual Satisfaction<br />Russian – Win at any cost<br />
  27. 27. Collaborative win-win <br />Collaborative negotiating is a win-win strategy that can focus the resources of the people involved in the process towards strengthening results, productivity, quality, creativity, and innovation in problem-solving.<br />1.Building thrust: The mutual trust is mainspring of collaborative winwin negotiation.<br />2.Gaining commitment: Getting support of others <br />3. Managing opposition : To get what you what<br />
  28. 28. Collaborative win-win (cont.)<br />WHEN USING NEGOTIATING COLLABORATIVELY:<br />1) Acknowledge the other person’s position. <br />2) Identify areas of mutual interest and agreement. <br />3) Set a positive accepting tone. <br />
  29. 29. The compromise solution<br />Compromise results in tan agreement in which each side gives up something it really wanted.<br />This solution is accepted to avoid a deadlock.<br />When pressure builds on both of us to lay aside out difference for the sake of society as a whole, we compromise at a mid point between our extreme position. <br />
  30. 30. Russian Negotiation Styles<br />Difference : <br />Patience ,long-term thinking, planning that goes into their decision making<br />Not in a hurry,” and they in fact negotiate like they play chess. <br />Soviet’s unwillingness to reveal their negotiating agenda.<br />Russians get their strength of negotiation from their infinite patience.<br />
  31. 31. Russian Negotiation Styles(cont.)<br />1.Extreme initial positions: They always start with tough demands <br />2.Limited authority: The negotiators themselves have little or no authority to make any concessions.<br />3.Emotional tactics: They get red faced, rise there voices, and act exasperated-horrified that they are being taken advantage of.<br />4.Adversary concessions viewed as weakness: Show extra ordinary lack of response.<br />5.Stingy in their concessions: They delay making any concession and when they finally do, it reflects only a minuscule change in there position. <br />6.Ignore Deadlines: They tend to be patient and act as though time is of no significance to them.<br />
  32. 32. Telephonic Negotiation<br />1. Easier to say no: Personal and oral presentation may be needed at times.<br />2. More Understanding: Behavioral cues are avoided<br />4. Much Quicker: Always shorter than person-to-person dealings.<br />5. Greater Risk: Undue haste puts one party in difficulty.<br />6. Advantage For The Caller: Negotiate with many.<br />
  33. 33. Conclusion<br />There aren’t any specific models for negotiating specific kinds of issues. Each negotiation depends on many issues & may be amenable to a variety of different approaches. <br />Negotiation is quite different from flying an airplane. A pilot must go through a precise pre-flight process before taking off. There is no room for varying that process. <br />A good negotiator understands that the process involves a continuous series of choices as to strategy and tactics. <br />Being locked into one strategy or set of tactics to implement that strategy weakens a negotiator's capacity to reach wise solutions in an efficient manner.<br />