What is negotiation


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What is negotiation

  1. 1. What is Negotiation?What is Negotiation?•The word negotiation means to confer,The word negotiation means to confer,bargain, to bring about an agreement orbargain, to bring about an agreement orarrange a treaty or prize by conferring.arrange a treaty or prize by conferring.•When we negotiate with someone, we try toWhen we negotiate with someone, we try toconfer with them to reach an agreement onconfer with them to reach an agreement onterms or arrangements affecting both parties.terms or arrangements affecting both parties.•Negotiation connotes the process ofNegotiation connotes the process ofnegotiating.negotiating.
  2. 2. • Roget’s Thesaurus lists out several words assynonyms for the word ‘negotiate’.These words are-1. Mediate2. Intervene3. Make peace4. Moderate5. Arbitrate6. Intercede7. Bargain8. Agree9. Stipulate10. Compromise.etc
  3. 3. • Negotiation is a goal orientedprocess involving face-to-faceinteractions.
  4. 4. • Art of Negotiation :-Negotiation is indeed a part of everydaybusiness life. The parties involved in thenegotiation process will have to indulge ina continuous process of exchange ofmessages.Some of the expressions used in the contextof negotiation are to work out, thrash out,hammer out, pull off, come to terms aboutand reach an agreement on.It involvesdiscussion,exploration,consultation,bargaining,persuasion and resolution.
  5. 5. At the end of a successfulAt the end of a successfulnegotiation:-negotiation:-• All the parties concerned should feelthat they have won or secured a gooddeal under the given circumstances.• Negotiation is often hard bargainingand successful resolution ofconflicting interests in a spirit ofaccommodation and a give –and-takeapproach.
  6. 6. DOS AND DON’TSDOS AND DON’TS• DOS-1. Be well prepared and set clear objectives.2. Be flexible in your approach. Remember that it is agive and take.3. Listen actively and attentively4. Maintain discipline and decorum. Give respect andtake respect.5. Show patience.6. Be open minded and pragmatic.7. Ask questions and seek clarifications.8. Be enthusiastic, reasonable and convincing.9. Be soft yet firm.10. Supplement your words with appropriate bodylanguage.
  7. 7. DON’TSDON’TS• Avoid sarcasm and hurtful comments.• Do not indulge in loose talk and casual approach.• Do not raise trivial or insignificant issues.• Do not get emotional or egoistic.• Do not get into avoidable arguments.• Do not interrupt others and jump to conclusions.• Do not insult people.• Do not yell or raise your voice.• Do not react or comment in a hurry.• Do not lie or be inconsistent.
  8. 8. Types of Negotiations:-Types of Negotiations:-• There are essentially twotypes of negotiations-1. Integrative2. Distributive
  9. 9. Integrative negotiationIntegrative negotiation• Integrative approach is also known as thewin-win syndrome. In this each partyappreciates that one should not try to havean upper hand to the detriment of theother. The approach is one in which eachgroup tries to be accommodative andconciliatory. It is based on a problemsolving approach. There is a mutualunderstanding and collective efforts aremade to ensure that issues are resolved tomutual satisfaction.
  10. 10. Distributive processDistributive process• In a distributive process, on the other hand,one party gains at the expense of theother. It is also known as the win- losesyndrome. It is also understood as a zero–sum game. The total sum being limited,the more one gets , the less there is forthe other. It is the process of distribution.Styles of negotiations used here areauthoritarian .One party tries to browbeatthe other to accept what is offered.
  11. 11. Why Negotiation Fail-Why Negotiation Fail-• Negotiation fails when either partyapproaches the process of negotiation withtotally unreasonable demands or extremelyhigh expectations. If the starting point of boththe parties is too divergent, negotiation maynot lead to a meeting point. Similarly,negotiation fails if the spirit of cooperation orgive-and –take is lacking. If one party wantsto make only gains and is unwilling to acceptcompromises or make sacrifices, negotiationcan not make much headway.
  12. 12. Stages of Negotiation ProcessStages of Negotiation Process• Negotiation is widelyrecognized to be a four-stepprocess. There arepreparation, opening,bargaining and closing.
  13. 13. PreparationPreparation• The first stage in a negotiation processrelates to planning and preparation. It isthe stage where the parties decide whatthey want, what are their minimumexpectations, how much they will yield andhow they will go about the negotiations.Each party will also try to visualize whatthe other party will be expecting from thenegotiation.
  14. 14. OpeningOpening• The second stage in the negotiationprocess concerns opening. This is whenthe parties concerned come to thenegotiation table and meet each other.Opening has two steps- rapport buildingand probing.• Rapport building is the process of gettingto know each other. Thus, introductionsare made, pleasantries are exchangedand names and backgrounds are noted.
  15. 15. • Care should be taken to address the personsby their correct names. Even if someone inthe other group is already known, too muchof familiarity or intimacy should be avoided.Negotiations should start on a friendly note,but with a professional approach. Whilemeeting people and interacting with them,perception do matter. Make sure thatnegotiations begin on the right note. Be politeand pleasant. Use appropriate words. Beopen minded. Show enthusiasm. Listenattentively.
  16. 16. BargainingBargaining• It is the stage when the negotiatingteams really sit down and talk it out.They state their positions and putforth the supporting arguments. Inany negotiation, the questionuppermost is, ‘What’s there in it forme? Bargaining is nothing but a giveand take.
  17. 17. ClosingClosing• Finally, you enter the settlement stageand work towards a ‘close’. Aftercompleting all the bargaining, thenegotiation parties come to the stage ofsettlement or agreement. The finalterms as agreed upon are documentedand the agreement gets signed.• Negotiations by their very nature involvesome compromises and sacrifices.
  18. 18. Negotiation StrategiesNegotiation Strategies• Given its complex nature, the process ofnegotiation calls for tremendous skills andcapabilities from the people who are a party tothe negotiations. While what happens during thenegotiations itself is no doubt significant, whatalso matters is the preparation done beforehand,the credibility of key persons in the negotiatingteams, their track records, confidence buildingmeasures, and the negotiation skills and stylesof people associated with the process.
  19. 19. • While there are different styles relating tonegotiation, the most desirable stylerelates to the win- win approach. Thisapproach is based on a balanced give-and-take-stance.• Negotiation is often referred to as theelusive art of negotiation. Since bothparties have their minimum levels ofexpectation and do not easily yield theirgrounds ,negotiations may not alwaysproceed on the expected lines and maytake more time than originally anticipated.
  20. 20. Each party gets what theyEach party gets what theynegotiate:-negotiate:-• Successful negotiation does notnecessarily mean that all yourexpectations will be met at the end ofthe process.
  21. 21. Some noteworthy points and someSome noteworthy points and somestrategies-strategies-• 1. Do not be an open book. Try to beenigmatic or not easy to read whenrequired. Let not the other party readyour mind or emotions easily. Keepthem guessing till you finalize theterms.• 2. At the same time, good negotiatorsmake every effort to read andunderstand their opponents.
  22. 22. • During discussions, certain topics mayhave to be kept confidential. This shouldnot be done by telling deliberate lies. Itwould be better to make statements like ‘I cannot answer right now.’ ‘ I have nocomments at this juncture.
  23. 23. Factors affecting Negotiation:-Factors affecting Negotiation:-1. Given its complexity, severalfactors affect the process ofnegotiation. We may broadly groupthem into six- 1.Authority2. Credibility3. Information4. Time5. Emotional control6. Communication skills.
  24. 24. AuthorityAuthority• The first key factor affecting anynegotiation is authority. Negotiationmay start with deliberation but to beeffective, it has to end up in aconclusion or settlement. For this ,both the parties should have thepower or authority to conclude thedeal.
  25. 25. CredibilityCredibility• Trust and mutual confidence are veryrelevant in any process of negotiation.People who are known to be honest , sincere,steady and reliable have an edge when theyenter the process of negotiation. Thequestion in the mind of a group when theother person speaks is can we trust thisperson’s perspectives, opinions andstatements? Credibility comes from theperson’s knowledge, expertise, track recordand relationship.
  26. 26. InformationInformation• Negotiation often proceeds on the basis offacts, figures, past data, future trends andoutlook, studies, empirical data andcalculations. Logical and persuasivearguments cannot be put forth in the absenceof relevant information. Before coming to thenegotiating table, each party should makeconscious efforts to gather as muchinformation as possible on all the issues thatwill be raised during negotiations.
  27. 27. TimeTime• The time frame within which the negotiationshould be completed is another importantfactor affecting the process of negotiation.One of the parties may have a certainurgency as a result of which they may be in ahurry to conclude the negotiation. It is due totime constraints that negotiations cannot goon endlessly and both the parties shouldagree on a time , the very process ofnegotiation is such that the other partycannot be hurried too much.
  28. 28. Emotional ControlEmotional Control• Human beings are not just rational, theyare also emotional . Every person has hisor her qualities of the head and heart. It istrue that in business situations, peopletake decisions based on thinking andreasoning and after a careful evaluation ofchoices before them. Yet, if we scratch thesurface, we do find emotions and areresponsive to them.