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