Excerpt of Negotiation Course

1. 42 hrs Negotiation Course
Excerpt
Agabio Consultants

2. The dominance of Negotiation
All aspects of our life practically go through some kind of
negotiation.
Children are the best negotiators
The parties involved have different degrees of power, but
never absolute power over the other (total control vs.
partial control).
There are always people who have a different point of view
from ours.
Since everyone demands the right to have a personal
opinion, we must find ways to respond to the mutual right
to dissent.
This is the reason for negotiation.

3. Alternatives to the Negotiations:
1. A party may dictate their decisions to the other.
2. Joint Troubleshooting
3. Arbitration
Conditions for Negotiation
In case of conflict parties can
1. ignore the issue and agreed to continue to disagree
2. accept the "agree to disagree“ approach
3. resolve the conflict
Drivers of Negotiating
1. own convenience (business or personal)
2. a penalty to force change
3. an incentive to encourage to make a change
4. high costs in the absence of agreement (history, time)
vs. cost minimization agreement

4. Negotiation is possible only when the parties are
willing to abandon their initial positions and when
this will shall be expressed in one or several
points of contact.
Negotiation is impossible due to
• immovable stance
• circumstances precluding one of the parties

5. Negotiation is an ongoing process based on the interaction
of the parties. The first estimates may be revised or
confirmed (including SWOT analysis).
Negotiation is a process of resolving a conflict between two
or more parties whereby both or all parties modify their
demands to reach a compromise acceptable to all.
Negotiation is…
Negotiation is a process of setting up an achievable result,
the views of both parties on what constitutes the ideal result.

6. At any time you can decide whether to negotiate (/continue
to negotiate) or not to negotiate (/suspend negotiation)
based on considerations of convenience (advantages vs.
disadvantages).
There is always the possibility of waiving the agreement

7. Types of conflicts:
1. Conflicts of interest: agreeing the terms of a
transaction or a contract (or re-negotiate)
2. Conflicts of rights: difference in interpretation when
there is an agreement between the parties
You have to note that:
1. The word "conflict" does not mean rupture, schism,
dispute, fight, quarrel, violence...
2. A conflict of rights or interests has to be, for a good
negotiator, a precondition for resolution.
3. The negotiation of the conflict is a victory of ideology over
experience.
Conflicts

8. Negotiation has to resolve conflicts without jeopardizing the
whole of the relations between the parties.
Relations

9. The negotiation is to reduce the distance
between two opposite sides…
…until they reach a mutually acceptable position

10. The "approach" word brings up the concept of distance:
"The distance that separates them from us on this subject …"
"We have come very close."
We move from one place and we go to another place
We move from our present position with the aim to reach a point of
agreement acceptable and, better, from a systemic point of view, than
the initial one.
The "approach“ word means moving closer to the other party.
Our opponent does the same thing.

11. In practice how does it work the Process Approach?
Limit
Limit

12. BP
BP
BP

15. BATNA is the Best Alternative to a Negotiated Agreement
BATNA
WATNA is the Worst Alternative to a Negotiated Agreement
Example.
Purchasing a car:
• my BATNA might be to accept the best deal I can get at a different
dealer
• my WATNA might be to accept a car with fewer of the features I
would like

16. Q. What decides the location of the point of agreement and the
distance we have to travel to reach it?
A. The relative power of the parties and their ability.
The skill of the negotiator is to travel the minimum consistent
distance with obtaining the agreement.

19. Simple negotiation process:
• The negotiator has to reach the field of
trade-off
• Once in it, the negotiator has to find an
agreement
• When the negotiator discovers the
possibility of an agreement, he has to
secure it at minimum cost and to agree on
its execution

20. More detailed negotiation process
A negotiation can be considered as a more or
less ordered sequence of different phases that
can be modeled in our mind in a relatevily simple
and credible way
We call it: The "method of the eight phases."
It is a model and like all the models does not
imply that it is a rule to be followed by all and in
very religious way.

21. I will illustrate a specific process proposal due to
the common experience, that every practitioner
can use during a negotiation...
...but if you will find the concepts, that I will
expose to you, useful, you can apply them (I
hope) with success in the future; if you will find
the same concepts useless or not completely
useful, you have to abandon them immediately
or modify them until you can find a formula that
perfectly suits your needs.
Orthodox behavior vs. unorthodox behavior

22. • The method of eight phases:
it focuses on the ability to negotiate (conflict is a fact and not an
obstacle).
• The method of psychological school:
it is mainly based on ideological ("neuro") schemes of the negotiators
• The method of necessity theory:
it implies that the negotiator is independent of the interests because
take in account the necessity of both parties
• The method of transactional analysis:
"I am a person trustworthy and worthy of respect in myself and in the
other."
• The method of approach to probability:
it leaves much to be desired
• The method of game theory:
it is explanatory, but very limited in practice
The most common methods of negotiation

23. Our approach is based on what the
negotiators do, not on what they should do.
The success of a method doesn't depend on
he fact that both negotiating parties use the
same method.
The method of the eight phases
For now we will face the study of the
negotiation without taking into account the
levels of thought, that will be discussed later.

24. For now we will breakdown the development of the
negotiation in eight phases that runs through every
negotiation, which aim is to reach an agreement,
taking in account that every phase
• it doesn't necessarily proceed in a rigid order
• it doesn’t need the same dedication and
attention
The differences among the phases are the different
skills and the different techniques which are
suitable in each case.

25. The eight phases constitute a map of the
environment in which the negotiation takes place.
As in the case of a map
• there is a relationship between the relative
position of its parts.
• we don't need to start from a predefined point

26. The purpose of the map
is to help us identify our
surroundings,...
...so we can get going
in the right direction to
reach our destination,...
...which in the case
of negotiation is to
reach an agreement.
Metafora visiva della negoziazione

27. In the method of the eight phases there are
four outstanding phases:
Among these main steps there are other minor.

28. Here there are all the eight phases.
In any negotiation four of the eight stages are crucial:
The method is dynamic and develops continuously (no
semantic apnea) in real-time:
• Preparation
• Discussion
• Proposal
• Exchange
• what it is happening at every moment of the negotiation
• the next position to which you want to reach
• what you have to do to get it

29. There are no predefined sequential schemes

30. An adequate prep is the necessary condition for a
successful negotiation
PREPARATION
The sine qua non of an adequate prep is
• not having to find us in the negotiating table in the
condition to improvise
• not having to take note that we should have had to
prepare ourselves better
• not having to take note that the counterparty has
become aware of our lack of preparation, becoming
more confident in itself and increasing its demands

31. The negotiator's attitude should be aimed at a continuous
process in order to know
On the contrary the negotiator needs to know
• what to get and
• how to get it
• his behavior
• what he want in the short and long term
• why he want to get it
• the aspirations and the circumstances of his opponent
The key issues of the preparation are:
1. Objectives with their order of priority
2. Information
3. Concessions
4. Strategy (Behavior)
5. Tasks

34. Experience and detailed planning will help
choosing realistic goals.

35. We have to make a list of our
objectives, including:
• those we want to achieve
• those that are implicit and
• those we already enjoy
We have to take into account that:
• in any negotiations all the points can
be discussed again and again
and
• we may lose some points that we had
previously considered as earned
Full list = more favorable position,
i.e. what we would like to get.

40. Si:
• todos nuestros objetivos son vitales (segun nosotros)
• todos los objetivos de nuestro opositor son vitales (segun
ellos)
• esperamos que sea el otro a moverse
el resultado serà
• un punto muerto (ninguna de las partes quiere moverse)
• una larga sesión (tendremos que prepararnos mejor)
Uno de los dos tendrá que hacer algún movimiento...
...para empezar el baile y motivar la otra parte a moverse
tambien y buscar conjuntamente soluciones sostenibles.
Como obtener un ZOPA?

41. Therefore, during the preparation, we have to train
ourselves to make the first move, if necessary, and how
to handle any countermoves

42. Does the opponent come to the
negotiation with a fully homogenized
interests and objectives?
In the group of the opposition do not
exist differences of opinion, of
priority criteria, of sensitivities, of
aspirations, of "position"?

43. Not all our objectives have a chance of being achieved
It is very likely that, while the negotiation progresses, we have to leave
• some objectives
• a part of them

46. Before the start of negotiations the parties must leave the unrealistic (or less
realistic) and weakest objectives, concentrating themselves in the objectives
with higher priorities, with more strengths and more realistic outlooks.
…will be filtered in the following way
E.g.: the “A's” objectives…

50. Without testing opponent hypotheses we can
• deny something that our counterpart does not demand us,
or
• require something that our counterpart is not denying us.
Contrasting hypotheses

52. We need to define
clearly
• our position more
favorable
• agreed position
more likely
• the limit of our
negotiating
authority
• concessions we
are willing to try
• legal and financial
implications of
these concessions

55. • Whether or not the product or service is essential to your business
• Value for money
• Price
• Long Term Costs
e.g.:
• After-sales service and maintenance arrangements
• Lifetime costs of a product or service
• Quality
• Product or Service Specifications
• Delivery Date
• Payment Terms
• Length of Warranty
• Warranty Coverage
• Legal Jurisdiction
• Packaging Requirements and Charges
• F.O.B. Terms
• Freight Charges and Carrier Used
• Order Quantity
• Length of Agreement
• Cancellation Terms
• Patents and Copyrights
Example of “Objectives”

59. During the preparation phase it is extremely important
setting an initial model of strategy, i.e. a meta-
strategy, able to reprogram its behavior, during its
running, whenever it is necessary.
Strategy concept

60. During the preparation phase it is extremely important
setting an initial model of strategy,
i.e. a meta-strategy, able to reprogram its behavior,
during its running, whenever it is necessary.
Strategy concept

61. The resulting strategy should provide us at all
times the best plan of action (variable over
time) to achieve the envisaged goals (varying
over time).
The main feature of a good strategy is the
"simplicity".

62. A strategy is like a mean of transportation that takes
us from a situation "A" to another situation "B"
The path, that the aforementioned "coach"
(understood as a transport carriage) runs through,
looks like a tree (sometimes we tend to simplify this
concept using it as "the decisions tree").

63. In this context, negotiation is part of a more complex
strategy to move from point A to point B.
To do this we must
• make key decisions,
• finalize important agreements and
• accept assumptions
Very simplified scheme:

64. Scheme a little more
complex (but not too
much compared to the
real world)

66. The strategy should not be excessively rigid but
capable of reacting to events arising in the course
of trading