Negotiation ppt


Published on

Published in: Business, Economy & Finance
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Negotiation ppt

  3. 3. NEGOTIATION  The term NEGOTIATION may be defined as the transfer of a negotiable instrument by one person to another so as to constitute the transferee the holder of the instrument. This term is defined Section 14 of the Negotiable instrument Act which read as, “When A PROMISSORY NOTE, BILL OF EXCHANGE OR CHEQUE IS TRANSFERRED TO ANY PERSON SO AS TO CONSTITUTE THAT PERSON THE HOLDER THEREFORE, THE INSTRUMENT IS SAID TO BE NEGOTIATED.”  The analysis of this section reveals that the negotiation takes place when the following two conditions are satisfied: • The negotiable instrument is transferred from one person to another. • The transfer is made in such a manner so as to make the transferee the holder of the negotiable instrument.
  5. 5. TYPES OF NEGOTIATION  There are two types of negotiation.  Integrative negotiation  Distributive negotiation
  6. 6. • DISTRIBUTIVE NEGOTIATION The term distributive means; there is a giving out; or the scattering of things. Hence, this type of negotiation is often referred to as 'The Fixed Pie'.. A distributive negotiation usually involves people who have never had a previous interactive relationship, nor are they likely to do so again in the near future. Simple everyday examples would be buying a car or a house. • INTEGRATIVE NEGOTIATION • Integrative negotiation, also known as principled negotiation, cooperative bargaining or win-win negotiation is a type or style of negotiation in which the parties cooperate to achieve a satisfactory result for both. Integrative negotiation the parties adopt an attitude aimed at solving the problem and seek a favorable outcome for both. Hence the goal of integrative negotiation is to create as much value as possible for oneself and for the other party, for example, through the stock exchange where each party makes concessions, makes or gives up some that values therefore little or no return for something he values greatly. Integrative negotiation usually occurs in negotiations where there are several things to negotiate, for example, in creating a society in which each partner can bring different resources, but complementary to those of other partners. • • •
  7. 7. PRINCIPLES OF NEGOTIATION • There are minimum two parties involved in the negotiation process. There exists some common interest, either in the subject matter of the negotiation or in the negotiating context that puts or keeps the parties in contact. • Though the parties have the same degree of interest, they initially start with different opinions and objectives which hinder the outcome in general. • In the beginning, parties consider that negotiation is a better way of trying to solve their differences. • Each party is under an impression that there is a possibility of persuading the other party to modify their original position, as initially parties feel that they shall maintain their opening position and persuade the other to change. • During the process, the ideal outcome proves unattainable but parties retain their hope of an acceptable final agreement. • Each party has some influence or power – real or assumed – over the other’s ability to act. • The process of negotiation is that of interaction between people – usually this is direct and verbal interchange.
  8. 8. SKILLS REQUIRED FOR NEGOTIATION Negotiation is a skill that anyone can learn and practice. The necessary skills required for successful negotiations can be listed as: • The ability to define a range of objectives yet is flexible about some of them. • The ability to explore the possibilities of a wide range of options. • The ability to be well prepared. • The ability to listen to and question other parties. • The ability to set priorities.
  9. 9. TEAM NEGOTIATION Due to globalization and growing business trends, negotiation in the form of teams is becoming widely adopted. Teams can effectively collaborate to break down a COMPLEx negotiation. There is more knowledge and wisdom dispersed in a team than in a single mind. Writing, listening, and talking, are specific roles team members must satisfy. The capacity base of a team reduces the amount of blunder, and increases familiarity in a negotiation.
  10. 10. ROLE OF EMOTION IN NEGOTAITION POSITIVE ROLE IN NEGOTIATION Positive emotions include joy, exhilaration, or relief. Yet, these positive emotions can derail your thinking. It is possible to be "too happy" in a negotiation . EFFECT IN NEGOTIATION • Negotiators who are in a positive mood tend to enjoy the interaction more, show less contentious behavior, use less aggressive tactics and more cooperative strategies. • Its drawbacks is distorts perception of self performance, such that performance is judged to be relatively better than it actually is.
  11. 11.  NEGATIVE ROLE IN NEGOTIATION • • • Negative emotions such as anger, jealousy, fear, remorse, and guilt. Negative emotions can cloud your thinking. Anger and other negative emotions can be barriers to an agreement EFFECT IN NEGOTAIATION • Negotiations, anger disrupts the process by reducing the level of trust, clouding parties' judgment, narrowing parties' focus of attention and changing their central goal from reaching agreement to retaliating against the other side • Angry negotiators pay less attention to opponent’s interests and are less accurate in judging their interests • It can sometimes be beneficial: legitimately expressed anger can be an effective way to show one's commitment, sincerity, and needs
  12. 12. NOGOTIABLE INSTRUMENT •A transferable,, signed document that promises to pay the bearer sum of money at a future date or on demand • According to section 13 of the Negotiable Instruments Act, 1881, a negotiable instrument means “promissory note, bill of exchange, or cheque, payable either to order or to bearer”. ExAMPLES OF NEGOTIABLE INSTRUMENT i) Bills of exchange ii) Promissory notes. iii) Cheques.
  13. 13. NON NEGOTIABLE INSTRUMENT • Document of title (such as an air waybill) or a financial instrument (such as a crossed check) that may not be transferred from the holder or named party to another • Nonnegotiable instrument is an instrument that is not negotiable. • It is not payable to order or bearer. • Any instrument which does not meet the requirements laid down to qualify an instrument as negotiable is a non negotiable Instrument. • Instrument. Similarly, an instrument which in its inception was negotiable but has lost its quality of negotiability is a nonnegotiable Instrument ExAMpLE Of NON-NEGOTIABLE INSTRUMENTS Money orders. Deposit receipts. Share certificates Dock warrants. Postal orders.
  15. 15. TypES Of NEGOTIABLE INSTRUMENT 1- pROMISSORy NOTE: Section 4 of the Negotiable Instruments Act, 1881 defines a promissory note as ‘an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instrument’. SpECIMEN Of A pROMISSORy NOTE RS 10,000/- new Delhi September 25,2002 On demand ,I promise to pay Ramesh, s/o Ram Lal of Meerut or order a sum of Rs 10,000/- (Rupees Ten Thousand only), for value received. To Ramesh Address………. sd/ sanjeev Stamp
  16. 16. pARTIES TO A pROMISSORy NOTE  The Maker or Drawer – the person who makes the note and promises to pay the amount stated therein. In the above specimen, Sanjeev is the maker or drawer.  The Payee – the person to whom the amount is payable. In the above specimen it is Ramesh. In course of transfer of a promissory note by payee and others, the parties involved may be – a. The Endorser – the person who endorses the note in favor of another person. In the a bove specimen if Ramesh endorses it in favor of Ranjan and Ranjan also endorses it in favor of Puneet, then Ramesh and Ranjan both are endorsers. b. The Endorsee – the person in whose favor the note is negotiated by endorsement. In the Above, it is Ranjan and then Puneet.
  17. 17. 2= BILL Of ExCHANGE: Section 5 of the Negotiable Instruments Act, 1881 defines a bill of exchange as ‘an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to or to the order of a certain person, or to the bearer of the instrument. SpECIMEN Of A BILL Of ExCHANGE RS 10,000 new Delhi may 2,2001 Five months after date pay Tarun or (to his) order the sum of Rupees Ten Thousand only for value received. To stamp Sameer Adress accepted sameer s/d Rajiv
  18. 18. pARTIES There are three parties involved in a bill of exchange. They are: • i.The Drawer – The person who makes the order for making payment. In the above specimen, Rajiv is the drawer. • ii. The Drawee – The person to whom the order to pay is made .He is generally a debtor of the drawer. It is Sameer in this case. • iii. The Payee – The person to whom the payment is to be made. In this case it is Tarun.The drawer can also draw a bill in his own name thereby he himself becomes the payee. Here the words in the bill would be Pay to us or order. In a bill where a time period is mentioned, just like the above specimen, is called a Time Bill. But a bill may be made payable on demand also. This is called a Demand Bill.
  19. 19. 3= chques: Cheque is a very common form of negotiable instrument. If you have a savings bank account or current account in a bank, you can issue a cheque in your own name or in favor of others, thereby directing the bank to pay the specified amount to the person named in the cheque. • • • A cheque may be regarded as a bill of exchange; the only difference is that the bank is always the drawee in case of a cheque. Negotiable Instruments Act, 1881 defines a cheque as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. A cheque is an order by the account holder of the bank directing his banker to pay on demand, the specified amount, to or to the order of the person named therein or to the bearer.
  20. 20. specimen of a cheque: ………… 20 ……… Pay……………………………………………………………………………… ……………………………………………… or bearer Rupees………………………………………… …………………………………………………. RS --------------------------STATE BANK OF INDIA Jawaharlal Nehru University ,new Dehli-110067 MSBL/97 653003 110002056 10
  21. 21. 4= hundis: • • • • • A Hundi is a negotiable instrument by usage. It is often in the form of a bill of exchange drawn in any local language in accordance with the custom of the place. Sometimes it can also be in the form of a promissory note. A hundi is the oldest known instrument used for the purpose of transfer of money without its actual physical movement. The provisions of the Negotiable Instruments Act shall apply to hundis only when there is no customary rule known to the people Types of hundis  Shah-jog Hundi  Darshani Hundi  Muddati Hundi