Negotiation consists of discussions between two or more parties around specificissues for the purpose of reaching a mutually satisfactory agreement.Pre-Negotiation process: Types of negotiation- You have to first identify the type of negotiation you are getting into. It can be of 2 types: Distributive negotiation: Parties compete over the distribution of a fixed sum of value. The key question in a distributed negotiation is, “Who will claim the most value?” A gain by one side is made at the expense of other. Integrative negotiation : In Integrative Negotiation, parties cooperate to achieve maximize benefits by integrating their interests into an agreement. This is also known as a win-win negotiation. • Goals- You have to set up your goals and analyze other party’s goals before entering any negotiation process as to what you want to achieve. What do you want to get out of the negotiation? What do you think the other person wants? Goals can be of 2 types: Short – term: Name the things that need to be included in an immediate solution. Long – term: Name the things that need to be included in a final solution. These goals are more focused on the relationship building. • Positions- Position is an option that one party is committed to as a solution to the conflict. Initially both the parties start with their own favorable
position but as the negotiation goes on, agree to a mutually acceptable position if the deal succeeds.• Nature of other party – You have to analyze the nature of other party before entering any negotiation. You got to know their objectives and motivation.• Bargaining mix – You have to establish our bargaining mix before entering any negotiation. Bargaining mix can be defined as the variables that can be negotiated or discussed during a negotiation. You have to thoroughly analyze our bargaining mix.• Solution – Solution can be defined as the best possible outcome out of a negotiation process. It might be possible that both the parties cannot arrive at a possible solution. This is the case of a no deal. Usually a solution is arrived by collaborating, competing, compromising or accommodating.• BATNA – Best alternative to negotiated agreement. One of the most important steps in the pre preparation of any negotiation is to assess your batna. Batna lets you know when to accept a deal and when to reject a deal. In this case you have to assess our alternatives and evaluate them. You also have to establish our reservation value, which is the point where you cannot have a deal. It is also very important to analyze the other party’s Batna and reservation value as well.
• Strategy: Intuition InfluenceSome of the key strategies that are involved while negotiating are as follows: Anchoring is the process of placing the first offer, the so-called opening offer. It should be kept in mind that the entire ZOPA needs to be kept in play and the high target value should be realistic and enough justification is to be provided. Focus should be on the other person’s BATNA and Resistance Value. Whenever the happenings of the negotiation seem unclear, be sure to seek clarification. When unreasonable offers and demands are placed on the table, silence is a very powerful weapon – use it! When you come forward to make concessions, be sure to get it reciprocated. The move should benefit both parties of the negotiation. To make sure you get your move reciprocated, label the concessions that you are placing and also go the extra mile to express your expectation of the
return. Use and also beware of the other party using diminishing concessions. Whenever you are not sure or not aware of anything that is being said, it is best to use contingency contracts.Kinds of Strategies: Compete & Dominate Collaborate & Influence Compromise Accommodate Appeal Concede AvoidDURING THE NEGOTIATIONMeeting Place Should be calm and serene so that both parties may listen to each other. It could be used as an advantage to you. If the place is of disadvantageous , party should try to rush to other places.Seating Seating arrangement should be according to physique of the parties If need a translator, she should sit near the party Supporting members should sit in second layer of sitting. First row or layer should be for main parties.Waiting Time Time taken by parties to begin It may end up in frustration as waiting may make some party lose mental calmness It’s always recommended to be punctual for negotiation meeting.Introductions Opposite party should be greeted handsomely Basic introduction of your company and ur team should be an impressive introduction Basic initial offer should be given during initial offer.Warm Up This basically triggers and sets the mood of the negotiation. Warm up should set an amicable environment for both of the parties. This phase could also be used to identify BATNA and RV of other party.
CREATE VALUE Try to create value for both of the parties. There should be even a single penny left of the table Try to make both party happy and make them get more than expected. Try to make each party compromise on less important issues and extract the best for the prominent issues and create value for each of them Some package RV can be given to other party so that some long lasting relation can be established.SHARE VALUE Once max value is created, it should be shared equally. Try to get the best out of deal with satisfying clients. At end, it should be a win-2 situation.ARRIVE AT CONSENSUS - RECORD Make a consensus between parties. Record the deal values and other contract details.Post Negotiation • PSS – Post settlement settlements. These are the settlements that are reached after the initial deal is signed. It can lead to parent improvements. After the deal is signed the parties are more optimistic and willing to open up. So this is good time to attain more value in the deal. PSS can only be attained if both parties benefit from it. Steps for PSS: 1. Acknowledge the already made progress. 2. Bring into notice that there are aspects that are undiscovered that if used can improve the deal on both the ends. 3. Suggest that you have already given everything in the deal and would want to think ‘out of box’ that could help both of us. 4. Confirm the it is not a new deal but a improved deal.