Negotiation skill

1. Negotiation Skill
The word "negotiation" originated from the Latin expression, "negotiatus", which
means "to carry on business".
Defined:
 Negotiating is the process of communicating back and forth, for the purpose
of reaching a joint agreement about differing needs or ideas.
 It is a collection of behaviors that involves communication, sales, marketing,
psychology, sociology, assertiveness and conflict resolution.
 A negotiator may be a buyer or seller, a customer or supplier, a boss or
employee, a business partner, a diplomat or a civil servant. On a more personal
level negotiation takes place between spouse’s friends, parents or children.
Features of Negotiation
• Minimum two parties
• Predetermined goals
• Expecting an outcome
• Resolution and Consensus
• Parties willing to modify their positions
• Parties should understand the purpose of negotiation
Why Do We Negotiate?
•To reach an agreement
•To beat the opposition
•To compromise
•To settle an argument
•To make a point

2. Principles of Negotiation
 Define the Goals of Both Parties – Listen carefully to each person, repeating
their words to make sure you understand exactly what they want.
 Establish a Neutral Position – Find out what each party feels would be a fair
solution. Ask open-ended questions, like “Can you be more specific,” and “How
important is meeting your goal?” Focus on helping both sides get as close as
possible to meeting their intended goals, while suggesting alternatives.
 Encourage Mutual Understanding – Encourage both parties in the argument
to understand the other person’s viewpoint. Gather feedback from each party, so
we can see where things are progressing.
 Provide More Than One Acceptable Solution – Provide options that encourage
flexibility and leads to a win-win conclusion. Provide more than one solution,
while focusing on both sides of the conflict.
 Reach an Acceptable Agreement – Make certain that the real needs of both
parties are met, along with clear agreements of how each party will proceed in
the future.
Types of Negotiation:
Day to Day Negotiation at work place- Every day we negotiate something or
the other at the workplace either with our superiors or with our fellow workers
for the smooth flow of work. These are called day to day negotiations.
Commercial negotiations- Commercial negotiations are generally done in the
form of contract. Two parties sit face to face across the table, discuss issues
between them and come to conditions acceptable to both the parties. In such
cases; everything should be in black and white. A contract is signed by both the
parties and they both have to adhere to its terms and conditions.

3. Legal Negotiation- Legal negotiation takes place between individual and the law
where the individual has to take by the rules and regulations laid by the legal
system and the legal system also takes into account the needs and interest of
the individual.
Types Parties Involved Examples
Day-to-day/
Managerial
1. Different levels of
Management
2. In between colleagues
1. Negotiation for pay, terms and
working conditions.
2. Description of the job and
fixation of
Negotiations
3. Trade unions
4. Legal advisers
responsibility. 3. Increasing
productivity.
Commercial
Negotiations
1. Management
2. Suppliers
3. Government
4. Customers
5. Trade unions
6. Legal advisors
7. Public
1. Striking a contract with the
customer.
2. Negotiations for the price and
quality of goods to be purchased.
3. Negotiations with financial
institutions as regarding the
availability of capital.
Legal
Negotiations
1. Government
2. Management
3. Customers
1. Adhering to the laws of the local
and national government.

4. Distributive Negotiation Distributive negotiation ends up in
a win-lose situation where some
parties stand at an advantage and
the others lose out.
Integrative Negotiation Integrative negotiation creates a
win-win situation for all the
parties.
Process of Negotiation
Preparation
One of the keys to effective negotiation is to be able to express your needs and
your thoughts clearly to the other party. It is important that you carry out some
research on your own about the other party before you begin the negotiation
process.

5. Exchanging Information
The information you provide must always be well researched and must be
communicated effectively. Do not be afraid to ask questions in plenty.
That is the best way to understand the negotiator and look at the deal from
his/her point of view. If you have any doubts, always clarify them.
Bargaining
The bargaining stage could be said to be the most important of the four stages.
This is where most of the work is done by both parties. This is where the actual
deal will begin to take shape. Terms and conditions are laid down.
Bargaining is never easy. Both parties would have to learn to compromise on
several aspects to come to a final agreement.
Closing and Commitment
The final stage would be where the last few adjustments to the deal are made
by the parties involved, before closing the deal and placing their trust in each
other for each to fulfill their role.
Common mistakes in negotiation process
1. Failing to prepare effectively for negotiation.
2. Underestimating your own power and assuming the other party knows your
weaknesses and strengths.
3. Being afraid by the status of the person with whom you are negotiating.
4. Concentrating on your problems rather than those of the other party and
forgetting the other side has things to gain from agreement as well as yourself.
5. having low hopes for yourself.
6. Giving too much acceptance to time deadlines set by the other side.

6. 7. Talking too much and failing to listen effectively.
8. Believing everything the other side says about you, your service, your
competition etc.
9. Being forced into discussing price too early in the negotiation.
10. Accepting the first offer and giving away concessions for nothing.
11. Conceding on important issues too quickly.
13. Making concessions of equal size to those on offer.
14. Paying too much attention to `price' rather than `value'.
15. Discussing issues for which you are not prepared.
16. Being inflexible.
17. Losing sight of the overall agreement when deadlock is reached over minor
issues.
19. Feeling deadlock is only unpleasant for you and not the other party.
20. Being intimidated by “This is my final offer!” or “If you don’t agree to my
terms we will not reach agreement”. Again this is a well known negotiating tactic.