For educational purpose only.

1. NEGOTIATIO
N:
NATURE,
ELEMENTS,
PROCESSES

2. 2
11/23/
2014
NEGOTIATION

3. NEGOTIATION
A discussion among individuals to reach to a
conclusion acceptable to one and all.
-Radpac

4. NEGOTIATION

5. Occurs when two parties set forth the
type of remedy each desires, and try
to reach some sort of agreement that
satisfies everyone involved.
May be used to resolve an already-
existing problem or to lay the
groundwork for a future relationship
between two or more parties.
NATURE OF NEGOTIATION

6. NEGOTIATION
CHARACTERISTICS
Voluntary, private
Bilateral/Multilateral
No third party facilitator
Informal
Flexible

7. ELEMENTS OF NEGOTIATION
1) Interests: What do the parties want?
2) Options: What are likely areas of agreement?
3) Alternatives: What if we don’t agree?
4) Legitimacy: How persuasive is each party?
5) Communication: Are both parties willing to
discuss and listen?
6) Relationship: Are both parties ready to establish
operational relationship?
7) Commitment: What is the structure of
commitment from both parties

8. NEGOTIATION PROCESS
a series of actions or steps taken in
order to achieve a particular end.

9. NEGOTIATION PROCESS
1. PREPARE
2.DISCUSS
3.PROPOSE
4.BARGAIN
5. AGREE

10. NEGOTIATION PROCESS
1. PREPARE
* WHAT DO YOU WANT?
- MAKE A LIST
- PRIORITIZE LIST
A. Essential
B. Highly desirable
C. Desirable
10

11. NEGOTIATION PROCESS
2. DISCUSS
* WHAT DO THEY WANT?
-KNOW EXACTLY WHAT THEY WANT BEFORE MAKING A PROPOSAL
11

12. NEGOTIATION PROCESS
3. PROPOSE
* WHAT COULD WE TRADE?
-UNDERSTAND THE WANTS AND NEEDS
OF BOTH SIDES

13. NEGOTIATION PROCESS
4. BARGAIN
*WHAT WILL WE TRADE?
-TRADE, DON’T GIVE.
13

14. NEGOTIATION PROCESS
5. AGREE
Agree to the best possible alternative
Set out clear
expectations for both sides.
* To reach an agreement,
both sides must be open
to new ideas and willing
to accept changes.

15. Once agreement has
been reached, the
parties will create a
written statement to
reflect the terms of their
negotiated agreement.

17. 17

19. DEVELOPING OPTIONS:
BEST ALTERNATIVE [BATNA]
WORST ALTERNATIVE [WATNA]
MOST LIKELY [MLATNA]
ESTIMATED ALTERNATIVE [EATNA]

20. BATNA
(Best Alternative To a Negotiated Agreement)
 What is your best option should you fail to
reach a negotiated agreement?
Always know this beforehand and always work
on strengthening your BATNA before and
during a negotiation…you might just need it.

21. WATNA
(Worst Alternative To a Negotiated Agreement)
Calculate the lowest-valued deal
you are willing to accept. If the
value of the deal proposed to you
is lower pursue your BATNA. If the
final offer is higher than your
BATNA you should accept it.

22. MLATNA
(Most Likely Alternative To a Negotiated
Agreement)
is the middle ground version of an
agreement.
is the best estimate reality check
outcome.
means that each party thinks
about what a neutral decision
maker will most likely decide.

23. EATNA
(Estimated Alternative To a Negotiated
Agreement)
often leads to last-minute breakdowns in negotiations,
particularly when many parties are involved. Disputants
can negotiate for months or even years, finally
developing an agreement that they think is acceptable
to all. But then at the end, all the parties must take a
hard look at the final outcome and decide, "is this
better than all of my alternatives?" Only if all the parties
say "yes," can the agreement be finalized. If just one
party changes his or her mind, the agreement may well
break down.

24. ZOPA
Exists if there is a potential agreement
that would benefit both sides more than
their alternatives.
In order for disputants to identify the
ZOPA, they must first know their
alternatives, and thus their “bottom line”,
“non-negotiable”, “take it or leave it” or
“walk away position.”
ZOPA
(Zone Of Possible Agreement)

25. TYPES OF NEGOTIATION
1.Distributive Negotiation (Position-Based)
2. Integrative Negotiation (Interest-Based)
Operates under a zero-sum condition
The gain made by one party is at the expense of
the other and vice versa
Each party involved in the negotiation defines
ultimate point where the settlement will be made
Win-Lose situation
Parties cooperate to achieve maximize benefits
by integrating their interests
The goal of the negotiations is a solution that is
fair and mutually agreeable
Win-Win situation

26. POSITION-BASED NEGOTIATION –VS- INTEREST-
BASED NEGOTIATION
while INTEREST-BASED NEGOTIATION focuses on the
needs, desires, concerns and fears of the parties
making them more sensitive with each other. Hence, an
agreement beneficial or advantageous to both parties
will be easily achieved.
POSITION-BASED NEGOTIATION is when the parties
involved in the negotiation stand firm on their
respective beliefs and wants. They are hard to
persuade, thus making the settlement hard to attain;

27. INTEREST-BASED BARGAINING
“Using a process of interest-based
bargaining, trade-offs and compromise,
the mediator can assist parties to
progress and agree on even the most
difficult of incompatible interests.”

28. INTEREST VS. POSITION
PROBLEM INTERPRETATION POSITION INTEREST ISSUE
The
immediate
source of
the problem
How people
interpret other
party’s behavior
Demands,
threats, fixed
solutions,
proposals,
points of view
What really
matters to this
person (why is
X a problem)
The topic the
parties need to
discuss and
decide
Barking
Dog
Neighbor is
unfriendly,
inconsiderate.
Violates my
privacy
Buy a muzzle I’m not well – I
need sleep. I
want my home
to be a quiet,
private place.
How to control
dog barking at
night.

29. “SALUBUNGAN”

30. TYPES OF BARGAINING
Distributive Bargaining
Positional bargaining (want based)
Rights-based bargaining (law or morality
based)
 Interest-based Bargaining (needs, desires,
goals, priorities)
 Integrative Bargaining (convergence and
expansion of interests and opportunities)

31. EXAMPLE OF POSITIONAL
BARGAINING:
Juan and Pedro are quarrelling in a room.
Juan wants the window open. Pedro wants it
shut.
They argue how much to leave it open
– a crack? Halfway? Three quarters-way?

32. EXAMPLE OF INTEREST-BASED BARGAINING:
Two sisters quarrel over an egg. They consider selling
the egg and divide the money. But they are not too
happy with the compromise.
Their Mom asks each daughter what her real interest in
the egg is. One is hungry and wants to eat the egg.
The other wants to use the egg shell as head for her
doll.
The Mom cuts a small opening at one end of the egg,
pours out the content and cooks it scrambled. She
gives the shell to the other daughter who makes it the
head of her doll,

33. INTEGRATIVE BARGAINING
Parties “expand the pie” by integrating the
interests of both parties and exploring additional
options or “sweeten the pie”.
EXAMPLE: Buyer of a brand new car asks for a
bigger cash discount because his money is not
enough but the car manufacturer and the company
has set a ceiling for discounts and has adopted a
uniform pricing policy. The salesman instead offers
“freebies” and helps the buyer sell his car to add to
his fund to buy the new car.

34. 1. Remind parties of consequences if no
agreement is reached;
2. Take a break;
3. Agree in principle and work out details later;
4. Try a trade-off or package deal;
5. Split the difference;
6. Spell out the details;
7. Get the parties to give one more thing;
8. Show the parties the big picture;
9. Know when to hold and when to fold.
CLOSING THE DEAL

35. INTEREST-BASED BARGAINING
“Using a process of interest-based
bargaining, trade-offs and compromise,
the mediator can assist parties to
progress and agree on even the most
difficult of incompatible interests.”

36. INTEREST VS. POSITION
PROBLEM INTERPRETATION POSITION INTEREST ISSUE
The
immediate
source of
the
problem
How people
interpret other
party’s behavior
Demands,
threats, fixed
solutions,
proposals,
points of view
What really
matters to this
person (why is
X a problem)
The topic the
parties need
to discuss and
decide
Barking
Dog
Neighbor is
unfriendly,
inconsiderate.
Violates my
privacy
Buy a muzzle I’m not well – I
need sleep. I
want my home
to be a quiet,
private place.
How to control
dog barking at
night.

37. Stay Safe.

38.  References:
A Manager’s Guide To Getting Most Out of
Agreements.
Bottomline Improvement Process.
Choose Your Negotiations Wisely, Harrison
Barnes
Everything Is Negotiable, Gavin Kennedy
Getting To Yes, Harvard Negotiation Project