Essential capacity for managerial effectiveness

1. BUILDING NEGOTIATION SKILLS

2. “Negotiation involves two or more parties with
competing or conflicting interests or needs,
working towards an agreement on how they
will cooperate.”
- Tillett
Negotiation is a process of finding a point of
balance between your objectives and that of
the other party.

3. “Negotiation can be defined as any form of direct
or indirect communication whereby parties who
have opposing interests discuss the form of any
joint action which they might take to manage
and ultimately resolve the dispute between
them. A negotiator should advance the interests
of the party that he or she represents in order to
obtain an optimal outcome for that party.”
- Scottish Public Services Ombudsman

4. Characteristics of a Good Negotiator
• Assertive
• Patient
• Open-Minded
• Careful Listener
• Self-Disciplined
• Creative
• Flexible
• Highly Ethical
• Persuasive
• Decisive
• Confident
• Considerate
• Prudent
• Respect for Others
• Ability to Handle Pressure

6. Factual Negotiator
Features
• Knows all facts related to the issues
• Asks factual questions
• Ensures that no fact is left out
• Provides information
Problem
Tendency to leave emotional issues aside while focusing on
details and make the other party hostile

7. Relational Negotiator
Features
• Establishes relationships with the other party
• Builds trust
• Is sensitive to the other party’s emotional issues
• Perceives the position of the other party
Problem
Propensity to concentrate on building relationships and lose sight
of the reason for negotiation

8. Intuitive Negotiator
Features
• Able to proffer unexpected solution
• Able to separate key issues from others
• Visualizes implications of proposal
• Accurately guesses the progress of negotiation
• Sees the picture
Problem
This may be dangerous because of wildness and lack of discipline

9. Logical Negotiator
Features
• Sets rules of negotiation
• Develops an agenda
• Argues logically
• Adapts position to meet changing situation
Problem
Likely to see the process as being more important that content or
outcome

10. The Lead Negotiator
This coordinates all the other roles and
decides appropriate strategy to apply.

11. Negotiation Approaches
• Competition: In this approach, a party just try to maximize
benefits accruable without consideration for the other. This is
focused on win/lose.
• Collaboration: This approach is based on belief that it’s
possible to reach a solution wherein both parties would
derive benefit i.e. win/win.
• Avoidance: If a party identifies the matter at stake to be of
low importance, it may decide to avoid negotiation, thus
leading to lose/lose situation. This approach can be adopted
to give room for further research or change of strategy.
• Accommodation: This involves giving concession to the
other party. It may be viewed as Achilles' heel or
benevolence.
• Compromise: In this case, both parties are expected to
sacrifice some elements of their demands, in order to arrive
at a middle ground.

12. Bargaining Styles
• Compromisers
• Problem Solvers
• Accommodators
• Competitors
• Avoiders

13. Nemawashi
To dig around a root before transplanting it
Applied as “groundwork laid inconspicuously in
advance.

14. Naniwabushi Strategy
This comprises three parts as follows:
 Kikkake: General background of story
 Seme: Account of critical events
 Urei: Expression of pathos and mourning for
what happened

15. Seven Elements of Negotiation
Interests: What do the parties want?
 Options: What are likely areas of agreement?
 Alternatives: What if we don’t agree?
 Legitimacy: How persuasive is each party?
 Communication: Are both parties willing to discuss and
listen?
 Relationship: Are both parties ready to establish operational
relationship?
 Commitment: What’s the structure of commitment from both
parties.

16. Functions of Nonverbal Communication
 Accent: Punctuating or drawing attention to a verbal
message
 Complement: Expressions/gestures that support but could
not replace verbal message
 Contradict: Expressions or gestures that convey meaning
opposite to that of verbal message
 Regulate: Expressions or gestures that control the pace or
flow of communication
 Repeat: A gesture or expression that can be used alone to
send the same meaning as verbal message
 Substitute: A nonverbal cue that replaces verbal message

17. Examples of Nonverbal Cues
 Accent: Touching someone’s shoulder in empathy
 Compliment: Smiling in approval or frowning with
disdain
 Contradict: Reading paper while saying “I am
listening”
 Regulate: Looking confused by too much
information
 Repeat: A stern look or pointing along with a verbal
command
 Substitute: Nods and shakes of the head

18. Types of Nonverbal Cues
1. Facial expression
2. Eye behaviour
3. Posture
4. Gesture
5. Proxemics
6. Touch
7. Personal appearance
8. Vocal features of speech

19. Real Nonverbal Cues
 Facial Expression: Happiness, sadness, surprise, fear,
anger and disgust
 Eye Behaviour-Functions: Regulatory, monitoring,
cognitive and expressive
 Posture: Indicative of attention, involvement, relative
status and rapport
 Gestures: Speech related and independent
 Proxemics: Use space
 Touch: ‘of self’ indicates emotion, and ‘of others’ indicates
relationship
 Personal Experience: Indicators of personality, values
and lifestyle
 Vocal Features of Speech: Tone, stress, accent, loudness
and rate of speech

20. Common Signs of Deception During Negotiation
i. New body movements
ii. Touching of self/fidgeting
iii. Hesitation
iv. Blinking, eye shifting and dilation of pupils
v. Lack of spontaneity
vi. Speech errors
vii. High vocal pitch
viii. Negativity

21. Negotiation Process
• Prepare objectives and strategy
• Discuss and exchange information
• Propose solution
• Bargain and review areas of concession
• Conclude and draft agreement

22. Types of Power
Positional Power
Information Power
Control of Reward
Coercive Power
Access to and Control of Agenda

23. Using Power in Negotiation
 Be able to manipulate meaning and symbols
 Maintain a measure of flexibility
 Use personal power through confidence
 Be able to manipulate rewards
 Develop networks and alliances
 Know the area in which you intend to negotiate

24. “Leverage is having something that
the other guy wants. Or better,
need. Or best of all, simply cannot
do without”
- Donald Trump

25. Three Positions for Decision Analysis
• Ideal Position
• Realistic Position
• Fallback Position

26. BATNA
The Best Alternative to a Negotiated Agreement
(BATNA) provides more leverage for favourable
positioning.
Identify BATNA through critical thinking, creative
thinking and strategic thinking.

27. Approaches to Sales Negotiation
Transactional Approach: One party demands
value and the other gives it up in a particular
transaction.
Transformational Approach: Application of
wide-ranging problem-solving techniques to
surmount hitches in customer relationship, thus
transforming vendor relationship to business
partnership.

28. Sales Negotiation Process
- Elijah Ezendu, Negotiation

29. Identifying Buying Signal
i. Assumptive ownership
ii. Issuing instruction for delivery
iii. Concentrated attention to buying details
iv. Disappointment at lead time for possession
v. Looking intently at the product
vi. Asking questions about usage of product

30. Action during Sales Negotiation
 Be prepared for tactical response in form of flinch or silence
 Use open-ended questions
 Mention benefits the prospect would derive from product/service
 Don’t be hasty to fill pauses during sudden silence.
 Listen
 Be ready to change value proposition to confirm price concession
 Identify tracks towards agreement
 Conclude agreements from time to time
 Paraphrase client’s statements and demonstrate commitment

31. Action After Sales Negotiation
Do the following, if agreement is accomplished
1. State agreement verbally and in draft
2. Reinforce purchase decision of prospect/customer and express
thankfulness.
Do the following, if no agreement is reached
1. Show appreciation to prospect/customer
2. Encourage the prospect/customer to try you next time.

32. English Auction
Dutch Auction
First-Price Sealed-Bid Auction
Vickery Sealed-Bid Auction
Auction

33. Auction
• English Auction: In this case, the Auctioneer declares reserve
price and bidding would progress with increasing price. The
last (highest bidder) wins and pays the highest valuation.
• Dutch Auction: This is characterized by a reducing bid price
from a high opening bid announced by the Auctioneer. The first
demand to match the descending bid price wins.
• First-Price Sealed-Bid Auction: Herein, the bids would be
sealed and submitted during the bidding period; and at the
resolution phase, the bids would be opened and the winner
announced as the highest bidder.
• Vickery Sealed-Bid Auction: In this type of auction, the highest
bidder wins at the second highest bidder’s price.

34. Negotiation Tactics & Ploys 1
 Brooklyn Optician: This is a type of add-on ploy in which a
service/product would be ‘completely knocked down’ into components,
and a prospective buyer ensnared unto a haggle circuit from one
component to another. For example, “The palmtop is 180,000 Naira; if
you want the ear piece, that’s 9,000 Naira; if you want the satellite
control system, that’s just 15,000 Naira; there’s even a special bag,
and if you want it, that’s only 5,000 Naira.”
 Fait Accompli: It’s a ploy used for shifting power to the doer and raise
the stakes, if counter sanctions are applied. For example, Military
officers seize a town, then offer to negotiate.
 Escalator Schedule: This is a formula for increasing an agreed share
or salary in uncertain future income stream, if performance reaches a
particular level. For example, an employer who agrees to escalate a
worker’s entitlement from a 100,000 Naira to 150,000 Naira, if his
performance level increases to 40 closed deals per month.
 Padding: It’s a negotiating margin set by sellers, wherefore the
padded price gives them room to tackle the bargaining instinct of a
prospect/customer.

35. Negotiation Tactics & Ploys 2
 Noah’s Ark: It’s a buyer’s pressure ploy used for moving a seller to
reduce the price of a particular product. For example, “You should sell at
a lower price, others have offered better than that”.
 Call Girl: This involves demanding for up-front payment. For example, “I
must be fully paid before I come to site”.
 Bad Publicity: Lure someone to think that if he obtains his goal and
some people find out, he would be widely scorned or condemned. For
example, “if your Boss finds out that you refused to endorse it, you
would lose credibility and your career may run amuck.”
 Quivering Quill: Pause exactly at the time of endorsing a deal, and
demand for extra concession. For example, “Oh! If you include the
laptop bag in the deal, I would just endorse the cheque.”
 Faking: Deceive the other party to believe you are who you aren't. For
example, “When I was in Cape town, I led a group of professionals to the
mining office and convinced the Chief Executive to implement a change
that increased the firm’s productivity.”

36. Negotiation Tactics & Ploys 3
 Nibbling: Demanding for little things one after the other so much that a
lot would be collected. For example, “Bring a pen…..and a piece of
paper……oh! Just come with cold water.”
 Red Herring: Set-up a false trail to mislead the other party and keep
him away from what you intend to hide. For example, “the seller of a
second-hand car tells a prospect to inspect its interior, emphasizing it’s
the only part that require refurbishing. Meanwhile, the engine had
developed a fault which would become noticeable to a layman only after
the vehicle must have been driven for some months.”
 Trial Balloon: This involves putting forward a suggestion as ultimate
solution, and see if the other party would accept it. For example, “Let’s
install this particular software in your firm, I think it would improve your
performance.”
 Russian Front: On deciding what to offer to the other party, present it as
a second option after telling them about the first option which would be
described to evoke repulsion. For example, “ The AG9T is a big engine
that demands crane to move it and its cost of usage is very high; the
AB4X is computerized, finer, portable and its life cycle cost is very low.”

37. Price Negotiation
Price negotiation is a zero-sum game - the game theory jargon
signifying that what one party gains the other loses.
The most profitable strategies in price negotiation are as
follows:
1) Form one-person-queue
2) Buyers should test quantity discounts, while sellers evaluate
total revenue
3) Focus on cooperative relationship
4) Deploy blue ocean strategy
5) Use add-on ploys
6) Test sensitivity of the other party
7) Focus on win-win
8) Test interest of the other party

38. Impasse
In negotiation, if what a party offers is
less than the least which the other
party will accept, then impasse may
arise, unless there’s change in the
standpoint of one or both.

39. How to Break Impasse
1. Change the subject.
2. Brainstorm together.
3. Throw some wild and crazy idea on the table.
4. Change the form of the payment.
5. Handle the emotional subject of money as
quickly as possible.
6. Change the members of the negotiating team.
Adapted from Michael Lee & Sensei Tabuchi, Black Belt Negotiating

40. Deadlock
This occurs when concessionary impasse
strains the enabling interface between
the parties and mutual interests wane.

41. Handling Price Deadlock
 Pay a fraction in cash, the rest in kind
 Pay more now, then less next month
 Pay in another way
 Pay in U.S Dollars or Euro
 Pay a quarter now, then the rest next month
 Split the invoice across various budgets

42. Handling Deadlock Across the Issues
i. Amend the specification
ii. Alter the time structure of events by
using Salami.
iii. Change the responsibilities
iv. Change the nature of the business

43. Deadlock Ploys
They are used for inducing fear of deadlock in another party.
Examples are as stated below.
 Introduction of phoney deadlines.
 Exhibit false temper.
 Become unavailable.
 Emphasize the dilemma of reaching an agreement.
 Accuse the other party of not being interested in agreement
 State final offer
 Express great pessimism
 Act as if you intend to go off in a huff.

44. Reason Versus Influence
Where a party resolutely refuse to understand or
admit reason, then influence would be an
alternative façade for progress.
Had your organization or department faced such
situation?
How was it handled?

45. An Influencing Agenda For Potential Allies
Identify
Potential
Ally
Analyse
Potential
Ally’s
Interests
Assess Your
Resources
Relevant to
Potential Ally
Diagnose
Your
Relationship
with Potential
Ally
Select
Influencing
Approach
Execute and
Monitor Your
Approach
- Gavin Kennedy, Influencing For Results

46. Goals of Lease Negotiation
• Gain reduction in rent, repairs, permission or
allowances.
• Sustaining congenial relationship with the
lessor

47. Strategies for Lease Negotiation
1. Emphasize existence of competition.
2. Using applicable information.
3. Enhancing collaboration by focusing on mutual benefits.
4. Take advantage of defects and demand for reduction .
5. Paint a picture of insufficient fund.
6. State whatever input you may need to bring into the
equipment or house, using that as a ploy for reduction.
7. Establish lines of agreement systematically.
8. Identify areas you would readily concede and areas of
no-concession. Then use areas of concession to gain
areas of no-concession.

48. Basic Rules in Collective Bargaining Negotiations
• Seek common grounds
• Use listening ability for indicating intention to
understand the other party.
• Build your case in a logical sequence, gaining
agreement at each stage.
• Use counter proposals when necessary for realigning
position.
• Invite the other party to look at the problem from the
opposite perspective.
• Avoid declaring that an area is non-negotiable.
• Use analytical questioning technique to shift the other
party.

49. Pre-Negotiation Preparation in Collective Bargaining
 Identify objectives in terms of keeping wage increases
below level of productivity increases and within inflation
rate.
 Organize a Negotiation Team and clarify the roles of
each member.
 Conduct extensive research concerning economic
impact of demands, comparative occurrence in the
industry, and identify demands which are important to
the other party as well as your core demands.
 Initial response should be in writing
 A wide-range of alternatives should be invented
 A negotiation strategy should be adopted.

50. Dr Elijah Ezendu is Award-Winning Business Expert & Certified Management Consultant with expertise
in Interim Management, Strategy, Competitive Intelligence, Transformation, Restructuring, Turnaround
Management, Business Development, Marketing, Project & Cost Management, Leadership, HR, CSR, e-
Business & Software Architecture. He had functioned as Founder, Initiative for Sustainable Business
Equity; Chairman of Board, Charisma Broadcast Film Academy; Group Chief Operating Officer, Idova
Group; CEO, Rubiini (UAE); Special Advisor, RTEAN; Director, MMNA Investments; Chair, Int’l Board of
GCC Business Council (UAE); Senior Partner, Shevach Consulting; Chairman (Certification & Training),
Coordinator (Board of Fellows), Lead Assessor & Governing Council Member, Institute of Management
Consultants, Nigeria; Lead Resource, Centre for Competitive Intelligence Development; Lead
Consultant/ Partner, JK Michaels; Turnaround Project Director, Consolidated Business Holdings Limited;
Technical Director, Gestalt; Chief Operating Officer, Rohan Group; Executive Director (Various Roles),
Fortuna, Gambia & Malta; Chief Advisor/ Partner, D & E; Vice Chairman of Board, Refined Shipping;
Director of Programmes & Governing Council Member, Institute of Business Development, Nigeria;
Member of TDD Committee, International Association of Software Architects, USA; Member of Strategic
Planning and Implementation Committee, Chartered Institute of Personnel Management of Nigeria;
Country Manager (Nigeria) & Adjunct Faculty (MBA Programme), Regent Business School, South Africa;
Adjunct Faculty (MBA Programme), Ladoke Akintola University of Technology; Editor-in-Chief, Cost
Management Journal; Council Member, Institute of Internal Auditors of Nigeria; Member, Board of
Directors (Several Organizations). He holds Doctoral Degree in Management, Master of Business
Administration and Fellow of Professional Institutes in North America, UK & Nigeria. He is Innovator of
Corporate Investment Structure Based on Financials and Intangibles, for valuation highlighting
intangible contributions of host communities and ecological environment: A model celebrated globally
as remedy for unmitigated depreciation of ecological capital and developmental deprivation of host
communities. He had served as Examiner to Professional Institutes and Universities. He had been a
member of Guild of Soundtrack Producers of Nigeria. He's an author and extensively featured speaker.

51. Thank You