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Negotiation Skill

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Negotiating is the process of communicating back and forth, for the purpose of reaching a joint agreement about differing needs or ideas.

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Negotiation Skill

  1. 1. Negotiation Skill
  2. 2. The word "negotiation" originated from the Latin expression, "negotiatus", which means "to carry on business". “A give-and-take decision-making process involving interdependent parties with different preferences.”
  3. 3. 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 behaviours 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. Defined :
  4. 4. Where Do We Use This Skill? Family and personal “Where should we go for dinner?” “Can I borrow the car?” Academic research “Fund my project.” “Publish my paper.” Business ventures “I want a raise.” “Invest in my company.” “Pay me a license fee or I’ll sue you.” Everything is negotiated
  5. 5. 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
  6. 6. Types Of Negotiation In Organizations Managerial Negotiations Day-to-day: 1. Different levels of Management 2. In between colleagues 3. Trade unions 4. Legal advisers Examples: 1. Negotiation for pay, terms and working conditions. 2. Description of the job and fixation of responsibility. 3. Increasing productivity
  7. 7. Types Of Negotiation In Organizations Commercial Negotiations 1. Management 2. Suppliers 3. Government 4. Customers 5. Trade unions 6. Legal advisors 7. Public Examples: 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
  8. 8. Types Of Negotiation In Organizations Legal Negotiations 1.Government 2.Management 3.Customers Examples: 1. Adhering to the laws of the local and national government.
  9. 9. Prepare Negotiate Close Perform & Evaluate Negotiation Process
  10. 10. Preliminary Question: 1. Should I negotiate? 2. Is this a position-based or interest- based negotiation? 3. Am I trying to resolve a dispute or make a deal? 4. How should I analyze a negotiation? 5. Is this a cross-cultural negotiation? 6. How should I handle ethical issues? 7. Should I use an agent to negotiate for me?
  11. 11. 1. Should I Negotiate? Prepare • Ashan Mudir buying a big screen TV • Lost of research on different models and dealer's costs. • Visited several dealers • Combines price of TV with installation, satellite dish, etc. • Obtained price concession by mentioning competitor's offer. • Saved $120. A successful negotiation?
  12. 12. 1. Should I Negotiate? Prepare In making a decision about whether to negotiate, consider your feelings about negotiation as well as the potential risks and rewards.
  13. 13. If you don't know where you are going, you may end up somewhere else.
  14. 14. 2. Position or Interest Prepare Interest-based Bargaining / Win-win Bargaining Integrative bargaining in which parties collaborate to find a “win-win" solution to their dispute. This strategy focuses on developing mutually beneficial agreements based on the interests of the disputants. Interests include the needs, desires, concerns, and fears important to each side.
  15. 15. 2. Position or Interest Prepare Interest based Bargaining Positional bargaining is one that involves holding on to a fixed idea, or position, of what you want and arguing for it and it alone, regardless of any underlying interests.
  16. 16. 2. Position or Interest Prepare Position based Interest based Distributive Integrative Competitive Cooperative Win / Lose Win / Win Zero Sum Non-Zero Sum Adversarial Problem Solving Position based Interest based Calming Value Creating Value
  17. 17. 3. Dispute Resolution or Deal Prepare
  18. 18. 3. Dispute Resolution or Deal Prepare 4:00 am: Students began forming a line (freezing weather) to purchase basketball tickets. 7:00 am: Other students formed a second line nearby and demanded that students in the first line move to the back of their line. What processes could be used to resolve this dispute?
  19. 19. 3. Dispute Resolution or Deal Prepare 4:00 am: Students began forming a line (freezing weather) to purchase basketball tickets. 7:00 am: Other students formed a second line nearby and demanded that students in the first line move to the back of their line. What processes could be used to resolve this dispute? Power Litigation Arbitration Mediation Negotiation Avoidance 6 Types of Dispute Resolution
  20. 20. 3. Dispute Resolution or Deal Prepare Resolving Dispute options: Power Use power to force the other side to do what we want. Rights Let a third party (a judge or arbitrator) decide who is right. Avoidance Withdraw from the dispute and let the other party have what they want. Interest Try to negotiate an agreement based on our need..
  21. 21. 4. Analyzing Negotiation Prepare
  22. 22. 4. Analyzing Negotiation Prepare Key Questions
  23. 23. 4. Analyzing Negotiation Prepare Risk of Stretch Goal
  24. 24. 4. Analyzing Negotiation Prepare Possible Answer
  25. 25. Best Alternative To Negotiated Agreement BATNA
  26. 26. Why BATNA Matter BATNAs tell you when to accept and when to reject an agreement. When a proposal is better than your BATNA: ACCEPT IT When a proposal is worse than your BATNA: REJECT IT Your “BATNA “ is the only standard which can protect you both from accepting terms that are too unfavourable and from rejecting terms it would be in your interest to accept.” In the simplest terms, if the proposed agreement is better than your “BATNA”, then you should accept it. If the agreement is not better than your “BATNA” , then you should reopen negotiations.
  27. 27. Determining Your BATNA BATNAs are not always readily apparent. Fisher and Ury outline a simple process for determining your BATNA: • develop a list of actions you might conceivably take if no agreement is reached; • improve some of the more promising ideas and convert them into practical options; and • select, tentatively, the one option that seems best.
  28. 28. 4. Analyzing Negotiation Prepare
  29. 29. 4. Analyzing Negotiation Prepare Other Perspective
  30. 30. 4. Analyzing Negotiation Prepare ZOPA (Zone of Potential Agreement)
  31. 31. Case: Dispute Resolution
  32. 32. Using Decision Tree Analysis
  33. 33. 5. Cross-Cultural Negotiation Prepare Analyze Your Interest Analyze Other Side's Interests Every Culture Negotiating Style Values and Beliefs Other Side's Interest Your Interests
  34. 34. 5. Cross-Cultural Negotiation Prepare Culture can influence negotiation. But: Many variations with in a culture. Therefore: be sensitive to culture but don't stereotype
  35. 35. 6. Handling Ethical Issues Prepare Legal Ethical
  36. 36. 6. Handling Ethical Issues Prepare Legal Fraud False Representation of material fact Fiduciary Duty High duty of trust and loyalty Unconscionability Violates principles of good conscience
  37. 37. 6. Handling Ethical Issues Prepare Ethical Organizational Standards Mentor Someone you admire Personal Standards Gut Test Newspaper Test Family Test Golden Rule
  38. 38. 6. Handling Ethical Issues Prepare Mentor
  39. 39. 6. Handling Ethical Issues Prepare Gut Test
  40. 40. 6. Handling Ethical Issues Prepare Family & Newspaper
  41. 41. 6. Handling Ethical Issues Prepare Except Economical Rational, Why would you reject the part of split?
  42. 42. Accommodating Collaborating DominatingAvoiding Compromising Negotiating Style
  43. 43. 7. Should I use Agents Prepare • Is the agent a better negotiator? • Does the agent have more experience in negotiating the issues.? • Does the negotiation involve a technical matter that requires the expertise of an agent? • How much time do I have to invest in a negotiation? • What is my relationship with other side?
  44. 44. Issues In Negotiation The Role of Mood & Personality Traits in Negotiation; Positive moods positively affect negotiations Traits do not appear to have a significantly direct effect on the outcomes of either bargaining or negotiating processes (except extraversion, which is bad for negotiation effectiveness)
  45. 45. Gender Differences In Negotiations; Women negotiate no differently from men, although men apparently negotiate slightly better outcomes. Men and women with similar power bases use the same negotiating styles. Women’s attitudes toward negotiation and their success as negotiators are less favorable than men’s.
  46. 46. Thank You Negotiation means getting the best of your opponent. ~ Marvin Gaye

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