1. By-Prof. Snehal Chincholkar
SEM-I ,2010-11

2. “Let us never negotiate out of fear.
But never fear to negotiate”
John F. Kennedy

3.  Two children squabbling over dividing an apple.
 A manager making a suggestion to his superior.
 A salesman trying to arrange an appointment with
a prospective customer. To which can be added
others like.

4.  Two friends debating on which movie to see.
 Managers and union officials negotiating the
union’s charter of demands.
 A counter salesman in a textile mill showroom
bringing out and unraveling dozens of bolts of
cloth to a customer who has vaguely indicated his
need for a suit length.

5.  Avoidance
 Capitulation ( Surrender )
 Suppression ( Control )
 Accommodation ( Adjustment )
 Problem solving (e.g. conciliation ( Pacify),
negotiation, mediation, facilitation)
 Escalation
 Confrontation ( Argument )

6. Gavin Kennedy (The New Negotiating Edge) describes 3 types of
behaviour that we can display and encounter when in a negotiating
situation
RED BLUE PURPLE
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7. RED Behaviour
• Manipulation
• Aggressive
• Intimidation / Pressure
• Exploitation
• Always seeking the best for you
• No concern for person you are negotiating with
• Taking
People behave in this manner when they fear exploitation by the other party, but by
behaving this way to protect themselves, they provoke the behaviour they are trying to
avoid.
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8.  Win win approach
 Cooperation
 Trusting
 Pacifying
 Relational
 Giving
Kennedy talks of a ‘behavioural dilemma’, do you cooperate (blue) or defect (red)?
Can you trust the other person? And to what extent? Trusting someone involves risk, on the
one hand being too trusting is naïve and on the other, not trusting at all can create deceitful
behaviour.
The answer is to merge blue and red behaviour into purple.
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9.  Give me some of what I want (red)
 I’ll give you some of what you want (blue)
 Deal with people as they are not how you think they are
 Good intentions
 Two way exchange
 Purple behaviour incites purple behaviour
 Tit for tat strategies
 Open
 People know where they stand
 Determination to solve problems by both sets of criteria of the merits of the case
and/or the terms of a negotiated exchange
To the red behaviourist the message is loud and clear, ‘You will get nothing from me unless
and until I get something from you’.
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10. Conflicts and Negotiation
Negotiation try for the resolution
of conflict to satisfaction of all
parties involved.

11.  The word "negotiation" is from the Latin,
"negotium".
 It is a dialogue intended to resolve disputes, to
produce an agreement upon courses of action,
to bargain for individual or to craft outcomes
to satisfy various interests.
 Occurs in business, non-profit organizations,
government branches, legal proceedings,
among nations and in personal situations such
as marriage, parenting, and everyday life.

12. Negotiation – What is it?
‘The process by
which we search for
the terms to obtain
what we want from
somebody who
wants something
from us’
Gavin Kennedy
Confer with others to
reach a compromise or
agreement.
Concise Oxford Dictionary
To negotiate
is to trade
something we
have for
something we
want.
Anon
‘Negotiation is an
explicit voluntary
traded exchange
between people who
want something from
each other’
Gavin Kennedy

13.  There are minimum two parties involved in the negotiation
process. There exists some common interest, either in the
subject matter of the negotiation or in the negotiating
context, that puts or keeps the parties in contact.
 Though the parties have the same degree of interest, they
initially start with different opinions and objectives which
hinders the outcome in general.
 In the beginning, parties consider that negotiation is a better
way of trying to solve their differences.

14.  Each party is under an impression that there is a possibility
of persuading the other party to modify their original
position, as initially parties feel that they shall maintain
their opening position and persuade the other to change.
 During the process, the ideal outcome proves unattainable
but parties retain their hope of an acceptable final
agreement.
 Each party has some influence or power – real or assumed –
over the other’s ability to act.
 The process of negotiation is that of interaction between
people – usually this is direct and verbal interchange.

15.  When you’d lose the farm
 When you are sold out
 When the demands are unethical
 When you do not care
 When you do not have time
 When they act in bad faith
 When waiting would improve your position
 When you are not prepared

16. PLAN
DEBATE
PROPOSE
BARGAIN
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17. Summary Close Summarise the details of the conditions and
the offer, and ask for agreement.
Adjournment Close Useful where there remains some small
differences. It gives both parties time to
consider the final agreement.
Final offer close Make it clear that this is your final offer
by choosing the right words, tone and body
language. Create an atmosphere of
decisiveness, gather your papers together as
though getting ready to leave.
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18. Types Parties
Involved
Examples
Day-to-day/ Managerial
Negotiations
1.Different levels of
Management
2.In between colleagues
3.Trade unions
4.Legal advisers
1.Negotiation for pay, terms and
working conditions.
2.Description of the job and
fixation of 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.

19. Cost structure of a typical
manufacturing enterprise
Purchased
Materials
60% Overheads
15%Labour
15%
Purchased
Materials
54% Overheads
15%Labour
15%
Profit16%
Before the savings achieved
through better negotiations
After the savings achieved
through better negotiations
10%Profit
M7:U1:1.1-4ITC

20. Preparation
 Negotiation
 Communication

21. 1. Poor communications
2. Hardball attitudes / inflexibility
3. Unable to build a deal that has value for both
parties
4. Negotiating with the wrong people
5. Unrealistic demands / expectations
6. Lack of trust…

22.  The negotiators must have authority on both the
sides.
 Needs of all parties have to be satisfied
 Be ready to compromise
 Good manners
 Relax
 Stick to your core needs
 Know what you have and promote it
 Do not rush to agree
 Control your reactions

23.  Change relative perceptions of power
 Be personal
 Be self confident
 Relaxed but be very watchful and alert
 Try to take charge
 Keep small negotiating teams
 Phrase questions for “Yes” answers
 Early minor concessions
 No surprises
 Identify need ( Versus position)

24.  Make promise with caution
 Make terms specifics
 Keep session reasonably short
 Do no be passive
 Take frequent break
 Speak less
 Cool it
 Agree to the next step
 Do not allow digressions
 Do not over do self criticism

25.  Do not linger
 Do not reopen closed issues
 Be right the first time
 Do not misrepresent
 Have every thing on tap
 Be yourself
 Do not run down others
 Be positive
 Do not push too far
 Expect negative reactions
 Clarify each point of agreement
 Record

26. Good Practice Avoid
 Actively listen
 Question for clarification
 Summarising
 Test commitment
 Seeking & giving information
 Encourage two way conversation
 State and plan your proposal –
then summarise
 Use the ‘if you ….then we’ll’
principle
×Interrupting
×Attacking
×Blaming
×Talking too much
×Sarcasm
×Threats
×Taking it personally
×Closed body language
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28. Barney wants to buy a car. He spotted the high-quality used car on a dealer’s lot over
the weekend. He would buy it immediately if he had more cash. The dealer will give
him only $1200 on a trade for his current automobile. The car Barney wants is really
great, and chances are good it will be sold he can swing the deal if in short order.
Barney has planned carefully and decided he can swing the deal if he can send his
present vehicle to a private party to around $ 2000. This would give him $1,500 for a
down payment and $ 500 for accessories he wish to add. The car is in good condition
except for a couple of minor dents in the fender. The snow tires for his current car
won’t fit the new one but can probably be sold; that will help. Barney remove the
new stereo system he installed last month and place it in the new car.
Billie, one of Barney’s co-workers, herd that Barney want to sell his car and plans to
talk to him about it. Her daughter is graduating from college in three months and will
need a car to drive to work. Billie can only afford about $ 1800 including any repairs
that might be required, and she needs to reserve enough money for snow tires. Her
daughter has seen the car and think it’s sporty, specially with the stereo. Billie check
the blue book price for the model of Barney’s car and she knows the average whole
sell price is $1,200 and the average retail price is $1,950.

29.  What are Barney’s objectives ?
 What are Billie’s Objectives ?
 What are likely to be the points of conflict ?
 What power does Barney have ?
 What power does Billie have ?
 How important is time to Barney ?
 How important is time to Billie ?
 What are some possible points of compromise ?

30. SALARY NEGOTIATION

31.  Delay discussion of compensation until after you have
been offered the job.
 After getting offer remain quite at least for 30 second (
Chances that the person can offer higher price or talk
about flexibility)
 Clarify the doubts , role and responsibilities.
 Say you would like to think it over and talk again the
next day.

32.  Do not discuss benefits before salary. First fix
the salary then negotiate the fringe benefits.
 Than take decision.

33. Thanks