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Basics of negotiation
Stages and Phases of negotiation
Tactics of negotiation
Persuasion in negotiation
The specialized are of negotiation (Crisis International Salaries)

What is Negotiation?
An interactive communication process that may take place whenever we want something from someone else or another person
wants something from us.
To Negotiate is to arrange or settle by conferring or discussing; or to use information and/or power to affect human behavior
in an environment filled with multiple issues and tensions.
Also it is a strategic endeavor directed toward the specific ends of reaching agreements and satisfying negotiators needs.
Strategies are the pre-formulated game plans, objectives, and approaches that guide negotiators in reaching their goals;
Tactics are the specific ways bargainers implement these strategies.
To confer with another or others to come to terms or reach an agreement.
From Latin: to transact business in which negotiation is basically deal-making.
But Problem solving is what we do on a daily basis with family and friends and this is not negotiation

Characteristics of a negotiation
A preference to search for a solution rather than have a fight and it Depends on:
Personalities of the people involved
History that exists between them
The persuasive ability of each

Negotiating is about WHY, not WHAT

The purpose of negotiating is seeing if you can get your interests met through an agreement, versus an alternative.
Positions are WHAT we want
Interests are WHY we want something
Negotiate the WHY.not the WHAT

Negotiation Keys
Time and Timing the party with the tight time frame is at a disadvantage
Who can wait it out?
Who needs who?
Information: Gather as much information about any and everything as possible
Power: Even if you do not feel you have the power, act as though you do.
Limited Authority: Buys time
Recognize tactics: What are they trying to get you to do?
Yield Grudgingly - Chart concessions - Listen and pay close attention - Avoid splitting the difference - Be willing to give on
some things - Reserve judgment be open minded - Ask questions prepare a list - Build trust with shared values,
views, attitudes, experiences, and interests - Convince the other party that you have other options (even if you dont!) PREPARE PREPARE

Types of Negotiation and Negotiators

Good Negotiation:
Should produce a wise agreement which (Meets legitimate interests of both sides - Resolves conflicting interests fairly - Will
last)
Should be efficient
Should improve or at least not damage the relationships between the parties
Basic Types of Negotiation:
Distributive negotiations: negotiations involve a fixed pie. There is only so much to go around and each party wants as big a slice
as possible. An example of a distributive negotiation is haggling over the price of a car with a car salesman. In this type of
negotiation, the parties are less interested in forming a relationship or creating a positive impression. Distributive relationships
involve: Keeping information confidential. For example, you dont want a car salesman to know how badly you need a new car or
how much you are willing to pay. Trying to extract information from the other party. In a negotiation, knowledge truly is power.
The more you know about the other partys situation, the stronger your bargaining position is. Letting the other party make the
first offer. It might be just what you were planning to offer yourself!

Involve in win-lose, zero sum, fixed-amount situations wherein one partys gain is another partys loss
A dollar more to one side is a dollar less to the other

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Carpet sale where buyer and seller have no relationship
Wage negotiations between business owners and union employees
Integrative negotiations: are based on cooperation. Both parties believe they can walk away with something they want without
giving up something important. The dominant approach in integrative negotiations is problem solving. Integrative negotiations
involve: Multiple issues. This allows each party to make concessions on less important issues in return for concessions from the
other party on more important issues. Information sharing. This is an essential part of problem solving. Bridge building. The
success of integrative negotiations depends on a spirit of trust and cooperation

Involve joint problem solving to achieve results benefiting both parties (WIN WIN)
Both sides work to increase the value of the solution
Goals are to:
Create as much value for yourself and the other side
Claim value for yourself
Open about information and circumstances
Positional Negotiating
When negotiators bargain over positions they tend to lock themselves into those positions.
The more you clarify your position and defend it against attack, the more committed you become to it
The more you try to convince the other side of the impossibility of changing your opening position, the more difficult it
is to do so.
The result is frequently an agreement that is far less satisfactory to each side than what it could have been
Positional Negotiation pros and cons
Pros

Cons

Easy to understand

Rewards stubbornness and deception

Simple communication

Discourages exploration of interests and options

Can be quick and efficient

Promotes arbitrary outcomes

Very operational

Takes longer in complex situations

Requires little preparation

Rewards stubbornness and deception

Universally understood

Discourages exploration of interests and options

Often expected

Promotes arbitrary outcomes

Co-operative = win/win : (Empathetic - partnership agreements)

Adversarial = win/lose : ( maximize own gain and others loss - unstable agreements)

Criteria for a Successful Negotiation

Win-win outcomes occur when each side of a dispute feels they have won. Since both sides benefit from such a scenario, any
resolutions to the conflict are likely to be accepted voluntarily. The process of integrative bargaining aims to achieve, through
cooperation, win-win outcomes.
Win-lose situations result when only one side perceives the outcome as positive. Thus, win-lose outcomes are less likely to be
accepted voluntarily. Distributive bargaining processes, based on a principle of competition between participants, are more likely
than integrative bargaining to end in win-lose outcomes--or they may result in a situation where each side gets part of what he or
she wanted, but not as much as they might have gotten if they had used integrative bargaining.
Big power defiance (imbalance power)
Short term relation
Lose-lose means that all parties end up being worse off. An example of this would be a budget-cutting negotiation in which all
parties lose money. The intractable budget debates in Congress in 2012-13 are example of lose-lose situations. Cuts are essential-the question is where they will be made and who will be hurt. In some lose-lose situations, all parties understand that losses are
unavoidable and that they will be evenly distributed. In such situations, lose-lose outcomes can be preferable to win-lose outcomes
because the distribution is at least considered to be fair.

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Characteristic

Win/Win Style

Win/Lose Style

Negotiation
Goal

Obtain a result that is satisfactory to both sides,

including a fair and reasonable price.

Obtain the best possible deal for your side regardless of

consequences to the other side.

Focus

Solve mutual problems.

Defeat the other party.

Environment

Cooperation and trust

Mistrust and gamesmanship

Negotiation
Characteristics

Negotiators attack the problem not each other

Focus on long-term satisfaction
Available alternatives considered
Results based on objective standards
Focus on positive tactics to resolve differences
Emphasis on a win/win result.

Tactics designed to increase or emphasize relative power.

Focus on negotiating positions rather than long-term
satisfaction.
Argumentative
Reluctance to make any meaningful concessions
Highly competitive

Criteria for a Successful Negotiation

Everyone believes the agreement meets their basic needs.

Each person believes others accept his or her concerns as legitimate.
All parties believe the process was fair and equitable.
Each person believes the other will keep the agreement.
The negotiators are willing to have a rematch in the future.

Top Factors for Successful Negotiating:

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Consider the timing and method of negotiations: Change the game to win-win problem solving by negotiating from interests,
not positions.
Prepare point-by-point: Negotiators who prepare outperform those that do not, or only prepare marginally.
Offer benefits for accepting your offer: The benefit is whats in it for them or the yeah, so? test.
Frame your negotiation around one or two key points, preferably one: Keep it simple by framing and reframing to keep things
on track and reach agreements efficiently. Purpose, process, payoff.
Know your BATNA: Your personal power comes from the ability to walk away if you are not able to reach an agreement. You
need to be able, if necessary, to walk away leaving the relationship intact.
Prepare Options for Mutual Gain: Be creative. Think of innovative ways for both sides to get their interests met. Remember,
our goal is a satisfying agreement for BOTH parties.
Listening is the most powerful negotiating tool: This is how you learn where your interests are shared and where they are
opposed.
Use the Power of the Draft: Get in it writing. Always, every single time

The 5 Basic Bargaining Styles

Avoider: dislikes conflict
Compromiser: fair-minded people interested in maintaining relationships
Accommodator: resolve interpersonal conflicts by resolving the other persons problem
Competitor: winning is the main thing
Problem-Solver: seeks to find the underlying problem, use brainstorming to solve
In dealing with conflict, it is important to first determine the intention of the other party. Ones handling will depend on the
assertiveness or cooperatives of the other person.
As you can see from this graph, the more unassertive and uncooperative the person is, the best way to handle the conflict is to avoid.
Likewise, if the person is very assertive yet cooperative, the best handling style is collaborating

Competition
Accommodation
Compromise
Collaboration

Plus
The winner is clear
Winners usually experience gains
Curtails conflict situation.
Enhances ego of the other.
Shows good will.
Establishes friendship.
Everyone wins.
Creates good feelings

Minus
Establishes the battleground for the next conflict.
May cause worthy competitors to withdraw
Sometimes establishes a precedence.
Does not fully engage participants.
No one gets what they want.
May feel like a dead end
Hard to achieve since no one knows how.
Often confusing since players can win something they didnt
know they wanted.

Accommodating (I Lose - You Win)

Individuals who negotiate with an accommodating style put great value and emphasis on preserving the relationship. It is a great style when
in negotiation with a recurring party (say a recurring trade partner) however, it is less ideal to use when chances are high you will only
negotiation once with this party.
Avoiding (I Lose - You Lose)
This style is used by parties who dislike negotiation and tend to avoid it. When trapped in a negotiation, parties will tend to concede swiftly
and have little initiative. This can be viewed as diplomatic. The downside is that avoiding parties will not be very likely to obtain a
satisfactory result in the negotiation.
Collaborating (I Win - You Win)
Collaborating parties tend to enjoy coming to creative solutions during negotiation. This can potentially lead to positive results or transform
simple problems into difficult solutions. Either way, parties that prefer a collaborating style make a real effort to understand the issues
of the opposing party of the negotiation.
Competing (I win - You lose)
Individuals who prefer the competing style of negotiation see negotiation as a game that must be won at any cost. It is an ideal style when
dealing with negotiation where lasting relationships are not very important. However, when preservation of the relationship is an issue,
the competing style of negotiation is less suited.
Compromising (I Lose / Win Some - You Lose / Win Some)
Parties that value fair and equal deals in negotiation tend to prefer the compromising style. This style tends to get fast results from a
negotiation. A pitfall of this style is that concessions often come too fast, without properly discovering the underlying issues.

Principles and Tips of Negotiations

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Separate the people from the problem:

Disentangle the people from the problem
Deal with the people problem: acknowledge perceptions, emotions
Listen actively
Speak to be understood
Speak about yourself, not them
Relationship Issues:
Substantive Issues:
Emotion/reason
Money
Understanding
Terms
Communication
Conditions
Reliability
Concessions
Coercion/persuasion
Promises
Acceptance/respect
Dates/numbers

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2. Focus on Interests not Positions :
Positions: What disputants say they want in a negotiation: a particular price, job, work schedule, change in someone elses
behavior, revised contract provision, etc.
Interests: Underlying desires or concerns that motivate people in particular situations (May sometimes be the same as their
positions!) so Interests = desires and concerns that underlie positions
Substantive: How people describe the issue: barking dogs, cars blocking driveway, dying reefs
Relational: How people they should be treated or acknowledged.
Procedural: How people think issues should be addressed. (e.g. courts)
When is the Interest-Based Approach Appropriate?
Other party is willing to problem-solve
There is sufficient trust and informationor a willingness to develop them
On-going relationships are important
Commitment to carry out the agreement is needed
Quality agreement is more important than an expedient one
When is the Interest-Based Approach Unnecessary?
On-going relationships are not important
Negotiation is viewed as strictly distributive (e.g. buying a car)
Lack of commitment to problem-solving on the part of one or more parties
One or more parties see the negotiation as involving fundamental rights (but some contention about this)
Prepare for negotiation:
Clarify interests
Understand the interests of the other side
Focus the negotiation discussion on interests not positions.
Ex:
Problem: barking dog
My interpretation: my neighbor doesnt care about my needs
My position: quiet the dog
My interest: I need sleep
Issue: how to control the barking
3. Invent Options for Mutual Gain
To invent creative options:
Separate inventing from judging.
Broaden the options on the table, rather than look for a single answer.
Search for mutual gains.
Invent ways to make their decision easy.
Focus on the variety of ways issues/ interests (yours/theirs) might be addressed?
Avoid assuming theres a single solution
Separate brainstorming from evaluation of options
Dont assume zero-sum conditions
Think creatively
4.

Insist on using Objective Criteria

Name each issue as a joint search for objective criteria.
Reason and be open to reason as to which standards are most appropriate and how they should be applied.
Never yield to pressure, only to principle.
Fair standards: market value, precedent, blue book value, professional standards, best practice, industry average, equal
treatment, etc.
Fair procedures: e.g. last best offers, taking turns, drawing lots

Negotiation Principles:
Get the Other Side to Commit First
Acting Dumb is Smart
Do not Let the Other Side Write the Contract
Read the Contract Every Time
Funny Money
People Believe What They See in Witting

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Concentrate on the Issues
Always Congratulate the Other Side
1. Tip #1 Negotiating is not Compromising:
It is joint problem solving
Our goal is to efficiently reach a satisfying agreement for both parties, and to conclude on a positive note.
Fisher and Ury define negotiations as Back and forth communication to reach agreement where some interests are shared
and some interests are opposed.
Getting to Yes
2. Tip #2 People Skills Make the Difference
What is your preferred style of communicating?
What is the style of the other person with whom you will be negotiating?
Are these styles compatible, or are they opposites?
Tip #2A: Listening is the most powerful negotiating skill
It begins with effective communicationunderstanding your preferred method and learning the method of the other
party.
Communicate with them in a way that will be most effective with their style
This helps to eliminate the possibility of misunderstanding, as we communicate in many ways
Tip #2B: Listening is your most powerful negotiating tool
But before you can listen, you have to be skilled at asking questions:
Three critical questioning skills
a. Know where your questions are going
b. Ask for permission to ask questions
c. State why you want to ask questions
Purpose-Process-Payoff
If that is the case, why are we such bad listeners?

We listen to reply, argue, rebut, make our point, or win.

We do not typically listen to understand.

As Covey said, Seek first to understand, then be understood

Tip #3: Have a game plan before beginning to negotiate
Few people plan before beginning to negotiate If you cannot walk away from the negotiation at any time, you will lose.
Knowing your options outside of the negotiation is a direct function of preparation.
Without a plan you risk agreeing to something worse than what you may have done on your own.
Tip #4: The Top 10 Factors for Successful Negotiating
a. Know what you want: the clearer you are, the better your chances of getting it.
b. Know the other side: Learn as much as you can about the people with whom you will be negotiating. Know their styles,
backgrounds, interests. Little things do not mean a lot, they mean everything.
Top Tips for Negotiating
1. Preparation beforehand.
2. Always look like youre listening.
3. Keep calm.
4. At the end summarise what each side has agreed.
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5. Find out how much time is available.

Introduce yourself.
9. Ask for their responses.
11. Summarise your position.
13. Use positive body language.
15. Focus on common ground.

6. Avoid making judgements about the other people.

8. Thinking through the case in your terms and theirs.
10. Copy minutes after the meeting to those involved.
12. Introduce issue, briefly explain issue and points of solution.
14. Dont respond straight away to any proposed solution. Ask for time to consider.
16. Ask questions to elicit further information and responses if necessary.

17. Be brief and polite.

18. Team negotiating if possible so one person can take notes.
19. Dont get into an argument, it uses too much time and focuses on the negative.

Stages of Negotiation
Prepping for Your Negotiation:
What are our interests? What are theirs? How can we find out?
Whats our BATNA? Whats theirs?
Whats our WATNA? Theirs?
What do we know about their circumstances that might affect the negotiations?
Whats their negotiation style? Etc.

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Adapting General Principles to Specific Negotiations:
Pacing: fast or slow?
Formality: high or low?
Oral or written agreements: which are more binding and inclusive?
Bluntness of communication: direct or indirect?
Time-frame: short or long term?
Who negotiates: Equals or most competent?

Prepping for Your Negotiation

What are our interests? What are theirs? How can we find out?
Whats our BATNA? Whats theirs?
Whats our WATNA? Theirs?
What do we know about their circumstances that might affect the negotiations?
Whats their negotiation style? Etc.

Adapting General Principles to Specific Negotiations

Pacing: fast or slow?

Formality: high or low?
Oral or written agreements: which are more binding and inclusive?
Bluntness of communication: direct or indirect?
Time-frame: short or long term?
Who negotiates: Equals or most competent?

Phases of negotiation )Preparation Opening Bargaining Closing(

A. SET YOUR OBJECTIVES:

These should be S.M.A.R.T. (Specific, Measurable, Achievable, Resourced-based and Time-bound).

By setting your objectives, you are making decisions on what you want to achieve, how to achieve it, and you set up a
monitoring system to establish how you are doing.
B. IDENTIFY THE OTHER PERSONS NEEDS:
What are their needs?
What problems do they have?
How do they make decisions?
What are their priorities?
C. WHAT WILL YOU GIVE?
This is where you decide what concessions you will make and this often involves doing some planning. There are few
situations where you would not be giving up something. And an easy way of doing this is to ask yourself: how
important is this concession to me?
D. PREPARE TO MEET WITH THE OTHER PERSON:
You need to know what you can give, what the other persons response is likely to be, the areas on which you can make
concessions, how you will be perceived (more as a giver or a taker).

What are my objectives?

What exactly do I wish to achieve?

Which of my objectives:
Must I achieve?
Do I intend to achieve?
Would I like to achieve?
What other options are acceptable to me?
How might this fit with what the other party wants?

What does the other party want?

What information will influence the outcome?
How am I going to achieve my objectives?
What concessions can I make?

What is the best deal I can realistically get?

What concessions do I have; their cost to me and value to the other party?
What is the limit of my authority?

When should I walk away; and at what cost to the outcome?

What part will other people play?

The Planning Steps:

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What is the negotiating style of the other party?

What are our/my interests?
What are the interests of the other side?
What do I have to trade that is low value to me, but high value to the other side?
What are the three options I can use to move the negotiation to joint problem-solving?
What is the very least that is acceptable?
What do we aspire to?
What will we be content with?
What can we live with? Make sure that this is better than the next step
What is your Best Alternative to a Negotiated Agreement (BATNA)?
Ask yourself what the other sides BATNA may be.
Why is the other side talking to you? Why do they need something from you?
What is preventing them from doing it another way, or doing it themselves?

Preparing for a Negotiation :BATNA: yours and theirs, know them

Identify value creation opportunities

Determine negotiation authority levels
Understand the people and their culture
Prepare for flexibility
Show fairness in your position
Alter the process in your favour

Starting Point

A successful negotiation must have a basic framework

The alternative to negotiation
The minimum threshold for a negotiated deal
How flexible a party is willing to be, and what trade-offs it is willing to make

Getting Off to a Good Start

Express respect for the other side

Frame the task positively, as a joint endeavor
Emphasize openness to the other sides interests and concerns
Start by breaking bread.

Establish the issues

Agree an agenda
what needs to be discussed and agreed
what are the major issues
what are the timescales
Keep everything general at the beginning
Gain commitment early on, but only once all the negotiable items are identified

Gather information

You have and are willing to give

You have and are not willing to give
The other party has and is willing to give
The other party has and is not willing to give
Do not give concessions until you believe you have all the information

Closing stages

Vital to overall success.

Do not be over eager as may make the other party hold back for more concessions
Beware one sided concessions at end of negotiation - the majority of concessions are given or traded in last 5% of
total time
Review position to date and agree it
Record the details

Define and timetable outstanding issues

Agree with the other party that you both have the same interpretation

Closing the deal

Signal the end before you get there

Allow flexibility if you anticipate going beyond the final round
Discourage the other side from seeking further concessions
Write down the terms

Four Key Concepts

1. BATNA / WTANA :

Best Alternative to a Negotiated Agreement (BATNA)

Typical example: negotiate or go to court
Improving your situation
Improve your BATNA
Identify the other sides BATNA
Weaken the other partys BATNA
In most negotiations, the parties are influenced by their assumptions about what they think are the alternatives to a negotiated
agreement. Often the parties have an unrealistic idea of what these alternatives are, and they are unwilling to make concessions
because they think they can do just as well without negotiating. If you do not have a clear idea of your WATNA (Worst Alternative
to a Negotiated Agreement) and BATNA (Best Alternative to a Negotiated Agreement), you will negotiate poorly based on false
notions about what you can expect without an agreement.
Often the parties in a negotiation need to decide how likely a particular outcome will be. If your WATNA is something that would
be difficult for you to accept, but the likelihood of it happening is small, you might not feel compelled to give up much in
negotiations. Realism is essential in this situation. If you could have the ideal situation, the blue sky scenario, negotiations would
not be necessary. In order to focus on the negotiations with a sense of purpose, your WATNA is important. What is often referred
to as the worst case scenario is something that any sensible person will think about before embarking on any initiative. What if
it goes wrong? How will we deal with that? How you feel about the WATNA will dictate how flexible you need to be (and therefore
will be) in negotiations.
The BATNA is almost more important than the WATNA. If you look at your situation in the absence of a negotiated agreement, and
find it almost unthinkable, you will be pressed to enter negotiations in the hope of getting a satisfactory agreement. The word
satisfactory is important here. Is the WATNA better than satisfactory? Is the BATNA worse? Generally, people only enter into
negotiations because they feel they have to. They arrive at this conclusion based on analysis of their WATNA and BATNA.

2. Reservation Price

The least favorable point at which one will accept a deal

The walk-away
Example: you are looking for larger office space. You set your BATNA at $20/SF and your Reservation Price at
$30/SF
If owner wont budge from $35, you walk away and take advantage of your BATNA

Zone of Possible Agreement (ZOPA)

The difference between the Sellers Reservation Price and the Buyers Reservation Price
What happens if positions below are reversed?

3. ZOPA

$275k

$250k
ZOPA

Sellers Reservation Price

Buyers Reservation Price

Zopa stands for Zone of possible agreement. This is the zone in which both the negotiating parties agree to each other. The
phase in which they can be satisfied of what they have got.
For example. We can say you are looking to buy a house, now as a buyer there will always be an appropriate budget in your
mind. And a price which would be the max you are ready to pitch in. Assume that is 500,000. At the same time a seller (who has
not disclosed his amount to you) is looking forward to sell the house for 400,000 or above. Every seller wants the best of what
he can get from a deal. However there is always a minimum price he sets.

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If you are offered a house beyond 500,000 you simply walk away. If the seller is offered a deal less than 400,000 she simply walks
away.
Here the difference between the 2 values (500K-400K), the 100,000 is the Zopa. It is the zone in which the deal can work out.
Lets say the final amount is 450,000. If the both the negotiators dont get another alternative (another buyer or seller). Or want
to close the deal asap; this amount fits well to their expectation.
Zopa is an essential part to every negotiation. If Zopa is not achieved in a negotiation, there are chances that either of the
negotiators will walk away from the deal. In case if you are a mediator in any conflict, or are assigned the task to negotiate on
behalf of someone else, it is very important for you to understand the ZOPA between the parties.
things you should consider for ZOPA.
3 The bigger the ZOPA, higher are the chances of the deal getting closed successfully.
4 Try to analyze the ZOPA but dont reveal your BATNA.
5 If at the first shot the offer is in your ZOPA, try negotiating further to sweeten the deal rather than
just accepting it as it is.

4. Value Creation through Trades : Trade things you value less to the other party
Examples:
For a supplier the greater value may be not price but an extended delivery time
For a customer, extended warranty versus price
For an employee, working at home versus salary