Negotiation Skills Basics

Negotiation
Objective
Explain What is Negotiation
Explain the Basic Principles of
Negotiation
Describe the Benefits of Negotiation
Explain the Types of Negotiation
Strategies
Explain the Stages of the Negotiation
Process the Concepts of a Win-Win
Describe
Negotiation
Explain the Various Styles of
Negotiation
Explain What is BATNA
Describe Strategies for Developing
Negotiation Skills of Third Party
Explain the Types
Explain the PROBE Technique for
Negotiating
Describe the Negotiations in
Organizations
List the Issues in Negotiation
List the Characteristics of a Good
Negotiator
List the Tips for Effective Negotiation
Introduction
Globus Inc. is a
leading IT giant.
Peter Looney is
a Project
Manager in
Globus Inc. He is
responsible for
meeting the
clients for every
new software
development
project that
comes to
Introduction
Maxwell
Telecommunicati
ons, a leading
Telecom Service
company
recently came to
Globus to have
new SAP based
database
software to be
developed for
them.
Introduction
Peter carefully
reviewed and
analyzed
Maxwells
requirements
and came up
with a Project
Plan.
Introduction
Now, the only

thing that Peter
needed to go
ahead with
starting the
project and
develop the
software was
the clients
approval of the
Project Plan.
Introduction
Peter held a
meeting with the
clients to
discuss the
Project Plan and
gain overall
approval for the
terms and
conditions of the
Project.
Introduction
The client was in

a hurry to get
the software.
Peter tried to
negotiate upon
broader
deadlines but
due to clients
pressure, he
ultimately
agreed to finish
the project as
per their
Introduction
When the
project was
under progress,
Peter and his
team realized
that the
deadlines that
he had agreed
upon are nearly
impossible to
meet.
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to the
Introduction
Peter and his

team were not
able to complete
the project as
was promised to
the client due to
which Globus
had to pay some
penalty for late
delivery.
Introduction
Also, the client

added new
requirements
that had to be
incorporated in
the software.
However, Peter
had not
negotiated
about the terms
with the client
for any further
enhancements
or features
Introduction
Hence, Globus
had to incur a
loss in the
project because
the scope of
work had
increased but
the terms of the
project had not
been negotiated
well.
Introduction
Also, Peters
team was forced
to work 7-days,
even from home
to try to
complete the
project.
Introduction
Why do you
think Peters
team had to
suffer? Why did
Globus have to
incur a loss in
this Project?
Introduction
Yes, all this

happened
because Peter
had not initially
negotiated well
with the client
about the
deadlines and
the scope of
work.
Introduction
If Peter had
clearly
negotiated the
terms of the
project with the
client and
negotiated
realistic
deadlines,
Globus would
not have needed
to pay any
penalty.
Introduction
Also, if Peter
had negotiated
the scope of
work in detail
with the client,
then Globus
would not have
to incur any loss
in this project.
Fee)

to the
Introduction
Thus, you can

see that
negotiation
skills are a must
for anyone to
succeed when
dealing with
people.
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N e
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otiiaattiio
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Skkiillllss iin
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Objective
Negotiation
Strategies
Describe
Negotiation
Negotiation
Explain the Types
Negotiating
Organizations
Negotiator
What is Negotiation?
Negotiation is a discussion
between two parties to find out
the solution and for the purpose
of reaching a joint agreement
about differing needs or
opinions.
It involves using the art of

persuasion to get others to
understand and agree with your
viewpoint. It works best when
an individual has a win-win
attitude.
What is Negotiation?
The key skills that are involved
in a successful negotiation are
that of good communication
skills, sales and marketing skills,
good psychological analytical
skills, sociology skills,
assertiveness and conflict
resolution skills.
Therefore, negotiations may

take place between various
kinds of different people such as
between a customer and seller,
a boss and employee, two
business partners, a diplomat or
a civil servant and a foreign
diplomat, between spouses,
between friends and between
parents and children.
Need for Negotiation
s a me. al
x a c tly i v id u
re e yi n d
o p l e a e v e r
e n t l y in
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b h a
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th a t i n d aim o ple
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iff e t s , b e t a
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e r ,
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M e r l
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r s
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Need for Negotiation
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Objective
Negotiation
Strategies
Describe
Negotiation
Negotiation
Explain the Types
Negotiating
Organizations
Negotiator
Basic Principles of Negotiation
There are a few common basic principles that apply to all types of
negotiations and in all situations. Some of the basic principles of
negotiation are as follows:
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The Art of Negotiation
Negotiation is an art; you
can get better and better
with it.
If you feel that you dont
have an innate talent for
negotiations, dont be
disappointed because
these skills can be honed
and developed with the
proper training and
practice.
People who always speak
good things may feel
that they are good
negotiators, but that is
not always the case.
Negotiation is all about
Fee)

to the
The Art of Negotiation
Negotiation happens
everywhere its
omnipresent. You may
have to negotiate over
anything right from the
deadlines of a project to
which person will do
what chores at home.
In the real world, it is
sometimes difficult to
ascertain whether your
negotiation is good or
bad. You may think that
you are a good
negotiator, but in reality,
it may be just the
opposite.
Objective
Negotiation
Strategies
Describe
Negotiation
Negotiation
Explain the Types
Negotiating
Organizations
Negotiator
Benefits of Negotiation
The following are some of the benefits of negotiations:
Good It helps to Good

They help you to
negotiations reach a Win- negotiations
identify and
help you to gain Win Solution, also help to
understand youre
better control in which is improve
as well as the other
business as well mutually interpersonal
parties interests
as personal beneficial to relationships.
and also
situations. understand the all the parties
differences involved in a
Benefits of Negotiation
The following are some of the benefits of negotiations:
They help to Negotiations help

It is one of Negotiations
develop and to reach an
the easiest help to
maintain an agreement in
and quickest reduces
overall cases where a
ways to solve stress and
harmonious and dead-end may be
conflicts and frustration
thriving reached if a
disagreement among two
interpersonal consensus is not
s. conflicting
environment. established
individuals.
Objective
Negotiation
Strategies
Describe
Negotiation
Negotiation
Explain the Types
Negotiating
Organizations
Negotiator
Types of Negotiation Strategies
There are two main types of negotiation strategies which are as
follows:
tri bu t i v e
Di s
g o t i a t i o n
Ne
Integra
tive
Negoti
a ti o n
Lets look at each in detail.

Distributive Negotiation
Distributive Negotiation is
also known as Positional or
Competitive or Fixed Pie or
Win-Lose Negotiation. It is a
type or style of negotiation in
i s tr i b u t iv e
which the parties compete for D
g o ti a ti on
the distribution of a fixed Ne
amount of value.
The involved parties in a
distributive negotiation
have a win-lose attitude
towards reaching the goal
and is based on an attempt to
divide up a fixed pie or
amount of resources for
oneself.
involves holding on to a fixed
idea, or position, of what you
want and arguing for it and it
Distributive Negotiation is
also known as Positional or
Competitive or Fixed Pie or
Win-Lose Negotiation. It is a
type or style of negotiation in
i s tr i b u t iv e
which the parties compete for D
g o ti a ti on
the distribution of a fixed Ne
amount of value.
The involved parties Theinmaain foc
us in such a
n e g otiation stra t yp e o f
distributive negotiation tegy is on ac
im m
have a win-lose attitude ediate goals hieving
, with little o
towards reaching rtheegagoalrd for buildin
g future
r no
r e la
and is based on an attemptt io n shiptos. Generally
creaor tive solution , no new
divide up a fixed pie is reached in
n e g o t ia t
amount of resources for ions as the part such
least possible ies spend
oneself. time and ene
r e s o lving the con rgy in
Distributive Negotiation f ict. The outc
th e n e
involves holding on to a fixedg o tiation is rea ome of
p re s e c he d b y
n
idea, or position, of what tyout a ion of fixed s
deforcisio olutions and
want and arguing it nandor cithoice is mad a
e quickly.
Integrative Negotiation is
Integrative Negotiation
also known as Interest-
based or Cooperative or
Win-Win or Non-zero Sum
Negotiation. It is a type or
style of negotiation in which
the parties cooperate to
achieve a satisfactory result
for both. The involved parties
in an integrative
negotiation have a win-win
attitude towards reaching the
goal and attempt to strive
not just for their own
outcomes, but for favorable
outcomes for both sides.
Integrative Negotiation
involves reaching an
agreement keeping into
consideration both the
parties interests which
Integrative Negotiation is
Integrative Negotiationalso known as Interest-
based orRoll Cooperative
your mouse
or
Win-Winover or the
Non-zero
icon, to Sum
Negotiation. It is
learn a type or
more.
style of negotiation in which
the parties cooperate to
The main achieve a satisfactory result
focus in such
negotiationboth. The involved
for a t yp e oparties
f
s t ra te g y is
mutuallyinban e n
integrative on developin
g
eficial ahave
negotiation g r e e a win-win
on the intere m ents based
s t s o f the disreaching
attitude towards putants. the
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, new creativ
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not e soown
lutions are
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and energ outcomes for m both
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me of the ne
g the confic
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te.
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Fee)

to the
Tip
u c ial
t cr
e m o s
c o me
th o b e
r e t
w i ng a elp you
fo llo a n h r:
Th e at c
l s t h o t iato ible
sk il ne g fe x
ea t a n d l
a gr e n h ic a
B e op be et hize i lls
y s pa t s k
A lwa e m o c i al

l w ays good s itions
A evelop ur intu
D llow yo ve
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F asser
e
B
Distributive vs. Integrative
Negotiation
The given table shows the comparison between Distributive
Negotiation and Integrative Negotiation.
Distributive Negotiation Integrative Negotiation
It involves discussion of only one It involves discussion of several
issue at a time. issues at a time.
Involved parties have a Win-Lose Involved parties have a Win-Win
attitude towards reaching the attitude towards reaching the
negotiation outcome. negotiation outcome.
Each party wants to use the Each party wants to use the
negotiation to maximize its own negotiation to expand its own share
share of fixed pie. of the pie by creating and claiming
value.
It is an approach usually used in It is an approach usually used in a
one-time relationship between two continuing relationship between two
people. people.
The involved parties keep their The involved parties share their
respective interests hidden. respective interests with the other
party.
Distributive vs. Integrative
Negotiation
The given table shows the comparison between Distributive
Negotiation and Integrative Negotiation.
Distributive Negotiation Integrative Negotiation
The involved parties keep The involved parties share
information hidden. information with each other and try
to get to the root cause of the why
of the existence of the issue.
The involved parties are adversaries. The involved parties are joint
problem-solvers.
The aim of such negotiation is The aim of such negotiation is
winning. making a wise decision.
The main focus of involved parties is The main focus of involved parties is
on their stance or position. on their goals and objectives.
The involved parties use pressure to The involved parties do not use
get what they want. pressure but strive to get what they
want through principles.
MCQ
Q. Distributive Negotiation is
also commonly known as
___________.
Click on
the radio
button to
select the
correct
answer!
MCQ
Q.
G Distributive Negotiation is
Go o
oalso
odd!!commonly
T
Thha
att''ss R
Rknown
iig
ghhtt!!as
___________.
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D
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onn iiss aallsso
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onllyy kkn n o w o
N
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gottiiaattiioon n.. Possiittiio
onnaall
i ck h ere to
Cl e!
continu
MCQ
Q.
T
Th hDistributive
a t '
at'sscommonly
NNo
ott Q
Negotiation is
also Qu
uiiknown
tte
eR as
Riig
___________. ghhtt!!
CCoorrrreecctt AAn nssw weerr::
D
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Neeg own n a
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go t
otiiaattiio
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Po s
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i ck h ere to
Cl e!
continu
Objective
Negotiation
Strategies
Describe
Negotiation
Negotiation
Explain the Types
Negotiating
Organizations
Negotiator
Stages of the Negotiation Process
The following are the stages of any negotiation process:
Let us look at each in detail.

Meeting
1
Meeting:
The first stage of the

negotiation process is
the negotiation meeting.
The meeting can be in an

informal or formal
setting.
When there are two

parties meeting, the
venue, date and time are
decided first.
The meeting begins with

introductions.
Inquiry
2
Inquiry:
The second stage of the

the stage of inquiry.
During the inquiry stage,

both parties exchange
information and discuss
their concerns.
The main objective of

this stage is to ascertain
the strengths and
weaknesses, needs,
wants, desires and
issues.
Bargaining
3
Bargaining:
The third stage of the

that of bargaining.
During the bargaining

stage, both parties make
offers and tradeoffs.
At this stage, both the

parties consider all the
possible options
available to find a middle
path between their
differences.
Closure
4
Closure:
This stage occurs after

both the parties have
looked at all the options
closely.
During the closure stage,

both parties restate their
positions and confirm
their tradeoffs they are
willing to negotiate.
Acceptance
5
Acceptance:
The final stage of the

acceptance.
During the acceptance

stage, both parties
would either decide to
suspend negotiations or
they may reach an
agreement.
Real Life Example
Let us now look at a

real life example to
understand the
stages of the
negotiation process.
Fee)

to the
Real Life Example
You have seen in

the introduction
scenario how
Peter Looney, a
Project Manager
at Globus Inc.
failed to
negotiate well
with the Maxwell
client due to
which Peters
team had to
suffer and also
his company had
Real Life Example
Yes, all this

happened
because Peter
had not initially
negotiated well
with the client
about the
deadlines and
the scope of
work.
Real Life Example
Stage 1: Meeting
Stage 5:
Acceptance
Stage 4:
Closure
To negotiate well with the
Stage 3: client, the first thing that Peter
should do is to prepare well for
Bargaining
the meeting. Peter could go
Stage 2: through the Project Plans of
Inquiry similar projects that Globus
had handled in the past, talk to
Stage 1: and seek guidance from his
superiors and put all the data
Meeting and information that he gets
related to the project at one
place.
Real Life Example
Stage 1: Meeting
Stage 5:
Acceptance
Stage 4:
Closure
To negotiate well with the
Stage 3: client, the first thing that Peter
Peter sshould
hould ado is to prepare well for
Bargaining lso make a li
queriesthe thameeting. st of go
Peter could all the
t he ha s t o c
clien t , through
t the learPlans
Project with of
th e
Stage 2: h in gs that he ca
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ree to and
Inquiry cannot similar
agree tprojects that
o with the cl
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Meeting confiden t and profes cogets
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project rsoone
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place.
Real Life Example
Stage 2: Inquiry
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry During the inquiry stage, Peter
should exchange information
with the client and discuss
Stage 1:
their concerns, scope of work,
Meeting deadlines, future
enhancements etc.
Real Life Example
Stage 2: Inquiry
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
At this stage
, Peter shou
Stage 2: the clieDuring
nts req ld find out
Inquiry and wh the inquiry
uirements,stage, Peter
en can exchange h o w , which
should he fulfil thinformation
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d any and
othediscuss
Stage 1: conditiotheir
ns thconcerns, r terms and
at may noscope
t be agof work,
to Globu s.
deadlines, future re eable
Meeting
enhancements etc.
Real Life Example
Stage 3: Bargaining
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry At this stage, Peter should now
agree to terms that are
completely acceptable and
Stage 1:
offer options and tradeoffs for
Meeting things that are unacceptable as
is stated by the client.
Real Life Example
Stage 3: Bargaining
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Peter should
make sure th
Stage 2: ascertaAt
insthis a t he
his stage,
p osition andshould
Peter now
Inquiry stand in t a ke sa
agree
agree to
interms
g to o n that are
acceptacompletely ly possible a
ble deadlinacceptable
e s , cu and nd
Stage 1: terms roffer
egardoptions rrent scope,
ing futuandre enhancem for
tradeoffs
etc. things that are unacceptable entas
s
Meeting
is stated by the client.
Real Life Example
Stage 4: Closure
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry At this stage, it is important
that both the client and Peter
Stage 1: restate their positions and
confirm their tradeoffs they are
Meeting willing to negotiate.
Real Life Example
Stage 4: Closure
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
So, agreeme
Bargaining nt should be
the agreed d achieved on
eadlines, cur
terms regard rent scope,
Stage 2: in g future enh
e t c . It sAt
hothis
uld b ancements
Inquiry stage,
e agreitedisuimportant
the parties t pon by both
h a
that both t tthe
he dclient
iscussand Peter
agreed upon e d a nd
Stage 1: restatetetheir
rms w positions
ould nowand
drafted into be
a letheir
confirm gal atradeoffs
nd binding they are
Meeting co n t r acwilling
t betwetoennegotiate.
the two part
ies.
Fee)

to the
Real Life Example
Stage 5: Acceptance
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2: At this final stage of the

Inquiry
negotiation process, Peter
should make sure that both the
Stage 1: parties agree to signoff the
Meeting deal and reach an agreement
on the terms of the Project.
Negotiation Outcomes
The given image shows the various options of possible
outcomes with respect to the parties involved in a negotiation.
YOU
WIN LOSE
WIN
We Both I Win,
Win You Lose
ME
I Lose,
LOSE
We Both
You Win Lose
Objective
Negotiation
Strategies
Describe
Negotiation
Negotiation
Explain the Types
Negotiating
Organizations
Negotiator
Critical Concepts of Win-Win
Negotiation
The following are the five most critical concepts that you
should keep in mind for a win-win negotiation:
Pause for
reflectio
n
Control the Search for
outcome needs and
requireme
nts
Agree on
factual Clarify your
information objectives
in the
beginning
Lets look at each in detail.
Negotiation
Pause for
Reflectio Pause for Refection
n
Control the Ask the questions:
Search for
outcome needs and o What do you want
requireme from this
nts meeting?
o What resistances
do you envisage?
Agree on o What will you do
Clarify your
factual
objectives to overcome
information
in the these
beginning resistances?
Negotiation
Search for needs and
Pause for requirements
reflectio
n
Ask the questions:
Control the Search for o What are my
outcome needs and
needs and
requireme
requirements?
nts
o What are the
needs and
Agree on requirements of
Clarify your the other party?
factual
objectives o What do we have
information
in the in common?
beginning
o What are the
biggest gaps?
Negotiation
Clarify your objectives
Pause for in the beginning
reflectio
n
Ask the questions:
Control the Search for o What are the
outcome needs and most important
requireme issues that need
nts to be discussed?
o What are the
Agree on most important
Clarify your issues to the
factual
objectives other party?
information
in the o What are the
beginning
levels of potential
outcomes?
Negotiation
Agree on factual
information Pause for
reflectio
n
Ask the questions:
o Have I examined outcome needs and
all arguments requireme
that I intend to nts
use during the
meeting?
o Which of the Agree on
factual Clarify your
arguments are
information objectives
assumptions?
in the
o Which of the beginning
arguments are
facts?
Fee)

to the
Negotiation
Pause for
reflectio
n
Control the outcome
outcome needs and
Ask the questions:
requireme
o What elements of nts
timing can you
control?
o What is the best Agree on
Clarify your
combination or factual
objectives
channel? information
in the
beginning
Roll your mouse
over the icon, to
learn more.
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b e st ff e cti o alw .
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f e
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Try tiating iating i e othe t for
o t h u
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Negotiation

Now, the only

The client was in

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Peter and his

Also, the client

Yes, all this

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Thus, you can

It involves using the art of

Therefore, negotiations may

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Good It helps to Good

They help to Negotiations help

Lets look at each in detail.

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Let us look at each in detail.

The first stage of the

The meeting can be in an

When there are two

The meeting begins with

The second stage of the

During the inquiry stage,

The main objective of

The third stage of the

During the bargaining

At this stage, both the

This stage occurs after

During the closure stage,

The final stage of the

During the acceptance

Let us now look at a

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You have seen in

Yes, all this

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Stage 2: At this final stage of the

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