Negotiation Skills

Dr Manas Ranjan Tripathy HRM Area,IBS Hyderabad

Negotiation

Negotiation is a process in which the common and conflicting interests come to reaching an agreement. Negotiation can be either collective or individual: It is the very essence of any industrial Relations system based on collective bargaining. Negotiation is concerned with:
Purposeful persuasion Constructive compromise

Features of Negotiation Process

It is relatively unstructured with no chairperson There are no firm rules of procedures There is no common agenda: each party pursues its own interest It involves talking, listening and observing The aim is to reach an agreement acceptable to both parties The process belongs to the parties concerned: no third party unless there is a deadlock Negotiation doesnt result in agreement: the parties may simple agree to disagree

Negotiation Outcomes

Win-Lose
One party achieves all or most of what it sets to do. The
other party achieves nothing or very little

Lose-Win
One party achieves nothing or very little.

Lose-lose
The parties fail to reach agreement

Win-Win
Both parties achieve some but not all of their opening positions.

When to negotiate?

Let us never negotiate out of Fear , but let us never fear to negotiateJohn F Kennedy

When to negotiate?

What must be present prior to negotiations?

There is a willingness to enter into negotiations. This indicates perceived common interest There are potential areas in which concessions can be made Both parties have the authority to adjust their positions Each party has carefully prepared its negotiation position

When to negotiate?
Dont negotiate if:

You have no bargaining power You have nothing to bargain with Broader objectives may be prejudiced You are not prepared You dont know exactly what you want

Structure of Negotiation
A. Preparation
This involves setting objectives and priorities, collecting information and adopting strategies

B. Discussion
This signals the commencement of actual negotiation

C. Bargaining
This involves making proposals, offering concessions and moving towards agreement

D. Closure and Agreement

The parties actively seek a win-win situation and reach an agreement

A. Preparation
To fail to plan is plan to fail

The Purpose of preparation is to develop a case that is well researched, follows a plan and identifies consequences Successful negotiation doesnt come out of magicians hat, but needs careful preparation

Preparation
To fail to plan is plan to fail

1. 2. 3.

Preparation involves :
Collecting information Setting objectives Establishing priorities Assessing the other party and its case Developing a negotiation strategy Knowing policy constraints and mandate limitations Considering the consequences of failure

4.
5. 6. 7.

Preparation
Collecting Information; This entails collecting facts
concerning

the agreed procedures for settling disputes the validity of a claim under law the cost implications of concessions the spillover effects of concessions the previous outcomes of such types of claim the external competitive situations the indicators of inflation,productivity,industry growth and enterprise profitability *make sure that you have enough evidence to support the facts

Preparation

Setting Objectives
This involves:

Knowing why you want to negotiate and what the negotiation is about Distinguishing between objectives Each party considering three positions, namely: The Ideal position The resistance position The target position ******Negotiators try to push the other party as close as
possible to that partys resistance point

Preparation

Establishing Priorities
This involves deciding on

Which objectives are most important and must be achieved The issues of lesser importance on which concessions

might be made

The order in which concessions might be made

*********Establishing priorities involves distinguishing between what must and what might be achieved

Preparation

Assessing the other party and its case

This involves:
Considering the likely objectives and priorities of the other party Preparing responses to expected questions of the other party Predicting the expected composition of the other negotiating team Identifying who is the main decision maker in the other team Predicting the expected negotiation style of other team Identifying your assumptions about the other teams case and seeking to check their validity

Preparation

Developing a Negotiation Strategy

A strategy should be amenable to adjustment, according to the circumstances and issues arising during the negotiation

Preparation

Developing a Negotiation Strategy This involves:

pre-negotiation persuasion deciding on the tactics and style to be used during the negotiation deciding on when to be persuasive and when to compromise deciding on when to be competitive and when to be cooperative

Preparation
Developing a Negotiation Strategy

deciding on who should be involved and the division of responsibilities among team members selecting the team members for negotiation identifying the elements in each partys position where concessions may be possible deciding on where negotiation should take place allocating sufficient time for the negotiation

Preparation

Knowing policy constraints and mandate limitations

This involves:
being sure that the current policy

situation is being understood Knowing when the negotiation will have to be adjourned to allow consultations with superiors and constituents understanding that few negotiators have unlimited authority

Preparation

Consequences of failure This involves :

looking at options should negotiation breakdown Considering whether it is better to make more concessions or have the conflict resolved by a third party
*****Considering the consequences of failure can help build commitment to negotiation process.

B. Discussion

The discussion stage involves :

Communicating Questioning Signaling Presenting arguments

******During discussion stage, no offers are made and no trade-offs take place.

Discussion

Communicating:
Talking

Not speak too quickly be aware of your body language Concentrate on communicating meaning, not just words Communicate in an open and clear way; don't leave room

for double interpretation

be aware of non verbal aspects

Discussion

Communicating:
Listeningconcentrate on what is being said listen attentively and actively keep listening, notwithstanding repetitive, irrelevant and long winded declarations assess what you hear repeat to yourself the main substance of what you hear be sensitive to non verbal body language make notes, if necessary not show irritation, boredom or interrupt be attentive to hidden meanings of the messages

Discussion

Questioning:
Asking questions has several functionsto obtain information to challenge statements and assertions to check if you understand everything properly to show interest in what someone is saying Closed questions Open questions

Discussion

Signaling :

Signals are provided through both verbal statements

and body language. Signals can indicate the style of negotiation(competitive/cooperative),what the need are, degrees of commitment to the case as well as areas for further exploration

Clear and unambiguous communication is an important part of giving signals if you want them to be understood.

Discussion
Presenting arguments :
make only a few points at a time start with your strongest, best supported arguments build of your arguments in a logical and careful way dont start by saying you disagree restate the other partys case to show that you have understood. ask for justification of the other partys case(why or why not) dont interrupt an argument of other party

C. Bargaining

Discussion of the problem can not continue indefinitely. A stage comes where discussion gives way to actually making proposals and counter proposals. During this stage, one need to be: prepared to make concessions in return for some of the things you want prepared to move from a set position ready to package and repack proposals prepared to relate concessions to different timeframes

******** Making compromises is not a sign of weakness; it is commitment to the negotiation process.

Bargaining

Making proposals
make specific proposals; don't just complain or say you can not agree making proposals forces the other party to concentrate on your case aim high with your proposals, but be aware that unrealistic ones can lead to a breakdown of the negotiation be specific in stating the conditions under which you could accept a proposal or make a concession try to be creative in the proposals/counter proposals

Bargaining

Making concessions:
concessions should always be traded try to trade your concessions for something not less than something of equal value initial concessions may be relatively smaller making the first concessions shouldnt be seen as weakness set a deadline for responding to offers of concession dont be too quick to accept concessions to avoid giving an impressions that the other party has offered too much when making concessions, don't lose sight of the main subject of the negotiation.

D. Closure and Agreement

In this stage, the parties actively seek to reach an agreement acceptable to both. It represents a search for Win-Win outcome.
be very clear on what, in fact has been agreed ask questions to be sure that you are talking about the same thing define the scope of agreement write down the contents and conditions of agreement be sure that it is clear and unambiguous

Closure and Agreement

ensure that what is agreed relates to specific timeframe agree on the consequences in case either of the parties doesnt comply with the agreement provide the dispute settlement procedures ensure that an agreement for an indefinite period sets out how its provisions may be varied in future follow up the negotiation agreement, once signed, to ensure its implementation.

*****In the closing phase of negotiation, the situation changes from us and them to we.

Deadlock

A deadlock is not a lose-lose situation. It occurs when both parties are reluctant to move towards each other beyond a certain point. In a deadlocked situation, the end result of the negotiation is intentionally held in suspense. Before obtaining the help of an independent and impartial third party(conciliator or arbitrator),you might consider the following to end the deadlock:
try to understand why the other party says no seek new issues on which to make concessions try to agree to put a specific matter aside for the time being to enable negotiations on other issues continue If convinient,a concession already agreed on may be offered as a trade off.

Deadlock

Consider the possibility of trading off a group of small concessions for one major, more important one
Where there may still be a possibility for further negotiation:

dont escalate the scope of activity that might be under dispute dont go back over old disputes dont publicize your position to a third party to secure support

Different styles of Negotiating

Before deciding on your style of negotiating ,consider:

the long term or one-off relationship with the other party the strength of the other party the strength and position of your team the importance of reaching an agreement

A. Cooperative negotiation

create an atmosphere of mutual respect and trust make it clear from the beginning that you want a win- win situation start with identifying problems before indicating solutions begin with issues on which an agreement can easily be reached if possible, make several small concessions avoid defensive language and postures. be flexible

Different styles of Negotiating

B. Competitive negotiation:
Competitive negotiation is acceptable in very few circumstances and is possible only if you have a very strong position. you should be aware of the long term consequences this may have. you may have to adopt this style if it becomes very clear that the other party doesnt want a cooperative negotiation.

state from the beginning your commitment to your set position indicate the consequences if you dont get what you want provide for some concessions which are not important to you, but which will prevent the other party from completely losing face.
*****positional bargaining leads to negative relations between the parties and results in deadlock rather than agreement.

Note taking and keeping records

Note-taking and record-keeping are important in the negotiation process:

take notes of each stage of the negotiation process note key points only note carefully who said what note if any further action is required and who will do it be organized in note-taking note down tentative agreements.

Making negotiation/agreement public

Bad timing of public statements can seriously deteriorate relations with colleagues/grassroots supporters, making all further negotiations more difficult.

 THANKS