THE ART OF NEGOTIATION
THE ART OF NEGOTIATION
A DIALOGUE BETN TWO OR MORE PARTIES WITH THE INTENT OF
COMING TO A MUTUALLY AGREEABLE SOLN, BECAUSE EACH PARTY HAS SOMETHING THE OTHER WANTS.
A COMN PROCESS BETN TWO OR MORE PEOPLE IN WHICH THEY
CONSIDER ALT TO ARR AT MUTUALLY AGREEABLE SOLN OR MUTUALLY
SATISFACTORY OBJS.
NEGOTIATION IS…….
SOME OTHER THOUGHTS !!!
NEGOTIATION OCCURS IN BUSINESS, NON-PROFIT ORGANIZATIONS, GOVERNMENT BRANCHES, LEGAL PROCEEDINGS, AMONG NATIONS AND IN PERSONAL
SITUATIONS SUCH AS MARRIAGE, DIVORCE, PARENTING, AND EVERYDAY LIFE.
PROFESSIONAL NEGOTIATORS ARE OFTEN SPECIALIZED, SUCH AS UNION NEGOTIATORS, LEVERAGE BUYOUT
NEGOTIATORS, PEACE NEGOTIATORS, HOSTAGE NEGOTIATORS, OR MAY WORK UNDER OTHER TITLES,
SUCH AS DIPLOMATS, LEGISLATORS OR BROKERS
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BEST ALTERNATIVE
TO ANEGOTIATEDAGREEMENT
(BATNA)
RESISTANCE PT
ZONE OF
POSSIBLE AGREEMENT
(ZOPA)
SOME TERMINOLOGIES
EXAMPLE
• ‘A’ wants to sell his 3 yr old car. Min price expected by him is Rs 1.7 lac
• ‘B’ has already sold his old car and has Rs 1.8 lac as floating capital to buy another sec hand car.
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BEST ALTERNATIVE TO A NEGOTIATED AGREEMENT (FISHER AND URY,1991)
BATNA IS WHAT YOU WALK AWAY TO IF YOU CHOOSE NOT TO NEGOTIATE
HOW DO THE PROPOSALS MATCH YOUR REALISTIC ALTERNATIVES IF YOU CANNOT COME TO A DEAL.
YOUR ALTERNATIVE TO NEGOTIATIONS
KNOWING AND APPRECIATING YOUR “BATNA” ALSO HELPS TO DEVELOP YOUR STRATEGY
THE MORE ATTRACTIVE YOUR BATNA IS COMPARED WITH THE PROPOSALS YOU RECEIVE, THE MORE POWER YOU HAVE AND VICE VERSA.
NORMALLY, A STRONG ALTERNATIVE TO NEGOTIATION MEANS A STRONG NEGOTIATING POSITION.
WHAT IS BATNA???
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LIST WHAT YOU WOULD DO IF YOU FAIL TO REACH AN AGREEMENT.
CONVERT THE MOST PROMISING OPTIONS INTO PRAC CHOICES.
SELECT THE SINGLE BEST OPTION – THAT IS YOUR BATNA.
COMPARE YOUR BATNA TO OTHER PROPOSALS.
IF AN OFFER IS BETTER THAN YOUR BATNA – CONSIDER IMPROVING OR ACCEPTING IT.
IF AN OFFER IS WORSE THAN YOUR BATNA, CONSIDER REJECTING IT.
DEVELOPING BATNA
SO WHAT’S YOUR BATNA???
• ANY ONE OF THE FWG:-– CAR POOL.– CAB.– BUS.– LOOK FOR ANOTHER DEALER(You might end up
getting a higher price tag for the same vintage and condition of veh)
• All these alternatives depict a weak BATNA – i.e. your urgency and compulsion to buy a sec hand car earliest.
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THE POINT (VALUE) AT WHICH THE PERSON WOULD NOT GO BEYOND AND WOULD RATHER BREAK OFF NEGOTIATIONS (LEWICKI, 2004)
THE LEAST THE SELLER WOULD ACCEPT OR THE MOST A BUYER WOULD PAY
CAN BE INFLUENCED
NOT YOUR BATNA
RESISTANCE PT(RP) OR “BOTTOM LINE”
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ZONE OF POTENTIAL AGREEMENT (LEWICKI, 2004)
AKA: BARGAINING RG OR SETTLEMENT RG
THE SPREAD BETWEEN THE RESISTANCE PTS
MUST EXIST TO NEGOTIATE (BUYER’S RP MUST BE GREATER THAN THE SELLER’S RP)
ZOPA!!!
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Seller’s
Buyer’s
1.5 Lac 2.0 Lac1.7 Lac 1.8 Lac
Resistance point
Resistance point
ZOPA
EXAMPLE – CAR SALE
NEGOTIATION STRATEGIES
(Lewicki, et al, 2004) 15
RELATIONSHIP
OUTCOME
COMPETE
AVOID
COLLABORATE
YIELD
NEGOTIATION STRATEGIES (INTERDEPENDENCE)
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• Distributive—competitive, win-lose
• Integrative—collaborative, win-win
TYPES OF NEGOTIATIONS
COMPETE
AVOID
COLLABORATE
YIELD
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ONE SIDE WINS AND ONE SIDE LOSES.
FIXED RESOURCES DIVIDED SO THAT THE MORE ONE SIDE RECEIVES, THE LESS THE OTHER DOES.
ONE PERSON’S INTERESTS OPPOSE THE OTHERS.
DOMINANT CONCERN IS USUALLY MAXIMIZING ONE’S OWN INTERESTS.DOMINANT STRATEGIES INCLUDE MANIPULATION, FORCING, AND WITHHOLDING INFO.
FACE-TO-FACE ARGUING OVER POSITION.
DISTRIBUTIVE NEGOTIATION
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VARIABLE AMOUNT OF RESOURCES TO BE DIVIDED AND BOTH SIDES CAN WIN.
DOMINANT CONCERN IS TO MAXIMIZE JOINT OUTCOMES.
DOMINANT STRATEGIES INCLUDE COOPERATION, SHARING INFO, AND MUTUAL PROBLEM SOLVING.
SIDE-BY-SIDE PROBLEM SOLVING WITH A FOCUS TOWARD MUTUAL INTERESTS.
INTEGRATIVE NEGOTIATION
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GOOD LEARNER, OBSERVER AND LISTENER.
ANALYSE BODY LANGUAGE.
BE OPEN AND FLEXIBLE AND YET FIRM.
EX GREAT PATIENCE, COOLNESS AND MATURITY.
CONT YOUR EMOTIONS AND DO NOT EXPOSE WEAKNESSES.
CHARACTERISTICS OF A GOOD NEGOTIATOR
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BARGAIN FROM POSN OF STR.
ANTICIPATE PROS AND CONS OF EACH MOV.
BUILD TRUST AND CONFIDENCE.
PLAN AND PREP THOROUGHLY - HAVE CLEAR CUT OBJS AND GOALS.
HUMAN PSY AND FACE READING.
CHARACTERISTICS OF A GOOD NEGOTIATOR
COMPETITION
COLLABORATION
AVOIDANCEACCOMODATION
COMPROMISE
TIPS FOR LEADERS AND LEADERS TO BE
WHEN QUICK , DECISIVE ACTION IS VITAL(IN
EMERGENCY) ON IMP ISSUES.
WHERE UNPOPULAR
ACTIONS NEED
IMPLENTATION E.G DISCP ISSUES ETC.
ISSUES VITAL TO
ORG INTEREST.
WHEN CONVINCE
D THAT YOU ARE
RIGHT.
AGAINST PEOPLE WHO
TAKE ADVANTAGE
OF UNCOMPETITI
VE BEHAVIOUR.
USE………..COMPETITION
TO FIND AN INTEGRATIVE SOLN WHEN
BOTH CONCERNS ARE
TOO IMPORTANT TO
BE COMPROMISED.
WHEN YOUR OBJ
IS TO LEARN.
TO MERGE INSIGHTS
FROM PEOPLE WITH
DIFFERENT PERSPECTIVE
S.
TO GAIN COMMITMEN
T BY INCORPORATING CONCERNS
INTO A CONSENSUS.
TO WK THROUGH FEELINGS
THAT HAVE INTERFERED
WITH A RELATIONSHIP
.
USE………..COLLABORATION
ON TRIVIAL ISSUES WHEN
ANALYSED AGAINST IMP
PRESSING ISSUES.
WHEN POTENTIAL
DISRUPTION OUTWEIGHS BENEFITS OF RESOLUTION.
LET PEOPLE CALM DOWN AND REGAIN PERSPECTIVE.
WHEN OTHERS CAN RESOLVE CONFLICT EFF.
USE………..AVOIDANCE
WHEN YOU ARE WRONG AND TO
ALLOW A BETTER
POSN TO BE
HEARD.
TO LEARN AND
DEMO REASONABLENESS.
TO SATISFY OTHERS
AND MAINT
COOPERATION.
BUILD SOCIAL
CREDITS FOR
POSTERITY.
TO MINIMISE
LOSS WHEN
OUTMATCHED AND LOOSING.
TO ALLOW
SUBORDINATES TO DEVP BY
LEARNING FROM
MISTAKES.
USE………..ACCOMODATION
WHEN OPPONENTS WITH EQUAL POWERS ARE
COMMITTED TO MUTUALLY EXCL
GOALS.
TO ACHIEVE TEMP SETLLEMENT TO
COMPLEX ISSUES.
TO ARR AT EXPEDIENT SOLNS
UNDER TIME PRESSURE.
AS A BACK UP WHEN
COLLABORATION OR COMPETITION IS UNSUCCESSFUL.
USE………..COMPROMISE
?