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Negotiation and Counselling MBA HR04

Negotiation and Counselling MBA HR04

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Published by Amit Kumar
Lecture notes of Negotiation and counselling as per MMTU syllabus........
Lecture notes of Negotiation and counselling as per MMTU syllabus........

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Published by: Amit Kumar on Feb 20, 2013
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Prof. Amit Kumaramit040985@gmail.comFIT Group of Institutions
NegotiationNegotiation is a technique of discussing issues among oneselves and reaching to a conclusion benefiting all involvedin the discussion
. It is one of the most ways to avoidconflicts and tensions. When individuals do not agree witheach other, they sit together, discuss issues on an openforum, negotiate with each other and come to analternative which satisfies all. In a layman’s language it isalso termed as bargaining.Please go through the above two real life situations onceagain.You want to go for a movie but you know that yourparents will never agree to your decision. Will you fightwith your parents? Obviously NO, instead you will sit withthem and try your level best to convince them andnegotiate with them without fighting and spoilingeveryone’s mood. Probably you will spend the comingweekend with your parents if they allow you today for themovie else you will negotiate with your friends so thatthey agree for a noon show.
Negotiation helps you toachieve your goal without hurting anyone
. Your goal inthis case is to go for a movie and you negotiate either withyour parents or friends to achieve the same.In the second situation, Tom could not afford to lose theCD player as it was an exclusive one, thus he tries tonegotiate with the store owner to lower the price so that itsuits his pocket and even the store owner earns his profitas well.Negotiation is essential in corporates as well as personallives to ensure peace and happiness.Your boss asks you to submit a report within two workingdays and you know that the report is a little critical oneand needs more time. Will you say a yes to your boss justto please him? Your yes might make the boss happy thenbut later you will land yourself in big trouble if you fail tosubmit it within the desired time frame. It’s always betterto negotiate with your boss rather than acceptingsomething which you know is difficult. Ask for some moretime from your boss or probably don’t make an exhaustivereport. Negotiation is better as it would prevent spoilingyour relation with your superiors later.
An individual representing an organization or a positionwho listens to all the parties carefully and comes to aconclusion which is willingly acceptable to all is called thenegotiator.
Skills of a negotiator
A negotiator ideally should be impartial and neutral andshould not favour any one.He needs to understand the situation and the parties welland decide something which will benefit all.It is not always that people will easily accept thenegotiator’s decision; they may counter it if they feel theirpersonal interests are not satisfied. In such a situation,where the negotiator is left with no choice, he must usehis power to impose his ideas on all, after all one can’tplease everyone.A negotiator has to be a little tactful and smart enough tohandle all situations and reach to a conclusion.
Elements of NegotiationNegotiation
 Process + Behaviour + Substance (Agenda)
The way individuals negotiate with each other iscalled the process of negotiation. The process includes thevarious techniques and strategies employed to negotiateand reach to a solution.
How two parties behave with each otherduring the process of negotiation is referred to asbehaviour. The way they interact with each other, the waythey communicate with each other to make their pointsclear all come under behaviour.
There has to be an agenda on which individualsnegotiate. A topic is important for negotiation. In the firstsituation, going for the late night movie was the agenda onwhich you wanted to negotiate with your parents as wellas your friends.
Models of Negotiation
Let us go through various
models of negotiation:
Win Win Model -
In this model, each and every individualinvolved in negotiation wins. No body is at loss in thismodel and every one is benefited out of the negotiation.This is the most accepted model of negotiation.Let us understand it with the help of an example:Daniel wanted to buy a laptop but it was an expensivemodel. He went to the outlet and negotiated with theshopkeeper to lower the price. Initially the shopkeeperwas reluctant but after several rounds of discussions andpersuasion, he quoted a price best suited to him as well asDaniel. Daniel was extremely satisfied as he could nowpurchase the laptop without burning a hole in his pocket.The negotiation also benefited the store owner as he couldearn his profits and also gained a loyal customer whowould come again in future.2.
Win Lose Model -
In this model one party wins and theother party loses. In such a model, after several rounds of discussions and negotiations, one party benefits while theparty remains dissatisfied.Please refer to the above example once again whereDaniel wanted to buy a laptop. In this example, bothDaniel and the store owner were benefited out of the deal.Let us suppose Daniel could not even afford the pricequoted by the storeowner and requests him to furtherlower the price. If the store owner further lowers theprice, he would not be able to earn his profits but Danielwould be very happy. Thus after the negotiation, Danielwould be satisfied but the shopkeeper wouldn’t. In a winlose model, both the two parties are not satisfied, only oneof the two walks away with the benefit.3.
Lose Lose Model -
As the name suggests, in this model, theoutcome of negotiation is zero. No party is benefited outof this model.
Prof. Amit Kumaramit040985@gmail.comFIT Group of Institutions
Had Daniel not purchased the laptop after several roundsof negotiation, neither he nor the store owner would havegot anything out of the deal. Daniel would return emptyhanded and the store owner would obviously not earnanything.In this model, generally the two parties are not willing toaccept each other’s views and are reluctant tocompromise. No discussions help.Let us understand the above three models with anexample from the corporate world.Mike got selected with a multinational firm of repute. Hewas called to negotiate his salary with Sara- the HR Headof the organization.
Case 1 -
Sara quoted a salary to Mike, but Mike was nottoo pleased with the figure. He insisted Sara to raise hissalary to the best extent possible. After discussions Saracame out with a figure acceptable to Mike and sheimmediately released his offer letter. Mike got his dream job and Sara could manage to offer Mike a salary wellwithin the company’s budgets - A Win win Situation (Boththe parties gained)
Case 2 -
Sara with her excellent negotiation skills managedto convince Mike at a little lower salary than he quoted.Mike also wanted to grab the opportunity as it was hisdream job and he was eyeing it for quite some time now.He had to accept the offer at a little lower salary thanexpected. Thus in this negotiation, Mike was notcompletely satisfied but Sara was - A win lose negotiation
Case 3 -
Mike declined the offer as the salary quoted bySara did not meet his expectations. Sara tried her levelbest to negotiate with Mike, but of no use.-A lose losemodel of negotiation. No body neither Mike nor Saragained anything out of this negotiation.4.
RADPAC Model of Negotiation
 RADPAC Model of Negotiation is a widely used model of negotiation in corporates.Let us understand it in detailEvery alphabet in this model signifies something:R - RapportA - AnalysisD - DebateP - ProposeA - AgreementC - Close
R - Rapport:
As the name suggests, it signifies the relationbetween parties involved in negotiation. The partiesinvolved in negotiation ideally should be comfortable witheach other and share a good rapport with each other.
A - Analysis:
One party must understand the second partywell. It is important that the individual understand eachother’s needs and interest. The shopkeeper mustunderstand the customer’s needs and pocket, in the sameway the customer mustn’t ignore the shopkeeper’s profitsas well. People must listen to each other attentively.
D - Debate:
Nothing can be achieved without discussions.This round includes discussing issues among the partiesinvolved in negotiation. The pros and cons of an idea areevaluated in this round. People debate with each otherand each one tries to convince the other. One must notlose his temper in this round but remain calm andcomposed.
P - Propose:
Each individual proposes his best idea in thisround. Each one tries his level best to come up with thebest possible idea and reach to a conclusion acceptable byall.
A - Agreement:
Individuals come to a conclusion at thisstage and agree to the best possible alternative.C - Close: The negotiation is complete and individualsreturn back satisfied.Let us again consider Mike and Sara’s example tounderstand RADPAC ModelR - Rapport between Mike and Sara. They must becomfortable with each other and should not start thenegotiation right away. They must first break the ice. Thediscussions must start with a warm smile and greetings.A - Both Mike and Sara would try their level best tounderstand each other’s needs. Mike’s need is to grab theopportunity while Sara wants to hire an employee for theorganization.D - The various rounds of discussions between Mike andSara. Mike and Sara would debate with each other tryingto get what they want.P - Mike would propose the best possible salary he canwork on while Sara would also discuss the maximum salaryher company can offer.A - Both Mike and Sara would agree to each other, whereboth of them would compromise to their best possibleextent.C - The negotiation is complete and probably the nextcourse of action is decided, like in this case the next stepwould be generation of the offer letter and its acceptance.
 When a negotiation is integrative, it means thatnegotiation is based on interest or otherwise negotiation
Prof. Amit Kumaramit040985@gmail.comFIT Group of Institutions
strategy which lay emphasis on win-win situation. The goalof Integrative Negotiation is to make the parties’ interestcompatible, so that both sides can win. That is, reach anagreement that satisfies their need. The goals of theparties are integrative. Negotiations are not mutuallyexclusive. If one party achieves its goals, the other is notprecluded from achieving its goals as well. Thefundamental structure of integrative negotiation situationis such that, it allows both sides to achieve their objective.While Integrative Negotiation Strategies are preferable,they are not always possible. Sometimes parties’ interestsreally are opposed as when both sides want a larger shareof fixed resources.
 Ø It focus on commonalties rather than differencesØ It attempt to address needs and interests, not positionsØ It commit to meeting the needs of all involved partiesØ Exchange information and ideasØ Invent options for mutual gainØ Use objective criteria for standard of performance.Past experience, based perceptions and truly distributiveaspects of bargaining makes it remarkable that integrativeagreements occur at all. But they do, largely becausenegotiators work hard to overcome inhibiting factors andsearch assertively for common ground. Those wishing toachieve integrative results find that they must manageboth the contest and the process of negotiation in order togain the cooperation and commitment of all parties. Keycontextual factors include:- Creating a free flow of information- Attempting to understand the other negotiator’s realneed and objective- Emphasizing the commonalties between the parties andminimizing the differences- Searching for solutions that meet the needs andobjectives of both sides.
There are four major steps in the Integrative NegotiationProcess:Ø Identify and define the problemØ Understand the problem and bring interests and needsto the surfaceØ Generate alternative solution to the problemsØ Evaluate those alternatives and select among them.Increasing Value to BuyerClaiming ValueCreating Value Pareto efficient frontierIncreasing Value to SellerThe first three steps of the Integrative Negotiation processare important for “Creating Value”. While the fourth step othe Integrative Negotiation Process, the evaluation andselection of alternatives INVOLVE “CLOUMING Value”.Claiming value involves many of the distributive bargainingskills discussed earlier.1. IDENTIFY AND DEFINE THE PROBLEMThe problem identification step is often the most difficultone and it is even more challenging when several partiesare involved. Negotiator need to consider five aspectswhen identifying and defining the problems.§ Define the problem in a way that is mutually acceptableto both sides.§ State the problem with an eye toward practicality andcomprehensiveness§ State the problem as a goal and identify the obstacles toattaining this goal.§ Depersonalize the problem§ Separate the problem definition from the search forsolution.2. UNDERSTAND THE PROBLEM FULLYIdentify interest needs – Many writers have stressed that a

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