NEGOTIATION

THE LATIN ROOT OF THE WORD NEGOTIATION IS “NEGOTIATUS”,

WHICH MEANS “TO CARRY ON BUSINESS” TO NEGOTIATE IS TO SEEK
MUTUAL AGREEMENT THROUGH DIALOGUE. DIFFERENCES CAN BE
RESOLVED THROUGH NEGOTIATIONS, IN ANY OF THESE CASES:
PURCHASE OF A NEW BIKE.
A UNION DEMAND IN A COLLECTIVE BARGAINING.
AWARDS CONTRACT DISPUTE.
ISSUES IN A MERGER PROCESS.
COMPENSATION PACKAGE WITH A PROSPECTIVE EMPLOYER.
PEACE ACCORD BETWEEN TWO WARRING NATIONS.
JOB DISTRIBUTION IN A DEPARTMENT
TYPES OF NEGOTIATION

1. DISTRIBUTIVE NEGOTIATION

A NEGOTIATION IN WHICH THE PARTIES COMPETE OVER THE

DISTRIBUTION OF A FIXED SUM OF VALUE. EACH INDIVIDUAL /PARTY
WANTS TO GET A LARGER SHARE FOR ITSELF. IN DISTRIBUTIVE
NEGOTIATIONS, A GAIN BY ONE SIDE IS MADE AT THE EXPENSES OF
THE OTHERS.

2. INTEGRATIVE NEGOTIATION

A NEGOTIATION IN WHICH THE PARTIES COOPERATE TO ACHIEVE

MAXIMUM BENEFITS BY INTEGRATING THEIR INTERESTS INTO AN
AGREEMENT. THESE DEALS ARE ABOUT CREATING VALUE AND
CLAIMING IT. THE FOCUS OF AN INTEGRATIVE NEGOTIATION IS TO
AGREE ON A MUTUALLY SATISFYING OUTCOME, AND HENCE BY DESIGN
IT BECOMES A WIN-WIN KIND OF NEGOTIATION.
 JUST LIKE DISTRIBUTIVE NEGOTIATION, HERE ALSO THE RESOURCES
MAY BE LIMITED AND THE INDIVIDUAL/PARTIES MAY COME WITH AN
OPTION CONTRARY TO THE OTHERS, BUT THERE IS A WILLINGNESS TO
GENERATE OTHER OPTIONS AND AGREE ON THEM TO CREATE
MUTUALLY UTILITARIAN OUTCOME. THE GAIN OF ONE
INDIVIDUAL/PARTY IS NOT AT THE COST OF THE OTHERS. THERE IS A
MUTUALITY OF UNDERSTANDING AND AN ATTEMPT TO SATISFY THE
CONCERNS OF EACH OTHER.

3. MULTI-PHASE NEGOTIATIONS

4. MULTI-PARTY NEGOTIATIONS

5. THIRD-PARTY NEGOTIATIONS
CONCEPTS OF NEGOTIATION
THE FOUR KEY CONCEPTS OF NEGOTIATION ARE:

1 BEST ALTERNATIVE TO A NEGOTIATED AGREEMENT (BATNA)

IT IS A CONCEPT DEVELOPED BY ROGER FISHER AND WILLIAM URY AND IS THE
BEST ALTERNATIVE TO A NEGOTIATED AGREEMENT. IT IS ONE’S PREFERRED
COURSE OF ACTION IN THE ABSENCE OF A DEAL. KNOWING YOUR BATNA
MEANS KNOWING WHAT YOU WILL DO OR WHAT WILL HAPPEN IF YOU FAIL
TO REACH AGREEMENT IN THE NEGOTIATION AT HAND.

2. RESERVATION PRICE
THE RESERVATION PRICE (ALSO REFERRED TO AS THE WALK-AWAY) IS THE
LEAST FAVORABLE POINT AT WHICH ONE WILL ACCEPT A DEAL. YOUR
RESERVATION PRICE SHOULD BE DERIVED FROM YOUR BATNA, BUT IT IS
NOT USUALLY THE SAME THING. IF THE DEAL IS ONLY ABOUT MONEY,
HOWEVER, AND A CREDIBLE RUPEE OFFER IS YOUR BATNA, THEN YOUR
RESERVATION PRICE WOULD BE APPROXIMATELY EQUAL TO YOUR BATNA.
3. ZONE OF POSSIBLE AGREEMENT (ZOPA)

THIS IS THE THIRD KEY CONCEPT OF NAGOTIATION AND IS THE AREA OR

RANGE IN WHICH A DEAL THAT SATISFIES BOTH PARTIES CAN TAKE PLACE.
THUS, IT IS THE SET OF AGREEMENT THAT POTENTIALLY SATISFY BOTH
PARTIES. EACH PARTY’S RESERVATION PRICE DETERMINES ONE END OF
THE ZOPA. THE ZOPA ITSELF EXISTS (IF AT ALL) IN THE OVERLAP BETWEEN
THESE HIGH AND LOW LIMITS, THAT IS, BETWEEN THE PARTIES’
RESERVATION PRICES.

4. VALUE CREATION THROUGH TRADES

THIS CONCEPT TELLS US THAT NEGOTIATING PARTIES CAN IMPROVE THEIR

POSITIONS BY TRADING THE VALUES AT THEIR DISPOSAL. VALUE
CREATION THROUGH TRADES OCCURS IN THE CONTEXT OF INTEGRATED
NEGOTIATIONS. IT USUALLY TAKES THE FORM OF EACH PARTY GETTING
SOMETHING IT WANTS IN RETURN FOR SOMETHING IT VALUES MUCH LESS.
PRE-NEGOTIATION PLANNING

1. KNOW THYSELF

IT IS IMPORTANT TO HAVE KNOWLEDGE ABOUT ONE’S OWN

PERSONALITY AND PREDISPOSITIONS
2.KNOW YOUR ADVERSARY
IT IS EQUALLY IMPORTANT ALSO TO KNOW THE BACKGROUND
AND ANTECEDENTS OF THE INDIVIDUAL /PARTY YOU ARE GOING TO
NEGOTIATE WITH.
3.SPECIFY YOUR GOALS AND OBJECTIVE
BE CLEAR OF YOUR IMMEDIATE AND LONG TERM OBJECTIVES IN
THE NEGOTIATION.
4.CONSIDER WHAT A GOOD OUT COME WOULD BE FOR YOU AND
THE OTHER SIDE.
5.IDENTIFY POTENTIAL VALUE CREATION OPPORTUNITIES.
6.IDENTIFY YOUR BATNA AND RESERVATION PRICE AND DO THE
SAME FOR THE OTHER SIDE.
7. SHORE UP YOUR BATNA
IF YOUR BATNA ISN’T STRONG, FIND WAYS TO IMPROVE IT.
8. ANTICIPATE THE AUTHORITY ISSUE
FIND OUT IF THE PERSON OR TEAM YOU’RE DEALING WITH HAS
THE AUTHORITY TO MAKE A DEAL.
8. PREPARE FOR FLEXIBILITY IN THE PROCESS DON’T LOCK
YOURSELF INTO A RIGID SEQUENCE.
9. GATHER EXTERNAL STANDARDS AND CRITERIA RELEVANT TO

FAIRNESS.
10. ALTER THE PROCESS IN YOUR FAVOUR.
DON’T EXPECT THINGS TO FOLLOW A LINEAR PATH TO A
CONCLUSION. BE PREPARED FOR BUMPS IN THE ROAD AND PERIODIC
DELAYS. ALTER THE AGENDA AND PROCESS MOVES IN YOUR FAVOUR.
STRATEGIES AND TACTICS OF NEGOTIATION

STRATEGIES CHANGE AS PER THE DEMAND OF THE SITUATION. AS THE

NEGOTIATION PROGRESSES, SITUATIONS BECOME CLEAR AND THEY
REQUIRE CHANGE IN THE MOVES AND STRATEGIES

GETTING THE OTHER SIDE TO THE TABLE

• OFFER INCENTIVES
• PUT A PRICE ON THE STATUS QUO
• ENLIST SUPPORT

MAKING A GOOD START

• EXPRESS RESPECT FOR THE OTHER SIDE’S EXPERIENCE AND
EXPERTISE.
• FRAME THE TASK POSITIVELY, AS A JOINT ENDEAVOR
• EMPHASIZE YOUR OPENNESS TO THE OTHER SIDE’S INTERESTS
AND CONCERNS.
SPECIFIC TACTICS FOR DISTRIBUTIVE NEGOTIATION
• ANCHORING
• COUNTER ANCHORING
• BE PREPARED FOR CONCESSIONARY MOVES
• THE TIME FACTOR
• PACKAGE OPTIONS FOR A FAVOURABLE DEAL
• CLOSING THE DEAL
 SIGNAL THE END OF THE ROAD BEFORE YOU GET THERE.
 ALLOW FLEXIBILITY IF YOU ANTICIPATE GOING BEYOND THE FINAL.
 DISCOURAGE THE OTHER SIDE FROM SEEKING FURTHER
CONCESSIONS.
 WRITE DOWN THE TERMS
SPECIFIC TACTICS FOR INTEGRATIVE NEGOTIATION
• ASK OPEN-ENDED QUESTIONS ABOUT THE OTHER SIDE’S NEEDS,
INTERESTS, CONCERNS, AND GOALS.
• PROBE THE OTHER SIDE’S WILLINGNESS TO TRADE OFF ONE THING

FOR ANOTHER.
• INQUIRE ABOUT THE OTHER SIDE’S UNDERLYING INTERESTS BY
ASKING WHY CERTAIN CONDITIONS.
• LISTEN CLOSELY TO THE OTHER SIDE’S RESPONSES WITHOUT
JUMPING IN TO CROSS-EXAMINE, CORRECT, OR OBJECT.
• BE AN ACTIVE LISTENER. THE MORE THEY TALK, THE MORE
INFORMATION YOU’RE LIKELY TO GET.
• EXPRESS EMPATHY FOR THE OTHER SIDE’S PERSPECTIVES, NEEDS
AND INTEREST.
• ADJUST YOUR ASSUMPTIONS BEST ON WHAT YOU HAVE LEARNED.
• BE FORTHCOMMING ABOUT YOUR OWN BUSINESS NEEDS, INTEREST
• WORK TO CREATE A TWO-WAY EXCHANGE OF INFORMATION.
• BE AN ACTIVE LISTENER.
• CONTINUE YOUR RELATIONSHIP – BUILDING EFFORTS.
• REFRAIN FROM PERSONAL ATTACK.
• MAINTAIN A SENSE OF HUMOR.
• DON’T FEEL PRESSURED TO CLOSE A DEAL TO QUICKLY.

LOOK FOR OPTIONS THAT EXPLOIT DIFFERENCES

• ACCESS TO RESOURCES.
• FUTURE EXPECTATIONS.
• TIME PREFERENCE.
• RISK AVERSION.

TAKE YOUR TIME

FRAMING THE SITUATION

CONTINUAL EVALUATION AND PREPARATION

FREQUENTLY ASKED TACTICAL QUESTIONS
• SHOULD I EVER STATE MY ACCEPTABLE RANGE?
• SHOULD I EVER TELL THE OTHER SIDE MY REALBOTTOM LINE?
• SUPPOSE THAT THE OTHER SIDE OPENS WITH AN INCREDIBLY REASONABLE
NUMBER. SHOULD I COUNTER WITH AN EQUALLY UNREASONABLE NUMBER,
OR DECLINE TO COUNTER AT ALL?
• IS IT EVER ACCEPTABLE TO BID AGAINST MYSELF-TO MAKE TWO MOVES IN
A
ROW?
• IS IT SMART OR FAIR TO BLUFF?
• IN A COMPLEX DEAL, IS IT BETTER TO REACH AGREEMENT ISSUE BY ISSUE
OR WAIT UNTIL THE END?
• IS IT BETTER TO DEAL WITH DIFFICULT OR EASY ISSUES FIRST?
• WHAT IF THERE IS AN UNEXPECTED TURN IN THE ROAD-BEFORE OR AFTER
AN AGREEMENT?
• WHAT HAPPENS WHEN YOU PIT A COLLABORATIVE NEGOTIATOR AGAINST A
 HOW SHOULD I RESPOND IF THE OTHER SIDE SEEKS TO CHANGE
SOMETHING IN ITS OFFER AFTER A DEAL HAS BEEN REACHED?
 WHAT SHOULD I DO WHEN THE NEGOTIATOR ON THE OTHER SIDE
HAS A TEMPER TANTRUM?
 I DON’T BELIEVE WHAT THE OTHER SIDE IS SAYING. WHAT SHOULD

I DO?
 WHEN, IF EVER, IT IS APPROPRIATE TO NEGOTIATE OVER THE
TELEPHONE OR BY E-MAIL? OR IS IT ESSENTIAL TO INSIST ON A
FACE-TO-FACE MEETING?
 HOW SHOULD I REACT WHEN THE OTHER SIDE CHALLENGES MY
CREDENTIALS, STATUS, OR AUTHORITY TO MAKE A DEAL?
NEGOTIATING PROCESSES

NEGOTIATING IS AN ACT OF CREATING AGREEMENT ON SPECIFIC ISSUE

BETWEEN TWO (OR MORE) PARTIES WITH DIFFERENT VIEWS. THE
SUCCESS OF SUCH NEGOTIATION DEPENDS ON MANY FACTORS, BUT
THE MOST IMPORTANT IS ABILITYAND SKILL OF THE NEGOTIATOR.

STEPS IN NEGOTIATING
1.PREPARATION
THINK AHEAD
SET CLEAR OBJECTIVES
ANTICIPATE POSSIBLE REACTIONS
WORKOUT STRATEGIES – (STRUCTURE AND SEQUENCES).
PREPARATION PROVIDES A ROAD MAP NOT A STRAITJACKET
INTENDED TO BE STRAIGHT FORWARD TO THE POINT AND EFFECTIVE
AND NOT RESTRICTIVE.
2. INVITATION TO NEGOTIATION
THIS IS OPENING AND TAKING OFF STAGE OF NEGOTIATION. THEREFORE,
IT DESERVES ALL CARE.
 TAKE INITIATIVE IN FIXING THE TIME, VENUE, AND AGENDA OF THE
MEETING.
 INITIATE THE NEGOTIATION PROCESSES.
 TAKE CONTROL OF ORGANIZATION OF THE MEETING.
 SELL THE CONCEPT OF THE AGREEMENT BEFORE YOU START
NEGOTIATING THE TERMS.

3.PRESENTATION
THIS IS THE OCCASION TO PRESENT YOUR IDEAL TERMS AS DECLARATION
OF YOUR OPENING POSITION AS ALSO OCCASION TO JUDGE AND WEIGH
THE DEMANDS OF THE OTHER SIDE. IT IS EXPLORATORY STAGE – WHERE
WE GAUGE THE ATTITUDE, STRENGTH AND IMPORTANCE OF DEMANDS.
SOME DON’TS
 DO NOT OVER-REACT.
 DO NOT BECOME OVER – EMOTIONAL.
 DO NOT LOSE PATIENCE / TEMPER.
 DO NOT BE UNPLEASANT.
 DO NOT BE PROVOCATIVE.
 DO NOT INSULT THEM.
 DO NOT PUSH THEM TOO HARD AT THIS MOMENT.
 DO NOT BE PANICKED.
SOME DOS
 BE PROFESSIONAL IN APPROACH.
 LOOK CONFIDENT, RELAXED AND AT EASE.
 BE OPEN, SINCERE, HONEST AND CREDIBLE.
 SHOW RESPECT AND VALUE FOR THE OTHER SIDE.
 SHOW EMPATHY AND UNDERSTANDING FOR THE OTHER SIDE.
 SHOW COMMITMENT FOR ‘WIN-WIN’ OUTCOME.
 GIVE COUNTER-DEMAND, IF NEED BE TO CREATE COUNTER-
PRESSURE.
BARGAINING
BARGAINING SESSION IS THE MOST IMPORTANT AND CRUCIAL STAGE
OF NEGOTIATION PROCESSES. IT IS REAL NEGOTIATION OF SKILL
AND EXPERTISE. YOU NEED TO BE ASSERTIVE AND POWERFUL WHILE
GIVING RESPECT TO THE VIEWS OF OTHER SIDE.
 “NEVER GIVE A CONCESSION, TRADE IT RELUCTANTLY” – CHEAP
TO GIVE AND VALUABLE TO RECEIVE. DO NOT GIVE ANY THING
FOR NOTHING.
 “ENHANCE AND REDUCE EVERY CONCESSION” i.e. BUILD-UP
VALUE FOR WHATEVER YOU ARE OFFERING AND MINIMIZE THE
VALUE OF WHATEVER IS BEING OFFERED TO YOU.
BARRIERS TO AGREEMENT

HOW TO RECOGNIZE AND OVERCOME THEM

DIE-HARD BARGAINERS
LACK OF TRUST
INFORMATIONAL VACUUMS AND THE NEGOTIATOR’S DILEMMA
STRUCTURAL IMPEDIMENTS
SPOILERS
DIFFERENCES IN GENDER AND CULTURE
DIFFICULTIES IN COMMUNICATION
THE POWER OF DIALOGUE
SUMMING UP
THE THIRD PARTY INTERVENTION

1. RESOLUTION THROUGH COURTS (LITIGATION)

2. RESOLUTION ALTERNATIVE TO COURTS/ ALTERNATIVE DISPUTE
RESOLUTION (ADR).
NEGOTIATION
CONCILIATION
ARBITRATION
MEDIATION
THE RENT-A-JUDGE PROGRAMME
SUMMARY JURY TRIAL
MINI TRIAL
NEGOTIATION
IT IS THE BEST WAY FOR THE RESOLUTION OF A DISPUTE THROUGH
COMPERMISE AND REACHING AN AGREEMENT.

ARBITRATION
IT PRODUCES A BINDING DECISION MADE BY A THIRD PARTY.

MEDIATION
IT DIFFERS FROM ARBITRATION IN THAT THE NUTRAIL THIRD PARTY,
THE MEDIATOR, DOES NOT IMPOSE A SOLUTION.

THE RENT-A-JUDGE PROGRAMME

NORMALLY A RETD. JUDGE IS CHOSEN TO HEAR THE CASE AND
PRONOUNCE THE JUDGEMENT.

SUMMARY JURY TRIAL

HERE, A SMALL JURY, USUALLY SIX MEMBERS IS CHOSEN FROM THE
REGULAR JURY POOL.

MINI TRIAL
IT IS A HYBRID OF MEDIATION, TRADITIONAL SETTLEMENT
NEGOTIATION & ADJUDICATION
NEGOTIATING WITH PROSPECTIVE EMPLOYER

SALARY NEGOTIATIONS ARE EXTREMELY IMPORTANT BECAUSE THEY

AFFECT YOUR LIVELIHOOD AND WELFARE FOR THE FUTURE. HERE ARE A
FEW STEPS TO GUIDE YOU THROUGH:
1.FIGURE OUT WHAT YOU REALLY WANT.
2.DO YOUR HOMEWORK.
3.DETERMINE YOUR BATNA AND YOUR ASPIRATION.
4.RESEARCH THE EMPLOYER’S BATNA.
5.DETERMINE THE ISSUE MIX.
6.PREPARE SEVERAL SCENARIOS.
7.CONSIDER GETTING A “COACH”.
ASSUME THAT THEIR OFFER IS NEGOTIABLE

IMMEDIATELY RE-ANCHOR THEM BY REVIEWING YOUR NEEDS

AND YOUR RATIONALE

DO NOT REVEAL YOUR BATNA NOR YOUR RESERVATION POINT

REHEARSE AND PRACTICE

IMAGINE THAT YOU ARE NEGOTIATING ON BEHALF OF SOMEONE

ELSE (NOTJUST YOURSELF)

POST OFFER: YOU HAVE THE OFFER, NOW WHAT?

DONOT IMMEDIATELY AGREE TO THE OFFER
GET THE OFFER IN WRITING
BE ENTHUSIASTIC AND GRACIOUS
ASSESS THEIR POWER TO NEGOTIATE WITH YOU
TELL THEM EXACTLY WHAT NEEDS TO BE DONE FOR YOU
TO AGREE
DO NOT NEGOTIATE IF YOU ARE NOT OR COULD NOT BE
INTERESTED
EXPLODING OFFERS
NEGOTIATION SKILLS
PATIENCE
EFFECTIVE COMMUNICATOR
TURNING NEGOTIATION INTO A CORPORATE CAPABILITY THROUGH
TRAINING AND RESOURCE MOBILIZATION
CLARIFY GOALS AND EXPECTATIONS
INSIST THAT EVERY NEGOTIATING TEAM KNOWS ITS BATNA
CAPTURE AND REUSE LESSONS LEARNED
DEVELOP PERFORMANCE MEASURES AND LINK THEM TO REWARDS.
ALIGNS NEGOTIATING GOALS WITH ORGANIZATIONAL GOALS.
PREPARES THOROUGHLY AND USES EACH NEGOTIATING PHASE TO
PREPARE FURTHER.
USES NEGOTIATING SESSIONS TO LEARN MORE ABOUT THE ISSUES
AT STAKE AND THE OTHER SIDE’S BATNA AND RESERVATION PRICE.
HAS THE MENTAL DEXTERITY TO IDENTIFY THE INTERESTS OF

BOTH SIDES, AND THE CREATIVITY TO THINK OF VALUE-

CREATING OPTIONS THAT PRODUCE WIN-WIN SITUATIONS.
CAN SEPARATE PERSONAL ISSUES FROM NEGOTIATING ISSUES.
CAN RECOGNIZE POTENTIAL BARRIERS TO AGREEMENT.
KNOWS HOW TO FORM COALITIONS.
DEVELOPS A REPUTATION FOR RELIABILITY AND
TRUSTWORTHINESS.
d