Examination Paper of Business Communication

IIBM Institute of Business Management

Examination Paper MM.100

Subject Code-B-109 Business Communication

Section A: Objective Type & Short Questions (30 marks)

 This section consists of multiple choices and Short Notes type questions.
 Answer all the questions.
 Part one questions carry 1 mark each & Part Two questions carry 4 marks each.

Part one:

Multiple choice:

1. Communication

2. Physiological Hearing impairment

3. Oral

4. Persuasion

5. All the above

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6. Communication through speech

7. Communication between the CEO and the managers

8. All of the above

9. Discomfort & Anxiety

10. Transmission

Part Two:

1.
There are 7 C’s of effective communication which are applicable to both written as well as oral
communication. These are as follows:
Completeness - The communication must be complete. It should convey all facts required by the
audience. The sender of the message must take into consideration the receiver’s mind set and
convey the message accordingly. A complete communication has following features:
 Complete communication develops and enhances reputation of an organization.
 Moreover, they are cost saving as no crucial information is missing and no additional cost is
incurred in conveying extra message if the communication is complete.
 A complete communication always gives additional information wherever required. It leaves no
questions in the mind of receiver.
 Complete communication helps in better decision-making by the audience/readers/receivers of
message as they get all desired and crucial information.
 It persuades the audience.
Conciseness - Conciseness means wordiness, i.e, communicating what you want to convey in least
possible words without forgoing the other C’s of communication. Conciseness is a necessity for
effective communication. Concise communication has following features:
 It is both time-saving as well as cost-saving.
 It underlines and highlights the main message as it avoids using excessive and needless words.
 Concise communication provides short and essential message in limited words to the audience.
 Concise message is more appealing and comprehensible to the audience.
 Concise message is non-repetitive in nature.
Consideration - Consideration implies “stepping into the shoes of others”. Effective communication
must take the audience into consideration, i.e, the audience’s view points, background, mind-set,
education level, etc. Make an attempt to envisage your audience, their requirements, emotions as
well as problems. Ensure that the self-respect of the audience is maintained and their emotions are
not at harm. Modify your words in message to suit the audience’s needs while making your
message complete. Features of considerate communication are as follows:
 Emphasize on “you” approach.
 Empathize with the audience and exhibit interest in the audience. This will stimulate a positive
reaction from the audience.
 Show optimism towards your audience. Emphasize on “what is possible” rather than “what is
impossible”. Lay stress on positive words such as jovial, committed, thanks, warm, healthy,
help, etc.
Clarity - Clarity implies emphasizing on a specific message or goal at a time, rather than trying to
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achieve too much at once. Clarity in communication has following features:

 It makes understanding easier.
 Complete clarity of thoughts and ideas enhances the meaning of message.
 Clear message makes use of exact, appropriate and concrete words.
Concreteness - Concrete communication implies being particular and clear rather than fuzzy and
general. Concreteness strengthens the confidence. Concrete message has following features:
 It is supported with specific facts and figures.
 It makes use of words that are clear and that build the reputation.
 Concrete messages are not misinterpreted.
Courtesy - Courtesy in message implies the message should show the sender’s expression as well as
should respect the receiver. The sender of the message should be sincerely polite, judicious,
reflective and enthusiastic. Courteous message has following features:
 Courtesy implies taking into consideration both viewpoints as well as feelings of the receiver of
the message.
 Courteous message is positive and focused at the audience.
 It makes use of terms showing respect for the receiver of message.
 It is not at all biased.
Correctness - Correctness in communication implies that there are no grammatical errors in
communication. Correct communication has following features:
 The message is exact, correct and well-timed.
 If the communication is correct, it boosts up the confidence level.
 Correct message has greater impact on the audience/readers.
 It checks for the precision and accurateness of facts and figures used in the message.
 It makes use of appropriate and correct language in the message.
Awareness of these 7 C’s of communication makes you an effective communicator.

2.

Space language is how we communicate with the space around us. The space around its content
and the people surrounding around the organisation differ to convey a definite meaning. For
example, the personal space such as the office environment, defined for higher ranked workers
differs from that of lower ranked workers in terms of comfort in seating and settings.

3.

Listening is the communication skill we use most frequently. In fact 45% of our communication time
is spent listening.
Listening is also the most important skill in sales, management, customer service and interpersonal
effectiveness. Ironically, it is also the skill in which we’ve had the least training.
If you multiply the lack of listening skills to include your colleagues and friends, there is a staggering
cost to your personal and business relationships.
In fact, studies show that poor listening skills are responsible for more communication problems
and loss of productivity that any other causes. And that over 80% of business communication must
be repeated 3 or 4 times!
On top of that our retention rates are also really poor. The average person listens at 25% of their
capacity and retains only about 20% of the information they hear. It’s like starting off with a
megaphone and ending with a whisper.

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Poor Listeners:
 Interrupt the speaker
 Have a wandering mind and/or gaze
 Don’t give eye contact
 Show no enthusiasm or interest in the speaker
 Use negative body language, facial expressions and verbal signals
 Jump to conclusions
 Don’t check understanding
 Finish other people’s sentences
 Don’t respond
 Change the subject
 Give unwanted advice
 Don’t give feedback
 Are easily distracted
 Don’t ask questions
 Take too many notes thus missing the point
 Fidget and don’t pay attention to the speaker
 Talk too much
 Appear preoccupied

Good Listeners:
 Pay attention to the person who is speaking
 Keep eye contact
 Use positive body language, facial expressions and verbal signals
 Show interest by nodding or by smiling at appropriate times
 Ask questions if anything is not clear when the speaker has finished
 Pay careful attention to words
 Summarise frequently
 Check understanding
 Give feedback
 Give the speaker time to articulate their thoughts
 Remain calm and in control
 Give vocal responses
 Appear interested
 Let the speaker finish his or her thoughts without interrupting
 Paraphrase before responding

4.

Business reports & different types of reports:

The word ‘report’ is derived from the Latin ‘reportare’ which means to carry back (re=back+ portare
= to carry). Generally a report is a description of an event carried back to someone who was not
present on the scene. Thus in a broad sense, many memorandums, letters and news items are
called as reports. When an instructor prepares a list of absent students or an analysis of an
examination result, or when a technician fills in the form of readings taken from a measurement, he
is writing a report. Such reports are the result of careful investigation, sound thinking, logical
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organization and clear writing and they are presented in a conventional form sanctioned by long
and varied experience.
 A report is an account of something. It is usually an answer to a question or a demand from
some other person from information.
 A formal report, that are present in organized form the information that has been requested by
an authorized person.
 A report is a communication from someone who has information, to someone who wants to
use that information.
There are some essential points implied in the above definitions. They are as follows:
 A report is a formal statement of facts or information or an account of something
 It is presented in a conventional form.
 It is written for a specific audience.
 It contains conclusions reached by the writer.
 It often includes recommendations.
Definition:
A report is a formal communication written for a specific purpose; it includes a description of
procedures followed for collection and analysis of data, their significance, the conclusions drawn
from them, and recommendations, if required.
Different types of Reports:
Generally business reports are categorized into two ways. They are oral and written. An oral report
is a piece of fact-to-face communication about something seen or observed. Though it saves the
reporter’s time, it is more time-consuming for the receiver as he has to listen to every word of the
report.
Reports:
 Oral
 Written
 Formal
 Informal
 Informational
 Interpretive
 Routine
A written report is relatively more accurate and permanent. In certain cases the reader may just
skim through it, or read the abstract or the conclusions or recommendations only. It can be referred
to again and again and is by its very nature more formal than an oral report. Written report is then
divided into two types. They are as follows:
 Formal report.
 Informational.
 Interpretive.
 Routine.
Informal report:
Formal reports vary a great deal according to their purposes and contents, and different
organizations have different ways of classifying them. some classify them according to their source
or frequency of appearance, others by their length or degree of formality or physical form.
Informational report:
An informational report contains only the data collected or the facts observed in an organized form.
It presents the situation as it is and not as it should be. It does not contain any conclusions or
recommendations. It is useful because it presents relevant data put together in a form in which it is
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required by the management to take decisions.

Interpretive report:
An interpretive report, like an informational report, contains facts but it also includes an evaluation
or interpretation or analysis of data and the reporter’s conclusions. It may have recommendations
for actions. An interpretive report which consists principally of recommendations is also called a
recommendation or recommendatory report.
Routine report:
All that the report writer has to do is to put a tick mark against certain items listed in the form or
write very brief remarks against them. These reports are written usually for recording routine
matters at regular intervals, e.g. confidential reports on employees, periodic reports on the
progress of projects, reports on inspection of equipmendations also, they are called as Routine
reports. Routine reports are further divided into many types. They are as follows:
 Progress reports,
 Laboratory reports,
 Inspection reports,
 Inventory reports.
Progress reports:
The frequency of progress reports depends upon the practice followed in an organization. They may
be written and circulated at the end of each phase or a specified period of time or completion of a
stage of work. If they are prepared at regular intervals, they are called as periodic reports. They
contain the following information:
 Date, Total work to be completed.
 Work completed to date, work to be completed.
Laboratory reports:
A laboratory report is an account of various steps, findings and conclusions put together in a logical
order. As a matter of fact, no scientific experiment can be considered valid unless it is presented in
terms intelligible to other scientists. Thus, writing laboratory reports is considered to be an
essential part of scientific investigation and experimentation. These reports contain the following
elements:
 Heading, Experiment No.
 Date
 Statement of analysis
 Apparatus used
Inventory reports:
It is customary for every organization to take stock of equipment, furniture, stationery, etc. at
regular intervals. The person who checks the stock fills in his findings in a prescribed form.

5.

Kinesics
Kinesics is the interpretation of body motion communication such as facial expressions and
gestures, nonverbal behavior related to movement of any part of the body or the body as a whole.
The equivalent popular culture term is body language, a term Ray Birdwhistell, considered the
founder of this area of study, neither used nor liked (on the grounds that what can be conveyed
with the body does not meet the linguist's definition of language).
Birdwhistell's work
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 Kinesics was first used in 1952 by an anthropologist named Ray Birdwhistell. Birdwhistell
wished to study how people communicate through posture, gesture, stance and movement. His
ideas over several decades were synthesized and resulted in the book Kinesics and Context.
Interest in kinesics specifically and nonverbal behavior generally was popularized in the late
1960s and early 1970s by such popular mass market (nonacademic) publications as How to
Read a Person Like a Book. Part of Birdwhistell's work involved filming people in social
situations and analyzing them to show elements of communication that were not clearly seen
otherwise. One of his most important projects was The Natural History of an Interview, a long-
term interdisciplinary collaboration including Gregory Bateson, Frieda Fromm-Reichmann,
Norman A. McQuown, Henry W. Brosin and others.
 Drawing heavily on descriptive linguistics, Birdwhistell argued that all movements of the body
have meaning and that nonverbal behavior has a grammar that can be analyzed in similar terms
to spoken language. Thus, a "kineme" is "similar to a phoneme because it consists of a group of
movements which are not identical, but which may be used interchangeably without affecting
social meaning."
 Birdwhistell estimated that no more than 30 to 35 percent of the social meaning of a
conversation or an interaction is carried by the words.[7] He also concluded that there were no
universals in these kinesic displays, a claim that was disputed by Paul Ekman, who was
interested in analysis of universals, especially in facial expression.
Modern applications
In a current application, kinesic behaviors are sometimes used as signs of deception by interviewers
looking for clusters of movements to determine the veracity of the statement being uttered,
although kinesics can be equally applied in any context and type of setting to construe innocuous
messages whose carriers are indolent or unable to express verbally.
Relevant concepts include:
Emblems - Body movements or gestures that are directly translatable into a word or phrase
Illustrators - Accompany or reinforce verbal messages
Batons - Temporally accent or emphasize words or phrases
Ideographs - Trace the paths of mental journeys
Deitic movements - Point to a present object
Kinetographs - Depict a bodily action
Spatial movements - Depict a spacial relationship
Pictographs - Draw a picture of their referent
Rhythmic movements - Depict the rhythm or pacing of an event
Affect Displays - Show emotion
Regulators - Control the flow and pace of communication
Manipulators - Release physical or emotional tension
Kinesic behaviors are an important part of nonverbal communication. Body movements convey
information, but interpretations vary by culture. As many movements are carried out at a
subconscious or at least a low-awareness level, kinesic movements carry a significant risk of being
misinterpreted in an intercultural communication situation.

END OF SECTION A

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Section B: Caselets (40 marks)

 This section consists of Caselets.

 Answer all the questions.
 Each Caselet carries 20 marks.
 Detailed information should form the part of your answer (Word limit 150 to 200
words).

Caselet 1

Mr. and Mrs. Sharma went to Woodlands Apparel to buy a shirt. Mr. Sharma did not read the
price tag on the piece selected by him. At the counter, while making the payment he asked for
the price. Rs. 950 was the answer.

Meanwhile, Mrs. Sharma, who was still shopping came back and joined her husband. She was
glad that he had selected a nice black shirt for himself. She pointed out that there was a 25%
discount on that item. The counter person nodded in agreement.

Mr. Sharma was thrilled to hear that “It means the price of this shirt is just Rs. 712. That‟s
fantastic”, said Mr. Sharma.
He decided to buy one more shirt in blue color.

In no time, he returned with the second shirt and asked them to be packed. When he received
the cash memo for payment, he was astonished to find that he had to pay Rs. 1,900 and Rs.
1,424.

Mr. Sharma could hardly reconcile himself to the fact that the counter person had quoted the
discounted price which was Rs. 950. The original price printed on the price tag was Rs. 1,266.

Questions

1.

It was apparent that Mr. Sharma did not read the price tag. By reading the price tag, he would have
known about the actual price. Mr. Sharma should have also asked the counter person about the
actual price of the shirt instead of relying on Mrs Sharma’s interpretation of the price. The fact that
the counter person nodded when Mrs Sharma pointed out about the discount meant that there
was no verbal understanding when they received their cash memo.

2.

The main features involves in this case is that the right message was not conveyed to the user. In
fact, the message was ineffective to Mr. Sharma since he failed to communicate using the linear
model. This meant that the sender did not encode the message by not reading the price tag and
hence failed to decode and receive the message properly. This meant a breakdown in

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communication. Also the two-way communication did not work since the feedback was not
appropriate and lead to disastrous outcome when payment receipt was given. Also body language
was wrongly interpreted hence leading to failure in effective and correct response. All these
features meant that there were barriers to communication leading to undesired result.

Caselet 2

I don‟t want to speak to you. Connect me to your boss in the US,” hissed the American on the
phone. The young girl at a Bangalore call centre tried to be as polite as she could. At another
call centre, another day, another young girl had a Londoner unleashing himself on her, “Young
lady, do you know that because of you Indians we are losing jobs?”

The outsourcing backlash is getting ugly. Handling irate callers is the new brief for the young
men and women taking calls at these outsourced job centres. Supervisors tell them to be
„cool‟. Avinash Vashistha, managing partner of NEOIT, a leading US-based consultancy firm
says, “Companies involved in outsourcing both in the US and India are already getting a lot of
hate mail against outsourcing and it is hardly surprising that some people should behave like
this on the telephone.” Vashistha says Indian call centre‟s should train their operators how to
handle such calls. Indeed, the furor raised by the Western media over job losses because of
outsourcing

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has made ordinary citizens there sensitive to the fact that their calls are being taken not from
their midst, but in countries such as India and the Philippines.

The angry outbursts the operators face border on the racist and sexist, says the manager of a
call centre in Hyderabad. But operators and senior executives of call centres refuse to go on
record for fear of kicking up a controversy that might result in their companies‟ losing clients
overseas.

“It‟s happening often enough and so let‟s face it,” says a senior executive of a Gurgaon
call centre, adding, “This doesn‟t have any impact on business.”

Questions

1.

Handling such calls involves effective communication to limit the misunderstanding between callers
and receivers. It is crucial that the caller is handled with the best practice of effective
communication and this involves basic knowledge of elements of communication process. For
example, the caller is basically the sender and must be interpreted properly by the receiver who in
turns encodes the message for a desired outcome. Through this channel of communication, it is
important that the receiver does not give feedback which influences the sender’s moods and
attitude and is not in accordance with the sender’s expectation. For example, angry outburst can
sometimes be remedied by controlled ideas of reinforcement or correct ideas in the mind of the
receiver. Such can be seen in examples whereby proper questions as well as words are used to the
sender is asked and proper as well as correct answers is provided to eliminate doubt in the senders
mind. Handling such calls involved having the proper mindset in terms of communication in the
operators mind as well as proper training.

2.

When communication is effective such abusive happenings will be limited although there is what
we call ‘difficult customers’. Impact on business can be positive if abusive calls are turned into
‘happy successful stories’. These customers will show appreciation if they are handled with care.
Whilst of course, it is not always easy to please everyone; effective communication can help build
bridges between the callers and the person handling these calls. Racist remarks can sometimes be
ignored and maybe misunderstood due to cultural barriers at times. Callers must be diverted to
stay on the course of achieving the goal of communication and hence limit the impact on business.

END OF SECTION B

Section C: Applied Theory (30 marks)

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 This section consists of Applied Theory Questions.

 Answer all the questions.
 Each question carries 15 marks.
 Detailed information should form the part of your answer (Word limit 200 to 250
words).

1.
`
Communication Barriers - Reasons for Communication Breakdown
Communication is a process beginning with a sender who encodes the message and passes it
through some channel to the receiver who decodes the message. Communication is fruitful if and
only if the messages sent by the sender is interpreted with same meaning by the receiver. If any
kind of disturbance blocks any step of communication, the message will be destroyed. Due to
such disturbances, managers in an organization face severe problems. Thus the managers must
locate such barriers and take steps to get rid of them.
There are several barriers that affects the flow of communication in an organization. These
barriers interrupt the flow of communication from the sender to the reciever, thus making
communication ineffective. It is essential for managers to overcome these barriers. The main
barriers of communication are summarized below.
Following are the main communication barriers:
Perceptual and Language Differences: Perception is generally how each individual interprets the
world around him. All generally want to receive messages which are significant to them. But any
message which is against their values is not accepted. A same event may be taken differently by
different individuals. For example : A person is on leave for a month due to personal reasons
(family member being critical). The HR Manager might be in confusion whether to retain that
employee or not, the immediate manager might think of replacement because his teams
productivity is being hampered, the family members might take him as an emotional support.
The linguistic differences also lead to communication breakdown. Same word may mean different
to different individuals. For example: consider a word “value”.
 What is the value of this Laptop?
 I value our relation?
 What is the value of learning technical skills?
 Communication Barriers
“Value” means different in different sentences. Communication breakdown occurs if there is
wrong perception by the receiver.
Information Overload: Managers are surrounded with a pool of information. It is essential to
control this information flow else the information is likely to be misinterpreted or forgotten or
overlooked. As a result communication is less effective.
Inattention: At times we just not listen, but only hear. For example a traveler may pay attention
to one “NO PARKING” sign, but if such sign is put all over the city, he no longer listens to it. Thus,
repetitive messages should be ignored for effective communication. Similarly if a superior is
engrossed in his paper work and his subordinate explains him his problem, the superior may not
get what he is saying and it leads to disappointment of subordinate.
Time Pressures: Often in organization the targets have to be achieved within a specified time
period, the failure of which has adverse consequences. In a haste to meet deadlines, the formal
channels of communication are shortened, or messages are partially given, i.e., not completely

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transferred. Thus sufficient time should be given for effective communication.

Distraction/Noise: Communication is also affected a lot by noise to distractions. Physical
distractions are also there such as, poor lightning, uncomfortable sitting, unhygienic room also
affects communication in a meeting. Similarly use of loud speakers interferes with
communication.
Emotions: Emotional state at a particular point of time also affects communication. If the receiver
feels that communicator is angry he interprets that the information being sent is very bad. While
he takes it differently if the communicator is happy and jovial (in that case the message is
interpreted to be good and interesting).
Complexity in Organizational Structure: Greater the hierarchy in an organization (i.e. more the
number of managerial levels), more is the chances of communication getting destroyed. Only the
people at the top level can see the overall picture while the people at low level just have
knowledge about their own area and a little knowledge about other areas.
Poor retention: Human memory cannot function beyond a limit. One cant always retain what is
being told specially if he is not interested or not attentive. This leads to communication
breakdown.

Effect of Communication Barriers in Business Communication

In organizations the barriers in communication go a long way in distortion of the message and the
information does not reach in its desired form.

Imagine a situation where you want some report from your team members which needs to be
forwarded to the managing director of the organization. What if your team misinterprets your
information, screws up the project and fails to submit it within the deadline. The managing
director will literally sit on your head and make your life miserable. The poor communication can
actually cost you your job.

How barriers in communication effect business communication

Noise acts as a devil in business communication. Any information downloaded at a noisy place is
bound to get distorted and result in a complete mess.
Unorganized and Haphazard thoughts also lead to ineffective communication in organizations.
Business communications are bound to suffer due to ineffective communication. If any individual
wants something from his team members, he first must be himself very clear what actually he
expects from his team. The boss must clearly mention his team member’s key responsibility areas
in clear words to avoid wastage of manpower, duplicacy of work, effective time management and
more output from them.
During any business meeting, presentation or seminar, the speaker has to be very careful about
his pitch and tone. It has been observed that during seminars or presentations only the front
benchers are attentive, the last benchers are almost lost in their own sweet world. The person
who chairs the meeting has to speak very clearly, has to be very confident and must maintain a
tone audible to everyone, even to the individuals sitting on the last row. Information must pass to
them also to expect the best out of them and increase their efficiency. Try to make the seminar or
the meeting interactive. Dont just speak, also invite questions from the team. After any seminar
or meeting, the superior or the incharge must send the minutes of the meeting through e mail to
all the required recipients to avoid last minute confusions and discrepancies. The speaker must
ensure whether everyone is clear or not?
Difference in thought process also results in a poor communication in business areas. A boss
and the employee can never think on the same level. Let us try to understand the situation with
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the help of an example.

Overcoming Communication Barriers

There are a lot of communication barriers faced these days by all. The message intended by the
sender is not understood by the receiver in the same terms and sense and thus communication
breakdown occurs. It is essential to deal and cope up with these communication barriers so as to
ensure smooth and effective communication.
Eliminating differences in perception: The organization should ensure that it is recruiting right
individuals on the job. It’s the responsibility of the interviewer to ensure that the interviewee has
command over the written and spoken language. There should be proper Induction program so
that the policies of the company are clear to all the employees. There should be proper trainings
conducted for required employees (for eg: Voice and Accent training).
Use of Simple Language: Use of simple and clear words should be emphasized. Use of ambiguous
words and jargons should be avoided.
Reduction and elimination of noise levels: Noise is the main communication barrier which must
be overcome on priority basis. It is essential to identify the source of noise and then eliminate
that source.
Active Listening: Listen attentively and carefully. There is a difference between “listening” and
“hearing”. Active listening means hearing with proper understanding of the message that is
heard. By asking questions the speaker can ensure whether his/her message is understood or not
by the receiver in the same terms as intended by the speaker.
Emotional State: During communication one should make effective use of body language. He/she
should not show their emotions while communication as the receiver might misinterpret the
message being delivered. For example, if the conveyer of the message is in a bad mood then the
receiver might think that the information being delivered is not good.
Simple Organizational Structure: The organizational structure should not be complex. The
number of hierarchical levels should be optimum. There should be a ideal span of control within
the organization. Simpler the organizational structure, more effective will be the communication.
Avoid Information Overload: The managers should know how to prioritize their work. They
should not overload themselves with the work. They should spend quality time with their
subordinates and should listen to their problems and feedbacks actively.
Give Constructive Feedback: Avoid giving negative feedback. The contents of the feedback might
be negative, but it should be delivered constructively. Constructive feedback will lead to effective
communication between the superior and subordinate.
Proper Media Selection: The managers should properly select the medium of communication.
Simple messages should be conveyed orally, like: face to face interaction or meetings. Use of
written means of communication should be encouraged for delivering complex messages. For
significant messages reminders can be given by using written means of communication such as :
Memos, Notices etc.
Flexibility in meeting the targets: For effective communication in an organization the managers
should ensure that the individuals are meeting their targets timely without skipping the formal
channels of communication. There should not be much pressure on employees to meet their
targets.

2.
Negotiation:
Negotiations can be called as a way of resolving disputes. It is considered as being synonymous to
settlement, agreement, and collaboration and bargaining. It takes place almost in all spheres of life
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-be it is business, personal circumstances (married life, parenting, etc.), legal procedures,
government matters, etc. Negotiation can be defined as a channel of communication intended to
reconcile differences between parties and to settle conflict jointly. The parties aim at achieving a
win-win position.
Business Negotiations requires a lot of homework, such as asking what is the need of negotiation,
who all are involved, what are their view points, what are your aims, what is expected from
negotiation, etc.
Negotiation involves minimum of two parties. The aim of negotiation is understood by both parties.
The parties are willing to arrive at a mutually agreeable outcome. The outcome is acceptable to
both parties.
There are certain do’s and don’ts in case of negotiations:
 Do not discuss too many issues, emphasize on the prior issues.
 Be honest and straightforward. Don’t get carried away by rumours.
 Never give deadlines, it might lead to delays in deals.
 Keep away personal differences. Just focus your arguments on facts.
 Keep on giving recaps during the negotiation process.
 Avoid being rigid. Listen to the other parties view point if valid.
 Give testimonials for your argument. Support your argument with facts.
 Don’t make demands which can’t be accepted at all.
 Don’t let emotions overwhelm you.
 Be optimistic. Don’t fear losing. There are opportunities in other transactions also.

Characteristics of Negotiation
There are certain characteristics of the negotiation process. These are:
 There are a minimum of two parties present in any negotiation.
 Both the parties have pre-determined goals which they wish to achieve.
 There is a clash of pre-determined goals, that is, some of the pre-determined goals are not
shared by both the parties.
 There is an expectation of outcome by both the parties in any negotiation.
 Both the parties believe the outcome of the negotiation to be satisfactory.
 Both parties are willing to compromise, that is, modify their position.
 The incompatibility of goals may make the modification of positions difficult.
 The parties understand the purpose of negotiation
Phase of Negotiation:
Phases of the Negotiation Process
The negotiation process can essentially be understood as a four-stage process. The four stages of
the negotiation process are preparation, opening, bargaining and closure.
Phase 1: Preparation
Preparation is instrumental to the success of the negotiation process. Being well-prepared
generates confidence and gives an edge to the negotiator. Preparation involves the following
activities:

Gathering Information: One needs to learn as much as one can about the problem and ascertain
what information is needed from the other side. Understanding clearly the issues involved is also
needed.
Leverage Evaluation: Evaluation of one’s leverage and the other party’s leverage at the outset is
important because there may be a number of things one can do to improve one’s leverage or

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diminish the leverage of the other side.

Understand the people involved: It is important to know the people with whom the negotiation is
to take place. An understanding of their objectives, roles and the issues likely to be raised by them
will facilitate better handling of the situation during the negotiation process.
Rapport: It is helpful to establish a rapport with the opponent during the early stages, that is,
before the bargaining process begins is helpful. This was, one can determine early on how
cooperative the opponent is going to be.
Know your objectives: Clarity of objectives is absolutely essential. It needs to be decided in advance
how much you are willing to concede to the opponent and what your priorities are. All arguments
and justifications should be ready.
Type of negotiation: Anticipate the type of negotiation expected, that is, ascertain whether it will
be highly competitive, cooperative or something unusual; whether the negotiation will be face to
face, by fax, through a mediator, or in some other manner.
(vii) Plan: Decide on the negotiation approach and plan accordingly.
Phase 2: Opening Phase
Here the two sides come face to face. Each party tries to make an impression on the other side and
influence their thinking at the first opportunity. Psychologically, this phase is important because it
sets the tone for the negotiation to a large extent. It involves both negotiating parties presenting
their case to each other.
Phase 3: Bargaining Phase
The bargaining phase involves coming closer to the objective you intended to achieve when you
started the negotiation. In this phase, the basic strategy is to convince the other side of the
appropriateness of your demands and then persuading the other party to concede to those
demands. For this, one needs to be logical in one’s approach and frame clearly-thought-out and
planned arguments.
Phase 4: Closure Phase
The closing phase of a negotiation represents the opportunity to capitalize on all of the work done
in the earlier phases. The research that has been done in the preparation phase, combined with all
of the information that has been gained is useful in the closing phase. It also involves the sealing of
the agreement in which both parties formalize the agreement in a written contract or letter of
intent. Reviewing the negotiation is as important as the negotiation process itself. It teaches lessons
on how to achieve a better outcome. Therefore, one should take the time to review each element

END OF SECTION C
and find out what went well and what needs to be improved.

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