Negotiation & Conflict Resolution

8/1/2021 Negotiation &
Conflict Resolution
Sensitivity: LNT Construction Internal Use

NEGOTIATION & CONFLICT MANAGEMENT
CONFLICTS arise due to control of resources. Conflicts are a part of our lives. To resolve a
conflict, we resort to fighting. Net result of war = destruction, no resolution. Hence conflicts
today are resolved by negotiations.
Conflict Resolution is conceptualized as the methods and processes involved in facilitating the
peaceful end of conflict. Conflict resolution is a method for two or more parties to reach an
amicable solution to a disagreement. The conflict could be personal, financial, political, or
emotional. When a disagreement arises, often the best course of action is to resolve the
disagreement through negotiation.
Levels of Conflicts:
- Interpersonal – conflict involving two or more people. Pragyan and son eg. Think it
through and talk it out face to face. Use a mediator if required and learn to apologize if
appropriate. Communication skills are critical like in any other conflict resolution.
Resolution is Carrot and stick way to resolve.
- Team – galwan dam india and china teams. In 2020 China had brought in hundreds of
soldiers and heavy construction equipment in eastern Ladakh’s Galwan Valley with
several reports pointing out that the PLA was building the dam on the river to block its
flow. Both sides engaged into talks to de-escalate the situation and work has been
stopped.
- Organisation – FB and WA teams engaged in negotiations for WA acquisition
- Interest Groups – eg save the girl child, save the planet
- Countries – indo pak always at conflict. Instead of war are engaging in dialogue again
and again.
Optimal level of conflict is when people disagree with each other which thereby results in
new constructive ideas and solutions to deal with the problem and use the resources
available to optimum level.

Negotiation – is the process of working together to arrive at a mutually acceptable resolution.
A strategic discussion channeled to resolve an issue, in a way that is acceptable to both parties.
Each party in a negotiation attempts to persuade the other to agree with his or her point of
view. By negotiating, all parties involved attempt to avoid a conflict while agreeing on some
form of compromise. The negotiating parties will reach an agreement only if a positive
bargaining zone exists.
Involves:
 Parties (two or more)
 Issues, transactions, contracts, deals
 Human interaction
 Decisions
Importance of negotiation:
Negotiation is the key to advancing in the workplace, resolving conflicts, and adding value to
contracts. When disagreements arise in business or personal relationships, it is all too easy to
avoid conflict in order to save the relationship. Finding out why the other party wants to make a
deal is one of the most powerful things you can do in a negotiation. You can accomplish this by
asking questions and establishing negotiating roots.
Rules of Negotiation:
1) SHUT UP and Listen
2) Be willing to Walk Away
3) Shift the Focus Light
4) Do Not take it Personally
5) Do Your Homework
Hallmark of good negotiation:

1. Should produce a wise agreement
a. Meets legitimate interest of both sides
b. Resolves conflicting interests fairly
c. Is durable
d. Considers community interest
2. Should be efficient
3. Should improve, maintain but not damage the relationship
Fundamentals or Characteristics of good negotiation skills:

 preparation and planning skill – don’t get into negotiations underprepared or under-
informed. Take time to analyze the all perspectives in the situation and apply your
knowledge bank and skills for a resolution. If you haven’t thought of your BATNA that is
plan B, the power of negotiating will lie with the other party.
 knowledge of the subject matter being negotiated
 ability to think clearly and rapidly under pressure and uncertainty
 ability to express thoughts verbally
 listening skill
 judgment and general intelligence
 integrity
 ability to persuade others
 patience

 decisiveness
 considers lots of options
 aware of the process and style of the other person
 is flexible
 thinks and talks about possible areas of agreement
The most fundamental aspects of negotiation strategy is the creation and assertion of value.
The cooperative process of integrative or interest-based bargaining creates value. This means
that the parties to a dispute have found ways to increase the amount of beneficial goods
(things they want or that will improve their situation) that will be divided between them. This is
also known as "joint value" or "joint gains," and it means that new developments are regarded
as improvements by both parties. The primary method of creating value is to focus on the
underlying interests of the disputing parties – why do they want what they want? The parties
work together to find shared interests and create joint value by sharing information openly and
communicating with one another. Adding value increases the likelihood that both parties will
get something they want out of the negotiation. A "win-win" solution is one in which both
parties benefit.
The competitive process of claiming value entails dividing a "fixed pie," or the total amount of
value available to the disputing parties, into equal parts. This process is most closely related to
distributive bargaining, in which each side tries to get the biggest piece of the pie. The more
one side claims, the less one side receives. This is also referred to as a "win-lose" negotiation. In
order to claim value in a negotiation, you must use competitive tactics to persuade the other
party that he wants what you have to offer far more than you want what he has. Starting high;
conceding slowly; exaggerating the value of your concessions; minimizing the value of the
other's concessions; concealing information; arguing forcefully for principles that imply
favorable settlements; making commitments to accept only highly favorable agreements; and
being willing to outwait your opponent are some tactics for "winning" at distributive
negotiation.
Creating & claiming values are linked activities. Creating new value benefits both parties.
However, now that new value has been created, negotiators must divide the resulting "pie."
Unfortunately, the collaborative strategies required to create value tend to undermine the
competitive strategies required to claim value (and vice versa). Exaggeration and concealment
are required for effective competition, but they are diametrically opposed to the open sharing
of information required for mutual benefit. Taking an open cooperative approach, on the other
hand, leaves one vulnerable to the hard bargaining tactics of a competitive negotiator.
As a result, when both parties cooperate, the outcome is usually favourable, whereas when one
cooperates and the other competes, the competitor usually outperforms. However, when both
compete, they usually come out worse than if both cooperated – the same "payoff structure" as
the prisoners' dilemma game. However, the assumption is that claiming value in integrative
(i.e., cooperative) situations is more likely to be balanced. This is because the parties are
expected to form cooperative relationships and communicate freely, which is not always
permitted in prisoner's dilemma games.

Whatever the level of conflict, Principles of Negotiation remain the same.
TKI CONFLICT TEST
Competing
Competing is when people enter a conflict with the intention of winning. They are abrasive and
uncooperative. This method is distinguished by the assumption that one side will win and
everyone else will lose. It does not allow for the incorporation of various points of view into a
well-informed overall picture. Competing may be effective in sports or war, but it is rarely an
effective strategy for group problem solving.
 High on Assertiveness
 Low on responsiveness
 Open competition and win-lose situation
 Evokes bitterness and hostility in the losing party
 Dominance or force is used:
 in emergencies
 When Companies need to implement unpopular course of action
 When both parties are in adversary relationship and no other approach is
possible
Accommodating
Low on Assertiveness and high on responsiveness
All conversation tend to be positive
Accommodating is a strategy in which one party agrees to another’s wishes or demands by
being cooperative, and not assertive. When one realises he or she has been wrong about an
argument, this may appear to be a gracious way to concede. It is less beneficial when one party
accommodates another solely to maintain harmony or avoid disruption. Overaccommodating
can lead to avoidance and unresolved issues. It can also lead to groups in which the most
assertive members commandeer the process and dominate most conversations.
Avoiding

When people avoid, they simply ignore or withdraw from the conflict. They rather choose this
method and avoid the discomfort of confrontation even though it outweighs the potential
reward of conflict resolution. While this may appear to be a simple solution for the facilitator,
people aren’t really contributing anything of value to the conversation and may be withholding
valuable ideas. Nothing is resolved when conflict is avoided.
 Low on assertiveness and low on responsiveness
 Its useful for
 A cooling-off period
 Postponing issues until a better time
 Preventing disputes over unimportant issues
 Situation over shadowed by the potential damage of confrontation
Compromising
Compromise is another strategy in which participants are both assertive and cooperative.
Everyone gives up a little bit of what they want, and no one gets everything they want. When
working by compromise, the best outcome is perceived to be one that “splits the difference.”
Even if no one is particularly pleased with the final result, compromise is perceived as fair.
 mid-way between assertiveness and responsiveness
 It’s a give-and –take process, seeks mutually accepted solution
Collaborating
When people are both assertive and cooperative, they collaborate. A group may learn to allow
each member to contribute with the goal of co-creating a shared solution that everyone can
support. Reaching out and touching them is a great way to collaborate and overcome conflict.
 High assertiveness and high responsiveness
 It involves
 Sharing relevant facts and feeling
 Openly admitting differences
 Clarifying the issues, the need of the opposing parties, and their current feelings
https://theparticipationcompany.com/2016/06/5-conflict-resolution-strategies/

Levels of negotiation success:
Level 1 – Mutual Settlement: When two parties have a discussion to resolve an issue and then
reach an agreement, this is referred to as a negotiation that results in a mutual agreement.
When the goal for two or more parties involved is to reach a common ground, it generally
involves some give and take with both trying hard for the other to come around to its point of
view. When the issue is settled to satisfy all, it means both have reached a mutual agreement.
Eg: Chinas’ invasion of Doklam plateau to build the road for its BRI initiative. Bhutan approaches
India to intervene. Through mutual agreement between India and China, road work is stopped
and tensions deescalated.
Level 2 – Win Win: Settle demonstrably superior to other feasible settlements.

As per the game theory a Win-Win situation is minimizing risk and optimizing gain for both
parties involved. Also called the Nash equilibrium, is the equilibrium point where incremental
gain of one or exponential loss of the other is least. The Nash equilibrium named after John
Forbes Nash, Jr. describes a stable-state equilibrium in a multi-person situation in which no
participant benefits from a change in strategy as long as the other participants remain
unchanged. A Nash equilibrium occurs when each player remains in the same position as long
as no other player takes a different action.
Eg: the most famous example of the prisoner’s dilemma in which two criminals interrogated
separately would be best off if they both do not confess to the police. Each expects the other to
confess and reach a plea deal.
https://www.investopedia.com/ask/answers/071515/what-difference-between-dominant-
strategy-solution-and-nash-equilibrium-solution.asp
Level 3 – Pareto optimal: is the best ever solution to a conflict. No other outcome can prove to
be better than the chosen one. It represents a situation where resources are fully employed

where increasing the production of one good requires sacrificing the other. It may not factor in
fairness or equality.
Eg: Mahakali treaty: India built the dam for Nepal which stopped the flooding for them and in
return India got free power
https://www.youtube.com/watch?v=cT3DcuZnsGs
NEGOTIATION MYTH
 Negotiations Are Fixed-Sum
 You Need to Be Either Tough or Soft
 Good Negotiators Are Born
 Life Experience Is a Great Teacher
 Good Negotiators Take Risks
 Good Negotiators Rely on Intuition
2 KINDS OF INTEREST OR OUTCOME OF A NEGOTIATIONS that every negotiator desire:

1. Substance
2. Relationship
Types of negotiation
DISTRIBUTIVE NEGOTIATION
INTEGRATIVE NEGOTIATION
DISTRIBUTIVE NEGOTIATION Is a crude way of bargaining in a two-party negotiation.

 Goals of both parties are diametrically opposed
 Limited or fixed resources
 Both want to maximize share. One will be loser, and other is winner
Distributive negotiation is a competitive and crude bargaining strategy in which one party
benefits if and only when the other party suffers a loss. A negotiation strategy used to
distribute fixed resources such as money, assets, and so on between both parties. This
negotiation style is a dance between your reservation value and your opponents walk-away
value. Goal is to reach as close to your set target or RV. This style is considered aggressive using
suboptimal tactics as the focus of both the parties is more on their differences instead of what
they could get out of the deal, and hence it is does not give the best results.
Distributive bargaining is also known as zero-sum negotiations as the assets that need to be
distributed are fixed. So, all the negotiations will have to happen by taking that into context.
Zero sum game theory – the total of another’s gain and my loss should be zero. Eg: I pay 550 for
pizza and ish pays 250. He gets 3 pcs and I get 5 pcs. The sum total of my 50 loss and his 50 gain
is a zero.
When preparing for a distributive negotiation, the following 4 strategies will help you claim
most from the negotiation:
1. Improve your BATNA by researching the various options or alternatives available to you
2. Determine your Reservation Point so that you are less likely to cave in to unreasonable
demands
3. Assess the other party’s BATNA and RV so you know how high can you aim
4. Determine the ZOPA after arming yourself with the BATNA and RV of all concerned parties

Language of Distributive Negotiation
Target Point Reservation Value Asking Price Negotiation Range
Optimal Goal Bottom Line Initial Bid Spread between
the resistance
points
Aspiration Value Walk-Away Point Entry Price Settlement range
Resistance Point ZOPA
Exit Price
Target point is where the negotiations should end. Also known as the optimal goal or aspiration
value. Eg: I pay 550 for pizza and Ish pays 250. However, he aspires to get 4 pieces of the pizza
instead of 3. If I decide to go 50-50 on the quantity, that is my aspirational value. In short it is
the dream price or dream value that you desire to get as the outcome of a negotiation.
Aspiration value in a negotiation are the specific goals that a negotiator wishes to achieve as
part of an agreement. Aspirations can be monetary or non-monetary in nature. Aspirations are
based on the negotiator's underlying needs and interests, and they are conceptually
independent of the negotiator's bottom line. Negotiators should set optimistic goals because
evidence shows that higher-aspiring negotiators achieve better bargaining outcomes with
greater patience. Aspirations motivate negotiators to work harder at bargaining increasing the
likelihood of a favourable outcome. At the same time aspirations should be rational and
justified. Make your ambitious aspiration seem reasonable by preparing a justified argument. A
negotiator, for example, may be willing to sell her house for $150,000 if that is the best offer
she can get, while aiming for a sale price of $300,000.
The bottom line is intended to serve as the final point at which a negotiation will be terminated.
Most negotiators understand the importance of determining their own bottom line—the
smallest amount they would accept before leaving the bargaining table. Reservation value,
bottom line, walkaway point, exit price or resistance point all mean the same.
For a seller the Reservation Value would be the least possible he is willing to accept and for the
buyer it is the maximum he would be willing to pay. Example while shopping I have decided not
to exceed my reservation value of $500 to buy a ring. I will stick to that and not pay a penny
beyond that.
Asking price is the opening offer that starts a negotiation. It anchors the negotiation.
Negotiation range is the spread between the resistance points ZOPA which will help conclude
the negotiation.
ZOPA (reservation value will always be withing the ZOPA)
ZOPA
Zone of Potential Agreement
A zone of possible agreement or bargaining range is defined as the point where two or more
negotiating parties may find common ground. It is in this area that parties will frequently
compromise and reach an agreement. Negotiating parties must work toward a common goal

and seek an area that incorporates at least some of each party's ideas in order to reach a
settlement or reach an agreement.
To fall within this range, all concerned parties must understand and value each other’s needs
and interests.
Possible existence of Zopa is only when there is some overlap between all negotiating party’s
expectations. The non-existence of this range will lead to a negative bargaining zone. A deal
cannot be reached in this zone. Negotiating parties can overcome this zone if they are willing to
learn each-others needs desires and interests.
Knowing the reservation value of the other party arms you to capture the lion’s share.
Reservation value is the least that both the parties will accept. Your understanding of the Zopa
should help you avoid making extreme demands that the other party dismisses the negotiation
completely. A buyer in most likelihood will make his first offer outside the ZOPA and that is how
it should be. However, this number though aggressive should be justifiable and not random,
else it may even offend the other party.
For a seller the RV would be the least possible he is willing to accept and for the buyer it is the
maximum he would be willing to pay. The difference between these ranges of expectations is
called the ZOPA. The P in the ZOPA indicates ‘possible’ as negotiations can still fail.
Eg:
I want to sell my car for $30,000. However, I will negotiate to maximum $25,000. 25-30 is my
range and 25,000 is my RV.
A buyer has a budget of maximum $27,000. Although he might start the bargain at $24000.
ZOPA = 25000-27000
Nobody reveals their reservation value, the trick lies in finding that out during your negotiation.
Now, if the buyer’s max budget was $24000, that means RV’s do not overlap, that would be the
negative bargaining zone. In this case there wouldn’t be a deal.
When you lack the information of the ZOPA, let the other party make the first offer and if you
have done your homework then anchor the negotiation.
Process of Distributive Negotiation

• Settlement Point – To reach an agreement as close as possible to the others resistance point
 Create Value
 Claim Value
 Trade Value
 NEGOTIATION (bargaining) Mix
• Package of issues
BARGAINING MIX IN A NEGOTIATION
Bargaining mix is the interests at stake in a negotiation.
Types of interests:
Substantive – the actual thing that is being negotiated such as price, ownership,
Procedural or Process – fairness and respect desired in the negotiation
Relationship (intrinsic | instrumental) – it adds a layer of underlying context and a form of value
that must be accounted for
Interest in Principle – is the deeply held belief that is intended to be pursued in the negotiation.
Political negotiations are based on many deep-rooted beliefs.

960 × 540
Good tactics for Distributive Negotiation

 Guard information carefully
 Part with info for strategic advantage
 Info improves negotiation power
 Tactics and strategies decide who benefits more
 Ask questions for Vital Info
Fundamental Strategies of Distributive Negotiation

1. Settle close to sellers resistance point
2. Convince seller to change resistance point
3. Create a positive settlement range
4. Convince Seller that settlement is best possible
Negotiation Strategies for Distributive Style

 Focus on the other party’s BATNA and RV
 Avoid making unilateral concessions
 Make Contingent Concessions
 Be aware of the diminishing rates of concession
Hardball Tactics used in Distributive Negotiation
Any tactic used to claim value in a negotiation at the expense of the other party is referred to as
a distributive tactic also known as hardball tactics. Such tactics are used to set a competitive
tone by using some form of power, leverage, or persuasion to coerce the other party into
changing their objectives, expectations, or negotiating position. Hardball tactics are generally
unpopular and should be used with caution in any negotiation. They can be effective in single
deals or transactions where there is no expectation of future dealings or relationship building.
Auction – reverse auction: online negotiations where you are negotiating with the distributor
and he is in turn in real time negotiating with his supplier.
Brinksmanship – lies

Bogey – untrue; selling the boogey. A bogey is a specific issue that the negotiator pretends is
critical to the deal, however, realistically it is unimportant to them. They expect you to concede
something important if you agree to concede the bogey issue. A difficult tactic to detect
because you rarely know your counterpart's true intentions especially when it is the first time. I
f your counterpart's attitude toward the issue changes abruptly, you can assume it is a tactic. If
they are adamantly opposed to conceding and then abruptly offer it up in exchange for
something else, the issue was most likely unimportant in the first place. Asking questions is the
most effective way to combat this tactic. Ask questions like why that particular issue is so
critical, or why they changed their stance so abruptly. This may force them to reveal how
important that part of the deal is, or it may allow you to devise alternative solutions that do not
require you to give up an important aspect of the deal. If they object to your alternatives, they
don't truly value the issue, and you know you're dealing with a bogeyman.
Chicken – who will chicken out first. Eg: drag racing where 2 drivers will drive into each other
from opposite directions at full speed and the one who severs first has chickened out
Defense in depth – breathing space required. Eg; I will talk to my boss and revert back
Deadlines – fix it to force a deal
Flinch – guy who backs out first. Shows signs of weakness
Good cop, bad cop is used with someone who is not forthcoming or willing to negotiate. While
it may be effective in stand-off situations, its shortcomings include being relatively transparent
and difficult to orchestrate effectively.
High ball, low ball – makes an extreme proposal with either very high or very low offer. It is like
fishing to see if the other party is aware of the true value. Usually, this tactic is only successful
when the other party is unaware or in desperate need with no other options. The risk in
employing this strategy is that the other party will conclude that negotiating is a waste of time
and will halt the process. Consider the following approaches to deal with this tactic:
Insist on the other party to make a reasonable opening offer and refusing to engage in further
negotiations it is relooked.
State the market value backed up with facts and figures, demonstrating that you have a fair
understanding.
Threaten to quit, demonstrate dissatisfaction for the use of this tactic, or respond with an
extreme counter-offer.
Nibble – A nibble is when a negotiator seeks minor or insignificant concessions just before a
deal is finalized. It is not a hold-out tactic, but it seeks gains that are largely insignificant at a
time when refusing them would cause administrative hassle or stall the deal. When using this
strategy, exercise caution. If the party using the nibble did not bargain in good faith, the
counterparts may perceive this as procedural unfairness. It is like giving a small concession, eg
free audio system if you book the car today
Snow Job – confusing the buyer with excess info, that finally seller takes the decision. A snow
job is a common technique used to confuse and distract the other party. It occurs when the
other party discloses large amount of information and overwhelming you with facts and
numbers. When you're on the receiving end of a snow job, the most difficult task is determining
what is truly important and what is simply there to distract you. It frequently uses highly

technical language and requires subject-matter expertise to translate what is said. Fighting this
tactic requires you to be steadfast in your negotiating position. You need to get to the heart of
the matter, so ask specifically and consistently what is important in the avalanche of
information. Do not give up! Ask questions until you fully comprehend what is being discussed,
and bring in your own experts if necessary. The key is to avoid agreeing to anything you don't
understand, which is what the snow job tactic is all about. Pay attention to what the other party
is saying and look for inconsistencies in their responses.
Lack of Authority: If you are in a negotiation and are unsure whether your counterpart has
decision-making power, simply ask them. If they reveal that they are not authorised to make a
deal at any point, refuse to continue until you speak with the person who is. It would be a
waste of your time and effort to speak with anyone else. The opposing party is hoping that this
tactic will sap your energy and willpower. They're hoping that by the fifth time they've "had to
check with their superiors," you'll back down from your stance. So, find out who the final
decision maker is right away and don't talk to anyone else.
Mirroring and labeling – interesting technique used by Chris Voss FBI negotiator. Voss’s
impactful methodology is based on logic and reason in which a zero-sum game transforms into
joint decision making with both parties feeling satisfied at the end of it. The technique involves
repetition of 3-5 words of the other parties’ statement in the form of a question.
Eg:
Party 1 – ‘we can’t renew the subscriptions because of budget cuts.’
Party 2 – ‘you can’t commit because of budget cuts?’
Benefits:
 Establishing rapport with ease, whilst giving counterpart the confidence
 Seamless information gathering for better perspective
 Leveraging gathered information for better negotiation
Emotional Labeling entails careful and proactive listening skills thus enabling to label the other
party’s emotions. Use phrases such as – it seems like, it sounds like, it appears like
Eg: situation – salesman sensing customers fear – “ it looks like you’re concerned about
security”
According to Voss empower the other party to say ‘No’ as it makes them more comfortable,
and not being pushed into a commitment. That is what makes them receptive to ideas. Many
leaders embark on negotiations with the goal of securing a ‘yes’ and that is the biggest mistake
as the other party gets defensive.
Voss also believes that a breakthrough moment in a negotiation is when the other party is
triggered to say ‘that’s right.’ To arrive to this moment be an active listener, summarize their
feelings and what are they hoping to achieve.
Eg: if you are selling a software solution for which the buyer is expressing concerns of low
adoption rate, try “it seems like you need a user-friendly solution that will not require steep
learning” exhibiting to the buyer that you understand their pain point, you empathize with
them. This increases the likelihood of seller’s proposition.
To do this Voss recommends open-ended calibrated questions that start with “how” or “what”
instead of close-ended with verbs such as ‘is’ ‘can’ ‘does’

Eg instead of “Is this important to you?” “How about the importance of this to you?” helping
the other’s thoughts expand, giving the illusion of control they have in a situation.
BATNA
Balance of Power
Best Alternative To a Negotiated Agreement or Plan B
Negotiation is about making choices All parties walk in with a BATNA
Make your BATNA stronger in a negotiation if you desire to hold power while negotiating.
Knowing your BATNA will enable establish your reservation value – the point at which you
would be indifferent between a negotiated agreement and an impasse.
Identify the other’s BATNA (only illegally can you find out the other party’s actual BATNA). It
will help you get the reservation value of the other party and enable you to fall within the
ZOPA. It isn’t easy to know the other party’s BATNA. However, research on the possible
alternative solutions that they have in the situation, not only before but also during the talks.
Weaken the others’ BATNA
If you have 2 job offers you can negotiate a higher salary at offer 1 since offer 2 is a fallback
Office purchase example illustrated – the office on top (belonging to landlord) was the BATNA
for professor D’Souza although the office adjacent to his was the ideal option. However, he was
ready with the best alternative solution in case the negotiation does not come through.
When you prepare for a no deal in a negotiation, that is your BATNA – you will emerge with a
fantastic deal in hand.
There is always some sort of bargaining between a buyer and a seller. The Best Alternative to a
Negotiated Agreement, or BATNA, is the course of action that a party will take if current
negotiations fail and an agreement cannot be reached. A successful negotiator's primary focus
and driving force is BATNA. It is recommended to have a strong BATNA as it aids negotiating a
better deal as one is aware of the comparable alternative.
Example: negotiating a real estate.
The seller should check the current prices through all possible relevant resources such as
newspaper, property editions, online listings, local real estate agents, etc
The buyer on other hand should do the same. To strengthen their BATNA, they both should
look to acquire knowledge on the asking price in the market for a similar category.
During a negotiation, both must be careful to not to disclose their BATNA, as the opposite party
w ill look to take advantage of this information.
Elements of BATNA success

Knowledge – of the subject, domain or industry
Alternatives – eg india need stronger aerial security in the north against naval in the south to
secure its borders
Resources –
Other party’s resources –
Information – of that particular negotiation
Experience –
Interests –
NEGOTIATION TRAPS
1. Leaving money on the table (Lose-Lose)

2. Settling for too little (winner’s curse)
3. Walking away (hubris or pride)
4. Settling for worse than BATNA (agreement bias)
WHEN TO USE:
Condition Distributive Integrative
Goals In Conflict Not in Conflict
Relationship Not High Priority High Priority
Resources Fixed or Limited resources, divided Not Fixed or Limited. Enlarge the
competitively resources and divide
collaboratively
Trust & Is Lacking Exists
Cooperation
DISTRIBUTIVE NEGOTIATION INTEGRATIVE NEGOTIATION

Technique in which parties try to gain max Strategy with an intent to settle a dispute,
value for self, from definite resources with mutually acceptable solutions
Competitive strategy Collaborative approach
A win-lose orientation A win-win orientation
Suitable technique when resources are Suitable when resources are in abundance
limited
Motivation lies in self-interest and individual Motivation is mutual interest and gain act for
profit all involved
Discusses only one issue at a time Multiple issues are taken into account
Controlled and selective environment Open and constructive environment
INTEGRATIVE NEGOTIATION – PRINCIPLED NEGOTIATION

It is a creative process of creating value. It is a problem-solving process which needs to be done
collaboratively, trying to understand the other’s perspective with respect, while satisfying your
own interest.
INTEREST V/S POSITION

Interest Position
• Why do you want X - What do you want
• Unlimited possibilities - Non-negotiable
• Greater flexibility - Unchangeable
• Creative process - Limited choices
STRATEGIES FOR CREATING VALUE IN AN INTEGRATIVE NEGOTIATION

- Share information about relative priorities. Explain what is important to you and why but
without revealing your RV or any other privileged information.
- Ask questions. Perspective taking enables understands the concerns, viewpoints,
interests, needs, alternatives, motivations, of the other party.
- Negotiate multiple issues simultaneously – deal terms, price, financing, etc to conclude a
profitable tradeoff.

- Present several offers simultaneously so if all are rejected the best one chosen amongst all
rejects will give a sense of other partie’s interests to be able to craft another proposal.
- Try a post-settlement settlement. Ground rule of a PSS process is how do we make the
deal better for all parties concerned.
4 STEP METHOD OF NEGOTIATION ON MERITS:

1. Separate people from problem. Recognize the emotion behind the negotiation
PEOPLE –
 Perception – understand, discuss, don’t blame them, put yourself in their shoes
 Emotion – recognize, let off steam, don’t react, use symbolic gestures
 Communication – listen actively, speak
2. Focus on interest not position. Basic human needs. Soft on people; hard on problem
 Interests define the problem
 Interests lie behind positions
 Most powerful interests – basic human needs
 Be concrete but flexible
 Be hard on the problem, soft on people
Most common interests –

• Security
• Economic well-being
• Sense of belonging
• Recognition
• Control over one’s life
3.Invent options for Mutual gain. Change the scope of proposed agreement.
Identify shared interests
Dovetail different interests
Ask for their preferences
Make their decision easy
Major obstacles in inventing options:

 Premature judgement
 Search for a single answer
 Assumption of a fixed pie
 Solving the problem is their problem
Brainstorming is critical
Before Brainstorming –
 Define your purpose
 Choose a few participants
 Change the environment
 Design an informal atmosphere
 Choose a facilitator
During Brainstorming –

 Seat participants side by side
 Clarify ground rules (no- criticism)
 Brainstorm
 Record ideas on a board
After Brainstorming –
 Star the most promising ideas
 Invent improvements for promising ideas
 Set up a time to evaluate ideas and decide
Broaden Options
Look through the eyes of different experts
Invent agreements of differen strengths
Stronger Weaker
Substantive Procedural
Permanent Provisional
Comprehensive Partial
Final In principle
Unconditional Contingent
Binding Non-binding
First order Second order
4.Develop Objective Criteria

 Fair standards & practice
 Fair procedures
 Frame each issue as a joint search for objective criteria
 Reason and be open to reason
 Never yield to pressure
Getting to Yes for a negotiation

Invent options to meet the interest of both sides
Do not evaluate during brainstorming

3 C’s of Interest
complementar
COMPROMISE = common conflicting
y
Negotiations can make or break relations with key stakeholders. In some cases, your willingness
to bend on certain issues may be more or less dependent on how much you value the
relationship you have with the other party involved. If you don't care about them or don't
believe they have anything to offer you, you're not going to be very cautious in your dealings
with them – after all, you have nothing to lose and everything to gain if you can wear them
down. Negotiation, on the other hand, is critical in reaching a compromise that benefits both
parties when dealing with someone with whom you want to maintain an amicable professional
relationship.
Compromise - When you're in a relationship where you truly value equality in the outcome, a
"split-the-difference" approach where nobody wins- but no one loses- is a must. As a result, this
would be the only truly neutral approach to negotiation.
Conflicting or competing - is best used when you don't care about how the outcome affects the
other party and you're in it to win it – in this outcome, you strive to be the winner regardless of
what happens to the other party because maintaining a relationship with them doesn't matter
to you.
Complementary or collaborative - When the outcome is mutually beneficial to both parties, you
actively work to ensure that they get the most out of it. It's the "everyone wins" strategy.
According to our text, this is the most effective negotiation strategy because if it works,
everyone is happy and the relationship is maintained.
If you want to actually perform well and reap the benefits of negotiation, you'll need to employ
some effective strategies. Firstly, you must comprehend your target audience—that is, who are
you attempting to entice with your proposal. What do they have a vested interest in? What
could they possibly do for you? Or, perhaps, what are their flaws, and what are they willing to
give up? That is a form of leverage. This can be accomplished through research or direct
questioning – assuming, of course, that you have a reliable source. After you've established a
knowledge base, you're ready to start discussions with the other party. Finding common ground
—perhaps you share a goal—is a great icebreaker. Or maybe you're both trying to avoid a
specific negative outcome, and you can bond over that. Once you've established such
correspondence, you can start using other tactics to move the negotiation along, such as adding
issues to the discussion to get more than you originally stated, talking about money because
money talks and is a good way to motivate people, determining where certain issues will be
best handled and delegating accordingly, and being clear about contractual agreements. Before
making any offers, you should make sure that you've truly tailored your approach to the person
or group you're pitching to – you should go in believing that they might actually want what
you're offering to give, or you should know how much you're willing to bend to their whim to
accommodate them while still getting what you need. You may need to renegotiate from time
to time as circumstances change, new tactics or problems emerge, or there is some kind of
organic evolution within the organisation that necessitates major changes.

ANCHORING
Technique to create a cognitive bias in the other person’s mind. Anchor a negotiation, say it
first, to get the desired price. The anchoring effect refers to the fact that the first estimate or
offer made in a negotiation tends to have a powerful influence. Although be mindful of it being
feasible and not irrational.
Power of anchoring is not driven by the premise that the first offer is more justifiable rather, it
orients attention to the narrow range set around the anchor, which is difficult to counter or
reset once the anchor has been dropped. If you are focused on your BATNA, the other party’s
aggressive anchor will not influence you.
Negotiators may gain an advantage by making the first offer and anchoring the conversation in
their favour is anchoring effect.
Decision on who should make the First Offer depends on two factors:
 Your knowledge of the ZOPA
 Your assessment of the other side’s knowledge of the ZOPA
When you believe the other party knows more about the size of the ZOPA than you do, it will
be difficult to anchor effectively. Arm yourself with as much information as possible before
dropping an anchor in such situations. Anchors are unlikely to have a significant impact if both
parties have a strong sense of the zone of possible agreement (ZOPA), as in the case of a long-
term relationship between a supplier and a customer with open books. You may be able to
effectively drop an anchor if neither side knows much about the size of the zone of possible
agreement (ZOPA), but you risk being too concessionary or too demanding. If you know a lot
about the asset under consideration, you can confidently make an aggressive first offer and
expect your offer to anchor the discussion to your advantage.
Defuse the First Offer before handing out the Counter Offer. What should you do if your
opponent anchors first? The most important step at this point is to recognize the movement.
A common mistake in negotiation is to respond with a counteroffer before defusing the other
side's anchor. Clearly and forcefully defuse the anchor else it would be an indication of your
ZOPA, that the anchor is within the bargaining zone.
Make the Counter Offer immediately with an explanation of it being fair and justified. Explain
your counter offer and be aware of the midpoint rule. The midpoint of the first reasonable offer
and counteroffer is the best predictor of the final deal price. The degree to which you can
achieve or exceed beyond the midpoint rule will be determined by how well you have defused
the anchor. Repeat the Counter Offer with the caveat that explicitly and repeatedly mentioning
the anchor may validate it. It is important to distinguish between when you are being given
information and when the other party is using leverage. They want information and the offer
should be accepted because of the leverage. In a job interview, for example, they may say, "We
have three other qualified candidates who fit within our budget." Three other candidates is
leveraging by introducing competition, and budget is information as well as the anchor. When
you learn how many other candidates they have, you may be persuaded to lower your
expectations. When it comes to human biases, the first step toward improvement is simply
acknowledging their existence. When you are not well informed and someone provides you
with the desired information as a point of reference, the brain is adaptable and relies heavily on
the data that is immediately available. Approach all negotiations with caution and reflection on
the information provided, carefully treading through any point of reference and seeing them
for what they are – effective anchors. Researching, preparing, and knowing your numbers is
critical, so that you realize if and when you are being anchored, as knowledge is the greatest
power in a negotiation.

STRATEGIES IN ANCHORING
Establishing an Anchor
Responding to the initial offer
Strategy 1: Ignore the anchor
Strategy 2: Separate information from influence
Strategy 3: Avoid dwelling on their anchor
Strategy 4: Make an anchored counter Offer
Strategy 5: Give them time to moderate the offer
SETTING AND ANCHORING INITIAL BID

 Keep the entire ZOPA in play
 Justify your offer
 Set high but realistic aspiration
 Consider the Context and the Relationship
Beside Anchoring other cognitive biases or common traps to anticipate:

- Mythical fixed pie of negotiation causes us to overlook other opportunities that could
possibly create value. Opportunities are infinite, capture and create value.
- Egocentrism – self-serving perceptions and judgements restrain us from looking at
matters objectively and the self-benefitting outcome is justified on the basis of fairness.
Eg: china on climate change blaming industrialized economies like the USA.
- Overestimating our value or the endowment effect wherein we overvalue what we own
simply because it is ours. Eg: homeowners in a sale deal
- Vividness bias is the tendency to overweigh vivid attributes of a decision and under
weigh less striking factors that are equally important. Always keep in mind what you
want and stay focused on that. Additionally, view vivid claims with skepticism and look
for hard evidences. Eg: campus recruitment of MBA students who opt for known MNCs
to only quit in a few years and pursue their dreams
- Winner’s curse is a common pitfall in competitive bidding where you end up as a victim
by overpaying. Eg: auctions of paintings
- Escalation of commitment is the tendency to make continued commitments even in the
face of mounting loses. This bias results in escalation of conflict which tends to reflect a
desire to beat the other party irrationally, at any cost
PREPARING OR STAGES IN NEGOTIATION

Preparation –
• List your interests
• What’s your BATNA ?
• What’s their BATNA ?
• Know the subject of negotiation
• Know the parties involved
• Know what you can deliver
Other details:
Set agenda
Choose a strategy
Create right atmosphere

Assign roles
Tactical seating
Brief the team
Proposal –
When making a proposal :
Keep options open
Timing
Phrasing
Check response
DO’s DON’Ts
Listen carefully Start with concessions
Leave room to maneuver Open with extremes
Reject first offer Say “never”
Make conditional offer Say “yes” or “no”
Probe attitudes Make opponents look foolish
Get personal
Start irrelevant arguments
Responding to a proposal :
Seek clarifications
Stall for time
Propose alternatives
Debate –
Establish position
Keep advantage
Stay cool
Undermine opponents’ argument
Look for errors in logic
Negotiation –
Make concessions
Discuss terms
Negotiate a package
Avoid rejections
Record points of agreement
Closing –
Focus on issues
Confirm terms
Time offer
Make offer
Encourage close
Emphasize benefits
Present a win-win
Move towards a compromise
If negotiations breakdown:
Limit damage

Heal the rift
Find a mediator
Use arbitrator
Legal recourse
7 PILLARS OF NEGOTIATION that can lead to an Agreement

Consider how each of these elements affects the process and how each is prioritized each time
you negotiate according to Cohen.
Relationships - You may find yourself negotiating with the same people over and over again. As
a result, it is critical to consider each negotiation in the context of the long-term relationship. It
may be worth it to lose the battle in order to win the war. “Treat each negotiation as an episode
in an ongoing relationship,”
Interests - You must understand your own interests so that your decisions do not jeopardize
them, but you must also understand as much as possible about the interests of the other parties.
By doing so, you can increase your ability to influence those parties by demonstrating how you
have taken their interests into account in your proposals.
BATNA - is the balance of power between the negotiating parties. If you have a strong BATNA,
you will have more clout in influencing the outcome of the negotiation. If you understand the
relative BATNAs, you'll be able to determine whether negotiation is a viable option for resolving
the issues you're facing. You will also be aware of the options available to you when selecting
negotiation partners, as well as the information that may cause you to withdraw from an
unfavorable negotiation.
Creativity - If your negotiating partner has a narrow scope and cannot see alternatives to his or
her initial proposal, creativity may take precedence in the negotiation process.
Fairness - Other negotiating partners' perceptions of your behaviour, as well as their beliefs about
the fairness of the process, can influence whether they are committed to the end results.
Commitment - No matter how promising the outcome appears to be, a negotiation is only
successful if it results in an agreement to which all parties are committed.
Communication - “In negotiation, information is the most valuable asset. Communication is the
transfer of information from one party to another. Paying attention to other parties not only
demonstrates respect, but it can also provide information critical to your decision-making.
ROLES OF TEAM MEMBERS IN A NEGOTIATION

Leader: conducts negotiation, ruling on matters of expertise, orchestrating team. Takes center
stage with seating in the center. With good guy and bad guy on one side and hardliners and
sweepers on the other side.
Good guy: empathy & understanding, appears to compromise, leads opponents to relax
Bad guy: plays devils advocate, opposes arguments, plays tough with opponents
Hardliner: delays progress by stalling, makes up for soft positions, records progress of
negotiations, keeps team focused on objective
Sweeper: suggests ways out of a deadlock, prevents arguments from straying, suggests
compromises, brings sides together, summarizes negotiations
TYPES OF NEGOTIATORS:

use visual aids step wise agenda
CONFUSED written proposal
proceed slowly reiterate agreed

INDECISIVE points
present issues in a fresh way adjourn
keep calm dont display emotions

AGGRESIVE keep a firm stance adjourn for discussions
respond with rational questions dont interrupt

EMOTIONAL dont challenge
tempers
adjourn to cool
DON’T REMEMBER THIS
CBMs – CONFIDENCE BUILDING MEASURES

During negotiations you will witness constantly shifting dynamics and frequent surprises as you
engage with another party across the table. A solid understanding of how to build trust, use
persuasive methods, and deal with power differences will help you maintain your equilibrium
and remain focused on the goal you desire to achieve. Trust, rapport, and relationship building
are all equally critical for a favorable outcome of a negotiation.
Lao Tzu – the Chinese philosopher holds that humans and animals should live in balance with
the Tao, or the universe.
- Chunk down problems
- Reduce emotions
Examples of CBM:
Dinner diplomacy
Cross border trade
Shimla (Indo-Pak)
Camp David (Israel-Egypt)
FRAMING
A frame is the subjective mechanism through which people evaluate and make sense out of
situations. Framing provides a perspective to the problem, understand facts, determine

outcomes and contingency actions. A skilled negotiator is like a visual artist who can gauge all
potential options – gains and losses, in a situation because he has done his homework well. The
more clarity you have regarding the process the less likely are you to make mistakes.
Framing entails analyzing the negotiation situation and then transforming that analysis into the
most advantageous context to present in the negotiation. It orients the parties and encourages
them to examine the issues from defined perspectives. There are three critical steps here.
Collect as much relevant information as possible, ranging from specific details about the
organization to broader environmental factors and industry trends. Sort the data to find
common themes and groupings as a single piece of information can be related to a variety of
different themes. Finally, choose the most powerful positioning theme that is most appropriate
for the specific customer. You are actively shaping the other party's frame of reference and
controlling what they pay attention to by going through the framing process. Present your
proposal in terms that represent a gain instead of a loss. Use risk aversion to your advantage.
People who are risk averse prefer the certainty of a smaller offer to the uncertainty of a larger
future gain.
• Focusing on relevant issues to avoid distraction from advancing your interests. Calling
attention to important and advantageous aspects.
• Shaping. Negotiators who frame a potential course of action often achieve their goals.
• Organizing.
Interests – identify and list them for all parties concerned
Alternatives – to reach an agreement. And if all alternatives are rejected then you would
want to specify your BATNA.
Reservation point|values – at what point you are willing to walk away to avoid making
emotional decisions
Target point – your individual & collective aim that you intend to achieve that is an
acceptable outcome
ZOPA – helps you to come out with a win-win negotiation
Bargaining range – where or at what point you intend to start the negotiation so both parties
come within the ZOPA
Constraints – identify all the possible constraints such as timing, geography, culture, ethics,
relationships, process of negotiation, etc in order to adequately plan for them and deal with
them
Strategy:
Orientation – your orientation towards the situation. How you wish to approach the matter
to arrive to a resolution. (Accommodating, competing, collaborating, avoiding,
compromising)
Objective – goals that you seek to accomplish or the outcome of the negotiation by using
each tactic that would be engaged in the negotiation
Tactics – will depend upon your orientation
By choosing a frame of reference negotiators should not limit themselves to approaching the
issue in one particular way. They should be open to alternative viewpoints and solutions.
TYPES OF FRAMES
Outcome- The proclivity of a party to achieve a specific result or outcome from the negotiation.
To the extent that a negotiator has a specific, preferred outcome in mind, the dominant frame
may be to direct all strategy, tactics, and communication toward achieving that outcome.
Parties who have a strong outcome frame that emphasizes self-interest while downplaying

concern for the other party are more likely to engage in distributive (win-lose or lose-lose)
negotiations than other types of negotiations. USA and North Korea standoff
Substantive- what the conflict is all about. Parties adopting a substantive frame have a specific
attitude toward the conflict's central issue or concern. Spratly islands
Aspiration- a proclivity in negotiation to satisfy a broader set of interests or needs. Rather than
focusing on a specific outcome, the negotiator attempts to ensure that his or her fundamental
interests, needs, and concerns are met. Parties with a strong aspiration frame are more likely
than others to engage in integrative (win-win) negotiation. Environmental dispute
Process- how the parties intend to settle their dispute. Negotiators with a strong process frame
are less concerned with specific negotiation issues and more concerned with how the
deliberations will proceed or how the dispute should be resolved. Process frames will be strong
when the major concerns are primarily procedural rather than substantive. Indo-Bangladesh
border dispute
Identity- how the parties define themselves. They could belong to a variety of social groups,
such as gender, religion, ethnic origin, birthplace, current residence, and so on. These are just a
few examples of the many categories that people can use to build an identity frame that
defines and distinguishes them from others. Middle east crisis
Characterization- how the parties define each other. Experience with the other party,
information about the other party's history or reputation, or how the other party comes across
early in the negotiation experience can shape a characterization frame. When there is a conflict,
identity frames (of oneself) tend to be positive, while characterization frames (of others) tend
to be negative. Rohingya crisis
Loss-gain- the parties' definitions of the risk or reward associated with specific outcomes.
People react differently to proposed actions when the expected consequences are framed in
terms of losses rather than gains, because preventing a perceived loss is often more salient and
highly valued than capturing a corresponding gain. In a sales negotiation, for example, a buyer
can consider the transaction in terms of loss that is the monetary cost of the purchase, or gain
that is the monetary benefit of the purchase, the value of the item. Apple-Samsung dispute on
the round toggle for operating a mobile handset, where apple won due to its original design.
SKILLS OF A GOOD NEGOTIATOR

To be an effective negotiator learn to claim value for yourself, effectively and appropriately.
1. Information gathering – capture as much of the available resources as you can.
2. Rational decision making
3. Persuasion
4. Innovation
5. Implementation
SOFT skills HARD skills

Between friends Between adversaries

Goal is agreement Goal is victory
Make concessions to build relationship Demand concessions as condition for relationship
Be soft on people and problem Be tough on people and problem
Trust Distrust
Change position easily Dig in and stay put
Make offers Make threats
Disclose bottom line Mislead about bottom line
Accept losses for agreement Demand gain for agreement
Search for an answer for them Search for an answer for you
Insist on agreement Insist on position
Avoid contest of will Win contest of will
Yield to pressure Apply pressure
CROSS-CULTURAL FACTORS
Culture can be defined as a social group's distinct personality, values, and norms that
set it apart from other social groups. Traditions and customs, for example, reflect
deeper, less obvious values, beliefs, and norms. Cultures can be distinguished by
geographies, political, economic, social, religious backgrounds. Furthermore, families,
organizations, industries, and professions frequently have their own distinct culture that
influences how members negotiate.
Cultures vary on individualism – collectivism, which identifies the degree to which a
cultural group is motivated by individual versus group goals and values.
Eg:
USA – individualistic culture. Autonomy and personal expression are paramount.
Americans are deadpan
China – collectivist culture. Committed to meeting their obligations to family and society.
Chinese and Japanese hate to say no.
Negotiators from individualistic cultures can be less co-operative than those from collectivist
culture.
Cultures can also be distinguished as egalitarian and hierarchical. Individuals in many western
egalitarian cultures expect to be treated equally and believe they can gain status and power,
whereas in many eastern hierarchical cultures status boundaries are fixed and difficult to
transcend. Members of egalitarian cultures run the risk of offending their partners by engaging in
behaviors that disregard the importance of status, such as sending a junior employee to negotiate
with a senior official.
Negotiators should identify the risks of cross-cultural negotiations however, not rely too heavily
on it. Just coz Japanese / Finns don’t make eye contact, Italians speak with their hands and are
always late, Indians roll their eyes, head and British hold a stiff upper lip should not lead us to
view our counterparts in negotiations as stereotypes.
All individuals are unique and individual differences can be stronger than cultural heritage. And
cultures’ are constantly evolving today – a Japanese negotiator who is doing business in the west
may be embarrassed of a deep bow as handshake would have become a habit by now.
Stereotyped judgements can lead us to enter negotiations with low expectations and negative
mindset.
Approach a cross-cultural negotiation in terms of cultural prototypes, approach the other party as
a unique individual as differences can vary as much with individuals within your own culture.
Research the norms and behaviors of your counterpart but not without researching the culture of

the organization, industry or profession they belong to. Share information and encourage the
other party to do the same to understand each-others interests and preferences.
Moreover, try to build a rapport and trust to strive a deal.
Setting an example are the CEOs of Renault and Nissan, who worked on building rapport and
trust which enabled the merger to be a complimentary relation wherein they were together, yet
distinct. Although bargaining styles and backgrounds can be distinct, cross-cultural negotiations
can open doors to tremendous opportunities, new partnerships, untapped markets, greater profits.
NEGOTIATION ETIQUITTES
• Genuinely communicate your own strength
• Pick the right moment
• Be fair and objective
• Listen attentively, ask questions, repeat and summarise
• Visualise your arguments
• Use clever phrases
The Handshake
• Who should extend the hand first?
• If a client visits you at your office, then you should extend your hand first
• Knuckle Cruncher
• Dead Fish Handshake
• Pumper
• Sanitary Handshake
• Condolence Handshake
• Proper Handshaking
pdfdrive.com – get books free there
Mars pen case study.

https://business.bridestory.com/blog/someone-duplicated-my-product-or-service-what-
should-i-do
Salary negotiation of sally soprano caselet
SOME POSSIBLE CRITERIA FOR ESTABLISHING A SALARY
 $45,000 what Lyric is willing to pay to get her to sing
 $45,000 last title role in Norma x 2 (for inflation in opera salaries) + $1,000 (because
time is short)
 $44,000 last title role x 2 (for inflation in opera salaries)
 $38,500 same premium (2.75 x secondary) Sally received 4 years ago when she sang lead
 $36,000+ best recent secondary role x 2 (for lead) + some adjustment for inflation
 $31,250 what Lyric paid last year’s lead + 25% for inflation

 $31,250 Sally’s last secondary role with the Lyric x 2 (for lead) + 25% (one year’s
inflation in opera salaries)
 $30,000 what Lyric would have paid Renata Rising star, the soprano originally cast as
Norma
 $30,000 last year’s secondary role x 2 (for lead) + 25% (one year’s inflation in opera
salaries)
 $29,999 less than Lyric would have paid the other singer because Lyric preferred her to
Sally
 $28,000 current secondary role x 2 (for lead)
 $25,000 Sally’s lowest-paying secondary role in the past 2 years x 2 (for lead) + 25%
(inflation)
 $25,000 what Lyric paid Sally last year (secondary role) x 2 (for lead)
 $20,000 Sally’s lowest-paying secondary role in the last two years x 2 (for lead) $18,000
Sally’s highest- paying recent (secondary) role
 $15,000 lowest payment Sally has received in the last 2 years + 50% (inflation) $12,500
what Lyric paid Sally last year for secondary role
 $10,000 lowest payment Sally has received in the last 2 years
 $0 what Sally said she’d be willing to accept for the lead role in Norma
Brief for Honda Udyog Ltd.
Honda Udyog Ltd. Is about to launch a new model in India. Their old model has been
quite successful except for recurring consumer complaints about the spark plugs. Their
design department has sent a stern memo to the management about the cheap spark
plugs sourced by the purchase department.
The company has floated a tender and has received quotes from many manufacturers
and importers. But the design department insists on sourcing the item from National
Spark Plugs Ltd. Only since their quality has been tried and tested and has proved to be
the best.
The purchase department however has been rejecting NSPL quotations because of the
high price. Now they have been compelled to buy NSPL at the best price. The last time
they obtained spark plugs at Rs. 110/- per pc with 6 months credit and deferred supplies
according to their production schedule. The supplier agreed to hold stock on their
behalf. They would ultimately consume 6 million spark plugs for their new model this
year. There is also a possibility of the cost increasing after 3 months due to raw material

shortage. With great reluctance they have called NSPL for negotiations. They MUST
buy NSPL at any price.
CASELET
Mavji Patel owns a tailoring business in St Lucia in the Caribbean. His main product line is in
mail-order of made-to-measure jackets and trousers. These had been his father’s most recent
activity before he handed over his business to Mavji on retirement; his father’s original trade
was the general repair of men’s clothes, which still accounted for a declining percentage of
Patel Suits’ total profit, with most of the rest in mail-order suits. Mavji had taken the business
to the current mix of products, marketed under his father’s slogan, “Patel Suits You”. Recently,
Mavji had designed a new lightweight suit (‘Patel Specials’) which doubled as formal wear for
business or smart casual, and this was currently growing towards twenty per cent of total
profit.
The Internet had created new marketing opportunities and Mavji found that customers from
other parts of the Caribbean were measuring themselves for ‘Patel Suits’ (Internet business
divided approximately 50–50 between made-to-measure and ‘Patel Specials’). He had invested
money and time into his Patel website, acquired a secure credit card facility and took on an
extra employee to process the orders and ship them. If Internet demand continued to grow, he
would need additional help in the cutting and stitching room; perhaps also new machinery to
open another production line.
A month ago, Patel Suits received a visit from Wilson Maraj, the owner of Maraj Men’s Clothes
in Jamaica and clearly a talented salesman, who had bought a few of the ‘Patel Specials’ and
had been impressed with his customers’ responses, some of whom also bought other made-to-
measure items. He told Mavji Patel that he believed he could sell all the ‘Patel Suits’ he could
import into Jamaica (more if they were manufactured locally) and that he wanted to set up a
deal from which they would both make ‘mighty profits’.
Wilson said there were several issues to agree upon before they could go into some kind of
business relationship. These included, he said: a) pricing; b) Jamaican Internet sales; c) an
exclusive distributorship in Jamaica; d) licensed manufacturing in Jamaica.
Patel pondered his options before responding to Maraj’s proposition. He wanted to expand his
business, but also wanted to retain control of his branded products. He saw the ‘Patel Specials’
as the first of several designs he had in mind and he thought there was a lot of room for growth
in developing the mail-order made-to-measure business. Growing through local distributors,
such as Wilson Maraj (who had passed an initial scrutiny of his business and personal affairs),
could become a model for the future of Patel Suits in the Caribbean; hence, Mavji Patel was not
keen on granting him exclusivity or a licence to manufacture locally until, at least, he had
proved himself; also Mavji Patel had more knowledge of the prospects for his suits in the
Caribbean. On the other hand, depending on the pricing issue, he could use the profits from
Jamaica to fund his direct expansion elsewhere via the Internet.
1. How would you assess the interests of Mavji Patel for these negotiations? (10 marks)

2. How would you describe the interests, issues and positions of Wilson Maraj for the
negotiations? (10 marks)
3. Why might it be better for Mavji and Wilson to link rather than separate the negotiable
issues in their bargaining behaviour? (10 marks)
4. Why are Internet sales to customers in Jamaica a negotiable issue? (10 marks)
5. Which style of negotiation would you advise them to adopt distributive or integrative and
why? (10 marks)
PATEL OVERVIEW WILSON OVERVIEW

Brand Owner Importer / Trader
Tailoring business – Men’s wear Seller of Men’s fashion wear
Location: St Lucia, Caribbean Location: Jamaica, Caribbean
Made to order + Specials Various brands
PATELS ISSUES WILSONS ISSUES

Declining repair jobs Strong customer base for made to measure
Mail orders 50% Profit oriented
Growing demand of Patel Specials 50% Exclusive online & offline distributor in
Jamaica for Patel brand
Increasing demand in online orders licensed manufacturer of Patel suits
Need of additional manpower & machinery
to meet online demand
Has expansion plans
Wants to retain control
Not in favor of giving
PATELS INTEREST WILSONS INTEREST
PATELS POSITION WILSONS POSITION

1. Describe the language of Distributive Bargaining and the meaning of each term?
2. In a Distributive Bargaining situation, strategy plays an important part. Describe some of

these that you know?
3. Hardball tactics are frowned upon. Yet Negotiators sometimes use them Describe at least 5
such that you are aware of.
https://www.pon.harvard.edu/daily/batna/10-hardball-tactics-in-negotiation/
4. Framing is an important tool in negotiation. Illustrate 5 frames with examples.
https://www.sicotests.com/darticle.asp?page=16
https://www.pon.harvard.edu/daily/business-negotiations/framing-in-negotiation/
https://www.beyondintractability.org/essay/framing
5. Integrative Negotiation is described by Fisher, Ury and Patten as a 4-Step method. Explain.
6. BATNA is a term used frequently. What goes into creating a good BATNA?
7. Culture plays an important role in defining Negotiation styles. Describe at least 5 Cultural
stereotypes that you may be aware of?
7. Thomas and Kilmann defined Conflict Resolving Styles. Describe them.
Countless books and articles offer advice that can help deal makers avoid missteps at the
bargaining table. But some of the costliest mistakes take place before negotiators even
sit down to discuss the substance of the deal. That’s because people fall prey to a
seemingly reasonable—but ultimately faulty—assumption about deal making.

Negotiators often take it for granted that if they bring a lot of value to the table and have
sufficient leverage, they’ll be able to strike a great deal. While those things are certainly
important, many other factors influence where each party ends up.
In this article I draw on my experience advising scores of companies on deals worth

millions or billions of dollars to present four factors that can have a tremendous impact
on negotiation outcomes. In each case, I provide guidance on what negotiators should
do before either side starts making offers or counteroffers.
1. Negotiate Process Before Substance

A couple of years ago, two cofounders of a tech venture walked into a meeting with the
CEO of a Fortune 100 company who had agreed to invest $10 million with them. A week
earlier, the parties had hammered out the investment amount and valuation, so the
meeting was supposed to be celebratory more than anything else. When the cofounders
entered the room, they were surprised to see a team of lawyers and bankers. The CEO
was also there, but it soon became clear that he was not going to actively participate.
As soon as the cofounders sat down, the bankers on the other side started to renegotiate
the deal. The $10 million investment was still on the table, but now they demanded a
much lower valuation; in other words, the cofounders would have to give up
significantly more equity. Their attempts to explain that an agreement had already been
reached were to no avail.
What was going on? Had the cofounders misunderstood the level of commitment in the
previous meeting? Had they overlooked steps involved in finalizing the deal? Had the
CEO intended to renege all along—or had his team convinced him that the deal could be
sweetened?
Upset and confused, the cofounders quickly assessed their options. Accepting the new
deal would hurt financially (and psychologically), but they’d get the $10 million in
needed funds. On the other hand, doing so would significantly undervalue what they
brought to the table. They decided to walk out without a deal. Before they left, they
emphasized their strong desire to do a deal on the initial terms and explained that this
was a matter of principle as well as economics. Within hours, they were on a plane, not
knowing what would happen. A few days later, the CEO called and accepted the original
deal.
The gutsy move worked out for the cofounders, but it would have been better not to let
things go wrong in the first place. Their mistake was a common one: focusing too much
on the substance of the deal and not enough on the process. Substance is the terms that
make up the final agreement. Process is how you will get from where you are today to
that agreement. My advice to deal makers: Negotiate process before substance.
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Consider another scenario. You’ve been negotiating with someone for months. You have
a few final concessions that you’ve been holding back—they’re costly but worth making
if it will close the deal. With the finish line in sight, you make the concessions, and the
other side responds: “This is great. I appreciate your flexibility on these issues. Let me
share this with my boss to see what she thinks.” Unfortunately for you, you had no idea
your counterpart even had a boss—you thought he was the final decision maker. The
negotiations are clearly not over, and you have nothing left to give.
The more clarity and commitment you have regarding the process, the less likely you are
to make mistakes on substance. Negotiating process entails discussing and influencing a
range of factors that will affect the outcome of the deal. Ask the other party: How much
time does your company need to close the deal? Who must be on board? What factors
might slow down or speed up the process? Are there key milestones or dates we should
be aware of? Remember to find out simple things such as, Who will be in the meeting
tomorrow? What will the agenda be? Since we are not going to discuss the issues of
importance to us in the next meeting, when will we address them?
Of course, you can’t always get clear answers to every question at the outset—and
sometimes it is premature to ask certain questions. But you should seek to clarify and
reach agreement on as many process elements as possible—and as early as is
appropriate—to avoid stumbling on substance later.
2. Normalize the Process

A businessman who owns multiple manufacturing facilities in Asia once told me that he
no longer does business with companies from the West unless their top managers are
willing to first fly into his city to meet with him. My initial thoughts were: Is this about
ego? Is it about building relationships? Is it a cultural norm or ritual of some sort?
Actually, none of those had anything to do with his precondition to signing a contract.
Here’s how he explained it to me: “Until they have flown into my city and then driven to
our manufacturing plants—which are located 20 kilometers from the airport but take
almost three hours to reach—until they have experienced that, they simply don’t
understand how things work around here. And if they don’t understand, we run into
serious problems. Because the first time there is a delay or disruption, or if we need to
renegotiate something, they will immediately assume we are either incompetent or
stealing from them. Once they’ve seen how things actually work, we can have a more
productive relationship.”
Unless business partners understand what is “normal” in a given context or culture, they
are likely to misunderstand or overreact to adverse events. The same is true in
negotiations of all kinds: It is important to normalize the process. If you’ve ever been
involved in an ugly conflict that went into mediation, you may have seen this in action.
When a good mediator sits down with parties who are in a bitter dispute, she might say

something like, “You think you hate each other today? I can assure you, about three days
into this process, you’re going to hate each other even more. And when that happens, I
want you to remember something: That’s normal.”
Tell counterparts what to expect so they don’t overreact to bumps in the road.
If the mediator does not give this warning, the parties are much more likely to abandon
the process when emotions heighten and things seem to be falling apart. But if she
explains at the outset that it’s normal for things to get worse before they get better, the
parties are more likely to keep at it. By normalizing the process, she effectively manages
their expectations.
The same principle applies to any negotiation where there’s a risk that things will not go
perfectly smoothly. If you anticipate delays or disruptions on your side, tell your
counterparts. This allows you to shape how they will interpret a negative event should
one occur and to ensure that they do not overweight its significance. You’ll have a much
harder time trying to influence their perceptions or win back their trust after something
goes wrong that they did not expect.
Normalizing the process entails discussing, in advance, any factors that might cause the
other side to question your intentions or ability or to doubt the likelihood of a successful
outcome. You might explain typical barriers that need to be overcome, moments during
the process when it’s common for parties to feel anxious or pessimistic, events that
might delay progress, and the difference between disruptions that are commonplace and
easy to resolve and ones that are more serious.
Encourage the other side to do the same for you. People often hesitate to discuss “what
might go wrong,” because they’re focused on presenting themselves and the merits of
the deal in the best possible light. This is especially true in certain cultures and in
contexts where competition is fierce. Your counterpart might be thinking, “Why should I
talk about problems if my rivals are pretending things will be great?”
That’s understandable. If other parties think that mentioning a potential disruption

could cost them the business, or that you’ll use it as a lever to extract greater
concessions, they’re unlikely to be truthful. To encourage people to be open about
problems, make it safe for them. Explain that you are experienced enough to know that
every deal and relationship is likely to encounter difficulties and disruptions, and that
you want to learn more about the specific risk factors that might play a role in this case.
And if you can signal (or commit to) having no intention of holding those factors against
them, you have a better chance of reaching an understanding that works for both sides.
3. Map Out the Negotiation Space

Some years ago, a client of mine was preparing to sell his stake in a company that was
jointly owned by four entities. The owners had been squabbling for many years; it was
clear that the asset would need to be consolidated under one party (or perhaps two who
could get along). It was also clear that no one wanted to sell. However, there was little
choice in the matter, because one of the owners—Company X—was a much larger
company with the power and the clout to push people out. It announced that it would
buy out the other three.

My client wanted to wait until Company X had bought out the other two owners before
negotiating the sale of his shares. He figured that by being “the last piece of the puzzle,”
he would be able to hold out for more money.
When we met to discuss his strategy, I asked him to step back and “map out the
negotiation space.” This consists of every party that can affect the negotiation, along
with any party that will be affected by the negotiation. In my experience, a strategy that
makes perfect sense when you’re thinking bilaterally—that is, about the relationship
between any two parties in the negotiation—can suddenly become ineffective or even
disastrous when you take a multilateral perspective. I encouraged my client to evaluate
the interests, constraints, alternatives, and perspective of all the relevant parties. One of
the things we looked at was how much equity each party had and how much of the board
each one controlled:
We then focused on the interests of each company: What exactly are their interests in
this deal? How would you rank their priorities? The four parties had known one another
a long time, and my client did not have any trouble identifying what mattered most to
each. Company X, for example, was concerned about three things, and its priorities were
as follows: (1) Reputation: It did not want ties with any organization that could hurt its
reputation. (2) Control: It wanted ownership only in businesses where it had a majority
of board seats, and (3) Money: It would want to pay as little as possible, but this was not
as big a concern as reputation and control.
After delving into the perspectives of all parties, we unearthed one more important bit of
information: Company A was the least interested in selling and was already putting up a
fight that could drag things out.
When we put all these details together, it became clear that the “last piece of the puzzle”
strategy would be unwise. Why?
For Company X, control was a higher priority than money. To get control, it needed to
buy either my client or Company A—as soon as it made either purchase, it would control
more than 50% of the board seats and hence the company (for most decisions).
Therefore, if my client were the last to sell, he would be negotiating with Company X
after it had control. At that time, my client would be able to get paid only for his 1/6
share of the firm’s equity. But if he were to sell first, at a time when Company A was

refusing to sell and was making things difficult for Company X, he could monetize two
assets: his shares and his board seat. In other words, the last party to negotiate would
have the least leverage and limited opportunities to monetize its assets.
Make sure to consider the perspective of every party that can affect the deal.
In the real world, you’ll never have as complete a picture as you’d like, but you put
yourself at further disadvantage if you focus too narrowly on the party on the other side
of the table. You have to assess the perspective of all the parties that can influence or are
influenced by the deal: Who has the ability to influence the person on the other side of
the table? How might the strategy or actions of other parties change your alternatives,
for better or worse? How does the deal affect the interests of those who are not at the
table? How will this negotiation affect your leverage with future negotiation partners? If
multiple parties are involved in the deal, does it make sense to negotiate with them
simultaneously or in sequence, together or separately?
Your analysis might suggest a change of strategy—that you should negotiate with a
different party first, delay the deal or speed it up, bring others into the room, expand or
contract the scope of the deal, and so on.
4. Control the Frame

The outcome of a negotiation depends a great deal on each side’s leverage—the better
your outside options are and the more ways you have to reward or coerce the other side,
the more likely you are to achieve your objectives. But the psychology of the deal can be
just as important.
In my experience, the frame, or psychological lens, through which the parties view the
negotiation has a significant effect on where they end up. Are the parties treating the
interaction as a problem-solving exercise or as a battle to be won? Are they looking at it
as a meeting of equals, or do they perceive a difference in status? Are they focused on
the long term or the short term? Are concessions expected, or are they seen as signs of
weakness?
Effective negotiators will seek to control or adjust the frame early in the process—
ideally, before the substance of the deal is even discussed. Here are three elements of
framing that negotiators would be wise to consider.
Value versus price.
I’ve worked with many technology companies whose innovative products provide
tremendous value for customers but are priced significantly higher than what their
competitors are charging—or what customers are paying for their legacy systems. While
the high price is justified by the value proposition, salespeople often face immediate
resistance when a potential customer learns that the cost will be five or 10 times the
amount he is currently paying. Too often, the salesperson will hear something like: “You
are charging five times what others charge. No one pays that much for this kind of
thing!”

From the outset, control the lens through which parties view the negotiation.
One of the most common mistakes salespeople make in those situations—without even
realizing it—is to apologize for having a high price. They do this when they say “I
understand it’s pricey, but…” or when they hastily signal a willingness to adjust the
price. My advice: Always justify your offer, but never apologize for it. When you
apologize, you signal that even you don’t think the price is appropriate, and you give the
other side license to haggle. The entire frame of the negotiation becomes about price,
when what you really want to discuss is value.
A better response would be, “What you seem to be asking is, How is it that despite a
higher price, we still have a long and growing list of customers? We both know that no
one will pay more for something than it’s worth, so let’s discuss the value we bring so
that you can decide what’s best for you.”
In negotiations of all kinds, the sooner you can shift the discussion away from the cost to
your counterpart and focus on the value you bring to the table, the more likely it is that
you will be able to monetize that value.
Your alternatives versus theirs.
Research and experience suggest that people who walk into a negotiation consumed by
the question “what will happen to me if there is no deal?” get worse outcomes than those
who focus on what would happen to the other side if there’s no deal. When you are
overly concerned with your own alternatives, and especially when your outside options
are weak, you think in terms of “what will it take (at a minimum) to get them to say
yes?” When you make the negotiation about what happens to them if there is no deal,
you shift the frame to the unique value you offer, and it becomes easier to justify why
you deserve a good deal.
Equality versus dominance.
Not so long ago I was consulting on a strategic deal in which our side was a small, early-
stage company and the other was a large multinational. One of the most important
things we did throughout the process—and especially at the outset—was make sure the
difference in company size did not frame the negotiation. I told our team, “These folks
negotiate with two kinds of companies—those they consider their equals and those they
think should feel lucky just to be at the table with them. And they treat the two kinds
very differently, regardless of what they bring to the table.” Over the years, I’ve seen
many large organizations impose demands on their perceived inferiors that they’d never
require from those they considered equals. In this negotiation, I wanted to make sure
our counterpart treated us like equals.
To keep the dominance frame from taking hold, we started shaping expectations and
perceptions at the very beginning, before we even considered the economics of the deal.
For example, any time our counterpart made a procedural demand—however small—
that we felt they would not have made of an equal, we respectfully pushed back on it.
Any time they included a provision in the term sheet that seemed one-sided, even if it
would not have been a costly concession, we redrafted it to be symmetrical. And
throughout the negotiation, we made sure they understood that although our firm was

much smaller, we were equals in this negotiation because of the tremendous value we
offered. While I am not an advocate of nitpicking on minor issues, in this case we did so
intentionally to help set the right frame.
Negotiators can shape the frame in countless other ways and on many other dimensions.
At the very least, you want to ensure that the psychological lens that takes hold respects
the value you bring to the table.
In The Art Of War, Sun Tzu posits that every war is won or lost before it even begins.
There is truth to this sentiment in most strategic interactions. While it would be unwise
for negotiators to minimize the importance of carefully managing the substance of a
deal, they should make every effort to avoid the mistakes that can occur before anyone
has even formulated an offer. By paying attention to the four factors discussed here, you
increase your chances of creating more-productive interactions and achieving more-
profitable outcomes

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Negotiation &amp; Conflict Resolution

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8/1/2021 Negotiation &

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Hallmark of good negotiation:

Fundamentals or Characteristics of good negotiation skills:

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TKI CONFLICT TEST

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Level 2 – Win Win: Settle demonstrably superior to other feasible settlements.

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2 KINDS OF INTEREST OR OUTCOME OF A NEGOTIATIONS that every negotiator desire:

DISTRIBUTIVE NEGOTIATION Is a crude way of bargaining in a two-party negotiation.

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Process of Distributive Negotiation

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Good tactics for Distributive Negotiation

Fundamental Strategies of Distributive Negotiation

Negotiation Strategies for Distributive Style

Hardball Tactics used in Distributive Negotiation

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Elements of BATNA success

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DISTRIBUTIVE NEGOTIATION INTEGRATIVE NEGOTIATION

INTEGRATIVE NEGOTIATION – PRINCIPLED NEGOTIATION

INTEREST V/S POSITION

STRATEGIES FOR CREATING VALUE IN AN INTEGRATIVE NEGOTIATION

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4 STEP METHOD OF NEGOTIATION ON MERITS:

 Interests lie behind positions

 Most powerful interests – basic human needs

 Be concrete but flexible

 Be hard on the problem, soft on people

Most common interests –

Major obstacles in inventing options:

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4.Develop Objective Criteria

Getting to Yes for a negotiation

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SETTING AND ANCHORING INITIAL BID

Beside Anchoring other cognitive biases or common traps to anticipate:

PREPARING OR STAGES IN NEGOTIATION

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7 PILLARS OF NEGOTIATION that can lead to an Agreement

ROLES OF TEAM MEMBERS IN A NEGOTIATION

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proceed slowly reiterate agreed

keep calm dont display emotions

respond with rational questions dont interrupt

DON’T REMEMBER THIS

CBMs – CONFIDENCE BUILDING MEASURES

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SKILLS OF A GOOD NEGOTIATOR

SOFT skills HARD skills

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Negotiation & Conflict Resolution

Negotiation & Conflict Resolution