Negotiation Skills | Negotiation | Cognition

HOW TO BECOME MILLIONAIRE

There is no shortcut to success, Hard work is only a key to success.

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NEGOTIATION SKILLS

CONTENTS 4 What is Negotiation?  Features of Negotiation  Why Negotiate ?  Types of Negotiation  Distributive Vs Integrative Negotiation  Negotiation Process  BATNA  Bargaining Zone Model of Negotiation  Negotiating Behavior  Issues in Negotiation  Third party Negotiations  How to achieve an Effective Negotiation  Negotiation Tips  .

Where do use this skill? 5  Everything  Family   is negotiated.” “ Pay me a license fee or I’ll sue you.” “ Publish my paper. and personal “ Where should we go for dinner?” “ Can I borrow the car?”  Academic   research “ Fund my project.” .” “ Invest in my company.”  Business    ventures “ I want a raise.

"negotiatus".WHAT IS NEGOTIATION ? 6  The word "negotiation" originated from the Latin expression. process of conferring to arrive at an agreement between different parties. give-and-take decision-making process involving interdependent parties with different preferences.”  The  “A . each with their own interests and preferences. which means "to carry on business".

FEATURES OF NEGOTIATION 7       Minimum two parties Predetermined goals Expecting an outcome Resolution and Consensus Parties willing to modify their positions Parties should understand the purpose of negotiation .

Why do we NEGOTIATE ? 8  To reach an agreement  To beat the opposition  To compromise  To settle an argument  To make a point .

TYPES OF NEGOTIATION 9   Distributive Negotiation Integrative Negotiation .

the deal is confined: there are not much opportunities for creativity or for enlarging the scope of the negotiation.  . the Buyer’s goal is to negotiate as low a price as possible.  The Seller’s goal is to negotiate as high a price as possible. “Who will claim the most value?” A gain by one side is made at the expanse of other.10 1st Type: Distributive Negotiation  Parties compete over the distribution of a fixed sum of value. Thus. The key question in a distributed negotiation is.

 – When the deal involves many financial and nonfinancial terms.. In an integrative negotiation. The key questions is: “How can the resource best be utilized?” Integrative negotiations tend to occur in following situations: – Structuring of complex long-term Strategic Relationships or other collaborations. and the goal of each side is to “create” as much value as possible for itself and the    . parties cooperate to achieve maximize benefits by integrating their interests into an agreement. there are many items and issues to be negotiated.11 2nd Type: Integrative Negotiation  In Integrative Negotiation. This is also known as a win-win negotiation.

DISTRIBUTIVE VERSUS INTEGRATIVE NEGOTIATIONS 12 Characteristic Outcome Motivation Interests Relationship Issues involved Ability to make trade-offs Solution Distributive Win-lose Individual gain Opposed Short-term Single Not Flexible Not creative Integrative Win-win Joint and individual gain Different but not always Opposite Longer or Short-term Multiple Flexible Creative .

NEGOTIATION PROCESS 13 PREPARATION Click here INFORMATION SHARING Click here BARGAINING click here FINALIZING THE DEAL click here .

BATNA 14 BATNA is an acronym for: Best Alternative To a Negotiated Agreement .

Why BATNAs Matter 15  BATNAs tell you when to accept and when to reject an agreement  When a proposal is better than your BATNA: ACCEPT IT a proposal is worse than your BATNA: REJECT IT  When .

BATNA 16   “Best Alternative to a Negotiated Agreement” Develop “your” BATNA .Establish your best as your BATNA     Consider “their” BATNA Have a Reservation Point – the least you will accept List their alternatives – their BATNA .Evaluate your alternatives  .List your alternatives  .

BATNA Example 17 Example: [Showroom salesman V/s customers]  A persons go for car purchase. [To negotiate with showroom sales man for lesser price]   The car owner is not agreeing for the lesser price. Than customer can ask for Radial tires[best alternative] with any increase in price further. .

NEGOTIATION STRATEGY Berrin” By: “Kenneth 18 High INTITUTION [Ability to modify others] BARGAINING EMOTION COMPROMISE LOGICALLY Low Low INFLUENC E High .

Bargaining Zone Model of Negotiation 19 Your initial point Your target point Your resistance point Area of potential agreement Opponent’s resistance point Opponent’s target point Opponent’s initial point .

EXAMPLE 20 .

NEGOTIATING BEHAVIOUR 21 Gavin Kennedy describes 3 types of behaviour that we can display and encounter when in a negotiating situation. RED BLUE PURPLE .

22 RED Behaviour        Manipulation Aggressive Intimidation Exploitation Always seeking the best for you No concern for person you are negotiating with Taking .

23 BLUE Behaviour      Win win approach Cooperation Trusting Pacifying Relational  Giving .

24 PURPLE Behaviour           Give me some of what I want (red) I’ll give you some of what you want (blue) Deal with people as they are not how you think they are Good intentions Two way exchange Purple behaviour incites purple behaviour Tit for tat strategies Open People know where they stand Determination to solve problems by both sets of criteria of the merits of the case and/or the terms of a negotiated exchange .

3. Investigation Mediation Conciliation Arbitration Adjudication .25 THIRD-PARTY NEGOTIATIONS 1. 5. 4. 2.

 Example:   “The Negotiator’s Dilemma” a classic risk strategy game . Lack of trust leads to “win-lose” or “lose-lose” result.EFFECTIVE NEGOTIATION 26  Successful relationships are built on communication and trust. Negotiation is one way of creating trust – or deciding whether trust is justified.

B has terrible outcome .The Negotiator’s Dilemma 27 B Cooperates A Cooperates Both cooperates Both have a good outcome B Competes A Cooperates B Competes A has terrible outcome. B has great outcome A Competes A Competes B Cooperates Both competes Both have mediocre outcome A has great outcome.

It is a mistake to assume you know what the other party wants. Don’t fear to negotiate.NEGOTIATION TIPS 28 1) 2) 3) 4) 5) Do not underestimate your power. . Do not assume that other party knows your weaknesses. Never accept the 1st offer.

SKILLS FOR EFFECTIVE NEGOTIATION 29  Preparation and planning skill  Knowledge of the subject  Ability to think clearly and rapidly under pressure and uncertainty  Ability to express thoughts verbally  Listening skill  Patience  General problem-solving and analytical skills .

30 THANK YOU .

7. Firstly understand what it is you want? What do you think your opponent wants? What would happen if you didn’t do a deal? Do you know your stakeholders? Do you know who the decision maker is? Are you negotiating with them? If not what affect does that have? Are there concessions you can build into the negotiation? Know your product / service inside out? What standards are there in the market place? Know your price points? What issues do you think you’ll need to overcome? Prioritize! . 4. 3. 2. 10.PREPARATION 31 1. 8. 6. 9. 5.

8. Company activities and market position Opinion on entry points What elements are clearly off the table or not up for discussion and why Opponents attitude and commitment Motivational factors (“I want this price because…”) Stakeholders and importantly decision makers Problems. issues or risk An order/structure for proceedings . 5. 4.INFORMATION SHARING 32 1. 6. 3. 7. 2.

BARGAINING 33  Bargaining has two basic parts – Debating – Proposing .

DEBATING 34   To be successful in negotiation you must build relationships and trust You need to avoid the following    Point scoring – “Your company is always late with deliveries so I’m not paying that!” Insults – “If you insist on that price you must be stupid” Provocation – “Keep talking like that and see where it gets you!” Threats – “You just wait until your other customers hear about this” Building a relationship – It will make your negotiation much easier Sticking to an agreed agenda – This will help avoid destructive discussions. Share information and ask questions – What do you want – what do they want Try and be positive and listen – What do they want and why – look for areas of win/win or easy compromise.  Instead try    .

and invite a response from your opponent.PROPOSING 35  When proposing your offer consider Consider both your entry and exit – This could include all or some of your wants.  .  Remember the key thing is to propose – don’t argue and try and remain realistic. and your opponents entry and exit points  Consider how you will phrase your proposal  Consider what will motivate your opponent into making the deal  Consider the likely response – Think about the “if I do that then they will do that”  Are there alternative proposals? – Once an initial response has been made are you happy or do you need to offer up something new.

 Do not offer further concessions!  Agree the measures that will be applied to record fulfilment of the deal.  .FINALIZING THE DEAL 36  So when closing the deal consider Do you have what you want?  Do they have what they want?  Can you signify to your opponent that if certain terms were met the deal could be done.  Do you both understand the potential non deal by not closing or reaching agreement?  Document the agreement quickly and share it with your opponent and get agreement on the details of the deal.

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