CASE STUDY

Your are member of the sales department of Company X, the

manager of your department ordered you to work more hours
than you legal working hours( extra working time) without
paying overtime or any other compensation of your extra
working hours. What would you do in this situation?
a. You should say yes to please the manager because this could
have a positive impact on your performance appraisal.
b. Decline letting the manager to know that you have priorities
at home that keeping you from staying over the regular
work schedules.
c. You should notify the manager’s boss of the request.
d. You should let the manager know that while you would like
to support the needs of the department, you don’t want to be
doing something that is against company policy.
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 CASE STUDY
Things are not going right on a project and you feel that one
person is responsible for the issue. This team member is
argumentative and tends to put others down when they make
suggestions. What will you do?
a. Readdress the team behaviour guidelines at the next meeting
with the idea that once they are reminded about proper team
etiquette the individual will change their behaviour.
b.Take the other team members aside and ask if they have any
issue with how things are going.
c. After additional reflection you decide that it’s really not that
big of a deal, since the project is still on a track, after all that is
the real goal of the project not how every one is getting alone.
d.Speak directly with the team member to address your concerns
and reaffirm the proper business meeting behaviour.
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 Brainstorming objective questions
What are the positive effects of conflicts? List all that you can
recall.

 Idea diversity
 Harmony
 Individuals are listened to and thoughts are accepted
 Disrespect for management
 Individual performance is increased

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 Case study
Layla in the marketing department is fed up with the group
of videographers assigned to her project. They ‘ve already
missed several deadlines and the project will not be ready as
result.
This is an example of interpersonal conflict ?
 True
 False

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 Chapter 9
Negotiation
DEFINITION of 'Negotiation'
A strategic discussion that resolves an issue in a way that
both parties find acceptable. In a negotiation, each party
tries to persuade the other to agree with his or her point of
view.

In advance of the negotiation, participants learn as much as

possible about the other party's position and what the
strengths and weaknesses of that position are, and are
prepared to defend their positions and counter the arguments
the other party will likely make to defend their position

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 Negotiation Cont…
Many offers that people assume to be firm and final are
actually flexible.

For example, negotiation can be used to reduce debts, to

lower the sale price of a house, to get a better deal on a car
or to improve the conditions of a contract.

Negotiating a job offer is particularly important because all

future increases in compensation will be based on the initial
offer.

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Negotiation is a method by which people settle
differences. It is a process by which compromise or
agreement is reached while avoiding argument and dispute.

In any disagreement, individuals understandably aim to

achieve the best possible outcome for their position (or
perhaps an organisation they represent). However, the
principles of :
 fairness,
 seeking mutual benefit and
 maintaining a relationship
are the keys to a successful outcome.

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 FORMS OF NEGOTIATION
Specific forms of negotiation are used in many situations:
• international affairs
• the legal system
• government
• industrial disputes or
• domestic relationships as examples.
However, general negotiation skills can be learned and
applied in a wide range of activities.  Negotiation skills can
be of great benefit in resolving any differences that arise
between you and others.

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 Why Negotiate?

It is inevitable that, from time-to-time, conflict and

disagreement will arise as the differing needs, wants, aims
and beliefs of people are brought together. 

Without negotiation, such conflicts may lead to argument

and resentment resulting in one or all of the parties feeling
dissatisfied.

The point of negotiation is to try to reach agreements

without causing future barriers to communications.

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 Stages of Negotiation
In order to achieve a desirable outcome, it may be useful to
follow a structured approach to negotiation. For example,
in a work situation a meeting may need to be arranged in
which all parties involved can come together.

The process of negotiation includes the following stages:

• Preparation
• Discussion
• Clarification of goals
• Negotiate towards a Win-Win outcome
• Agreement
• Implementation of a course of action
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1. Preparation
Before any negotiation takes place, a decision needs to be
taken as to when and where a meeting will take place to
discuss the problem and who will attend.  Setting a limited
time-scale can also be helpful to prevent the disagreement
continuing.

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2. Discussion
During this stage, individuals or members of each side put
forward the case as they see it, i.e. their understanding of
the situation. 
Key skills during this stage include
• questioning,
• listening and
• clarifying.
Sometimes it is helpful to take notes during the discussion
stage to record all points put forward in case there is need
for further clarification.  It is extremely important to listen,
as when disagreement takes place it is easy to make the
mistake of saying too much and listening too little.  Each
side should have an equal opportunity to present their case.
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3. Clarifying Goals
From the discussion, the goals, interests and viewpoints of
both sides of the disagreement need to be clarified. 
It is helpful to list these factors in order of priority.  Through
this clarification it is often possible to identify or establish
some common ground. Clarification is an essential part of
the negotiation process, without it misunderstandings are
likely to occur which may cause problems and barriers to
reaching a beneficial outcome.
4. Negotiate Towards a Win-Win Outcome
This stage focuses on what is termed a 'win-win' outcome
where both sides feel they have gained something positive
through the process of negotiation and both sides feel their
point of view has been taken into consideration. 
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A win-win outcome is usually the best result. Although this
may not always be possible, through negotiation, it should
be the ultimate goal.
Suggestions of alternative strategies and compromises need
to be considered at this point.  Compromises are often
positive alternatives which can often achieve greater benefit
for all concerned compared to holding to the original
positions.
5. Agreement
Agreement can be achieved once understanding of both
sides’ viewpoints and interests have been considered. 
It is essential to for everybody involved to keep an open
mind in order to achieve an acceptable solution.  Any
agreement needs to be made perfectly clear so that both
sides(C)know what has been decided.
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6. Implementing a Course of Action
From the agreement, a course of action has to be
implemented to carry through the decision.
Failure to Agree
If the process of negotiation breaks down and agreement
cannot be reached, then re-scheduling a further meeting is
called for.  This avoids all parties becoming embroiled in
heated discussion or argument, which not only wastes time
but can also damage future relationships.
At the subsequent meeting, the stages of negotiation should
be repeated.  Any new ideas or interests should be taken
into account and the situation looked at afresh.  At this
stage it may also be helpful to look at other alternative
solutions and/or bring in another person to mediate.
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 Negotiation Strategies 
Throughout most of human history, people gathered at
traditional markets to trade goods. The amount paid for those
goods was always determined through the process of
negotiation. In fact, the price tag is a relatively recent
invention.
Today, negotiation is a lost art as few modern Americans
remain skilled at the practice. We see a price and expect to pay
that amount, with the exception of negotiating when buying
cars and homes. But even in those instances, you may end up
paying more than you should, if you don’t know how to drive a
hard bargain. The bottom line is, if you want to save money,
you need to learn how to become a skilled negotiator. Here are
four negotiation strategies. 
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 1. Yielding

A yielding strategy is to not negotiate. A person who yields

accepts the first offer or assumes the price is fixed.
A common reason a person yields is to avoid inner discomfort
from thoughts of taking advantage of someone else or the fear of
breaking social rules that say you must accept what others say as
truth. Another reason is fear of some form of conflict or other
unpleasantness.
People who use the yielding strategy typically assume other
people are more important and powerful than them, and so abase
themselves by giving in at the earliest opportunity. They put
gaining the approval of others well above getting what they want
from the situation.
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 2. Compromising

A compromising strategy seeks some fair balance where both

parties appear to get an equitable deal. A typical tactic people
used by people who adopt this approach is to 'split the
difference', which is not necessarily the best way when the
other person is using tactics such as highballing or asking for
all needs, wants and likes.
People who use compromising tend to see others as worthy
and equal to them, and hence seek fair play. They realize that
nobody can get everything they want and seek an equitable
arrangement. As with yielders, they care about what others
think about them but have higher self-esteem and  see
themselves as equal to others rather than inferior.

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 3. Competing
A classic and more aggressive approach is to treat the
negotiation as a zero-sum game where their goal is to get as
much as possible at whatever cost to the other party.
People who take this approach often assume they are superior
or feel inferior but need to appear superior. They may well use
any of the negotiation tactics, including the more deceptive
ones, and consider this is not at all wrong (after all, it is a
negotiation). They may well generally distrust others, seeing
the world as a dog-eat-dog place where you deserve what you
can get and also deserve to lose what you lose.
4. Problem-solving
The problem-solving approach is closer to Compromising than
Competing in that it starts from a position of respect for the
other party.
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 Cont…
A person using this approach does not see the other person as
competitor or threat, but rather as a person who has legitimate
wants and needs, and that the goal of negotiation is less to make
trades and more to work together on an equitable and
reasonable solution.
In particular, a problem-solver will seek to understand the other
person's situation, explain their own, and then creatively seek a
solution where both can get what they need. They will listen
more and discuss the situation for longer before exploring
options and finally proposing solutions.
The relationship is important for a problem-solver, but mostly in
that it helps trust and working together on a solution rather than
it being important that the other person necessarily approves of
the first person.
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 Essential Negotiation Strategies
1. You Can Negotiate Anything
The first thing you should know about negotiating is that
everything is fair game, not just cars and houses. At stores, we
tend to look at price tags and presume that the offer is final. It
rarely ever is. At the very minimum, you should always ask the
clerk if they have any coupons available or if any other
discounts apply.
2. Ask to Speak With a Manager or Owner
Most sales clerks don’t really care if you make a purchase or
not. They’re getting paid minimum wage, and your purchases
won’t put any more money in their pocket. So the second step is
to find the person at the store who will directly benefit from the
sale. Ideally, you will want to speak with the owner of a small
store, but that is impossible with most bigger retailers
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 Cont...
In those cases, look for the manager, whose compensation is
most often tied to store sales and customer satisfaction. Ask him
if they will offer a discount if you purchase more than one of the
item, or if you’re a regular customer, ask for a small percentage
off retail as a loyalty reward. The key is to let them know that
the sale is dependent on their response, otherwise they have no
incentive.
3. Keep a Poker Face
If you see an item you want and exclaim loudly that it’s perfect
and that you’ve been seeking it for all of your life, there is little
incentive for the other party to negotiate. Always keep your cool
and don’t display any unusual interest in the item. When asked,
limit your enthusiasm while unfavourably comparing it to other
products.
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 Cont…
Then suggest that you might still be interested for the right price.
The strength of your negotiating position relies on your actual
alternatives to this deal. As a buyer, you should never fixate on a
single product; always shop around and keep your options open.
As a seller, you should always be prepared to seek more
potential buyers.
4. Don’t Make the First Offer and Don’t Negotiate with
Yourself
Whether you are buying or selling, you never want to make the
first offer. Why? Because the other party may offer a price that is
a much better deal than what you initially had in mind. If you’re
buying, consider the starting point to be the list price, but make
it clear that the price is too high. From there, ask the seller if
there is any flexibility and force the seller to offer you a lower
price. It is only at that point you should make your first offer.
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 Cont…
But once you have made your offer, do not volunteer another
price unless and until the other party has responded with a
counteroffer. Expect the negotiations to be a back-and-forth
process, but remain confident throughout.
5. Bundle
A great way to augment your negotiation over price is to include
other items. When you reach an impasse in your negotiations, an
offer to purchase multiple quantities of the item or additional
items might trigger flexibility on the part of the seller.
The seller may be willing to lose a customer if it’s a single item.
But when a seller has the opportunity to make a much larger
transaction, there is a much greater likelihood he will be
amenable to a lower price.

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 Cont…
Likewise, as a seller you can negotiate the buyer to a higher price
by throwing in an extra item. If you’re selling your house, for
instance, and you have brand new porch furniture that fits the
deck perfectly, offer to include it in the price you want as an
incentive to the buyer.
6. Barter
Do you have any items that might be of interest to the seller?
Could you offer some services that would be of value to the
seller? Consider making a trade to eliminate or significantly
offset the need for actual dollars in a transaction. The idea is to
use creativity in order to reach a deal that might otherwise not
come to fruition. As a starting point, you can find many bartering
websites online.
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7. Use Silence and Time as a Tactic
Never respond too quickly to an offer. Pausing or even
suspending negotiations can convey that you’re not desperate to
close the deal and that you have other options. Silence can force
a surprising amount of pressure on the other party as well.

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8. Be Willing to Walk Away
Even if it’s the car, television, or house of your dreams, if the
seller won’t come down to the maximum price you have set for
your budget, force yourself to walk out of the store or away
from the deal. This strong stance more often than not will get
you the price you’re looking for, as the seller doesn’t want to
lose the sale. In flea markets and overseas, for example, I often
get my best price only as I am literally walking away from the
shop.
9. Keep It Light
You never want to let negotiations become too tense. Always
feel free to smile and inject some humour in the conversation.
Lightening up the mood can ingratiate you with your opponent
while also conveying your negotiating strength.

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 Cont…
If you do not appear to be taking the negotiation extremely
seriously, your opponent may conclude that you are ready to
move on if you don’t get the price you want.
10. Use Written Communication If Possible
In foreign markets, it’s common to negotiate in writing on a pad
using just numbers. This solves language barriers while
producing a record of the negotiations. Furthermore, it’s just
easier to communicate non-verbally when negotiating back and
forth. Non-verbal communication strips away all of cues that
one’s body language and tone of voice can give away – which is
why most real estate deals are made through realtors and in
writing. Outside of foreign markets, you will find it easier to
negotiate back and forth over email or even through an online
chat for customer service.
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 11. Practice
The only way to become an expert negotiator is to practice a lot.
In the United States, the closest things we have to traditional
markets are flea markets and garage sales. Spending a day or
two bickering over t-shirts or used furniture will improve your
negotiating skills and give you the confidence that will be
valuable when you purchase a car or a house. It’s also a great
idea to practice in foreign countries, where bargaining is much
more widely accepted and even expected

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 Case Study
On September 3, 2013, Microsoft announced a deal to acquire
Finnish mobile phone company Nokia’s handset and services
business for $7.2 billion, the New York Times reports. The
agreement marks a belated but bold move by Microsoft to
upgrade its presence in handheld devices and signals an end to
Nokia’s long struggle to enter the hyper-competitive (and
extremely lucrative) smartphone market.
What negotiating skills brought negotiators to an agreement in
one of the tech industry’s largest acquisitions and what
bargaining strategies can business negotiators use to bring
competitors to a negotiated agreement in similar negotiation
scenarios? This article briefly explores the dynamics behind the
negotiations that saw Finland’s phone giant join forces with icon
of US technology and software, Microsoft.
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 Cont…
Both sides had strong incentives to join forces. Nokia has lost
significant ground in recent years to smartphone manufacturers,
most notably Samsung and Apple, by failing to keep up with
innovations such as touch screens. Having shed its
underperforming handset business, Nokia plans to focus on
telecommunications equipment, mapping business, and patent
portfolio. Ballmer first approached Nokia CEO Stephen Elop
about a possible acquisition during the Mobile World Congress
industry conference in Barcelona. Ballmer and Nokia chairman
Riisto Siilasmaa conducted methodical, discreet negotiations
across the globe in 2013.
As with any large merger or acquisition, this one faces even more
complexity after the ink has dried on the contract—namely, the
challenges of integrating employees from different cultures
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 Cont…
Merging distinct cultures can be a confusing, lengthy process –
even without the added complexity of joining together two of
the world’s largest companies, each of which is emblematic of
its mother country in its own way. It often makes sense to
maintain each organization’s unique identity and borrow from
the best of both. Moreover, because national culture is just one
facet of our identities, it pays to view negotiating counterparts
as unique individuals rather than as cultural ambassadors.
Keeping this in mind, it never hurts to infer strategies based on
expected cultural norms so long as this acknowledgement is part
of a holistic bargaining process aimed at creating value and
forging workable, sustainable agreements.
There has been a completely mixed response to whether the
deal was good or was a decision taken in a hurry. State your
point of view about this deal?
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END
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