Business Negotiation: Strategy &

Practices
Course Focus
• We all negotiate on a daily basis. On a personal level, we negotiate
with friends, family, landlords, car sellers and employers, among
others. Negotiation is also the key to business success. No business
can survive without profitable contracts. Within a company,
negotiation skills can lead to your career advancement. Through this
course, you’ll learn the strategies and skills that can lead to
successful negotiations in your personal life and in business
transactions.
Basic Steps of Successful Negotiation
• Prepare: Plan Your Negotiation Strategy
• Negotiate: Use Key Tactics for Success
• Close: Create a Contract
• Perform and Evaluate: The End Game
Preparing for Negotiation
Can you go into Burger King or Pizza
Hut and get a bargain?

Please write down on a piece of paper

 1. Do we need to negotiate?
The answer largely depend on your personality type. And also we need
to consider the cost benefit analysis. And of course the consideration of
the associated risk to negotiation
2. Is it a position or interest based
negotiation?

• is it position-based or interest-based? 
• Traditionally, negotiations were very much positional. 
• I take one position. 
• I want a high price. 
• You take the other position, low price. 
• And then we fight over whether the price is a high price or low price
or maybe something in the middle
 The Pizza Case
Position-based, as we just discussed, versus interest-based. My personal favorite
is dividing the pie could be called claiming value, as opposed to enlarging the
pizza, which is creating value. And so somehow you have to cut through all this
verbiage and keep in mind the central issue, which is what type of negotiation
am I involved with, is it dividing the pie or enlarging the pie, and that will help
shape your strategy. If it's a negotiation that creates opportunities for building a
larger pizza, then you'll want to spend a lot more time searching for mutual
interests that enable you to do this.
3. A Dispute Resolution or Deal Making
Negotiation?
Key differences between dispute resolution
and deal making
Dispute Resolution Deal Making
Backward Looking Forward Looking
Position Based Interest Based
Adversarial Problem Solving
Alternative Dispute Resolution (ADR)
• Arbitration
• Mediation
• Negotiation

These are alternative to Litigation

• we think about the distinctions between dispute resolution and deal
making. I encourage you to search for interests, even when you're in a
dispute resolution negotiation.
• It's important to understand the six types of dispute resolution.
• And the three lenses that you can use for looking at these types.
- The ADR lens,
- the third party processes lens and
- the power/rights/interests lens
- And finally, consider using dispute resolution processes for deal making,
such as mediation and arbitration.
Analyzing the negotiation
• This question is so important that I'm breaking the discussion into
three segments. 
• First of all, what questions should I ask to complete an analysis? 
• Second, what is my BATNA in a dispute resolution negotiation? 
• And finally, how can I use an especially valuable tool called a decision
tree to complete a BATNA analysis, regardless of whether it's a
dispute resolution negotiation or a deal-making negotiation. 
6 processes of dispute resolution
1. Avoidance
2. Negotiation
3. Mediation
4. Arbitration
5. Litigation
6. Power
Case of Pooja – selling the car
And that is how can I conduct a negotiation analysis? How
should I analyze a negotiation?
BATNA
Decision Tree
Negotiation Phase
3 Main Steps
-First, the importance of getting to know the other side at the
beginning of a negotiation. 
- Second, the importance of understanding your power, and where
your power comes from. 
- And then finally, what psychological tools can you use for successful
negotiation. And, what are the psychological traps that the other side
might use, and that you want to avoid.
Things needed to know while trying to know the other side

• Try to understand the cultural differences while you are involved in

cross cultural negotiation
• Try to develop conversational intelligence
• Remember, listening is critical
Using Power in Negotiation
One very important aspect in negotiation is to understand your power

- Information represents your main source of power in negotiation

• When in fact the best negotiators are the ones who ask questions,
harvest information and then use that information to analyze your
position, and to analyze your interests.
Two very important factors behind successful
executives
1. conceptual knowledge. It comes from experience in the business,
understanding the business, building your experience. 

2. The importance of the ability to listen, the ability to hear.

Strategic using of BATNA as power in negotiation
The single most important information that provides power in
negotiation is knowing other sides BATNA

How powerful are they? (Find their BATNA)

BATNA Weaken their power (their BATNA)

= POWER
Improve your Power (Your BATNA)
Coalition as a powerful form of Negotiation
• When there are two many alternatives and there is no clear
mathematical solution, we can try coalition. e this you can round and 
• What becomes important in a coalition bargaining is developing 
trust from the other parties, treating the other parties fairly
• Even on the surface you might look less powerful, but a coalition can
make your position stronger
Psychological Tools to use in Negotiation
 Descriptive
(Behavioral)

Decision Making

Prescriptive
(Normative, decision
tree)
Descriptive or behavioral decision making
• Heuristics
We as human beings use certain rule of thumbs to simplify our decision
making process, these rule of thumbs are called heuristics.
- Though it has got a lot of benefits, it also can create serious error. In
order to avoid that there must be a checklist while going with your
heuristics
Psychological tools in negotiation
• Mythical Fixed Pie Assumptions –
We assume that our interests are in direct conflict with the interests of
the other side

• Reactive Devaluation –