Alternatives to Negotiations
• PERSUASION ( convincing the other party )
• GIVING IN
• COERCION ( threatening )
• PROBLEM SOLVING
• INSTRUCTION ( employer / employee relationship )
• ARBITRATION ( seeking fairest 3rd party ruling )
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Formal Negotiation Situations
• Pre Announced meeting of two parties
• Agenda is already fixed
• More than two persons are involved
• Time to prepare and fix roles for each party
• Simpler to handle than unannounced
meetings
• Strength & Weakness
2
Informal Negotiation Situations
• Unannounced and casual meetings
• Generally two persons are involved
• It appears as casual
• It gives you no time to prepare for
discussions
• Friendly approach is meant to act as an influence on
your final decision making
• It does not allow time to study the strength or
weakness of the other side
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Distributive Negotiation
• It is a win-loss type of situation in some ways. In this
–Relationship and reputation means little in this tug of war.
–Information plays an important role.
–Less the each side knows about the others weaknesses and the
others preferences, better the position.
• It is important that
–First offer can made a strong psychological anchor point, one that
sets the bargaining range.
–Outcome relates to this offer.
4
Integrative Negotiation
• Parties cooperate to achieve maximum benefits by
integrating benefits into an agreement while also competing
to divide the value.
• You have to be good at creating value and claiming it.
• Each side willing to disclose some of its interests and others.
• If one party gives it on price, other may offer value on some
other account (credit)
• Two fold talk
• To create as much value as possible for you and for other
side.
• To claim value for yourself.
• Collaborative bargaining is win-win situation.
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Components of Success
OR
Crucial Variables
for
Successful Negotiation
Planning
Attitude
Information
Time
Power
and… 6
Limited Authority
Solutions
Establish authority early
Play on pride
Gain commitment
Invent your own authority
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Negotiation Process (REPA)
• Relate: Building a relationship
• Explore: Interests of both sides
• Propose: One concrete proposal addresses all
underlying interests
• Agree: Compromising & create alternatives
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9 9
Phases of the Negotiation Process-
Implementation Phase
• Implementation Phase
If due attention is not paid to implementation part of
a negotiation, then negotiation fails
Confirm in writing all that has been agreed upon
Mention in agreement an implementation program
Ensure every concerned person is clearly told about
agreement, its implications and actions which will
follow
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The INCREMENTAL NATURE
of
CONCESSIONS
“Concede Slowly and ask for
Something in Return”
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Know your BATNA
• Best Alternative To a Negotiated Agreement
to produce something better
• The better your BATNA the greater your power
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Framework for Negotiation
• BATNA – Best alternatives to negotiated agreement
• Reserve Price.
• ZOPA (Zone of possible agreement)
• Preferred courses in the absence of a deal.
• Alternative to negotiations
• Minimum thresh hold for a negotiations deal –
reserve price
• Flexibility of party and willingness to trade offs.
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Five Ways To Negotiate Effectively
• Learn to flinch
• Recognize that people often ask more than
they expect to get
• The person with the most information usually
does better
• Practice at every opportunity
• Maintain your walk away power
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Why do negotiations fail?
• Getting too emotional
• Focus on personalities, not issues
• Not trying to understand the other person
(too focused on our own needs)
• Wanting to win at all costs
• Regarding negotiation as confrontational
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Soft
• Tends to see negotiators as friends
• Sees agreement as the goals prepared to make
concessions to cultivate the relationship
• Is willing to trust the other side
• Is willing to modify position at an early stage
• Discloses “bottom line” early in discussions
• Avoids contests of will on particular points
• Concedes to pressure
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Hard
• Sees negotiators as opponents or adversaries
• Sees victory as the goal
• Demands concessions to establish a relationship
• Tends to mistrust the other side
• Is reluctant to alter position in any way
• Misleads as to “bottom line”
• Expects to win contests of wills
• Applies pressure
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