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What is Negotiation?
The act or process of dealing with others to reach an agreement.

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What is Negotiation all About?

    

To reach an agreement. To pass by or over safely/successfully. To deal with desires & demands. To communicate. To act for oneself or for the others.
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Instances of Negotiation
Purchasing an object at a store Agreeing on work plans Discussing a raise with your boss Signing of new business contracts Agreeing on realistic project deadlines Managing a conflict (conflict resolution)
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communication

Negotiation

Persuasion

motivation

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Communication
Empathy Rapport Tact Sympathy Listening Questioning Body language
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Motivation Maslows Hierarchy of Needs

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What is Negotiation all About?

    

To reach an agreement. To pass by or over safely/successfully. To deal with desires & demands. To communicate. To act for oneself or for the others.
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Definition
Negotiation takes place when two people (Or more), with differing views, come together to attempt to reach agreement on some issues. This may be a one-off event or part of an on-going relationship. It is a form of communication-persuasive communication; in a word, bargaining. Persuasive communication is about getting what you want, negotiation is about getting the best possible deal. This is getting what you want in the best possible way.

Negotiation Types
1.

Distributive:
Sometimes called Win/lose negotiation, distributive negotiation arises when the parties are in conflict and each sees the objective as beating the other. Tactics can thus be negative and confrontation is more likely, with a satisfactory conclusion more difficult to obtain than in mutually positive encounters.

Negotiation Types
2. Interactive:
Sometimes called Win/Win negotiation, integrative negotiation arises when the parties see the aim as being to gain agreement. Through collaboration an outcome that is acceptable to both parties.

Power TO Influence
What gives a negotiator power to influence events?:

Promise of reward Threat of Punishment Legitimacy Bogeys

Never underestimate or overestimate either your power or theirs.

Five Kinds of Power

1. 2. 3. 4. 5.

Expert Power Personal Power Reward Power Coercive Power Legitimate Power

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Sources of Power
Title Power Reward Power Punish Power Reverent power Charismatic Power Expertise Power Situation Power Information Power

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Negotiating Characteristics
1. Two or more parties are involved. 2. Involved parties common interests.

have

3. Involved parties consider

negotiations satisfactory to settle differences.

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Negotiating Characteristics (cont.)

4. Each party hopes to persuade the other

party to modify its initial position. 5. Each party has some degree of Power over the other party. 6. Results are affected by personal attitudes.

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Negotiating Characteristics (cont.)

7. Negotiations have different

qualities, depending on individuals. 8. Negotiations conduct depends on Negotiators.

9. Negotiations

Uncertainty.

involve
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Negotiation Ingredients
Knowledge of Human Behavior. Self-Preparation. Own Assumptions. Anticipation of the assumption(s). Strategies & Tactics.
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other

partys

Strategies The Overall Approach Conducting Negotiations. Tactics Particular Actions Implement a Strategy. Used

for

to

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1. 2. 3.

Has a quick Mind.

A Successful Negotiator .

Has unlimited patience. Knows how to dissemble without being a liar. Inspires trust without trusting others.

4.

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A Successful Negotiator .
1. 2.

Modest, but Assertive. Charming others without succumbing to their charm. Has plenty of money, but remains indifferent to all temptations.
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3.

Attributes of a Credible Negotiator Confidence Preparedness & Organization Knowledgeableness Honesty Firmness
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1. Aggressive Goals

4. Self-Centered Goals
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1. Aggressive Goals
Seek to Damage an Opponent. Hurt the Competitor Causing someone else to lose the respect of others
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2. Competitive Goals
Gaining more than the other party. Paying the Lowest Price Getting a Better Public Image Receiving the Highest Price
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3. Cooperative Goals
Agreement Leads to Mutual Gain. A Joint Venture, Partnership Settlement for Mutual Gain Payment Plan for the Benefit of Both Payer & Payee.
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4. Self-Centered Goals
Seek a Particular Result Regardless of What the Other Party Receives. Obtaining a Particular Property Selling a Property Gaining the Others Respect
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5. Defensive Goals
Seek to Avoid a Particular Result. Avoiding Loss of Respect Preventing a Strike Avoiding Loss of a good Customer/Supplier Maintaining a Business/Personal Relationship
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Combination of Goals
Each Negotiation Has Multiple Goals.

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1. Preparation

2. Actual Negotiation

3. Monitoring

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A Simplified Preparation Diagram

Negotiation Subject

Establish Objectives Negotiate Rehearse Options Determine Strategy Reconsider Needs Review Assumptions Rehearse Fact Define Issues Decide Positions
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II. Issues
Preparation Phase Checklist

I. FactFact-Finding

III. Arguments

IV. Agenda
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1. Fact-Finding
Financial Situation Internal Problems General Reputation Integrity & Credibility Who is the Decision-Maker
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2. Issues
Major Issues Minor Issues - Target - Initial Position - Walk-Away Point

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3. Arguments
Take Stock of all Arguments in Support of Each Position to Take. Anticipate other Partys CounterAgreements and be Prepared for it.

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4. Agenda
Decide on Proposed Agenda. Give attention Sequence. to

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Actual Negotiations
     

Orientation Phase Positioning & Arguing Exploring Possibilities Definition of Proposals Crisis Phase, and Settlement
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1. Orientation Phase
Information Exchange Introducing Teams Formal/Informal Ice-Breaking Agenda & Rules Discussion Determination of Authority Negotiators

of
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2. Positioning & Arguing

Reviewing Details. Issues in

Explaining & Defending Initial Positions, Questions and Attack those of Opponents.
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2. Positioning & Arguing (cont.)

Probing for Soft Spots. Trying to get Ideas about the Opponents Intentions, Expectations & Objectives.
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3. Exploring Possibilities
Float New Ideas and See what Responses Occur.

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4. Definition of Proposals
Firm Propositions Begin to Emerge Parties Move Towards Consensus Contours of the Agreement Emerge
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5. Crisis Phase
Deadlines & Deadlocks Occur Can Mean End Negotiation of

Can Lead to the Next Phase

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6. Settlement
Proposals begin to emerge as a probable satisfactory outcome. Difficulty to Identify a Point of Safe Stop. Tried too soon, may cause Agreement Loss.
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6. Settlement (cont.)
Left too late, may Allow Opponents to Think of New Angles. It is Important to Conclude what the Agreement is All About, with very Clear & Unambiguous Understanding.

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Successful Negotiation Strategies

1. No Concessions 2. No further Concessions 3. Making Only Deadlock-Breaking 4. High Realistic Expectations With

Small Systematic (HRESSC)

Concessions
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Successful Negotiation Strategies (cont.)

5. Concede First 6. Problem-Solving 7. Goals other than To Reach an

Agreement 8. Moving for Closure 9. Combining Strategies

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Strategy 1: No Concessions
Used when:
1. 2. 3.

Balance of Power is in Your favor. You are in a disproportionately weak position. Another Party is Waiting in the Wings.
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Strategy 1: No Concessions
Used when (Cont.):

4. The Amount of Money is Too Low

or the Time is Too Short. 5. The Same Terms Must be Available To Everyone. 6. Bids or Written Proposals are Sought.

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Trading Concessions ABCs

A. B. C.

Never Give a Concession Optimize your Concession Minimize Their Concession

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A. Never Give a Concession

 

Trade Concession Reluctantly. The Number of Variables is Finite, you want to Share. You must be Perceived as being Driving A Hard Bargain The If. Then Approach.
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B. Optimize Your Concession

Stressing the Cost to you. Referring to Major Problem you, making a concession, will solve. Implying that it is an Exceptional, Beyond the Call of Duty Concession.
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C. Minimize Their Concession

Do Not Over Thank. Depreciate & Belittle the Value of the Other Persons Concession.

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C. Minimize Their Concession

Amortize the Concession Where Appropriate. Treat Concession as Given, But Dont put a Value on it, Brief Acknowledgment.
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Strategy 2: No Further Concessions

Used when:

1. The Other Party Can be Forced to

Make the Final Concession.

2. The Situation has Changed.

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Strategy 3: Making Only Deadlock-Breaking Concessions

Used Only when the NoRisk of Agreement is Acceptable.

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Strategy 4: HRESSC
The most Generally Useful Negotiation Strategy. Relies mainly on offering High Realistic Expectations with Small Systematic Concessions.
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Strategy 5: Concede First

Viable When: You do not Concede Too Much. When this Concession will later allow you to Demand a Reciprocal Concession Without Appearing Weak.
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Strategy 6: Problem-Solving Creating a Procedural Agreement to Solve a Common Problem that has been Identified.
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Strategy 7: Goals Other Than To Reach An Agreement Reaching Agreement is not necessarily the End Purpose of all Negotiating Goals & Strategies.
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Strategy 8: Moving For Closure

Acting to Close the Deal by Creating a Firm Agreement.

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Strategy 9: Combining Strategies

Using Different Strategies at Different Stages of the Negotiation and for Different Issues.

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Negotiation Range = X XI Probable Settlement Range = Z - ZI

Your WAP ------------$ 20,000 $ 19,500 $ 19,000

---------------------------- X --Opponents initial Position Y

Opponents Target -----------Z

-------------------------------- ZI --------------------------------- YI Opponents WAP ---------------- XI
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Your Target ---------- $ 18,000 Your Initial Position-----$ 17,500

$ 17,000