NEGOTIATION SKILLS AND CONFLICT MANAGEMENT

BAU 07413

TOPIC 1: GENERAL CONCEPTS IN NEGOTIATION SKILLS

Negotiation is well-known phenomenon and it is practiced in all fields of

human activity. The word negotiate is derived from the Latin infinitive
„negotiaari‟ meaning “to trade or do business”. This verb itself was derived from
another „negare‟ meaning “to deny” and a noun, „otium‟ meaning “leisure”.
Therefore, the ancient Roman businessman would “deny leisure” until the deal
had been settled (Curry, 1999).

General meanings of the term Negotiation

 Negotiation is an activity of influencing another person. McCormack (1995)

defines negotiation in his book Negotiating as the process of getting the best
terms once the other side starts to act on their interest. In other words,
negotiation is a process to get what is wanted. It is a process that leads to
an end.
 The negotiating process involves balancing matters between two parties so
that the negotiator not only gets what he wants but also gets what he wants
in the best possible way (Forsyth, 2009). It is the journey of how to get to
the destination and not the destination itself. Negotiation is therefore all
about the process of arriving at a certain destination.
 Cambridge Advanced learner‟s Dictionary 4th Ed. defines Negotiation as
the process of discussing something with someone
in order to reach an agreement between them, or the discussions themselves

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 Companies have to negotiate in numerous areas of organizational conflict.
Negotiation is an open process for two parties to find an acceptable solution
to a complicated conflict. By Jennifer Lombardo

 Negotiation is a method by which people settle differences. It is a process by

which a compromise or an 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 organization they
represent).

However, the principles of fairness, seeking mutual benefit and maintaining a

relationship are the keys to a successful outcome.

Meaning of Negotiation in business contexts

 The act of discussing an issue between two or more parties with competing
interests with an aim of coming to an agreement
 Negotiation is a process where two or more parties with different needs
and goals discuss an issue to find a mutual acceptable solution. In
business, negotiation skills are important in both informal day-to-day
interactions and formal transactions such as negotiating conditions of
sale, lease, service delivery, and other legal contracts. This is according
to Business Queensland

Generally, negotiation is a way of settling disputes without fighting, a way of

making joint decisions when those who are making decisions hold different
views or a way of achieving your own objectives despite other participants
having different objectives.

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Negotiation skills
It can be defined as qualities or abilities that allow two or more parties to reach
a compromise. These are often soft skills and include abilities such as
communication, persuasion, planning, strategizing and cooperating.

The skills you'll need depending on your environment, your intended outcome
and the parties involved. This means, on the other hand, that negotiation skills
refers to one‟s ability that enable antagonistic parts to copy with disagreement,
with varying views and with different objectives.

Generally, negotiation skills refers to the abilities possessed by individuals for

settling disputes without fighting, a way of making joint decisions when those
who are making decisions hold different views or a way of achieving your own
objectives despite other participants having different objectives.

THE CONCEPT OF CONFLICT

Again, the garden variety approach of defining (via the dictionary) "conflict"
leads to the idea that it is an activity which leads to a "fight or struggle"
brought forth by disagreement between people with different ideas or beliefs.
This antiseptic approach to "conflict" does not tell the "whole" story; and now,
for the rest of the story! Even though the term may be difficult to definitively
describe or label, "we know it when we see it, and we certainly feel it." The fact
is that "conflict" appears everywhere. Conflict is a natural part of being; it is
just there. It has become the critical issue of our time. Obviously, it's not a
question of whether you have "conflict" in your life. It's more of what you do
with that "conflict" and how effectively you deal with it that makes the
difference.

Conflict is a clash or struggle that occurs when a real or perceived threat or

difference exists in the desires, thoughts, attitudes, feelings or behaviors of two
or more parties OR

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Conflict is a clash of interests, values, actions, views or directions (De Bono,
1985). Conflict refers to the existence of that clash. Conflict is initiated the
instant clash occurs.

Generally, there are diverse interests and contrary views behind a conflict,
which are revealed when people look at a problem from their viewpoint alone.
Conflict is an outcome of organizational intricacies, interactions and
disagreements. It can be settled by identifying and neutralizing the etiological
factors. Once conflict is concluded it can provoke a positive change in the
organization.

NATURE OF CONFLICT IN ORGANIZATIONS

Why does conflict arise?

In most organizations, conflicts increase as employees assert their demands for

an increased share in organizational rewards, such as position,
acknowledgment, appreciation, monetary benefits and independence. Conflicts
emanate from more than one source, and so their true origin may be hard to
identify. Important initiators of conflict situations include among the following:

According to De Bono (1985), in organizations, conflict ours due to the

following reasons:

(i) People’s disagreement. People disagree for a number of reasons:

(a) They see things differently because of differences in understanding and view
point. Most of these differences are usually not important. Personality
differences or clashes in emotional needs may cause conflicts. Conflicts arise
when two groups or individuals interacting in the same situation see the
situation differently because of different sets of settings, information pertaining
to the universe, awareness, background, disposition, reason or outlook. In a
particular mood, individuals think and perceive in a certain manner. For

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example, the half-full glass of one individual can be half-empty to another.
Obviously both individuals convey the same thing, but they do so differently
owing to contrasting perceptions and dispositions.

(b) People have different styles, principles, values, beliefs and slogans which
determine their choices and objectives. When choices contradict, people want
different things and that can create conflict situations. For example, a risk-
taking manager would be in conflict with a risk-minimizing supervisor who
believes in firm control and a well-kept routine.

(c) People have different ideological and philosophical outlooks, as in the case
of different political parties. Their concepts, objectives and ways of reacting to
various situations are different. This often creates conflicts among them.

(d) Conflict situations can arise because people have different status. When
people at higher levels in the organization feel indignant about suggestions for
change put forward from their subordinates or associates, it provokes conflict.
By tolerating and allowing such suggestions, potential conflict can be
prevented.

(e) People have different thinking styles, which encourage them to disagree,
leading to conflict situations. Certain thinking styles may be useful for certain
purposes, but ineffectual or even perilous in other situations (De Bono, 1985).

(f) People are supposed to disagree under particular circumstances, such as in

sports i.e. differed in hobbies and interests. Here conflict is necessary, and
even pleasurable.

(ii) People are concerned with fear, force, fairness or funds

(a) Fear relates to imaginary concern about something which might happen
in the future. One may fear setbacks, disgrace, reprisal or hindrances which
can lead to conflict situations.

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(b) Force is a necessary ingredient of any conflict situation. Force may be
ethical or emotional. It could be withdrawal of cooperation or approval. These
forces are instrumental in generating, strengthening and terminating conflicts.
It is when force is applied by those in power to their subordinates.

(c) Fairness refers to an individual's sense of what is right and what is not
right, a fundamental factor learnt in early childhood. This sense of fairness
determines the moral values of an individual. When fairness not observed
across all employees in an organization, conflict is inevitable.

(d) Funds or costs can cause conflict, but can also force a conclusion through
acceptable to the conflicting parties. The cost of being in conflict may be
measurable (in money terms) or immeasurable, being expressed in terms of
human lives, suffering, diversion of skilled labour, neglect or loss of morale and
self-esteem.

(e) Double standard; it is when employees in the same organization are treated
unequally. Unequal treatment results to conflicts particulars the conflict with
management team.

CONDITIONS CREATING CONFLICT SITUATIONS IN ORGANIZATIONS

According to Kirchoff and Adams (1982), there are four distinct conflict
conditions, i.e. high stress environments, ambiguous roles and responsibilities,
multiple boss situations, and prevalence of advanced technology.

Filley (1975) identified nine main conditions which could initiate conflict
situations in an organization. These are:

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 (i) Ambiguous jurisdiction, which occurs when two individuals have
responsibilities which are interdependent but whose work boundaries
and role definitions are not clearly specified.
(ii) Goal incompatibility and conflict of interest.
It refers to accomplishment of different but mutually conflicting goals
by two individuals working together in an organization. Obstructions
in accomplishing goals and lack of clarity on how to do a job may
initiate conflict. Barriers to goal accomplishment arise when goal
attainment by an individual or group is seen as preventing another
party achieving their goal.
(iii) Communication barriers; difficulties in communicating can cause
misunderstanding which can then create conflict situations.
(iv) Dependence on one party; by another group or individual.
(v) Differentiation in organization; where, within an organization, sub-
units are made responsible for different, specialized tasks. This
creates separation and introduces differentiation. Conflict situations
could arise when actions of sub-units are not properly coordinated
and integrated.
(vi) Association of the parties and specialization. When individuals
specialized in different areas work in a group, they may disagree
amongst themselves because they have different goals, views and
methodologies owing to their various backgrounds, training and
experiences.
(vii) Behaviour regulation; Organizations have to have firm regulations
for individual behaviour to ensure protection and safety. Individuals
may perceive these regulations differently, which can cause conflict
and negatively affect output.
(viii) Unresolved prior conflicts; which remain unsettled over time create
anxiety and stress, which can further intensify existing conflicts. A
manager's most important function is to avoid potential harmful

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 results of conflict by regulating and directing it into areas beneficial
for the organization.

EFFECTS OF CONFLICTS

Conflict situations should be either resolved or used beneficially. Conflicts can

have positive or negative effects for the organization, depending upon the
environment created by the manager as she or he manages and regulates the
conflict situation.

Positive effects of conflicts

Below are some of the positive effects of conflict situations as postulated by

Filley (1975):

 Diffusion of more serious conflicts. Games can be used to moderate

the attitudes of people by providing a competitive situation which can
liberate tension in the conflicting parties, as well as having some
entertainment value. In organizations where members participate in
decision making, disputes are usually minor and not acute as the
closeness of members moderates belligerent and assertive behaviour into
minor disagreements, which minimizes the likelihood of major fights.
 Stimulation of a search for new facts or resolutions. When two
parties who respect each other face a conflict situation, the conflict
resolution process may help in clarifying the facts and stimulating a
search for mutually acceptable solutions.
 Increase in group cohesion and performance. When two or more
parties are in conflict, the performance and cohesion of each party is
likely to improve. In a conflict situation, an opponent's position is

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 evaluated negatively, and group allegiance is strongly reinforced, leading
to increased group effort and cohesion.
 Assessment of power or ability. In a conflict situation, the relative
ability or power of the parties involved can be identified and measured.

Negative /destructive effects of conflicts

 Impediments to smooth working

 Diminishing output
 Obstructions in the decision making process and
 Formation of competing affiliations within the organization.

However, the overall result of such negative effects is to reduce employees'

commitment to organizational goals and organizational efficiency.

THEORIES OF CONFLICT MANAGEMENT

Conflict is defined as disagreement between individuals. It can vary from a mild
disagreement to a win-or-lose, emotion-packed, confrontation. Kirchoff and
Adams (1982) suggest two theories of conflict management.

The traditional theory

The theory holds that conflicts are bad things caused by trouble makers that
should be subdued.
Contemporary theory
This theory holds that conflicts between human beings are unavoidable. They
emerge as a natural result of change and can be beneficial to the organization,
if managed efficiently. An atmosphere of tension, and hence conflict, is thus
essential in any organization committed to developing or working with new
ideas.

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CONFLICT-RESOLUTION BEHAVIOUR

Depending on their intentions in a given situation, the behaviour of conflicting

parties can range from full cooperation to complete confrontation. Two
intentions determining the type of conflict-handling behaviour
are assertion and cooperation: assertion refers to an attempt to confront the
other party; and cooperation refers to an attempt to find an agreeable solution.

Depending upon the degree of each intention involved, there can be five types
of conflict handling behaviour (Thomas and Kilman, 1976). They are:

 Competition is a win-or-lose style of handling conflicts. It is asserting

one's one viewpoint at the potential expense of another. Competing or
forcing has high concern for personal goals and low concern for
relationships. It is appropriate in dealing with conflicts which have no
disagreements. It is also useful when unpopular but necessary decisions
are to be made.
 Collaboration aims at finding some solution that can satisfy the
conflicting parties. It is based on a willingness to accept as valid the
interests of the other party whilst protecting one's own interests.
Disagreement is addressed openly and alternatives are discussed to
arrive at the best solution. This method therefore involves high
cooperation and low confrontation. Collaboration is applicable when both
parties desire to solve the problem and are willing to work together
toward a mutually acceptable solution. Collaboration is the best method
of handling conflicts, as it strives to satisfy the needs of both parties. It is
integrative and has high concern for personal goals as well as
relationship.
 Compromise is a common way of dealing with conflicts, particularly
when the conflicting parties have relatively equal power and mutually
independent goals. It is based on the belief that a middle route should be
found to resolve the conflict situation, with concern for personal goals as
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 well as relationships. In the process of compromise, there are gains and
losses for each conflicting party.
 Avoidance is based on the belief that conflict is evil, unwanted or
boorish. It should be delayed or ignored. Avoidance strategy has low
cooperation and low confrontation. It is useful either when conflicts are
insignificant or when the other party is unyielding because of rigid
attitudes. By avoiding direct confrontation, parties in conflict get time to
cool down. Avoiders deliberately ignore or withdraw from a conflict rather
than face it. Avoiders do not seem to care about their issue or the issues
of others. People who avoid the situation hope the problem will go away,
resolve itself without their involvement or rely on others to take the
responsibility.
 Accommodation involves high cooperation and low confrontation. It
plays down differences and stresses commonalities. Accommodating can
be a good strategy when one party accepts that it is wrong and has a lot
to lose and little to gain. Consequently, they are willing to accommodate
the wishes of the other party.
Accommodation is for situations where you don't care as strongly about
the issue as the other person, if prolonging the conflict is not worth your
time, or if you think you might be wrong. This option is about keeping
the peace, not putting in more effort than the issue is worth, and
knowing when to pick battles.

WHAT IS COMPROMISE?
Compromise is an attempt to resolve a conflict by identifying a solution that is
partially satisfactory to both parties, but completely satisfactory to neither.

Compromises usually occur in win-lose situations -- when there is a fixed pie

to be divided up, and whatever one side gets, the other side loses. In
compromise situations, neither side gets all of what they really want, but they
each make concessions in order to reach an agreement that is acceptable to

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both.

 This usually takes place around a single issue, such as the price of an
item. For example, Juan and Antonia want to buy a house that is on the
market for $200,000. However, they do not want to pay that much, so
they make an offer of $160,000. Bob, the seller, does not want to go that
low, but does want to sell the house soon, so he offers to sell for
$180,000. Juan and Antonia accept the deal and the house is sold. In
this case, Juan and Antonia paid $20,000 more than they wanted to and
Bob sold for $20,000 less, but the house was exchanged, which was the
main goal of both parties.

WHAT IS ACCOMODATION?

Accommodation as a negotiating style is characterized by the desire to please

others at the expense of your own interests. This approach is often called
“lose-win negotiation” or “soft negotiation”. Accommodation is very
appropriate when the issues are much more important to the other party
and there is an opportunity to build “credits” for later use on more important
issues. This is the principle of making concessions in negotiation. Other
uses for an accommodating approach include:

 when you find out that you are in the wrong;

 you want to seem reasonable;

 continued competition would only damage the situation or

the relationship;

 preserving the relationship is especially important; and

 You want to minimize losses by conceding early.

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Potential negative consequences of accommodating include

 frustration as own needs are not met;

 relinquished (Abandon or give up) best solution; and

 self-esteem undermined

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The origin of negotiation
The history of negotiation can be traced back to the times of Monarch era
where Kings used to negotiate at the time of ongoing Wars in order to prevent
the bloodshed in war. After the two great World Wars in the 20th century the
negotiation rounds resulted into the creation of League of Nations followed by
United Nations.

The frequency of negotiation has increased over the time. The major objective
behind negotiation is that the parties involved wishes to settle the dispute
outside the court. The litigation process has its own disadvantages such as:
bulky paperwork, excessive time, delays in process, costly- expensive and
unfavorable decision.

Because of such reasons alternative dispute resolution gained fame and with
increase in fame of negotiation the demand for experienced negotiators also
increased. Negotiation is considered to be alternative dispute resolution as an
informal process which helps the parties to resolve that differences through
mutual understanding and agreement.

Scope of negotiation
Some situations in which negotiation is applicable include:
Marital Deadlock
Where a dispute involves a relationship of marriage the pre litigation process
includes negotiation. In such disputes sentiments and ego between husband
and wife in a conjugal relationship are often settled by communication during
negotiation process.

Business Negotiation
Business negotiation aims to manage business and corporate matters. The
skills which are required in such negotiation includes making deals discussion

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on profits of the company, team building, negotiation of contracts, negotiating
a salary hike with the HR manager after promotion, negotiating a project
deadline with your team lead or manager, negotiating few days off for a family
holiday with your manager and negotiations with employees and laborer's
efficiently handling cases of disputes between clients and employees.
In order to establish a business agreement, the art of negotiation is essential
full stop business negotiation can be considered as a skill where in the big
problems are drop down to small chunks and to every touch problem a solution
is carefully found out.

Contract-Based Negotiations
Before entering into a contractual relationship, the parties negotiate the terms
condition of dispute. This type of negotiation is the most famous type of
negotiation and is in somewhat line with that of business negotiation. After a
breach of contract, the deadlock can also be settled with the help of
negotiations.

International Negotiations
The conflict between different nations can easily turn into scandals that need
to be resolved immediately. The international negotiations generally take a
longer time than other negotiation processes as this process is complicated and
involve various steps s bureaucrats are involved in the process. The major
objective of International Organization is primarily to allow a smooth
interconnectivity and interrelations between Nations in such a way that it is
beneficial for both for all countries in the economy.

Generally, it can be argued that 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

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can be of great benefit in resolving any differences that arise between you and
others.

Characteristics of Negotiation Process

Negotiation process principally bears the following features:

Voluntary
Process of negotiation is conducted through free consent of parties. No party is
forced to participate in the process. The outcome of negotiation can be freely
accepted or rejected at the will of parties. Also, at any point of process it can be
withdrawn. The parties can directly negotiate or they may choose anyone to be
represented.

Bilateral/ Multilateral
The process of negotiation can involve two or more parties. The parties can
range from two individuals seeking to agree on a particular issue differed in
views.

Non-Adjudicative
Negotiation is an informal process which only involves the parties. The outcome
is amicable reached by the parties together without any records to a third party
through mutual understanding.

Informal
Unlike arbitration negotiation is an informal process which has no prescribed
rules and regulations. The parties get a free will to adopt whatever rules they
choose if any. Generally, the parties agree on the issues such as the subject
matter timing and location for the process. Other rules may include metals
such as confidentiality number of negotiating sessions and which documents
may be used can be addressed.

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STAGES OF NEGOTIATION (PROCESS)
Each negotiation has its own unique characteristics. Therefore, there is no
such uniform and exclusive method of negotiation and bargaining session. A
structured approach has to be followed in order to come at a desired outcome.
Therefore, various steps have to be followed in the negotiation process so that
the parties with conflicting ideas and differences reach to an amicable solution.

Preparation/ Initial Assessment

The process of negotiation begins with the signal of communication from one
party to the other showing a willingness to bargain. As negotiation is a
voluntary process it is of primary importance to know that whether the other
party is interested in negotiation or not.

Some of the important factors should be ensured before moving on. They are:
 if there is desire to resolve the dispute
 the credibility of other parties
 the willingness of parties to preserve or establish the relationship
 whether there is disparity between the parties that it would be impossible
to bargain equal or not
 Desirability of using any other form of dispute resolution system.
This stage involves ensuring the important facts of the dispute and its situation
in order to clarify the position of both the parties. Before any negotiation takes
place, a decision shall be taken as to when and where the meeting for
negotiation shall happen and as to who will attend the discussion and
negotiation sessions. During this time setting of a limited timescale can help
prevent this agreement continuing.

Discussions
Once it has been established that negotiation is the appropriate course of
action the further arrangement shall be made in that course with the other
party included. The arrangement must include:
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  outlining the scope of negotiation
 forming a time table as to whether or not that will be a fixed duration of
negotiation
 ensuring that all the interested parties are identified and have been
consulted
 Choosing a location feasible to both the parties.
During this stage the parties of other side put forth their case as they see it
and try to understand the vice-versa situation. Clarification as to
misunderstandings and disagreements shall be spoken and heard. An equal
opportunity shall be granted to both the side.

Clarification of Goals
From the second stage of discussion whatever goes interest and viewpoints of
the parties of this agreement needs to be clarified. To clarification it becomes
easy and possible to identify and establish a common ground post settlement.
Clarification is one of the crucial parts of negotiation process is without a
doubt the misunderstanding and disagreements are likely to continue which
main result to cause problems and barrier in reaching a beneficial outcome.
This can lead to harmonizing and reconcile the bearing and competing interest
of the parties.

Negotiating Towards a Win-Win Situation

It is not always possible to reach to a Win-Win situation but it shall be the
ultimate goal. This stage focuses on which can be termed as Win-Win outcome
wherein both the parties may have the satisfaction that they have gained
something positive through the process and both the parties may feel that their
point has been considered.

Agreement
A proper agreement can be achieved only when both the parties understand
each other‟s point of view and interest are considered simultaneously. For every
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member involved in the negotiation process, it is essential to keep an open
mind so that an acceptable solution can be reached full stop, and such
agreement needs to be clearly communicated so that no further dispute can
occur.

Implementation of action
Once agreement is reached a proper course of action has to be implemented so
that the decision can be carried out.

Advantages of Negotiation in business contexts

1. Party-based dispute resolution

One of the primary reasons for success of negotiation is that it only involves
the stakeholders and does not involve any other party as a result of which the
process remains a private affair and confidential. The parties decide the subject
matter duration of process locations papers to be referred.
2. Freedom of Parties
The parties are at freedom to choose agendas of the choice in addition to
ensure your objective that negotiation is achieved be implemented successfully.
3. Consent of Parties
The negotiation process ensures that both the parties involved in negotiation
have free will in participating and that no one is forced to engage in the
process. This freedom also ensures that all the parties are at equal footing and
there is no play of powers.

4. No Third-Party Intervention
Unlike most of the radius system which requires a neutral third party for
dispute resolution, that is not the case with negotiation. Only responsible
parties meet for negotiation and no room for intruders.

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 5. Comfortable Process
Negotiation is an informal process. It is normally a speedy process whose
decisions are not binding upon the parties. Latest a completely self-build
process wherein the decision can either be accepted or rejected by the parties
at their own win all the process can be withdrawn at any point of time.

6. Improvement in Relations
Once the negotiation process is successfully completed, it results to
improvement in the relation between the parties. And it also facilitates the
process of negotiation for any further education.

Disadvantages of Negotiation
1. Power Tactic
It is not always necessary that the parties to negotiations are of equal stature
and power. Therefore, in the absence of a neutral third party the party
whichever is in the position to dominate the other uses the dominance over the
consent of other party and come at an agreement. This leads to an unfair
agreement which is ultimately useless.

2. Impasse
Sometimes the difference is and disagreement between the parties may lead to
a deadlock situation. And Impasse situation occurs during the negotiation
process where at any discussion the parties are stand still and cannot have
any for the discussion. This stage is very frustrating when no possible
successful outcomes can happen. This generally happens when any one party
is so rigid over its goal that no middle ground can be achieved. This ultimately
results into a walkout situation.

3. Backing off
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The unsuccessful negotiation leads to creation of bad relations between the
parties along with termination of any business are contractual relations
afterwards. It also happens that sometimes the parties lose confidence in the
process of negotiation as a dispute resolution and consider the other
options.

4. Not all issues are Negotiable

There are various cases which involve multiple stakeholders for home
negotiation process cannot be made applicable and such cases can directly go
to the court for the decisions.

FAILURE OF AGREEMENT
It is when the process of negotiation breaks down and agreement cannot be
reached and 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.

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. However, when it comes
negotiation is totally impossible and mutual agreement can‟t be reached, legal
procedures can be rooted for further decision.

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MITAKES THAT RESULTS TO THE FAILURE OF NEGOTIATION
Negotiation is a vital skill for professionals in today‟s business environment. If
you‟re aiming to maximize value for your organization at the bargaining table,
there are a number of best practices and tactics you can employ to craft a
winning strategy. Here under are some common negotiating mistakes to keep
in mind which people commit while at the bargaining table.

i. Forgetting to Shake Hands

While a handshake may seem like a simple gesture, it can have a major impact
on the outcome of a negotiation. Handshake fosters collaboration and promote
deal-making in the bargaining process. Across many cultures, shaking hands
at the beginning and end of a negotiating session conveys a willingness to
cooperate and reach a deal that considers the interests of the parties at the
table.

ii. Letting Stress and Anxiety Affect Your Demeanor

Before entering into a negotiation, take some time to collect your thoughts and
get your emotions in check so that you don‟t carry negative emotions into the
negotiation which might impact your success. Further, stress and anxiety can
affect your ability to adequately communicate your position and can snowball
into other issues as the conversation goes on. You may be reluctant to reveal
your interests, for example, fearful of being exploited. And if you‟re wary of
others, you may be too quick to interpret an innocent question as a ploy.
iii. Neglecting the Other Side’s Perspective
A negotiation is a two-way street. In addition to representing your own
interests, you need to be open to hearing the other side‟s point of view. Rather

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than simply asking what the other person is hoping to gain, seek to
understand the reasoning behind their motives.

iv. Negotiating Against Yourself

Listening to the other side throughout the negotiation process can reveal key
details about the goals they want to achieve. Basically, Negotiation is just
another word for persuasion, and it's all about convincing the other side to see
your side of the story.

v. Using Aggressive, Accusatory Language

Despite all, strategies and tactics, how you communicate during a negotiation
can divulge a lot about your willingness to cooperate. Instead of the pronoun
“I,” emphasize your willingness to work together by using “we” statements and
empathetic phrasing that acknowledges how the other side feels. Opt for more
open-ended questions, such as “What led you to make that choice?” so you can
invite the other side to explain their reasoning, rather than just defend their
actions.

vi. Immediately Giving in to Ultimatums

Negotiations can be contentious. Sometimes, you‟re presented with ultimatums
that push you to decide whether to take the deal on the table or face impending
consequences. In the face of such scenarios, it can be the words you don‟t say
that have the greatest impact.

vii. Rushing the Process

Reaching an agreement that satisfies all parties in a negotiation takes time and
patience. There can be a lot at stake, and the process shouldn‟t be rushed if
you hope to achieve the best possible outcomes for your organization.

viii. Not Understanding Your BATNA

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Not all negotiations will end in a successful business deal. In cases where the
zone of possible agreement (ZOPA) fails and a mutually agreeable solution isn‟t
possible, a common mistake is failing to understand your BATNA. Failing to
understand your BATNA before initiating a negotiation can lead you to make
rash decisions under pressure. To avoid making this mistake, consider the
alternatives that are available well in advance of the negotiation.

ACTIVE LISTENING IN NEGOTIATION

Active listening is one of the crucial skills for successful negotiation. Contrary
to popular belief, active listening doesn‟t mean sitting patiently while your
counterpart talks. Nor does it simply entail saying “I understand” or
establishing good eye contact. Rather, active listening is associated with some
elements to include:

1. Showing your interest: prove that you‟re listening by using body language.
Also, brief verbal replies show interest and concern. Simple phrases such as
“yes,” “OK” or “I see” effectively show you are paying attention. This encourages
the other person to continue talking and relinquish more control of the
situation to the negotiator.

2. Paraphrasing: Tell the other person what you heard they say, either quoting
them or summarizing what they said.

3. Emotion Labeling: This means attaching a tentative label to the feelings

expressed or implied by other person‟s words and actions. This shows you are
paying attention to the emotional aspects of what other person is conveying.
When used effectively, emotion labeling is one of the most powerful skills
available to negotiators because it helps identify the issues and feelings driving
the other person‟s behavior.

4. Mirroring: Repeating the last words or main idea of other person‟s message.
This indicates interest and understanding. For example, a subject may say,

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“I‟m sick and tired of being pushed around,” to which a negotiator can respond,
“Feel pushed, huh?” Mirroring can be especially helpful in the early stages of a
crisis, as negotiators attempt to establish a non-confrontational presence, gain
initial intelligence and build rapport.

5. Open-Ended Questions: Use open-ended questions instead of “why”

questions, which could imply interrogation. If you do most of the talking, you
decrease the opportunities to learn about other person. Effective open-ended
questions include, “Can you tell me more about that?” “I didn‟t understand
what you just said; could you help me better understand by explaining that
further?” and, “Could you tell me more about what happened to you today?”

6. “I” Messages: Negotiators have to avoid being provoking when they express
how they feel about certain things the other person says or does. Using “I”
statements lets you ostensibly shed the negotiator role and react to the subject
as just another person.

7. Effective Pauses: Any good interviewer knows the power of the long,
awkward silence. People tend to speak to fill spaces in a conversation.
Therefore, you should, on occasion, consciously create a space or void that will
encourage the other person to speak and, in the process, provide additional
information.

QUESTIONING TECHNIQUES IN NEGOTIATION

Questioning techniques is another issue of concern in negotiation process.

Questioning can make negotiation bear results quickly that can be negative or
positive.

Think of: do you ask good questions in your business negotiations? You want
and need information, and to win "yeses" rather than emotional resistance or
indifference.

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Asking questions in the right way is both an art and a science. Ask the
question the wrong way, and the other negotiator might act like a turtle,
becoming defensive and withdrawing into their shell. Ask the question the right
way, and the other negotiator might “spill the beans.” Let‟s look at some of the
important distinctions in asking good questions to gain an advantage.

The following are good types of questions to have in your repertoire when
negotiating to move the sale or purchase in your desired direction, or
simply to get the information you need.

1. Use open-ended questions

These are the kinds of questions that require a detailed answer in a negotiation
and cannot be simply replied to with a “yes” or “no” response. These questions
consist of using who, what, where, when, why, and how. The respondent has
no alternative but to provide some detail.
Example: “How did you arrive at that particular price?”

2. Use open opportunity question

This form of question invites the person to participate and offer their views.
Example: “What do you think of this option as a solution?”

3. Use leading question

Just like it sounds, with this type of question, you try to guide the person to
your point of view in a persuasive manner. Example: “With all these advantages
I‟ve pointed out, don‟t you think that this package benefits us both and is the
best way to go for both of us?”
Or, another form of leading negotiation question simply tails off and invites the
other person to fill in the blanks. Example: “And after we provide those
documents that you just mentioned, you will….?”

4. Use low-key question

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This is a gentle way to ask a question and not trigger an emotional or hostile
response.
Example: “How much more will this cost if we chose this additional feature?”

5. Use sequential questions

Sometimes, it can be a wise strategy to ask a series of questions to lead up to
and achieve a particular conclusion. Generally, it might be a good idea to plan
these kinds of question in advance.
Example: “And after you complete the first delivery, how long will it take for you
to have the second shipment ready and sent to us?”
6. Use flattery question
This is an effective means to both be complimentary towards the other
negotiator and to elicit information, both at the same time. Most people
respond well to a friendly compliment.
Example: “Could we draw upon your particular and specialized expertise to add
some input into this particular issue?”

7. Use emotional thermometer

There are occasions when you will sense that something might be starting to
boil beneath the surface. This might be a good time to address a pending
emotional response that might derail the negotiation by simply checking out
how the other person feels about certain issues.
Example: “How do you feel about that aspect of the settlement package?”

LANDMINE QUESTIONS
These are the kinds of questions that can be counterproductive,
confrontational, and can evoke negative emotional responses. When used in
the wrong stage of a negotiation, you might put the other side on the defensive
or cause them to respond aggressively in return. Either way, your negotiation
could end up being inadvertently derailed. These include:

1. Aggressive questions
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Certain kinds of question can result in being too pushy, especially when used
at the wrong stage of your negotiation. For example: “You‟re not trying to
pull a fast one on us are you?”

2. Loaded questions
This style of question puts the person on the hot seat regardless of how they
respond to the answer, and therefore puts them in a very defensive position. It
is very aggressive.
Example: “Do you expect me to believe that this is the only acceptable solution
that you will accept?”

3. Emotional trigger questions

Certain questions are likely to result in triggering a powerful emotional
response, particularly when posed with a tint of arrogance or insulting and
scorn. You are definitely not going to add to your knowledge base by adopting
this type of question because it‟s like shooting yourself in the foot in the
process. Example: “Do you really think that this ridiculous proposal is worth
wasting my time?”

4. Impulsive Question
This is the type of question that pops out of your mouth before you gave it any
thought. Always think, then ask⁠-not the other way around.

5. Tricky question
These are the questions that are loaded with innuendo and may imply a threat
or some similar action. Example: “Are you going to cede to the demands we‟ve
outlined, or take us to arbitration?”

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NONVERBAL COMMUNICATION IN NEGOTIATION

Negotiating successfully is all about arguing and defending our interests in the
right way. Body language is a key element whose command is a challenge in
that it can determine the outcome of a negotiation. These include among the
following:

1. Mirror the other person

Look at the body language of the other person and try to adopt their same tone
and behavior. This is the „mirroring‟ technique; try to imitate others so as to
favor a situation of trust. If our interlocutors lean forward, that will show
connection and understanding. If they don‟t, and they lean backwards or cross
their arms instead, you must try to restore harmony and ask them what the
cause of their upset is, as those are gestures denoting discontent.

2. Nod and keep eye contact

Nodding and keeping eye contact is essential to reduce tension and build
relationships, even if you are in the middle of a disagreement or harsh
criticism. There are many aspects of body language that can spoil a
negotiation, but hesitant eye contact is the most damaging one. “The eyes are
the windows to the soul” is a saying also applicable to communication: when
you avoid eye contact, you are showing unease and lack of confidence, which
translates into a burden for any negotiator.

3. Pay attention to your hands

Your hands should show confidence and calmness. If you are in the middle of a
negotiation, you must avoid showing a feeling of restlessness (if you put your
hands together too often). The best you can do is to keep your hands in a
natural position to convey tranquility.

4. Relax your body

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Even in intense negotiations, it is important to keep a relaxed body position to
help you relieve tension. Add to that a soft and non-aggressive tone of voice to
build trust and favor effectiveness in negotiations.

5. Don’t forget to smile

It is highly likely that we will try to build long-term relationships in a
negotiation. In the Merchants negotiation course, emphasis is placed on these
types of relationships, to be built on friendly and sincere foundations. Smiling
and showing a natural and transparent attitude is essential for the agreement
to succeed.

PRINCIPLES OF NEGOTIATION

Fisher and Ury (1981) summed up their approach to integrative bargaining

with what they call the “seven essential elements of principled negotiation:

1. Identify interest

According to Fisher and Ury, the first step in principled negotiations is to

identify the interests involved in an issue area as opposed to dealing with
positions of the negotiating parties. Integrative approaches maintain that to
negotiate efficiently negotiators should go beyond positions and seek to satisfy
true underlying interests. In so doing, negotiators can approach issues of
mutual concern with greater creativity, understanding and flexibility. Interests
may be harder to identify than positions and may be unspoken or even hidden
behind a party‟s stated demand or position. Often parties may not have
carefully defined their own underlying interests in a particular issue for
themselves.

2. Separate People from the problem

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Fisher and Ury argue that parties in a dispute often forget that the other side
consists of people who, just like themselves, are subject to the human frailties
such as emotions, potentials for misunderstandings and mistaken
assumptions. A negotiator is therefore to separate the people from the problem.
This means finding a way for solving problem without getting distracted by
personal elements, and coming to an agreement in a manner that will preserve
the relationship. That is to say, on the other hand, that it is important to save
others face despite all.

3. Find the alternatives

Fisher and Ury argue that it is crucial for both parties to know their Best
Alternative to a Negotiated Agreement (BATNA) both before and throughout all
stages of a negotiation. Fisher and Ury argue that having a resolute bottom line
can come at high costs. By its nature, a bottom line can be inflexible and
onerous. It can prevent creative thinking and lock parties into positions that
may prevent them from coming to a favorable solution.
Negotiators who fail to evaluate (and reevaluate) their alternatives to an
agreement both before and during the process may therefore also be in danger
of rushing to an agreement without having fully considered their or the other
party‟s alternatives, leading one side to end up with a deal that should have
been rejected.

4. Identify the options

In negotiations, options are possible solutions to a problem shared by two or
more parties. In integrative bargaining, options represent possible ways of
meeting as many of both parties‟ interests as possible. Generating options
through techniques such as brainstorming -a technique which involves inviting
all parties to list any idea that comes to mind without criticizing or dismissing
those ideas - helps to encourage creative thinking about a problem and
increases the chances that the parties involved will formulate a “win-win”
solution.

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 5. Have commitments
A negotiated settlement is only enduring if all parties honor the commitments
that they make. Those that fail to follow through on their promises stand to
suffer a loss of integrity, be subject to the resentment of the other side, and
risk that their partner in the negotiations (and possibly others outside of the
deal as well if word of their reputation escapes) will refuse to deal with them in
the future. One way to build trust is to create a commitment structure that can
be implemented in stages. Parties may be more willing to make a deal with an
opponent when there is an opportunity to demonstrate that each side is
honoring their commitments along the way. Once trust is broken, how can
parties recover?

6. practice good communication

Negotiation is only possible through communication. Good communication can
change attitudes, prevent or overcome deadlock and misunderstandings and
help to improve relationships. Above all, good communication skills are
essential to cogently relay your message, and to thoroughly understand the
message of the other side. In addition, integrative approaches stress the
importance of sharing information as a means of uncovering interests and of
helping parties to explore common problems or threats. Still, negotiators are
frequently hampered in their roles by common communicational errors or
inefficiencies.

7. Have criteria/Legitimacy
There is a better way to approach the negotiation process. This involves
invoking objective criteria as part of the negotiation process. In negotiations,
joint decision-making is a process that increases the perceived fairness of the
negotiations, improves satisfaction with outcomes, promotes positive relations
between parties, enhances the legitimacy with which agreements are viewed,
and helps to create a willingness to abide by the commitments made. By
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framing negotiations as a decision making process based upon objective
criteria, negotiators free themselves and the other side from needing to cling to
a position stubbornly in order not to appear (or feel) weak or disingenuous.

NEGOTIATION IN BUSINESS CONTEXTS

Business negotiation is a critical part of the day-to-day life of any business.

Making or breaking a deal can have tremendous consequences for your
company. Missing out on opportunities can deal a fatal blow to an otherwise
great product or service.
As it was discussed before, a business negotiation can be seen as a discussion
between two or more parties focused on conflict resolution. The goal is to arrive
at a win-win situation, meaning all sides will benefit from the contract signed
in the end. Since participants all have different outlooks and strategic
interests, making concessions is required in order to make progress.

Negotiation can take place between buyers and sellers, employers and
prospective employees, two or more governments, and other parties. Here is
how negotiation works and advice for negotiating successfully.

Preparation for business negotiation in an organization

Most people succeed or fail in a negotiation based on how well-prepared they
are or not. The reality is that most people are woefully unprepared when they
enter a negotiation. Many business executives describe their negotiations as
win-win, only to discover they have left thousands of dollars on the table.
Research indicates that fewer than 4% of managers reach win-win outcomes
and the incidence of outright lose-lose outcomes is 20%. Even when
negotiators are in perfect agreement, they fail to realize it half the time.

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Based on the research out comes, SOS method has been developed for
successful negotiation so as to avoid the common mistakes.
SOS consists of three steps: (1) Self-assessment; (2) Other party assessment;
and (3) Situation assessment. Most people have no problem in engaging in
some modest amount of self-assessment. They ask themselves “what do I want
from this deal?” Unfortunately, most people begin and end here. So how should
you engage in self-assessment?

Self-Assessment
A good negotiator begins by the strategic planning process by assessing her
interests, BATNAs, (Best Alternative to Negotiation Agreements) and otherwise
framing up their side of the negotiation. In doing so, she will seek to
understand both sides of the negotiation.

Elements of Self-Assessment in a Negotiation

 Interests
Identify your interests at stake in the negotiation. Prioritize these interests
based on personal objectives. If interests are interrelated, attempt to determine
optimal outcomes for combinations of interests.
 Alternatives & Resistance (Reservation) Point
After determining the interests at stake (or potentially at stake) in a
negotiation, determine the Best Alternative to a Negotiated Agreement (BATNA)
for each interest. This will allow you to identify a reservation point as to that
interest.
 Target or Desired Outcome
Once you have identified all the relevant interests in a negotiation, you should
identify the desired outcome for each of these interests. From there, you can
establish a target point, which is the upper limit of what you expect to get out
of the negotiation.
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  Risk Propensity
Risk is the probability of an undesirable outcome. Understanding that risk is a
part of any structured negotiation, try to understand your willingness to accept
the possibility of an outcome that is negative or does not meet your interests.
Understanding your risk propensity will help you in determining or setting your
negotiation BATNA.

Other Party Assessment

Assessing counterparty simply means taking steps to uncover any relevant
information about other party. The resistance point will likely be tied to the
options available for a given interest or the collective interests at issue.
However, assessing these attributes of the counterparty can be quite difficult.
Again, these attributes cannot be ascertained. Thus, a party must make
assumptions or estimates regarding the other party's dispositions. In any
event, a negotiator should attempt to uncover as much of said information as
possible.

Situation Assessment
The objective of a situation assessment is to develop a common understanding
of the substance of the problem, the needs and interests of the parties, and the
risks associated with different procedures for resolving the issues.

In assessing situation, you can ask yourself the following questions.

 What is the timing of the negotiation?

 What is the geography or location of the negotiators?
 What communication methods are employed?
 Is this a single or repetitive negotiation?
 Is there a power dynamic
 What resources are available to support the negotiation?
 Is the negotiation for a transaction or a dispute situation?
 Are the negotiations public or private?
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 TYPES OF NEGOTIATIONS
There are two types of negotiations
i. Distributive negotiation

Distributive negotiation is a type of negotiation in which parties bargain for

shares of a fixed resource. This is also known as distributive bargaining, it can
be used in labor negotiations, sales, and in any problem-solving scenario where
people are trying to divvy up things of value.

SPIN PRINCIPLE

The SPIN question consists of sequence of four question types. This model is
the acronym an acronym as prolonged hereunder:

S – Situation question

P – Problem question

I – Implication question

N – Need – payoff question

1. SITUATION QUESTION

This question is used to collect facts and data about the

customer‟s/buyer existing situation that is relevant to the one selling the
product and services. Situation question are normally the first question
one need to ask after he has introduced himself to the prospect buyer.

Often situation question can be as part of the prospecting process. Hence

one need only to ask “essential” situation questions as prospect buyer
quickly becomes impatient if many questions are asked.

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 Having a good knowledge or information of prospects customer can help
planning the call in a way to reduce the number of situational questions
required.

Examples of situational questions might include. What happened when

your laptop broke down? What equipment are you using now? How long
have you had it? How many people use it?

2. PROBLEM QUESTIONS

These are questions which are designed to identify customer‟s problem.

They normally reflect on the prospects problems, difficulties and
dissatisfaction that the prospect has on which they can be provided with
a solution later. The answer to problem question will direct towards the
core need of prospect buyer as every problem implies a need.

An overall objective of a problem question is to help prospects define

their need explicitly, Example of problem questions include ; Are you
satisfied with your present equipment? What are the disadvantages of
the way you are doing it now?

3. IMPLICATION QUESTIONS

These questions ask about the effects of the problem, eg „what would be
the worst scenario if you had no internet connection for a week or more‟?
how will this problem affect your future profitability?

4. NEED – PAY OFF QUESTIONS

Need – Payoff Question are intended to develop the buyer‟s desire for a
solution to their problems. The answer to need questions will get the
prospect buyer to tell you the benefits that they are looking and the
benefits your solutions offers

For example how do you feel a faster machine will help you?

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 When these questions are asked too early in the sales call, customer
would naturally be suspicious.

HOW TO INFLUENCE A PARTNER DURING NEGOTIATION USING SPIN

PRINCIPLE:

The following need to be considered during negotiations using spin principles

that can influence a partner during negotiation

(i) You must build rapport with your buyer before they buy. Rapport
eases the tension that buyers have about finding a solution to their
problem.

(ii) Don‟t manipulate the buyer by finding common areas of similarity

between you. Instead, look for unconscious rapport such as
matching speed and tone of speech.

(iii) Don‟t ask too many situation questions that the buyer feels
uncomfortable with. Instead, do your homework on your buyer‟s
situation first.

(iv) Spend most of your time asking problem questions rather than
situation questions on the basis that people buy when the pain of
their problem is greater than the cost of the solution.

(v) Know in advance how your product or services solves problems.

(vi) Uncover several problems before asking implication questions as

focusing on just one problem invites your buyer to raise issues
where your solution doesn‟t do too well.

(vii) Aim to get buyers to articulate the benefits in your product or

services rather than have you spell them out.

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 (viii) Work out the action steps that the buyer needs to take to complete
the sale and get commitment to one of these steps on each
occasion that you talk.

(ix) Understand that a questioning mindset is more important than the

ability to persuade.

All in all these questions take the buyer through the steps of
identifying their problem, their pain, and a solution that the
product or service offer.

POSITIONAL BARGAINING

Positional bargaining is a negotiation strategy that involves holding on to a

fixed idea, or position, of what you want and arguing for it and it alone,
regardless of any underlying interests. The classic example of positional
bargaining is the haggling that takes place between proprietor and customer
over the price of an item. The customer has a maximum amount she will pay
and the proprietor will only sell something over a certain minimum amount.
Each side starts with an extreme position, which in this case is a monetary
value, and proceeds from there to negotiate and make concessions. Eventually
a compromise may be reached.

Why is Positional Bargaining Important?

Positional bargaining tends to be the first strategy people adopt when entering
a negotiation. This is often problematic, because as the negotiation advances,
the negotiators become more and more committed to their positions,
continually restating and defending them. A strong commitment to defending a
position usually leads to a lack of attention to both parties' underlying
interests. Therefore, any agreement that is reached will "probably reflect a
mechanical splitting of the difference between final positions rather than a
solution carefully crafted to meet the legitimate interests of the parties.

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Therefore, positional bargaining is often considered a less constructive and less
efficient strategy for negotiation than integrative negotiation. Positional
bargaining is less likely to result in a win-win outcome and may also result in
bad feelings between the parties, possibly arising out of the adversarial, "you
vs. me" approach or simply a result of one side not being truly satisfied with
their end of the outcome. Positional bargaining is inefficient in terms of the
number of decisions that must be made. The example above demonstrates the
back-and-forth nature of positional bargaining. The more extreme the opening
positions are, the longer it will take to reach a compromise.

MANIPULATIVE TACTICS

The Moral Appeal tactic is supposed to remind you that the goal of the
negotiation is mutual satisfaction. It appeals to your sense of fairness. It
includes any statement whose purpose is to get you onto the other party‟s
side. “Let’s be fair. You can’t expect a firm price with the problems in the
economy.”

Explain to the other party that the terms you have agreed to are in each
other‟s best interests. Ask probing questions to find out what will happen to
the other party. What is their underlying motivation?

Good Guy/Bad Guy - we have all seen this one used on police shows on
television. One member of a negotiating team takes an extreme stand or radical
position, making excessive demands and refusing to offer reasonable
concessions. This tends to intimidate you, get you off-balance and lower your
aspiration. Then the “Good Guy” comes into the act with conciliatory and
soothing comments and a more reasonable offer. Even though the offer may
still not be very good in absolute terms, it looks great in comparison to what
the “Bad Guy” had to say. Often the natural impulse is to agree.

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Be careful not to be taken in by the Good Guy. While his offer may sound
fantastic compared to the Bad Guy‟s, the terms may still be unacceptable. Find
out more about the terms, and see if they are consistent with your objectives.

BEST ALTERNATIVE TO A NEGOTIATED AGREEMENT (BATNA

In negotiation theory, the Best Alternative to a Negotiated Agreement (BATNA)

is the most advantageous alternative course of action a party can take if
negotiations fail and an agreement cannot be reached. BATNA is the key focus
and the driving force behind a successful negotiator. A party should generally
not accept a worse resolution than its BATNA.

BATNA means 'Best Alternative to a Negotiated Agreement'. This is your

alternate plan when the talks start to wobble out of control. It can also be your
trump card to make the deal happen to your advantage, or walk away from it
altogether.

Care should be taken, however, to ensure that deals are accurately valued,
taking into account all considerations, such as relationship value, time value of
money and the likelihood that the other party will live up to their side of the
bargain. These other considerations are often difficult to value, since they are
frequently based on uncertain or qualitative considerations, rather than easily
measurable and quantifiable factors.

The BATNA is often seen by negotiators not as a safety net, but rather as a
point of leverage in negotiations. Although a negotiator's alternative options
should, in theory, be straightforward to evaluate, the effort to understand
which alternative represents a party's BATNA is often not invested. Options
need to be real and actionable to be of value, however without the investment
of time, options will frequently be included that fail on one of these
criteria. Most managers overestimate their BATNA whilst simultaneously
investing too little time into researching their real options. This can result in
poor or faulty decision making and negotiating outcomes. Negotiators also need

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to be aware of the other negotiator's BATNA and to identify how it compares to
what they are offering.

What's in Your BATNA?

How do you determine your best alternatives to a negotiated agreement? First,

you have to dissect both your position and your negotiation interests. Then,
look at the sum of these parts relative to all the alternative options available.
Pick the best option. Finally, do the reverse from your counterparts
perspective. A well prepared negotiator looks at the whole picture.

Some of the most crucial factors which should be considered include;

 The cost - Ask yourself how much it will cost to make the deal
relative to the cost of your best alternative. Cost estimation may
entail both the short term and the long term. It boils down to
figuring out which of your options is the most affordable.
 Feasibility - Which option is the most feasible? Which one can you
realistically apply over all the rest of your available options?
 Impact - Which of your options will have the most immediate
positive influence on your current state of affairs?
 Consequences - What do you think or estimate will happen as you
consider each option as a possible solution?

Boosting Your BATNA

In the reverse situation, what can you do with a weak BATNA? Can you turn
the tables? Yes, there are two ways this might be accomplished. The first
possibility is to strengthen your own BATNA. The second way is to reduce the
BATNA of your counterpart.

 Be Creative - Simply ask yourself what other options you might

employ that could increase your bargaining position. Brainstorm the
situation with all the key players in your organization. Your
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 planning must also factor in your counterpart's interests and
options.
 Improve Your BATNA - Endeavour to expand your options. One
possibility is to consider bringing into the mix, other interested third
party partners. A third parties interests may coincide with key
components of your interests, or of your counterpart's. For example,
this might entail creative financing which presents a more attractive
option to your counterpart. If you weaken the other sides best
alternative by injecting another element into the mix, the game
takes on a whole new slant.
 Use Experts - Neutral parties with their own relevant expertise might
be able to unravel your problem into a newly designed, but more
attractive perspective. If your side lacks some area of expertise, get
the experts to lend a hand.

Developing a BATNA
It is highly recommended that people develop a BATNA before engaging in a
negotiation. Without taking the time to develop a BATNA, you will likely be
unaware of what would happen if the negotiation fails. As a result, you may feel
a strong inner pressure to reach an agreement, even if it is not in your best
interests. Alternatively, you may feel overly optimistic about the proposed
agreements. Your optimism may cloud your view of costs associated with the
agreements.

There are seven basic steps to developing a BATNA:

1) List what you will do if you fail to reach an agreement

2) Convert the most promising options into practical choices

3) Select the single best option (that becomes your BATNA)

4) Compare your BATNA to all proposals

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 5) If an offer is better than your BATNA, consider improving or accepting
it

6) If an offer is worse than your BATNA, consider rejecting it

7) If the other party will not improve their offer, consider exercising your
BATNA

One of the determinants of your power in a negotiation is the attractiveness of

your BATNA as compared to the proposals made during the discussions.

WORST ALTERNATIVE TO A NEGOTIATED AGREEMENT

WATNA stands for the “Worst Alternative to a Negotiated Agreement”. In the

preparation phase of your negotiation, you need to consider what is the worst
that will happen if you do not sell in a particular negotiation. Going to the
worst case scenario in your negotiation preparation has a particular benefit:
you might reconsider your bottom line. In negotiation skills, it is good to know
what you would reconsider and the rationale.

In most negotiations, the parties are influenced by their assumptions about

what they think are the alternatives to a negotiated agreement. Often the
parties have an unrealistic idea of what these alternatives are, and they are
unwilling to make concessions because they think they can do just as well
without negotiating.

If you do not have a clear idea of your WATNA and BATNA, you will negotiate
poorly based on false notions about what you can expect without an
agreement. Often the parties in a negotiation need to decide how likely a
particular outcome are.

If your WATNA is something that would be difficult for you to accept, but the
likelihood of its happening is small, you might not feel compelled to give up

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much in negotiations. Realism is essential in this situation. If you could have
the ideal situation, the “blue sky” scenario, negotiations would not be
necessary. In order to focus on the negotiations with a sense of purpose, your
WATNA is important. What is often referred to as the “worst case scenario” is
something that any sensible person will think about before embarking on any
initiative. What if it goes wrong? How will we deal with that? How you feel
about the WATNA will dictate how flexible you need to be (and therefore will be)
in negotiations.

The BATNA is almost more important than the WATNA. If you look at your
situation in the absence of a negotiated agreement, and find it almost
unthinkable, you will be pressed to enter negotiations in the hope of getting a
satisfactory agreement. The word “satisfactory” is important here. Is the
WATNA better than satisfactory? Is the BATNA worse? Generally, people only
enter into negotiations because they feel they have to. They arrive at this
conclusion based on analysis of their WATNA and BATNA.

Factors that affect negotiation process

Personalities: be conscious of aspects of your personality such of your own

needs and interpersonal style as well as the other person's personality; these
factors will play a key role and understanding yourself will be an important
factor.

Physical space: sometimes where the negotiation takes place can be

important; are we negotiating in a space we are uncomfortable and other is
comfortable?

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Past interaction: if there is a history of conflict resolution with this person,
think about how this history might affect the upcoming negotiation.

Time pressure: Think about whether time pressure will affect the negotiation
and whether you need to try to change this variable?

Subjective utilities: be aware that people place very different values on

elements of a negotiation. For example, in negotiating for a job, you may place
a high value on location and relatively lower on salary; it is important to be
aware of your subjective utilities and try to ascertain the other person's
subjective utilities; it is difficult to know in advance or even during the
negotiation what a particular outcome will mean to the other party. Finding out
what is "valued" is one of the key parts of negotiation.

Understanding the Context for the Conflict

 What are the important personal and organizational consequences of the

conflict? What are possible future consequences?
 What behavior patterns characterize the conflict
 What are the substantive issues? Are the issues biased by each side's
perceptions and feelings?
 What are the underlying or background factors that have led to the
situation and the related feelings, perceptions, and behaviors?

What is the role of ethics in negotiation?

The dictionary definition of ethics is: "a system of moral principles or values;
the rules or standards governing the conduct of the members of a profession;
accepted principles of right or wrong." Ethics establish the means of doing
what is right, fair and honest. Why are ethics important in a negotiation?

Reputation plays a vital role in every negotiation. It's much easier to achieve
win-win outcomes when you have a reputation for being fair, honest and

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willing to do the right thing. A counterpart who feels you are unfair, dishonest
or unwilling to do the right thing will be less willing to make concessions or
even to begin a negotiation with you in the first place. So guarding your
reputation by always acting in an ethical manner is key to successful
negotiation. When making any decision, remember this: A reputation takes
years to build, and only minutes to destroy.

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Win-Win Negotiation
Win-win negotiation is a collaborative approach to negotiating in which both
parties involved try to come up with a mutually beneficial solution. It is based
on the idea that both sides can gain something positive from the negotiation
and that an agreement can be reached without one party having to give up too
much or feeling like they have lost.
Win-win negotiation involves open communication, active listening, and
creative problem-solving. It is about finding ways to expand the pie, rather
than simply dividing it.
This approach requires willingness to compromise and a commitment to
finding a solution that benefits both parties equally. Win-win negotiation
involves collaboration, communication, and creativity to create a solution that
benefits both parties.
It is a more effective and satisfying approach to negotiation than a competitive
approach, as it creates value and fosters positive long-term relationships
between the parties involved.

Win - Win negotiations overcome partners’ disagreement in the number of

the ways:
 By focusing on common interests and mutual benefits rather than each
side's individual desire
 By using a collaborative approach that aims to find a solution that
satisfies the interests of both parties.
 When partners have differing opinions, a win-win negotiation process can
help to create an environment where both parties feel heard and
understood
 Active listening and empathy are essential tools in this process, as they
allow each partner to understand the other's perspective and find
common ground.
 The win-win negotiation process can involve brainstorming and creative
problem-solving to find a solution that satisfies both parties' interests.
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 This may involve compromise on both sides, but the end result should be
a mutually beneficial outcome that meets the needs of both parties.
 Another key element of win-win negotiation is transparency and
communication. Both parties must be open and honest about their
interests and goals to reach a successful agreement. It's also essential to
establish trust and build a positive relationship between the partners
 The win-win negotiation process can involve brainstorming and creative
problem-solving to find a solution that satisfies both parties' interests.
This may involve compromise on both sides, but the end result should be
a mutually beneficial outcome that meets the needs of both parties.
 Another key element of win-win negotiation is transparency and
communication. Both parties must be open and honest about their
interests and goals to reach a successful agreement. It's also essential to
establish trust and build a positive relationship between the partners.
 Compromise: In a win-win negotiation, both parties may need to make
concessions to reach an agreement. This requires a willingness to be
flexible and find a solution that satisfies everyone's priorities.
 Focus on the future: A win-win negotiation aims to create a solution that
benefits both parties in the long run. This requires looking beyond the
immediate disagreement and considering how the agreement can support
ongoing positive relationships.

POSITIONAL NEGOTIATION
Positional negotiation is a type of negotiation in which each party takes a firm
position and tries to negotiate from that position without considering the
underlying interests or needs of the other party.
In positional negotiation, each party is focused on achieving their own
objectives and is less concerned with finding a mutually beneficial solution.
Positional negotiation is often characterized by a competitive and
confrontational approach. Each party tries to gain as much as possible, and
concessions are seen as weaknesses.
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This can lead to a stalemate, where neither party is willing to budge from their
position, and the negotiation breaks down.
An example of positional negotiation might be a salary negotiation between an
employer and an employee.
The employer may take the position that they can only offer a certain salary,
while the employee takes the position that they need a higher salary to meet
their financial needs. If each party is only focused on their position, they may
not be able to find a solution that addresses both parties' interests.

Positional negotiation is often less effective than other negotiation approaches,

such as win-win negotiation, because it can lead to lose-lose outcome. Both
parties may walk away feeling dissatisfied, and the relationship between the
parties may be strained.
In contrast, win-win negotiation aims to create a solution that benefits both
parties and can lead to a more positive and collaborative relationship.

Positional negotiation is often not effective in overcoming partner's

disagreement, as it is focused on each party trying to gain as much as possible
without considering the underlying interests or needs of the other party.
However, positional negotiation may be effective in overcoming disagreement if
one party has significantly more power or leverage than the other party.

In positional negotiation, the party with more power may be able to force the
other party to accept their position through tactics such as threats,
ultimatums, or using their position of authority.
This can lead to a situation where one party feels they have lost and are
dissatisfied with the outcome.

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Presentation skills

Presentation skills refer to the ability to deliver a clear, engaging, and impactful
message to an audience. Effective presentation skills involve several key
components, including delivery, structure, and content.
Presentation skills include a set of competencies essential for effectively
conveying information to an audience.

Skills associated with presentation skills

 Planning
 Organization
 Verbal communication
 Nonverbal communication
 Public speaking
 Memorization
 Writing
 Story-telling etc

Presentation Structure
• It is the way your key points are organized. A well-structured
presentation can help ensure that the audience understands the key
message and follows along with the content.
• The usual flow of a presentation covers all the vital sections and is a
good starting point for yours. It allows your audience to easily follow
along and sets out a solid structure you can add your content to.

Parts of presentation
 Greet the audience and introduce yourself
Before you start delivering your talk, introduce yourself to the audience and
clarify who you are and your relevant expertise.
This does not need to be long or incredibly detailed, but will help build an
immediate relationship between you and the audience

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Introduction
In the introduction you need to explain the subject and purpose of your
presentation whilst gaining the audience's interest and confidence. It's
sometimes helpful to think of your introduction as funnel-shaped to help filter
down your topic:
• Introduce your general topic
• Explain your topic area
• State the issues/challenges in this area you will be exploring
• State your presentation's purpose
• Provide a statement of what you're hoping the outcome of the
presentation will be, for example, "I'm hoping this will provide you
with..."
• Show a preview of the organization of your presentation
The main body of your talk
• The main body of your talk needs to meet the promises you made in the
introduction.
• Depending on the nature of your presentation, clearly segment the
different topics you will be discussing, and then work your way through
them one at a time - it's important for everything to be organised logically
for the audience to fully understand.

Conclusion
In presentations the conclusion is frequently underdeveloped and lacks
purpose which is a shame as it's the best place to reinforce your messages.
Regardless of what that goal is, be sure to summarise your main points and
their implications. This clarifies the overall purpose of your talk and reinforces
your reason for being there.

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Lee Iacocca's presentation structure
• This structure involves starting with a powerful opening statement or
hook, followed by an overview of the key points to be covered, and then a
detailed explanation of each point.

The five steps of the Lee Iacocca presentation structure are:

 Opening: The opening statement or hook is the first thing the audience
hears and should be designed to grab their attention and create interest
in the presentation. Iacocca suggests using a personal story, a quote, a
shocking statistic, or a rhetorical question to engage the audience.
 Overview: Once the audience's attention has been captured, the
presenter should provide a brief overview of the key points that will be
covered in the presentation. This helps to set expectations and gives the
audience a sense of what they can expect to learn.

 Key Points: In the third step, the presenter provides detailed information
on each of the key points identified in the overview. This section should
be well-organized and easy to follow, using clear and concise language,
and supported by evidence, data, or examples.

 Conclusion: After presenting all of the key points, the presenter should
summarize the main ideas and reinforce the key messages. This section
should be memorable and persuasive, leaving the audience with a clear
sense of what they have learned and why it is important.
 Call to Action: The final step of the Lee Iacocca presentation structure is
the call to action, where the presenter motivates the audience to take
action based on the information presented. This might involve asking for
feedback, encouraging participation, or urging the audience to make a
specific decision or take a specific action.

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 The other popular structure for presentations is the AIDA method,
which stands for Attention, Interest, Desire, and Action. The AIDA
method involves the following steps:
Attention: Grab the audience's attention with a hook or opening
statement.
Interest: Build interest in the topic by presenting relevant information or
benefits.
Desire: Create desire for the topic by presenting more information and
emphasizing its importance or relevance.
Action: Call the audience to action by providing clear instructions or a
next step.

Appropriate Information Choice

• Selecting the appropriate information to include in a presentation is
crucial to its success. Presenters should consider the audience's
interests, needs, and level of knowledge when selecting information.
• It is important to include relevant and reliable information, as well as
evidence or examples to support the argument.

Basic Rhetoric
Basic rhetoric involves using persuasive techniques to engage the audience and
convey a message effectively. Some of the basic rhetorical techniques include:
• Ethos: Establishing credibility by presenting expertise or authority on
the topic.
• Logos: Using logical reasoning and evidence to support the argument.
• Pathos: Appealing to the audience's emotions or values to create a
connection or emotional response.
• Repetition: Repeating key phrases or ideas to emphasize their
importance or create a memorable message.
• Storytelling: Using storytelling or narrative techniques to engage the
audience and convey a message.
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 Generally
The Lee Iacocca presentation structure is a highly effective approach to
organizing and delivering presentations.
It is well-suited to a wide range of audiences and topics and can be
adapted to suit the presenter's style and the specific needs of the
audience.
However, it is important to note that while the structure can help guide
the presenter, it is not a substitute for thoughtful preparation and
engaging delivery.

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