CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

MODULE 4
INTRODUCTION TO NEGOTIATION
NEGOTIATION
Meaning
The term "negotiation", in simple words, is a problem-solving method, which helps two
parties to accept a common decision after sorting out the differences among them.
Negotiation is a combination of two Latin words, i.e., 'neg' which means 'not' and 'otium'
which means 'ease or leisure'.
This term is not only limited to resolve the conflicts and problems related to the
business world but also has its grip over parenting, legal issues and disputes related to
industries, etc. Thus, negotiation can be said as a kind of bargaining, which provides the
two parties with such an agreement that can be mutually accepted by both.
So, in the situation when any of the two parties are unable to achieve the expected
outcome or the parties are disagreeing on any issues, negotiation is used as a tool to
satisfy the requirements of both the parties to the maximum extent by providing a
reasonable outcome. This makes both the parties to come together, clear out their
differences and take a decision that is mutually accepted by both.
Definition:
According to Robert Fisher & William Ury, "Negotiation is a basic means of getting what
you want from others".
According to Fowler, "Negotiation can be defined as a process whereby parties or
groups attempt to resolve matters of dispute by holding discussions and coming to a
mutually agreed decision".
According to H. McCormack, "Negotiating is the process of getting the best terms once
the other side starts to act on their interest".
Characteristics of Negotiation
Following are the characteristics of negotiation:
1) Multiple Parties: Parties involved in negotiation may be two or more. It is a process
which aims at arriving at a decision which is mutually agreed upon between the parties
of negotiation. The discussion takes place with a view to resolve disputes and is
voluntary in nature.
2) Clash of Interests: It is a characteristic feature of every negotiation. The parties are
likely to have distinctive interests. Gain of one party might result in loss to other. The
middle path which is profitable to both parties should be acquired in such case.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

3) Voluntary in Nature: In negotiation, the parties negotiate out of their own will and
rarely under compulsion. The parties negotiate because they feel that negotiation would
provide them something better than what would become available to them if they
accept what is provided by the other party.
4) Mutual Adjustment: The negotiations are based on give-and-take relationships.
Though there is increased and vigorous debate at the start of negotiations, all parties
have to adjust their demands mutually to reach a final settlement.
5) Satisfying Mutual Needs: The needs of the parties to negotiation are interdependent
on each other. A fulfilment of these needs is mandatory for a successful negotiation.
6) Use of Strategies and Tactics: There are various strategies and tactics used during
negotiations to influence the other parties. These strategies are well-organized and are
prepared beforehand to establish a successful negotiation. They are not tricky or
manipulative.
7) Controlling Intangibles and Tangibles: The tangibles include the prices, terms and
conditions, etc. Whereas the intangibles are toughness of representative, strive to win
over the other party, etc. Both the factors must be handled well for a successful
negotiation, because both of them affect the parties to negotiation in some or the other
way.
Types of Negotiation
Based on stability, the process of negotiation has been classified as under:
1) Distributive Negotiations: Distributive negotiations are also known as 'competitive
negotiations'. And the other terms commonly used for distributive negotiation are
'claiming value', 'win-lose', or 'zero-sum' bargaining. It aims at getting the maximum
possible of what is being contested. Hence, it becomes obvious that if one side wins the
other loses.
The types of distributive negotiation are as follows:
I. Zero-Sum: Competitive negotiation has an underlying principle of 'zero-sum'
which states that there is certain fixed amount which is to be attained and this
fixed amount is being aimed at by two people. If one person is able to attain it,
the other is left with no option but to lose it.
II. Win and Lose: This type of negotiation creates two results, i.e., win and loss. The
party which gets what it desired feels elated. While the losing party feels
betrayed.
III. Substance Only: The impact of the zero-sum situation is that the financial aspect
of what is being aimed at becomes the sole concern and the rest becomes
secondary. For example, the resale value of a mobile phone is the first thing
which comes to mind while purchasing it.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

IV. Unimportant Relationship: In competitive negotiations, the relationships are not

much cared for. Displaying a feeling of concern for the opposite party showcases
the weak side of the winner and may sometimes backfire by seeming fake or
dual-faced.
2) Integrative negotiations: integrated negotiations are also known as 'collaborative
negotiations'. This is also commonly termed as 'interest-based bargaining' or 'win- win
bargaining'.
The approaches of integrative negotiations are:
i. Win-Win: Under 'distributive negotiation', the assumption is that there is a fixed
stake being contested. The result is zero- sum or win-lose situation. On the other
hand, in integrative negotiation, the stake is expanded and more value is created
for the parties. It thus creates a win-win situation where both parties have
actually gained something ultimately.
ii. Fair Process: Fairness holds a lot of significance in our lives. Lack of fairness
leaves us with discontentment even when we have won the negotiation. A
negotiation is most satisfactory when it fulfils individual needs fairly.
iii. Joint Problem-Solving: Here lies the greatest strength of integrative negotiation.
Through this, the individual needs and wants are made to acquire the shape of
single issue. These issues are then taken up with the concerned parties with a
view to sort them out.
DIFFERENCE BETWEEN DISTRIBUTIVE AND INTEGRATIVE NEGOTIATION:

Basis for difference Distributive Negotiation Integrative Negotiation

1) Relationship For a short duration For a long duration
2) Consideration individual All parties to negotiation
3) Atmosphere Disbelief Trustworthy
4) Focus Positions Concerns
5) Aim to gain To win the negotiation To obtain mutual consent
6) Information Obscured Shared
7) Strategy Win oriented Fairness and consensus
oriented

8) Tactics Pressure and trickeries Based on set principles,

equity and justice

9) Outcome Win-lose win-win

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

SIX FOUNDATIONS OF NEGOTIATION

Negotiation, whether in business, personal relationships, or any other context, typically
relies on several foundational principles to achieve successful outcomes. Here are six key
foundations of negotiation:
1) Preparation: Adequate preparation is crucial before entering into any negotiation.
This involves researching the other party, understanding their needs, interests, and
constraints, as well as clarifying your own objectives and priorities. The more
information you gather, the better equipped you'll be to navigate the negotiation
process effectively.
2) Communication: Effective communication is essential for building rapport,
understanding each other's perspectives, and conveying your own interests clearly.
Active listening skills, empathy, and the ability to articulate your points persuasively are
vital components of successful negotiation.
3) Flexibility: Negotiation often involves give-and-take, requiring both parties to be
flexible and open to compromise. Being rigid or overly attached to specific outcomes can
hinder progress. Flexibility allows negotiators to explore creative solutions that satisfy
the interests of both parties?
4) Problem-solving: Negotiation is fundamentally about solving problems and finding
mutually beneficial solutions. Approaching negotiations with a collaborative mindset,
focusing on shared interests, and seeking win-win outcomes can lead to more
sustainable agreements.
5) Negotiation Tactics: Familiarity with various negotiation tactics and strategies can
give negotiators an advantage in navigating challenging situations. These tactics may
include techniques for framing offers, handling objections, managing concessions, and
dealing with conflict constructively.
6) Ethics and Integrity: Maintaining ethical standards and integrity throughout the
negotiation process is essential for building trust and preserving long-term relationships.
Honesty, fairness, and transparency contribute to a positive negotiation climate and
increase the likelihood of reaching agreements that are mutually acceptable and
sustainable.
NEGOTIATION PROCESS

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

1) Preparation and Planning: This step calls for understanding the nature of
dispute/issues, causes for negotiation to take place, parties involved, viewpoints of the
parties, expectations, and objectives of negotiation.
2) Definition of Ground Rules: After planning and developing the strategic plan, the
rules and process to be followed should be made aware to the parties. It helps the
parties to negotiation in getting acquainted with each other, venue, time-limits, issues,
and the ideal process to be followed if the negotiation process reaches a deadlock
situation. At this stage, the mutual exchange of agenda in between the parties to
negotiation is also done.
3) Clarification and Justification: In this step, the parties to negotiation have an
opportunity to support their demands to their counterparts by justifying and
emphasizing them in the most convincing manner. The situation should not be used as
platform for conflict. Rather, it should be used as an opportunity for enlightening and
informing each other about the genuineness and the need of their demands. The
situation may call for exchange of documents to make their stands clearly understood by
each other.
4) Bargaining and Problem-Solving: This particular stage comes into play, only after the
parties to the negotiation have become fully familiar with each other's requirements
and constraints. Negotiations are mainly characterized by the granting and receiving the
concessions during finalizing an agreement. This step involves the actual bargaining
process for solving the issues.
Manjula SM, Asst. prof.
MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

5) Closure and Implementation: The final agreement which is the outcome of the
negotiation has to be put in a formal way under this final step. Also, this step
Encompasses development of any necessary steps for executing and controlling the
agreement.
PRINCIPLES FOR SUCCESSFUL NEGOTIATION
1) Each Negotiation is Different:
Since each negotiation is different - involving particular parties and a specific set
of issues - there are no universal rules for the process. The interaction between
negotiators does not rely on any absolute guidelines. Just the opposite,
negotiators may do anything. That is why the negotiation process can at any
moment become baffling and unpredictable, taking individual by surprise. It
might help to think of negotiation as a big bureaucracy that only spells-out
prohibitions, not possibilities. That is, it always tells individual what he cannot do,
but never how to get around the rules and reach his goals. Just remember that a
successful negotiation calls for cooperation and agreement on both sides. If one
party's aims are hopelessly out of synch with the others, coming to an agreement
is about as likely as growing a cactus garden in a rain forest.

2) Interacting Well with Other Side:

It stands to reason, therefore, that individual can negotiate successfully only by
interacting well with the other side. That goes for many aspects of his communication,
especially reporting factual development, proving their analysis, and interpreting those
facts into a legal basis for a contract. Negotiation, however, is rarely based upon rational
discussion alone. Underlying emotional factors always play a key role. To communicate
effectively, individual must understand the other party's attitudes, motives, and goals,
as well as how they affect them. Individual must be careful while making a decision.
3) Self-Discipline:
Good negotiators have self-discipline. Although they are partial, they remain objective.
That is because they know that personal attacks only add to problems, and that
aggression breeds aggression.
A corollary of this principle is that taking a cynical stance only prompts the other side to
do the same. Negotiation works best when it is firm but friendly. Also keep in mind that
if individual is going to use promises or "treats", they must be appraised,
comprehended, and believed before they can be taken seriously. So it pays to be
credible. Wise negotiators neither promise too much nor threaten too little, and either
tactic should be based in the desire to work toward agreement.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

4) Set Agenda: The agenda set at the start of negotiations affects the outcome of the
agreement. Whoever controls the agenda has a better chance of achieving favorable
results for following reasons:
 Individual can define and limit the issues in dispute.
 Controlling the agenda allows individual to establish priorities so he can move the
company's issues to the bargaining table while keeping own issues on the back
burner.
 Once the other side accepts individual's agenda, individual is in a position to
know the key issues in advance which gives them time to prepare persuasive
arguments.
5) Understand the Basic Conceptual Goal of Negotiations: To be a successful
negotiator, individual must understand the basic conceptual goal of the process. In any
dispute that uses negotiation to resolve issues, each side has a preferred outcome and a
bottom line. Individual might think of the distance between the parties as a continuum
of each other's desired outcomes and bottom lines.
Individuals goal as a negotiator, then, becomes two-fold - to get their opponent to think
that their bottom line is closer to the opponent's preferred outcome than it actually is;
and to get opponent to re-assess his or her own bottom line, moving it further away
from the desired outcome.
6) Use Strategy of Compromise to Settle Negotiation Issues: No issue ever stand-alone,
for the simple reason that a decision on any single issue always affects others. That is
why good negotiators use a strategy of compromise to settle issues of concern and
reach their desired goals. Compromise plays an indispensable part in the process of
negotiation because no agreement can be reached satisfactorily without it.
7) To negotiate is not to Agree: A party's willingness to negotiate does not necessarily
indicate its willingness to reach agreement. One side may only be interested in taking
the other for all it is worth. Companies make it a point to know each other's business,
word of a deceptive negotiator travels fast. Individual could lose his credibility in the
entire field of business. So avoid taking a chance; deceptive negotiating could backfire
and ruin his reputation.
FACTORS INFLUENCING NEGOTIATION
The factors that affect negotiation are as follows:
1) Personal Factors: These include characteristics of an individual such as, needs, wants,
behavior, inclinations, expectations, etc. As the personal characteristics are innate in
individuals, these are present in the process right from its beginning. These factors of
the parties involved in negotiation derive their orientation and viewpoint during the
process of negotiation. They also help in defining the nature of conflict as well as in
resolving the conflict.
Manjula SM, Asst. prof.
MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

2) Role Factors: These factors comprise of the influences that negotiator receives from
his friends, family, colleagues, etc. And as the name suggests, job role of the negotiator
and expectations from his designation also contribute to these factors. Various
suggestions and recommendations also come with these factors which exert pressure on
negotiator. These factors and the negotiator's responsiveness to them derive the
behaviour during negotiations.
1) Situational Factors: These factors are concerned with physical as well as social
factors which the negotiation process comes across. Following are some
situational factors:
i) Physical Factors: Venue for process of negotiation and its neutrality,
physical arrangements for handling conflicts, etc.
ii) Social Factors: Number of participants and third parties involved in
negotiation.
iii) Issues: Nature of conflicts, their frequency, extent, etc.
iv) Factors of Interpersonal Orientation: Type of communication channel
to be used, nature of issue (confidential or general), concerns, etc.
The process of negotiation or conflict management is highly affected by the above
mentioned situational factors, and hence quality of negotiation and its outcome is
influenced by these factors. Situational factors can even affect the standpoint and
interests of parties.
4) Interactional Factors: Inter-personal relations between parties to negotiation play a
very crucial role in the process of negotiation. The relationship between the parties
before conflict may either be very amicable (cooperative to each other) or may be
completely adverse (rivals of each other). These factors depict the nature of relationship
among the parties which in turn helps in choosing the effective and suitable strategies of
negotiation.
ESSENTIAL SKILLS FOR NEGOTIATION
Following are the essential skills that play a crucial role in the process of negotiation:
1) Analytical Skills: This skill is required for a negotiator in order to study and scrutinize
the problem and to understand the individual interest of the parties to negotiation.
Further, a detailed analysis of problem may enable an expert negotiator to arrive at a
favorable outcome.
For example, during negotiation of employee and employer contract, most probable
areas of conflict may be related to wage and salary, allowances, benefits, etc. To find a
compromising situation for both the parties, their issues need to be analysed.
2) Preparatory Skills: Skilled negotiators undertake the preparations particularly before
a bargaining meeting. Herein, they concentrate on defining goals, issues to be
negotiated, and alternatives to the defined goals.
Manjula SM, Asst. prof.
MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

3) Listening Skills: These skills constitute the most important part of a skilled negotiator.
It calls for the ability to read, both the verbal and the non-verbal communication during
the process of negotiation. To identify the common ground, listening to all the parties is
of utmost importance. A good negotiator will always give more preference to listening
to others instead of suggesting personal opinions.
4) Emotionally Strong: It constitutes another vital constituent of a skilled negotiator. It
calls for keeping one's emotions well under control. This can be best explained through
an example. A leader under negotiation for wage revision may have to undergo
repeated failures to arrive at the desired results. This may expose him to adverse
criticisms both from the management and his colleagues.
Such a person if fails to keep his emotions (frustration) under control, it is quite likely
that he may give up and let the negotiation get finalized on a package that might turn
out to be a deal of loss for his organization. Also, after getting too emotional, employees
might refuse what is being offered by the employer during a pay-raise negotiation which
in turn hampers communication.
5) Verbal Communication Skills: A skilled negotiator must have the ability to put up his
stand clearly, emphatically, and effectively. Failing to do this may cause adverse effect
on negotiation leading to cropping up misunderstandings, misconceptions, etc. Without
effective communication skills, he may even fail to state his expectations and to justify
it.
5) Verbal Communication Skills: A skilled negotiator must have the ability to put up his
stand clearly, emphatically, and effectively. Failing to do this may cause adverse effect
on negotiation leading to cropping up misunderstandings, misconceptions, etc. Without
effective communication skills, he may even fail to state his expectations and to justify
it.
6) Cooperative and Team Skills: Approach of a skilled negotiator must be in a way that
negotiation is a team activity. Hence, all the parties involved should work as a team to
reach a common solution for all. It is aimed at arriving at a win-win situation for all. It is
not something where one stands to battle against the rest.
7) Problem-Solving Skills: A skilled negotiator must be capable in the art of solving a
problem through a number of ways rather than just attaining negotiation objectives.
These skills are useful not only for negotiating. But they also help in solving other
problems that arise simultaneously such as interrupted communication, problems
related to physical arrangements, etc.
8) Decision-Making Skills: These are skills that enable a negotiator to take decisions
authoritatively and unhesitatingly while negotiating. An effective negotiator is expected
to take quick decisions while at the same time compromising in order to avoid a
situation of deadlock.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

9) Interpersonal Skills: Effective negotiators are masters in the art of interpersonal skill
due to which they are able to foster sound working relationship with all the
counterparties. If the negotiation is difficult then in that case negotiators are required to
be patient and cordial towards others in order to maintain a progressive environment.
10) Ethics and Trustworthiness: Trustworthiness of a negotiator and his ethical
principles fosters a feeling of trust among all the parties to negotiation. It is very
important to have a trust on each other that every party will keep his promises after the
negotiation ends. An effective negotiator should also have the skill to implement all the
promises after the completion of negotiation process.
TRICKS USED IN NEGOTIATION PROCESS
There are 20 basic tactics to defend oneself. These include four control tactics to limit
our freedom of action, seven pressure tactics to push us into making concessions, and
nine trap tactics to tempt or entice us into making concessions.

THE FOUR CONTROL TACTICS +

These tactics can be used against you to enclose you in the middle of the accompanying
box you will get boxed unless you negotiate your way out of it.
1) Agenda Control: This is a universal tactic. "You" is trapped in a box and normally takes
two forms: control of agenda items and control of procedures. Pay close attention to the
opponent's proposed agenda and probe into the following areas:
I. Does it include items that you consider non-negotiable?
II. Does it exclude items that you want to include for negotiation?
III. Identify the procedures that will operate to your disadvantage.
IV. Pay special attention to those who will participate and the proposed third-party
roles.
V. Negotiate procedures to ensure security.
VI. Pay special attention to proposals regarding the scheduling of meetings.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

If the other party can control both the content and the process of negotiation, then you
are at a tactical disadvantage.
2) Limits: This is frequently used as a tactic to reduce the area open for negotiation. But
you would notice that those limits are also cited by the other party when they want to
use it to their advantage and your disadvantage. Some typical limits are:
 Limits of authority: Approval of plans by Chairman/GM/CEO.
 Policy limits: Being against the company policies and rules.
 Financial limits: Requirement of additional finances.
 Technological limits: Installation of new technology.
 Legal limits: Barriers from the law in carrying out the process.
Limits, however, can change. It is not static, and anything that can change in dispute,
disagreement, or settlement is subject to negotiation.
3) Precedent: Negotiators frequently employ an appeal to precedent to place the
current negotiation within the pattern of other negotiations when it is to their
advantage. This tactic takes either of the following two forms:
Citing the precedent of previous negotiations with the same party as, "We have always
negotiated a three-year lease with you in the past. Why should you demand a five-year
lease now?"
Citing the precedent of agreements reached in negotiations by other parties as, "The
rest of the industry has settled for a 20% increase; your offer of 12% is very low.
4) Time: Each party may try to reduce the time available for negotiations to its
advantage. Your opponent may:
 Try to reduce the time for negotiations.
 Try to extend the time available.
THE SEVEN PRESSURE TACTICS
There are seven powerful tactics to pressure you into making concessions to your
disadvantage.
1) Large Demands: Most negotiations begin with both parties making large demands,
which neither expects to realize. As time progresses, they modify their initial demands
through concessions.
Finally, they reach agreements somewhere between the extremes of their initial
differences. The initial large demands are meant to shake the opponent's self-
confidence. If these demands are reinforced by repetitions, their impact increases.
2) Threats: The other party may threaten you directly or indirectly, tactlessly or with
finesse. The objective is to pressure the other party into making concessions. The

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

popular and frequent threats include threats of action such as strikes, stopping
shipments, cancelling franchises, etc., and personal threats like attacking or questioning
the opponent's integrity, veracity, etc. The goal is to discourage the opponents.
3) Deadlock: If one party wants to make a timely agreement, the threat of a deadlock
can put serious pressure on that party. Instead of conceding to avoid a deadlock, a
timely reminder of the common ground between the parties can show that this tactic is
a two-edged sword, which can hurt the other party as well.
4) Surprise: In spite of careful planning, minor surprises. when confronted with, shake
confidence. If allowed, such surprises can make the party concerned disorganized. One
can tackle this by adopting information-seeking behavior.
5) Bypass: The other party may bypass you to contact your superiors in an attempt to
undermine your position or isolate you from support. This can put you under extreme
pressure, especially when support from the top authority is uncertain. It can be
encountered through anticipation.
6) Divide and Conquer: If a party is negotiating as a team, then differences of opinion
are inevitable. Though they may be small initially, these differences may widen with the
passage of time.
The best solution can be to emphasize full participation of all team members in pre-
negotiation planning and careful role assignment during negotiations.
7) Coalition: When the parties combine and form a coalition, the pressure on the other
party multiplies. The challenge is to convince members of the coalition that there is
more common ground among the members of the coalition. It develops a stronger
bond, and the group becomes a powerful force.
THE NINE TRAP TACTICS
This is the category with the largest number of tactics where one puts pressure on
oneself instead of the other party doing it. Many a time, our own impatience puts us
into a trap. Here are nine lures that one should recognize and avoid.
1) Simplicity: Simple solutions to complex problems have a direct appeal to everyone.
But behind this choice, there may be a desire to avoid effort and uncertainty due to
which one prefers a simple solution. One should learn to resist simplicity unless it is
really to one's advantage.
2) Contrast: Suppose our opponent starts the proceedings by asking for an 80%
increase. We reject it outright, and he reacts by offering "very generously" a demand
half of the previous. However, this 40% would still be about two times our affordable
limits. It is not wise to make a decision on the basis of the contrast between the first and
second positions, which seems very generous and tempts one to accept the offer.
Exorbitant contrast may lure you.
Manjula SM, Asst. prof.
MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

3) Untrue: The opposition may present incorrect data either due to ignorance or
deliberately to mislead us. In either case, we need to be alert so that we can easily
distinguish between the two data and identify any misinformation.
4) Hidden Strings: At times, we may realize that to the agreed earlier proposal, some
hidden expectations were bound to it. We can counter it by asking questions before
agreeing so that ploys, if any. Can be unearthed.
5) Slicing: We might have made a series of minor concessions only to eventually realize
that we have actually made a major concession. The key behaviour to avoid this trap lies
in summarizing so that we are in a better position to estimate how much ground we
have yielded. It also signals to the other party that we are in control of the situation.
6) Off the Record: All negotiations are a matter of record. The other party may,
however, call us over for dinner or otherwise informally contact us. The opponent may
Label this as an "off-the-record" meeting. We can use this to avoid an impasse in
informal negotiations, but in a more relaxed mood, we may find ourselves offering too
many clues. Hence, this tactic must be used with a lot of prudence.
7) Good guy-Bad guy: This tactic has been widely used the world over. While one party
puts us under immense pressure, the other is friendly. So, we tend to give too much
information about the bad guy to the good guy. This is a variation of the contrast effect.
During negotiations, we can either ignore or confront it. This tactic has more impact on
beginners than on veterans.
8) Final Offer: Once an agreement is made, we may still be uncertain if it really is their
final offer. We need to test the credibility of the data presented so that we can finally
decide for or against the offer and analyses in case it is a trap.
9) Last Minute Demand: Once an agreement has been reached and the formalities are
over, the opponent may claims that he has forgotten some points regarding the
agreement. It may be a trap too, as we may make a major concession which has been
termed as "minor" by the other party because of our impatience to settle things.
PSYCHOLOGICAL ADVANTAGES OF NEGOTIATION
Engaging in negotiation offers numerous psychological advantages that can empower
individuals and enhance their overall well-being. Here are some key psychological
advantages of negotiation:
1) Sense of Control: Negotiation allows individuals to take an active role in shaping
outcomes and advocating for their interests. This sense of control can boost self-
confidence and reduce feelings of powerlessness or helplessness.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

2) Problem-Solving Skills: Negotiation involves identifying issues, exploring options, and

finding solutions that satisfy both parties. Engaging in negotiation exercises individual’s
problem-solving abilities, fostering creativity, critical thinking, and resilience.
3) Increased Self-Efficacy: Successfully navigating negotiations reinforces individuals'
belief in their ability to influence situations and achieve desired outcomes. This
increased self-efficacy can translate into greater motivation, persistence, and
achievement in various areas of life.
4) Enhanced Communication Skills: Negotiation requires effective communication,
including active listening, assertiveness, and empathy. Engaging in negotiation helps
individuals develop and refine these communication skills, improving their ability to
express themselves clearly, understand others' perspectives, and build rapport.
5) Emotional Intelligence: Negotiation often involves managing emotions, both one's
own and those of the other party. Negotiators develop emotional intelligence by
recognizing and regulating emotions, empathizing with others' feelings, and maintaining
composure in challenging situations.
6) Conflict Resolution Abilities: Negotiation provides opportunities to practice
constructive conflict resolution strategies. Negotiators learn to navigate disagreements,
find common ground, and reach mutually satisfactory resolutions, contributing to
interpersonal relationships and reduced stress.
7) Resilience Building: Negotiation involves navigating obstacles, setbacks, and
uncertainties. Successfully overcoming challenges in negotiation builds resilience, the
ability to bounce back from adversity, and the confidence to persevere in pursuit of
goals.
8) Sense of Accomplishment: Successfully reaching agreements through negotiation can
provide a sense of accomplishment and satisfaction. Negotiators feel rewarded by
achieving their objectives, resolving conflicts, and creating value for both parties
involved.
9) Improved Relationship Skills: Negotiation offers opportunities to build and
strengthen relationships with others. Collaborative negotiation processes that prioritize
mutual understanding and respect can foster trust, goodwill, and cooperation, laying the
foundation for positive ongoing interactions.
10) Adaptability: Negotiation requires adaptability and flexibility in response to
changing circumstances and diverse negotiation styles. Engaging in negotiation exercises
individuals' adaptability skills, enabling them to thrive in dynamic environments and
navigate complex interpersonal dynamics effectively.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

TECHNIQUES OF NEGOTIATION
1) Open-ended Questions: Asking open-ended questions encourages the other party to
provide detailed responses, going beyond simple "yes" or "no" answers. These questions
promote deeper insights into the other party's thoughts, concerns, and motivations. By
eliciting comprehensive responses, you gain a better understanding of their perspective,
facilitating a more productive and meaningful Negotiation process.
2) Empathy and Understanding: Demonstrating empathy is essential in Negotiation. Put
yourself in the other party's shoes and seek to understand their emotions, concerns, and
motivations. By showing empathy, you create a safe and trusting environment, which
encourages open communication and collaboration. Understanding the other party's
perspective allows you to craft solutions that meet their needs while addressing your
own.
3) Setting Clear Goals: Clear goals are crucial for effective Negotiation. Before
commencing, clearly define your objectives and desired outcomes. Setting specific goals
keeps you focused and helps you evaluate potential agreements against your
predetermined criteria. Clear goals also provide a benchmark for measuring the success
of the Negotiation process.
4) Using the Power of Silence: Silence can be a potent tool during Negotiations. After
the other party speaks, allow brief pauses instead of rushing to respond. This technique
encourages the other party to provide additional information or concessions. Silence
also creates space for thoughtful reflection, prevents hasty decision- making, and can
compel the other party to fill the void with valuable insights or compromises.
5) Focus on Interests: To achieve mutually beneficial outcomes, it is crucial to focus on
interests rather than rigid positions. Positions are often fixed and can lead to an
impasse. By understanding the underlying interests and motivations driving each party,
you can explore creative solutions that satisfy everyone involved. This approach expands
the scope of possibilities and fosters win-win outcomes.
6) Brainstorming and Problem-solving: Encourage open discussion and brainstorming
sessions to generate innovative ideas and alternative solutions. Involve all parties in
problem-solving, leveraging their unique perspectives and expertise. By promoting a
collaborative environment, you empower each party to contribute actively, increasing
their sense of ownership and commitment to the Negotiated outcome.
7) Building Relationships: Negotiations often involve ongoing relationships. Invest time
in building positive relationships, even if you disagree on certain issues. Cultivating trust,
respect, and goodwill strengthens interpersonal connections, facilitates open
communication, and improves long-term outcomes. Building relationships creates a
foundation for future collaborations and enhances the potential for mutual success.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

8) Flexibility and Compromise: Negotiation demands flexibility and a willingness to

compromise. Understand that not all demands can be met entirely. Instead, explore
flexible options and seek creative solutions that consider the interests of all parties
involved. Demonstrating flexibility and a cooperative attitude promotes goodwill and
strengthens the likelihood of reaching mutually satisfactory agreements.
9) Maintaining Professionalism: Professionalism is paramount throughout the
Negotiation process. Emphasize the issues at hand rather than resorting to personal
attacks or negative emotions. Maintain a respectful and composed demeanor, even
when faced with challenging situations. Professionalism enhances your credibility,
encourages cooperation, and improves the overall atmosphere of the Negotiation.
10) Documenting Agreements: After reaching an agreement. document the terms and
conditions in writing. Clear and concise documentation ensures that all parties have a
shared understanding of the agreed-upon terms. This practice minimizes the risk of
misunderstandings or disputes in the future, providing a reliable reference for ongoing
collaboration and ensuring the sustainability of the negotiated outcome.
ISSUES IN NEGOTIATIONS
The contradictory opinions in an organizational environment sometimes complicate the
negotiation process and give rise to certain issues which need to be resolved. Some of
the important issues are as follows:
1) Differences in Personality: Neither the bargaining process nor the results of
negotiation are directly influenced by the role played by personality in negotiation, as
per the evidences provided by research. According to the research, an individual must
not focus on the opponent's personality. Instead, he/she should pay attention to the
situational issues in the bargaining process. Difficult individuals must be handled
efficiently. These difficult individuals can be either chronic or occasional.
While occasionally difficult individuals may become difficult in certain situations, the
chronically difficult individuals consistently look to create problems for others once they
get power. They consider themselves the most righteous as against the customers.
Irrespective of the scenario, chronically difficult individuals are characterized by a feeling
of superiority over others. They behave with others in a commanding manner. It is
important for an individual to deal with them as adults when they try to demean
him/her.
The negotiation process may witness the following five types of difficult people:
i) Sherman Tank: These individuals are over-aggressive and tend to put down, demean,
destroy, and threaten anything or anyone obstructing them. Sherman tanks are
characterized by power abuse and unfair demands.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

ii) Super-Agreeable: These individuals try to win over others without upsetting them or
indulging in conflicts. They do not criticize openly and are generally polite. Super-
agreeable can be therefore termed as 'silent killers'.
iii) Know-it-All Expert: This type of individuals can be:
 Bulldozer: These individuals constantly try to disturb the balance of others and
force them to agree with their decisions and views. They consider themselves
superior to others.
 Balloon: These types of know-it-all experts are self- proclaimed experts and
pretend to have the entire knowledge and information about everything. Even if
they do not possess any knowledge on a specific issue, they seem to talk and
debate on it very confidently.
iv)Exploder: An individual who outbreaks and loses his cool on people to whom he
considers himself superior is called an exploder. Though these individuals seem to be
very angry at times, they become normal once again as their outrage is temporary.
v) Complete Complainers: This category of difficult people is ever complaining and is
never happy.
2) Differences in Gender: Though women are believed to be more accommodating and
harmonious during negotiations than males, research has denied this belief. As per the
research, men are found to negotiate more effectively than women. However, men have
excelled only by a small margin in this regard. Very few key positions held by females in
large firms and the biasness based on gender are the main reasons why women are
perceived more cooperative than men.
The attitudes of both men and women are different towards being negotiators and
towards negotiation itself. A lower level of confidence is witnessed in women in
expectation of a better negotiation outcome. Even if they achieve the same results as
men, women seem to be a little dissatisfied after the negotiation process.
3) Decision-Making Biases: It is sometimes observed in a negotiation process that a
satisfactory decision which is mutually agreed upon cannot be achieved due to the
influence of individual biases on decision-making.
Following are few examples:
 Baseless commitments and pretending to have complete knowledge of
everything.
 Supposing that only win or lose remedies are present.
 Using poor and incomplete information for decision-making.
 Assuming the demands made by the opponent at the start of negotiation process
are the final demands and getting frustrated because of the same.
 Gender bias like believing that women are better negotiators than men.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

4) Cultural Factors: Different cultures also influence negotiation patterns. French people
are found to be quite argumentative and do not care regarding the views of other
people about them. This is why negotiating with French people takes a lot of time. The
Japanese and Chinese negotiations are also lengthy. Even the minute components of
negotiation are addressed by them as they look forward to establishing enduring
relationships.
STRATEGY AND TACTICS FOR DISTRIBUTIVE BARGAINING
Distributive bargaining is an adversely competitive negotiation where two parties strive
to divide a fixed and limited resource in their favor. Distributive bargaining tactics are
essential, especially in situations where no alternatives seem to satisfy the situation's
demand.
Distributive bargaining or zero-sum bargaining is a strategy used to divide a limited or
fixed resource in a high and almost unhealthy manner that puts them at risk of securing
no further business in the future with the other party.
"Sharing the pie" is a common metaphor used to describe the distributive bargaining
process as a pie is a limited source of gain, and if one party gets more, naturally, the
other one has a lesser share left.
Strategies to utilize in Distributive Negotiations
1) Know Your Walk-Away Value and BATNA: A walk-away value, also referred to as a
reservation point, is the minimum or maximum price you are willing to pay or accept. It
is the figure to which negotiators are indifferent to accepting a deal before turning to
their best alternative to a negotiated agreement (BATNA).
By knowing your walk-away value, you understand how much you are willing to sell or
buy. By knowing your BATNA, you understand how low or high you are willing to go to
agree on a price if your negotiations fail. Your walk-away value should always be higher
than your BATNA.
2) Be Firm, Hard, and Tough: People often conflate distributive negotiation with
adversarial bargaining, where negotiators make tough demands, bluffs, or even threats.
However, this is not always the case.
An effective distributive negotiator is firm, hard, and tough, but without sacrificing their
integrity or acting in bad faith. This means standing your ground and pushing hard to
win.
3) Be Comfortable Sitting in Silence: Research shows that silence can be effectively used
to weaken an opponent's resolve during distributive negotiation. Sometimes when
making an offer to a business counterpart, the opponent may take longer than expected
to respond.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

This can create an uncomfortable air that could yield retractions or concessions. Expect
silence when using distributive negotiation; use it to your advantage by using it for more
time to prepare an effective response.
4) Understand Concessions: Concessions are the act of making compromises or offers of
value to help reach an agreement with another party. It generally involves one party
showing the willingness to give something up to potentially gain something in return. In
distributive bargaining, you typically want to avoid making concessions if you want to
"win."
5) Know Your Zone of Possible Agreement: A zone of possible agreement is a bargaining
range where the negotiating parties may find common ground, and therefore a solution
to the negotiation A ZOPA can only exist when a solution overlaps between both parties'
expectations and wishes regarding an agreement/ If the parties involved in the
negotiation cannot reach a ZOPA, they are in a negative bargaining zone where one
party must make concessions or exercise their reservation point.
IMPORTANCE OF NEGOTIATION
Importance of negotiation is as follows:
1) It Resolves Conflict: Contradiction in the interests and needs of individuals or their
affiliates is the root cause of conflict. Parties to negotiation witness varied conflicts
based on their demands. If negotiation process is conducted effectively by the parties, it
often boosts up the morale of the employees in an organization and hence it also
influences the productivity. The conflicts should be resolved as soon as possible, in order
to save time for the organization which it can use in other productive functions such as
product innovation. expansion of business, customer relations, etc. In addition to these,
it also reduces employee turnover because they start finding the work environment
healthy to work.
2) Cost Effective: Competence in negotiation helps in bringing down the overall cost as it
helps in identifying the incorrect contracts and hence lessens the cost involved in it. It
also saves the cost of legal arbitration used for conflict resolution.
3) Makes Relationships Stronger: Negotiations bring parties closer because during the
course of negotiation they exchange thoughts and ideas in order to reach a common
ground. It also fosters mutual trust among the parties that they keep each other's
interests in mind while negotiating. Collectively, all this helps in procuring quality
environment at workplace.
4) Helps in Gaining Competitive Advantage: Discussions during the process of
negotiation within an organization enables people to identify the ways to improve the
existing processes.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur
 CONFLICT & NEGOTIATION MANAGEMENT MODULE 4

When some parties to negotiation are from outside the organization, the process of
negotiation yields the synergic effect, i.e., the cooperative efforts of parties' produces
results more than the sum of efforts by the parties individually.
5) It Helps in Problem-Solving: Negotiation is all about arriving at a mutually agreeable
decision through exchange of views, dialogue, or discussion without affecting the
congeniality of the working atmosphere. It also facilitates in developing improved
processes of problem-solving.
6) It Helps to Reach Common Ground: Conflicts and confrontations, if not resolved,
spread negativity at the workplace. Negotiation is a means to resolve these conflicts and
confrontations by finding a mutually acceptable situation.
The main reason behind workplace conflicts is the inflexible nature of the employees,
i.e., those who are not ready to compromise with others to arrive at mutually
acceptable situation.

Manjula SM, Asst. prof.

MBA dept, HMSIT, Tumkur