negotiation skill session 1
TRANSCRIPT
Selling & Negotiation SkillsMMS Semester I
Sameer PhanseMarketing & Information Technology Consultant
CIMR2010
Session 1
07:50
Sameer Phanse Marketing & Information Technology Consultant 1
07:50 2
What's ours is ours….and what's yours is negotiable!
Soviet outlook toward Negotiations during the Cold War with the West
Sameer Phanse Marketing & Information Technology Consultant
What's ours is of course ours! What you say was yours, is rightfully ours,
so, where is the question of Negotiations?The Chinese Negotiation attitude – Sameer Phanse (2010)
07:50 Sameer Phanse Marketing & Information Technology Consultant 3
Objectives - Session 1 Introduction
Topic Importance Evaluation Scheme Student Representative
Negotiation examples – A Quiz Why Negotiate? Management Students and Negotiation Skills The “Skills” in Negotiation Skills Why the increasing stress on Negotiations? Accomplished Negotiators vis a vis Average Negotiators The Conflict Management Grid Conflict Continuum and the place of Negotiation
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Objectives - Session 1 Negotiation Pre-Conditions When not to Negotiate! Negotiations – Myths and Truths Home Work
Groups of 5 to 6 students Students to read up on a real life Negotiation situation Discussion in Session 2 if possible
Sources of Power Negotiations, Mediations and Arbitrations Types of Negotiations The Negotiator’s Dilemma
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Term Paper Term Paper
Individual students to research and prepare a Term Paper Topic
The on-going Government of India (GOI) and Research in Motion (RIM) negotiations
Provide in brief, all relevant background information about the situation at hand
Analyze the implications for all the stakeholders involved Develop Negotiation Strategies for
GOI and RIM
Paper Specifications At least 5 to 6 single side typed A4 size page lengths
Submission Through the student representative To reach the college office on or before 27th November 2010
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Introduction Introduction
Topic Importance Life-Skill
Professional Life Personal Life Ubiquitous mechanism
Business Politics Society
A way of Conflict Management Culmination of Sales
Evaluation Scheme Active Class Participation/Interaction – 10% Case Study/Term Paper/Project/Quiz/Presentation - 30% End Semester Examination - 60%
Student Representative to report to me for all future co-ordination
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Negotiation examples – A Quiz
Negotiation examples – A Quiz Which of these situations represents a negotiation?
Buying a rug in a West African market Soliciting a new source of venture capital Trying to capture/kill a terrorist in an encounter Chatting with someone you do not know on the Internet Meeting your potential in-laws for the first time Giving or receiving commendation and criticism Deciding whether to stay late at work to finish up a project Making up, or rebuilding a relationship with someone you love Picking a successor for the CEO of a company where you are on
the board Getting a child to go to bed Getting into a class or training program with limited enrollment Laying off or firing someone
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Negotiation examples – A Quiz
Discussing the outsourcing of a business function with the manager of the function
Soliciting a sponsorship from a major corporate for your College Seminar Soliciting bids for the new advertising campaign for your company Saying good-by to someone you will not see for a long time Finding an advisor, or a mentor, or a counselor Discussing with a recruiter the salary and benefits you feel you deserve Trying to get back to sleep when something is worrying you Getting an extension on a paper or a project Apologizing to someone whose property you unknowingly damaged Accepting a bribe Turning down a bribe Getting another country to lower a trade barrier Struggling to stay on a diet or exercise plan or give up smoking
All interactions personal or professional where there are two or more points of view are Negotiations
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Power, Negotiation, Persuasion & Force
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Outcome possible by Persuasion?
Goal Achieved?
UsePersuasion
Outcome possible by
Negotiation?
Goal Achieved?
UseNegotiation
Outcome possible by
EthicalPower?
Goal Achieved?
UseEthicalPower
Outcome possible & justified by
Force?
Goal Achieved?
UseForce
YES
NO
YES
NO
YES
NO
YES
NO
YES
NO
YES
NO
YES
NO
YES
NO
End
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Management Students and Negotiation Skills
Job Interview
New Job
Career
Negotiations
Negotiations
Negotiations
NegotiationsJob/Entrepreneurship
Negotiations
SurvivalSkills
(Within Organization)
ThriveSkills
(External)e.g.Sales
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Management Students and Negotiation Skills
MANAGEMENTTRAINEE
Resources
GeneralExpectations
ExternalCommunities
WorkExpectations
Internal Communities
Boss 2
Boss 1
Peers
CustomersBoss’sPeers
OtherEmployees
Subordinates
SeniorManagement
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Negotiations Criticality Why the increasing stress on Negotiations?
Escalating Multidimensionality of Deals More Sophisticated Buying Fraternity Price focused competitive behaviour Customer Lifetime Value Concept Internal Negotiations and Boundary Spanner Stresses Global trend towards selling “Value and Solutions”, in
contrast to “Price and Product” Escalating Competition Increasing Cost pressures
Resource Crunch Inflation
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Negotiations Criticality Why the increasing stress on Negotiations?
Escalating Multidimensionality of Deals Price
Variations Schemes Offers Financing Alternatives
Products Multi Components/Combinations
E.g. Mobiles Allied Services
Pure Services Agreements
Intricate Service Level Agreements (SLAs) Legal Aspects Licensing arrangements Intellectual Property considerations Statutory norms and disclosures ….and so on
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The Talented Negotiator Skilled Negotiators
Consider wider range of outcomes More attention to common
ground Better anticipation of long-term
interest domains Decide upper/lower “bounds” for
settlement No rigid issue discussion priority Use neutral phrases (signals)
when making offers Take time to respond to offers Position defense is based on few
arguments Objectively evaluate past deals for
future learning
Average Negotiators Consider narrow range of outcomes Lesser attention to common
interests Poor anticipation of long-term
interest domains Decide upper/lower “points” for
settlement Rigid issue discussion priority Use qualifying phrases (signals)
when making offers Make counter-offers
instantaneously Position defense is based on a
multitude of justifications
No such review of past negotiation processes
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The Conflict Management Grid
Accommodation
Relationship
Self-interest
Competition
Collaboration
Avoidance
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The Conflict Continuum
Avoidance
Avoid the Conflict
Assertion
Negotiate
Aggression
Mediate ArbitrateOr
PursueGrievance
Fight orWage War
Litigate
Denial or Escape
Needs &Interest
Rights Power
The Coleman Raider Conflict Resolution Continuum Adapted from Deutsch & Coleman (2000)
If your General Strategy is …
..….then the Method you will use …..
…. and your Focus will be on …..
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Negotiation Pre-Conditions
Sameer PhanseMarketing & IT Consultant
YESIS THE ISSUENEGOTIABLE?
MINIMAL MUTUAL TRUST?
YES
WILL TOGIVE
AND TAKE?
YES
START
NO
Negotiation
Negotiation
NO
Negotiation NO
Negotiation
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Negotiation – A definition The greatest misunderstanding about the
negotiation process is that it is adversarial in nature. In actuality, it is not designed for those with a trial and debate mentality. It is a problem solving process in which each party may look across the table and regard its counterparts as [potential] advocates.
Colosi
“……when two individuals exchange messages, an interaction I refer to as negotiation”. Paul Byers (1985)
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Negotiation – A Definition Negotiation is a process whereby two or more
persons or groups strive to reach agreement on issues or courses of action where there is some degree of difference in interest, goals, values or beliefsThe job of the negotiator is
To build credibility with the "other side," Find some common ground (shared interests), Learn the opposing position, and Share information that will persuade the "other side" to
agree to an outcome
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Why Negotiate? What is gained through conflict negotiation?
Crystallize important issues Generate superior, more creative solutions Reach mutually acceptable agreements that
Meet your key interests and Those of your counterpart(s)
Strengthen your working relationship with your counterpart(s) Even as you honestly and respectfully negotiate your
differences
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Why Negotiate?When disagreements are denied, avoided, or
compromised away, they can: Bleed energy from essential activities and issues Affect morale Polarize groups and individuals and, Ultimately, make future cooperation or collaboration
impossible Induce careless and undesirable behavior Harm or demolish working relationships
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Negotiate when not to! When not to Negotiate
When time is of essence The need for speed may hurt your ability to think clearly and cause you to
miscalculate the result of your concession When your Best Alternative to Negotiated Agreement (BATNA) is extremely
weak When your BATNA is superior to their highest offer When Negotiating can send the wrong signal When other non-price interests may get compromised When negotiating is culturally inadvisable When you are in a situation that could cause you severe financial or
personal risk When the other party asks for something you cannot sustain because it’s
illegal or morally and ethically improper When your counterpart seems untrustworthy When you’re not all set
A failure to analyze your positions, issues, and strategies will mar your ability to reach a favourable result
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Negotiations – Myths and Truths
Negotiations – Myths and Truths To comprehend how negotiation functions and what
information, skills and abilities are important, one must first debunk certain misleading notions about Negotiations
Which of the following are statements are factual and which are hearsay? Good Negotiators are born Experience is a great Teacher Good Negotiators take risks Good Negotiators make concessions Good Negotiators never lie Good Negotiators look for common interests Everyone is a Good Negotiator
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Negotiation Merits Mutually settled solution (No external party
necessary) No intervention/approval of third parties need be
solicited The resolution being mutually agreed has greater
chance of being successful Since both parties “own” the solution there is
greater commitment from both sides An authentic solution is likely since innermost
feelings and emotions are exposed By the very nature of the process, any hidden
agendas can get crystallizedSameer Phanse
Marketing & Information Technology Consultant
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Negotiation Demerits Time Consuming Costly Requires both parties to be willing to negotiate Some parties may be at a disadvantage because
of asymmetries in Negotiation Skills Information Resources Authority Power Influence
Sameer Phanse Marketing & Information Technology Consultant
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Sources of Power Sources of power wield great negotiation potential
within organisations Typical Features of Managerial Power hubs
Holding formal authority Controlling scarce assets Possessing information Possessing unique proficiency Exhibiting the ability to manage ambiguity Commanding influential Networks Belonging to the prevailing organizational culture
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Negotiations, Mediations and Arbitrations
Arbitration:Non-voluntary,Interested partieshave the least control
Negotiation:Voluntary,Participants controlthe process &outcome
Mediation:Neutral third party helpsparticipants reachvoluntary agreement
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Types of Negotiations
Sameer Phanse Marketing & IT Consultant
Negotiation Types (All in the Mind!)Based on
How the Parties Perceive the Value of the subject of the Negotiation
One-dimensional (or few parameters) or Limited definition Multi-dimensional interpretation or Expansive definition
The basic attitude of the involved parties Self-Interest Relationship Orientation
Number of Parties Involved Issues in Focus Phases of Interactions
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Types of Negotiations
Sameer Phanse Marketing & IT Consultant
Types Based on Value perception and Party attitudes
Distributive Negotiations Integrative Negotiations
Based on number of Parties, issues and Phases Range from One-on-one, single Issue, single sitting to Multi-
party, multi-issue, multi-phase
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Types of Negotiations
Sameer Phanse Marketing & IT Consultant
Distributive Negotiation Here the Perception of the Value is
One-dimensional (or few parameters) The basic attitude of the involved parties is
Self-Interest A Negotiation characterized by competition over the
allocation of a fixed amount of value The aim of the parties is to gain as much as possible at the
expense of the other A gain by one side is made at the expense of the other Minimum/camouflaged information exchange Example
A Manufacturer – Vendor transaction in which the only value-proposition is the price of the supplied material
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Types of Negotiations
Sameer Phanse Marketing & IT Consultant
Integrative Negotiation Multi-dimensional interpretation of the value in question
Here the Perception of the Value is spelled out in a Multi-dimensional manner or an unrestrained way
Efforts are made by parties to re-interpret the value proposition so as to augment its worth and utility to all involved parties
The basic attitude of the involved parties is Relationship or Alliance oriented
A Negotiation in which the parties collaborate to optimize gains by integrating their interests into an agreement
Sufficient and transparent information sharing The aims of the parties are to
Generate value and Gain as much as possible, in a mutually approved way
Example A Manufacturer – Vendor relationship in which the
value-proposition is a set of variables including the price, quality, delivery period, payment terms and conditions and so on as well as the relationship between the two firms
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Types of Negotiations
Sameer Phanse Marketing & IT Consultant
One-on-one, Single Issue, Single sitting The typical everyday negotiation situation The most simplistic, but not necessarily the easiest
negotiation form Multi-party, multi-issue, multi-phase
Professional and Commercial negotiations will usually fall in this typology
In Multi-party negotiations, The challenges are to
Anticipate, Identify and Leverage the natural and situational coalitions that develop
It is imperative to Identify the pivotal decision makers and power centers and Initiate a rapport building dialogue with these important entities
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Types of Negotiations
Sameer Phanse Marketing & IT Consultant
The Multiple Sittings Need a
Patient, Professional and Focused approach
The flip side is that the early phases can be capitalized to develop A working relationship and Foster mutual trust
The Multitude of Issues must be objectively Examined, Prioritized, and Consciously manipulated on the negotiation chess-board to control
the parties and the course of the negotiations Game theory based Software Simulations are available to guide
decision makers in complex situations. However decision makers are loathe to suspend their own judgments for machine based suggestions
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Types of Negotiations
Sameer Phanse Marketing & IT Consultant
Negotiation Reality In real life, few commercial negotiations are
strictly distributive or integrativeMost are a mix of both, containing opportunities
for collaboration, but coming to a head with vigorous competition for a share of the worth
Integrative negotiations are more prominent today because of The realization of the benefits of long-haul business
alliances Emergence of Joint Ventures Successful business enhancing mechanisms such as
outsourcing
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Types of Negotiations“You have to believe that it’s in your interest to
look for ways to benefit your negotiating counterpart. Your goal is not to hurt them, but to help them at a little cost to yourself-and have them help you at a little cost to them. The more creative you are at coming up with things that are good for both of you, the happier both of you will be.” Michael Gordon, Negotiation Expert, (1999)
Sameer Phanse Marketing & Information Technology Consultant
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The Negotiator’s Dilemma
Sameer Phanse Marketing & IT Consultant
The Negotiator’s DilemmaA Negotiator always has a starting issue
Should she go in for an aggressive bargaining stance? ( Distributive style) or
An inclusive, co-operative manner of negotiation? (Integrative style)
DistributiveNegotiation
IntegrativeNegotiation
Win / Lose Lose / Win
Self
Win / Win
OpponentSelfor
OR
Opp
Self
Oppo
nent
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The “Skills” in Negotiation Skills
The Logical order of Learning Knowledge Skills Techniques
Other Critical Factors Attitude Experience
Negotiation is a vast sea where learning doesn’t end even for the veterans This Course will help you to gather basic information about Negotiation and
some of the skills which go with it Reflection on the learning and application in actual life are critical to quickly
internalize the teachings Its more important to understand the “Why” of Negotiations (or any subject
for that matter) than just the “How to” Just learning the gimmicks and tricks of the trade whether Selling or negotiation
wont take you too far If you understand the concepts (Why?), you can apply them successfully to almost
any situation What worked for someone in a certain situation may not necessarily work for you
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End of Session 1
Thank You!