negotiation skills updated

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  • 1.Negotiation Skills Information Technology Institute Soft Skills Unit Ministry of Communications and Information Technology Information Technology Institute

2. Table of Contents

  • What is negotiation?
  • Why negotiate ?
  • Negotiation Process
  • How to achieve an effective negotiation
  • Setting your Negotiation Strategy
  • Haggling
  • Bargaining
  • Distributive Vs Integrative Negotiation
  • Issues in Negotiation

3. What is Negotiation ?

  • The process of conferring to arrive at an agreement between different parties, each with their own interests and preferences.
  • The process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them.

4. Why Negotiate ?

  • To reach an agreement
  • To beat the opposition
  • To compromise
  • To settle an argument
  • To make a point

5. The Negotiation Process

  • The negotiation process
    • The most crucial variable in determining the outcome of negotiations.
    • The five stages in the negotiation process are:
      • Planning and preparing
      • Relationship building between negotiating parties
      • Information exchange
      • Persuasionattempts
      • Concessions/ Agreement

6. The Negotiation Process contd

  • Planning and preparation
    • Advance planning and analysis
    • Background research
    • Gathering of relevant information
      • DontASSUME
    • Planning of strategies and tactics
    • Setting objectives
    • Predetermining possible concessions
  • Stage 1
    • Planning and Preparation

7. The Negotiation Processcontd

  • Relationship building between negotiation parties
    • Developing trust
    • Developing personal rapport
    • Establishing long-term association
  • Stage 2
    • Relationship Building
  • Stage 1
    • Planning and Preparation

8. The Negotiation Processcontd

  • Information exchange
    • Learning about the needs and demands of the other set of negotiators
    • Acquiring and exchanging other information
  • Stage 2
    • Relationship Building
  • Stage 1
    • Planning and Preparation

Stage 3 Information exchange 9. The Negotiation Processcontd

  • Persuasion attempts
    • Mixture of approaches
      • Assertive and straightforward
      • Warnings or threats
      • Calculated delays
  • Stage 2
    • Relationship Building
  • Stage 1
    • Planning and Preparation

Stage 3 Information exchange Stage 4 Persuasion Attempts 10. The Negotiation Processcontd

  • Concessions/ Agreement
    • Permit each party to win something of value
    • Some use normative appeals such as its your obligation
  • Stage 2
    • Relationship Building
  • Stage 1
    • Planning and Preparation

Stage 3 Information exchange Stage 4 Persuasion Attempts Stage 5 Concessions/Agreement 11. How to Achieve an Effective Negotiation

  • Positions
  • People Involved
  • Maintaining/ IncreasingCompetition
  • (Win/Lose Focus)
  • Interests
  • Problem/Issue
  • Decreasing/Leasing Competition
  • (Collaborative Focus)

12. Setting your Negotiation Strategy

  • Decide on your Walk-Away Point
  • Select your deal-making strategy
        • Auction
        • Sticker Price
        • Sticker price plus or minus a bit
        • Haggling
        • Bargaining

13. Haggling

  • Haggling involves arguing about a well-defined object.
  • In haggling you dont have to worry about a long-term relationship.

14. Haggling (Contd)

  • Rules of Haggling
  • Rule 1: Set yourself a really challenging objective
  • Rule 2: Make what you want a KISS
  • Rule 3: Haggling is a Game
  • Rule 4: You dont have to be reasonable

15. Haggling(Contd)

  • Rules of Haggling
  • Rule 5: Bluffing is part of the game, just dont get caught
  • Rule 6: A bit of overreacting never hurts
  • Rule 7: Use every bit of leverage you have
  • Rule 8:Never Reveal your budget

16. Haggling(Contd)

  • Rules of Haggling
  • Rule 9: Make Smaller & Smaller concessions
  • Rule 10: Silence is a great Tactic
  • Rule 11: Work on maintaining an on-going auction
  • Rule 12: Timing is crucial

17. Haggling(Contd)

  • Rules of Haggling
  • Rule 13: You can always renegotiate after you close the deal
  • Rule 14: Dont get emotionally attached to the object of haggling
  • Rule 15: Never get angry
  • Rule 16: Be ready to flash the cash
  • Rule 17: Nibbling is OK

18. Bargaining

  • Bargaining ensures a long-relationship with your opponent.
  • In Bargaining, Never give something for Nothing
  • Think Win/Win: Enlarge the pie for all to have a share
  • Ensure that everything that has been agreed on is recorded

19. Bargaining contd

  • Perceptions are the only reality
  • Offer your Opponents alternatives
  • Plan your cues & listen carefully for cues from your opponents
  • Use Rational arguments that support your cause
  • Be flexible

20. Bargaining contd

  • Bargaining Tactics
  • Reciprocity
  • Silence
  • Good Cop/ Bad Cop
  • Third Party Mandate

21. Bargaining contd

  • Bargaining Tactics
  • Bluffing
  • Ultimata, threats & Walk-outs
  • Time-out
  • Use breaks & informal Sessions

22. Bargaining contd

  • Handling Deadlocks
  • Throw out lots of options
  • Ask a lot of (open) questions
  • Issue an Ultimatum (BAFO)
          • This is my Best & Final Offer,Take it or Leave it
  • Invite your Opponent to give their BAFO
  • Capitulate
  • Walk Away
  • Agree to Sleep on it

23. Bargaining contd

  • Bargaining Strategies
  • Distributive Bargaining
  • Integrative Bargaining

24. Bargaining contd Distributive Bargaining

  • Operates under zero-sum condition.
  • Negotiates over who gets what share offixed pie .

Party Astargetpoint Party Bsresistance point Party Asresistance point Party Bstargetpoint Party As aspiration range Party Bs aspiration range Settlementrange 25. Bargainingcontd Integrative Bargaining

  • Operates under the assumption that there exists one or more settlements that can create a win-win solution.
  • To achieve more integrative outcomes
    • Bargain in teams will reach more integrative agreements thanbargain individually.
    • Put more issues on the table
    • Compromise may be your worst enemy in negotiating a win-win agreement.

26. Distributive Versus Integrative Bargaining BargainingCharacteristic Distributive Bargaining Integrative Bargaining Information sharing Low (sharing information will only allow other party to take advantage) High (sharing information will allow each party to find ways to satisfy interests of each party) Duration Short ter