negotiation strategies.pptx
TRANSCRIPT
-
7/21/2019 Negotiation Strategies.pptx
1/34
NEGOTIATION STRATEGIES
STYLES
SELLING & NEGOTIATION
SKILLS
-
7/21/2019 Negotiation Strategies.pptx
2/34
2
NEGOTI TION STR TEGIES
Strategyis the overall approach for conducting the
negotiation.
Tacticsare particular actions used to implement a
strategy.
-
7/21/2019 Negotiation Strategies.pptx
3/34
3
NEGOTI TION STR TEGIES
Whereas a strategyprovides the overall approach used
throughout the negotiation, a tacticis particular action
used at a specific time during the negotiation to serve a
more limited role or purpose.
-
7/21/2019 Negotiation Strategies.pptx
4/34
NEGOTI TION OUTCOMES
-
7/21/2019 Negotiation Strategies.pptx
5/34
THE DU L CONCERNS MODEL
How much concern does the actor have forachieving the substantive outcomes at stake in thisnegotiation?
(substantive goals)
How much concern does the negotiator have for thecurrent and future quality of the relationship with
the other party?(relationship goals)
5
-
7/21/2019 Negotiation Strategies.pptx
6/34
6
-
7/21/2019 Negotiation Strategies.pptx
7/34
Negotiation Styles
Assertive
Unassertiv
e
Uncooperative Cooperative
Lose/ Lose
(Avoidance)
Win / Lose
(Competitive)
Lose/ Win
(Accommodating)
Win / Win
(Collaborating)
Compromise
-
7/21/2019 Negotiation Strategies.pptx
8/34
Win Lose Style
The win-lose is the most common style of distributive negotiationwherein a person pursues his or her own wishes at the expense of
other party.
Under this style negotiation is viewed as a game to be won.
Losing may be taken as failure, weakness, and a loss of status.
When engaged in this style, the parties may use different tactics to
win like: persuasion, argument, power, or even threat.
-
7/21/2019 Negotiation Strategies.pptx
9/34
Usefulness
A forceful position during negotiation may be appropriate when thestakes are high and costs of indecision and compromise are non-affordable.
It is useful when issues of legality and ethics are at hand.
Where you do not expect to deal with people ever again, and you do
not need their goodwill.
When there is only one prize.
At management level, this style is helpful when unpopular butnecessary decisions must be made.
Win-lose is also a style to use when the other party has a tendencyto take advantage of you.
-
7/21/2019 Negotiation Strategies.pptx
10/34
Avoiding Style
Avoiding the conflict in certain situationsneed of no negotiation
at allis also a negotiation.
People may physically withdraw by simply leaving the scene of
conflict or they can refuse to get involved by using silence, orchanging the topic of conversation.
Psychologically, avoiders can also deny the existence of conflict.
During formal negotiation, avoiding style is exercised by payingdeaf ear and / or blind eye to the conflicting stimulus.
-
7/21/2019 Negotiation Strategies.pptx
11/34
Usefulness
Useful when:
your involvement will only result in negative outcomes for you;
issue is insignificant;
cost of challenge / cost is quite high;
there is little chance of success;
relationships are more important to be maintained;
to buy time and / or get other party cool down.
-
7/21/2019 Negotiation Strategies.pptx
12/34
Accommodating Style
Accommodating style of negotiation entails giving in to the wishes
of the opponent party.
Like avoidance, accommodating the other party almost in one-
sided way, is also a negotiation.
Unlike avoiders, the accommodators enter into negotiation and
give in a way that strengthens the relationships.
During negotiation, giving in totally / partially may be part ofstrategic maneuvering.
-
7/21/2019 Negotiation Strategies.pptx
13/34
Usefulness
When other issues are more important that need satisfying others
and maintaining cooperation.
When social credit is to be built for some latter issue.
To minimize loss when one is already losing.
When relationships are more important than the interests.
Though frequent yielding is not a virtue, a yielding to a fellow in
ire, a balanced yielding among spouses, or even the frequent
yielding obedience of a child to a parent or teacher is a healthy
move.
-
7/21/2019 Negotiation Strategies.pptx
14/34
Compromising Style
Compromising, the most common style of conflict resolution,
entails splitting the differences and reaching an acceptable middle
ground solution through give-and-take whereby each party should
gain something and may have to lose something.
Parties under this style of negotiation, generally use techniques
like trading, bargaining, smoothing over differences, and voting
etc.
Most of the negotiations though start with lose-win style, do endup at the compromising style.
-
7/21/2019 Negotiation Strategies.pptx
15/34
Usefulness
It is useful:
when two parties have relatively equal power and havemutually exclusive goals;
when time is not available to solve problems that are complexand require a great deal of effort to sort out all the issues;
to allow for a temporary solution until more time could bedevoted to unravel and analyze the complexities; and
when competition or collaboration fails to lead to a solution.
-
7/21/2019 Negotiation Strategies.pptx
16/34
Collaborating (Win-Win) Style
Collaborating is based on a willingness to accept other partys
needs while asserting your own needs as well.
It assumes that there is some reasonable chance that a solution can
be found to satisfy both parties in conflict without losing much.
Such solution, most of the time, is not possible but a collaborator
believes that it is worth trying to find that.
-
7/21/2019 Negotiation Strategies.pptx
17/34
Negotiation Strategies
Amar and Hari decided to purchase an office for their newly
started business three months ago. Their first choice was an office
located in a new development, and priced Rs. 500, 000 (about Rs.
25,000 above their limit). Amar thought they could get the price
down through negotiation with the salesman Mr. Shah around theirlimit while Hari was less optimistic in that regard.
-
7/21/2019 Negotiation Strategies.pptx
18/34
Negotiation Strategies
Amar and Hari decided to purchase an office for their newly
started business three months ago. Their first choice was an office
located in a new development, and priced Rs. 500, 000 (about Rs.
25,000 above their limit). Amar thought they could get the price
down through negotiation with the salesman Mr. Shah around theirlimit while Hari was less optimistic in that regard.
-
7/21/2019 Negotiation Strategies.pptx
19/34
Amar conducted some research on the development and learned that
several of the offices including the one they liked had been on the
market almost a year. Though the house they liked was their first
choice, other offices were also quality offices and could be
accepted as a second choice. Amar met the other salesman, Mr.Agha and learned that the prices of those offices were also within
their limit. With this homework done, he made an appointment
with Mr. Shah and decided to meet him alone.
-
7/21/2019 Negotiation Strategies.pptx
20/34
Amar informed the
salesman he really liked
the office and might besincerely interested at a
lower price such as Rs.
450,000.
LOWBALL
He was going for thelowest possible price.
Approach Strategy
VINEGAR-HONEY
-
7/21/2019 Negotiation Strategies.pptx
21/34
Approach Strategy
The salesperson sounded
shocked and said, That isimpossible, we would not
even consider it.Amar
anticipated that response,
and asked, If you would
not accept Rs. 450,000,
what will you ask?
PINPOINT THE NEED
It had been established
that the seller would takeless than the asking price
but not Rs. 450,000. The
task then was to pinpointhow much less than Rs.
450,000?
-
7/21/2019 Negotiation Strategies.pptx
22/34
Approach Strategy
The salesperson did somefiguring before he said Rs.
490,000.Amar was prepared
for this response who tried
another strategy saying, Mr.Agha has recently sold two
office of similar stature for
Rs. 470,000, and several
others are available with him.
Why would not you do the
same for me?
A strategy designed to put the
other party on the defensive
in an effort to win someconcessions. Added to the
Pinpoint, the Need strategy
assists in determining what
the seller will actually take.
CHALLENGE
-
7/21/2019 Negotiation Strategies.pptx
23/34
Approach Strategy
The salesperson said,That house went
cheaper, anyway perhaps I
could trim the price to Rs.485,000 but you will have
to pay 20% cash down
and the rest within one
week.Amar guessed the
salesman has a room to
tread downward and said,
-
7/21/2019 Negotiation Strategies.pptx
24/34
Approach Strategy
Down payment is notthe problem but I cannot
pay the rest before three
weeks. It is impossible,
said the salesman, our
company rules do not
permit it.Amar replied,
But I cannot pay at leastthis much within this
period of time.
FEINTING
This strategy gives the
impression one thing is
desired whereas primary
objective is really
something else.
-
7/21/2019 Negotiation Strategies.pptx
25/34
Approach Strategy
Politicians use a variationof this strategy to test
receptivity by the public to
something they plan to do.
This planned action is
leaked by a reliable
resource to testacceptability before
final action is taken.
-
7/21/2019 Negotiation Strategies.pptx
26/34
Approach Strategy
I do not think I could make
further concession, said the
salesman. Ok! Let me consult
my business partner since finaldecision will only be after our
mutual consensus, saidAmar
and left the salesmans office.
LIMITED AUTHORITY
Limited authority is an
attempt to postpone the
decision on a pretext to getapproval from a competent
authority. Whereas the real
aim is to gain time for
reconsideration, and / orkeeping the opponent under
pressure for a possible
negotiation breakage.
-
7/21/2019 Negotiation Strategies.pptx
27/34
Approach Strategy
Next day, Amar appeared inthe salesmans office again
along with Hari, his business
partner and reiterated his
yesterdays position that theycould not pay Rs. 485,000 at
least within one week. It
seems difficult to give any
further concession without
consulting the builder, said
the salesman.
-
7/21/2019 Negotiation Strategies.pptx
28/34
Approach Strategy
I told you not to approach thisagency, you could never conclude any
deal with them, growled Hari and
stepped out of the office.
You are spoiling an almostconcluded deal. I offer Rs.475,000
though I am not sure my partner will
agree to it. A slight budge from your
position can bring the deal back on
track, murmured Ahmed to the
salesman in confiding style.
-
7/21/2019 Negotiation Strategies.pptx
29/34
Approach Strategy
By the time you bringyour partner back, I call to
the builder for his
opinion. I think it ispossible to reach a deal,
said the salesman while
dialing a telephone
number when Amar
walked out of his office to
trace his estranged
business partner.
GOOD GUY / BAD GUY
The good guy / bad guy
is an internationally
used strategy. One
member of a team takes
a hard line approach
while other member isfriendly and easy to
deal with.
-
7/21/2019 Negotiation Strategies.pptx
30/34
Approach Strategy
When bad guy steps out
for a few minutes, the
good guy offers the deal
that under the
circumstances seems too
good to refuse. Bad guys
usually comprise spouses,lawyers etc.
-
7/21/2019 Negotiation Strategies.pptx
31/34
Approach Strategy
After few minutes Amar enteredthe salesmans office along with
Hari.
The builder has not been around,but I have availed my own limit
and reduced the price to Rs.
482,000 provided you could give
us your offer in writing today with
the 20% deposit.
-
7/21/2019 Negotiation Strategies.pptx
32/34
Approach Strategy
Amar sensing they wereclose to their goal replied,
We really do like this
office, but it is still more
than we want to pay.
Please excuse us while we
discuss ways in which we
might increase our offer.Would you please
reevaluate your position
too?
DEFER
Deferring strategy
allows the negotiatorstime to reevaluate
their positions.
Deferring a decisionto make often proves
that patience pays.
-
7/21/2019 Negotiation Strategies.pptx
33/34
Approach Strategy
Amar and Hari returned inan hour and offered Rs.
478,000.
The salesperson told them,I called the builder while
you were away. He gave a
little, but Rs. 478,000 justwont do.
-
7/21/2019 Negotiation Strategies.pptx
34/34
Approach Strategy
However, if you would bewilling to split the
differences, and make it
Rs. 480,000, we can make
a deal, providing you sign
the paper and put down
your 20% cash today.
SPLIT THE DIFFERENCE
Amar and Hari looked
towards each other and
t d ith l