The Art of Negotiation

By

Mr. Zakaria Laroussi

C o n t e n t s

Negotiation: a fact of life Negotiation: definition of Negotiation approaches

Win - Lose Lose - Lose Win - Win

Principles of Win – Lose (distributive) Common dirty tricks used in negotiations Principles of Win – Win (integrative) Stages of negotiation Conclusion References

Negotiation Situations A child living in a family where quarrels, and sometimes even

fights, between his mother and father are frequent. The child wonders if there is a better way of dealing with differences.

In July 2010, in its bid to reach out to a global clientele, Japan’s Internet shopping mall operator Rakuten Inc. announced that it would make English its official language by 2012. A bit apprehensive about the move, employees voice their concern to top management.

A customer wants to buy a jacket but the price is high.

Question: How can one handle situations like these? Answer: Communication.

‘Negotiation is a basic means of getting what you want from others. It is back-and-forth communication designed to reach an agreement when you and the other side have some interests that are shared and others that are opposed.’--- William Ury

Question: How do we go about securing interests?

What’s negotiation?

Approaches in negotiation

win - lose

lose - lose win - win

Positional bargaining Principled bargaining

Participants are friends Seeks agreement Makes concessions to cultivate

the relationship Be soft on the people and the

problem Trusts others Changes his position easily Makes offers Discloses his bottom line Insists on agreement Yields to pressure

Participents are adversaries Seeks victory Demands concessions as a

condition of the relationship Be hard on the people and the

problem Distrusts others Sticks to his position Makes threats Misleads as to his bottom line Insists on his position Applies pressure

A Soft or a Hard negotiator?

Soft Hard

Phony facts: Example: A salesperson tries to persuade his customer that an Siera

washing machine is much better than a Whirlpool one. Counter tactic: Ask the salesperson to explain how he has come to the

conclusion.

Ambiguous authority: Example: Your counterpart makes you believe that he is the final

decision-maker. This trick serves to make you make further concessions or to give in to earlier demands, which may not be to your advantage.

Counter tactic: Don’t get defensive or accuse your negotiation counterpart of misleading you. You may say to him something like, ‘You may want to tell your manager that if anything changes, everything will be open for renegotiation.’ Maybe you can appeal to his ego and say, ‘So you don't have any authority. And I thought you had some power.’

Common dirty tricks used in negotiations

Stressful situations: Example: The physical circumstances in which negotiations take place. Ask

yourself: will negotiations take place at your place or at his, or on a neutral territory? Do you feel stress? Is the room cold/hot? Is it noisy?

Counter tactic: Tell your counterpart about what circumstances you don’t feel happy with and suggest changing things in a way that will make both of you comfortable.

Personal attacks: Example: Your counterpart could use verbal and non-verbal communication to

make you feel uncomfortable. He can attack your status, ignore you during a negotiation, fail to make eye contact, or comment negatively on your appearance, your intelligence , or integrity.

Counter tactic: Recognize the trick for what it is then refocus the negotiation on the problem at hand.

Good guy / Bad guy: One person plays the good guy; the other the bad guy.

Example: While the bad police officer is very tough with an arrested criminal to get important information about a crime, the good officer is nice to the arrested man and says that he wants to help him. The result is that the arrested man cooperates with the good officer and supplies important information.

Counter tactic: Identify the tactic and discuss it openly.

Threats: Example: If you do not respect the deadline of sending me the ordered

goods, I will be obliged to turn to another supplier. Counter tactic: Discuss the ramifications of this action.

Mark: ‘Stephen, this Win-Win idea sounds good, but it is so idealistic. The tough, realistic business world isn’t like that. There’s much Win/Lose everywhere, and if you’re not […] playing the game, you just can’t make it.’

Stephen: ‘All right! Trying going for Win-Lose with your customers. Is that realistic?’

Mark: ‘Well, no.’Stephen: ‘ Why not?’Mark: ‘I’d lose my customers.’Stephen: ‘Then, go for Lose-Win---give the store away. Is that realistic?’Mark: ‘No. No margin, no mission.’As Mark and Stephen considered the 3 approaches, Win/Win appeared to be

the only truly realistic approach.Mark: ‘I guess that’s true with customers, but not with suppliers.’Stephen: ‘You are the customer of the supplier. Why doesn’t the same

principle apply?’

What approach will work for you?Mark talks to Stephen

Fundamental principles: People : Separate the people from the problem. Interests: Focus on interests, not positions. Options : Make a list of possibilities before

deciding what to do. Criteria: Insist on objective criteria.

Let’s negotiate in a mutually beneficial way!

1. Participants are problem-solvers.2. The objective is a wise result reached efficiently and

amicably3. Separates the people from the problem.4. Be soft on the people, hard on the problem.5. Proceed independent of trust6. Focus on interests, not positions.7. Explores interest.8. Avoids having a bottom line9. Invents options for mutual gain.10. Insists on using objective criteria11. Open to reason; yields to principle, not pressure.

Principled Negotiator

Six Stages of Negotiation

1. Preparation2. Exchanging information3. Evaluation 4. Negotiation for resolution5. Reaching consensus6. Close

ONE Preparation

1. What is the main problem?2. How does it affect you?3. How does the other party benefit

from it?4.What is the best you can hope for?5. What is the worst?6. What is your Best Alternative to a

Negotiated Agreement (BATNA)?

7. What guidelines will help you know you have achieved a fair outcome?

TWO Exchanging information

1. Participants meet to discover one another.

2. Practise active listening.3. Avoid commitment.4. Establish close rapport.

o Identify interests and needs.o Separate the people from the

problemo Focus on interests not

positions5. Observe carefully the body language

of the other party and record his activities.

THREE Evaluation

1. How did you do at the meeting?2. Where did things go well, and

why?3. Where did you have problems,

and why?4. What would you do differently

next time?

FOUR Negotiation for resolution

1. Negotiate the big picture first2. Cover all the issues under

consideration.3. Shift from the general issues into

the specific ones.4. Trade concessions.5. Bargain value adds.

FIVE Reaching consensus1. Restate final conclusions.2. Check that everyone has the

authority to agree the deal.3. Check with each party

individually that they agree.

SIX Close1. Check that participants are

happy.2. Shake hands or sign.3. Keep promises

1. Know well your objective. 2. Get prepared for the negotiation.3. Invent options 4. Acknowledge your counterpart’s legitimate needs.5. Build a working relationship with him.6. Keep your temper. 7. Show respect towards your negotiation

counterpart.8. Step back from the situation for clear perspective.

Conclusion

References

Thank you