You are on page 1of 51

BUILDING NEGOTIATION SKILLS

| 

2 2 2 2 222  
   
  
½Negotiation involves two or more parties with
competing or conflicting interests or needs,
working towards an agreement on how they
will cooperate.´
- O 

Negotiation is a process of finding a point of


balance between your objectives and that of
the other party.
½Negotiation can be defined as any form of direct
or indirect communication whereby parties who
have opposing interests discuss the form of any
joint action which they might take to manage
and ultimately resolve the dispute between
them. A negotiator should advance the interests
of the party that he or she represents in order to
obtain an optimal outcome for that party.´
- !    !
  
áharacteristics of a Good Negotiator

‡ Assertive ‡ Persuasive
‡ Patient ‡ Decisive
‡ Open-Minded ‡ áonfident
‡ áareful Listener ‡ áonsiderate
‡ Self-Disciplined ‡ Prudent
‡ áreative ‡ Respect for Others
‡ Flexible ‡ Ability to Handle Pressure
‡ Highly Ethical
Factual
Negotiator

Lead Relational
Negotiator Negotiator

Negotiating
Roles

Logical Intuitive
Negotiator Negotiator
Factual Negotiator
Features
‡ Knows all facts related to the issues
‡ Asks factual questions
‡ Ensures that no fact is left out
‡ Provides information

Problem
Tendency to leave emotional issues aside while focusing on
details and make the other party hostile
Relational Negotiator
Features
‡ Establishes relationships with the other party
‡ Builds trust
‡ Is sensitive to the other party¶s emotional issues
‡ Perceives the position of the other party

Problem
Propensity to concentrate on building relationships and lose sight
of the reason for negotiation
Intuitive Negotiator
Features
‡ Able to proffer unexpected solution
‡ Able to separate key issues from others
‡ Visualizes implications of proposal
‡ Accurately guesses the progress of negotiation
‡ Sees the picture

Problem
This may be dangerous because of wildness and lack of discipline
Logical Negotiator
Features
‡ Sets rules of negotiation
‡ Develops an agenda
‡ Argues logically
‡ Adapts position to meet changing situation

Problem
Likely to see the process as being more important that content or
outcome
The Lead Negotiator

This coordinates all the other roles and


decides appropriate strategy to apply.
Negotiation Approaches
‡ áompetition: In this approach, a party just try to maximize
benefits accruable without consideration for the other. This is
focused on win/lose.
‡ áollaboration: This approach is based on belief that it¶s
possible to reach a solution wherein both parties would
derive benefit i.e. win/win.
‡ Avoidance: If a party identifies the matter at stake to be of
low importance, it may decide to avoid negotiation, thus
leading to lose/lose situation. This approach can be adopted
to give room for further research or change of strategy.
‡ Accommodation: This involves giving concession to the
other party. It may be viewed as Achilles' heel or
benevolence.
‡ áompromise: In this case, both parties are expected to
sacrifice some elements of their demands, in order to arrive
at a middle ground.
Bargaining Styles

‡ áompromisers
‡ Problem Solvers
‡ Accommodators
‡ áompetitors
‡ Avoiders
Nemawashi
To dig around a root before transplanting it

Applied as ½groundwork laid inconspicuously in


advance.
Naniwabushi Strategy

This comprises three parts as follows:


ü Kikkake: General background of story
ü Seme: Account of critical events
ü Urei: Expression of pathos and mourning for
what happened
Seven Elements of Negotiation

 Interests: What do the parties want?


 Options: What are likely areas of agreement?
 Alternatives: What if we don¶t agree?
 Legitimacy: How persuasive is each party?
 áommunication: Are both parties willing to discuss and
listen?
 Relationship: Are both parties ready to establish operational
relationship?
 áommitment: What¶s the structure of commitment from both
parties.
Functions of Nonverbal áommunication
 Accent: Punctuating or drawing attention to a verbal
message
 áomplement: Expressions/gestures that support but could
not replace verbal message
 áontradict: Expressions or gestures that convey meaning
opposite to that of verbal message
 Regulate: Expressions or gestures that control the pace or
flow of communication
 Repeat: A gesture or expression that can be used alone to
send the same meaning as verbal message
 Substitute: A nonverbal cue that replaces verbal message
Examples of Nonverbal áues
A Accent: Touching someone¶s shoulder in empathy
A áompliment: Smiling in approval or frowning with
disdain
A áontradict: Reading paper while saying ½I am
listening´
A Regulate: Looking confused by too much
information
A Repeat: A stern look or pointing along with a verbal
command
A Substitute: Nods and shakes of the head
Types of Nonverbal áues
1. Facial expression
2. Eye behaviour
3. Posture
4. Gesture
5. Proxemics
6. Touch
7. Personal appearance
8. Vocal features of speech
Real Nonverbal áues
 Facial Expression: Happiness, sadness, surprise, fear,
anger and disgust
 Eye Behaviour-Functions: Regulatory, monitoring,
cognitive and expressive
 Posture: Indicative of attention, involvement, relative
status and rapport
 Gestures: Speech related and independent
 Proxemics: Use space
 Touch: µof self¶ indicates emotion, and µof others¶
indicates relationship
 Personal Experience: Indicators of personality, values
and lifestyle
 Vocal Features of Speech: Tone, stress, accent,
loudness and rate of speech
áommon Signs of Deception During Negotiation

i. New body movements


ii. Touching of self/fidgeting
iii. Hesitation
iv. Blinking, eye shifting and dilation of pupils
v. Lack of spontaneity
vi. Speech errors
vii. High vocal pitch
viii. Negativity
Negotiation Process
‡ Prepare objectives and strategy
‡ Discuss and exchange information
‡ Propose solution
‡ Bargain and review areas of concession
‡ áonclude and draft agreement
Types of Power

Positional Power
Information Power
áontrol of Reward
áoercive Power
Access to and áontrol of Agenda
Using Power in Negotiation
A Be able to manipulate meaning and symbols
A Maintain a measure of flexibility
A Use personal power through confidence
A Be able to manipulate rewards
A Develop networks and alliances
A Know the area in which you intend to negotiate
½Leverage is having something that
the other guy wants. Or better,
need. Or best of all, simply cannot
do without´
Ñ O
 
Three Positions for Decision Analysis

‡ Ideal Position
‡ Realistic Position
‡ Fallback Position
BATNA
The Best Alternative to a Negotiated Agreement
(BATNA) provides more leverage for favourable
positioning.

Identify BATNA through critical thinking, creative


thinking and strategic thinking.
Approaches to Sales Negotiation

  One party demands
value and the other gives it up in a particular
transaction.

  Application of
wide-ranging problem-solving techniques to
surmount hitches in customer relationship, thus
transforming vendor relationship to business
partnership.
Sales Negotiation Process

áonduct Research, Identify Best Practices, Establish BATNA, Identify áompromise Pad


Initiate Negotiation, Foster áonducive Platform

! 
áonduct Positional Evaluation, Assess Interests, Identify & Review Realistic Openings


Assert and Present Options, Highlight Solution álusters

"
Steer Parties to a Favourable áonvergence


Endorse Agreement, Manage áordiality

Ñ    
Identifying Buying Signal

i. Assumptive ownership
ii. Issuing instruction for delivery
iii. áoncentrated attention to buying details
iv. Disappointment at lead time for possession
v. Looking intently at the product
vi. Asking questions about usage of product
Action during Sales Negotiation
 Be prepared for tactical response in form of flinch or silence
 Use open-ended questions
 Mention benefits the prospect would derive from product/service
 Don¶t be hasty to fill pauses during sudden silence.
 Listen
 Be ready to change value proposition to confirm price concession
 Identify tracks towards agreement
 áonclude agreements from time to time
 Paraphrase client¶s statements and demonstrate commitment
Action After Sales Negotiation
Do the following, if agreement is accomplished
1. State agreement verbally and in draft
2. Reinforce purchase decision of prospect/customer and express
thankfulness.

Do the following, if no agreement is reached


1. Show appreciation to prospect/customer
2. Encourage the prospect/customer to try you next time.
English Auction

Dutch Auction

Auction

First-Price Sealed-Bid Auction

Vickery Sealed-Bid Auction


Auction
‡ English Auction: In this case, the Auctioneer declares reserve
price and bidding would progress with increasing price. The
last (highest bidder) wins and pays the highest valuation.

‡ Dutch Auction: This is characterized by a reducing bid price


from a high opening bid announced by the Auctioneer. The first
demand to match the descending bid price wins.

‡ First-Price Sealed-Bid Auction: Herein, the bids would be


sealed and submitted during the bidding period; and at the
resolution phase, the bids would be opened and the winner
announced as the highest bidder.

‡ Vickery Sealed-Bid Auction: In this type of auction, the highest


bidder wins at the second highest bidder¶s price.
Negotiation Tactics & Ploys 1
  # $This is a type of add-on ploy in which a
service/product would be µcompletely knocked down¶ into components,
and a prospective buyer ensnared unto a haggle circuit from one
component to another. For example, ½The palmtop is 180,000 Naira; if
you want the ear piece, that¶s 9,000 Naira; if you want the satellite
control system, that¶s just 15,000 Naira; there¶s even a special bag,
and if you want it, that¶s only 5,000 Naira.´
 2It¶s a ploy used for shifting power to the doer and raise
the stakes, if counter sanctions are applied. For example, Military
officers seize a town, then offer to negotiate.
   ! This is a formula for increasing an agreed share
or salary in uncertain future income stream, if performance reaches a
particular level. For example, an employer who agrees to escalate a
worker¶s entitlement from a 100,000 Naira to 150,000 Naira, if his
performance level increases to 40 closed deals per month.
 !!" It¶s a negotiating margin set by sellers, wherefore the
padded price gives them room to tackle the bargaining instinct of a
prospect/customer.
Negotiation Tactics & Ploys 2
 % #It¶s a buyer¶s pressure ploy used for moving a seller to
reduce the price of a particular product. For example, ½ ou should sell at
a lower price, others have offered better than that´.
 & This involves demanding for up-front payment. For example, ½I
must be fully paid before I come to site´.
 !   Lure someone to think that if he obtains his goal and
some people find out, he would be widely scorned or condemned. For
example, ½if your Boss finds out that you refused to endorse it, you would
lose credibility and your career may run amuck.´
 ' "Pause exactly at the time of endorsing a deal, and
demand for extra concession. For example, ½Oh! If you include the
laptop bag in the deal, I would just endorse the cheque.´
 2#"Deceive the other party to believe you are who you aren't. For
example, ½When I was in áape town, I led a group of professionals to the
mining office and convinced the áhief Executive to implement a change
that increased the firm¶s productivity.´
Negotiation Tactics & Ploys 3
  "Demanding for little things one after the other so much that a
lot would be collected. For example, ½Bring a pen«..and a piece of
paper««oh! Just come with cold water.´
 D!( "Set-up a false trail to mislead the other party and keep him
away from what you intend to hide. For example, ½the seller of a second-
hand car tells a prospect to inspect its interior, emphasizing it¶s the only
part that require refurbishing. Meanwhile, the engine had developed a
fault which would become noticeable to a layman only after the vehicle
must have been driven for some months.´

 This involves putting forward a suggestion as ultimate
solution, and see if the other party would accept it. For example, ½Let¶s
install this particular software in your firm, I think it would improve your
performance.´
 D2 On deciding what to offer to the other party, present it as
a second option after telling them about the first option which would be
described to evoke repulsion. For example, ½ The AG9T is a big engine
that demands crane to move it and its cost of usage is very high; the
AB4X is computerized, finer, portable and its life cycle cost is very low.´
Price Negotiation
Price negotiation is a zero-sum game - the game theory jargon
signifying that what one party gains the other loses.
The most profitable strategies in price negotiation are as
follows:
1) Form one-person-queue
2) Buyers should test quantity discounts, while sellers evaluate
total revenue
3) Focus on cooperative relationship
4) Deploy blue ocean strategy
5) Use add-on ploys
6) Test sensitivity of the other party
7) Focus on win-win
8) Test interest of the other party
Impasse
In negotiation, if what a party offers is
less than the least which the other
party will accept, then impasse may
arise, unless there¶s change in the
standpoint of one or both.
How to Break Impasse

1. áhange the subject.


2. Brainstorm together.
3. Throw some wild and crazy idea on the table.
4. áhange the form of the payment.
5. Handle the emotional subject of money as
quickly as possible.
6. áhange the members of the negotiating team.

i
  ! O      
Deadlock

This occurs when concessionary impasse


strains the enabling interface between
the parties and mutual interests wane.
Handling Price Deadlock
A Pay a fraction in cash, the rest in kind
A Pay more now, then less next month
A Pay in another way
A Pay in U.S Dollars or Euro
A Pay a quarter now, then the rest next month
A Split the invoice across various budgets
Handling Deadlock Across the Issues

i. Amend the specification


ii. Alter the time structure of events by
using Salami.
iii. áhange the responsibilities
iv. áhange the nature of the business
Deadlock Ploys
They are used for inducing fear of deadlock in another party.
Examples are as stated below.
ü Introduction of phoney deadlines.
ü Exhibit false temper.
ü Become unavailable.
ü Emphasize the dilemma of reaching an agreement.
ü Accuse the other party of not being interested in agreement
ü State final offer
ü Express great pessimism
ü Act as if you intend to go off in a huff.
Reason Versus Influence
Where a party resolutely refuse to understand or
admit reason, then influence would be an
alternative façade for progress.

Had Karrington Group faced such situation?


How was it handled?
An Influencing Agenda For Potential Allies
Identify
Potential
Ally

Analyse
Potential
Ally¶s
Interests

Assess our
Resources
Relevant to
Potential Ally

Diagnose
our
Relationship
with Potential
Ally

Select
Influencing
Approach

Execute and
Monitor our
Approach

Ñ   

Goals of Lease Negotiation

‡ Gain reduction in rent, repairs, permission or


allowances.
‡ Sustaining congenial relationship with the
lessor
Strategies for Lease Negotiation

1. Emphasize existence of competition.


2. Using applicable information.
3. Enhancing collaboration by focusing on mutual benefits.
4. Take advantage of defects and demand for reduction .
5. Paint a picture of insufficient fund.
6. State whatever input you may need to bring into the
equipment or house, using that as a ploy for reduction.
7. Establish lines of agreement systematically.
8. Identify areas you would readily concede and areas of
no-concession. Then use areas of concession to gain
areas of no-concession.
Basic Rules in áollective Bargaining Negotiations

‡ Seek common grounds


‡ Use listening ability for indicating intention to
understand the other party.
‡ Build your case in a logical sequence, gaining
agreement at each stage.
‡ Use counter proposals when necessary for realigning
position.
‡ Invite the other party to look at the problem from the
opposite perspective.
‡ Avoid declaring that an area is non-negotiable.
‡ Use analytical questioning technique to shift the other
party.
Pre-Negotiation Preparation in áollective Bargaining

 Identify objectives in terms of keeping wage increases


below level of productivity increases and within inflation
rate.
 Organize a Negotiation Team and clarify the roles of
each member.
 áonduct extensive research concerning economic
impact of demands, comparative occurrence in the
industry, and identify demands which are important to
the other party as well as your core demands.
 Initial response should be in writing
 A wide-range of alternatives should be invented
 A negotiation strategy should be adopted.
| 
     
 
 




    


 



 

   

 
   

   
  
 
  
   ! 
"     #

  
  

   




#  


    

 

 $ 
 
   %|
   
 $
  
&  %'
 
#
  

(
    
 

   %|
 )   
 
  * 
|


$ 
 %

 +
 


 
   

     
%   (#   
 $ 

 

 % $  
   ,"
-.

* 
   # 

   


  

  

! 
* /
 


 

 


     
 

     
 
 
 0      
$ 
 
%$ 
 
1* 
%&

  
 

   %&


  
 

%&
  

* 
|


%&
#
 #
&   

%&
  
 

#  %

"
   
)    |


%

  
# 
$ 
 %#
 

  
$

 

"
%#
 


  
#   ,"
-


* 
|


#  


 


$ 
 #  
    
  

 
 


  
 
 

    
!2     ! # 
  

 
 #  
# 

     

+
+ + 
  
 

%   1   
 
 
+
3&     
 
   
 
 



    
      
 1



 
   
  
    

  1 1
 


4 %$ 1)
'

5

,*#$  
-' +
#+ ! 

)
 %|
 *#$  
,"
 6 
- 

  
  %

6
 6
.  
%
 7
$

 

(
  


  
 

%|
 $  
 

(
  )
  

* 
|


%|
 .

  % 
  $ 
   

x 

| 

elezendu@yahoo.com, 234 8033024596, 234 8058835237

You might also like