1. Negotiation consists of discussions between two or more parties around specific
issues for the purpose of reaching a mutually satisfactory agreement.
Pre-Negotiation process:
Types of negotiation- You have to first identify the type of negotiation you
are getting into. It can be of 2 types:
Distributive negotiation: Parties compete over the distribution of a fixed sum
of value. The key question in a distributed negotiation is, “Who will claim the
most value?” A gain by one side is made at the expense of other.
Integrative negotiation : In Integrative Negotiation, parties cooperate to
achieve maximize benefits by integrating their interests into an agreement.
This is also known as a win-win negotiation.
• Goals- You have to set up your goals and analyze other party’s goals before
entering any negotiation process as to what you want to achieve. What do
you want to get out of the negotiation? What do you think the other person
wants? Goals can be of 2 types:
Short – term: Name the things that need to be included in an immediate
solution.
Long – term: Name the things that need to be included in a final solution.
These goals are more focused on the relationship building.
• Positions- Position is an option that one party is committed to as a solution
to the conflict. Initially both the parties start with their own favorable
2. position but as the negotiation goes on, agree to a mutually acceptable
position if the deal succeeds.
• Nature of other party – You have to analyze the nature of other party before
entering any negotiation. You got to know their objectives and motivation.
• Bargaining mix – You have to establish our bargaining mix before entering
any negotiation. Bargaining mix can be defined as the variables that can be
negotiated or discussed during a negotiation. You have to thoroughly analyze
our bargaining mix.
• Solution – Solution can be defined as the best possible outcome out of a
negotiation process. It might be possible that both the parties cannot arrive
at a possible solution. This is the case of a no deal. Usually a solution is
arrived by collaborating, competing, compromising or accommodating.
• BATNA – Best alternative to negotiated agreement. One of the most
important steps in the pre preparation of any negotiation is to assess your
batna. Batna lets you know when to accept a deal and when to reject a deal.
In this case you have to assess our alternatives and evaluate them. You also
have to establish our reservation value, which is the point where you cannot
have a deal. It is also very important to analyze the other party’s Batna and
reservation value as well.
3. • Strategy:
Intuition
Influence
Some of the key strategies that are involved while negotiating are as follows:
Anchoring is the process of placing the first offer, the so-called opening
offer. It should be kept in mind that the entire ZOPA needs to be kept in
play and the high target value should be realistic and enough justification
is to be provided.
Focus should be on the other person’s BATNA and Resistance Value.
Whenever the happenings of the negotiation seem unclear, be sure to
seek clarification.
When unreasonable offers and demands are placed on the table, silence
is a very powerful weapon – use it!
When you come forward to make concessions, be sure to get it
reciprocated. The move should benefit both parties of the negotiation. To
make sure you get your move reciprocated, label the concessions that you
are placing and also go the extra mile to express your expectation of the
4. return. Use and also beware of the other party using diminishing
concessions.
Whenever you are not sure or not aware of anything that is being said, it is
best to use contingency contracts.
Kinds of Strategies:
Compete & Dominate
Collaborate & Influence
Compromise
Accommodate
Appeal
Concede
Avoid
DURING THE NEGOTIATION
Meeting Place
Should be calm and serene so that both parties may listen to each other.
It could be used as an advantage to you.
If the place is of disadvantageous , party should try to rush to other places.
Seating
Seating arrangement should be according to physique of the parties
If need a translator, she should sit near the party
Supporting members should sit in second layer of sitting. First row or layer
should be for main parties.
Waiting Time
Time taken by parties to begin
It may end up in frustration as waiting may make some party lose mental
calmness
It’s always recommended to be punctual for negotiation meeting.
Introductions
Opposite party should be greeted handsomely
Basic introduction of your company and ur team should be an impressive
introduction
Basic initial offer should be given during initial offer.
Warm Up
This basically triggers and sets the mood of the negotiation.
Warm up should set an amicable environment for both of the parties.
This phase could also be used to identify BATNA and RV of other party.
5. CREATE VALUE
Try to create value for both of the parties.
There should be even a single penny left of the table
Try to make both party happy and make them get more than expected.
Try to make each party compromise on less important issues and extract the
best for the prominent issues and create value for each of them
Some package RV can be given to other party so that some long lasting
relation can be established.
SHARE VALUE
Once max value is created, it should be shared equally.
Try to get the best out of deal with satisfying clients.
At end, it should be a win-2 situation.
ARRIVE AT CONSENSUS - RECORD
Make a consensus between parties.
Record the deal values and other contract details.
Post Negotiation
• PSS – Post settlement settlements. These are the settlements that are
reached after the initial deal is signed. It can lead to parent improvements.
After the deal is signed the parties are more optimistic and willing to open
up. So this is good time to attain more value in the deal. PSS can only be
attained if both parties benefit from it. Steps for PSS:
1. Acknowledge the already made progress.
2. Bring into notice that there are aspects that are undiscovered that if used
can improve the deal on both the ends.
3. Suggest that you have already given everything in the deal and would
want to think ‘out of box’ that could help both of us.
4. Confirm the it is not a new deal but a improved deal.