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Negoti a ti ng Effectively

Negoti a ti ng Effectively

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Negoti a ti ng Effectively

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  1. Negotiating Effectively Madhu Raman Acharya 5 December 2018 Nepal Administrative Staff College

  2. Framework of discussion • Concepts • Types • Process • Styles • Negotiation techniques • Elements and variables • Hidden agenda • Challenges constraints • Strategy for effective negotiation

  3. Example- small role play • Parties: You and your spouse • Subject: Family saving of Rs. 150,000 • Positions: Buy an ornament or a smart phone • Arguments on either side • Interests versus position (hidden agenda) • Options • Reaching agreement

  4. Important things to consider in negotiation

  5. What is negotiation?

  6. Negotiating Environment • Increasingly complex environment • Requirement of “trouble-shooter” role • Conflicting interests of peers, supervisor and juniors • Stakeholder and beneficiary pressure • Increasing availability of facts and figures • Media chase • Political influence /politicization • Involvement in diplomatic negotiations • Pressure to deliver outputs • Changing styles and tools of negotiation

  7. Negotiation and Diplomacy • Diplomacy is another word for negotiation • Diplomacy as an instrument of national power • Diplomacy works best when backed by hard and soft power- require “smart power” • “War begins when diplomacy fails” • “Every war ends with diplomacy • “Diplomacy is continuation of war by other means” • Most of the work during absence of war- is conducted through negotiation

  8. Traditional concepts of diplomacy and negotiation • Chanakya Neeti, Bidur Neeti, Shukra Neeti, Bhardwaj Neeti etc. • Taking positions as per desh kaal paristhiti • sam dan danda bhed (all means are justified to fulfil the national interests)- including diplomacy (kootneeti) and deceit • sandhi (art of concluding treaties), bigraha (severing of relations), yana (attacking), asan (composure and consolidation of power), dwaidibhava (double role) and samashraya (taking protection under a bigger state) • preference to diplomacy over war (Relevant even today)

  9. Negotiation Theory • Structural analysis • Analysis of power differential / use of soft and hard power • Strategic Analysis • Cooperation versus defection /Prisoner's Dilemma • Procedural analysis: • Outcome depends upon process/ Bargaining • Behavioural analysis: • Behaviour (rational and irrational) and personality traits affect the outcome of negotiations • Rational Choice Theory • Outcome analysis: • Game Theory/ Mathematical Models • Win-lose models

  10. Win-lose Models (outcomes)

  11. What is win-win? • All creative options for maximizing gains for both exhausted • Negotiation is not a zero-sum game- (one party wins without other getting nothing) • Win-win is a myth- not possible in all situations • Your aim in every negotiation is to gain 100% that is available on the table: that is to win • Winning without other side feeling to be loosing (managing your counterpart's satisfaction, not letting them win)- e.g. buyer's bargain (satisfied if price is lower than expectation)- Maximizing your gains without compromising their gains • Make compromises: if only if you have no other options left, or if relation with the other side is more important than winning

  12. Sources of power in negotiations • Authority, rule, law • Information • Rewards • Sanctions • Good solution / win-win options • Personal charisma • Commitment • Relationship • Alternates

  13. Negotiation ProcessRADPAC Model • Rapport: get to know each other • Analysis: know each other’s intentions, interests and positions, and bottom lines • Debate: discussion about perceptions, interests, needs and positions to convince the other side • Propose: best possible solution acceptable to both sides based on the interests of either side • Agreement: best alternate acceptable to both sides, (formal, informal, oral or written) • Close: after both sides having agreed to a solution

  14. Negotiation Steps

  15. Negotiation process: important points • Sequencing (low hanging fruits first) • Confidence building • Exploring options • Finding common grounds • Short-term or long-term gains

  16. Negotiation Styles “Style” is as important as “substance” • Accommodating- seeks to accommodate the interests of the other side • Avoiding- seeks to avoid outcomes, common in bureaucracy • Collaborating- tries to find synergy among interests • Competing- views negotiators as competitors • Compromising- concedes easily (Each style can be used depending upon circumstances) (A combination of these styles can be applied)

  17. Negotiation styles

  18. Negotiating Behaviour • Rational versus Irrational (e.g. negotiating with a child stealing money) • Adversarial versus friendly (aggressive body language etc.) • Competition versus cooperation • Attacking-evading-informing- open behaviour- uniting • Avoiding tension versus taking up the challenge • Fast solution versus procrastination • Passive versus active • Hard and soft • Rigid versus flexible

  19. Negotiation ethics • What is permissible to maximize your interests • Ends justify means • Good faith: an important element: you negotiate in good faith so that what you agree will be implemented in good faith • It is possible to use powers at your hand: sam, dan, danda, bhedaetc. • Working according to desh kala, paristhiti

  20. Negotiation Techniques • Ask smart questions • Play fair • Develop trust, relationship • Create creative options and offers • Develop bottom line and fallback positions • Take third party assistance • Try informal negotiations • Apply criteria and principles

  21. Negotiation strategy • Clear goals and objectives • Develop bottom lines and options • Rank your priorities (if negotiating for multiple issues) • Quid pro quo and reciprocity –(jacket for jacket) • Step by step, one by one • Know what you can trade-off or give in exchange of something you want • Know when to leave the table

  22. Breaking a negotiation deadlock • Informal consultations/ side talks • Change the date and venue • Change negotiators/ team leaders • Change sequence of agenda • Use third party role/ mediation

  23. Negotiation Types • Bureaucratic / Diplomatic • Bilateral/ Multilateral • Persuasive versus Coercive • Distributive versus Integrative • Positional Bargaining- parties stick to their positions and bargain as much as they can • Hard - participants as adversaries- goal to achieve victory, makes threats • Soft - participants as friends, open to making concessions and compromises • Principled Negotiation- Harvard Negotiation Project

  24. Difference between diplomatic and regular negotiations • Core elements of negotiations are same • State parties/ governments involved • More cultural/linguistic differences/ interpretations/ higher risk of misunderstanding • More political in diplomatic negotiations • Need to deal with laws, polices, and authorities in more than one country • Diverse trade-offs/links to unrelated issues

  25. Difference between bilateral and multilateral negotiations • Complexity- variety of interests at stake in multilateral negotiations • Linguistic and cultural diversity • Slow decision-making / difficulty to reach agreement • Decisions usually taken by consensus/ “critical mass” required to arrive at decisions • Involves coalition building • More informal negotiation on the sidelines • Presence of large number delegates

  26. Negotiation Types

  27. Principled Negotiation “Getting to Yes”- Fisher and Ury (1991) • Negotiators as problem solvers • Separate people from the problem • Hard on substance, soft on people • Focuses on interests, not positions (interest-based negotiation) • Invents multiple options for mutual gains • Insists on objective criteria and principles

  28. Best Alternate to a Negotiated Agreement (BATNA) • Walk away point • Find your best alternative (e.g. cheaper car) • BATNA increases negotiating power • Reduces chances of over compromise • Saves you from unwanted agreement • Know other side’s BATNA • Important in power-based negotiations

  29. Zone of Possible Agreement (ZOPA)Positional Bargaining 500 600 750 900 1000 Reservation PointReservation Point

  30. Negotiation Skills • Knowing negotiations (what, how, barriers, elements, process, styles, principles etc.) • Communication skills (articulating, listening, informal communication and messaging, putting your points) • Analytical skills/ problem-solving skills • Interpersonal skills (understanding people, personal rapport - know the interests , reduce stress) • Diplomatic skills(persuasion, winning by influence) • Professional skills (subject matter expertise)

  31. Negotiation Skills • Problem analyzing and solving skills • Team building skills (often held in teams) • Skills to understand your weaknesses and strengths and that of your counterpart • Cross-cultural skills • Skills to leave the negotiation • Skills to implement the outcomes • Situational negotiation skills

  32. Situational Negotiation Skills • Take it or leave it situation: • Insist on your position (take risks) • Stop asking favours • Insist on principle or objective criteria • When other side does not want negotiation • Agree to disagree • Third party involvement • When other side uses dirty tricks • Attack tricks, not persons, insist on fair play • Principle of reciprocity (sometimes acceptable) • When other side is powerful and does not yield • Develop alternate to negotiated solution (BATNA)

  33. Negotiation Tactics • Methods to achieve advantage over counterparts • Finns out the hidden interest and agenda, uncover • Can be deceptive as well as manipulative • Consider relationship • Good cop, bad cop • Use plural (we) as if developing options together • Ultimatums, deadlines • Control logistics (drafting etc.) • Document all agreements • Hard on substance soft on people • Control your emotions, use them when necessary • Nothing is agreed until everything is agreed

  34. Hidden Agenda in Negotiation • What is the most important information that is hidden from you at a shop? • The Shadow Negotiations (2000)- originally how women could master the hidden agenda • Unspoken attitudes • Hidden assumptions • Good faith versus bad faith • Ask questions/ informal consultations • Know their interests • Understand non-verbal communication

  35. Cross cultural negotiation skills • Avoiding stereotypes (soft, arrogant, informal etc.) • Understand language differences/ interpretation • “Yes” for “No” • Use non-verbal communications / Body language / Eye contacts • Exchange of gifts (courtesy versus bribe) • Direct vs. Indirect communication (e.g. Outliers) - get the message across

  36. Cross-cultural negotiation skills • Friendship –weakness or strength • Sharp time-orientation in some cultures • Seniority and Gender • High risk taking, low risk taking behaviour • Individualism versus collectivism

  37. Qualities of a good negotiator • Knows what is negotiable and what is not • Capacity to put logical argument • Tact of avoiding conflict/ agrees to disagree • Highlights common values/ common ground • Gives people credit for their ides • Steers conversation away from emotional topics • Makes efforts to understand other's viewpoint • Breaks official talks for informal consultation • Knows when to walk out (BATNA)

  38. Barriers to Successful Negotiation • Structural constraints / mutually exclusive claims • Lack of trust • Information gaps • Communication / getting the message across • Spoilers (within and outside) • Cultural and gender differences • Power differentials, asymmetry • Principal-agent dilemma (mandate etc.)

  39. Common Mistakes • Negotiating without a goal/strategy • Not listening • No best alternate • Using emotions/impatience • Talking too much • Too much indirect communication

  40. Agreement Skills • Formal and informal (Gentleman’s Agreement) • Art of putting down what is agreed in writing • Drafting / Who brings the draft out is important • Paragraphing (preamble and operative ) • Bracketing / Referring to higher levels • Definition of terms • Provisions for dispute resolution • Interpretation and explanation • Mutually binding mechanism for implementation • Implementation : schedule and accountability • Provisions for ratification, extension, amendment and expiry

  41. Some points to consider in multilateral negotiations • Importance of informal negotiations/ consultations • Corridors/ sidelines meetings /coffee breaks /social events, • Art of coalition-building, negotiation between groups (regional, thematic, economic etc) • Decision-making requires “critical mass” • Complex rules of procedure • Lowest common denominator • “Low hanging fruit” first

  42. Some points to consider in multilateral negotiations • Annotations- most crucial facts inserted already • Secretariat and support staff- influence from behind • Role of influential powers/ groups/ chairperson • Multi-stakeholder negotiations/ INGOs/Track II etc. • Role of non-papers etc. • "Constructive ambiguity" common practice • Disagreement obscured using vague language • “Nothing is agreed until everything is agreed" • “outcome is reached when everybody is equally unhappy“

  43. Nepal's negotiation problems • Neglected aspect in bureaucracy • Focus on power, authority, status, position, not expertise and skills • Poor negotiating strategy/ Weak strategic guidance to negotiators • Mandate deficiency/ little flexibility to negotiators • Lack of strong political support/ politicization of administrative issues • Inadequate homework, teamwork and preparations

  44. Negotiation problems… • Lack of institutional memory/ files/ staff continuity • Absence of recorded experience of past negotiations • Rarely backed up with required resources • Poor coordination among various agencies • Weak communication and articulation skills • Too much secrecy / or too much media • “kich kich” on small details and missing important issues

  45. Negotiation problems… • Inadequate specialization • Influence of extraneous issues in negotiations • National interest / interest of the government (subject to interpretation) • Lack of technical expertise/ inadequate specialization • Non-implementation of agreed outcomes • Inability to adjust during implementation • Insufficient dispute solving mechanisms

  46. Nepal's negotiation problems • Asymmetry in power and expertise (negotiating out of fear) - e.g.. with India • Absence of note taking (e.g. one-to-one meetings) • Weak language/ articulation/ communication and professional skills • Weak drafting/legal skills • Non-implementation • Poor follow up and monitoring

  47. Investing in Negotiation skills • Investing in three sets of skills (diplomatic, legal, professional or subject matter expertise) • Enhancing communication skills/ better articulation • Language skills- Chinese, Arabic, others • Cross-cultural negotiation skills • Building upon experience- e.g. with India

  48. Improving Negotiation Skills • Give best negotiation skills • Support with mandate and resources • Improve internal consultation • Avoid asymmetrical teams on grounds of seniority and expertise • Focus on interests, options and mutual gains than on positions and bargaining • Stop asking favours, focus on principles • Know to walk away if that is in the best interest • Implement all agreements reached during negotiations