NEGOTIATION STRATEGIES Prepared By: BURCU ŞİMŞEK ELİF AKKURT SÜMEYRA KARATAŞ TÜRKAN COŞKUN F. BETÜL EKREM
NEGOTIATION GOALS • PROCESS OF STRATEGY DETERMINATION BURCU ŞİMŞEK
NEGOTIATION STRATEGIES • Strategyis the overall approach for conducting the negotiation. • Tactics are particular actions used to implement a strategy.
NEGOTIATION STRATEGIES • Whereas a strategy provides 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.
NEGOTIATION GOALS • Negotiation goals encompass a wide range of both tangible and intangible desires. • Categories of goals which in turn affect the negotiator’s choice of strategy and tactics.
Aggressive goals Competitive goals Cooperative goals Self-centered goals Defensive goals Combinations of goals Categories of Negotiation Goals
AGGRESSIVE GOALS • Seeks to undermine, deprive, damage or otherwise injure a rival or opponent. Example: Taking a customer or supplier away from a competitor in order to hurt the competitor.
AGGRESSIVE GOALS • Aggressive goals seek to damage an opponent.
COMPETITIVE GOALS • One side seeks to gain more from the negotiation than the other side. • In fact the negotiator hopes to obtain as large a comparative advantage as possible. Example: • Receiving the highest possible price. • Paying the lowest possible price.
COMPETITIVE GOALS • A competitive goal means getting more than the other party.
COOPERATIVE GOALS • Cooperative goals are achieved through an agreement that leads to mutual gain for all negotiators and their respective sides. • This achievement is also referred to as win-win negotiating. Example: Forming a joint venture, partnership, or corporation to engage in business opportunities to achieve a mutual profit.
COOPERATIVE GOALS • With cooperative goals, agreement leads to mutual gain.
SELF-CENTERED GOALS • Self-centered goals are those that depend solely on what one’s own side achieves. • Scenario: two large accounting firms merge. The tremendous size of the new firm raises a self centered goal to find sufficient prestigious space in a single location. The goal is reached when the new firm negotiates a lease for 15 floors in a major midtown New York office building.
SELF-CENTERED GOALS • Self-centered goals seek a particular result regardless of what the other side receives.
DEFENSIVE GOALS • One seeks to avoid a particular outcome. • Examples: • Avoiding a loss of respect. • Preventing a strike. • Avoiding the loss of a customer or supplier.
DEFENSIVE GOALS • Defensive goals seek to avoid a particular result.
COMBINATION OF NEGOTIATION GOALS • Each negotiation usually has multiple goals. • Case: In a collective bargaining negotiation, a transportation firm seeks to have its employees make prompt deliveries in order to maintain its business volume. This is a self-centered goal. A defensive goal is suggested if the maintenance of volume is intended to avoid a loss of customers. The goal is also aggressive to the extent that the same activity lures new customers away from competitors, a result which is likely to weaken the latter.
PROCESS OF STRATEGY DETERMINATION • Strategies are chosen for use in a particular negotiation in order to achieve your side’s goals. The nature of those goals will affect the choice of strategy or strategies. • A variety of factors determine the best strategy for a negotiating situation.
PROCESS OF STRATEGY DETERMINATION The choice of strategy also may be affected by the answers to a number of questions, such as: • Does the negotiation involve a transaction or a dispute? • Is there more than one issue involved? • Can new issues be introduced into the negotiation? • Are the parties’ interests short-term or long-term? • Are the parties’ relationships long-term, limited to one negotiation or some where in between?
MAIN NEGOTIATION STRATEGIES • AVOIDANCE STRATEGY • COMPETITIVE STRATEGY • COLLABORATIVE STRATEGY • ACCOMMODATIVE STRATEGY ELİF AKKURT
MAIN NEGOTIATION STRATEGIES THE DUAL CONCERNS MODEL • How much concern does the actor have for achieving the substantive outcomes at stake in this negotiation? (substantive goals) • How much concern does the negotiator have for the current and future quality of the relationship with the other party? (relationship goals)
AVOIDANCE STRATEGY(The Nonengagement Strategy) Reasons of why negotiators might choose not to negotiate: • If one is able to meet one’s needs without negotiating at all, it may make sense to use an avoidance strategy. 2. It simply may not be worth the time and effort to negotiate.
Avoidance Strategy • The decision to negotiate is closely related to the desirability of available alternatives. Alternativesare the outcomes that can be achieved if negotiations don’t work out 4. Avoidance may be appropriate when the negotiator is responsible for developing others into becoming better negotiators.
Active-Engagement Strategies • Competition • Collaboration • Accommodation
COMPETITIVE STRATEGY • Distributive Bargaining • Win-Lose Bargaining (I win, you lose) Zero-sum game: whatever extent one party wins something, the other party losses
Competitive Strategy Distributive Bargaining refers to the process of dividing or distributing scarce resources • Two parties have different but interdependent goals • There is a clear conflict of interests
Distributive Bargaining The essence of Distributive Bargainingis who gets what share of fixed pie.
Examples of Distributive Bargaining • A wage negotiation • A price negotiation • A boundary or territorial negotiation
COLLABORATIVE STRATEGY • Integrative Bargaining • Win-Win Bargaining (I win, you win) Positive-sum situations are those where eachparty gains without a corresponding loss for theother party.
Integrative Bargaining The law of win/winsays “Let’s not do it your way or my way; let’s do it the best way” Greg Anderson The 22 Non-negotiable Ways of Wellness Integrative Bargainingis about searching for common solutions to problems that are not exclusively of interest to only one of the negotiators.
Concepts for Integrative Bargaining • Separate people from the problem • Focus on interests, not positions • Invent options for mutual gains • Insist on using objective criteria
ACCOMMODATIVE STRATEGY • Win-lose strategy (I lose, you win) • The negotiator wants to let the other win, keep the other happy, or not to endanger the relationship by pushing hard to achieve some goal on the substantive issues
Accommodative Strategy Accommodative Strategy is often used; • When the primary goal of the exchange is to build or strengthen the relationship and the negotiator is willing to sacrifice the outcome. • If the negotiator expects the relationship to extend past a single negotiation episode.
“In a successful negotiation, everyone wins. The objective should be agreement, not victory." • “The key to successful negotiation is to shift the situation to a "win-win" even if it looks like a "win-lose" situation. Almost all negotiations have at least some elements of win-win. Successful negotiations often depend on finding the win-win aspects in any situation. Only shift to a win-lose mode if all else fails.” Professor E. Wertheim, College of Business Administration, Northeastern University
NEGOTIATION STRATEGIES • No-Concessions • No Further Concessions • Making Only Deadlock-Breaking Concessions • High Realistic Expectations With Systematic Concessions • Concede First • Problem Solving • Goals Other Than To Reach Agreement • Moving For Closure • Combining Strategies
NO-CONCESSIONS • NO FURTHER CONCESSIONS • MAKING ONLY DEADLOCK-BREAKING CONCESSIONS SÜMEYRA KARATAŞ
NO-CONCESSIONS • A No-Concessions Strategy is tough and dangerous,since concessions usually are expected. • With a no-concessions strategy, the negotiation becomes a unilateral process.
NO-CONCESSIONS • A no-concessions strategy is suitable for aggressive, competitive and self-centered goals. • A no-concessions strategy is not suitable for cooperative and defensive goals.
WHEN TO USE NO-CONCESSIONS • When the balance of power is strongly in your favor. • When you are in a disproportionately weak position. • When the dollar amount is too low or time is too short. • Cost Efficiency • Available Time
WHEN TO USE NO-CONCESSIONS • When the same terms must be available to everyone. • When bids or written proposals are sought • When another party is waiting in the wings.
DRAWBACKS OF THE NO-CONCESSIONS STRATEGY • Might preclude an agreement the terms of which, although less favorable, are still acceptable. • A strategy shift away from no concessions might be read as a failed attempt at bluffing, a position to be avoided.
DRAWBACKS OF THE NO-CONCESSIONS STRATEGY • Avoid inadvertent bluffs by rashly miscalculating the use of this strategy. • It may also be helpful to accompany the demand with reasons why your side is notin a position to offer anything else, and to explain how the demand is fair.
COUNTERING TIPS FOR THE NO-CONCESSIONS STRATEGY • Appeal to a higher level of authority in an attempt to change the party’s position. • Ignore it and proceed as if concessions are possible. • Present cost saving or win-win measures that justfy a concession. • As a seller, offer less(such as fewer services), thereby effectively increasing the price. • As abuyer, demand more, thereby, in effect, reducing the price. • Terminate the negotiating session.
NO FURTHER CONCESSIONS A No-Further-Concessions Strategy is possible when the other party can be forced tomake the final concession, or when the situation has changed.