WelcomeMBAIUKBNEGOTIATION SKILLSGeneral OverviewPresentationDuncan Borg Ellul M.Sc.(Leic), D.M.S.(Leic), M.C.M.I. 10 October 2009
What is Negotiation? Negotiation is a more formal means of achieving cooperation. Negotiation uses formal bargaining to win acceptance and approval of a desired change. For example, if the marketing department fears losing power if a new management structure is implemented, top managers may negotiate with marketing to reach a solution.
….What is Negotiation? Companies that have strong unions frequently must formally negotiate change with the unions. The change may become part of the union contract reflecting the agreement of both parties. For example, when General Motors changed the way it runs Saturn, a part of implementation involved negotiating new labor rules with the United Auto Workers union local.
What is Negotiation about? Because negotiation is a function of communication, it is also a function of the relationship in which the negotiation takes place. As there are always power imbalances in a relationship, negotiation goes all the time.
Defining Negotiation We can define Negotiation as the process of communicating back and forth for the purpose of reaching a joint agreement about differing needs or ideas.
Statements about Negotiation • ‘The process by which we search for the terms to obtain what we want from somebody who wants something from us’. Gavin Kennedy • Confer with others to reach a compromise or agreement. Concise Oxford Dictionary • To negotiate is to trade something we have for something we want. Anon
Basics of Negotiation • There must be at least two or more parties involved. • There is a common interest between parties. • Have definite goals and objectives. • Allow adequate time for the process.
Know your BATNA Best Alternative To a Negotiated Agreement to produce something better. The better your BATNA the greater your Power.
BATNA “Best Alternative to a Negotiated • Agreement” • - List your alternatives • - Evaluate your alternatives • - Establish your best as your BATNA Have a Reservation Point – the least you • will accept • List their alternatives – their BATNA
I do not agree but…. They say that ‘Animals do not negotiate. They use violence or the threat of violence to get what they want, whether it be food, a mate or territory.’ Challenging question: Have you ever seen2 dogs negotiate over a bone?
Do Humans Negotiate? Yes it is a known fact that humans do negotiate all the time, but are humans negotiating in a different form?
When do we negotiate? • When we need someone’s consent • When the time and effort of negotiating are justified • When the outcome is uncertain
Bargaining/Negotiation • Bargaining and negotiation mean that the parties engage one another in an attempt to systematically reach a solution. They attempt logical problem solving to identify and correct the conflict.
Mediation Using a third party to settle a dispute involves mediation. A mediator could be a supervisor, higher level manager, or someone from the human resource department. The mediator can discuss the conflict with each party and work toward a solution. If a solution satisfactory to both sides cannot be reached, the parties might be willing to turn the conflict over to the mediator and abide by his or her solution.
Negotiation Patterns • Aggressive Behaviour • Win to Win • Openness
Aggressive Behaviour • Manipulation • Aggressive • Intimidation • Exploitation • Always seeking the best for you • No concern for person you are negotiating with • Taking
Win to Win • Win win approach • Cooperation • Trusting • Pacifying • Relational • Giving
Openness • Give me some of what I want • I’ll give you some of what you want • Deal with people as they are not how you think they are • Good intentions • Two way exchange • Purple behaviour incites purple behaviour • Tit for tat strategies • Open • People know where they stand • Determination to solve problems by both sets of criteria of the merits of the case and/or the terms of a negotiated exchange
Disclosing Information The opening of a collaborative negotiation will involve you in gathering as much information as possible, but also in disclosing information to develop solutions acceptable to both parties. This will involve behaviours such as considering a high number of alternatives for each issue, using open questions to gather information and actively helping the other party to expand his/her ideas about potential solutions.
Behavioural Patterns Aggressive Behaviour - People behave in this manner when they fear exploitation by the other party, but by behaving this way to protect themselves, they provoke the behaviour they are trying to avoid. Win to Win - Can you trust the other person? And to what extent? Trusting someone involves risk, on the one hand being too trusting is naïve and on the other, not trusting at all can create deceitful behaviour. Openness - To the aggressive behaviourist the message is loud and clear, ‘You will get nothing from me unless and until I get something from you’.
Conflict and negotiation across cultures Cross-cultural conflicts, disputes and negotiations are increasingly important for a number of reasons: Societies are becoming more multicultural; businesses more global; and international conflicts apparently more intractable. In these circumstances some appreciation of what we currently know about dispute processing within and across cultures is important.
Communications in Negotiations To achieve success in negotiations, effective communications must be a focal point of the strategy employed. From listening to communicating both verbally and nonverbally, all the signals sent (and received) affect the outcome of your negotiation efforts. You must develop an overall communication plan and know how as well as when to use the various communication skill techniques during the negotiation process. Understanding the difference between tactical and strategic negotiations will also affect the types of communication skills used and the degree of openness employed during negotiations.
The ten commandments of Negotiations Know who you are dealing with Negotiate only with decision makers Timing is everything Preparation Review All Possible Scenarios Understand your contribution Give slowly and reluctantly Never negotiate half issues Be humble – Be an advocate Finalizing the agreement
Negotiating with Males and Females Popular writings on gender and language makes the claim that women an men differ in their communication and negotiation styles. Although research does not always reveal gender effects in negotiation patterns, studies have shown that there could be linkages and violations
The Four Phases of Negotiation • Plan • 2. Debate • 3. Propose • 4. Bargain
Plan When you have no time to prepare for a negotiation, do you: a. Rely on your experience of similar situations? b. React to what the other person has said? c. Listen to them and adjourn at the first opportunity?
Planning for Negotiating • 1 ) • Avoid Surprises • Provide more options • 2) • Rational: Why we are negotiate • Objectives: (Yours): Goals Priorities • Differences: Possible conflicts • Mode of Negotiation • Bargaining, time-frame and issues
Debate You are negotiating with a colleague over parking spaces for your teams, and he makes a factually incorrect statement about your entitlement to parking places. Do you: a. Stop him right there to correct the error? b. Shake your head vigorously, indicating disagreement but say nothing until he finishes or gives way? c. Say and do nothing until he is finished?
Propose • A union leader interviewed on television made a passionate case that if only the management would return to the negotiation table and ‘show some flexibility’, he had no doubt that the bitter strike ‘would be settled in a matter of hours’. Did he mean that: • The union was ready to make some concessions? • The management must make some concessions? • If the management made some concessions then the union would too?
Bargain • How might the following proposals be amended to make them assertive? • ‘If we agreed to foreign rights, would you accept this on a licence-only basis?’ • ‘Your fee is slightly more than I was expecting, so could we pay it in monthly instalments?’ • ‘Would it be ok if we used our own transport?’
Negotiation in the Financial Industry • In the financial industry we can identify 3 potential areas of negotiation: • Negotiating with customers on selling financial services to satisfy their needs and demands focusing on: • long term relations • customer retention • customer satisfaction • customer extension of other financial services
Put it in Writing Whenever you and the other person reach agreement in a negotiation, you should be the one to put the agreement in writing. This gives you the opportunity to tie down any loose ends, such as times, dates or wording that favours your interests. Counter: If you don’t agree with the ‘loose ends’ that someone else includes, you should immediately email or write the person, explaining how you think the issues should be handled.
The Negotiator Must Be: Self confidence, patient, empathy. Know where to start, stop and your bottom line Know your best alternative to a negotiated settlement “BATNA” If other party respects you they will try harder to agree with you Aware of non-verbal communication
Dealing with Difficult Negotiators • Intimidation • Domineering • Bullying • Threats • Focusing on their own interests and not yours
Emotions in Negotiation • Positive affect in Negotiation: • People in positive mood have more confidence. • Higher tendencies to plan to use a cooperative strategy. • Use less aggressive tactics.
….Emotions in Negotiation • Negative affect in Negotiation: • Anger in the primary emotion. • Angry negotiators plan to use a competitive strategy. • Cooperate less. • Anger disrupts the process by reducing the level of trust. • Pay less attention to opponent’s interests • Achieve lower joint gains.
Remember The best time to make a request is BEFORE you accept an offer, this is when you hold the most power. Also, the way in which you negotiate your starting offer establishes an important impression and lays the foundation for future interactions and negotiations.