Chapter
9
Negotiation
“You often get not what you deserve, but
what you negotiate.”
~ John Marrioti
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–1
Chapter Objectives
•
Determine what you want in a negotiation and make a plan to
facilitate your ability to achieve it.
•
Determine what you’re willing to accept if you don’t get all that
you want in a negotiation.
•
Understand what the other party’s wants and needs are in a
negotiation.
•
Involve the other person in a collaborative and interest-based
negotiation.
•
Know when to walk away from a negotiation if a resolution
doesn’t appear possible.
•
Utilise framing, scripting and other negotiation tactics to
increase your effectiveness as a negotiator.
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–2
Why is Negotiation Important?
Factors driving the need for
negotiation skills:
•
Scarcity of resources
• Increased use of teams in
the workplace
• Global diversity
• Litigious tendency of our
modern society
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
Negotiation is a
process in which
two or more people
or groups share
their concerns and
interests to reach
an agreement of
mutual benefit.
9–3
Benefits of Honing
Negotiation Skills
•
Ability to maintain better control in business and
personal situations.
• Much better way to reach a solution than either a lawsuit
or arbitration.
– Negotiation more likely to end in a “win–win” scenario.
– Both parties are involved from the outset.
•
Helps both parties achieve a workable resolution, and
helps to preserve and improve their relationship,
reputations and sense of professional achievement.
• Reduces stress and frustration.
• Often reduces the number of future potential conflicts.
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–4
Integrative Bargaining Strategy
•
Used when a win–win situation exists.
• Goal is to collaborate and generate one or more
creative solutions that are acceptable to both
parties.
• Only works when both parties are committed to
preserving the relationship that exists between
them.
• Requirements:
– Proper skills and attitude
– Climate that supports and promotes open communication
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–5
Distributive Bargaining Strategy
•
Used to divide a fixed amount of resources,
resulting in a win–lose situation.
• Negotiators typically have an adversarial or
competitive posture.
• Focus is on achieving immediate goals,
not building or preserving relationships.
• Usually only one or two fixed solutions are
presented.
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–6
Comparing Bargaining Approaches
Figure 9.1
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–7
Five Stages of Negotiation
1. Preparation and planning
•
•
•
•
Clarify what you want and why
Establish a BATNA
Develop a frame
Create a strategy
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–8
Five Stages of Negotiation (cont)
2. Definition of ground rules
•
•
•
•
Set an agenda
Agree on objective criteria
Agree on what to do if an
agreement is not reached
Discuss what is acceptable or not,
e.g. yelling
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–9
Five Stages of Negotiation (cont)
3. Clarification and justification
•
Clarify your interests
• Use a frame to make your case
persuasive
• Use questions to understand others’
interests
• Share relevant information that
supports your case
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–10
Five Stages of Negotiation (cont)
4. Bargaining and problem solving
•
•
•
•
•
Focus on problems, not people
Focus on interests, not positions
Look forward, not backward
Create options for mutual gain; adopt a
win–win attitude
Select from options using principles, or
objective criteria
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–11
Five Stages of Negotiation (cont)
5. Closure and implementation
•
Verbally summarise what both parties
agreed to
• Review key points to ensure
understanding
• Draft agreement in writing
• Have both parties sign the agreement
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–12
Strategies for Negotiating Effectively
•
Scripting
– Develop an interest-based strategy/approach prior to a
face-to-face negotiation
– Identify potential options/plans that can be proposed
– Topics to consider:
 Opponent’s probable strategy
 Your strategy
 How to begin the negotiation
 Core issues and problem to be solved
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–13
Strategies for Negotiating Effectively (cont)
•
Framing
– Provides a perspective that helps others
understand our position
– Highlights the points you want to make and
provides a filter for the other party
– Focuses attention on the priorities you want to
emphasise
– Establishes a “big picture” context
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–14
Strategies for Negotiating Effectively (cont)
•
Managing
–
–
–
–
Practice negotiating
Manage your emotions
Agree to disagree
Use agendas, questions and summarising
techniques
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–15
Principles of Successful Negotiation
•
•
•
•
•
Determine the importance of the outcome
for you
Look forward, not backward
Separate people from problems
Adopt a win–win attitude
Know your best alternative to a negotiated
agreement (BATNA)
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–16
Principles of Successful Negotiation (cont)
•
Focus on interests, not fixed positions
• Go into the negotiation with objective
criteria
• Respond, don’t react
• Use a third party
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–17
Third-Party Negotiations
•
Used in serious negotiations, or
when objective assistance is
needed
• Allows each party to “vent” in a
non-threatening environment
• Parties can benefit from third
party’s expertise and experience
• Helps the negotiating parties
organise their thoughts and develop
options that may be acceptable to
both parties
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
Mediator
Arbitrator
Conciliator
Consultant
9–18
Global Negotiations
•
•
•
•
•
Clarify what you want and why
Develop your BATNA
Base your strategy and
implementation on what you know
about the practices and customs of
your global negotiating partner
Research culture, practices and
business
Use the eight elements of
international protocol
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
Global
negotiations are
negotiations
between domestic
and foreign firms.
9–19
Summary
•
Learning how to negotiate can benefit you in your
personal as well as your business life.
•
The type of negotiating strategy you use is determined by
the situation.
– Interactive bargaining is used if a win–win outcome is possible.
– Distributive bargaining is used if a fixed amount of resources
must be divided, resulting in a win–lose outcome.
•
When negotiating, the more prepared you are, the
greater the chance that you will get what you deserve and
bargain for.
Copyright  2006 McGraw-Hill Australia Pty Ltd
PPTs t/a Interpersonal Skills in Organisations
Slides by Caroline Juszczak
9–20