Negotiation Skills Basics

Negotiation
Objective
• Explain What is Negotiation
• Explain the Basic Principles of
• Negotiation
Describe the Benefits of Negotiation
• Explain the Types of Negotiation
• Strategies
Explain the Stages of the Negotiation
• Process the Concepts of a Win-Win
Describe
• Negotiation
Explain the Various Styles of
• Negotiation
Explain What is BATNA
• Describe Strategies for Developing
• Negotiation Skills of Third Party
Explain the Types
• Explain the PROBE Technique for
• Negotiating
Describe the Negotiations in
• Organizations
List the Issues in Negotiation
• List the Characteristics of a Good
• Negotiator
List the Tips for Effective Negotiation
Case study-2
Globus Inc. is a leading IT

giant. Peter Looney is a
Project Manager in Globus
Inc. He is responsible for
meeting the clients for
every new software
development project that
comes to Globus.
Introduction
Maxwell
Telecommunications, a
leading Telecom Service
company recently came to
Globus to have new SAP
based database software
to be developed for them.
Introduction
Peter carefully
reviewed and
analyzed Maxwell’s
requirements and
came up with a
Project Plan.
Introduction
Now, the only thing that

Peter needed to go
ahead with starting the
project and develop the
software was the
client’s approval of the
Project Plan.
Introduction
Peter held a meeting with

the clients to discuss the
Project Plan and gain
overall approval for the
terms and conditions of
the Project.
Introduction
The client was in a hurry to

get the software. Peter
tried to negotiate upon
broader deadlines but due
to client’s pressure, he
ultimately agreed to finish
the project as per their
requested deadlines.
Introduction
When the project was

under progress, Peter and
his team realized that the
deadlines that he had
agreed upon are nearly
impossible to meet.
Introduction
Peter and his team were

not able to complete the
project as was promised
to the client due to
which Globus had to pay
some penalty for late
delivery.
Introduction
Also, the client added new

requirements that had to
be incorporated in the
software. However, Peter
had not negotiated about
the terms with the client
for any further
enhancements or features
being added to the
software.
Introduction
Hence, Globus had to

incur a loss in the project
because the scope of
work had increased but
the terms of the project
had not been negotiated
well.
Introduction
Also, Peter’s team

was forced to work 7-
days, even from home
to try to complete the
project.
Introduction
Why do you think

Peter’s team had to
suffer? Why did
Globus have to incur
a loss in this Project?
Introduction
Yes, all this happened

because Peter had not
initially negotiated well
with the client about the
deadlines and the scope
of work.
Introduction
If Peter had clearly

negotiated the terms
of the project with the
client and negotiated
realistic deadlines,
Globus would not have
needed to pay any
penalty.
Introduction
Also, if Peter had

negotiated the scope
of work in detail with
the client, then Globus
would not have to
incur any loss in this
project.
Introduction
Thus, you can see that

‘negotiation skills’ are a
must for anyone to succeed
when dealing with people.
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Objective
• Negotiation
• Strategies
Describe
• Negotiation
• Negotiation
Explain the Types
• Negotiating
• Organizations
• Negotiator
What is Negotiation?
• Negotiation is a discussion between two

parties to find out the solution and for
the purpose of reaching a joint
agreement about differing needs or
opinions.
• It involves using the art of ‘persuasion’

to get others to understand and agree
with your viewpoint. It works best when
an individual has a win-win attitude.
What is Negotiation?
• The key skills that are involved in a

successful negotiation are that of good
communication skills, sales and
marketing skills, good psychological
analytical skills, sociology skills,
assertiveness and conflict resolution
skills.
• Therefore, negotiations may take place

between various kinds of different
people such as between a customer and
seller, a boss and employee, two
business partners, a diplomat or a civil
servant and a foreign diplomat,
between spouses, between friends and
between parents and children.
Need for Negotiation
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Objective
• Negotiation
• Strategies
Describe
• Negotiation
• Negotiation
Explain the Types
• Negotiating
• Organizations
• Negotiator
Basic Principles of Negotiation
There are a few common basic principles that apply to all types of negotiations
and in all situations. Some of the basic principles of negotiation are as follows:
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Harvard Negotiation process study.
1. Separate the person from the issue.

2. Negotiate not position-focused, but interest-
oriented.
3. Develop criteria that a solution must fulfill.
4. You should have different options to choose
from
The Art of Negotiation
Negotiation is an art; you can get
better and better with it.
If you feel that you don’t have an
innate talent for negotiations,
don’t be disappointed because
these skills can be honed and
developed with the proper
training and practice.
People who always speak good
things may feel that they are good
negotiators, but that is not always
the case. Negotiation is all about
understanding what you want and
what the other person wants, and
then coming up with a win-win
scenario.
The Art of Negotiation
Negotiation happens everywhere
– it’s omnipresent. You may have
to negotiate over anything – right
from the deadlines of a project to
which person will do what chores
at home.
In the real world, it is sometimes
difficult to ascertain whether your
negotiation is good or bad. You
may think that you are a good
negotiator, but in reality, it may be
just the opposite.
Even before you negotiate, you
will have to know what can be
negotiated and what cannot be
negotiated.
Objective
• Negotiation
• Strategies
Describe
• Negotiation
• Negotiation
Explain the Types
• Negotiating
• Organizations
• Negotiator
Benefits of Negotiation
The following are some of the benefits of negotiations:
Good negotiations It helps to reach Good

They help you to
help you to gain a ‘Win-Win’ negotiations also
identify and understand
better control in Solution, which help to improve
you’re as well as the
business as well as is mutually interpersonal
other parties’ interests
personal situations. beneficial to all relationships.
and also understand the
differences between the parties
both. involved in a
negotiation.
Benefits of Negotiation
The following are some of the benefits of negotiations:
They help to Negotiations help to

It is one of the Negotiations
develop and reach an agreement in
easiest and help to reduces
maintain an overall cases where a dead-
quickest ways to stress and
harmonious and end may be reached if
solve conflicts frustration
thriving a consensus is not
and among two
interpersonal established between
disagreements. conflicting
environment. two differing needs,
individuals.
wants or opinions.
Objective
• Negotiation
• Strategies
Describe
• Negotiation
• Negotiation
Explain the Types
• Negotiating
• Organizations
• Negotiator
Types of Negotiation Strategies
There are two main types of negotiation strategies which are as follows:
e
Distributiv
n
Negotiatio
Integrati
ve
Negotia
tion
Let’s look at each in detail.

Distributive Negotiation
• ‘Distributive Negotiation’ is also known

e
Distributiv
as ‘Positional’ or ‘Competitive’ or ‘Fixed
Pie’ or ‘Win-Lose’ Negotiation. It is a n
type or style of negotiation in which the Negotiatio
parties compete for the distribution of a
fixed amount of value.
• The involved parties in a ‘distributive
negotiation’ have a ‘win-lose’ attitude
towards reaching the goal and is based
on an attempt to divide up a fixed pie or
amount of resources for oneself.
• ‘Distributive Negotiation’ involves
holding on to a fixed idea, or position, of
what you want and arguing for it and it
alone, regardless of any underlying
interests.
Distributive Negotiation
• ‘Distributive Negotiation’ is also known

as ‘Positional’ or ‘Competitive’ or ‘Fixed
D istributive
Pie’ or ‘Win-Lose’ Negotiation. It is a
N eg otiation
type or style of negotiation in which the
parties compete for the distribution of a
fixed amount of value.
• The involved parties in aT‘distributive
he main focus in
negotiation’ have a ‘win-lose’ such a type of ne
strategattitude
y is on achieving gotiation
towards reaching the goal or and immediate goals,
no reisgbased
ard for building fu with little
on an attempt to divide Gup enaefixed ture relationship
rally, npie or
o new creative so s.
amount of resources forsuoneself.
ch negotiations a lu tion is reached in
• ‘Distributive Negotiation’ s the parties spen
timinvolves
e and energy in re d least possible
holding on to a fixed idea, solving the conflic
outorcom position, of
e of the negotiati t . Th e
what you want and arguing
presefor on is reached by
ntaittioand it
n of fixed solutio
alone, regardless of anychunderlying
oice is made quic ns and a decision
k ly. or
interests.
Integrative Negotiation
• ‘Integrative Negotiation’ is also known
as ‘Interest-based’ or ‘Cooperative’ or
‘Win-Win’ or ‘Non-zero Sum’
Negotiation. It is a type or style of
negotiation in which the parties
cooperate to achieve a satisfactory
result for both. The involved parties in
an ‘integrative negotiation’ have a ‘win-
win’ attitude towards reaching the goal
and attempt to strive not just for their
own outcomes, but for favorable
outcomes for both sides.
• ‘Integrative Negotiation’ involves
reaching an agreement keeping into
consideration both the parties’ interests
which includes the needs, desires,
concerns, and fears important to each
side.
Integrative Negotiation
Roll your mouse over
• ‘Integrative Negotiation’ is also known
the icon, to learn
as ‘Interest-based’more.
or ‘Cooperative’ or
‘Win-Win’ or ‘Non-zero Sum’
Negotiation. It is a type or style of
negotiation in which the parties
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Distributive vs. Integrative Negotiation
The given table shows the comparison between Distributive Negotiation and
Integrative Negotiation.
Distributive Negotiation Integrative Negotiation
It involves discussion of only one issue at a It involves discussion of several issues at a
time. time.
Involved parties have a ‘Win-Lose’ attitude Involved parties have a ‘Win-Win’ attitude
towards reaching the negotiation outcome. towards reaching the negotiation outcome.
Each party wants to use the negotiation to Each party wants to use the negotiation to
maximize its own share of ‘fixed pie’. ‘expand its own share of the pie’ by creating
and claiming value.
It is an approach usually used in one-time It is an approach usually used in a continuing
relationship between two people. relationship between two people.
The involved parties keep their respective The involved parties share their respective
interests hidden. interests with the other party.
Each party expresses a strong position for Each party expresses and try to come up with
each issue. as many options as possible per issue to
maximize mutual gains.
Distributive vs. Integrative Negotiation
The given table shows the comparison between Distributive Negotiation and
Integrative Negotiation.
Distributive Negotiation Integrative Negotiation
The involved parties keep information hidden. The involved parties share information with
each other and try to get to the root cause of
the ‘why’ of the existence of the issue.
The involved parties are adversaries. The involved parties are joint problem-
solvers.
The aim of such negotiation is ‘winning’. The aim of such negotiation is ‘making a wise
decision’.
The main focus of involved parties is on their The main focus of involved parties is on their
‘stance or position’. ‘goals and objectives’.
The involved parties use pressure to get what The involved parties do not use pressure but
they want. strive to get what they want through
principles.
MCQ
Q. Distributive Negotiation is also

commonly known as ___________.
Click on the
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MCQ
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Evolution of conflict resolution:
Partnership strategies
Consultative
Negotiation
Persuasion
Theories of negotiating.
• Traditional approach: also called the salesmanship
approach,a sales persons behaviour is regarded as
the key ingredient in the negotiation process.
a)Canned sales presentation approach.

These are fully structured presentations which are
memorised by the negotiator. Frequently used in
door to door selling, canned sales provide a preset
procedure of what is considered to be the best way
to sell the product. Here the prospect is considered
to be passive.
Traditional approach :
b)Stimulus –response theory:

This theory states that prospects are triggered
to agree upon hearing a certain set of
statements-provided that the statements are
presented in the correct manner. If the
negotiator provides the right stimulus then
the prospect will respond to the stimulus by
complying to the request.
Traditional approach..contd.
c) AIDAS formula approach:Proposed by Arthur Fredrick
Sheldon
• in 1902 as the AIDR (r for resolve) was later adapted into

sales management as AIDAS.
• According to this principle selling is a net result of the
Following set of factors set in motion one after the other:
A for Attention
I for Interest.
D for Desire.
A for action and
S for satisfaction.
Spin off from the traditional..
• Attribute based negotiating.

• Need based negotiating.
• Value based negotiating.
• Application based negotiating.
Alaska-Selling refrigerators.
Alaska-Demographics.
• Population Ranked 48th
• Total 739,795 (2017 est).
• Density 1.26/sq mi (0.49/km2)
• Ranked in Density as 50th
• Median household income $75,723 (3rd)
• Climate Artic with 30 deg C
as maximum and -51 deg C as minimum.
Modern Viewpoint of selling:
• The Buyer –seller Dyad:

The Dyad represents a situation where two
people interact.This theory explains that
external factors like the future expections of
both the negotiator and the prospect can
influence the negotiation methodology.
The external and internal environments of
both negotiator and the prospect can
influence the approach that will have to be
implemented.
Modern approaches
• Need satisfaction approach.
Based on notion that the negotiation is to

satisfy a particular need or set of needs. The
Stress is on probing the respondent to
understand his needs ,and only after identifyng
needs the negotiator begins to offer his
suggestions for satisfying these needs.
Modern theories:
• Problem solving approach.

This is an extension of the need satisfaction
approach .It goes beyond identifying needs to
developing alternate solutions for satisfying
these needs.
Modern selling theories.
• Consultative approach.
Consultative negotiating is the process of
helping respondents reach their strategic
goals by using the products,services and
expertise of the negotiator .This method
focuses achieving strategic goals of
respondents not just meeting needs or
solving problems.
Objective
• Negotiation
• Strategies
Describe
• Negotiation
• Negotiation
Explain the Types
• Negotiating
• Organizations
• Negotiator
Stages of the Negotiation Process
The following are the stages of any negotiation process:
Let us look at each in detail.

Meeting
1
Meeting:
• The first stage of the negotiation

process is the negotiation
meeting.
• The meeting can be in an informal

or formal setting.
• When there are two parties

meeting, the venue, date and time
are decided first.
• The meeting begins with

introductions.
Inquiry
2
Inquiry:
• The second stage of the

negotiation process is the stage of
inquiry.
• During the inquiry stage, both

parties exchange information and
discuss their concerns.
• The main objective of this stage is

to ascertain the strengths and
weaknesses, needs, wants, desires
and issues.
Bargaining
3
Bargaining:
• The third stage of the negotiation

process is that of bargaining.
• During the bargaining stage, both

parties make offers and tradeoffs.
• At this stage, both the parties

consider all the possible options
available to find a middle path
between their differences.
Closure
4
Closure:
• This stage occurs after both the

parties have looked at all the
options closely.
• During the closure stage, both

parties restate their positions and
confirm their tradeoffs they are
willing to negotiate.
Acceptance
5
Acceptance:
• The final stage of the negotiation

process is acceptance.
• During the acceptance stage, both

parties would either decide to
suspend negotiations or they may
reach an agreement.
Real Life Example
Let us now look at a

real life example to
understand the stages
of the negotiation
process.
Real Life Example
You have seen in the

introduction scenario
how Peter Looney, a
Project Manager at
Globus Inc. failed to
negotiate well with the
Maxwell client due to
which Peter’s team
had to suffer and also
his company had to
incur a loss in the
Project.
Real Life Example
Yes, all this happened

because Peter had not
initially negotiated
well with the client
about the deadlines
and the scope of work.
Real Life Example
Stage 1: Meeting
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
To negotiate well with the client, the first
Bargaining
thing that Peter should do is to prepare
well for the meeting. Peter could go
Stage 2: through the Project Plans of similar
Inquiry projects that Globus had handled in the
past, talk to and seek guidance from his
Stage 1: superiors and put all the data and
Meeting information that he gets related to the
project at one place.
Real Life Example
Stage 1: Meeting
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
To negotiate well with the client, the first
Bargaining
thing that Peter should do is to prepare
Peter should also
makmeeting.
well for the e a list ofPeter
all thcould go
Stage 2: he has to clear w e queries that
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ree to whadith thandled
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r shall
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ld co
client as a cool, c me across to the
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project at one place.
Real Life Example
Stage 2: Inquiry
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
During the inquiry stage, Peter should
exchange information with the client and
Stage 1: discuss their concerns, scope of work,
Meeting deadlines, future enhancements etc.
Real Life Example
Stage 2: Inquiry
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2: At this stage, Pete

Inquiry r should find out
requiremeDuring
nts, hothe the client’s
w, winquiry
hich anstage,
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these requexchange
irementsinformation n can he fulfi l
and any othewith the client
r terms and
and
Stage 1: conditionsdiscuss
that mtheir
ay noconcerns,
t be agreescope of work,
able to Globus.
Meeting deadlines, future enhancements etc.
Real Life Example
Stage 3: Bargaining
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
At this stage, Peter should now agree to
terms that are completely acceptable and
Stage 1: offer options and tradeoffs for things that
Meeting are unacceptable as is stated by the client.
Real Life Example
Stage 3: Bargaining
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2: Peter should mak

Inquiry e sure that he as
position aAt
ndthis certains his
takestage,
s a staPeter
nd in should
agreeinnow agree to
possible aterms
nd accthat g to o nly and
eptaare completely
ble d ea d acceptable
lines, current sco
Stage 1: terms regaoffer
rdingoptions
future eand thingspthat
e,
nhatradeoffs
ncementsfor etc.
Meeting are unacceptable as is stated by the client.
Real Life Example
Stage 4: Closure
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Bargaining
Stage 2:
Inquiry
At this stage, it is important that both the
client and Peter restate their positions and
Stage 1: confirm their tradeoffs they are willing to
Meeting negotiate.
Real Life Example
Stage 4: Closure
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Bargaining
So, agreement sh
ould be achieved
deadlines, curren on the agreed
Stage 2: t scope, terms re
enhancements et garding future
Inquiry c. It should be ag
the partieAt this
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ld noand grepositions
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drafted into a leg
Stage 1: contract bconfirm
etween the twtradeoffs
their a l an
they are willing
d bindto
ing
Meeting negotiate. o p a r ti es .
Real Life Example
Stage 5: Acceptance
Stage 5:
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry At this final stage of the negotiation
process, Peter should make sure that both
the parties agree to signoff the deal and
Stage 1:
Meeting reach an agreement on the terms of the
Project.
Negotiation Outcomes
The given image shows the various options of possible outcomes with respect
to the parties involved in a negotiation.
YOU
WIN LOSE
WIN
We Both Win I Win,

You Lose
ME
LOSE
I Lose, We Both
You Win Lose
Objective
• Negotiation
• Strategies
Describe
• Negotiation
• Negotiation
Explain the Types
• Negotiating
• Organizations
• Negotiator
Critical Concepts of Win-Win Negotiation
The following are the five most critical concepts that you should keep in
mind for a win-win negotiation:
Pause for
reflection
Control the Search for

outcome needs and
requirements
Agree on
factual Clarify your
information objectives in
the beginning
Let’s look at each in detail.

Pause for
Reflection
Pause for Reflection

outcome • Ask the questions:
needs and
requirements o What do you want from
this meeting?
o What resistances do you
envisage?
Agree on o What will you do to
Clarify your
factual
objectives in overcome these
information
the beginning resistances?
Pause for Search for needs and

reflection requirements
Control the Search for • Ask the questions:

outcome needs and o What are my needs and
requirements
requirements?
o What are the needs and
requirements of the
Agree on other party?
Clarify your o What do we have in
factual
objectives in common?
information
the beginning
o What are the biggest
gaps?
Pause for
reflection Clarify your objectives in the
beginning

outcome • Ask the questions:
needs and
requirements o What are the most
important issues that
need to be discussed?
o What are the most
Agree on important issues to the
Clarify your
factual other party?
objectives in
information o What are the levels of
the beginning
potential outcomes?
Pause for
Agree on factual information reflection

• Ask the questions:
outcome needs and
o Have I examined all
requirements
arguments that I intend
to use during the
meeting?
o Which of the arguments Agree on
factual Clarify your
are assumptions?
information objectives in
o Which of the arguments the beginning
are facts?
Pause for
reflection
Control the outcome Control the Search for

outcome needs and
• Ask the questions: requirements
o What elements of timing
can you control?
o What is the best
Agree on
combination or Clarify your
factual
channel? objectives in
information
the beginning
Roll your mouse over

the icon, to learn more.
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Thank You

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Negotiation

Globus Inc. is a leading IT

Now, the only thing that

Peter held a meeting with

The client was in a hurry to

When the project was

Peter and his team were

Also, the client added new

Hence, Globus had to

Also, Peter’s team

Why do you think

Yes, all this happened

If Peter had clearly

Also, if Peter had

Thus, you can see that

• Negotiation is a discussion between two

• It involves using the art of ‘persuasion’

• The key skills that are involved in a

• Therefore, negotiations may take place

IItt iiss aa ggeener parttyy

n t tthhaatt iinn TThhee nneeggotia

1. Separate the person from the issue.

Good negotiations It helps to reach Good

They help to Negotiations help to

Let’s look at each in detail.

• ‘Distributive Negotiation’ is also known

• ‘Distributive Negotiation’ is also known

Q. Distributive Negotiation is also

a)Canned sales presentation approach.

b)Stimulus –response theory:

• in 1902 as the AIDR (r for resolve) was later adapted into

• Attribute based negotiating.

• The Buyer –seller Dyad:

Based on notion that the negotiation is to

• Problem solving approach.

Let us look at each in detail.

• The first stage of the negotiation

• The meeting can be in an informal

• When there are two parties

• The meeting begins with

• The second stage of the

• During the inquiry stage, both

• The main objective of this stage is

• The third stage of the negotiation

• During the bargaining stage, both

• At this stage, both the parties

• This stage occurs after both the

• During the closure stage, both

• The final stage of the negotiation

• During the acceptance stage, both

Let us now look at a

You have seen in the

Yes, all this happened

Stage 2: At this stage, Pete

Stage 2: Peter should mak

We Both Win I Win,

Control the Search for

Let’s look at each in detail.

Control the Search for

Pause for Search for needs and

Control the Search for • Ask the questions:

Control the Search for

Control the Search for