“You often get not what you deserve, but what you negotiate.” 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

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

Why is Negotiation Important? Factors driving the need for negotiation skills: Negotiation is a process in which two or more people or groups share their concerns and interests to reach an agreement of mutual benefit. 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

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

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

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

Comparing Bargaining Approaches Figure 9.1 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Interpersonal Skills in Organisations Slides by Caroline Juszczak

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

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

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

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

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

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

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

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

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

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

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 Mediator Arbitrator Conciliator Consultant Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Interpersonal Skills in Organisations Slides by Caroline Juszczak

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 Global negotiations are negotiations between domestic and foreign firms. Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Interpersonal Skills in Organisations Slides by Caroline Juszczak

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