NEGOTIATION

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NEGOTIATION:

NEGOTIATION

Concept:

Concept Negotiation is a process in which two or more individuals or groups, having both common and conflicting goals, state and discuss proposals for specific terms of a possible agreement. It includes a combination of compromise, collaboration and some pressure on vital issues. A face to face decision making process between parties concerning a specific issue. 2 Negotiation

Characteristics:

Characteristics There is a clash of interests between two or more parties It is an explicit and deliberate event The individuals are committed to peaceful means for resolving their conflicts, and there is no clear or established method or procedure for making the decision It is a collective process to arrive at a solution It is flexible (give and take) It is a complex process involving a number of procedures, techniques, tools and preparation 3 Negotiation

Characteristics contd….:

Characteristics contd …. There are a minimum of two parties present Both parties have predetermined goals Some of the predetermined goals are not shared by both the parties There is an expectation of an outcome Both parties believe the outcome of the negotiation may be satisfactory Both parties are willing to modify their positions The parties’ incompatible positions might make modification of position difficult The parties understand the purpose of negotiation 4 Negotiation

Pre-conditions for Negotiation:

Pre-conditions for Negotiation The issue is negotiable The negotiators are interested in not only taking but also in giving , are able to exchange value for value and are willing to compromise Negotiating parties trust each other to some extent Two or more individuals must make a decision about their interdependent goals and objectives All parties involved in negotiation are interested in long term relationship 5 Negotiation

Types of Negotiation:

Types of Negotiation Integrative bargaining Distributive bargaining 6 Negotiation

Integrative Negotiation:

Integrative Negotiation The negotiation process in which both the parties feel that they are gaining what they expected. The parties feel happily reconciled, empathetic, open, receptive and satisfied. Involves joint problem solving to achieve the results that will benefit both the parties Collaborative and compromise conflict handling styles are dominant Win-Win situation 7 Negotiation

Principles of Integrative negotiation:

Principles of Integrative negotiation Separate the people from the problem Focus on interests, not positions Invest options for mutual gain Insist on using objective criteria 8 Negotiation

Distributive Negotiation:

Distributive Negotiation Takes place when the resources are fixed and limited (fixed-pie situation) and each individual wants to get a large share for himself The negotiation process in which each of the parties tries to grab maximum benefit, and impose maximum losses on the other. Characterized by win-lose situation wherein one party’s gain is the other party’s loss. (fixed pie) Interaction patterns include guarded communication, limited expression of trust, use of threats, distorted statements, and demands. Forcing and compromise conflict handling styles are dominant 9 Negotiation

Negotiating strategies and tactics:

Negotiating strategies and tactics Negotiating strategies involve a way of thinking that consider the negotiating party’s power and objectives, and how one or both of these can be most effectively used to secure the other, given that the other party has objectives and sources of power of its own. Negotiating tactics are the nuts and bolts of the strategies to be adopted . 10 Negotiation

Tactics used in distributive bargaining:

Tactics used in distributive bargaining Bluffing: refers to the making of a false statement of position, a promise or a threat, which the party ha no intention of carrying out. Delays: discussions for reaching the favourable settlements are often deliberately prolonged to put pressure on the other party . Snow job: refers to putting pressure on the other party by presenting a long list of issues to be discussed, which may not have any significance for the party presenting them. The idea is to ‘blind’ the other party. 11 Negotiation

Slide 12:

Temper tantrums: used to show one’s anger, frustration or dissatisfaction . This is to make the other party uncomfortable and agree on a proposal favourable to the angry party. Nibble: refers to wearing down the adversary to reach an agreement on an issue after hard and prolonged bargaining. When the adversary is about to agree, the party asks for a small favour before the final agreement is signed. Limited authority: used to push a particular proposal and emphasizing that this proposal is within the authority of the bargainer. 12 Negotiation

Reasons for behaving unethically:

Reasons for behaving unethically Profit motive A sense of competition Concern for justice 13 Negotiation

Tactics used in integrative bargaining:

Tactics used in integrative bargaining Bridging: refers to inventing new, mutually acceptable solutions by integrating individually –held proposals. This suggests to find a location that has elements of both preferences. Non-specific compensation: to ‘pay off’ the other. This is possible only if the pay off is something that is of value to the other party. Relevant compensation is offered to offset the loss of not getting one’s preferences fulfilled. 14 Negotiation

Slide 15:

Logrolling: where each party gets that part of its demand that it finds most important Expanding the pie: refers to increasing the resources; adding options which are of value to one side but not as much to the other side so that there is more to share 15 Negotiation

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