The Art of Negotiating

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The Art of Negotiating : The Art of Negotiating T. Sivasankaran Advesh Consultancy Services Chennai India

Factors to successful negotiation
1) Mastery 2) Skill 3) Knowledge 4) Awareness

• We all negotiate, all the time- at home, with friends, at office, in public These negotiations can be about anything Negotiation is the most effective way of resolving conflicts and securing agreement A two way discussion to agree terms Conferring for the purpose of mutual agreement A process of discussion aimed at reaching agreement Establishing consensus amongst two or more parties • Negotiation Is : Negotiation Is A dialogue between two or more parties, with the intent of coming to a mutually agreed solution, because each party has something the other wants. A communication process between two or more people in which they consider alternatives to arrive at mutually agreeable solutions or mutually satisfactory objectives

Setting Goals Balancing Outcome and Relationships:

• BATNA : BATNA Best Alternative To a Negotiated Agreement 8 The Art of Negotiating a. WHAT IS BATNA? : WHAT IS BATNA? How do the proposals match your realistic alternative if you cannot come to a deal? The more attractive your BATNA is compared with the proposals you receive, the more POWER you have; the less attractive your BATNA is compared to the deal on offer, the less power you have. b. BATNA : BATNA Retain the existing supplier Go to another supplier Strike/Lockout Not an immediate requirement c. DEVELOPING BATNA : DEVELOPING BATNA List what you would do if you fail to reach an agreement Convert the most promising options into practical choices. Select the single best option; that is your BATNA Compare your BATNA to all proposals If an offer is better than your BATNA,consider improving or accepting it If an offer is worse than your BATNA, consider rejecting it If they will not improve their offer consider exercising your BATNA d. BATNA : BATNA Know your BATNA Work with all the BATNAs Be ready to walk away e. BATNA : BATNA Developed by Roger Fisher and William Ury • RESERVATION PRICE : RESERVATION PRICE Reservation Price is the least favourable point at which one will accept a deal • ZOPA ZONE OF POSSIBLE AGREEMENT : ZOPA ZONE OF POSSIBLE AGREEMENT ZOPA is the area or range in which a deal that satisfies both parties can take place. It is the set of agreements that potentially satisfy both parties. a. EXAMPLE : EXAMPLE Sellers Expectation Buyers Expectation

Balancing Outcome and Relationships : Balancing Outcome and Relationships DISTRIBUTIVE NEGOTIATION INTEGRATIVE NEGOTIATION

• Distributive Negotiation : Distributive Negotiation A negotiation in which the parties compete over the distribution of a fixed sum of value. Key question here is “Who will claim the most value?” A gain by one party is at the expense of the other. Win-lose situation • Integrative Negotiation : Integrative Negotiation A negotiation in which the parties cooperate to achieve the maximum benefits by integrating their interests into an agreement. These deals are about creating value and claiming it. Win-win situation.

STAGES OF NEGOTIATION : STAGES OF NEGOTIATION Phase 1: Preparation Phase 2: Interacting Phase 3: Agreement

• Understanding one’s own position and interests of the other party or parties the issues at stake, and alternative solutions. • Consider What a good outcome would be for you and the other side. Identify potential value creation opportunities Identify your BATNA and Reservation Price and do the same for the other side. Shore up your BATNA • Anticipate the Authority Issue Learn All you can About the Other Side Prepare for Flexibility in the Process Gather External Standards and Criteria Relevant to Fairness Alter the process in your favour

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