Negotiation Skills Basics

Negotiation
Course Objectives
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
Describe the Concepts of a Win-Win
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
Introduction
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
Introduction
Maxwell
Telecommunicati
ons, 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
Maxwells
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 clients
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 clients
pressure, he
ultimately
agreed to finish
the project as
per their
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
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, Peters
team was forced
to work 7-days,
even from home
to try to
complete the
project.
Introduction
Why do you
think Peters
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.
LLeett us
us lleeaarrn
n aab
bo
ou
utt
N
e
Neg
t
go
otiiaattiio
on
n
S
Skkiillllss iin
nd
deettaaiill..
Objective

Negotiation
Strategies
Process
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

me . a l
a
s
actly individu
x
e
re
in
a
ry
y
e
l
e
t
l
v
n
p
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ere
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ff
i
n
o
d
e
w
r
t
s
a
e
,e
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ave
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I
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.
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h
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a
T
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ople
think ituation fs and a
e
p
een
nt s s, belie
e
w
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t
a
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e
t
t
b
n
n
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e
wa
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e
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r
e
r
e
d
g
nee asic diff o disa
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t
b
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m
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t
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ith
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ct f
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p
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co
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,
r
e
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pe
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s
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oth
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b
as w tant tha should
r
s
i mp o e e me n t
r
disag
Need for Negotiation
to
d
a
e
yl
a
m
icts
ich
fl
h
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nt
ec
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u
m
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r
is
ll
This ent and ne or a nhappy.
o
m
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gu
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a
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p
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ro
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l
n
o
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o
in
iat
t
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omm e
g
c
e
n
a
e,
ek
c
e
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n th et their
s
e
e
o
H
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tw
ed
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o
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al
en
inv
d
m
n
e
a
e
r
s
of ag eement tives.
r
c
disag ual obje
id
indiv
Objective

Negotiation
Strategies
Process
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:
T
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otiia
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hink
The Art of Negotiation

Negotiation is an art; you
can get better and better
with it.
If you feel that you dont
have an innate talent for
negotiations, dont 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
The Art of Negotiation

Negotiation happens
everywhere its
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.
Objective

Negotiation
Strategies
Process
Negotiation
Negotiation
Explain the Types
Negotiating
Organizations
Negotiator
Benefits of Negotiation
The following are some of the benefits of negotiations:
Good
negotiations
help you to gain
better control in
business as well
as personal
situations.
They help you to

identify and
understand youre
as well as the other
parties interests
and also
understand the
differences
It helps to
reach a WinWin Solution,
which is
mutually
beneficial to all
the parties
involved in a
Good
negotiations
also help to
improve
interpersonal
relationships.
Benefits of Negotiation
The following are some of the benefits of negotiations:
They help to
develop and
maintain an
overall
harmonious and
thriving
interpersonal
environment.
It is one of
the easiest
and quickest
ways to solve
conflicts and
disagreement
s.
Negotiations
help to
reduces
stress and
frustration
among two
conflicting
individuals.
Negotiations help
to reach an
agreement in
cases where a
dead-end may be
reached if a
consensus is not
established
Objective

Negotiation
Strategies
Process
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
v
i
t
u
b
i
r
t
s
Di
n
o
i
t
a
i
t
o
g
Ne
Integra
tive
Negoti
a ti o n
Lets look at each in detail.
Distributive Negotiation
Distributive Negotiation is
also known as Positional or
Competitive or Fixed Pie or
Win-Lose Negotiation. It is a
type or style of negotiation in
which the 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.
involves holding on to a fixed
idea, or position, of what you
want and arguing for it and it
iv e
t
u
b
i
r
t
s
i
D
n
o
i
t
a
i
t
o
g
Ne
The main foc

us in such a
t yp e o f
negotiation
strategy is o
n achieving
immediate g
oals, with lit
tle or no
regard for bu
ilding future
relationships
. Generally, n
o new
creative solu
tion is reach
ed in such
negotiations
as the partie
s spend
least possible
time and ene
rgy in
resolving the
confict. The
outcome of
the negotiat
ion is reache
d by
presentation
of fixed solu
tions and a
decision or c
hoice is mad
e quickly.
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.
Integra
ti v e
Negoti
ation
involves reaching an
agreement keeping into
consideration both the parties
interests which includes the
needs, desires, concerns, and
Roll your mouse
over the icon, to
learn more.
The main foc

us in such a
t yp e o f
negotiation
strategy is o
n developing
mutually ben
eficial agree
ments based
on the intere
sts of the dis
putants.
Generally, ne
w creative s
olutions are
reached in s
uch negotiat
ions as the
parties spen
d maximum
possible tim
and energy in
e
resolving the
confict.
The outcome
of the negot
iation is
reached by c
ollaboration
between the
parties to fin
d a win-win
" solution to
their dispute
.
Tip
al
i
c
u
t cr me
s
o
e m o beco
h
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are
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Distributive vs. Integrative

Negotiation
The
given table shows the comparison between Distributive
Negotiation and Integrative Negotiation.
It involves discussion of only one
issue at a time.
Involved parties have a Win-Lose
attitude towards reaching the
negotiation outcome.
Each party wants to use the
negotiation to maximize its own
share of fixed pie.
It is an approach usually used in
one-time relationship between two
people.
The involved parties keep their
respective interests hidden.
It involves discussion of several
issues at a time.
Involved parties have a Win-Win
attitude towards reaching the
negotiation outcome.
Each party wants to use the
negotiation to expand its own share
of the pie by creating and claiming
value.
It is an approach usually used in a
continuing relationship between two
people.
The involved parties share their
respective interests with the other
party.
Distributive vs. Integrative

Negotiation
The
given table shows the comparison between Distributive
Negotiation and 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
The aim of such negotiation is
winning.
making a wise decision.
The main focus of involved parties is The main focus of involved parties is
on their stance or position.
on their goals and objectives.
The involved parties use pressure to The involved parties do not use
get what they want.
pressure but strive to get what they
want through principles.
MCQ
Q. Distributive Negotiation is
also commonly known as
___________.
Click on
the radio
button to
select the
correct
answer!
MCQ
Q.
Distributive Negotiation is
G
Go
o
oalso
od
d!!commonly
T
Th
ha
att''ss R
iig
Rknown
gh
htt!!as
___________.
C
Co
orrrreecctt A
An
nssw
weerr::
D
Diissttrriib
bu
uttiivvee N
Neeg
go
cco
ottiiaattiio
om
m
mmo
on
n iiss aallsso
n
onllyy kkn
o
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w
n
o
n
w
a
n
s
N
a
P
s
Neeg
o
o
gottiiaattiio
Possiittiio
on
on
naall
n..
re to
e
h
k
c
i
Cl
e!
continu
MCQ
Q.
Negotiation is
T
Th
a
hDistributive
t
'
at'sscommonly
N
No
ott Q
also
as
Qu
tte
uiiknown
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Riig
gh
htt!!
___________.
C
Co
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An
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Neeg
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otiiaattiio
osiittiio
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continu
Objective

Negotiation
Strategies
Process
Negotiation
Negotiation
Explain the Types
Negotiating
Organizations
Negotiator
Stages of the Negotiation Process

The following are the stages of any negotiation process:
1
2
3
4
5
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

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

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

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 Peters
team had to
suffer and also
his company had
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 5:
Stage 1: Meeting
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
To negotiate well with the

client, the first thing that Peter
should do is to prepare well for
the meeting. Peter could go
through the Project Plans of
similar projects that Globus
had handled in the past, talk to
and seek guidance from his
superiors and put all the data
and information that he gets
related to the project at one
place.
Real Life Example
Peter should
also make a
list of all the
queries that
he has to cle
ar with the
client, thing
s that he can
agree to and
cannot agree
to with the c
lient etc.
Also, at the
meeting Pet
er should
come across
to the client
as a cool,
confident an
d profession
al person.
Real Life Example

Stage 5:
Stage 2: Inquiry
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
During the inquiry stage, Peter

should exchange information
with the client and discuss
their concerns, scope of work,
deadlines, future
enhancements etc.
Real Life Example
At this stage
, Peter shou
ld find out
the clients r
equirements
, how, which
and when ca
n he fulfil th
ese
requirement
s and any ot
her terms an
conditions th
d
at may not b
e
agreeable
to Globus.
Real Life Example

Stage 5:
Stage 3: Bargaining
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
At this stage, Peter should now

agree to terms that are
completely acceptable and
offer options and tradeoffs for
things that are unacceptable as
is stated by the client.
Real Life Example
Peter should
make sure th
a t he
ascertains h
is position a
nd takes a
stand in agr
eeing to only
possible and
acceptable d
eadlines, cu
rrent scope,
terms regard
ing future en
hancements
etc.
Real Life Example

Stage 5:
Stage 4: Closure
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
At this stage, it is important

that both the client and Peter
restate their positions and
confirm their tradeoffs they are
willing to negotiate.
Real Life Example
So, agreeme
nt should be
achieved on
the agreed d
eadlines, cur
rent scope,
terms regard
ing future en
hancements
etc. It should
be agreed up
on by both
the parties t
hat the discu
ssed and
agreed upon
terms would
no w b e
drafted into
a legal and b
inding
contract bet
ween the tw
o parties.
Real Life Example

Stage 5:
Stage 5: Acceptance
Acceptance
Stage 4:
Closure
Stage 3:
Bargaining
Stage 2:
Inquiry
Stage 1:
Meeting
At this final stage of the

negotiation process, Peter
should make sure that both the
parties agree to signoff the
deal and 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.
WIN
LOSE
WIN
We Both
Win
I Win,
You Lose
LOSE
ME
YOU
I Lose,
You Win
We Both
Lose
Objective

Negotiation
Strategies
Process
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
reflectio
n
Control the
outcome
Agree on
factual
information
Lets look at each in detail.
Search for
needs and
requireme
nts
Clarify your
objectives
in the
beginning

Negotiation
Pause for
Reflectio
n
Control the
outcome
Agree on
factual
information
Pause for Refection
Search for
needs and
requireme
nts
Clarify your
objectives
in the
beginning
Ask the questions:

o
What do you want

from this
meeting?
What resistances
do you envisage?
What will you do

to overcome
these
resistances?

Negotiation
Search for needs and

requirements
Pause for
reflectio
n
Control the
outcome
Agree on
factual
information
Search for
needs and
requireme
nts
Clarify your
objectives
in the
beginning
Ask the questions:

o
What are my
needs and
requirements?
What are the

needs and
requirements of
the other party?
What do we have
in common?
What are the

biggest gaps?

Negotiation
Clarify your objectives

in the beginning
Pause for
reflectio
n
Control the
outcome
Agree on
factual
information
Search for
needs and
requireme
nts
Clarify your
objectives
in the
beginning
Ask the questions:

o
What are the

most important
issues that need
to be discussed?
What are the

most important
issues to the
other party?
What are the

levels of potential
outcomes?

Negotiation
Agree on factual
information
Pause for
reflectio
n
Ask the questions:

o
Have I examined
all arguments
that I intend to
use during the
meeting?
Which of the
arguments are
assumptions?
Which of the
arguments are
facts?
Control the
outcome
Agree on
factual
information
Search for
needs and
requireme
nts
Clarify your
objectives
in the
beginning

Negotiation
Control the outcome
Ask the questions:

o
What elements of
timing can you
control?
What is the best

combination or
channel?
Pause for
reflectio
n
Control the
outcome
Agree on
factual
information
Search for
needs and
requireme
nts
Clarify your
objectives
in the
beginning
Roll your mouse

over the icon, to
learn more.
Tip
ou
y
t
tha
s
e
tic
c
and ays
a
r
e
p
v
st
cti
e
alw .
e
b
ff
o
e
t
e
n
th
is
an
o
f
i
n
r
t
o
o
a
o
i
One ollow f gotiat negoti
e
f
can ssful n to-face id

o
e
or
c
v
e
c
e
a
c
s
u
n
a
p
d
s
o
l
f
n
h
e
a
a
p
h
t
e
hav our bes ver the person
o
n
y
r
Try tiating iating i e othe t for
u
t
h
o
neg l. Nego stand t ching o
t
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nd
a
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o
g
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pers ody lan vocal i elp yo n
b
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a
o
his
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i
ss
et
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p
t
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Negotiation

Explain What is Negotiation

Now, the only

The client was in

Peter and his

Also, the client

Yes, all this

Thus, you can

Explain What is Negotiation

It involves using the art of

The key skills that are involved

Therefore, negotiations may

Need for Negotiation

Need for Negotiation

Explain What is Negotiation

Basic Principles of Negotiation

Basic Principles of Negotiation

Basic Principles of Negotiation

The Art of Negotiation

The Art of Negotiation

Explain What is Negotiation

They help you to

Explain What is Negotiation

Types of Negotiation Strategies

Lets look at each in detail.

The involved parties in a

The main foc

The main foc

Distributive vs. Integrative

Distributive vs. Integrative

The involved parties share

Explain What is Negotiation

Stages of the Negotiation Process

Let us look at each in detail.

The first stage of the

The meeting can be in an

When there are two

The meeting begins with

The second stage of the

During the inquiry stage,

The main objective of

The third stage of the

During the bargaining

At this stage, both the

This stage occurs after

During the closure stage,

The final stage of the

During the acceptance

Real Life Example

Let us now look at a

Real Life Example

You have seen in

Real Life Example

Yes, all this

Real Life Example

To negotiate well with the

Real Life Example

Real Life Example

During the inquiry stage, Peter