Negotiation Skills

Slide 1 : Copyright @ 2011 IILM Institute of Higher Learning. All rights Reserved. Business Communication

NEGOTIATION SKILLS : NEGOTIATION SKILLS Negotiation may be defined as a process of conferring, discussing or bargaining among two or more parties with different needs and wants to reach an agreement in business or diplomacy. It is intended to settle and conclude a deal that enables people to succeed, surmount difficulties and accomplishing objectives.   Negotiations have become important and integral part of any business / diplomacy. It is the core process for selling any product, service or an idea; it is the heart of clinching orders for purchasing and procurement work and it is resorted to by management team to either jointly solve disputes, disagreements or to bargain new wage and salary structure with the representative union.   Although conducting negotiations among business partners is fairly regular, always remember the famous advice of John F Kennedy, the late President of USA:   ‘Do not ever fear to negotiate but never negotiate out of fear’.

CRITERIA OF A SUCCESSFUL NEGOTIATOR : CRITERIA OF A SUCCESSFUL NEGOTIATOR There has been a considerable debate and discussions on the traits of successful negotiators. Research on the subject has evolved broad consensus on the following criteria for determining skilled negotiators: Rated as effective by the parties. :This precondition for identifying candidates for further study enables to prevent picking a person from a single frame of mind.  Have a track record of significant success:The central criterion for choosing effective negotiators is their track record over time to ensure an element of consistency so as to avoid any conclusions based on short term studies where agreements might have been secured through tricks or deception. (3) Have a low incidence of implementation failures:The purpose of negotiations is not only to reach agreements but also to make them work during implementation. Track record of successful implementation is a pre-requisite for identifying skilled negotiators.

BEHAVIOUR PATTERNS OF SKILLED NEGOTIATORS : BEHAVIOUR PATTERNS OF SKILLED NEGOTIATORS Skilled negotiators have markedly different pattern of behaviour than the average negotiators. Based on a research carried out on face-to-face negotiations, it has been found that following behaviours were used by skilled negotiators more frequently: Behaviours that are avoided These are: (i) Using irritators :Negotiators tend to use certain words / phrases that do not add any value to the process of persuasion that moves parties closer to agreement. For instance,  Using the prefix of ‘generous offer’ to own proposal Using ‘fair’ or ’reasonable’ for own offers Although it is rather difficult to avoid saying favourable things about ourselves, these should be treated as ‘irritators’ as they tend to offend the other party. Skilled negotiators use these irritators about 2 times per hour compared to 11 times by average negotiators in the face-to-face negotiations. (ii) Making counter proposals:During negotiations, it happens frequently that the moment one party puts forward a proposal the other party follows it up immediately with a counter proposal. Skilled negotiators make such counter proposals less often – only about 2 times against 3 times per session made by average negotiators. Disadvantage of making counter proposals are:  Introducing new and additional options leads to complicating and clouding the clarity of negotiations Giving counter proposals when the other party is pre-occupied with own proposal, are not received well The other party usually perceives counter proposals as a way of blocking or conveying their disagreement

Slide 5 : (iii) Avoiding ‘Defend / Attack Spiral’ :Negotiations often happen for resolving conflicts. When negotiators use emotional or value-loaded behaviour to attack the other party or to defend own proposal, the process goes in to a spiral and the line between defend / attack blurs. One party may perceive it as a legitimate defence while the other may deem it as an unwarranted attack. Skilled negotiators use it about 2 times per hour against the average negotiators’ 6 times in face-to-face negotiations.  (iv) Avoiding dilution of argument :Laypersons seem to think that more reasons or justifications offered to support an issue, better are the chances of their acceptance by the other party. In reality, opposite is true because more arguments lead to more dilution because the opposite party would use the weakest justification to hit back. Thus the weakest argument dilutes the stronger ones and becomes the common denominator of the process in hand. Skilled negotiators use them less often. (2) Behaviours that are used frequently .These are: (i) Giving advance indication of behaviour supporting agreement :Skilled negotiators tend to label their behaviour before setting it out especially if there is no disagreement involved whereas average negotiators tend to be abrupt. For example, prefacing a question by saying, ‘Can I ask a question ………’. Labelling behaviour beforehand has some advantages:  It draws the attention of listeners to the issue stated and would lead to a response from the other party. It slows down the negotiations as parties take time to gather their thoughts from the previous statements made before they can respond. It adds a certain formality which keeps the negotiations at rational level. It reduces ambiguity and leads to clearer communications

Slide 6 : (ii) Giving reasons before indicating disagreementThere is a marked difference between skilled negotiators and average negotiators when it comes to expressing disagreement: An average negotiator would say that ‘I disagree with that because ………’ whereas a skilled negotiators is more likely to begin with the reasons and explanations before making the statement of disagreement. This is illustrated below: Average Negotiators :Statement of Disagreement followed by Reasons and Explanations Skilled Negotiators :Reasons and Explanations before Statement of Disagreement (iii) Testing understanding and summarizing :Testing understanding is a behaviour used by negotiators to check and establish whether the previous statement has been understood by the other party. Summarizing is making a compact statement of points discussed previously. Both the behaviours are useful as they sort out misunderstanding and reduce misconceptions. Skilled negotiators tend to use them twice as more frequently than average negotiators because of the following reasons:  Concern for clarity and prevention of misunderstanding A measure of reflection of the other party’s response A concern for stick-ability and implement-ability of agreement  (iv) Seeking more information :Skilled negotiators seek more information than the average negotiators. Their justifications are:  Need to obtain necessary information to use it for bargaining Using the strategy of asking questions as they:

Slide 7 : Give control over discussions Are more acceptable alternatives to disagreements Keep the other party active, leaving little time to think Give time to negotiators to collect own thoughts (v) Sharing feelings Skilled negotiators tend to play their cards very close to their chest and are often able to keep their feelings to themselves. It is almost impossible to measure these feelings in any research. However, an indirect indicator is available as they tend to give ‘internal information’ more often that the average negotiators. Giving internal information amounts to sharing with others as to what is transpiring in their mind. Such revelations may or may not be genuine. Giving internal information has also been used instead of disagreeing behaviour.  Psychologists are of the opinion that expressing feelings helps build trust.

PLANNING FOR NEGOTIATIONS : PLANNING FOR NEGOTIATIONS Although skilled negotiators use certain behaviours and avoid other behaviours, planning for negotiations is the foundation for being successful in negotiations – those who fail to plan, plan to fail. Experience has confirmed the following salient aspects of planning for effective and successful negotiations: (1) Time spent in planning for negotiations :No significant difference was found between the total time spent in planning by the skilled and average negotiators. It is not the amount of time spent in planning but the quality time spent that determines the success of negotiations. (2) Exploration of range of options in negotiations :Skilled negotiators tend to explore the whole range of options covering not only issues introduced by them but also those that might be introduced by the other party. They tend to explore about twice more number of the options than an average negotiator and consequently, prepare better for securing a win-win situation for both the parties. (3) Focusing on common ground :Although both groups of negotiators concentrate on possible areas of conflict, skilled negotiators spend three times more time on possible areas of common ground than the average negotiators. Pull type of behaviour in persuasion is a better strategy and paying more attention to areas of common ground is more rewarding. (4) Freeing issues from sequencing and scheduling :Methodologies of critical path analysis work well with inanimate activities but do not work in negotiations as the sequence depends upon the consent and cooperation of the other party and it is not available in many negotiation processes. Skilled negotiators tend to plan around each issue in a way that is independent of the sequence. This is illustrated below:  Average Negotiators  Issue A followed by Issue B followed by Issue C and then followed by Issue D

Slide 9 : Skilled negotiators  Issue A   Issue D Issue C   Issue B  Each issue is planned independent of the other without any regard to their sequence.  (5) Concentrating on long term and not short term issues :Both skilled and average negotiators seem to be more pre-occupied with short term issue. However, skilled negotiators commented twice as often on long term considerations that the average negotiators. In the union-management negotiations, many times in India employees’ and employers’ expectations seem to be arising from unacceptable propositions. (6) Setting limits about objectives:As a part of the planning process, skilled negotiators set the range in which they would secure the agreement compared with average negotiators who plan a fixed point objective. Psychologists link setting up the range of objectives with the aspiration levels – higher the aspiration level, higher is the outcome achieved. They suggest three levels – maximum, minimum and target value.

PROCESS OF NEGOTIATIONS : PROCESS OF NEGOTIATIONS As an integral part of learning about negotiation skills, students must understand the process of negotiation as incorporating these steps in planning for negotiations increases the power of persuasion. Although every one negotiates, some of us are more aware of it than others: Advocates, procurement managers, union officials and diplomats are aware of it and they even call it ‘negotiations’. Most others, being not conscious about it, refer to these meetings as: Management meetings Conflict resolution sessions Team building Joint problem solving Handling inter-personal issues Based on the experience of training personnel for negotiation skills, following three patterns of the process of negotiations have been identified: (1) Giving one’s viewpoint :This is the pattern followed by novice negotiators like young sales persons. The position is shown in the diagram below:  Party A   Position X Party B  Negotiator A spends all his efforts to persuade Negotiator B to accept Position X and tries to anticipate all objections that he must overcome. However, he is not aware of the Position of B. Approach of A would look like as below:

Slide 11 : It has the following disadvantages:  Negotiator A is fostering a conflict situation Negotiator A is underestimating the impact of having two parties in a negotiation  (2) Giving one’s viewpoint and analyzing B’s objections and own counters :By now Negotiator A has become more aware of Negotiator B. He has become aware of the opposite party and anticipates its objections and counterproposal / position Y. Diagrammatically it looks like as below: Party A Position X Party B Position Y A knows that persuading B is tough. He has prepared himself for all objections and justifications for not moving beyond Position X. The process would look as shown below: If B has planned likewise and chances are that he would have, reaching an agreement will be hard, emotional experience because both would have to agree to all issues and move away from their respective positions – moving to a middle position from extreme conflicting positions is very difficult.  Many negotiators stay in this mode as they remain focused on issues of maximum resistance.  A small minority would move to the next pattern.

Slide 12 : 3) Finding the common ground of agreement :Negotiators following this pattern are fully aware of the probable conflict issues and pros and cons of each option. Party A spends considerable effort in determining how common ground can be introduced in to the negotiation. This situation can be represented as shown:   Party A  Position X Party B  Position Y  The shaded portion represents the common ground that offers the greatest opportunity for cooperative action. Common ground also includes areas in which there are no disagreements. Negotiators must remember that these include:  Past history of shared successes Commonality of overall goals Working for the same company Working for the same industry Having common enemies The above act as binders and remind parties that they are not adversaries but allies working to solve problem(s) jointly or seize opportunities that have mutual advantages. These type of negotiators plan how and when to focus on it and build upon the common ground.

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NEGOTIATION STYLES : NEGOTIATION STYLES Researches have confirmed the following four styles of negotiators:  Factual style Intuitive style Normative style Analytical style Each of these styles is detailed below: (1) Factual style :Such persons make the basic assumption that facts speak for themselves.   (i) Behaviours exhibited They:  Point out facts in a neutral way Keep track of what has been said Remind people of their statements made earlier Know most of the details of issues discussed Share details with others Relate facts to experience and clarify Are low key in their reactions Look for proof and documents of statements Use keywords like: clarify, define, explain, facts etc

Slide 15 : (ii) Guidelines  Be precise in presenting facts Refer to what has been carried out Know the dossier complete with details Document what they say  (2) Intuitive Style:These persons work on the basic assumption that imagination can solve any problem,(i) Behaviours exhibitedThey:  Make warm and enthusiastic statements Focus on the entire problem Pin-point the essentials of problem(s) Make projections in to the future Are imaginative and creative in analyzing the situation Go beyond the facts Come up with new ideas all the time Push and withdraw from time to time Put two and two together very quickly Get their facts wrong sometime Use deductive logic

Slide 16 : Acknowledgments We wish to acknowledge the people who actively contributed to the writing and delivery of the learning material Author Prof. Manohar L. Gulati Presenter M.Sadiqur Rahman, Fullbright Scholar, Lecturer, Employability Skills & Business Communication A special thanks to the technical support team who were instrumental in the design and implementation of this presentation.

Slide 17 : Contact Details For further information, please contact: IILM Institute for Higher Education 3, Lodhi Institutional Area, Lodhi Road, New Delhi- 110003 Email: learning@iilm.edu Web : www.iilm.edu

THANK YOU : THANK YOU