Negotiation Module Master
Negotiation Module Master
YEAR 1: SEMESTER 2
NG102: NEGOTIATION
TABLE OF CONTENTS
1 Introduction to Negotiation 2
3 Establishing Trust 45
5 Negotiation Strategies 75
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CHAPTER ONE
INTRODUCTION TO NEGOTIATION
Structure of Chapter
1.0 Introduction
1.1 The Nature of Negotiation
1.2 Defining Negotiation
1.3 Important Factors in Negotiation
1.4 The Use of Negotiation in Purchasing
1.5 Defining the Strategy Route Map
1.6 Two Common Mistakes Made in Negotiation
1.7 Objectives of Negotiation
1.8 Introduction to Negotiating Skills and Techniques
1.9 Characteristics of Good Negotiators
1.10 Introduction to Negotiating Strategy
1.11 Introduction to Negotiating Techniques
1.0 Introduction
To get what you want in life, in work, and in play, requires constant negotiation
with a variety of people. This involves basic communication skills, such as
active listening and attention to non-verbal cues, and a clear understanding of
your goals, as well as the objectives of your negotiating partner(s). To be truly
effective, however, you need to know more. You should be able to
communicate persuasively during the process of negotiation.
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1. Responding to staff members’ requests for promotions, salary increases, and
other employment perks (as well as negotiating your own)
2. Negotiating with vendors for their best possible products, services, and prices
The world negotiate derive from the Latin infinitive negotiarimeaning “to trade
or do business.” This verb itself was derived from another, negare, meaning “to
deny” and a noun, otium, meaning “leisure”. Therefore, the ancient Roman
businessman would “deny leisure” until the deal had been settled (Curry, 1999).
Negotiation is any activity that influences another person. McCormack define
negotiation in his book McCormack on Negotiating (1995) as the process of
getting the best terms once the other side starts to act on their interest.
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In otherwords negotiation is a process to get what is wanted. It is a process that
means to an end. The negotiating process involves balancing matters between
two parties so that the negotiator not only get what he wants but also get what
he wants in the best possible way (Forsyth, 2009). It is the journey of how to get
to the destination and not the destination itself. Companies should pay more
attention on how to get there but also at the same time should not lose the sight
of the destination. It is all about the process.
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getting ready to lose. It means that nobody gets what they really want. Everyone
has to reach a compromise away from their stated position. This is not a
satisfactory way to control a negotiation, and yet most people think this is what
negotiation is all about (Harvey, 2008). In compromise situation both parties are
unhappy after a deal because one party had to spend more than he initially
planned and the other party received less than he wanted in the transaction.
Usually compromise is a lose-lose situation. Negotiation can be done without
compromise but compromise cannot be done without negotiation.
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Negotiation is a method where people come to an agreement about a price or
product. It is a process by which a compromise or an agreement is reached
while trying to avoid argument. Negotiations do not always end in an
agreement. Those making a decision by negotiation usually have the option of
choosing some other solution, or saying ‘no’ or walking away.
Negotiating is one of the first steps in the trade process. It is necessary for the
buyer or the seller of the goods or services to get into contact and to negotiate
regarding the methods, the price of purchase/sale and regarding their
coordination. A good preparation reduces wasted efforts and time, identifies
gaps in the information needed to make decisions by trading, and establishing
the criteria for judging the merits of possible traded solutions. It allows to
anticipate likely stances and demand, and to focus the attention on the potential
for trade and potential for solution, which increases your effectiveness as
negotiator. For preparing a successful negotiation several factors need to be
taken in consideration: Which variables affect the outcomes of the negotiation
process? Which strategies support the execution of an agreement? Which
persons should be chosen for cooperation?
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To answer this questions and before starting a negotiation next the following
steps need to be taken:
Good preparation
Gather information
Choose a suitable strategy which can be used by the seller and the buyer
Choose the sale and delivery methods
The price of the goods or services
The methods of payment
Determinate the duration of the business relationship
The main condition for a successful outcome for any negotiation is obtaining
information. For this reason, it is very important to gather information through
desktop studies before making an offer. In most cases, this information can
mostly be obtained from the study of the research of various entities or from the
internet, as well as via telephone connections or correspondence. This will help
create a successful and sustainable negotiation. During this research, the below
mentioned matters should be evaluated:
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country to the World Trade Organization, the free trade agreements
between countries, agreements to avoid double taxation etc.
The economic development level, the leniencies of companies and their
business culture in the target area
Research regarding the leniency of growth in the target area, the target
sector, the existence of competition
Research regarding the administrative and financial capacity of the target
company, its place in the sector and research for reference regarding the
company
Evaluation of the banking system and financing opportunities in the target
market and the presence of banks which have the ability to conduct
foreign transactions and their ability and power to act as correspondent
banks
Information regarding accounting standards and evaluations
Research for the transportation conditions to the target company
Without adequately defining your objectives, preparing your case and planning
your strategy, your chances of achieving your ideal objectives in a negotiation
are minimal. If one party has spent time before a meeting defining the desired
outcome, planning how they will dictate the agenda, including how they will
open their case and tackle some tricky questions, they will always outperform
the person who has given no prior consideration to it.
The initial phase should incorporate objective setting, preparation and planning.
Preparation is about researching your own precise requirements and latitude for
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movement, the market, the other party’s strengths and weaknesses, and making
some (educated) assumptions about their ideal and fall-back positions.
Research by NRI found too few people dedicate time to planning. Here are
some key planning and preparation steps to consider:
A staggering two-thirds (62 per cent) of the people questioned spent one hour or
less preparing for a negotiation. Sixty-eight per cent admitted that better
preparation for their last deal would have produced a better outcome.
Negotiation is a performance; it is during the planning phase that the stage is set
and expectations managed. Effective negotiators envisage a far wider range of
potential variables, openings and outcomes than the average negotiator. They
also spend more time considering areas of common interest between the parties.
State assumptions.
Be creative – the longer and more creative the list of variables, the more
flexible your strategy will be.
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Prepare Open Questions
Of those surveyed, only 1 per cent would typically prepare 20 ‘open’ questions
for a negotiation, with 44 per cent relying on only 0-5 planned questions.
If we ask open questions, it is difficult for the other party to evade and therefore
puts the asker in a position of control. Many people believe that talking gives
you control. In fact, it is the person asking the open questions and listening to
the responses who will be in control.
If you talk too much and are under-prepared, the other party will put you on the
spot with a well-chosen question. If you have planned properly, you will know
what information you require and what assumptions you have made concerning
you, your business and the other party. Proper use of questions allows you to
check out all of this preparation before you move into the next phase of the
negotiation.
A negotiation has clear phases and these must be planned. Avoid entering one
without having drawn up a careful map of the direction and destination of the
meeting and any subsequent events. The route may not be completely sequential
– you may have to backtrack – but at least you will be prepared.
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A quarter thought that the other party was more prepared than the buyer, with
48 per cent saying that both parties were equally prepared. The research, which
was based on the responses of 90 delegates, would suggest that a lack of
preparation and planning is putting the buyer’s questions in a weaker
negotiation position before they even go in to do the deal.
Personality type, negotiating styles and interests are all key factors in building
rapport and managing behaviour during a negotiation. It is important these areas
are considered in the planning stage. The research found 43 per cent
‘sometimes’ consider these aspects, and 4 per cent ‘never’ consider it. It is
important to be unpredictable within a negotiation to prevent the other party
reading you too well. And if they are skilled, they will also be unpredictable.
You need to prepare and plan for a plethora of tactics, approaches and questions
because not all techniques will work all of the time on every one. So, when
you’re planning, consider the responses the other party is likely to give. Over
half the people interviewed ‘mostly to always’ consider the other party’s
response. This will put them in control and help them deal with the unexpected
that can sometimes arise during a negotiation.
Another part of the strategy should be setting well-defined targets for each issue
or variable. The research showed that negotiators often lose sight of their
objectives. Keep these in mind and set well-defined goals from the outset. If we
don’t know where we are going, how will we know when we’ve arrived?
Setting objectives from ‘ideal’ and ‘realistic’ to ‘walk away’ is paramount. It
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will help to control the extent to which you move from your ideal settlement
point and to understand the cost implications of any movement.
Skilled negotiators know the specific objectives for each variable: what must
they get? What might they achieve in an ideal world? And what is realistic?
Make sure that the ideal is a stretching objective and that you have clear targets
for each variable. The longer and more creative your give and take list of
variables, the more flexibility you will have in your negotiation.
The NRI study found 79 per cent either ‘always’ or ‘sometimes’ dedicated
preparation time to getting their objectives clear.
There are more than 75 tactics that are used during negotiations. Some will
work on certain personality types, but not on others. Skilled negotiators are
unpredictable in their use of different approaches. If you continue to use a
pattern of the same tactics in each negotiation, the other party will prepare to
counter them next time. It is important, therefore, to list and carefully plan the
tactics you will use in each negotiation.
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cent of people surveyed ‘always’ rehearsed their opening statement, with a huge
54 per cent ‘rarely’ or ‘never’ rehearsing.
“Fail to plan, plan to fail”. A cliché, yes, but one with a strong correlation to
negotiation results regardless of culture, industry, title or job function. Putting it
another way, those who plan better do better.
You should never strive to win every single deal point. While you need
competitive drive, sometimes being too competitive in the short term leads to
unintended long-term negative consequences.
First, deals take a long time to complete if someone is holding out to win every
single point, which can often delay larger successes. Second, and most
importantly, if the supplier doesn’t feel they win anything other than the order,
they will be less inclined to provide extra value-added services once the contract
is in place. Worse yet, they can become adversarial once the deal is signed and
try to make it up in reduced services and price increases.
As a part of your planning process, try to identify a few deal points that are
important to the supplier, but not critical for your side – and plan to concede
them. Typically plan to give a supplier a long-term contract, which also helps
to be more efficient over time by not constantly bidding something out, so long
as you have a 30-day termination for convenience clause, of course.
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Several negotiators say “why should you (the supplier) be allowed to have a
higher profit margin than me (the customer)?”. It sounds reasonable, but
negotiating using relative profit margins has nothing to do with financial reality.
The supplier is competing with the market for the maximum amount of revenue
their product or service commands and their own internal costs drive the margin
calculation. Notice the customer’s profit margin doesn’t factor in at all. Still,
many negotiators get off track by clinging to this issue if the supplier doesn’t
concede right away.
Suppliers should also make a healthy margin on your account so that you can
command a great service. How do you do this if your success is measured by
the savings you achieve? Here’s an example: we were negotiating with a well-
known marketing company to support a sustainability programme. They wanted
us to pay for them to spend hours interviewing several executives and then
report back with a list of potential names. The total projected cost was
US$30,000 (£19,207), which included a 25 per cent margin and it would take
three weeks for the results. The first negotiator spent a week focusing on the
margin and got the supplier to reduce it to 20 per cent. Upon further review, we
didn’t believe the interview process added value to the quality of the
brainstorming results and didn’t like adding three weeks (four weeks when you
include the negotiation time) to our project plan. We offered them a deal. We
would pay them US$10,000 (£6,402) to show us the lists of names they
provided for their last three Fortune 500 clients. Their margin would be much
higher while our costs would be much lower and we could save time. This win-
win was possible because we began negotiating based on total cost instead of
supplier margin.
Good negotiators are made, not born. Although some people have a natural
instinct for negotiation, most of us can find it difficult, scary and something that
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requires great planning. It is easy to worry about failing, especially if we think
our opponent is better than we are.
(e) Cash discount which can be claimed for prompt payment to the supplier.
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The dictionary meaning of negotiation is “conferring/ discussing” or bargaining
to reach agreement in business transactions.” Negotiation can be defined as a
process of planning, reviewing and analyzing used by a buyer and seller to
reach acceptable agreements or compromises. Negotiation covers all aspects of
business and not just price. It is a decision making process.
(d) To exercise control over the manner in which the contract is performed.
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Terms and prices must be thoroughly negotiated to prevent unreasonable
dictation by the seller.
Unions develop skills of highest order for negotiation and we can learn a lot
from unions in this regard. Labour leaders make themselves fully equipped
before entering into talks with management.
The authority of the vendor to sign the contract is much superior. The buyer
should make sure that the seller’s representation has authority to conclude the
contract.
The buyer should hold the negotiations at its own office. It has a number of
advantages.
Determine Concessions:
The best bargain is to ask the supplier to justify this price, quality, quantity etc.
A good offense is the best defense.
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Use Diversions:
Miscellaneous:
Interpersonal Skills
Good interpersonal skills are essential for effective negotiations, both in formal
situations and in less formal or one-to-one negotiations.
Problem Analysis
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Effective negotiators must have the skills to analyze a problem to determine the
interests of each party in the negotiation. A detailed problem analysis identifies
the issue, the interested parties and the outcome goals. For example, in an
employer and employee contract negotiation, the problem or area where the
parties disagree may be in salary or benefits. Identifying the issues for both
sides can help to find a compromise for all parties.
Preparation
Before entering a bargaining meeting, the skilled negotiator prepares for the
meeting. Preparation includes determining goals, areas for trade and alternatives
to the stated goals. In addition, negotiators study the history of the relationship
between the two parties and past negotiations to find areas of agreement and
common goals. Past precedents and outcomes can set the tone for current
negotiations.
Active Listening
Negotiators have the skills to listen actively to the other party during the debate.
Active listening involves the ability to read body language as well as verbal
communication. It is important to listen to the other party to find areas for
compromise during the meeting. Instead of spending the bulk of the time in
negotiation expounding the virtues of his viewpoint, the skilled negotiator will
spend more time listening to the other party.
Emotional Control
It is vital that a negotiator have the ability to keep his emotions in check during
the negotiation. While a negotiation on contentious issues can be frustrating,
allowing emotions to take control during the meeting can lead to unfavourable
results. For example, a manager frustrated with the lack of progress during a
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salary negotiation may concede more than is acceptable to the organization in
an attempt to end the frustration. On the other hand, employees negotiating a
pay raise may become too emotionally involved to accept a compromise with
management and take an all or nothing approach, which breaks down the
communication between the two parties.
Verbal Communication
Negotiators must have the ability to communicate clearly and effectively to the
other side during the negotiation. Misunderstandings can occur if the negotiator
does not state his case clearly. During a bargaining meeting, an effective
negotiator must have the skills to state his desired outcome as well as his
reasoning.
Problem Solving
Individuals with negotiation skills have the ability to seek a variety of solutions
to problems. Instead of focusing on his ultimate goal for the negotiation, the
individual with skills can focus on solving the problem, which may be a
breakdown in communication, to benefit both sides of the issue.
Leaders with negotiation skills have the ability to act decisively during a
negotiation. It may be necessary during a bargaining arrangement to agree to a
compromise quickly to end a stalemate.
Interpersonal Skills
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Effective negotiators have the interpersonal skills to maintain a good working
relationship with those involved in the negotiation. Negotiators with patience
and the ability to persuade others without using manipulation can maintain a
positive atmosphere during a difficult negotiation.
Focus on Win-Win. Win-win means that both parties feel good about the
outcome of the negotiating process. Some books that state win-win solutions are
not possible in business negotiating; the authors write that someone usually
gives away more than they should and the outcome becomes a win-lose
situation. Great negotiators don't believe that. They help their customer try and
solve problems and look for opportunities to give as much value as possible.
They also know how and when to limit their concessions, give-aways, and
discounts so they can work out an agreement that is equitable for both parties.
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Patience. Too many people search for the quick fix try to close the sale as fast
as possible so they can move on the next prospect. Great sales negotiators
recognize that patience is a virtue and that rushing the process often leads to an
undesirable outcome. They don't hurry to reach an agreement. Instead, they take
time to gather the necessary information. They think carefully about possible
solutions. They take their time during the entire process. This is critical because
major mistakes are made when we try to reach an agreement too quickly. We
rush through the process, not giving the other person's offer ample attention, and
often end up with an outcome that is win-lose. Simply because we were in a
hurry.
Persuasion Techniques
When it comes to negotiation strategies, the first thing that needs to be done is
defining the value of the product and after that start the negotiation if needed.
As mentioned before, a very important condition is gathering information about
the other party and the product or service.
There are many techniques to persuade the other party, but there is no single
technique that is appropriate in all situations, this asks for flexibility and being
able to estimate which technique can be used in which situation.
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The manner in which a person sits, the tone used while speaking can
communicate the way the person is feeling or maybe what he/she might think.
Another technique for persuasion is the use of storytelling. This includes the
way you speak but also the use of visuals. In order to convince the other party
more easily it is important to use vivid language. Present your message in the
context of a story that explains your expectations, problems and goals and
demonstrate what your proposal is to reach that. To achieve the maximum effect
during a negotiation it is critical to use factual details. These details can be
demonstrated by using media like, presentations, pictures, graphs and video’s.
For convincing the other party, having good arguments can have a significant
persuasive effect. It is most effective to present your stronger argument first and
reserve arguments to use throughout the negotiations. There are general rules
which can be applied for every argument:
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Be aware that often the first and the last arguments are those that are best
remembered by the other parties. So make sure that you start with a
strong argument and finish with a strong argument.
To gain an advantage in a negotiation make use of different ways of
asking questions. Ask open-ended questions to find out more about the
other parties’ position. This manner of asking questions can engage the
other party and make them feel more comfortable.
It is advised to start asking questions which begin with “Who, What,
Where, How, Why, Explain and Describe” rather than immediately
challenging the other party’s position. This gives you the opportunity to
discover what is motivating the other party during the negotiation.
To get more information, the following questions could be asked to the
other party: “What are their main concerns” and/or “Why are those
concerns important to you?”
If you have assumptions about something you might ask questions such
as “ Have you thought about….”
All these ways of asking questions could provide you with more information
and make the cooperation more effective and makes the negotiating process run
smoothly.
There are many ways to respond to the other parties’ position or actions, one of
those is emotion. If you decide to use any kind of emotion, through speaking,
body language, facial expression or tone make sure that those emotions are
showed intentionally. You need to estimate when to use which emotion. For
example: by reacting unemotional in particular difficult times of a negotiation
the other party might think that the only thing what matters to you or to your
party is “success”. This might cause difficulties and misunderstandings in a
negotiation.
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Another persuasion technique is making the decision to extend or not to extend
courtesy.
One of the most important values during negotiation is a proper preparation and
a good planning. It is of big importance to understand what the goals and
interests of the other party are, this can be accomplished by:
1. Encouraging dialogue
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Ask open-ended questions – this encourages the other side to provide
unsolicited information
Give the opportunity to the other party to speak openly, especially if they
are emotional or emphatically, this could give you important and useful
information.
Give the opportunity to other parties to express their position
Avoid making non-negotiable statements, because the other party might
avoid addressing important topics
2. Active listening
3. Eye contact
- Maintain eye contact with the other parties while talking, this will show that
you are interested in what is being said and shows trust in each other. Be
informed about the cultural differences, because in some cultures it is
inappropriate or could even send the wrong message when you make to much
eye contact
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4. Silence
- Often silence is seen as a bad thing, but do not speak just for the purpose to fill
an uncomfortable silence. When silence is used properly it can encourage other
parties to talk in an unguarded manner.
An important part of your strategy is knowing when and how one uses a
document and for what purposes. Below are a few advises regarding how to
deal with the documents:
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Another strategic advantage can be provided by using an expert. Experts can be
very useful in negotiations involving complex or technical issues. When
choosing an expert, all involved parties need to have confidence in his neutrality
and the usefulness of his opinion. But, be aware that no expert can be truly
neutral. Every expert brings his or her own biases, individual and cultural, to the
negotiation. Examples of experts are: interpreters, scientists, economists and
lawyers. These experts can advise you on complex issues and offer solutions for
it.
During a negotiation, make use of breaks. This gives the opportunity to parties
to step away from a complicated discussion, to refocus on the topic and to
discuss new information learned with your own party and apply this to your
strategy. When the discussion will restart after a break, a useful technique is to
summarize where the negotiations were before the break.
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including the use of ultimatums. In some cultures, ultimatums are considered a
regular part of negotiations. However, ultimatums generally are quite risky and
are a drastic measure in any negotiation. If the other party rejects your
delegation’s ultimatum, then your delegation may be faced with a difficult
decision to either end the negotiation or withdraw the ultimatum and risk losing
credibility. However, should the negotiations reach a point where no progress is
being made and only a few issues remain, issuing an ultimatum may encourage
the other parties to make a better offer.
During a negotiation it may happen that the negotiations fail and one of the
parties might leave. It is important to understand and being able to explain why
the negotiations failed. If you decide to come back and restart the negotiation, it
is important to show the other party that you are interested to resolve the dispute
and able to make compromises so that every party could reach its goals.
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CHAPTER TWO
PLANNING AND PREPARATION FOR NEGOTIATION
Structure of Chapter
2.0 Introduction
2.1 Designing a Negotiating Plan
2.2 Knowing the Other Parties
2.3 Setting the Setting
2.4 Choosing Who to Negotiate
2.5 Defining Roles
2.6 Choosing a Negotiating Style
2.7 Fact and Issue Expert
2.8 Four Phase Pre- Negotiating Framework
2.9 Pre- Negotiating Planning Literature Review
2.10 Additional Pre Negotiating Planning Process Activities
2.0 Introduction
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Effective preparation can be accomplished only through in-person meetings
among the team members. The preparation should be done in a location where
the team can be free from distractions and confidentiality maintained. Do not
underestimatethe amount of time that must be dedicated to preparation. As a
general rule, the team should spend at least one day in preparation for every
anticipated day of negotiation.
Proper preparation requires idea sessions with the group writingeach idea
down on a board, consultation with outside technical experts (lawyers for
example),and “red teaming.”
• Design a plan that addresses any aspect of the negotiation that could affect the
team’s ability to achieve the team’s goals.
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The structure of the negotiation(s) including: setting, timing and
sequence.
Built-in flexibility in the form of alternative plans (in the event there is a
change of goals, interests, parties, circumstances, etc.).
The team’s negotiation plan should not be too rigid and can (and should)be
subject to change up until, and even during, the negotiation itself. The plan
should,however, continue to be a point of reference throughout the preparation
phase,allowing the delegation to stay focused on not just the delegation’s
ultimate goal, butthe steps and means necessary for the delegation to get there.
As circumstanceschange and evolve, the delegation must be prepared to alter its
strategy andnegotiation plan accordingly.
• Learn as much as the delegation can about the other parties before
thenegotiations commence, based on the timing and circumstances.
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• Identify the objectives, interests, priorities and goals of the other parties.
In order to learn as much as possible about the other parties, the delegation
should utilize itspersonal and professional relationships for information, in
addition to using standardresearch techniques such as the internet and other
media. These relationships include localand international agencies, special
interest groups, non-governmental organizations,outside technical experts, and
the media.As part of this research, it is important to develop an understanding
of how the otherparties are perceived by and among these various persons.
In order to have any real value, this must be accomplished in advance of your
preparationsessions.
• Remember that the mediator has its own interests, biases and agenda.
– There are several degrees of mediator’s roles, ranging from merely providinga
neutral site for the purposes of conducting the negotiation (a host) to
oneimposing a resolution on the delegations (a United Nations sanctioned
arbitrator).
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– Ask the other side to identify their objectives, interests, priorities and goals.
Listen.
– Do not assume that the other side will speak the delegation’s language.
• Sometimes it may be useful for the delegation to have its own interpretereven
though the other parties believe that none is required – i.e., theybelieve their
language skills are sufficient. Though it is important to besensitive to the other
parties’ wishes, ensure an interpreter is present ifthe delegation believes that the
communication process will be hamperedby the lack of a competent interpreter,
• Understand the cultures, customs and formalities of the other parties,and the
relative importance of adhering to such formalities.
– Formalities can include when, and in what form, the delegation set outthe
delegation’s “demands.”
• Know and respect the other delegation’s sensitivity points and “breaking
points.”
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– The delegation may be able to get a sense of the other party’s deal breakersby
forwarding an agenda in advance of the meeting for their comments.If the other
delegation simply refuses to speak about certain agenda items,that is a good
indication that those items are breaking points.
• Evaluate various aspects of the setting and ask how each aspect can help
thedelegation to achieve a successful negotiation.
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– Geographic setting.
• Home location vs. other parties’ location vs. neutral location – weigh
theimportance of having all parties feel comfortable against the advantageof
gaining or losing a subtle psychological advantage (and potentially leavingthe
other party at a slight psychological disadvantage).
• Ask whether the location allows for the safety, security and confidentialityof
all parties involved.
– Accessibility.
– Does the setting allow each party the ability to confer privatelyin comfortable
surroundings?
• Does the delegation want access to the media, or to avoid media scrutiny?
– Means of communication.
• If translators are required, attempt to ensure that the facility has equipmentfor
simultaneous translation.
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• While keeping in mind what aspects of the setting will help the delegation to
achievethe delegation’s goals, consider the setting from each party’s perspective
to ensurethat the setting chosen will not ultimately impede the negotiation.
Determining who the delegation places “in the room” during the negotiation and
atwhat phase of the negotiation the delegation has them there can affect the
successand ultimate outcome of the negotiation. As part of the delegation’s
negotiationplan, consider not only who will be in the room during the actual
negotiation, butalso who should participate in other aspects of the negotiation,
including preparation,communications (internal or external) advising the team,
etc. Learning about theother parties in the room is crucial in assembling the
delegation’s negotiation team.
• What individuals will help our team attain its goals and ultimately
achievesuccess, at every phase of the negotiation?
– The people in the room, from both parties, should be of equal status.
– The delegation does not want the delegation’s “decision makers” in the roomif
the other party’s decision makers will not be there.
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– Preliminary stages or the “deal-making” stages.
• Are there other individuals the delegation should have on the team based
onother considerations?
– Internal politics, to get “buy-in” from the delegation’s side/from their side.
– Flexibility and ability to adapt their own beliefs and interests to the needsof
the negotiating team.
– Determine who on their side has the authority to make deals and/or is
theultimate decision maker.
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• Never be afraid to re-evaluate the delegation’s representing decisions.
Differentstyles of negotiations may call for different talent, experience and
expertise.
It is imperative during the preparation stage that the delegation establishes its
rolesand responsibilities, which may be influenced by the delegation’s goals.
There areseveral different approaches to the way in which delegations can be
structured, froma purely egalitarian structure to a hierarchical structure. States
have found that themost effective delegations are those structured in the
hierarchical manner. Oncethe structure is decided upon, determining what roles
each member will play withinthat structure, adequately defining those roles, and
explaining to the delegation howthe roles fit together will allow the delegation
to work together effectively andtowards a common goal.
• Decision maker.
– The member of the delegation who will be responsible for ensuring that
thestrategy is implemented and each of the other delegation members fulfil their
responsibilities as planned.
• Spokesperson.
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– Generally, there should be one person delegated to speak on behalf of
thedelegation so as to ensure that a consistent message is being delivered
andthat the pre-determined negotiation strategy is preserved.
– The choice of spokesperson may also influence the delegate with whomthe
mediator communicates on the other side.
• Person of influence.
• Scribe to document everything being said and to note down any physical
responsesbeing exhibited by the various representatives of the opposing party.
In each case, the size and composition of the delegation should be carefully
consideredas the delegation may wish to have these people at the negotiation
table or thedelegation may need to keep them away to meet the delegation’s
objectives. Eachof these roles should be taken by a member of the delegation,
though one membermay have several roles. Most states have found that the
scribe and interpretershould not hold any additional roles. The delegation
should know in advance whothe other delegation is bringing to the negotiation
so that the appropriate peoplefrom each delegation are present and that the
delegations are properly balanced.
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It is important to plan in advance for the possibility that there could be a
breakdown in roles, where someone fails to “obey their role.” To avoid this,
develop a means of communication among the delegation. For example, in the
event of a breakdown during a negotiation session, the decision maker may use
this as an opportunity to take a break from the negotiation and discuss the
matter with the delegation. This way, the delegation may be able to return to its
original strategic plan with minimal negative effects.
Choosing a negotiation style will help set the tone as well as influence the
ultimate outcome of the delegation’s negotiation. Choose a style that the
delegation believes is the most effective means to achieving the delegation’s
goals. At the same time, only adopt a style that is both natural and credible.
• Based on the type of negotiation, the timing and the parties involved, evaluate
what style would be most effective in achieving the delegation’s goals.
• Think about how and whether the delegation should adjust the delegation’s
style to account for differences of culture, gender, personality, etc.
• Learn the mediator’s culture, including rituals, styles and customs and
consider choosing a style that can accommodate or exploit such customs.
• Appreciate the other delegation’s culture, including rituals, styles and customs
and consider choosing a style that can accommodate or exploit such customs.
– Some styles that can be effective include those that are conciliatory in tone,
those that are more aggressive and harsh in tone, and those that are more
neutral. It is sometimes effective to have certain delegation
memberspurposefully assume different styles.
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• Recognize the needs and constraints within the delegation’s own organization,
as well as those of the other side.
Regardless of how much time and effort the delegation spends while getting
ready for the negotiation, unless the delegation’s members have thoroughly
researched and familiarized themselves with all of the key facts and issues
involved, the delegation is not prepared. Understanding all of the facts and
issues involved in the negotiation is the most critical aspect of being prepared.
Do not rely on others to know the key facts and issues involved.
• If the delegation’s team has sub-groups, make sure that at least the team leader
understands all of the key facts and issues, as well as short- and long-term goals.
• Understand what is at stake. Make a checklist of the key issues and facts
involved so that in the middle of negotiations, the delegation does not lose sight
of important issues on the way to achieving the delegation’s end goal.
• Consider internal factors such as: the relationships of the parties and
organizational and social structure.
• Consider external factors such as: political and economic policies, the
international marketplace, geographic locations, resources.
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and relevant environmental factors.
Formulation Entails developing goals, specific objectives, and setting
the parameters for each issue to be negotiated.
Information Gathering
Activities 1. Collect primary data (consult with others in your firm, client’s firm, 3rd
party firms)
2. Collect secondary data (industry, government, trade publications, Internet,
annual reports, 10k, etc.)
3. Gather data on market conditions, future trends, and how they may affect
each party
4. Understand other party (general profile, personality profiles, and
communication patterns of
others involved)
5. Knowledge of the competitive alternatives the client may be pursuing
6. Review history of the relationship form internal sources/data
7. Review the previous strategies used by both you and the client
8. Knowledge of client’s anticipated preparation
9. Understand the other’s decision-making unit (structure and process)
Formulation Activities 1. Set negotiation objectives
2. Define your interests
3. Define issues to be deliberated
4. Define the bargaining mix (what is no the table and what is not)
5. Set limit levels on issue(s) (optimistic, realistic, pessimistic)
6. Contrive BATNA (Best Alternative to a Negotiated Agreement, point
where you agree not to
do business)
7. Create an agenda for negotiation
8. Incorporate potential plans of the other party
9. Create a negotiating team assign responsibilities, role, and deadlines)
10. Outline the role you will assume (if part of a team)
11. Consult with others regarding your plan/strategy
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Strategy Development 1. Develop team strategy (who will speak, who will introduce demands,
Activities concessions, solutions)
2. Develop trade-off strategy on the issues (what you will give for what in
return)
3. Devise collaborative strategies (cooperative ideas and options)
4. Devise competitive attacking strategies (options to be highly aggressive)
5. Devise competitive defending strategies (options to defend against attacks)
6. Devise concession strategy (slow, but planned concessions to appease
client)
7. Develop strategy(ies) that use a 3rd party to influence client actions
(friendly/coercive influence asserted from 3rd party)
Preparation 1. Role Play
2. Script opening ceremonies (formal opening statement)
3. Prepare questions from client (questions that are in need of answers)
4. Prepare for anticipated questions from client (answers to questions or
objections)
5. Prepare a mutual interest business topic (topic both parties find relevant to
business concerns)
6. Prepare visual and other aids (charts, graphs, presentation aids)
7. Logistical concerns (seating arrangements, food, drink, room availability)
3. Review the previous strategies used by both you and the client
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8. Outline the role you will assume (if part of a team)
11. Prepare a mutual interest business topic (topic both parties find relevant to
business concerns)
12. Prepare visual and other aids (charts, graphs, presentation aids)
CHAPTER THREE
ESTABLISHING TRUST
Structure of Chapter
3.0 Introduction
3.1 Establishing Trust
3.2 Before the Negotiation
3.3 Embracing Opportunities
3.4 Setting the Scene
3.5 Establishing Parity
3.6 Greetings and Initial Impressions
3.7 The Use of Interpreters
3.8 Becoming Acquainted
3.9 Confidentiality
3.0 Introduction
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In a negotiation setting, trust must be established by developing trust
in the negotiatingprocess and each party must be seen as a good faith
negotiator. This trust can bedeveloped through where the negotiations
are held, how the negotiations begin,and how the parties communicate
through the sessions.
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made to “humanize” the delegation’smembers by demonstrating that
each individual in the negotiation process sharesa common desire to
try to resolve the dispute.
Your delegation must keep in mind that it must maintain the trust that
yourdelegation’s constituents have in it. In the end, any resolution
obtained in thenegotiations must have the constituents’ support before
it will be successfullyimplemented - remember your delegation’s
constituents will not have the benefitof the personal relationship with
the other negotiators.
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• Do not mislead or otherwise exaggerate claims when the facts and
claims arewell known to the other parties – lying will not establish
trust and continuedexaggeration will only harm the delegation’s
credibility.
The negotiation process begins long before the delegation and the
other partiesarrive at the negotiation location on the scheduled date.
Early decisions, seeminglyroutine and simple (including selecting a
date and location, determining who shouldand will participate (on the
delegation’s side and theirs), and structuring the agenda),can be as
important as the negotiation itself. These decisions will set the stage
forand define the scope of the negotiation, establish power and control
and, ultimately,position the delegation for success.
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– Establish basic rules.
– Suggest who should attend on each side. Insist that someone with
authorityattend. Insist that the participants be evenly matched in
stature and power.
The location of the negotiation, the physical setting and the manner in
which thedelegation’s team fills the space, will affect the delegation’s
ability to accomplish thedelegation’s negotiation goals. Maximize the
delegation’s opportunities to set thestage in a way that makes the
delegation feel most comfortable and in control.
• Physical Space/Location
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– If the delegation is in a position to select the location, invite the
other partyto the delegation’s home location. The delegation will have
a certain “homefield”advantage and will be able to control many
aspects of the negotiationfrom the beginning.
– Be there early. Aim to be the first to arrive. This will allow the
delegationto claim ownership of the space.
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• Inspect the chairs to make sure the delegation selects ones that are
ofappropriate height. The delegation’s members do not want to be
sittingat a lower height than the other party.
The benefit as the host is that your delegation can take advantage of
the fact that it isyour delegation’s space by, for example, timing when
breaks are scheduled, when food orbeverages are brought into the
room, when people join the meeting. This enables yourdelegation to
continually stay in control of the pace and even the overall mood of
thenegotiation.
When your delegation is not the host party it may still take advantage
of these opportunitiesor reduce the host’s advantage by, for example,
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proposing an agenda that establishes whenbreaks are to be had,
beverages brought into the room, or people join the meeting.
– Think about the number of people in the delegation’s group and the
messagethe quantity conveys.
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• Establish the identities and titles of each person the delegation wants
to participate.
• Ensure that the other parties are bringing appropriate members to the
negotiationsas well (perhaps by confirmation during the delegation’s
preliminary communication).
(b) Volume;
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(e) Expression; and
– During greetings, observe and study the other parties. Its reaction
andresponse will provide indicia of its mood, receptiveness and
expectation.
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• Part of a greeting may include reminding parties of the agenda and
groundrules. Your delegation is now leading the negotiation.
Do not make judgments about the other parties based solely on their
outward appearances.Physical appearance, such as gender,
height,weight, personal style, communicates an incompletemessage.
Decide what image the delegation wants/ needs to project. If your
delegation makesassumptions based on physical appearance it might
underestimate the other parties as a result,which puts your delegation
at a significant disadvantage. The same may be true of thejudgments
the other parties make about your delegation, which can provide your
delegationwith an advantage.
3.7 Interpreters
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• Position the delegation’s interpreter so that s/he can see and hear the
speaker(s).
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Make sure that everything that your delegation says is able to be
clearlyheard and understood by the other parties.
Do not attempt to have private discussions among your
delegation in thepresence of the other parties. Even if the other
parties cannot understandyour delegation’s words, they will be
able to observe the manner by whichyour delegation is
communicating through gestures, tone, tempo and volume.
Know the other parties’ preferences, and incorporate all of these into
your delegation’snegotiation plan. At this beginning stage of the
negotiation it is imperative that yourdelegation implement its
strategies based on principled strategies and not on emotion.
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– The consumption of alcohol is often used as part of a social
gathering,but it can also be used to a parties’ advantage.
– Observe and adapt to the personalities, tempo and goals of the other
parties.Be sure to pursue the delegation’s overall strategy or tone,
established in thepre-negotiation planning sessions with your
technical experts, counsel.
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• Does the delegation want to invite the other party to talk
substantivelyfirst (so that your delegation can learn before having to
present its positions)?
• Does the delegation want to present its most important issues first?
• Say very little and let the other parties express themselves to help
yourdelegation learn about the other parties.
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your delegation believes is in the other party’s possession,and how the
delegation might get it.
• If the delegation does not trust the other parties or is concerned that
confidentialinformation disclosed at the negotiation may be divulged,
test the other partiesbefore the negotiation by passing along non-
confidential (or benign) informationand see if it is shared with others
(“leaked”).
• Assume that anything your delegation says to the other parties will
not remainconfidential – no matter what assurances are given.
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CHAPTER FOUR
Structure of Chapter
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4.0 The Six Laws of Persuasion: an Overview
Psychologist Robert Cialdini wrote the seminal book on the Laws of Persuasion,
titled:Influence:The Psychology of Persuasion, in which he discusses the
prevalent methods of marketing. Even though you may not wish tobelieve it, a
great deal of psychological research indicates that human beings are quite
predictable in terms ofbehavior in response to certain stimuli, such as ads. This
is why marketing and advertising are highly successfulenterprises—by and
large, consumers respond to most ads and commercials by buying the products
and servicesthey promote. By understanding persuasion laws, you can control
how much others unduly influence you,as well as how to use them to your
benefit during negotiations.
The laws work because they provide shortcuts to making the countless decisions
people face every day as theylook for information to reduce the complexity of
life. If you can apply these laws in specific situations to yourbenefit, then your
influence over others increases significantly. Some of the best masters of the art
of persuasionin negotiation are highly successful salespeople who do their best
not only to make the sale, but alsoto meet the needs of their buyers.
Law of Reciprocity
Human beings, in general, try to repay in kind what another person has provided
to them. If someone givesyou something you want (or perhaps didn’t “realize”
you wanted), then you will wish to reciprocate becauseyou now feel obligated.
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Examples of this Law include the address labels you receive in the mail from
variousnon-profits requesting charitable contributions. Even though they are a
minor, unsolicited “gift,”sending themhas increased contributions for non-
profits many-fold, because people feel compelled to “return the favor.”Giving
free samples to potential customers is another way in which this Law is used by
successful salespeople.
People like to be (or at least appear to be) consistent in their thoughts, feelings,
and actions. Once they havemade a stand, they tend to stick to it and behave in
ways that justify their earlier decisions, even if they areerroneous. If you make a
commitment to a cause or product, however small, it then becomes easier to be
convincedto increase it. This is especially true if the commitment changes your
view of yourself in a favourable way. This is why salespersons attempt to get
customers to agree with them multiple times. After saying “yes”so often, it is
almost impossible to say “no” when it comes time for the close or direct request
for the sale.
Law of Liking
When you like someone, or believe that they are “just like you,” you are more
inclined to want to please themand, therefore, purchase whatever they are
selling. This is how successful salespeople operate; they establishrapport by
demonstrating how similar they are to their potential buyers. For example, they
note that they arefrom a comparable background as you, or even better, they are
people you know—your friends. As for thosein-home sales parties, the kicker
comes when your neighbors provide the testimonials for the product. Youdon’t
want to disappoint them by not purchasing, do you?
Law of Scarcity
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If you are not sure you want to buy something, the minute it becomes “the last
one available” you tend tohave second thoughts. After all, this must indicate
that others are purchasing it, and you might not be able toget another one
quickly, or at all, if you decide you want it later. So you take the bait to buy a
popular itemthat others won’t be able to get. At least that’s what you think.
Law of Authority
This is the law that uses celebrity endorsements or “expert” testimonials. When
people you admire promote aproduct or service, if it’s good enough for them,
then it’s good enough for you. And if you use it, then youmight even develop
similar characteristics to your heroes, such as good looks, wealth, or fame.
That’s what theadvertisers are counting on.
Why have TV sitcoms used canned laugh tracks for years? Producers wouldn’t
employ them unless they actuallyare successful in eliciting audience laughter
and, subsequently, higher ratings. Part of the reason you laughalong anyway in
spite of your annoyance lies in how you decide what is socially “correct”
behavior. If youdon’t know exactly what to do, you rely on others around you
(or the virtual TV audience) to help you find theway to properly react. You
think if others are engaging in a specific behavior, it must be the proper thing to
do.
Hence, you laugh in spite of yourself, or if you’re told that “everyone is buying
this product or service,” evenwithout evidence, you may think you’re missing
out if you don’t comply or conform and get it for yourself.
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is involved. (Note: a “good deal” is not always the same foreveryone;
negotiators often have different criteria by which they judge the success of their
bargaining outcomes.)
Negotiation strategies using the Six Laws of Persuasion include the following:
Law of Reciprocity
You can also use this law to appeal to fairness. For example, if the other party
manipulates the physical environmentby requiring that your team sits facing the
sun, at the next meeting they should reciprocate.
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leadto only one obvious conclusion: to accept the general concession. You
could employ this principle by asking apotential client if she values quality in
your product or service. Of course the only answer would be “yes.” Thenyou
could follow with a question that begs the obvious: “We’d love to provide you
with this product/service,but if we don’t get the resources we need from you (i.
e. sufficient money) and quality suffers as a result,would you still want it?”
How can the prospect say “yes” to poor quality? This tactic makes it easier for
you toask for additional funds.You might also see an example of this ploy when
lowballing (intentional last-minute additions to what wasoriginally a low price)
occurs. Unscrupulous vendors might attempt to make you psychologically
“invest” in aproduct that you initially believe costs less.
Law of Liking
This law is often seen in the strategy of “good cop, bad cop,” where one person
in the other negotiating partyis clearly opposed to your objectives, but it appears
that another of their team members is “on your side.” Thiscauses you to identify
with and trust the “good” team member, so you may find yourself agreeing to
the otherteam’s concessions and goals instead of your own. You can see this in
situations where a salesperson “battles”their supervisor to get you a “better”
deal (of course this was the result they wanted in the first place).You might also
apply this law to establish rapport up front when you are negotiating with your
own superiorsor teams.
Law of Scarcity
The more time you spend with a salesperson, the more commitment he or she
has to make the deal. If you areunder no time pressure and the other side is, you
have the upper hand.
Law of Authority
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Vendors often quote vague authorities to sell their wares, “Experts say our
product is the best.“ But who arethese experts? What are their qualifications to
make these claims? Do they have a vested interest in sellingthe company’s
products or services? In addition, use this Law to establish your own
credentials/credibility earlyin the negotiation.
This law works when you draw on testimonials from satisfied customers or
clients (unscripted ones are best)to encourage new prospects to buy your
services and products.The law also can be used to convince your supervisors or
staff that their counterparts in other divisions orcompanies are following similar
suggestions to yours. People want to feel like they are part of an
establishedcommunity that already knows where it is going.
Ethical Issues
Persuasion can be used for good or ill. In an environment that seeks to follow
ethical rules, it should only beused to make lives better. Manipulation occurs
when you exploit or deceive others solely for your own gain.This does not result
in a win-win situation.
4.2Summary
Being adept at persuasion is often the missing key to success in the workplace
and your personal life. If yougive people what they want via the Six Laws of
Persuasion, they’ll most likely return the favor. And when yourecognize that
you are being manipulated, you can call the other side on their tactics and
counter with anappropriate strategy. This will lead to a more effective way of
achieving the goals of all negotiating parties.
4.3Persuasion Techniques
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Once the delegation has determined the delegation’s goals (both long-term
andshort-term), a critical part of the delegation’s preparation is to determine
how topersuade the other party in order to achieve these goals. “Persuasion”
refers to themanner by which the delegation approaches a specific point in the
overall negotiationprocess. Determining the delegation’s persuasion technique
is a critical part ofpreparing for a negotiation. There are many techniques that
can be used to persuadethe other side. There is no single technique that is
appropriate in all situations.
Therefore, it may be appropriate to utilize more than one technique at any given
time.
Communicating Persuasively
• Even the manner in which a person sits can communicate the way the personis
feeling.
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– Leaning back in the seat as someone else is speaking can convey a calm
andreceptive listener, or that the listener is not paying attention to the speaker.
– “You can sit over here.” Depending on how the tone and emphasis,
thissentence can be taken as a command, and invitation, or a direction.
• The delegation may choose to use calm or reasoned language and demeanorto
diffuse a hostile situation.
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• Using expressive body language and more aggressive tones can express
outrage;but simply saying the delegation is “outraged” is not an effective tool.
Another technique for persuasion is the use of storytelling. This includes not
onlythe spoken word, but also the use of visuals. One of the most effective ways
toaccomplish this is to place the other parties in your delegation’s
circumstances.
– For example, tell the story from the standpoint of an individual, family
orcommunity that has been or will be affected by the conflict at issue.
Factualdetails are critical in the delegation’s descriptions in order to
achievemaximum effect.
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In addition to the substance of an argument, the organization of an argument
canhave a significant persuasive effect. Therefore, your delegation will benefit
fromgiving extensive consideration to organizing your delegation’s points
effectively.
• Draw the overall conclusion of your delegation’s argument from the facts.
• It may be important to begin with broad statements to define the scope ofyour
delegation’s arguments before proceeding with the specific items of
yourdelegation’s argument. Present specific subparts of the overall conclusions
basedon examples.
• It is often the case that the first and last arguments made are those that are
bestremembered by the other parties.
• Open-ended questions can engage the other parties and make them feel
morecomfortable.
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– More probing questions can gain the delegation more important
informationsuch as, “What are the delegation’s main concerns” and/or “Why
are thoseconcerns important to you.”
There is always more than one way to respond to the other parties’ position
orEmotion, just like the spoken word, body language, facial expression andtone
should be used thoughtfully and in accordance with your delegation’s
overallstrategic goal. The decision to use emotion and how should be one that is
carefullyconsidered and should be reached by relying on principled analysis.
The delegationshould never show an emotion unintentionally.
– Be aware that accusing the other delegation of wrongful conduct may putthe
other delegation on the defensive and make it more difficult to persuadethe
other delegation.
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• By responding unemotionally in particularly difficult times of a
negotiationyour delegation can convey that only the “success” of the negotiation
mattersto your delegation.
4.7Courtesy
• Generally, maintaining the proper courtesies will be the most effective wayto
open communications.
• Extending courtesies does not mean that your delegation has to accede to
theother parties demands.
• A theme or slogan will make it easy for the other parties to remember
yourdelegation’s priorities and convey them to their constituencies.
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• A theme may show that your delegation has thoroughly considered and
preparedfor the negotiation session.
• Be careful not to narrow the arguments to such a degree that it will be hardto
have the necessary exchanges and compromises that are imperative fora
successful negotiation.
• That said, recognize that identifying agreed points can help your delegationbe
more efficient at the negotiating table by focusing on points of true
andsignificant contention.
– For example, phrase the issue as, “We both have a problem that needs tobe
resolved,” rather than “The delegation caused the problem.” This maybe more
persuasive and result in shaping the conflict in a manner thatis less adversarial.
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4.11 Recognizingand Rewarding Compromises bythe Other Party
• In any negotiation it is critical to recognize when the other party has madea
concession or compromise.
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CHAPTER FIVE
NEGOTIATING STRATEGIES
Structure of Chapter
5.0 Introduction
5.1 Preparation and Planning
5.2 Adopt a Win – Win Approach
5.3 Maintaining High Aspirations
5.4 The Use of Language
5.5 The Use of Questions and Listening
5.6 Building Solid Relationships
5.7 Dos and Don’ts in Negotiating
5.0 Introduction
Franck Acuff (2008, 39) suggests the following 10 negotiation strategies that
will work anywhere:
5. Ask lots of questions, then listen with your eyes and ears
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6. Build solid relationships
8. Converse concessions
9. Be patient
10. Be culturally literate and adapt to the negotiating strategies of the host
country environment
Planning is bringing the future into the present so that you can do something
about it now. Negotiation is a process we undertake in everyday activities to
manage our relationships. In some personal negotiation, stakes are not that high
and thereis no need to pre-plan the process and the outcome but in cases like
business relationships, the stakes are high and there is need to prepare, plan and
negotiate more carefully (Ghauri and Usunier, 2003). How to negotiate
effectively? Before entering a negotiation it is vital to plan it beforehand. The
negotiators need to decide what it is they want to achieve and why the other
party should negotiate with them. They should also think why they should
negotiate with the other party (Etherington, 2008). Organizations need to
understand that they must spend time for planning. There is a saying; Well-
prepared is half the battle. If a person has not prepared a negotiation carefully
and his counterpart has, the person is at disadvantage immediately. Not being
prepared makes a person feel unprofessional and it will nearly always cost him
money.
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taken seriously; if you are casual then you will be taken casually” (Oliver, 2010,
9). After having the commitment to the negotiation process there must be clear
objectives and goals. Without the objective the negotiator will automatically
settle for less that need to. A common reason for getting poor negotiated results
is not being sure what we want. Overall objective should state company’s profit
levels, the type of business or supply that they want, the type of product or
service they want and the levels where the company want to buy and sell
(Oliver, 2010). Once the planners have clear objectives for their company, they
must put a strategy in place. Strategy will tell to the companies what to do,
when to do it and how, in order to achieve what they have set themselves. In
preparation stage company should consider whether an individual negotiator or
team is better for that negotiation. They need to define which person or people
are responsible for the negotiation process.
When planning and preparing to any negotiation it is wise for the planner to ask
himself questions about the other person. It will give a general view of the
whole negotiation-situation-to-be. The answers of those questions will form a
judgmentabout what may or may not be important to that other person. Oliver
(2010, 26) advises that people should ask these questions themselves when
preparing to an effective negotiation:
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1. Economic impact on the parties
4. Time constraints
Self-confidence has a major role in effective negotiation and good planning can
reinforce the feeling of confidence before getting to the table. A very beneficial
basic work-tool that is used in so many project management training programs
is S.W.O.T analysis (Etherington, 2008). S.W.O.T stands for Strengths,
Weaknesses, Opportunities and Threats. It is a strategic planning method to
identify company’s internal strengths and weaknesses, as well as its external
opportunities and threats.
The planner should sit down and draw a matrix of not just his own S.W.O.T but
also the other party’s S.W.O.T. The person will be nicely surprised at how
many weaknesses he can think of in the other side’s position.
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Smart negotiators always consider the other party’s BATNA. Mills (2005)
reminds that the better their BATNA, the stronger their bargaining position. If
the other party’s offers are better than his BATNA, he should take them. If the
offers are worse, he should bargain to improve them. It is important for
negotiator not to confront the other side with their BATNA too early. If the
negotiation is going badly, negotiator should not hesitate to reveal his BATNA
because it canincrease his authority. If the BATNA is worse than the other side
already imagines it would be wise not to reveal it because it will only weaken
his case. A negotiator has to put himself into the counterpart shoes which is
really hard because it is impossible to know what is that they want exactly.
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situation each party may have wished for more but at least they are both
satisfied and will be willing to negotiate again later. To be effective, both
parties must feel they have won (Oliver, 2010).
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be uncertain about, for example, they should express the saying in other words.
It is not always a good thing in communication to go straight to the point but it
is better to talk about general issues and then go to details. In some cultures, it
would sound rude if a business meeting would start with cost issues instead of
going smoothly.
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accurately communicating needs and interest in ways that people from other
cultures will understand becomes more challenging, and so does fully
understanding their words and meanings (Adler, 2002).
5.5 Ask lots of questions, then listen with your eyes and ears
It is important to always ask. This tip is simple but very powerful. As Beasor
(2006, 120) put it; “If you don’t ask…you won’t get”. Negotiator should not be
afraid to ask. He should be confident and realize that the other party would not
offer anything unless it is asked. Ask a lot of questions. Asking open questions
instead of closed ones a negotiator will get more precise information.
Remember that talking all the time and not letting the counterpart to say
anything is likely to cause fatal. A negotiator has to also listen not only with his
ears but also with his eyes. People send a lot of messages, positive and negative,
non-verbally with their body. To interpret the other person is a very useful skill
to master.
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communication. Hand gestures can be positive or negative depending on how
they are used. In some cultures hand gestures have a different meaning and to
avoid conflicts it is good for negotiators to get to know different cultures and
the way people are communicating with others. Negotiators should also know
when is appropriate to maintain eye contact and to know the “space bubble” in
different cultures. These are some of the main barriers to effective
communication.
In the negotiation table the first phase is getting to know the other party and
helping them to feel comfortable. Relationships matter and it is important to
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understand the reason why they are so important to the business. Good business
relationships offer more value in the long term. It is hard if not impossible to
build solid relationship in competitive negotiation situations. During
relationship building, parties develop respect and trust for members of the other
team (Adler, 2002). One of the biggest barriers for negotiation is lack of trust
(Harvard Business Essentials). To maintain solid relationships creditability is
very important. Trust is built through deeds, not words (Stark, 2003). A
negotiator has to do what he promised he will do and maintain the professional
appearance. Trust is also developed with honesty. The negotiator should be
honest also about things that may not be at his best. Business negotiators should
converse concessions. For example, if providing something in short delivery
time the negotiator may insist larger fee.
Be patient
Being in a good mood before entering the negotiation table the negotiator have
more confidence and is likely to be patient during the negotiation. All parties
are investing a lot of time, energy, personal and spiritual commitment, and other
resources to ensure the best possible outcome (Hamilten, 2008). International
business negotiation process is not a short process. It takes time and to achieve
win-win outcome negotiator must be patient.
Biggest barriers for negotiations are lack of trust, cultural and gender
differences, communication problems and power of dialogue. A useful tip for
business negotiators is that they should never assume anything and also avoid
stereotyping. Negotiators need to adapt the negotiating strategies of the host
country by doing some research. They should plan ahead how they would
starttheir negotiation, for example, would they want to first talk about sport or
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climate and how to proceed from there to the real topic. Negotiators should be
aware not to talk about politics or religions which are taboo in most of the
countries and cultures.
As mention earlier in this chapter that the most typical factors that affects how a
negotiation will play out are time, environment, personalities, information,
personal issues and hierarchy. Time has a crucial impact on effective
international business negotiations. The duration of a negotiation can vary
across cultures, for example Americans expect negotiations to take a minimum
amount of time and Vietnamese want to go forward slowly (Adler, 2002).
Everything is negotiable including deadlines. There is no need to panic if the
deadlines come near because they can be changed. But it does not mean that
there is no need to work hard. No pressure but remember that time is money.
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often select locations that are geographically placed somewhere between each
company’s headquarters. When the meeting is in neutral locationboth sides
travel, both sides have reduced access to information and both sides want to
conclude the negotiation as quickly as possible to minimize costs.
Being prepared and gathered as much information as possible will impact on the
effectiveness of international business negotiation. Information is power.
Negotiator needs to know the answers for possible questions their counterparts
might ask. It is also important to leave the personal issues outside the
negotiation room. In the negotiations emotions need to be concealed and make
decisions based on the rational reasons and not on emotional reasons.
Negotiator must understand the balance of power in negotiation (Black, 2009).
The negotiator has power when he has something the other party wants.
“The more you express emotions, the more you give away” (Oliver, 2010, 148).
In reserved cultures, such as those of Asia, visible emotional expressions are
considered signs of immaturity (Fatehi, 2008). Good negotiator does not show
triumph because it will create bitterness. It will imply that he won and the
counterpart lost. In these situations there is a chance that the counterpart will
regret the deal and look for a way out.
Do use experts
In situations where stakes are high it can be beneficial to use other people who
have particular skills (Oliver, 2010). It will not only save time but also money.
There is a chance getting a greater deal when there is an expert of a certain area
in the negotiation team.
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It is important to maintain the initiative because according to Oliver (2010)
without maintaining it a negotiator will lose three things. First, he will lose
money. He has spent money to be in the situation he is at that moment. When
the initiative is thrown away money is also wasted. Second, he will lose control.
A negotiator has to have control so that the negotiation in moving in his
direction. The third and most damaging thing he will lose is business. If a
negotiator is not initiative his negotiations may not be concluded and he will
lose the business. A negotiator has to maintain the initiative and predetermine
the next point of the contract and take responsibility for it.
When a person write things down it will help him to keep authority and control.
Having writing in black and white people will avoid all kinds of embarrassing
mistakes. It is hard to remember all details but it is easy to look out from reports
and agreements to fresh up the memory.
Understand the balance of power in the negotiation (Black, 2009). Power at the
negotiating table is not something anyone can give. Power and confidence is
something that comes from the inside of a person (Etherington, 2008).
Every time when paying with credit card it will cost for the seller. Seller needs
to pay surcharge. Ask for discount when paying cash. This may not work all the
time because some people find electronic money safer than cash, but if you do
not ask, you will not get.
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A negotiator has to be sharp all the time in negotiations because some silly
mistakes or some unnecessary comments can create a lose-situation. Business
people need to keep positive; they will not always get what they want.
Separate the People from the Problem (Fisher and Ury, 1991). Usually
negotiating parties become emotional and instead of attacking the problem they
attack each other. To improve the chances of success people need to
concealtheir emotions and build good working relationships. People need also
express emotions without taking them personally. It is wise for people not to try
to find out who caused the problem. Instead of using the energy investigating
who to blame people should come up with an idea how to solve the problem.
Negotiators are often drawn towards large round numbers. They take ownership
of a number and for some strange reason will not move from it (Beasor, 2006).
Good advice is to use real numbers. A number like 26.351 is a real number. It
looks like it was calculated and has an authenticity about it.
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Do not dig your heels in
It is important to remember to focus on the overall interest and not to dig the
heels in on one particular issue. Effective negotiators keep the whole proposal
in mind all the time which includes the product or service itself, delivery, prices,
profit and the future plan of the company.
Negotiation is risky because no one can ever foretell the outcome. To success in
business and in personal life people cannot be afraid of risks. When a person is
willing to take risks in negotiations it implies confidence and will often pay off
(Oliver, 2010).
In negotiations parties are strangers for each other and for them to reach an
agreement, they must communicate well (Fatehi, 2008). Use a language that is
easily understandable and do not throw the flap because jokes vary across
cultures and they may insult the counterpart.
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CHAPTER SIX
NEGOTIATING TECHNIQUES
Structure of Chapter
6.0 Introduction
6.1Gathering Information
6.2 Communicating with Your Delegation
6.3 Using Documents
6.4 The Mediator
6.5 Using Experts
6.6 Using Time Effectively
6.7 Re-directing the Topic
6.8 Holding a Topic for Future Discussion
6.9 Using Breaks
6.10 Changing the Players
6.11The Use of Ultimatums
6.12 Leaving Negotiations and How to Return
6.0 Introduction
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be prepared toeffectively negotiate a successful outcome and the best way to do
so is to go throughthe steps set forth in the previous chapters. If the delegation
has prepared carefullyfor the delegation’s negotiation, the techniques set forth
in this chapter should assistthe delegation in obtaining a successful outcome in
the delegation’s negotiation in avariety of negotiation settings. Some techniques
are reserved for unusual situationsthe delegation may not encounter and
therefore the delegation should avoid usingthem. Some techniques will seem
obvious to the delegation and others may seemcounter-intuitive, but all have
proven to be effective in different settings. Formalnegotiations may seem
daunting to you, but the delegation should be comfortedby the fact that the
delegation already possess many of the skills that are requiredfor a successful
negotiation – these skills are the communication skills that thedelegation uses
every day. Accordingly, the following sections will help the delegationdevelop
and hone these skills in a manner that will assist the delegation in being
aneffective negotiator.
Knowing as much as the delegation can about the other parties to the
negotiationand their interests is essential to achieving a favorable outcome. The
delegationmust fully understand the delegation’s goals and interests and
develop an understandingof what the other parties think the delegation’s goals
and interests are. During thecourse of the negotiation the delegation should
strive to update the delegation’sinformation about the other parties, their
interests and goals, and what they perceiveas the delegation’s interests. This can
be accomplished by:
1. Encouraging Dialogue
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• Let the other parties speak openly, especially if they are emotionally or
emphaticallystating a position – such behavior provides the delegation with
valuable informationabout where their interests truly lie.
• Generally avoid making non-negotiable statements that may force the other
partiesto avoid addressing important topics.
• If the delegation has prepared for the negotiation, the delegation can use
thepre-gathered information to ask pointed questions both to demonstrate
thedelegation’s understanding of the other parties’ positions and to focus
thenegotiations.
2. Active Listening
• Repeat, in the delegation’s own words (“summarize”), what the speaker saidto
demonstrate the delegation understood.
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• Include in the delegation’s summary a recognition of the emotion
demonstratedby the speaker. Empathy will show the delegation understood and
acknowledgedthe concerns of the speaker.
3. Eye Contact
• Maintain eye contact with the other parties as it shows the delegation is
payingattention and listening to them. Caution - be aware of cultural differences
inwhich eye contact may be inappropriate or may even send the wrong message.
4. Using Silence
• The delegation does not speak just to fill an uncomfortable silence. Silence
isnot a bad thing – if used properly it can encourage other parties to talk in
anunguarded manner.
If the delegation chooses carefully who is in the room and have designed the
delegation’snegotiation plan, the need for signaling the delegation’s team
members during thenegotiations should be minimal.
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• The delegation’s team leader should appear to be in control of the
delegation’steam’s negotiations at all times and should strive to maintain the
credibility andvalue of all team members.
• Recognize that the initial draft of any operative document, such as an agenda
orsettlement agreement, will often remain largely unchanged, with only the
mostsignificant points being negotiated. There is a distinct advantage to
submittingyour delegation’s draft first, because your delegation’s draft may then
define thewords and issues to be used throughout the negotiation.
• When using documents to illustrate a complex point, try to keep them simple.
• Always fully explain the illustration when the delegation presents it.
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6.4 Conducting Negotiations throughthe Mediator
There are many ways to use the mediator to your delegation’s strategic
advantage inthe negotiation process. Most frequently, parties use a mediator as
an informationconduit to express their views or position on the matters in issue
to the other party.There are other ways to effectively use the presence of a
mediator in internationalnegotiations; for instance, the mediator may facilitate
the provision of responses toquestions that have thus far been refused or ignored
in the negotiation process orto better define the interests and goals of each side
to the other.
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expert tobe effective all parties must have confidence in the expert’s neutrality
and in theusefulness of such expert’s opinions.
– Such an expert will be more effective if perceived by the other parties tobe
neutral
– Your delegation can expect that the other delegations and the mediator
willhave a lawyer as part of their negotiation team.
To negotiate effectively, the delegation must appreciate fully the effect time has
on the negotiation process. The delegation must be able to recognize whether
some issues may be resolved in the time constraints of the scheduled
negotiations.
• Know your delegation’s priorities and be able to focus on those within the
time constraints of the negotiations. Be realistic about the time needed to
accomplish your delegation’s goals.
• Your delegation must also know if any party is under any time constraints that
will affect their negotiation strategy or position.
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– If a quick resolution is important to another party, your delegation may be
able to gain concessions by acknowledging this pressure and quickly
makingconcessions in non-essential areas.
• Very few negotiations are open-ended, but if there are no external time
constraints, your delegation may want to set a time limit on the negotiations to
keep the parties focused and the negotiations efficient and effective.
During a negotiation your delegation must always be aware of the direction that
the discussion is headed and, if applicable, redirect the discussion back to the
topic at hand.
• Be vigilant to ensure that your delegation does not lose sight of your
delegation’s (or the other parties’ perceived) goals while discussing the details
of a particular topic.
• Redirecting the topic can also be used to effectively focus the discussion away
from a problem area to one that can more easily be resolved in the negotiation.
– Doing so will permit the delegation and the other parties to focus on and
resolve the easier topics before taking on the more difficult ones.
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• Redirecting the topic can also shift the discussion away from a problem areato
one of strength.
• Record and acknowledge each party’s positions on such issues, including what
concessions were made, and agree with the other parties that this issue will be
set aside for future negotiations.
– It is important to set a date for a future negotiation on all such issues that have
been set aside.
• Once the impasse is removed or eliminated, try to refocus the group and
continue toward resolving other issues.
• Caution should be used when suggesting or taking breaks as they can interfere
with the dialogue that is taking place between the parties.
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• Parties may use breaks to refocus their strategy (as suggested above) and
concessions which could have obtained prior to the break will no longer be
possible.
– To avoid this problem, try to conclude the discussion on a particular topic and
summarize where the parties are on the issues before taking a break.
– It may be useful create smaller negotiating teams to meet during these times.
It may be beneficial or even necessary for the parties to change the members of
their negotiating teams during the negotiations.
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Your delegation may also want to change the roles of your delegation’s
members in the negotiation. Doing so can permit your delegation to bring a new
perspective and voice to the table which could alter the dynamic in your
delegation’s favor.
• Having a new team member take the lead on a particular topic can be a
planned strategy that can be effective in either emphasizing or deemphasizing
the importance of a particular topic in the negotiations.
• A decision to change roles can also be made when the negotiations stall on a
topic.
The change can reinvigorate the discussion or change the focus enough to
permit the parties to reach a resolution.
• Making a change that was not planned in your delegation’s initial strategy is a
drastic step and should be well thought out and discussed with all members of
the delegation’s team. But, if the negotiations have stalled, then such a change
may be necessary to keep the dialogue moving to resolution.
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However, should the negotiations reach a point where no progress is being
made and only a few issues remain, issuing an ultimatum may encourage the
other partiesto make a better offer.
• Be creative and offer a counter to the ultimatum with an idea or solution that
has not been discussed.
• In most cases, your delegation can only use one ultimatum per negotiating
session and still maintain the delegation’s credibility.
Leaving a negotiation is an extreme step that should only be taken after your
delegation has exhausted all reasonable avenues of resolving the dispute. As
with every aspect of the negotiation, understanding the culture and customs of
the other parties is essential.
• Remember that, if your delegation does leave, your delegation will have to
answer to its constituents and explain why the negotiations failed.
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• If your delegation publicly criticizes the other parties’ behavior as the cause
for the breakdown in negotiations, future negotiations are likely to be more
difficult.
• If your delegation leaves the negotiation and attempts to return, credibility and
trust may be lost, and the delegation may re-enter the negotiations in a weaker
position than that from which it began.
Should your delegation decide to leave the negotiation and wish to return, it is
important that it reassure the other parties that your delegation is interested in
resolving the dispute at the negotiation table.
• Be cognizant that your delegation will have likely lost some credibility with
the other parties and offer them reassurance that it is and will continue to
negotiate reasonably.
• If the reason your delegation left the negotiations was because it was faced
with an issue that could not be resolved during the previous session,
acknowledge that an impasse was reached on that issue and suggest that other
issues be resolved and that one be reserved for a separate negotiation if possible.
• If the impasse was resolved while your delegation was away from the
negotiation, share that with the other parties and resolve that issue before
moving onto other issues.
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• In the event that the other party returns, then your delegation should do
everything possible to ensure that the returning party does not feel embarrassed.
• Remind the returning party that all parties are present to work toward a mutual
resolution of the dispute and that resolution can only be reached through
continued dialogue.
CHAPTER SEVEN
NEGOTIATING APPROACHES
Structure of Chapter
7.1 Acceptance
7.2 Bargaining
7.3 Compromising
7.4 Logic
7.5 Emotion
7.6 Relationships
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There are many styles and approaches to negotiation and some of the most
popular styles are:
7.1 Acceptance
7.2 Bargaining
This approach requires that both negotiating parties have something on offer
worth the exchange. It extracts value through the exchange of variables.
7.3Compromise
This is where the middle ground is sought between the stance you take and the
stance of the other party. Prior to negotiations it is always advisable to identify
the areas where you will and will not consider compromise within the deal, so
that you are clear where you can consider compromise. This necessitates being
aware of the areas where compromise is likely.
7.4 Logic
7.5 Emotion
This is the ability to identify the emotions of the main participants. This will be
influenced by the relationship (especially if there is an existing one) and/or the
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experience of the people involved. Emotions may be hidden or openly shared
depending on the personalities involved and the nature of the relationship.
Emotions can have both positive and negative effects and it is important to be
able to separate the substantive and relational is-sues as these will produce
different emotions.
7.6 Relationships
What is the history of the relationship? Could or should this history impact the
negotiation? Will there be any hidden issues that may influence the negotiation?
How will you handle these?
• Power: Who has what power in the relationship? Who controls resources?
Who stands to lose the most if agreement isn't reached? What power does the
other person have to deliver what you hope for?
• Goals: What do you want to get out of the negotiation? What do you think the
other per-son wants?
• Trades: What do you and the other person have that you can trade? What do
you each have that the other wants? What are you each comfortable giving
away?
• Alternatives: If you don't reach agreement with the other person, what
alternatives do you have? Are these good or bad? How much does it matter if
you do not reach agreement? Does failure to reach an agreement cut you out of
future opportunities? And what alternatives might the other person have?
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• Expected outcomes: What outcome will people be expecting from this
negotiation? What has the outcome been in the past, and what precedents have
been set?
• The consequences: What are the consequences for you of winning or losing
this negotiation? What are the consequences for the other person?
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& LabourRelations Review,.34(2):219-233.
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Fisher, R. and Ury, W., 1981. Getting to Yes: Negotiating Agreement Without
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Fisher, R., Ury, W. and Patton, B., 1991. Getting to Yes: Negotiating Agreement
WithoutGiving In. Revised 2nd edition. Penguin Books, New York, USA.
Lax, D.A. and Sebenius, J.K., 1986. The Manager as Negotiator. Free Press,
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Lewicki, R.J., Barry, B., Saunders, D.M. and John, M.W., 2003. Negotiation,
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Paulson, D.D. and Chamberlin, K.M., 1998. Guidelines and issues to consider
in planning acollaborative process. Institute for Environment and Natural
Resources, USA
Raiffa, H., 1982. The Art and Science of Negotiations. Belknap Press of
Harvard University Press Cambridge, Mass., USA.
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Sebenius, J. K., 1992. Negotiation Analyis: A Characterization and Review,
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Saner, R., 2000. The Expert Negotiator. Klumer Law International, The Hague,
The Netherlands.
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