Negotiation

Question 1

What are the components of a negotiation?

Answer 1

1. Process
   - How the parties negotiate
   - Context of the negotiations
   - Tactics used by the parties
2. Behaviour
   - Relationships among the parties
   - Communication between them
   - Styles they adopt
3. Substance
   - What the parties negotiate over
   - The agenda, the issues (positions + interests)
   - The options
   - The agreement(s) reached

Question 2

5 negation tactics?

Answer 2

1. Emotion
2. Logic
3. Threat
4. Bargaining
5. Compromise

Question 3

Emotion tactics

Answer 3

• in control of your emotions
• Sincerity is key unless you’re an amazing actor
• Use early in the negotiation
• Use to counter logic

Question 4

Logic tactics

Answer 4

• Don’t be too quick to ask “Why?”
• Get your own logic in first
• Keep to one powerful argument - don’t dilute
• Be credible
• If others can’t see it, change tack
• Counter logic with emotion

Question 5

Threat tactics

Answer 5

• Be slow to threaten
• Threaten at the business, not the person
• Use a discreet or veiled threat
• Never make a threat you can’t keep
• Be credible
• Add “if” to transfer threat to bargaining

Question 6

Bargaining tactics

Answer 6

• Don’t expose your position early
• Don’t put a marker down
• Don’t seem too eager to move
• Move in small steps
• Get a return for any concession you make

Question 7

Compromise tactics

Answer 7

• This is the last resort
• 50/50 is not the only compromise
• Compromise favours the more extreme party
• Let the other party suggest compromise…..the one suggesting compromise probably accepts or moves towards the position of the other

Question 8

Additional negotiation tactics

Answer 8

1. Salami slicing - building up and building up what they want to ask for.
2. Good cop/bad cop - someone applying good tactics and someone being angry
3. Cherry picking - Buyers will spend hours going over supplier spreadsheets to find the lowest prices by item and then systematically work-over each supplier. Buyers consider this tactic to ensure that they avoid over-paying.

Question 9

Characteristics of win/lose situations

Answer 9

• The creation of an ‘us and them’ distinction between the parties
• Individual’s energies are directed only towards victory
• own point of view only
• strong emphasis on immediate solutions regardless of whether the long-term objectives are met
• Too many personalised conflicts
• Emphasis is on short-term concerns-long-term relationship is forgotten

Question 10

Characteristics of lose/lose situations

Answer 10

• Neither party achieves its objectives
• Disillusionment with the negotiating process
• Frustration
• Loss of respect/trust from followers
• Long-term relationship soured
• Suppliers can find ways of still meeting contract requirements but in ways not helpful to you, so want to keep suppliers happy

Question 11

Characteristics of win/win situations

Answer 11

o	Meets needs of both parties
o	Decision is not unacceptable to anyone
o	Requires two-way communication
o	Emphasis is on flexible approaches
o	Concentrates on objectives
o	Long-term relationship is maintained 
o	What people want but not always possible

Question 12

‘Rules’ for good negotiation

Answer 12

1. Design the process and ensure it is transparent and fair
2. Gather intelligence and adjust the terrain
3. Invest in personal relationships
4. Make no concessions until the end
5. Use techniques to drive creative outcomes (e.g. brainstorming / DeBono’s five hats; people naturally think differently, this is problem in negotiation as someone may always take same view. He says in any given time we all take same colour hate e.g. we all look at it from out gut feeling. Each hat is a diff approach, so you all think in same approach and empowers people to be super critical. Read up on this.)
6. Ask lots of questions to understand other party
7. Long-term contracts and risk sharing wherever appropriate
8. Continue creativity after negotiations
9. Understand cultures, especially your own e.g. gender, age, org culture, pressure on you.

Question 13

The culture effect on negotiation

Answer 13

• National culture does not determine negotiation behaviour, but is an important influencing factor
• These differences can cause problems in international business negotiations e.g. Language, Non-verbal behaviours, Values thinking, Decision-making processes
• Stereotypes of all kinds are dangerous, and international negotiators must get to know the people they are working with, not just their culture, country, or company.