Unit 9 Flashcards
What is negotiation
Negotiation is defined by some leading thinkers as follows. “Negotiation is a basic means of getting what you want from others’ Getting to yes by Roger Fisher and William Ury, Negotiating is the process of getting the best terms once the other side starts to act on their interest.
On negotiating by Mark H McCormack. Negotiation is the process of getting what you want from others. The Negotiation Process is used to deal with our differences. According to Webster dictionary negotiation means
I or barter with another, Or others, as in the preparation of a contract or agreement.
• To arrange for or bring about discussion and settlement of terms for example a customer is To deaa person or group of people you are trying to influence.
Discuss the preparation phase in terms of research
- Research. A negotiator should, at the preparatory stage, seek, obtain and gather the much information available regarding the subject to be negotiated. know the rules and custom of the sector involved. A negotiator should also Know the rules of his organisation and their sentiments, priorities, and limits.
These will help in being able to generate options for mutual gains. The person with the most information usually does better in negotiations.
A negotiator should obtain all necessary information from you’re his client to understand his interests and concerns, including those that are personal and emotional. Too often, clients restrict their lawyers/representatives to focus exclusivelv on financial claims and unwittingly narrow the possibilities for a negotiated settlement.
Discuss preparations phase in-terms of Negotiation
Negotiation objectives. A negotiator at the preparatory stage should determine, define and prioritize his objectives in a manner that is realistic, achievable and measurable. A scholar in this field has suggested that one way to do this is to classify the objectives as ‘must achieve’, ‘intend to achieve’ and
‘like to achieve’. How does this work? A man purchases a phone without a warranty. Few days later the phone developed fault and the man contacts the seller. We will likely define and prioritize his ojective thus
Must achieve: getting a phone of the same class that works
Intend to achieve: getting the phone fixed
Like to Achieve: get a new replacementfor the phone
Under preparation phrase determining BATNA, WATNA, ZOPA
Determining BATNA, WATNA and ZOPA. A negotiator should normally determine his client’s Best Alternative to a Negotiated Agreement (BATNA), Worst Alternative to a Negotiated Agreement (WATNA) and the range of the Zone of Possible Agreement (ZOPA). BATNA is simply the best option available for to a party to walk away of if negotiations fail. The BATNA helps the negotiator to determine at what point to walk away from the bargaining table.
No negotiator or party should say yes to an offer that is worse than their
BATNA. That is why it is important to always put a value on the BATNA so as to be able to easily identify when an offer is below the BATNA. A negotiator should likewise determine reasonably the BATNA of his adversary. This may sometime be daunting due to dearth of information but a negotiator should make reasonable assessments of the options available to the opponents in order of priority. Knowing the BATNA of both parties helps the negotiator to determine how wide or small the room or space of settlement is. That space for possible settlement is the ZOPA. It is the overlap between the two value points of the parties, i.e. their BATNA. For example, if Tejiri’s walk away point for the sale of his laptop is 10,000 and Tega’s walk away point for the purchase of the laptop is 11,000, then there is said to be a zone of possible agreement.
Assuming Tega’s walk away point for the purchase of the same laptop is 8,000. then there is said to be no zone of possible agreement; no common ground.
Zopa can be large where the common ground is very wide and small when the common ground is very small.
What are other points in preparation phase
The negotiator should further, at this stage Know what concessions can be made and what to barter. Strengths, weaknesses, and the balance of power should necessarily be assessed at this stage. In negotiation, power is the ability to influence the outcome of things and get them done. Although power play is not encouraged in negotiation because of its potential to cause stalemate, a negotiator should nonetheless understand the balance so as to be able to counter it when its being used
Identify likely barriers to negotiation. The negotiator must consider the likely barriers that may prevent negotiation. Apparently, barriers to communication will top the list. Remember that negotiation is deliberate and conscious communication with a goal of resolving differences. Put communication barriers here
Opening and exploration phase
This stage gives an opportunity to each party to present his case from his own perspective
More often, disputes will comprise of issues, positions, and interests. The issues are the problems the parties are having. The positions are the various stands of parties regarding the issues while the interest are the needs behind the positions. Inherent in the case presentations at this stage are highlights of the components of the dispute. Hence negotiators have to deploy core verbal and non-verbal communication skiiis to properly identify the components of the disputes, particularly the issues and interests. In negotiations, interests are far more negotiable than positions. Identifying area of interest will also help determine the existence and range of zone of possible agreement. The more a negotiator finds out the needs of the other party, the greater the chances of finding a mutually acceptable solution.
In the opening phase why do negotiators have problems determining who should open a case
Negotiator sometimes encounter problem in deciding which party should open discussions and present his case. There is no hard and fast rule on this. Usually, the party at whose instance the meeting is convened opens discussion. Sometimes the custom of the trade or sector may determine who open negotiations. Again, the subject matter of the transaction may also determine who opens discussions. However, the determination of who starts discussion has its own effect on the negotiations. For example, allowing a party to open discussion may serve as a strategy to gather relevant information for the party who is not starting. Where a party has a weak case, it may also be a deliberate strategy to let the other party open the discussion. Through this strategy, the party with a weak case will be
able to access whether the other part knows about the weakness.
Negotiators should really focus on talking and not bargaining at this stage. Ask all the ‘why’ and ‘why not’ that may probably be needed in the entire process at this stage to seek clarification on every part of the exploration stage. It is highly recommended that a negotiator takes pain to write down as much as he can get from this stage and commit vital fact to memory. Here, the Chinese proverbs that the dullest pen is sharper than the sharpest memory is very much applicable. In closing up this phase, a good negotiator would normally do a recap of the issues identified for confirmation of both parties before moving to the bargaining phase.
Discuss the bargaining phase
Bargaining Phase
Bargaining is a process that facilitates the movement of parties towards each other. This phase focuses on the possible ways to resolve the issues between the parties. There is no rule on how to progress to this stage. In fact, most times, the phases in the negotiation process are not separated so that parties get deliberately informed that the process is moving to a new phase. However, a good negotiator will always use transitory statements to give notice of progression to the next phase. One that may be used for this stage is statements like “how do we resolve these issues”? or “where do we go from here”?. The use of the pro-noun “we” is collaborative and usually encourages the other party to see the issues as everyone’s issues and not his alone to resolve.
The bargaining phase offers opportunity for negotiators to make offers for settlement, debate and scrutinise such offers. Parties persuade opponents to accept their offers and counter offers for resolution. Whether or not success will be achieved in any bargaining will depend largely on the negotiation strategy or approach deployed by the parties.
The two classifications under the bargaining stage
Competitive/Positional Bargaining Strategy
The competitive negotiation strategy is one that is characterised by an atmosphere where parties and negotiators haggle, mostly in an unfriendly manner to maximise benefit over each other. The competitive strategy involves distributive negotiations where negotiators would usually assume that the elements or resources to be negotiated are fixed, such that they think there is no room to add additional value. Run writer describe this approach as the much talked about national kick in Nigeria Cortana, yet parties in the negotiations exhausts all energies scheming on how to share the key rather than look for an oven big more cakes. Those men targets is how to gain advantage over the openings This kind move approach finds expression Parties taking your most extreme position and moving I love the graphical lines of they are positions on the basis Of concessions. As in necessary consequence parties adopting this strategy our only likely to reach an agreement if there are respective positions move to a point where they overlap; which will be the zone of possible agreement.
In negotiations, the competitive or positional bargaining strategy has a potential to easily lead to a no-agreement outcome. This will usually occur where parties are unable to shift positions to a point where their positions overlap. It may also easily birth a win/lose situation. It is therefore ineffective strategy for mutually satisfying agreements and inappropriate in cases where parties have an ongoing relationship or where they intend to continue doing business after the negotiations.
This strategy is sometimes referred to as the integrative or problem-solving approach
Rather than compete for the highest share of the negotiation, negotiations in this strategy view the negotiation as a genuine opportunity to solve an impending problem. This strategy thrives on the firm belief by everyone involved that it is possible to reach a solution where everyone benefits. The focus is not you against me but us against the problem. The primary aim is how to mutually satisfy the parties’ needs. Hence it is also referred to as the win-win strategy. To achieve such mutually satisfactory result, parties must establish a high level of trust, co-operation, collaboration and sharing of information.
This strategy probably found the most notoriety as an option to the competitive bargaining strategy when Roger Fisher and William Ury of the Harvard Negotiation Project published their book in 1981 titled “Getting to Yes”. The main features of this strategy are:
a.
b.
Negotiating based on principles, not positions
Being tough on the problem and not the people
C.
Encouraging problem-solving
d.
Using objective standards to support decision making for mutual gains
e.
Aiming for wise outcome reached efficiently
f
Invent options and Strategy is the orientation or holistic approach of an individual toward achieving an outcome or objective
Closing phase
Generally, a negotiation may either end in deadlock or a walk-out, in which case a formal closing phase may not be necessary. However, where it ends in settlement being reached, certain issues necessary for having a realistic and enforceable agreement would necessarily have to be sorted out.
parties should present in writing, a summary of their understanding of each term of the agreement reached and exchanged with each other for harmonization. Observations of understanding that does not reflect the spirit of terms of the agreement are sorted out immediately,
Negotiators at this point should firmly focus on the use of certain non-obligatory words used like “may” or “perhaps”. There are some vital questions parties may also have to consider at this stage. Such would normally depend on the nature of the agreement.
However, on a general note, parties may have to be sure if there are time limits for the performance of obligations under the agreement, who is responsible for certain obligations, the need to monitor performance by a third party neutral and need for additional meetings to appraise progress made so far.
Parties should then sign the harmonized draft of the agreement and further agree on who prepares the clean copy and the time frame for doing that. When the clean copy is drafted, the other side would have opportunity to peruse and approve of the content before final execution by both parties. It should however be noted that there are contracts and documentation that must take certain form as a matter of law.
Tips for closing
a.
Diagnose the Barrier: The barrier may be strategic behaviour (unwillingness of one or both sides to make a best offer), reactive devaluation (if that were of importance to them they wouldn’t have made that offer), or authority issues (where those negotiating do not have the authority to settle).
b.
Use the Clock: Negotiations expand to fill the time available. We may not like to make important decisions under the gun, but deadlines can provide a healthy incentive to come to agreements. It is not accidental that some lawsuits are settled on the courthouse steps and that strikes often are averted at the eleventh hour. If you anticipate these moments, recognize your priorities, and keep channels of communication open and clear, you will be able to move quickly and wisely when you have to Impose a deadline at the outset of negotiation
3. Count Your Change: When you reach an agreement, confirm that all the key provisions have been covered so there will be no surprises. Even after you have gotten a sincere handshake, your counterpart may come back with further demands if he is having a tough time selling the deal internally. Be wary of making any unreciprocated concessions. If your counterpart asks for new terms, even if you can afford them, you should get a favourable adjustment in return. Otherwise, you are simply encouraging further requests.
- Let them Brag (Building a Golden Bridge): To get a deal ratified, you may have to make your counterpart look good to his constituents. This is not a question of virtue. If the other side loses face, he may be tempted to retaliate and spurn a deal that, by all rights, he should accept. If someone’s agreement comes grudgingly, getting him to deliver on his promises may be like pulling teeth. For example, in collective bargaining, the management often prefers it when the union makes an offer that the company can accept, rather than vice versa. Appearing weak is less of a concern for management than it is for the Union’s elected agents. Union officials can then say to their membership: “We got the company to accept our proposal”, rather than, “Here is what we finally accepted”. This involves allowing the other side make a graceful exit - the diplomatic art of letting others have your way.
- Sign Here! Most important deals require written contract. Whatever you have gained through artful negotiation will go down the drain if the understanding you reached is poorly reflected in formal documents. The technical side of executing an agreement is not glamorous, but it is where many battles are won or lost. Even if you are wary, resist the temptation to let the other side write it all up. It is better and smarter to have your own lawyers and specialists to get the language right than to seek their help later in rewriting a draft that the other side has prepared.
What makes a good Negotiator
Patience: Blunt instrument approach to negotiations tends to have a limited and short-term effect. Pulling the other party towards you may require time, but more result is likely if you can patiently achieve this.
b.
Firmness: A Negotiator needs to be firm, stand his ground (though not fixated and opinionated) and know when to walk away.
c. Emotional Intelligence: This is the knowledge of moods, persons, personalities, circumstances, right-timing, and all other intangibles. To be a good negotiator, one must have this attribute
d.
Friendliness: See the Facebook purchase of WhatsApp for $19b. Mark Zuckerberg won Jan Koum over by patiently pursuing his friendship and trust.
