Reflection report communication in business
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Lecture9Negotiation.ppt
Negotiation Skills
Lecture 9
The lecture material contains content owned by KOI and other materials copyrighted by Eunson, B. (2016) Communicating in the 21st century, 4th edn, John Wiley & Sons Australia Ltd, Milton, Qld
Learning objectives
- Explain why negotiation is not always the preferred mode for resolving a situation of conflict or disagreement
- Explain the nature of win–lose and win–win dynamics in conflicts
- Understand the value of research
- Define goals, bottom lines, and concessions, positions and interests
- Determine whether territory and time scarcity or abundance is relevant in negotiation
Learning objectives continued
- Assess the role of publics or stakeholders in negotiation
- Understand how to package offers in negotiation
- Work better as an individual or as a member of a team in a negotiation situation
- Understand the role of non-verbal communication and signalling in negotiation
- Use listening skills, questioning skills and persuasive skills in negotiations
Learning objectives continued
- Understand the role of culture and gender in negotiations
- Understand the importance of personal styles in negotiation
- Identify and use strategies and tactics in negotiations
- Identify and effectively use communication channels in negotiation situations
- Create an effective plan for a variety of negotiations situations
Negotiation: What is it?
Formally
- to confer with another or others in order to come to terms or reach an agreement
- mutual discussion and arrangement of the terms of a transaction or agreement
- to settle by discussion and bargaining
More colloquially:
- Haggling, bargaining, making deals, transacting, higgling, dickering, and horse-trading
The English word, incidentally, comes from the Latin neg [not] + otium [leisure], i.e. ‘not at leisure’, or simply ‘business’
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Negotiation: What is it?
A specialised skill:
- Used by diplomats, business people and union leaders
Relevant in everyday life?
- Negotiation is everyday life
Everyone negotiates in all kinds of situations:
- A child tries to convince a parent to buy sweets in the supermarket
- You try to persuade your flatmate to do the dishes, even though it is your turn, so you can go out
- A union representative sits down with management for an annual review of wages and conditions
- You are running late on an assignment and approach your lecturer for an extension
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Negotiation: What is it?
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A communication and problem-solving process built on a broad foundation of skills and knowledge.
A popular and effective means of resolving conflicts and misunderstandings.
Negotiation tends to be used when: conflicts are relatively simple; conflicts are of a low intensity; both parties are relatively equal in power (Bercovitch & Jackson 2001).
TEACHER NOTE: some overlapping points can be made from content from Chapter 14, Conflict Management.
Win–win outcomes?
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Differing outcomes. These outcomes can be classified according to the jargon of a branch of mathematics called game theory (Schelling 1960)
zero-sum outcome: one party loses, one party wins. For example, sporting contests are typical zero-sum situations in which there can be only one winner (except in the case of a draw, which is usually perceived to be an unsatisfactory and temporary resolution).
negative-sum outcome – both parties lose (both injured, lose something of value).
positive-sum outcome, a win–win situation – both parties win. Look at the examples described in the text on page 408 for the presentation of two departments in a company.
Win–win outcomes?
- Not just an over used phrase
- A win–win or positive-sum outcome is the goal
- No one likes to lose
- Losers may have little incentive to meet their agreements
- What if there were a way to have both parties win
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- A ‘win–win outcome’ has become almost a cliché these days; for some people the term sounds like a ‘feel-good’ piece of nonsense that has no place in the harsh world of winners and losers
- Yet in negotiation, where there is a need for a resolution that has some chance of lasting, at least in the short or medium term, a win–win or positive-sum outcome is not simply an ethical ideal, but a hard-nosed, ‘must-have’ goal
- No one likes to lose, and losers, whether real or apparent, will have little incentive to honour any agreement that damages their interests; consider how you feel when you lose: Do you like it? Do you want to change things so you can get out of a losing position?
Win–win outcomes?
Process
- Concessions may be made
- Both give and take are features
- Agreement is reached to the satisfaction of both parties
- Both parties own the agreement; both have won
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A difficult lesson to learn in negotiation is that, in order for a lasting agreement to be reached, valuable things may be conceded by you to people whom you do not necessarily like.
This is not simply because of the power exerted by those people, or because they would have been able to extract those concessions from you anyway. you may, that is, have to give in order to get.
This is because unless the people you are negotiating with feel that they ‘own’ the result, and that they have not lost face or suffered a defeat, you can be sure that the agreement is unlikely to last.
Activity: One red clip
Watch this clip of an interesting negotiation situation
In pairs, based on the model from the previous ppt discuss, what did the young man in the video do to succeed in his negotiations?
Write down at least 4 points.
Discuss in class.
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A difficult lesson to learn in negotiation is that, in order for a lasting agreement to be reached, valuable things may be conceded by you to people whom you do not necessarily like.
This is not simply because of the power exerted by those people, or because they would have been able to extract those concessions from you anyway. you may, that is, have to give in order to get.
This is because unless the people you are negotiating with feel that they ‘own’ the result, and that they have not lost face or suffered a defeat, you can be sure that the agreement is unlikely to last.
Negotiation: A model
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Look at a model of negotiation. Notice that it is in effect an endless loop: even when agreements are reached, the equilibrium attained is probably only temporary. Circumstances change, and thus it may be that life is really just a series of ongoing negotiations, at personal as well as professional levels.
BATNAs and WATNAs
BATNA (Best Alternative to a Negotiated Agreement)
- Another choice or substitute action
- To produce a superior outcome over any outcome you might gain from a negotiation process
WATNA (Worst Alternative to a Negotiated Agreement)
- Another choice or substitute action
- To produce an inferior outcome over any outcome you might gain from a negotiated process
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Is negotiation inevitable in all circumstances? No.
Let’s explore the concepts of BATNAs and WATNAs.
BATNAs and WATNAs
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You win with BATNAs and lose with WATNAs. BATNAs are a source of power, while WATNAs are a source of weakness (see table 13.1). The more likely that a side’s WATNA will happen, the more likely it is that that party will negotiate.
If a party’s BATNAs are superior to the current negotiation outcome, the party may not negotiate; if a party’s WATNAs are inferior to the current negotiation outcome, the party negotiates.
Positions and concessions
Bottom Line
The minimum point beyond which negotiating parties will not go
Concessions
Activities and assets that you can trade:
- You can have a $20/week wage increase for your union members
- You will work overtime at reduced rates
- You can have the disputed section of land
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Consider people’s positions:
you need to know, or speculate on, their fallback position, bottom line, limit or resistance point.
This is the irreducible minimum point beyond which a negotiator will not or cannot go, because to do so would spell failure. A negotiator will often try to conceal information about this point, although there may be a tactical advantage in deliberately announcing what it is. How does one reach the bottom line?
One reaches it, with varying degrees of unwillingness, by making concessions to TOS.
Integrative bargaining
Distributive bargaining - a negotiating process
Two parties:
- Concede as little as possible
- Gain as much they can
- Adopt a zero-sum outcome approach
- Use a position-based approach
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The ‘ships in the night’ model of negotiation presented in slide 15 can be very useful when planning for a negotiation.
It helps you to see that bottom lines, opening positions and concessions are vital to the horse-trading that takes place in many negotiations.
This model accurately describes what is sometimes called distributive bargaining — that is, a negotiating process in which the two sides try to concede as little as possible and to gain as much they can, using a zero-sum model of whatever it is that is being haggled over.
Integrative bargaining
Integrative bargaining - a bargaining approach
Two parties:
- Adopt a win-win outcome approach
- Try to move from a positions-based approach to an interests-based approach
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Integrative bargaining means moving beyond a least-worst outcome for one or both sides, or from a positions-based approach to an interests-based approach.
It may be, that is, that what people say they want is not what they need. The position they assume (and will not budge from, or can only be persuaded from with concessions) may not correspond to their interests. In other words, negotiation may not be a simple linear process, a tug of war, but something more multidimensional.
Territory and negotiation
Where should you negotiate?
- Should it be on our own territory, on their territory or on neutral ground?
- The issue can be complex and the fate of the negotiation process may be determined by the venue.
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See Table 13.3 (page 419) for pros and cons.
Territory has an important effect upon high-powered negotiations, but even upon more humble situations, such as
- Family members ponder whose house will host the family Christmas meal this year
- Two lovers quarrel, but decide to talk about it: where will they meet?
Other factors for ‘our place’:
- Access to resources (e.g. for quickly writing up agreement documents). Can do other work when not at the table.
Signals
- Each negotiating party needs to be good listeners and pay attention to signals
- Signals are verbal and non-verbal messages that tend to contradict or differ slightly from what is said
- Emphasis and inflection is the key part of the message
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Refer students to Table 13.5 (page 426) and discuss.
Why don’t people just come right out and say what they mean? Sometimes they do, but sometimes they prefer not to: they are trying to probe without committing themselves, to find out just how far you will go; you need to listen, and respond to the signals.
Strategies and tactics
Unless you understand the art of persuasion, the importance of listening, the essentials of building trust and maintaining goodwill, you can’t negotiate effectively, no matter what your line of strategy or arsenal of tactics includes.
(Calero & Oskam 1988, p. 127).
Take care:
- There’s no question that strategy and tactics are basic elements in any negotiation, but you think they’re often over-emphasised.
- Somehow the impression develops that negotiation is nothing more than working a variety of ploys to manoeuvre an opposite into a desired commitment.
- More fundamental considerations are slighted in favour of a kind of ‘game’ theory that concentrates attention on techniques for ‘playing’ the opposition rather than on understanding the nature and psychology of the negotiation process itself.
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Strategies and tactics
| TACTIC | BRIEF DESCRIPTION |
| It’s official | The other side declares an inability to alter policy, contracts or price |
| Grab the power seat | The physical position of the parties can determine who has the most power during the negotiation |
| Fait accompli | Announce in the negotiation that something has already been done, and therefore cannot be negotiated |
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Consider strategies and tactics. TEACHER NOTE: Refer to Table 13.6 for class discussion of some strategies.
Activity: How to negotiate a higher pay
1. Watch this video in pairs and discuss which of the following mistakes made in salary negotiation you think you might make
2. Write down 3 ways in which you can improve your negotiation technique
3. Practice in pairs the salary negotiation
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Consider strategies and tactics. TEACHER NOTE: Refer to Table 13.6 for class discussion of some strategies.
Chapter 13: Negotiation skills
Summary:
- Negotiation: what is it?
- Win-win outcomes?
- A model of negotiation
- BATNAs and WATNAs
- Positions and concessions
- Integrative bargaining
- Territory
- Signals
- Negotiation Styles
- Strategies and tactics
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