Meaning of the Concept Negotiation

The word "negotiation" originated in the early 15th century from the Old French and Latin expressions
"negociacion" and "negotiationem." These terms mean "business, trade and traffic." By the late 1590s
negotiation had the definition, "to communicate in search of mutual agreement." With this new
introduction and this meaning, it showed a shift in "doing business" to "bargaining about" business.
From another we have come to know that negotiation is an English word comes from Latin word
negotiation. The verb of the word is "negotiari". On the basis of the source we can say negotiation is an
act of dealing with another person. People negotiate all the time. Friends negotiate to decide where to
have diner. Children negotiate to which television program to watch. Businesses materials and to sell
their products. negotiate to

Definitions of Negotiation

Negotiation describes any communication process between individuals that is intended to reach a
compromise or agreement to the satisfaction of both parties. Small business owners are likely to face
negotiation on a daily basis when dealing with customers, suppliers, employees, and government
agencies. Negotiation may be by the different authors as follows.

1. Rubin and Brown: Negotiation refers to a process in which individuals work together to
formulate agreements about the issues in dispute.

2. Neale and Northcraft: Negotiation involves several key components including two or more parties to a
negotiation, their interest, their alternatives, the process and the negotiated outcomes.

3. Robert Fisher and William Ury: Negotiation is a basic means of getting what

you want from others. 4. Mc Cormack: Negotiation is the process of getting the best terms on the other

side starts to act on their best interest. 5. Roger Dawson: You will never make more money than when
you are
negotiating.

So, we can say that Negotiation is a dynamic process of adjustment by which two parties, each with their
own objectives, confer together to reach a mutually satisfying agreement on a matter of common
interest.

Characteristics of Negotiation Process

There are a few characteristics of negotiation. In a successful negotiation process we can see the
existence of all these characteristics or features or essentials. In the following points we will discuss
these characteristics of negotiation:

1. There are a minimum of two parties present in any negotiation. We can discuss negotiation as an
interpersonal or inter-group process.

2. Both the parties have predetermined goals which they wish to achieve

3. There is a clash of predetermined goals that is some of the pre goals are not shared by both of the
parties. determined

4. There is an expectation of outcome by the both parties in any negotiation.

5. Both the parties believe the outcome of the negotiation to be satisfactory.

6. Both the parties are willing to compromise, that is modifying their position.

7. The incompatibility of goals may make the modification of positions difficult.

8. The parties understand the purpose of negotiation. 9. There is a conflict of interest between two
parties that is when one wants is not
necessarily what the other one wants and the parties must therefore search for a way to resolve the
conflict. 10. The parties negotiate because they think they can use some form of influence to get a
better deal than by simply taking what the other side will give them.

Negotiate is largely a voluntary process. It is a strategy pursued by choice.

11. The parties, at least for the moment, prefer to search for agreement rather than to fight openly,
have one side capitulate,permanently break off contact, or take their dispute to a higher authority to
resolve it.

12. When we negotiate, we expect give and take. WE expect that both sides will modify or give in
somewhat on their opening statement, request or demands.

13. Successful negotiation involves the management of intangibles as well as the resolving of tangibles.
Intangible factors are the underlying psychological motivations that may directly or indirectly influence
the parties during a negotiation.

Functions of the Negotiation Process

The specific context of managerial functions within negotiations is created by organizing, maintaining
and evaluating different negotiating teams in a company, including their size, roles, tasks and so on.
These functions of negotiation are mentioned below:

1. Early planning (preplanning):

-appointing study group to assess costs and benefits as well as major issues in negotiations,

- determining general objectives for negotiations, -drawing up their tentative schedule.

2. Making decision to negotiate and calling together department managers;

- communicating broad objectives.

- inviting contributors,

- rallying managers around company goals,

-establishing oneself in leadership role.

3. Building negotiating team:

- selecting complementary members, - defining their responsibilities,

- stating broad objectives.

4. Facts (data) finding

-arranging communication network,

- providing conceptual framework for teams gathering information,

- reviewing summary report of findings.

5. Analyzing facts (data)

- providing analytical framework,

- participating in developing strategic objectives,

-reviewing plans with long term perspective of total organization.

6. Negotiation talks

- defining team authority,

-establishing guides (instructions),

- being available for remedial role.

7. Ratification and announcement of agreement.

The objective of the most important activities carried out while creating a

negotiating team is to clarify the tasks and powers of the company's

representatives in negotiations

-The individuals or team members as well as the other employees that are engaged in negotiations,
mainly from functional units. In order to achieve that objective the following actions are necessary:

a) Determining and delegating tasks,

b) Stating and allocating powers and responsibilities adequate to those tasks, c) Elaborating and
delivering relevant negotiation guidelines (instructions),

Objectives of Negotiation
Negotiation process is undertaken for the achievement of some objectives. If all these objectives are
fulfilled, the process comes to an end. The following are the objectives of negotiation:

>To settle a fair and reasonable price.

> To ensure that the contract is performed on time.

> To remove obstacles this may be there in future. > To exercise control over the manner in which the
contract is performed.

> To persuade the supplier to give maximum co-operation to the buyer's company.

>To develop cordial relations with competent suppliers.

The objectives of negotiation vary from organization to organization or nature of problem to nature of
problem. However, from another source the author has collected some different objectives of
negotiation. These are discussed in short below:

1. To achieve supply goals: In negotiating a contract, first objective is to procure the exact products and
services needed by your company under price and delivery terms that meet its volume, quality, delivery
time-frame, cash flow and pricing requirements. Achieving this objective requires thorough research
into your company's purchasing history, including rate of consumption, pricing, payme and delivery
terms. Going into a contract negotiation not fully prepared with the information will put you at a
negotiating disadvantage and potentially result in supply chain delays or overages.

2. To pay good prices: Your second objective is to pay a good price. This does not necessarily mean the
lowest price. In many ways, you get what you pay for The lowest price may come from a supplier
desperate for business who may fall to deliver because of financial difficulties. The lowest price may also
come with quality compromises in terms of the products and services being purchased, as well as the
degree of customer service.

3. To good supplier relations: The U.S. Department of Defense recognizes the importance of win-win
negotiations in maintaining good relationships with suppliers. If you have any intention of future
contract business with a supplier, your negotiating objective must recognize and offer motivation for
that supplier to want to do future business with you. This involves negotiating contract pricing and
terms that are agreeable to both sides.

4. To develop supply chain knowledge: Each negotiating session and resulting purchase adds to the
company's supply chain management knowledge. An additional objective is to aggregate this knowledge
to support future procurement operations. An example of useful knowledge is the relationship between
currencies, product quality, delivery time and availability of the product or service you are purchasing.
Compiling a history of these relationships allows you to better plan your purchasing schedule and carry
out your negotiations successfully. Even notes on the negotiating habits of your sales reps can prove
useful in future negotiations.

5. To achieve certainty: The aim of contract negotiation is firstly to achieve certainty, to record what is
being supplied, when, in what quantities and to what standard, and what are the consequences of delay
or failure to meet the agreed requirements. Many a dispute is caused by the failure of the parties to
define at the beginning of their relationship exactly what is going to happen; one example in my
experience was the failure of a major IT agreement because the parties both thought that their man was
project managing the project, in fact the issue had never been agreed. This is especially important in the
case of complex projects, where project plans and methodologies will normally be prepared as part of
the contractual documentation.

6. To obtain the best deal: Seeking clarity does not conflict with the view that negotiations should
achieve the best deal, it merely points out that both parties to a negotiation have to understand what it
is that they have agreed to. Many disputes have their origins in a lack of clarity. Careful discussions of
each element of the deal also ensure that each party's objectives are acknowledged and dealt with. In
the main negotiators should aim for a win-win solution which benefits both parties.

7. To create of a long-term relationship between the parties: Whilst this is not

always possible, and some cultures, such as the Japanese, place more emphasis on this aspect of
negotiation, this is increasingly important as companies build networks of alliance partners. Partnering
in industries like aerospace and IT is essential, due to the complexity of the products and related
projects. As the supply chain evolves into a virtual organization partnering is becoming increasingly
important: all industries.
8. To walk away from a bad deal: A Negotiator is also paid to walk away from a bad deal. A good
negotiator must be prepared to walk from a bad deal, not to get the sale at any price Your company will
not normally thank you for a unprofitable contract, or one with a poor partner, or where it is unclear
what the other side will actually do. If your company is prepared to make a deal at aty price, unless this
is the launch sale, then it has problems.

Five Biggest Myths about Negotiation

People who don't negotiate often may be afraid of negotiation because they fall for common negotiating
myths. These myths are fairly widespread and ingrained. In the following points a list of top five
negotiating myths are provided:

1. You either win or lose in a business negotiation: This is the number one myth about negotiations. As
anybody who has studied Karrass knows, negotiations are both win. A successful negotiation always
works out the best agreement for all the parties involved.

2. Good negotiator are born not made: Absolutely not! Negotiation is a learned skill. You can certainly
improve your negotiation skills by attending a seminars.

Also, the more you negotiate, the better you will become.

3. To be a good negotiator you must be very argumentative and opinionated:

Again, the idea that negotiations are fights, where one party will prevail over the other. is just plain
wrong. Effective negotiation is good communicator. Negotiation is about persuasion not about arguing.

4. Negotiating involves telling lies to get your way: Although there are unethical negotiators out there,
lying is certainly not the way to an effective negotiation. You don't have to reveal everything, but you
certainly do not have to resort to lying or other dirty tricks.

5. Nice people end up last: People like to do business with people they like. If you are not nice (you play
dirty or are backhanded, for instance), the other party will not want to negotiate with you. So go ahead
and be the nice person. If you have negotiation objectives, a clearly defined strategy and know your
negotiating you will be able to negotiate effectively.
Rules for Negotiation

According to Anthony Tjan, founder of Cue Ball, a venture equity bill, there are four main rules for
effective negotiation. He writes about them at the Harvard

Business School blog. These are his four rules: Do your homework

1.

2. Don't negotiate against yourself

3. Get around stalemates

4. Let the other party walk away

These are all very good tips and we have discussed some of them here as well. According to Tjan, the
golden rule is the last one, willingness to allow the opposing party to walk away. Essentially, Tjan is
saying one should stick to one's guns. One should be straightforward with what one is willing to do and
not to do. Chester Karass discussed 14 rules for winning in negotiation in his book: In Business as in Life-
You Don't Get What You Deserve, You Get What You

Negotiate. These rules are mentioned below:

1. Pick the best place and time to negotiate

2. Have a "plan b" if the negotiation breaks down 3. Be stingy with concessions and leave room to
negotiate

4. Buyers shouldn't give seller quick counteroffers to their asking price

5. Don't say yes too quickly

6. Buyers should always try to get cost breakdowns and sellers should not give them

7. Don't make the first major concession

8. Watch concessions as deadline approaches

9. Shut up

10. Be skeptical

11. Stop hoping for the best

12. Watch out for funny money

13. Know how to compromise

14. You can always find a better deal for both parties.

The Negotiation Process

When people prepare for bargaining encounters, they spend hours on the factual issues, the legal
issues, the economic issues, and the political issues. They spend no more than ten to fifteen minutes on
their negotiation strategy. When they begin their interaction, they have only three things in mind
relating to their negotiation strategy: (1) where they plan to begin; (2) where they hope to end up; and
(3) their bottom line. Between their opening offer and the conclusion of their encounter, most
individuals "wing it "thinking of the interaction as wholly unstructured. If they only understood how
structured bargaining transactions are, they would know what to do during each stage of the process.
Six distinct stages of the negotiation process are as follows:

1. Preparation;
2. Establishment of negotiator identities and the tone for the interaction;

3. Information exchange;

4. Exchange of items to be divided;

5. Closing the deal; and

6. Maximizing the joint returns

We will discuss the purpose of each stage and the most effective ways to accomplish the objectives
underlying each.

1. Preparation: There is no substitute for thorough preparation when individuals have to negotiate.
Information is power, and the person who is better prepared will exude an inner confidence that is likely
to undermine the confidence of her less prepared adversary. People must know the relevant facts,
economic issues, and, where applicable, any legal or political issues. Someone planning to purchase a
new car needs to know what the dealer paid for the vehicle in question. They should never look at a
dealer invoice, because it is a basically meaningless document that doesn't tell you how much the dealer
actually paid. It doesn't include the 2-4% "hold-back" which the dealer gets if it sells the car by a certain
date, and manufacturer-to-dealer rebates and incentives that are almost always in the hundreds of
dollars and often several thousand dollars. The best way to obtain such information is to go on line.

2. Establishment of Negotiator Identities and Tone for Interaction: Once people have thoroughly
prepared for their bargaining encounters, they begin to interact with their counterparts. We like
to get to the heart of the matter quickly and begin the exchange of items, forgetting the
personal nature of the process. When people commence bargaining encounters, they are
generally anxious, because they have no way of knowing whether their efforts will be successful.
If they begin the discussions in this frame of mind, their anxiety may adversely affect their
relationship with the other side and undermine the actual discussions. To diminish this
possibility, it is helpful for people beginning bargaining interactions to take the time to establish
some rapport and create positive environments.
3. Information Exchange: As the small talk declines and the parties begin to think about the substantive
issues to be negotiated, they move from the Preliminary Stage into the Information Exchange. Each side
focuses on the other as they try to determine what terms should be addressed. The best way to obtain
information from others is to ask questions. Individuals who issue declarative sentences give up
information, they do not obtain it. People who wish to get new information know how important it is to
get the other side talking. The more they speak, the more information they disclose. The best way to
accomplish this objective is through the use of broad, open-ended questions that can't be answered by
short responses. Most negotiators think their opponents know more about their particular situations
than they actually know. As a result, when they respond to expansive inquiries, they inadvertently
disclose details they think the other side already knows. Bargainers should only begin to narrow their
questions once they think they have a good picture of the other side's circumstances and they are trying
to confirm what they think they have been told.

4. Distributive Stage: Near the conclusion of the Information Exchange, the focus changes from the
other side back to our own sides. Negotiators stop asking the other party what it wants and
begin to state what they must obtain or what they are willing to give the other side. At this point
they enter the Distributive Stage. The Information Exchange involves value creation, as the
parties try to determine what they have to divide up, while the Distributive Stage involves value
claiming, as the parties try to obtain items for themselves. This is a highly competitive part of
bargaining exchanges, with both sides seeking to advance their own interests. Individuals who
ignore the competitive aspect of this stage are likely to lose to manipulative opponents who
seek to maximize their own returns.

5. Closing the Deal:Near the end of the Distributive Stage the parties see an agreement on the
horizon, and they enter the most delicate part of their interaction. Less competent bargainers want
so badly to conclude the transaction that they move quickly toward agreement and close most of
the gap remaining between the parties. Human beings like certainty, and when they see the
certainty of an agreement ahead of them, they want to solidify the deal and move on to something
else. Participants who get this far need to realize that a final deal is going to be achieved, but they
shouldn't rush the process.

6. Cooperative Stage: Once many parties conclude the Closing Stage and reach a tentative
agreement, they shake hands and end their interaction. Individuals who do so often make a critical
mistake. They fail to be certain that they have maximized the joint return achievable by the parties.
During the Information Exchange and the Distributive and Closing Stages, the parties have over and
under stated the value of items for strategic purposes. As a result, different terms may have ended
up on the wrong side of the bargaining table. The Cooperative Stage is the time to rectify these
inefficiencies.
 Types of Negotiation

There are mainly two types of negotiations: 1) Distributive Negotiations-The Fixed Pie and 2)
Integrative Negotiations Everybody Wins something (usually). The following paragraphs will discuss
these two types of negotiations:

1. Distributive Negotiations - The Fixed Pie

The term distributive means; there is a giving out; or the scattering of things. By its mere nature,
there is a limit or finite amount in the thing being distributed or divided among the people involved.
Hence, this type of negotiation is often

referred to as The Fixed Pie'. There is only so much to go around, but the proportion to be distributed is
limited but also variable. How many times h somebody shouted out, "Who wants the last piece of
pizza?" Everyone looks each other, then the pizza slice, and two or more hands rush to grab it.

In the real world of negotiations, two parties face off with the goal of getting a much as possible. The
seller wants to go after the best price they can the buyer wants to pay the lowest price to achieve the
best bargain. It's really jus good old plain haggling, which is not all that much different from playing a tug
of war. obtain, while

A distributive negotiation usually involves people who have never had a previous interactive
relationship, nor are they likely to do so again in the near future Simple everyday examples would be
when we're buying a car or a house Purchasing products or services are simple business examples where
distributive bargaining is often employed. Remember, even friends or business acquaintances can drive
a hard bargain just as well as any stranger.

Secondly, when we are dealing with someone unknown to us, and it's a onetime only occurrence, we
really have no particular interest in forming a relationship with them, except for the purpose of the deal
itself. We are generally less concerned with how they perceive us, or how they might regard our
reputation Ours and their interests are usually self-serving.
Basics of Distributive Bargaining

During the period of distributive negotiation, the conflicting parties are supposed to follow some basic
rules. These are as follows:

. Play your cards close to your chest: Give little or no information to the other side. The less they know
about our interests as to why we want to make the purchase, our preferences, or the point at which
we'd decline to deal, the better our position. Expressing eagerness or need reveals a weakness which
could be exploited to our disadvantage.

.The opposite is equally true: Try to pry as much information from the other

side. Any additional information that we uncover can be used as leverage to

negotiate a better deal.

. The only thing you should ever tell: The only information we should ever reveal are those alternative
options, such as other sellers, which shows we are prepared to walk from the negotiation whenever it
suits us.

. Let them make the first offer: Whatever is used as the first offer will generally act as an anchor upon
which the rest of the negotiation will revolve. Try to get the other side to set the stage from which to
start.

• Be realistic: Being too greedy or too stingy will likely result in no agreement,

so keep it real.

2. Integrative Negotiations - Everybody wins something

The word integrative means to join several parts into a whole. Conceptually, this implies some
cooperation, or a joining of forces to achieve something together. Usually involves a higher degree of
trust and a forming of a relationship. Both parties want to walk away feeling they've achieved something
which has value by getting what each wants. Ideally, it is a twofold process.

In the real world of business, the results often tilt in favor of one party over the other because; it's
unlikely that both parties will come to the table at even strength. when they begin the talks.

Nonetheless, there are many advantages to be gained by both parties, when they take a cooperative
approach to mutual problem solving. The process generally

involves some form or combination of making value for value concessions, in conjunction with creative
problem solving. Generally, this form of negotiation i looking down the road, to them forming a long
term relationship gain. It is often described as the win-win scenario. to create mutual

Basics of Integrative Negotiation

Some basic tips should again be followed while negotiating under integrative type. These basic tips are
mentioned in the points below:

Multiple Issues: Integrative negotiations usually entails a multitude of issues to be negotiated, unlike
distributive negotiations which generally revolve around the price, or a single issue. In integrative
negotiations, each side wants to get something of value while trading something which has a lesser
value.

• Sharing: To fully understand each other's situation, both parties must realistically share as much
information as they can to understand the other's interests. You can't solve a problem without knowing
the parameters. Cooperation is essential.

• Problem Solving: Find solutions to each other's problems. If you can offer something of lesser value
which gives your counterpart something which they need and these results in you realizing your
objective, then you have integrated your problems into a positive solution.

• Bridge Building: More and more businesses are engaging in long term relationships. Relationships offer
greater security.
Common Assumptions of

Negotiation Theories

Negotiation is a specialized and formal version of conflict resolution most frequently employed when
important issues must be agreed upon. Negotiation is necessary when one party requires the other
party's agreement to achieve its ain The aim of negotiating is to build a shared environment leading to
long-term trust and often involves a third, neutral party to extract the issues from the emotions and
keep the individuals concerned focused. It is a powerful method for resolving conflict and requires skill
and experience. Zartman defines negotiation as "a process of combining conflicting positions into a
common position under a decision rule of unanimity, a phenomenon in which the outcome is
determined by the process." Most theories of negotiations share the notion of negotiations as a process,
but they differ in their description of the process.

Structural, strategic and procedural analysis build on rational actors, who are able to prioritize clear
goals, are able to make trade-offs between conflicting values, are consistent in their behavioural
pattern, and are able to take uncertainty into account. Negotiations differ from mere coercion, in that
negotiating parties have the theoretic possibility to withdraw from negotiations. It is easier to study bi-
lateral negotiations, as opposed to multilateral negotiations.

1. Structural analysis: Structural analysis is based on a distribution of empowering elements among two
negotiating parties. Structural theory moves away from traditional Realist notions of power in that it
does not only consider power to be a possession, manifested for example in economic or military
resources, but also thinks of power as a relation.

Based on the distribution of elements, in structural analysis we find either power-symmetry between
equally strong parties or power-asymmetry between a stronger and a weaker party. All elements from
which the respective parties can draw power constitute structure. They may be of material nature, e.g..
hard (such as weapons) or of social nature, i.e. soft power, power, (such

as norms, contracts or precedents).

These instrumental elements of power, are either defined as parties relative position (resources
position) or as their relative ability to make their options prevail. Structural analysis is easy to criticize,
because it predicts that the strongest will always win. This, however, does not always hold true,
2.Strategic analysis: According to structural analysis, negotiations can be described with matrices, such
as the Prisoner's dilemma, a concept taken from game theory. Another common game is the chicken
dilemma. therefore

Strategic analysis starts with the assumption that both parties have a veto. Thus, in essence, negotiating
parties can cooperate (C) or defect (D). Structural analysis then evaluates possible outcomes of
negotiations (C, C; C, D; D, D; D, C), by assigning values to each of the possible outcomes. Often, co-
operation of both sides yields the best outcome. The problem is that the parties can never be sure that
the other is going to cooperate, mainly because of two reasons: first, decisions are made at the same
time or, second, concessions of one side might not be returned. the parties have contradicting
incentives to cooperate or defect. If one party cooperates or makes a concession and the other does
not, the defecting party might relatively gain more. Trust may be built only in repetitive games through
the emergence of reliable patterns of behavior such as tit-for-tat. This table illustrates

the options and possible outcomes of the Negotiator's Dilemma.

3. Process analysis: Process analysis is the theory closest to haggling. Parties start from two points
and converge through a series of concessions. As in strategic analysis, both sides have a veto
(e.g. sell, not sell; pay, not pay). Process analysis also features structural assumptions, because
one side may be weaker or stronger (e.g. more eager to sell, not willing to pay a certain price).
Process analysis focuses on the study of the dynamics of processes. E.g. both Zeuthen and Cross
tried to find a formula in order to predict the behavior of the other party in finding a rate of

concession, in order to predict the likely outcome.

process of negotiation therefore is considered to unfold between fixed points: starting point of discord,
end point of convergence. The so-called security point, that is the result of optional withdrawal, is also
taken into account.

4. Integrative analysis: Integrative analysis divides the process into successive stages, rather than talking
about fixed points. It extends analysis to pre-negotiations stages, in which parties make first contacts.
The outcome is explained as the performance of the actors at different stages. Stages may include pre-
negotiations, finding a formula of distribution, crest behavior and settlement.

5. Bad faith in negotiation: Bad faith is a concept in negotiation theory whereby parties pretend to
reason to reach settlement, but have no intention to do so, for example, one political party may pretend
to negotiate, with no intention to compromise, for political effect.
Negotiation Styles

Kenneth W. Thomas identified 5 styles/responses to negotiation. These five strategies have been
frequently described in the literature and are based on the dual-concern model. The dual concern model
of conflict resolution is a perspective that assumes individuals' preferred method of dealing with conflict
is based on two themes or dimensions

a) A concern for self (i.e. assertiveness), and

b) A concern for others (i.e. empathy).

Based on this model, individuals balance the concern for personal needs and interests with the needs
and interests of others. The following five styles can be used based on individuals' preferences
depending on their pro-self or pro-social goals. These styles can change over time, and individuals can
have strong dispositions towards numerous styles.

1. Accommodating: Individuals who enjoy solving the other party's problems and preserving personal
relationships. Accommodators are sensitive to the emotional states, body language, and verbal signals
of the other parties. They can, however, feel taken advantage of in situations when the other party
places little emphasis on the relationship.

2. Avoiding: Individuals who do not like to negotiate and don't do it unless warranted. When
negotiating, avoiders tend to defer and dodge the confrontational aspects of negotiating; however, they
may be perceived as tactful and diplomatic.

3. Collaborating: Individuals who enjoy negotiations that involve solving tough problems in creative
ways. Collaborators are good at using negotiations to understand the concerns and interests of the
other parties. They can, however, create problems by transforming simple situations into more complex
ones.

4. Competing: Individuals who enjoy negotiations because they present an opportunity to win
something. Competitive negotiators have strong instincts for all aspects of negotiating and are often
strategic. Because their style can dominate bargaining process, competitive negotiators often neglect
the importance of relationships.
 4. Compromising: Individuals who are eager to close the deal by doing what is fair and equal for all
parties involved in the negotiation. Compromisers can be useful when there is limited time to
complete the deal; however, compromisers often unnecessarily rush the negotiation process
and make concessions too quickly.

Tactics of Negotiation

Tactics are always an important part of the negotiating process. More often than not they are subtle,
difficult to identify and used for multiple purposes. Tactics are more frequently used in distributive
negotiations and when the focus in on taking as much value off the table as possible .Many negotiation
tactics exist. Below are a few commonly used tactics.

1. Auction: The bidding process is designed to create competition. When multiple parties want the same
thing, pit them against one another. When people know that they may lose out on something, they will
want it even more. Not only do they want the thing that is being bid on, they also want to win, just to
win. Taking advantage of someone's competitive nature can drive up the price.

2, Brinkmanship: One party aggressively pursues a set of terms to the point at which the other
negotiating party must either agree or walk away. Brinkmanship is a type of "hard nut" approach to
bargaining in which one party pushes the other party to the "brink" or edge of what that party is willing
to accommodate. Successful brinksmanship convinces the other party they have no choice but to accept
the offer and there is no acceptable alternative to the proposed agreement.

3. Bogey: Negotiators use the bogey tactic to pretend that an issue of little or no importance to him or
her is very important. Then, later in the negotiation, the issue can be traded for a major concession of
actual importance.

5. Chicken: Negotiators propose extreme measures, often bluffs, to force the other party to
chicken out and give them what they want. This tactic can be dangero..: when parties are
unwilling to back down and go through with the extreme measure.
5. Defence in Depth: Several layers of decision-making authority is used to allow further concessions
each time the agreement goes through a different level of authority. In other words, each time the offer
goes to a decision maker, tha decision maker asks to add another concession in order to close the deal

6. Deadlines: Give the other party a deadline forcing them to make a decision This method uses time to
apply pressure to the other party. Deadlines given can be actual or artificial.

7. Flinch: Flinching is showing a strong negative physical reaction to a proposal. examples of flinching are
gasping for air, or a visible expression of surprise or shock. The flinch can be done consciously or
unconsciously. The flinch signals to the opposite party that you think the offer or proposal is absurd in
hopes the other party will lower their aspirations. Seeing a physical reaction is more believable than
hearing someone saying, "I'm shocked."

8. Good Guy/Bad Guy: The good guy/bad guy approach is typically used in team negotiations where one
member of the team makes extreme or unreasonable demands, and the other offers a more rational
approach. This tactic is named after a police interrogation technique often portrayed in the media. The
"good guy" will appear more reasonable and understanding, and therefore, easier to work with. In
essence, it is using the law of relativity to attract cooperation. The good guy will appear more agreeable
relative to the "bad guy." This tactic is easy to spot because of its frequent use.

9. Highball/Lowball: Depending on whether selling or buying, sellers or buyers use a ridiculously high, or
ridiculously low opening offer that will never be achieved. The theory is that the extreme offer will cause
the other party to reevaluate his or her own opening offer and move close to the resistance point (as far
as you are willing to go to reach an agreement). Another advantage is that the person giving the
extreme demand appears more flexible he or she makes concessions toward a more reasonable
outcome. A danger of this tactic is that the opposite party may think negotiating is a waste of time.

10.The Nibble: Nibbling is asking for proportionally small concessions that haven't been discussed
previously just before closing the deal. This method takes advantage of the other party's desire to close
by adding "just one more thing," Snow Job: Negotiators overwhelm the other party with so much
information that

he or she has difficulty determining which facts are important, and which facts are diversions.
Negotiators may also use technical language or jargon to mask a simple answer to a question asked by a
non-expert.
11. Mirroring: When people get on well, the outcome of a negotiation is likely to be more positive. In
order to create trust and a rapport, it is recommended to mimic or mirror the opponent's behavior and
repeat what has been said. Mirroring is a behavior that refers to a person repeating the core content of
what another person just said, or repeating a certain expression. It indicates attention to the subject of
negotiation and acknowledges the other party's point or statement. Mirroring can help create trust and
establish a relationship.

The Making of Good Negotiator

Are good negotiators born or made? Certainly, there are innate personality traits that make some
people become good, or even great, negotiators. However, there are some skills that can be learned,
which also improve your negotiation ability. Here are some traits and skills of a good negotiator:

1. Practical intelligence/common sense

2. Vertability

3. Ability to think and communicate clearly under stress

4. Personal integrity

5. Good self-esteem

motivations/reactions)

6. Emotional intelligence (ability to understand others

7. Aspiration to achieve

8. Planning skill
9. Product knowledge

10. Ability to research and understand market conditions

11. Ability to stay calm under pressure

12. Ability to deal with uncertainty

It could be argued that even if you are not born with some of these traits, you can develop them over
time. Sometimes you can compensate for any areas of weakness by becoming highly adept at other
areas. For instance, you may not have great verbal skills and so you communicate better in writing.

Just having or developing these traits is not enough. These traits simply provide the foundation for being
able to negotiate well. Negotiation itself is a skill that you can learn through training seminars like the
many offered by Karrass.

Team Negotiation

Due to globalization and growing business trends, negotiation in the form of teams is becoming widely
adopted. Teams can effectively collaborate to break down a complex negotiation. There is more
knowledge and wisdom dispersed in a team than in a single mind. Writing, listening, and talking, are
specific roles team members must satisfy. The capacity base of a team reduces the amount of blunder,
and increases familiarity in a negotiation.

Roles and Responsibilities of a Negotiation Team

As a member of the negotiation team, it is very important that everybody understand the roles and
responsibilities assigned to them

A negotiating team is a very important component of any organization. A good negotiating team has
members with diverse skills. The team leader can be the chief negotiator, but that need not be the rule
of the thumb. At times, having two separate individuals in the positions of team leader and chief
negotiator is advantageous. The chief negotiator has to be articulate, good team player, and possess
good presence of mind. Other than experience in negotiation, it's important that all the members in the
team possess at least one of the following qualities

1. Technical knowledge

2. Relationship skills

3. Patience

4. Observational skills

5. Behavior analyzing skills

Having people with these qualities is a definite advantage during the process of negotiation. Depending
on their skills, the members are assigned certain roles and responsibilities in the negotiation process. It
is important that all the members understand them beforehand.

Negotiating as a Team

The key to taking a team approach to negotiation understands the psychology of how teams work. Here
we'll show you how, with thorough preparation, you can ensure your team negotiations run smoothly.
Creating a true team environment requires a great deal of preparation, coordination, and internal
negotiation before you even meet the other side. Then, much like a perfect golf swing, the negotiation
itself becomes all "follow-through."

Some executives protest that too much preparation crowds out creativity. Actually, the opposite is more
likely to be true. The most adaptive teams are those that meet often and work intensely, developing
effective methods to face and resolve their conflicts. The deep knowledge created through preparation
is likely to result in greater flexibility and creativity at the bargaining table.

1. Discuss the negotiation's substance: Before entering into the negotiation, the must agree on the
basics of the negotiation's substance, striving for complete unity. After all, at the first sign of cracks in
your armor, the other side will try to divide and conquer.
2. Assess skills and roles: Now that you've assessed the negotiation's substance, it's time to figure out
how to take advantage of the diverse skills of your team members. Begin with a skills assessment. What
technical knowledge is required? It would be helpful if one member of the rug-buying couple were
capable of assessing the value of Moroccan rugs their age, workmanship, and so on. Other important
abilities may include listening and other relationship skills, a knack for observing and analyzing behavior,
patience, foreign-language skills, acting ability (to convey toughness, for example), and past negotiation
expérience.

3. Plan the negotiation process: The substance of the negotiation and the diversity of roles come
together in the third step as the team makes decisions about the central process features of the
negotiation. What opening offer should they make? When should they make the first concession? How
many concessions should they make? Whether you're working with a group or flying solo, such
questions deserve to be worked out in advance.

Suitable Situation to Use a Team

Working as a team can be particularly beneficial in the following situations:

1. The negotiation is complex, requiring a diverse set of knowledge, abilities, or expertise.

2. The negotiation has great potential for creative, integrative solutions,

3. Diverse constituencies and interests must be represented at the table, as in union negotiations.

4. You want to display your strength to the other side, for example, in international

contexts where teams are expected.

5. You want to signal to the other side that you take the negotiation very seriously.
as in a merger or acquisition.

6. You trust and respect available team members.

7. You have sufficient time to organize and coordinate a team effort.

Negotiating Motivators: The Iceberg Theory

Negotiating motivators is a term to describe what makes people want to negotiate

One way to apply this is through a theory of negotiation called "The Iceberg

Theory." It is obvious that people want money, goods, and services, but this theory contends that many
things a person also needs remains unseen and

unspoken, hidden like the underside of an iceberg.

Money, goods, and services are the tip of the iceberg. If you want power, you must understand and
know how to gain access to and use the parts below the surface as well as the parts that show. It will be
harder to reach a workable settlement if you fail to be aware of and satisfy the other parties' unspoken
needs. Just like a real iceberg, what is under the surface can be even more powerful than what is above
the water line. Four hundred years ago, Sir Francis Bacon had this to say about power, persuasion, and
wants: "If you would work any man, you must either know his nature and his fashions, and so lead him,
or his ends a persuade him, or his weaknesses and so awe him; of those have interest in him and so
govern him. "Human beings have not changed much in four centuries and neither has power and its
relationship to negotiation. There are many hidden issues in every negotiation agenda, including: and so

• People want to make their lives easier They want others to think them competent

.
• They want peace of mind

They want to be listened to

. They freedom of choice

These desires are powerful. The key to gaining power it so recognize that if we are to persuade, anyone
we must "pay them well", not necessarily in terms of dollars. goods and services, but in satisfaction. So
when you are stepping into a negotiation scenario, be sure to think about the obvious negotiation
motivators, and to inquire about the ones that are there, but you can't obviously see.

Common Negotiation Mistakes

Even the most experienced negotiator makes some mistakes. After all, we are human beings. So due to
various reasons mistakes may be committed while negotiating. There are a few common negotiation
mistakes that can derail the efforts. According to Professor James K. Sebenius Harvard Business School.
Prof. Sebenius says these six mistakes which are as follows:

1. Neglecting the other side's problem.

2. Letting price bulldoze other interests.

3. Letting positions drive out interests.

4. Searching too hard for common ground.

5. Neglecting BATNAS (acronym for "best alternative to negotiated agreement"). 6. Failing to correct for
skewed vision.

Sebenius discusses all of these in the Harvard Business Magazine, the focus is on the last one-failure of
perception. All people have biases, and in a negotiation they may fall prey to self-serving biases that is,
interpreting (perhaps incorrectly) what the other party says or does to bolster one's own position.
Another issue that arises from having biased perceptions is the inability to assess the other side
correctly. Sebenius says that some negotiators become entangled in partisan perceptions, expecting the
other side to act in a certain manner. What is more, expecting the other side to act in a certain manner
may actually be a self-fulfilling prophecy. For instance, if you expect the other side to reject your offer
without considering it, you may give a half-hearted offer, which will lead the other party to reject it out
of hand. This in turn, ends up bolstering your opinion of the other party, which leads to a path of
adversity not cooperation.

To avoid making any of the six negotiation mistakes, negotiators must practice self-awareness and self-
analysis. Sometimes it is important to take a step back to be able to view one's actions more clearly. You
may ask yourself/your team the following questions:

• How are you approaching the negotiating table?

What are you really seeking to accomplish?

• How can you best work with the other party to reach your goals, and theirs?

Are there other paths to agreement?

• What is causing blocks?

Improve Your Negotiation Today

Negotiation is about preparation, skill and organization. The more you are able to get organized prior to
a business negotiation, the higher your likelihood of success. The Negotiating Game Pester has proposed
a four-part program to improve negotiation performance. parts these:

1. Improve negotiating planning- Planning is crucial, and depends on various steps such as improving
information gathering; understanding the difference between strategic, tactical and administrative
planning: and high-quality analysis 2. Establish a broad-based negotiation training program- Negotiation
training

offers high return on investment due to improved skills it imparts.

3. Improve the negotiator selection process- Not everyone has the temperament or knowledge to be a
good negotiator, even if he/she has lots of negotiating experience. Selecting the right people for the job
is a function of disciplined observation and some psychological profiling (those with low self-esteem, for

example, are not good candidates for negotiation). 4. Establish a high-level negotiation activity- This is
especially important in

large organizations, which would benefit from having an elite group of negotiators to conduct essential
corporate negotiations. This elite group could also create a negotiation climates among all departments
of the business and assist in selecting good negotiators at all levels.

After The Deal Is Done

We spend most of our time here at Negotiation Space discussing ways to move business negotiation
forward. But what happens once you have concluded the negotiation and you have a deal? After you are
done celebrating your new deal, you must give some thought to putting the deal into practice. In many
cases.

the agreement you have reached is the first part in a long-term relationship between your organization
and the other party. Your goal now is to maintain a positive and productive relationship. What to do
when the link is dry?" from the Harvard Program on Negotiation, there are a few steps to take. These
are:

1. Maintain open and clear communication. Make sure the communication is going both ways. Further,
to ensure that there are no misunderstandings, you may want to have a face-to-face meeting, whether
in person or on a video-conference call.

2. Establish and maintain mutual respect. In order for organizations to do

business with each other, there must be respect. 3. Maintain trust by being reliable. Deliver on the
terms of your agreement. Be

upfront when things are not going as planned.

4. Indicate and maintain your commitment to a long term relationship. Is your company in it for the
long-haul? Be sure the other party knows that you want to make this work (and make it a win-win for
both sides).

Fundamentals of Negotiation

Islam has instructed to follow some fundamental principles of negotiation. These

principles are universal. If any organization follows these principles, negotiation program will expected
to be concluded peacefully. These principles are as follows. 1. Commitment: The success of the
negotiations depends on the commitment of

the two conflicting sides( even both Muslim and non-Muslims). 2. Following Rules: Both the parties will
follow the fundamental rules governing the conduct of the negotiations.

3. Agreement: Agreement is usually reached in advance concerning these fundamental rules and
conditions, and dialogue proceeds from there. 4. Cognizance: The two sides will take cognizance of
these fundamentals only if

they have good intentions. 5. Diplomatic customs: Diplomatic customs and traditions have been such
that the

two sides first exchange letters and messages until they reach an agreement on the

practicalities of ending the conflict. 6. Amicable style: These letters or messages are drafted in an
amicable style that

seeks to remove whatever malice and hatred there might be on either side. 7. Expression of viewpoints:
Negotiations begin with expression of

viewpoints, presentation of arguments and evidence in support of one's own case. 8. Strict compliance:
A reminder to the other side of the principles of negotiation that were agreed upon is to be given so that
every party does not escalate from the agreement.
9. Islamic interest: During negotiations, the Muslim side must pay as much attention to the Islamic
interest as possible when agreeing on issues, in line with the instructions of the Imam to negotiators.

10. Observance of flexibility: One of the important factors of successful negotiation is the observance of
the principle of flexibility during negotiations to

bring points of view closer, end the conflict, stabilize security and peace, and replace dispute and
conflict with cordiality and understanding 11. Peacefulness: Peaceful negotiations should more common
than resorting to

force and fighting.

An excellent example of the flexibility of Muslims during negotiations came during the Hudabiah
Reconciliation. The Prophet, Allah's blessing and peace be upon him, called for Suhail ibn Ummr, the
man sent by the Quraish to negotiate the peace treaty, and instructed him to write at the top of the
page of the treaty. "In the name of Allah, the Most Gracious, the Most Merciful." Suhail, however,
objected, saying,

"As for the Most Gracious, the Most Merciful,' I do not know Allah by that name. Let us write (instead),
'In thy name, O Allah'." The Muslims said: "By Allah! We will not write this; we will write only, 'In the
name of Allah, the Most Gracious, the Most Merciful'." But the Prophet, Allah's blessing and peace be
upon him. instructed Suhail to write, 'In thy name, O Allah'. Then Muhammad continued, "This is what
Muhammad, the Messenger of Allah, agreed to." But Suhail said: "I don't believe that you are the
Messenger of Allah. If I did,