Selling & Negotiation Skills
MMS Semester I
Sameer Phanse
Marketing & Information Technology Consultant
CIMR
2010
Session 1
Sameer Phanse
23:12 Marketing & Information Technology Consultant 1
What's ours is ours….and what's yours
is negotiable!
Soviet outlook toward Negotiations during the Cold War with the West
What's ours is of course ours! What you
say was yours, is rightfully ours,
so,
where is the question of Negotiations?
The Chinese Negotiation attitude – Sameer Phanse (2010)
Sameer Phanse
23:12 Marketing & Information Technology Consultant 2
Objectives - Session 1
Introduction
TopicImportance
Evaluation Scheme
Student Representative
Negotiation examples – A Quiz
Why Negotiate?
Management Students and Negotiation Skills
The “Skills” in Negotiation Skills
Why the increasing stress on Negotiations?
Accomplished Negotiators vis a vis Average Negotiators
The Conflict Management Grid
Conflict Continuum and the place of Negotiation
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Objectives - Session 1
Negotiation Pre-Conditions
When not to Negotiate!
Negotiations – Myths and Truths
Home Work
Groups of 5 to 6 students
Students to read up on a real life Negotiation situation
Discussion in Session 2 if possible
Sources of Power
Negotiations, Mediations and Arbitrations
Types of Negotiations
The Negotiator’s Dilemma
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Term Paper
Term Paper
Individual students to research and prepare a Term Paper
Topic
The on-going Government of India (GOI) and Research in Motion
(RIM) negotiations
Provide in brief, all relevant background information about the situation at
hand
Analyze the implications for all the stakeholders involved
Develop Negotiation Strategies for
GOI and
RIM
Paper Specifications
At least 5 to 6 single side typed A4 size page lengths
Submission
Through the student representative
To reach the college office on or before 27th November 2010
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Introduction
Introduction
Topic Importance
Life-Skill
Professional Life
Personal Life
Ubiquitous mechanism
Business
Politics
Society
A way of Conflict Management
Culmination of Sales
Evaluation Scheme
Active Class Participation/Interaction – 10%
Case Study/Term Paper/Project/Quiz/Presentation - 30%
End Semester Examination - 60%
Student Representative to report to me for all future co-ordination
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Negotiation examples – A Quiz
Negotiation examples – A Quiz
Which of these situations represents a negotiation?
Buying a rug in a West African market
Soliciting a new source of venture capital
Trying to capture/kill a terrorist in an encounter
Chatting with someone you do not know on the Internet
Meeting your potential in-laws for the first time
Giving or receiving commendation and criticism
Deciding whether to stay late at work to finish up a project
Making up, or rebuilding a relationship with someone you love
Picking a successor for the CEO of a company where you are on the
board
Getting a child to go to bed
Getting into a class or training program with limited enrollment
Laying off or firing someone
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Negotiation examples – A Quiz
Discussing the outsourcing of a business function with the manager of the
function
Soliciting a sponsorship from a major corporate for your College Seminar
Soliciting bids for the new advertising campaign for your company
Saying good-by to someone you will not see for a long time
Finding an advisor, or a mentor, or a counselor
Discussing with a recruiter the salary and benefits you feel you deserve
Trying to get back to sleep when something is worrying you
Getting an extension on a paper or a project
Apologizing to someone whose property you unknowingly damaged
Accepting a bribe
Turning down a bribe
Getting another country to lower a trade barrier
Struggling to stay on a diet or exercise plan or give up smoking
All interactions personal or professional where there
are two or more points of view are Negotiations
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Power, Negotiation, Persuasion & Force
Outcome NO
possible by
Persuasion? Outcome NO
possible by NO
Outcome
Negotiation? possible by
NO
YES Ethical Outcome
Power? possible &
End
YES justified by
Use Force?
Persuasion YES
Use
Negotiation Use YES
Ethical
Power Use
NO Force
Goal
Achieved? NO
Goal NO
Achieved?
Goal
Achieved? NO
YES Goal
Achieved?
YES
Sameer Phanse YES
23:12 Marketing & Information Technology Consultant 9 YES
Management Students and Negotiation Skills
Negotiations
Job Interview Negotiations
Survival
New Job Negotiations Skills
Thrive
Skills
(Within Organization) (External)
[Link]
Career Negotiations
Negotiations
Job/Entrepreneurship
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Management Students and Negotiation Skills
Other
Employees
Peers
Work
Expectations
Resources
Senior
Management
Subordinates
Boss 2 External
Communities
MANAGEMENT
TRAINEE
Boss’s
Peers Customers
Internal Communities
Boss 1 General
Expectations
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Negotiations Criticality
Why the increasing stress on Negotiations?
Escalating Multidimensionality of Deals
More Sophisticated Buying Fraternity
Price focused competitive behaviour
Customer Lifetime Value Concept
Internal Negotiations and Boundary Spanner Stresses
Global trend towards selling “Value and Solutions”, in
contrast to “Price and Product”
Escalating Competition
Increasing Cost pressures
Resource Crunch
Inflation
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Negotiations Criticality
Why the increasing stress on Negotiations?
Escalating Multidimensionality of Deals
Price
Variations
Schemes
Offers
Financing Alternatives
Products
Multi Components/Combinations
E.g. Mobiles
Allied Services
Pure Services
Agreements
Intricate Service Level Agreements (SLAs)
Legal Aspects
Licensing arrangements
Intellectual Property considerations
Statutory norms and disclosures
….and so on
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The Talented Negotiator
Skilled Negotiators Average Negotiators
Consider wider range of outcomes Consider narrow range of outcomes
Lesser attention to common interests
More attention to common ground
Poor anticipation of long-term
Better anticipation of long-term
interest domains
interest domains Decide upper/lower “points” for
Decide upper/lower “bounds” for
settlement
settlement Rigid issue discussion priority
No rigid issue discussion priority Use qualifying phrases (signals) when
Use neutral phrases (signals) when making offers
making offers Make counter-offers instantaneously
Take time to respond to offers Position defense is based on a
Position defense is based on few multitude of justifications
arguments
Objectively evaluate past deals for No such review of past negotiation
future learning processes
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The Conflict Management Grid
Relationship
Accommodation Collaboration
Self-interest
Avoidance Competition
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The Conflict Continuum
The Coleman Raider Conflict Resolution Continuum
Adapted from Deutsch & Coleman (2000)
If your General Strategy is …
Avoidance Assertion Aggression
..….then the Method you will use …..
Avoid the Negotiate Mediate Arbitrate Litigate Fight or
Conflict Or Wage War
Pursue
Grievance
…. and your Focus will be on …..
Denial or Needs & Rights Power
Escape Interest
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START Negotiation Pre-Conditions
IS THE ISSUE YES
NEGOTIABLE?
NO MINIMAL YES
MUTUAL TRUST?
WILL TO YES
NO GIVE
Negotiation AND TAKE?
Negotiation NO Negotiation
Negotiation
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Negotiation – A definition
The greatest misunderstanding about the
negotiation process is that it is adversarial in nature.
In actuality, it is not designed for those with a trial
and debate mentality. It is a problem solving process
in which each party may look across the table and
regard its counterparts as [potential] advocates.
Colosi
“……when two individuals exchange messages, an
interaction I refer to as negotiation”. Paul Byers
(1985)
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Negotiation – A Definition
Negotiation is a process whereby two or more
persons or groups strive to reach agreement
on issues or courses of action where there is
some degree of difference in interest, goals,
values or beliefs
The job of the negotiator is
To build credibility with the "other side,"
Find some common ground (shared interests),
Learn the opposing position, and
Share information that will persuade the "other side" to
agree to an outcome
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Why Negotiate?
What is gained through conflict negotiation?
Crystallizeimportant issues
Generate superior, more creative solutions
Reach mutually acceptable agreements that
Meet your key interests and
Those of your counterpart(s)
Strengthen your working relationship with your
counterpart(s)
Even as you honestly and respectfully negotiate your
differences
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Why Negotiate?
Whendisagreements are denied, avoided, or
compromised away, they can:
Bleed energy from essential activities and issues
Affect morale
Polarize groups and individuals and,
Ultimately, make future cooperation or collaboration
impossible
Induce careless and undesirable behavior
Harm or demolish working relationships
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Negotiate when not to!
When not to Negotiate
When time is of essence
The need for speed may hurt your ability to think clearly and cause you to miscalculate the
result of your concession
When your Best Alternative to Negotiated Agreement (BATNA) is extremely weak
When your BATNA is superior to their highest offer
When Negotiating can send the wrong signal
When other non-price interests may get compromised
When negotiating is culturally inadvisable
When you are in a situation that could cause you severe financial or personal risk
When the other party asks for something you cannot sustain because it’s illegal
or morally and ethically improper
When your counterpart seems untrustworthy
When you’re not all set
A failure to analyze your positions, issues, and strategies will mar your ability to reach a
favourable result
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Negotiations – Myths and Truths
Negotiations – Myths and Truths
To comprehend how negotiation functions and what
information, skills and abilities are important, one must
first debunk certain misleading notions about
Negotiations
Which of the following are statements are factual and
which are hearsay?
Good Negotiators are born
Experience is a great Teacher
Good Negotiators take risks
Good Negotiators make concessions
Good Negotiators never lie
Good Negotiators look for common interests
Everyone is a Good Negotiator
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Negotiation Merits
Mutually settled solution (No external party
necessary)
No intervention/approval of third parties need be
solicited
The resolution being mutually agreed has greater
chance of being successful
Since both parties “own” the solution there is greater
commitment from both sides
An authentic solution is likely since innermost feelings
and emotions are exposed
By the very nature of the process, any hidden
agendas can get crystallized
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Negotiation Demerits
Time Consuming
Costly
Requires both parties to be willing to negotiate
Some parties may be at a disadvantage because
of asymmetries in
Negotiation Skills
Information
Resources
Authority
Power
Influence
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Sources of Power
Sources of power wield great negotiation potential
within organisations
Typical Features of Managerial Power hubs
Holding formal authority
Controlling scarce assets
Possessing information
Possessing unique proficiency
Exhibiting the ability to manage ambiguity
Commanding influential Networks
Belonging to the prevailing organizational culture
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Negotiations, Mediations and Arbitrations
Mediation:
Neutral third party helps
participants reach
voluntary agreement
Negotiation: Arbitration:
Voluntary, Non-voluntary,
Participants control Interested parties
the process & have the least control
outcome
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Types of Negotiations
Negotiation Types (All in the Mind!)
Based on
How the Parties Perceive the Value of the subject of the
Negotiation
One-dimensional (or few parameters) or Limited definition
Multi-dimensional interpretation or Expansive definition
The basic attitude of the involved parties
Self-Interest
Relationship Orientation
Number of
Parties Involved
Issues in Focus
Phases of Interactions
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Types of Negotiations
Types
Based on Value perception and Party attitudes
Distributive Negotiations
Integrative Negotiations
Based on number of Parties, issues and Phases
Range from One-on-one, single Issue, single sitting to Multi-
party, multi-issue, multi-phase
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Types of Negotiations
Distributive Negotiation
Here the Perception of the Value is
One-dimensional (or few parameters)
The basic attitude of the involved parties is
Self-Interest
A Negotiation characterized by competition over the
allocation of a fixed amount of value
The aim of the parties is to gain as much as possible at the
expense of the other
A gain by one side is made at the expense of the other
Minimum/camouflaged information exchange
Example
A Manufacturer – Vendor transaction in which the only
value-proposition is the price of the supplied material
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Types of Negotiations
Integrative Negotiation
Multi-dimensional interpretation of the value in question
Here the Perception of the Value is spelled out in a
Multi-dimensional manner or an unrestrained way
Efforts are made by parties to re-interpret the value proposition so as to augment its
worth and utility to all involved parties
The basic attitude of the involved parties is
Relationship or Alliance oriented
A Negotiation in which the parties collaborate to optimize gains by integrating
their interests into an agreement
Sufficient and transparent information sharing
The aims of the parties are to
Generate value and
Gain as much as possible, in a mutually approved way
Example
A Manufacturer – Vendor relationship in which the
value-proposition is a set of variables including the price, quality, delivery period,
payment terms and conditions and so on as well as the relationship between the two
firms
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Types of Negotiations
One-on-one, Single Issue, Single sitting
The typical everyday negotiation situation
The most simplistic, but not necessarily the easiest
negotiation form
Multi-party, multi-issue, multi-phase
Professional and Commercial negotiations will usually fall in
this typology
In Multi-party negotiations,
The challenges are to
Anticipate,
Identify and
Leverage the natural and situational coalitions that develop
It is imperative to
Identify the pivotal decision makers and power centers and
Initiate a rapport building dialogue with these important entities
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Types of Negotiations
The Multiple Sittings
Need a
Patient,
Professional and
Focused approach
The flip side is that the early phases can be capitalized to develop
A working relationship and
Foster mutual trust
The Multitude of Issues must be objectively
Examined,
Prioritized, and
Consciously manipulated on the negotiation chess-board to control the
parties and the course of the negotiations
Game theory based Software Simulations are available to guide
decision makers in complex situations. However decision makers
are loathe to suspend their own judgments for machine based
suggestions
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Types of Negotiations
Negotiation Reality
In real life, few commercial negotiations are strictly
distributive or integrative
Most are a mix of both, containing opportunities for
collaboration, but coming to a head with vigorous
competition for a share of the worth
Integrative negotiations are more prominent today
because of
The realization of the benefits of long-haul business
alliances
Emergence of Joint Ventures
Successful business enhancing mechanisms such as
outsourcing
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Types of Negotiations
“You have to believe that it’s in your interest to
look for ways to benefit your negotiating
counterpart. Your goal is not to hurt them, but to
help them at a little cost to yourself-and have
them help you at a little cost to them. The more
creative you are at coming up with things that are
good for both of you, the happier both of you will
be.” Michael Gordon, Negotiation
Expert, (1999)
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The Negotiator’s Dilemma
The Negotiator’s Dilemma
A Negotiator always has a starting issue
Should she go in for an aggressive bargaining stance? (
Distributive style) or
An inclusive, co-operative manner of negotiation?
(Integrative style)
Distributive
Negotiation
Integrative
OR Negotiation
Opp
nt
Self Opponent
one
Self Self
or
Opp
Win
Win // Lose
Lose Lose
Lose // Win
Win Sameer Phanse Win
Win // Win
Win
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The “Skills” in Negotiation Skills
The Logical order of Learning
Knowledge
Skills
Techniques
Other Critical Factors
Attitude
Experience
Negotiation is a vast sea where learning doesn’t end even for the veterans
This Course will help you to gather basic information about Negotiation and
some of the skills which go with it
Reflection on the learning and application in actual life are critical to quickly
internalize the teachings
Its more important to understand the “Why” of Negotiations (or any subject for
that matter) than just the “How to”
Just learning the gimmicks and tricks of the trade whether Selling or negotiation wont
take you too far
If you understand the concepts (Why?), you can apply them successfully to almost any
situation
What worked for someone in a certain situation may not necessarily work for you
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End of Session 1
Thank You!
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