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Negotiation
1.
2. What is negotiation?
A dialog or Problem solving process between
Interdependent parties.
Negotiation is possible only if the parties involved are
dependent on one another and see advantage in the
process, it may be an opportunity or sheer necessity.
3. Styles of Negotiation
Distributive
The term distributive implies that there is a finite amount of
thing that is being distributed or divided among the people
involved. It is also called the Fixed pie or Positional or hard-
bargaining negotiation, where each side often adopts an
extreme position, knowing that it is a Win-Lose scenario.
Integrative
Also called interest-based or principled negotiation.
Integrative negotiation often attempts to create value in the
course of the negotiation ("expand the pie"). It focuses on the
underlying interests of the parties rather than their arbitrary
starting positions, negotiation is approached as a shared
problem rather than a personalized battle. It often involves a
higher degree of trust and the forming of a relationship. It is
also sometimes called Win-Win negotiation.
4. Language of Negotiation
Position: The stand that each party takes at the beginning of
negotiation. The “What I want” stand. If both the parties
maintain this stand negotiation may turn into conflict.
Interest: The underlying interest / objective behind the stand
taken by the parties. The “why we want it” stand. Once the
interest of both the parties are in view it is easier to srtike a “win-
win” deal.
6. 5 Phases of Negotiation
Preparation
This is the back-office of negotiation. Research, planning and
emotional preparedness are keys to preparation for
negotiation.
Agenda Setting
Declare the what and how of negotiation. The context or the
premises.
Take a buy in on what would be discussed
Pre-empt the objections
Probing , asking right question may help us uncover the
interest of the parties
7. Proposal
Timing is crucial while making a proposal.
It is important to match with the speed/ style of the other
party, viz. Impatient or reflective/ analytical type.
The proposal may be accepted, out right rejected or met with
counter offer.
Finding common grounds to make the proposal may lead to
lesser resistance.
While listening to a proposal, please give a due hearing to the
offer and repect the time and effort put in to make the offer.
8. Bargaining
Bargaining is just a stage in negotiation that focuses largely
on the commercial terms viz. Price and Terms, conditions etc.
A trade of concessions, like margin or volumes
Common bargain tactics – good cop/bad cop, boogie, nibble
Best concession is to offer some thing of low cost to you but
higher value to other
Finalizing
It is vital to converge the various points of discussions and
summarize them
Remember the “Power of Pen”
9. Experiences
Our past experiences and perceptions may hinder the negotiation
process
We must also evaluate if our association with the past experiences
hold value in the given situation
Anchoring
This is our reference point during negotiation
We must be careful and reasonable while anchoring. An
unreasonable anchor point may stall the negotiation before it
begins.
Cycle of escalation
This is the sense of commitment we feel towards nailing the
negotiation because of the time and effort put in.
Beware of the escalation of comitment
Common Errors in Negotiation