Negotiation skills

Plan of Talk
 Introduction
– Why we negotiate?
– What is negotiation?
– Elements of negotiation
 Models of negotiation
– Win-Win
– Win-Lose
– Lose-Lose
– RADPAC
 Essentials of WIN-WIN negotiation
 Challenges of negotiation

Introduction
Life situation 1
 Your friends want you to come for a
late night movie with them.
 You know that your parents will never
appreciate your staying away from
house at late nights
 You don’t even want to miss the movie
as well as the company of your friends.

Cont. …
Life situation 2
 Tom went to a nearby mall and after a
day of extensive shopping came across
a CD player which he instantly liked.
 The cost of the CD player was around
$30, but unfortunately he was not left
with much cash.
 There was no way he could leave the
CD player as it was an exclusive model
and Tom was eyeing the product for
quite some time.

Cont. …
The answer to all the above questions lies in a simple word
“Negotiation”

Why We Negotiate?
 You negotiate to achieve whatever you want without the fear
of conflicts or misunderstandings.

What Is Negotiation?
 Negotiation is a technique of discussing issues and reaching
to a conclusion benefiting all parties involved in the
discussion.

Cont. …
 Negotiation is one of the most
effective ways to avoid conflicts and
tensions.

Cont. …
 When individuals do not agree
with each other, they sit
together, discuss issues on an
open forum, negotiate with each
other and come to an alternative
which satisfies all.

Cont. …
Back to the previously mentioned two real life situations once
again.

Cont. …
Life situation 1
 Your goal is to go for a movie
 You may sit with your parents and try to negotiate, probably
you may offer spending the coming weekend with them if
they allowed you today for the movie.
 Also you may negotiate with your friends so that they agree
for a noon show.

Cont. …
Life situation 2
 Tom could not afford to lose the CD player as it was an
exclusive one.
 He may negotiate with the store owner to lower the price so
that it suits his pocket and even the store owner earns his
profit as well.

Cont. …
Business situation
 Negotiation is essential in
corporate as well as personal
lives.
 Your boss asks you to submit a
report within two working days
and you know that the report
is a little critical one and needs
more time.
 Will you say a yes to your boss
just to please him?

Cont. …
 Your yes might make the boss
happy then but later you will land
yourself in big trouble if you fail to
submit it within the desired time
frame.
 It’s always better to negotiate with
your boss rather than accepting
something which you know is
difficult.
 Ask for some more time from your
boss or probably don’t make an
exhaustive report.

Substance Behavior Process Negotiation
Elements of Negotiation

Cont. …
Process
 It is the way individuals negotiate with each other.
 The process includes the various techniques and strategies
employed to negotiate and reach to a solution.

Cont. …
Behavior
 It describes how the two parties behave with each other
during the process of negotiation.
 The way they interact with each other, the way they
communicate with each other to make their points clear all
come under behavior.

Cont. …
Substance
 There has to be an agenda on which individuals negotiate.
 In the first situation, going for the late night movie was the
agenda on which you wanted to negotiate with your parents
as well as your friends.

Models of Negotiation
 Negotiation is a discussion
among individuals to reach to
a conclusion acceptable to all.

Cont. …
 It is a process where people
rather than fighting among
themselves, they;
1. Sit together
2. Evaluate the pros and cons.
3. Come out with an alternative
which would be a WIN-WIN
situation for all.

Win-Win Model of Negotiation
Win-Win Model
 In this model;
– Every individual involved in negotiation wins, and nobody is at loss.
– Every one is benefited out of the negotiation.
 This is the most accepted model of negotiation.

Cont. …
Example;
 Daniel wanted to buy a laptop, but it was an expensive model.
 He went to the outlet and negotiated with the shopkeeper to
lower the price.
 Initially, the shopkeeper was reluctant, but after several
rounds of discussions and persuasion, he quoted a price best
suited to him as well as Daniel.
 Daniel was extremely satisfied as he could now purchase the
laptop without burning a hole in his pocket.
 The negotiation also benefited the store owner as he could
earn his profits and also gained a loyal customer who would
come again in future.

Win-Lose Model of Negotiation
Win Lose Model
 In this model;
– One party wins and the other party loses.

Cont. …
Example;
 In the previous example, suppose Daniel could not even
afford the price quoted by the storeowner and asked him to
lower the price.
 If the store owner further lowered the price, he would not be
able to earn his profits, but Daniel would be very happy.
 Thus after the negotiation, Daniel would be satisfied but the
shopkeeper wouldn’t.
 In a WIN-LOSE model, both the two parties are not satisfied,
only one of the two walks away with the benefit.

Lose-Lose
Model Of Negotiation

Lose-Lose Model of Negotiation
Lose-Lose Model
 In this model;
– The outcome of negotiation is zero.
– No party is benefited out of this model.
– The two parties are not willing to accept each other’s views and are
reluctant to compromise.
– No discussions help.

Cont. …
Example;
 In the previous example, after several rounds of negotiation,
Daniel didn’t purchase the.
 Neither Daniel or the store owner would have got anything
out of the deal.
 Daniel would return empty handed and the store owner
would obviously not earn anything.

Business Situation
 Let us understand the above three models with an example
from the corporate world.
 Mike got selected with a multinational firm of repute.
 He was called to negotiate his salary with Sara, the HR Head
of the organization.

Cont. …
Case 1
 Sara quoted a salary to Mike, but Mike was not too pleased
with the figure.
 He insisted Sara to raise his salary to the best extent possible.
 After discussions Sara came out with a figure acceptable to
Mike and she immediately released his offer letter.
 Mike got his dream job and Sara could manage to offer Mike a
salary well within the company’s budgets.
 A WIN-WIN Situation (Both the parties gained)

Cont. …
Case 2
 Sara with her excellent negotiation skills managed to convince
Mike at a little lower salary than he quoted.
 Mike also wanted to grab the opportunity as it was his dream
job and he was eyeing it for quite some time now.
 He had to accept the offer at a little lower salary than
expected.
 Thus in this negotiation, Mike was not completely satisfied
but Sara was.
 A WIN-LOSE negotiation

Cont. …
Case 3
 Mike declined the offer as the salary quoted by Sara did not
meet his expectations.
 Sara tried her level best to negotiate with Mike, but of no use.
 No body neither Mike nor Sara gained anything out of this
negotiation.
 A LOSE-LOSE model of negotiation.

RADPAC Model of Negotiation
RADPAC Model of Negotiation
 RADPAC Model of Negotiation is a widely used model of
negotiation in corporate.
 Every alphabet in this model signifies something:
1. R – Rapport
2. A – Analysis
3. D – Debate
4. P – Propose
5. A – Agreement
6. C - Close

Cont. …
R - Rapport:
 It signifies the relation
between parties involved in
negotiation.
 Parties involved in negotiation
ideally should be comfortable
with each other and share a
good rapport with each other.

Cont. …
A - Analysis:
 It is important that the individual
understand each other’s needs
and interest.
 The shopkeeper must understand
the customer’s needs and pocket,
in the same way the customer
mustn’t ignore the shopkeeper’s
profits as well.
 People must listen to each other
attentively.

Cont. …
D - Debate:
 This round includes discussing
issues among the parties
involved in negotiation.
 The pros and cons of an idea are
evaluated in this round.
 People debate with each other
and each every one tries to
convince the other.
 You must not lose his temper in
this round, remain calm and
composed.

Cont. …
P - Propose:
 Each individual proposes his best
idea in this round.
 Each one tries his level best to
come up with the best possible
idea and reach to a conclusion
acceptable by all.
P - A - Agreement:
 Individuals come to a conclusion at
this stage and agree to the best
possible alternative.

Cont. …
C - Close:
 The negotiation is complete
and individuals return back
satisfied.

Example
 Let us again consider Mike and Sara’s example to understand
RADPAC Model;
R - Rapport between Mike and Sara.
 They must be comfortable with each other and should not
start the negotiation right away.
 They must first break the ice.
 The discussions must start with a warm smile and greetings.

Cont. …
A – Analysis
 Both Mike and Sara would try their level best to understand
each other’s needs.
 Mike’s need is to grab the opportunity.
 Sara wants to hire an employee for the organization.

Cont. …
D – Debate
 The various rounds of discussions between Mike and Sara,
both would debate with each other trying to get what they
want.
P – Propose
 Mike would propose the best possible salary he can work on
while Sara would also discuss the maximum salary her
company can offer.

Cont. …
A – Agreement
 Both Mike and Sara would agree to each other, where both of
them would compromise to their best possible extent.
 C – Close
 The negotiation is complete and probably the next course of
action is decided, like in this case the next step would be
generation of the offer letter and its acceptance.

Essentials of
Win-Win Negotiation?

1- Proper Preparation – Have
Knowledge

1- Proper Preparation – Have Knowledge
 Before starting with the negotiation, you have to be very clear
with the agenda (topic) of the negotiation.
 Ask yourself;
– Why this negotiation?
– What is the objective of the negotiation?
– What information may I need in this negotiation?

Cont. …
Knowledge is power
 You should be well prepared before going for a negotiation.
 You have to collect as much information as possible.
 The other party might ask/tell you anything and you should be
ready with your facts, you better go through as many details
as you can.
 Don’t go blank; the other party might fool you.

Cont. …
Tips;
 If you intend buying a pen, try to check out prices of the
leading brands as well, and compare their features.
 It is always better to check a few shops before finalizing the
product.
 Never be in a rush.

Cont. …
Example 1;
 Let us suppose you want to buy a Parker pen for your friend’s
birthday.
 Before purchasing, it is always better if you check out the
prices of other brands as well for instance Mont Blanc.
 Also check out its features; it will help you in better
negotiation with the store owner.

Cont. …
Example 2;
 Janet wanted to purchase a new laptop.
 She checked out the prices of almost all the leading brands
along with their features before going to the outlet.
 She went well prepared and thus managed to crack the best
deal and took the best quality laptop with the maximum
possible discount.

Cont. …
 For business deals, check out all the relevant documents so
that you don’t miss out anything.
 Do carry all the necessary documents along with you at the
time of negotiation, you might need them.

2- Set Specific Expectations
 The purpose of the negotiation must be clear.
 Why do you want to come out of the negotiation?

Cont. …
Don’t;
 Quote anything just for the sake of it, be reasonable.
 Quote imaginary or unusually high figures.
 Ask for anything you yourself know is not possible, it will just
be wastage of time and no one would benefit out of it.
 Be in a confused state of mind.

Cont. …
 Be focused and don’t change your mind quite often. If you
expect a particular salary, it’s better to stick to it.
 If you have the caliber and talent, you will definitely get what
you want but it is important to have realistic expectations.

3- Set an Alternate Plan
 Don’t rely on a single plan. It might not work out sometimes.
 You should always have some other options to offer to the
other party else you might end up sitting blank at the time of
discussion.

Cont. …
Example;
 If you want to purchase a laptop and you have decided to ask
for a discount but you realize that the shopkeeper is a little
reluctant to offer the discount, don’t start fighting with him.
 Don’t be adamant.
 You can always ask for a laptop bag or probably some
accessories. Learn to be a little tactful and intelligent

4- Be Honest
 Lies and manipulations never help.
 Honesty always pays in the long run.
 Don’t hide anything from the other party.
 If you hide the terms and conditions, the deal might turn in
your favor but you might land yourself in trouble later.
 If you are honest with the second party, you will be at peace
and there is no need to worry at all.

5- Be Very Confident
 You needs to be confident enough for an effective
negotiation.
 You might need something but never show your desperation
to anyone.
– They will take undue advantage of your helplessness.
 Take care of your facial expressions.
 Never be nervous in front of the second party.
 Don’t start sweating.

Cont. …
 A business deal might be very crucial for your promotion but
the second party must not come to know about this,
otherwise he will try to act pricy.
 Show a positive attitude and do flaunt your smile more often.

Cont. …
Example;
 Greg was offered a job with a leading advertising agency.
 He was really very happy as he was jobless for quite some
time now.
 The HR quoted a figure to Greg, which did not impress him
much.
 Greg tried his level best to negotiate with the HR, but
unfortunately the HR had already found that Greg was in dire
need of the job. He refused to negotiate further.
 Poor Greg, he had no option than to accept it.

Cont. …
Where did Greg go wrong?
 The only mistake he did was he made it very obvious that
there was no way he could afford to miss this opportunity.

6- Understand the Second Party
Well

6- Understand the Second Party Well
 Try to find out more about his needs and interests of the
other party you will negotiate with, and put them in
consideration.
 Do not decide on something which would not be feasible for
the other party.
 You should try to come to a conclusion that makes both
parties happy.

7- Be a Good Communicator
 Don’t play with words; make sure you carefully chose relevant
words.
 Avoid using foul words against anyone; it goes a long way in
spoiling the ambience. There are other ways by which you can
show your displeasure.
 Avoid being rude to anyone.
 Take care of your tone and pitch as well. It should not be too
high and must be audible to all.
 Don’t stammer in between.

Cont. …
Be a Good Listener
 Don’t jump to conclusions; instead listen to what the other
party offers.
 Understand the other party situation very well.
 It’s okay to think about your personal interests but don’t be
mad for it.
 If the deal is not benefiting the other party, he will obviously
not accept it.
 If you don’t listen to others, they would obviously not respond
to you.

8- Take Care of Your Dressing
 You must be well dressed for a negotiation.
 Don’t adopt a casual approach as the other person will never
take you seriously.
 Prefer wearing formals to create the desired first impression
on others.

9- Learn to Compromise
 You have to know when to compromise, as it is important to
reach to a conclusion.
 Remember you can’t get everything.
 If everyone is rigid on his views, no conclusion would ever
come out.
 For a WIN-WIN negotiation, it is better if individuals try to
adjust with each other and decide on something best suited
to all.

10- Have a Positive Attitude
 Adopting a negative attitude will lead to negativity all around.
 Don’t pretend, just be yourself and things will definitely fall
into place.

11- React Sensibly
 You should never lose your temper or over react.
 If you are unhappy with the deal, show your displeasure.
– Don’t keep things to yourself or assume that the others will
understand it on their own.
– Voice your opinions.
– Make the other person realize that you are not satisfied with the deal
and it must be revised.
– Show your unhappiness to others.

12- Be Patient
 You needs to be patient enough for a good negotiation.
 It is not always that the other person will accept your
suggestions in the first attempt itself.
 You need to convince him, and it needs patience.
 Never be in a hurry to close the deal.

13- Be Dignified
 You should maintain the decorum of the place and should not
stoop to any level for getting the best deal.
 Present your ideas in a dignified way.
 Remember it is just a discussion, not a battle field.
 Avoid shouting or using derogatory statements against
anyone.
 If you are not satisfied with the deal, its better to quit rather
than fighting and using abusive languages.

14- Get Ready to Finish
 Once you are done with the negotiation, do sign contracts and
agreements in the presence of both the parties.
 Make sure that all the necessary terms and conditions are
mentioned clearly in the contract.

Negotiation Challenges
 There are few challenges to negotiation and one must try his
level best to overcome them, let us review them in detail:

1- Not Ready to
Understand the Other Party

1- Not Ready to Understand the Other
Party
 This is the biggest challenge to negotiation.
 There are individuals who only think about their interests and
tend to ignore interests and needs of the other.

Cont. …
Example;
 Jim wanted to buy a shirt for himself. He was only concerned
with his pocket and never bothered about the store owner.
 He quoted an unusually low price and the store owner
refused to sell the shirt.
 The outcome was a big zero.
 Nobody could get what they wanted.

Cont. …
 Jim failed to understand the fact that the store owner is not
sitting for charity.
– He also has a family to look after and thus even his profits are
important.
– Why would he sell something at a less rate which would not earn him
his profits?
 Try to find out the expectations of the other party as well.

Cont. …
For business negotiation;
 You will definitely be appreciated if you save your
organization’s money but remember the other party is also
doing business.
 Quote something which will save your company’s money as
well as earn some profits for the other party as well.

2- Lack of Time
 One should never be in a hurry.
 You need time to convince others.
 Never be in a rush to purchase things or close a deal.
 Analyze things carefully and then only come to conclusions.

3- Going Unprepared
For A Negotiation

3- Going Unprepared For a Negotiation
 Going unprepared for a negotiation is unacceptable.
 Don’t underestimate the second party.
 You should do your home work carefully.
 Check out even the smallest details before going for a
negotiation.
 Don’t think that the other person is not as smart as you,
remember he will try his level best to convince you.
 You need to have valid answers for his questions.

4- Lack of Patience
 Lack of patience leads to a bad negotiation.
 Every individual has the right to express his views and one
should not interfere in other’s speech.
 You might not agree to him but at least listen.
 Explain to the second party and make him realize how the
deal would benefit you as well as him.
 If possible take a note pad and a pen with you to explain
things in a better way.
 Carry all the necessary documents which you might require at
the time of negotiation.

5- Criticism, Sarcasm & Derogatory
Remarks

5- Criticism, Sarcasm & Derogatory
Remarks
 They are the biggest threats to an effective negotiation.
 Never ever say anything which might hurt others.
 Remember everyone is here to do business and make profits,
so be logical and justified.
 Don’t get too involved and over emotional.
 One should be a little diplomatic and intelligent for an
effective negotiation.

6- Avoid Last Minute Changes
 Avoid last minute changes as it result in confusions and
misunderstandings.
 The two parties must be very clear on what they expect from
each other, and must stick to it.
 Don’t change statements every now and then.
 Once a conclusion is reached or a deal is cracked, it’s always
better to sign an agreement in presence of both the parties.

7- Being Too Rigid
 Be a little flexible.
 Compromise to your best extent possible and don’t crib
always.
 You should adopt a positive attitude and try your level best to
adjust with each other and find out a solution which will
satisfy all.

Cont. …
 Price is not the most important factor, other factors like
quality, brand name, durability must also be taken into
consideration.
 One CD player might cost you $5 but another might cost you
$4, a little cheaper than the first one, but it is quite possible
that the first one is far superior in quality than the second
one.
 Be a little sensible and understand things.

8- Lack of Confidence
 Make an eye contact with the person sitting on the other side
of the table.
 It’s important to be serious but that does not mean you will
not even greet the other person.
 Be straightforward and crisp in your communication.
 Take care of your dressing and appearance as well.

Negotiation skills

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