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Flashcards in Negotiation Deck (21)
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1

What is a negotiation?

Negotiation involves a trade of some sort, in order to result in mutual gain - each has something the other would like

Each party must feel they have reached an acceptable agreement

Process of deciding WHO captures WHAT share of the benefits of the deal

Aim of the negotiator is to capture the largest possible share for his or her constituency (e.g. organisation, project)

2

What might commercial negotiations involve?

deliverables

price

payment terms

timescales

intellectual property rights

after sales support etc.

3

What are some of the different strategies for negotiation?

Problem solving - both parties commit to examining and discussing issues when
entering into long-term agreements that warrant careful scrutiny

Contending - persuading your negotiating party to concede to your outcome if you're bargaining in one-off negotiations or over major 'wins'

Yielding - conceding a point that is not vital to you but is important to the other party; valuable in ongoing negotiations

Compromising - both parties forgoing their ideal outcomes, settling for an outcome that is
moderately satisfactory to each participant

Inaction - buying time to think about the proposal, gather more information or decide your next tactics

4

When focusing on a win-win outcome, what can the negotiation process offer?

separating the people from the problem

focusing on interests not positions

generating a variety of options before settling on an agreement

basing the agreement on objective criteria

5

What are the basic principles of negotiation?

Have the facts

Develop a common ground

Have a fair result in mind with an upper, lower, medium range

Take the views of the other party into consideration

Make a decision and be firm with it

6

Do you know of any theory on negotiation?

The Thomas and Kilman approach

7

What is the Thomas and Kilman approach?

To take a more 'people approach' to disputes, with 5 types of RESPONSES:

1. COMPETE whereby you pursue your own interests

2. ACCOMMODATE whereby you satisfy the other parties interests

3. AVOID whereby you try to avoid the conflict all together

4. COLLABORATE whereby you reach and agreement to satisfy both parties

5. COMPROMISE whereby you reach a mutually agreeable solution for both parties

8

What is a Win/Win outcome?

Where all parties view the outcome as beneficial

9

What is a Win/Lose outcome?

Where one party perceives the deal as inequitable (unfair)

10

Why do Win/Lose outcomes eventually become Lose/Lose outcomes?

The unhappy party may back out

The other party may not deal with the ‘Winner’ again

The ‘Loser’ will seek ‘payback’ in the future

If the ‘Loser’ cannot meet their obligations because of cash flow problems or go out of business the ‘Winner’ has won nothing

11

How would you conduct a negotiation?

Preparation = KEY; I will always review my arguments, produce and provide back-up information for each point. This allows me to negotiate my points confidently. This allows me to know my bottom line

Rehearse my opening – ask the opening question to control negotiation

Convey confident, congruent communication – match body language and terms used, maintain eye contact

Manage expectations – Trade at low value, do not give a concession without trading it with
reluctance

Be respectful but persistent – Assess offers on the spot and be courteous

Questioning – Ask open and closed questions to exert control

12

What are the SIX stages of negotiation?

1. Planning

2. Build relationship

3. Exchange information

4. Develop solutions and bargain

5. Concessions and agreement

6. Documenting the agreement

13

What should you consider when PLANNING for the negotiation?

Organise logistics – when, where and who will be attending

Set negotiation objectives with relevant stakeholders

Identify the elements to be negotiated

Prepare negotiation strategy

Understand balance of power and BATNA (Best Alternative to a Negotiated Agreement)

14

What should you consider when BUILDING the RELATIONSHIP during the negotiation?

Establish rapport and move past ‘conversational wallpaper’

Gradually move towards the subject of the negotiation

Understand any cultures, behavioural ‘norms’ or social rituals beforehand

It is better to decline to give particular information, rather than lie

15

What should you consider when EXCHANGING INFORMATION during the negotiation?

Each side states their situation and interests. Ask open questions – What? Why? Where? When? How? Who?

Aim = try find out as much about the other side’s situation as possible, listen actively and
pay attention to verbal and non-verbal (body language) cues

Acknowledge the other sides’ perspectives – some interests will be shared and some will
conflict

16

What should you consider when DEVELOPING SOLUTIONS & BARGAINING during the negotiation?

Parties start to generate and test possible solutions, and bargaining process begins

Where an idea cannot be adopted, aim to offer an alternative in a positive way

If conflicts arise, the wise negotiator remains calm and, does not ‘cave in’ or respond in a
confrontational way

17

What should you consider when developing CONCESSIONS & AGREEMENT during the negotiation?

Concessions should always be traded, and never given away with nothing in return

Neither party will get exactly what they want, therefore realism rather than perfection is needed to secure a final agreement

Once agreement reached, emphasis on mutually beneficial aspects of the deal will end
negotiation on a positive note

18

What should you consider when DOCUMENTING THE AGREEMENT during the negotiation?

Verbal summaries and note-taking during negotiation are important to keep track of
progress and check understanding

At the end of negotiation; one side documents the agreement e.g. a ‘subject to contract’
memorandum, to ensure both sides have a mutual understanding of what has been agreed

Then followed by a draft contract - eventually becomes the final, signed, legal agreement

19

What is the purpose of maintaining good records during negotiation?

To ensure that if a disagreement arises between two parties, evidence for your side of the argument can be provided

20

What is an example of a negotiation in your workplace?

You ask an agent to quote their fees and TOBs for selling a property

Agent submits TOBs and commission charged at 1.75% + VAT

Therefore, you initially believe this is quite high

You then consult the market and get three different rates, but you know you normally achieve 1.25% with your agents

Then negotiate with the agent the best position being 1.25% and the most reasonable being 1.5% and hopefully you can come to a mutual position

21

What Stages of a construction project might involve negotiations?

o Tendering and procurement
o Agreeing Variations
o Agreeing Final Accounts
o Extensions Of Time
o Payment Terms
o Loss and Expense
o Basically anything that will make an adjustment to the contract sum