THE NATURE OF NEGOTIATIONTHE NATURE OF NEGOTIATION

Rubin.J.Z. & Brown B.R (1975)Rubin.J.Z. & Brown B.R (1975)

““The process whereby two or more parties The process whereby two or more parties

decides what each will give and take in an decides what each will give and take in an

exchange between themexchange between them.”.”

Distributive / AdversarialDistributive / Adversarial Win – LooseWin – Loose Hostile / CompetitiveHostile / Competitive Based on secrecy and self interestBased on secrecy and self interest The objective is to increase advantages in price or The objective is to increase advantages in price or

costcost Low levels of trust Low levels of trust Unhealthy extremes of aggressive cohersition Unhealthy extremes of aggressive cohersition

blocking and ultimatumsblocking and ultimatums A no deal impasseA no deal impasse

NEGOTIATION APPROACHESNEGOTIATION APPROACHES

NEGOTIATION APPROACHESNEGOTIATION APPROACHES

Integrative /collaborativeIntegrative /collaborative Win – WinWin – Win Friendly – collaborativeFriendly – collaborative Based on openness and shared interest.Based on openness and shared interest. The objective is to ascertain common goalsThe objective is to ascertain common goals High levels of trustHigh levels of trust We are in this together We are in this together We will resolve our problems and work for our We will resolve our problems and work for our

shared interestsshared interests

NEGOTIATING BEHAVIOURNEGOTIATING BEHAVIOUR

Proposing behaviour (I think we should)Proposing behaviour (I think we should)

Reasoned negative behaviour (This wont work because)Reasoned negative behaviour (This wont work because)

Seeking Information behaviour (Asking for information)Seeking Information behaviour (Asking for information)

Giving information behaviour (Response is possible / likely)Giving information behaviour (Response is possible / likely)

Development behaviour (Building on supporting ideas)Development behaviour (Building on supporting ideas)

Clarifying behaviour (This is what we agreed)Clarifying behaviour (This is what we agreed)

Emotional negative behaviour (Defence against attack)Emotional negative behaviour (Defence against attack)

TIMETIME Have patience Have patience If there are benefits to resolving the negotiation If there are benefits to resolving the negotiation

quickly, sell the other party on the value a quick quickly, sell the other party on the value a quick settlement will have for him settlement will have for him

Realise deadlines can be moved, changed or Realise deadlines can be moved, changed or eliminated eliminated

Try to find out the other party’s deadlineTry to find out the other party’s deadline Take your time Take your time

NEGOTIATION GOALSNEGOTIATION GOALS

Substance goals.Substance goals. Outcomes that relate to content issues.Outcomes that relate to content issues.

Relationship goals .Relationship goals . Outcomes that relate to how well people involved in the Outcomes that relate to how well people involved in the

negotiations and any constituencies they represent are negotiations and any constituencies they represent are able to work with one another once the process is able to work with one another once the process is concluded.concluded.

THE NEGOTIATION PROCESS

PrenegotiationPrenegotiation

The actual negotiationThe actual negotiation

Post negotiationPost negotiation

PRENEGOTIATIONWho is to negotiate?Who is to negotiate? Individual approachIndividual approach Team approachTeam approach Spokesperson, recorder, expertsSpokesperson, recorder, experts. .

The venueThe venue Buyers should expect vendor [Lyson]Buyers should expect vendor [Lyson] Home groundHome ground Easy access to filesEasy access to files Expert advice facilitatedExpert advice facilitated

PRENEGOTIATIONIntelligence gatheringIntelligence gathering ascertaining respective strengths & weaknesses.ascertaining respective strengths & weaknesses. Relative data assembly (cost, sales, production etc)Relative data assembly (cost, sales, production etc) preparing presentable data (charts, graphs etc) preparing presentable data (charts, graphs etc)

Negotiation objectivesNegotiation objectives Specific Specific ClarificationClarification

Strategy and tacticsStrategy and tactics Overall planOverall plan Right attitudeRight attitude

THE ACTUAL NEGOTIATOINTHE ACTUAL NEGOTIATOIN Stages & TechniquesStages & Techniques

Stage one:Stage one: IntroductionIntroduction Agreement of agendaAgreement of agenda Rules and proceduresRules and procedures

Stage two:Stage two: Negotiation rangeNegotiation range

(adversarial/collaborative)(adversarial/collaborative)

Stage three:Stage three: Agreement of common goals.Agreement of common goals.

THE ACTUAL NEGOTIATOINTHE ACTUAL NEGOTIATOIN Stages & TechniquesStages & Techniques

Stage four:Stage four: Problem identificationProblem identification• Solutions being put forwardSolutions being put forward Removal of barriersRemoval of barriers• Determination for concessionsDetermination for concessions Reviewing and reconsiderationReviewing and reconsideration

DeadlockDeadlock

Stage five:Stage five:Same as first part of ‘post negotiation’Same as first part of ‘post negotiation’

POST NEGOTIATIONStatement of agreementStatement of agreement signed and commentedsigned and commented

Selling to constituents of both partiesSelling to constituents of both parties

Implementation of agreement Implementation of agreement

Procedures establishedProcedures established To monitor the implementationTo monitor the implementation to deal with arising problemsto deal with arising problems

Negotiation Post-mortemsNegotiation Post-mortems Satisfaction extent and improvement opportunitiesSatisfaction extent and improvement opportunities Cost reduction possibilitiesCost reduction possibilities Usefulness of efficient methodsUsefulness of efficient methods

ETHICS IN NEGOTIATIONETHICS IN NEGOTIATION

“ “these replies are typical, the meaning of these replies are typical, the meaning of ethics is hard to pin down and the views ethics is hard to pin down and the views many people have about ethics are shaky many people have about ethics are shaky how can you equate ethics with your how can you equate ethics with your feelings, being ethical is clearly not a feelings, being ethical is clearly not a matter of following ones own feelings and matter of following ones own feelings and in fact feelings frequently deviate from in fact feelings frequently deviate from what is ethical”. what is ethical”.

Professor Raymond Harvard Business

School

What is Ethics?What is Ethics? Is the branch of Is the branch of

Philosophy that defines Philosophy that defines what is good for the what is good for the individual and for society individual and for society and establishes the nature and establishes the nature of obligations or duties of obligations or duties that people owe that people owe themselves and one themselves and one another. another.

AristotleAristotle

Why Ethics in Negotiations?Why Ethics in Negotiations? its all about …

TrustTrust

RelationshipRelationship

FairFair

Honest and OpennessHonest and Openness

ReflectionReflection

Unethical Issues In NegotiationsUnethical Issues In NegotiationsIncludes…….Includes…….

LyingLying BribesBribes KickbacksKickbacks CorruptionCorruption ThreatsThreats

HOW TO IMPLEMENT HOW TO IMPLEMENT

ETHICSETHICS

Ethical CodesEthical Codes

““The very exercise of developing a code is in The very exercise of developing a code is in itself worthwhile; it forces a large number of itself worthwhile; it forces a large number of people...to think through in a fresh way about people...to think through in a fresh way about their mission and the important obligations their mission and the important obligations they as a group and as individuals have with they as a group and as individuals have with respect to society as a whole.”respect to society as a whole.”

Jane GibbsJane Gibbs

Chartered Institute of Purchasing and SupplyChartered Institute of Purchasing and Supply

ARE THEYARE THEY…….…….

QUESTIONSQUESTIONS

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