COMMERCIAL CONTRACT

NEGOTIATION SKILLS

S.C.KULSHRESHTHA
Head Corporate Training & Consultancy IMS, oida

NEGOTIATION SKILLS

What is Negotiation? Negotiation is a decision-making or problem-solving process involving two or more parties who are in a state of conflict with opposing interests, In simple terms, negotiation is a method of working out a compromise or agreement in which the parties to the negotiation try to achieve their mutual goals in a realistic and practical manner through a process of give and take and using effective communication. Negotiation is the process of achieving goals through an agreement, in situations where there exist mutual or complementary interests as well as antagonist and conflicting interests and ideas. ike it or not, everybody is a negotiator. We use negotiation techni!ues almost everyday. We negotiated when we were kids trading sports cards or toys. "nd we still do it, today, when we negotiate with the boss for a raise, or to buy bigger toys like autos and the latest gimmicks. It doesn#t stop there either, because we also use negotiation in our personal lives. We all have some combination of family, friends, spouse, or children. "t some level, we negotiate with them all the time without even knowing we#re doing so. We negotiate at home in doing up the chores or trying to get our moody teenagers to clean up their room. $eople unconsciously know more about negotiations than they#d ever care to admit. %teven $.&ohen in his book 'Negotiating skills for (anagers) has explained in the following way* 'When people want to do something together + buy or sell an item, make a business deal, decide where to go for dinner + they need to use some sort of mechanism for reaching an agreement. ,nless they agree instantly on every element of the choices to be made, they need to use a mutually acceptable processes, although people also use such terms as making a deal, trading, bargaining, dickering, or -in the case of price negotiation. haggling. " successful negotiation has taken place when the parties end up mutually committed to fulfilling the agreement they have reached. /airness is a crucial element to make a negotiation process succeed. %ome people negotiate as if their most significant ob0ective is to take advantage of other parties, this is self-defeating. If any party feels unfairly treated, he or she may walk away from the negotiation with a negative feeling and a disinclination to live up to the agreement.)

!rocess o"

egotiation#

$re-Negotiation %tage &onceptuali1ation %etting the norms 2iscussion "greement Implementation and its follow up. exchange of value and

3roadly speaking, a negotiation is an consideration among two or more parties.

Negotiation occurs when two or more parties who wish to maintain a long term relationship, are interacting to reach agreement, to which despite some divergent4conflicting interests each party will be committed enough to implement faithfully. $asic conditions "or &. egotiations#%

In'ol'e(ent o" t)o or (ore !arties# 5here are minimum of two parties involved in the negotiation process. 5here exists some common interests, either in the sub0ect matter of the negotiation or in the negotiating context that puts or keeps the parties in contact. Initial di""erences & +indrances a(ongst ,ot+ parties# 5hough the parties have the same degree of interest, they initially start with different opinions and ob0ectives which hinder the outcome in general. .ait+ o" ,ot+ t+e parties in negotiations# In the beginning, parties consider that negotiation is a better way of trying to solve their differences. Mutual trust and persuasing a(ongst ,ot+ t+e side * 6ach party is under an impression that there is a possibility of persuading the other party or modify their original position, as initially parties feel that they shall maintain their opening position and persuade the other to change. Retaining +ope "or ac+ie'ing "inal agree(ent# 2uring the process, the ideal outcome proves unattainable but parties retain their hope of an acceptable final agreement.. Eac+ party capa,le o" in"luencing ot+er# 6ach party has some influence or power, real or assumed, over the other#s ability to act. A process o" interaction# 5he process of negotiation is that of interaction between people which is usually direct and verbal interchange.

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egotiation S3ills 3e willing to negotiate 2on#t get emotionally involved 2on#t get suckered by rules4trick Never be a first person to name a figure et the other party believe that the final decision does not rest with you. %olicit others perspective 2on#t argue &onsider 5imings isten before you speak %mile when you say it %eparate the individual for problem 7emember your 3"5N" 2raft the settlement yourself. Ho) to get 45es6 in egotiation

"void &onflict 3e good listener earn to talk and understand the customer#s language 2evelop empathy ,nderstand your limitation 8eep margin of safety 8now your customer egotiation

7i""erent Steps in

&reating the climate 2eveloping of %trategies 5he 9pening $rocess 3uilding ,nderstanding 3argaining4raising &ounter demands &losing Implementation

!ersonality .actor E8tra'ersion + being sociable, assertive, talkative Agreea,leness + being flexible, cooperative, trusting Conscientiousness+being responsible, organi1ed, achievementoriented E(otional Sta,ility + being secure, confident, not anxious 9penness + being imaginative, broad-minded, curious.

$EST Alternate to a

egotiated Agree(ent :$AT A;

"spiration $oint - maximum one can achieve. 7eservation $oint + (inimum one can go down. 3"5N" is the best alternative to a negotiated agreement. It is your preferred course of action in the absence of a deal. 8nowing your 3"5N" means knowing what you will do or what will happen if you fail to reach agreement. 2on#t enter a negotiation without knowing your 3"5N". If your 3"5N" is weak, do what you can to improve it. "nything that strengthens your 3"5N" improve your negotiating position. Identify the other side#s 3"5N". If it is strong, think of what you can do to weaken it. egotiation ,y To((y Ko+l

Eig+t Lessons on :. ;. <. =. >. ?. @. B.

5reat every negotiation as special and different 3uild a cohesive and happy team. (aster your brief. 8now when and how to use "dvisors 3uild a common basis of facts 6xercise 6motional Intelligence &ultivate &ultural Intelligence -&A. 5hink win-win