Negotiation Structure

Different Stages of Negotiation The Negotiation Process Power Dynamics Dynamics of Agency-Constituency Relationship Negotiations for resolving Impasses and Disputes

The Basic Principles

Negotiation is a voluntary activity Desire to change status quo with a belief that an agreement is possible Acceptance by both parties that an agreement is required and that the outcome can be implemented The time element is important in negotiations Successful outcome is what both parties desire Progress is impacted by values, skills, perceptions and attitudes of both parties

Managing the Negotiation Process(in the different stages, resolving dispute)

Negotiations should not involve use of heavy tactics in order to have effective long term agreements Success in negotiation involves determination of the best means of persuasion and the ability to utilise them at the appropriate time Appropriate planning for the different phases of negotiation is required, the need to recognise the stage of the negotiating process Negotiations should be avoided if there is lack of required authority, lack of time or required experience to prepare effectively, unreasonable demands

Managing the Negotiation Process

It is not desirable to have a preset mindset while entering negotiations Knowledge of the final negotiating authority and effective utilisation of power is essential Clarity of the goals of negotiation and not a general outcome is required It is important not to lose control of factors which appear unimportant but impact outcome Matters at time appear to be deadlocked but there are solutions which can still be achieved on perseverance

Managing the Negotiation Process

Preparation involves identifying the issues and also the range of objectives for each issue An appropriate strategy and style has to be developed Each party has to initially make a presentation of their demands etc An understanding has to be build up in which each party justifies its position and also weigh the positions of other party / parties The Bargaining round is where each party tries to get concessions The close of negotiations is either with agreement being reached or a termination short of agreement

Managing the Negotiation Process

Preparation for negotiation also involves ensuring clarity of the objectives, and assessing the other partys case Attention has to be also paid to the assessment of relative strengths and weaknesses In setting objectives it is important to establish the following: The best outcome, the lowest acceptable outcome and a realistic target that could be an outcome

BATNA
BATNA best alternative to no agreement should be defined so as to ensure realistic target objectives In defining BATNA, issues like the point where negotiations can be stopped and the situation thereafter, the position of the other party should be examined Clarity on goals and firmness in the negotiation is required BATNA and bargaining objectives should not be altered unless underlying assumption changes

BATNA
The goals and interests of the other party should be understood and the point at which they will end negotiations The relationship and previous history are also important factors The competitors who would benefit if negotiations are unsuccessful The advantages that we have on the competitors and they have over us The affect of the competitors on our goals and tactics in the negotiation

Negotiating Styles
Controlling: Quick, decisive action is required and the issue is important We are sure of our position, advantage of cooperative behaviour would be taken Collaborating: Issues are important and cannot be compromised Different points of view have to be integrated and commitment to make solution work is required An important relationship has to be build up and maintained

Negotiating Styles
Avoiding: Issues are unimportant, there are minimal chances of achieving objectives Negotiation can lead to aggravation which would outweigh any possible benefit Time is required to collect the required information Accommodating: A reasonable appearance seems advantageous and credits can be build up for the future, it is apparent that we are not factually correct Compromising: When the outcome is the only alternative to no solution, the relationship is important, temporary solutions to complex matters is required

Negotiators Checklist IBN

( IBN International Business Negotiations) The location of the negotiation and the possible time schedule together with duration The time frame in which the negotiating team should reach the location and ensuring schedules are made available to the other party The locations where the various rounds of negotiation would take place The language of negotiation and appointment of interpreters The language of the contract and briefing of interpreters on certain essential points

Negotiators Checklist - IBN

The composition of the negotiating team, identifying the spokesperson Confirmation of the negotiating teams ability and experience with regard to the subject matter The specific authority of the team should be clearly defined with regard to the objectives of the negotiation Specific responsibilities have to be allocated to each member of the team and the strategy for the negotiations has to be finalised

Negotiators Checklist - IBN

Clarity has to be there as to whether negotiations are being held with the organisation that can deliver Also are negotiations being held with the correct department and people Also if any other party or Government representative is required to be present at the negotiations The standing of the other party and its reliability should also be examined

Negotiators Checklist - IBN

The compilation of required information about the other company, country before negotiations takes place Information about the members of the other team is also required Necessity of hiring local consultants and experts should also be examined and their requirement for attending the negotiations Necessary documents and information should be sent to the other party An agenda with specific items agreed to by the other party has to be put in place

Negotiators Checklist - IBN

The process of introduction of the teams has to be completed with clarity as to the specific roles of each team member Required time for introductions etc has to be provided so as to ease the process of negotiation It is important that both teams should have clarity as to their authority for taking decisions

Negotiators Checklist - IBN

Sufficient information has to be exchanged, climate of understanding can be build by careful listening and appropriately framed questions Knowledge of culture is important and its affect on the communication process, ideological factors are also important The principal issues have to be listed in order of importance and an appropriate strategy is required with respect to each issue The appropriate time for submitting the draft agreement as a basis for negotiation should be decided. Also the response if the other party puts out its draft agreement

Negotiators Checklist - IBN

Other commercial factors like foreign exchange risks, exchange controls, countertrades etc and their implications on the deal have to be clearly understood An adequate written record is required and also what communications have to be made with the other party after every negotiating cycle The required follow up must be defined and responsibilities fixed as to who will do the follow up Options for attaining goals and interests must be examined We must be sure that we understand the other partys goals and objectives and vice-versa An adequate dispute resolution process must be part of the negotiations outcome

Negotiators Checklist - IBN

Once the negotiations are completed, there has to be an assurance that the deal will last Future trends and events which may affect the agreement should be kept in view The agreements should be so structured so as to avoid future uncertainties The deal should be balanced and useful to both parties An appropriate strategy has to be put in place for effective implementation of the signed contract/ negotiation document

Power tools for global negotiations

Power is not inherently good or bad Care has to be ensured to use it properly in order to avoid loss of control or damage Power is the means by which a state, organisation or person attains a desired end in its relationship with its counterparts It is important in negotiations for attaining desired goals

Power tools for global negotiations

Power can be on account of physical or capital resources or even an original idea or a reputation for fair play Power has a perceptual dimension. Each party has its own set of lenses and at times they may reduce objectivity leading to miscalculation Classical example is of Khrushchev who viewed Kennedy as a weak inexperienced leader Russia had to back down in the Cuban missile crisis and remove missiles set up in Cuba

Power tools for global negotiations

Skilful use of negotiation tools can reduce power differences at the negotiating table An apparently less powerful party in international negotiations is not always in a disadvantageous position Negotiation is related to specific issues and interests and is not always impacted by each partys aggregate resources Canadas negotiation with USA in the Free Trade Agreement etc is one of such examples

In Conclusion
International negotiations should pay special attention to the following factors: Modern day business deals even after signing of contracts need continuous attention Negotiators have to master complete details with regard to countries, culture, people etc A global negotiator is a good listener and constantly processes information Agreements must be structured to protect against future uncertainties A continuous review of all matters related to negotiation activity is essential in the present global environment. Dialogue is a powerful mode of communication and effective in resolving disputes