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Negotiation Skills
Entrepreneurship – Group 3
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Presented By:

 Ahmad Azhari

 Anisa Setiatri

 Enrico Johannes

 Krisantya Indah
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What is Negotiation?

“A compromise to settle an argument or issue to benefit

ourselves as much as possible.”

“Activity to influence others to achieve personal

objectives.”
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Preparation for Negotiating

Before entering into any negotiation, we should consider

the following questions:

1. What is Your Objective?

 What should an agreement include?
 What must you have?
 What are your expectations of the other party?
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Preparation (cont.)

2. What Are Your Limits?

 What level of authority do you have/
 Will you need to get clearance prior to final agreement?
 What is nonnegotiable?

3. Whom Are You Negotiating With?

 What do you know about opponents?
 What might their requirements be?
 What can you find out about them?
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Preparation (Cont.)

4. Are You Dealing with the People Who Can “Sign Off” the
Deal?
 Will they have the authority to sign the contract?
 Will they need to get clearance from someone else before signing the
agreement?
 If so, how can you help them to recommend the deal?

5. What Would Be Unacceptable?

 At what point would you walk away from the deal?
 At what point would any short term benefits of the deal be outweighed by
the long term costs?
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Selecting a Strategy
High

Accomodating Collaborative
Lose to win Win-win

Importance of Compromise
Relationship Split the difference

Avoiding Competitive
Lose-lose Win all cost / Win-lose

Low High
Importance of Outcome
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1. Avoiding Strategy (Lose-Lose)

 Implement by: withdraw from active negotiation, avoid

negotiation entirely
 If negotiation can be costly (in time, money, relationship)
 The case not worth pursuing  low value outcome,
relationship not important enough to develop
 If strong alternative is available
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2. Accommodating (Lose to Win)

 Inthis situation, you “back-off” your concern for the

outcome to preserve the relationship. You intentionally
“lose” on the outcome, in order to “win” on the
relationship.
 When the relationship is more important than the outcome
of the negotiation (primary objective is the relationship)
 Usethe strategy to build/strengthen relationship, and to
obtain a better future outcome (long-term gain).
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3. Competitive (Win – Lose)

 The outcome (resource, gain, profit etc) is more important than the
relationship.
 The competitor will do anything to accomplish the objectives and obtain
as much of the pie as possible.
 Critical Factors:
a. Well-defined Bargaining Range  starting point, target, ending point
(walkaway)
b. A Good Alternative/BATNA (Best Alternative to Negotiated
Agreement)  backup option if negotiation fails
c. Tactics  bluffing, being aggressive, threatening
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4. Collaborative (Win-win)

 When both parties consider the relationship and the outcome to be equally
important. They look for common needs and goals and engage in mutually
supportive behavior to obtain them.
 Usually implemented within organization
 Must have high degree of trust, openness and cooperation
 Keys to successful Collaboration:
a. Understand other party’s needs and objectives
b. Free flow of information, both way
c. Finding the best solution to meet both needs
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5. Compromise (split the difference)

 Often seen as an acceptable “second choice”, compromise is usually

quick and efficient.
 Each side will have to modify its priorities for the relationship and for
the preferred outcome.
 When to compromise?
a. When a true collaborative (win-win) seems impossible
b. Short of time/ short of resources necessary to collaborate.
c. Both parties gain something (or don’t lose anything) on both
outcome and relationship.
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When to Choose Which Strategy?
Key factors to consider:
1) How important is the outcome to be gained from this negotiation?
2) How important is the past, present, and future relationship with the
opponent?

Analyze the: - Situation

- Personal preferences
- Your experience
- Style of both sides (you & opponent)
- Perceptions & Past experience
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Making Strategic Moves:

 Hold out incentives  opponent must recognize that you have something
value to them, and make the value visible.
 Step Up the Pressure  raise the costs of not dealing with you (issue a
credible threat, make opponent’s consequences tangible)
 Establish your Authority  ensure your credibility and your right to
speak
 Enlist Support  use allies as intermediaries, strategic partners, or source
of pressure to opponents
 Exert Control Over the Process  Anticipate reactions, plant the seeds
of your ideas, build support behind the scene
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Six Common Mistakes of Negotiation

1) Neglecting the Other Side’s Problem

2) Letting Price Bulldoze Other Interest
3) Letting Positions Drive Out Interest
4) Searching Too Hard for Common Ground
5) Neglecting BATNAs (Best Alternative to a Negotiated
Agreement)
6) Failing to understand both sides’ interest
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Non-Negotiable Items

 Standards

 Legal Requirements
 Health & Safety
 Overhead Costs
 Professional Codes of Conduct
 Market value & Market rate
 Ethics
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Thank You 