THE NATURE OF NEGOTIATION

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

“The process whereby two or more parties

decides what each will give and take in an
exchange between them.”
 NEGOTIATION APPROACHES
Distributive / Adversarial
 Win – Loose
 Hostile / Competitive
 Based on secrecy and self interest
 The objective is to increase advantages in price or
cost
 Low levels of trust
 Unhealthy extremes of aggressive cohersition
blocking and ultimatums
 A no deal impasse
 NEGOTIATION APPROACHES
Integrative /collaborative
 Win – Win
 Friendly – collaborative
 Based on openness and shared interest.
 The objective is to ascertain common goals
 High levels of trust
 We are in this together
 We will resolve our problems and work for our
shared interests
 NEGOTIATING BEHAVIOUR
 Proposing behaviour (I think we should)

 Reasoned negative behaviour (This wont work because)

 Seeking Information behaviour (Asking for information)

 Giving information behaviour (Response is possible / likely)

 Development behaviour (Building on supporting ideas)

 Clarifying behaviour (This is what we agreed)

 Emotional negative behaviour (Defence against attack)

 TIME
 Have patience
 If there are benefits to resolving the negotiation
quickly, sell the other party on the value a quick
settlement will have for him
 Realise deadlines can be moved, changed or
eliminated
 Try to find out the other party’s deadline
 Take your time
 NEGOTIATION GOALS

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

 Relationship goals .
 Outcomes that relate to how well people involved in the
negotiations and any constituencies they represent are
able to work with one another once the process is
concluded.
THE NEGOTIATION PROCESS
 Prenegotiation

 The actual negotiation

 Post negotiation
 PRENEGOTIATION
Who is to negotiate?
 Individual approach
 Team approach
 Spokesperson, recorder, experts.

The venue
 Buyers should expect vendor [Lyson]
 Home ground
 Easy access to files
 Expert advice facilitated
 PRENEGOTIATION
Intelligence gathering
 ascertaining respective strengths & weaknesses.
 Relative data assembly (cost, sales, production etc)
 preparing presentable data (charts, graphs etc)

Negotiation objectives
 Specific
 Clarification

Strategy and tactics

 Overall plan
 Right attitude
 THE ACTUAL NEGOTIATOIN
Stages & Techniques
 Stage one:
 Introduction
 Agreement of agenda
 Rules and procedures

 Stage two:
 Negotiation range
(adversarial/collaborative)

 Stage three:
 Agreement of common goals.
 THE ACTUAL NEGOTIATOIN
Stages & Techniques
 Stage four:
 Problem identification
• Solutions being put forward
 Removal of barriers
• Determination for concessions
 Reviewing and reconsideration
 Deadlock

 Stage five:
Same as first part of ‘post negotiation’
 POST NEGOTIATION
Statement of agreement

 signed and commented

Selling to constituents of both parties
Implementation of agreement

Procedures established
 To monitor the implementation
 to deal with arising problems

Negotiation Post-mortems
 Satisfaction extent and improvement opportunities
 Cost reduction possibilities
 Usefulness of efficient methods
ETHICS IN NEGOTIATION
 “these replies are typical, the meaning of ethics
is hard to pin down and the views many people
have about ethics are shaky how can you equate
ethics with your feelings, being ethical is clearly
not a matter of following ones own feelings and
in fact feelings frequently deviate from what is
ethical”.
Professor Raymond
Harvard Business School
What is Ethics?
 Is the branch of
Philosophy that defines
what is good for the
individual and for society
and establishes the nature
of obligations or duties
that people owe
themselves and one
another.
Aristotle
 Why Ethics in Negotiations?
its all about …
 Trust
 Relationship
 Fair
 Honest and Openness
 Reflection
Unethical Issues In Negotiations
Includes…….
 Lying
 Bribes
 Kickbacks
 Corruption
 Threats
 HOW TO IMPLEMENT
ETHICS

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

Jane Gibbs
Chartered Institute of Purchasing and Supply
ARE THEY…….
QUESTIONS
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