NEGOTIATION STRATEGIES

Prepared By: BURCU MEK ELF AKKURT SMEYRA KARATA TRKAN COKUN F. BETL EKREM

 NEGOTIATION GOALS PROCESS OF STRATEGY DETERMINATION

BURCU MEK

NEGOTIATION STRATEGIES
Strategy is the overall approach for
conducting the negotiation. Tactics are particular actions used to implement a strategy.

NEGOTIATION STRATEGIES
Whereas a strategy provides the overall
approach used throughout the negotiation, a tactic is particular action used at a specific time during the negotiation to serve a more limited role or purpose.

NEGOTIATION GOALS
Negotiation goals encompass a wide
range of both tangible and intangible desires. Categories of goals which in turn affect the negotiators choice of strategy and tactics.

Categories of Negotiation Goals

Aggressive goals Competitive goals Cooperative goals Self-centered goals Defensive goals Combinations of goals
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AGGRESSIVE GOALS
Seeks to undermine, deprive, damage
or otherwise injure a rival or opponent. Example: Taking a customer or supplier away from a competitor in order to hurt the competitor.

AGGRESSIVE GOALS
Aggressive goals seek to damage an
opponent.

COMPETITIVE GOALS
One side seeks to gain more from the negotiation
than the other side. In fact the negotiator hopes to obtain as large a comparative advantage as possible. Example:
Receiving the highest possible price. Paying the lowest possible price.

COMPETITIVE GOALS
A competitive goal means getting more
than the other party.

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COOPERATIVE GOALS
Cooperative goals are achieved through an
agreement that leads to mutual gain for all negotiators and their respective sides. This achievement is also referred to as win-win negotiating. Example: Forming a joint venture, partnership, or corporation to engage in business opportunities to achieve a mutual profit.

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COOPERATIVE GOALS
With cooperative goals, agreement leads
to mutual gain.

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SELF-CENTERED GOALS
Self-centered goals are those that depend
solely on what ones own side achieves.
Scenario: two large accounting firms merge. The
tremendous size of the new firm raises a self centered goal to find sufficient prestigious space in a single location. The goal is reached when the new firm negotiates a lease for 15 floors in a major midtown New York office building.

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SELF-CENTERED GOALS
Self-centered goals seek a particular result
regardless of what the other side receives.

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DEFENSIVE GOALS
One seeks to avoid a particular outcome. Examples: Avoiding a loss of respect. Preventing a strike. Avoiding the loss of a customer or
supplier.

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DEFENSIVE GOALS
Defensive goals seek to avoid a particular
result.

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COMBINATION OF NEGOTIATION GOALS

Each negotiation usually has multiple goals.
Case: In a collective bargaining negotiation, a transportation firm seeks to have its employees make prompt deliveries in order to maintain its business volume. This is a self-centered goal . A defensive goal is suggested if the maintenance of volume is intended to avoid a loss of customers. The goal is also aggressive to the extent that the same activity lures new customers away from competitors, a result which is likely to weaken the latter.
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PROCESS OF STRATEGY DETERMINATION

Strategies are chosen for
use in a particular negotiation in order to achieve your sides goals. The nature of those goals will affect the choice of strategy or strategies. A variety of factors determine the best strategy for a negotiating situation.

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PROCESS OF STRATEGY DETERMINATION

The choice of strategy also may be affected by the answers to a number of questions, such as: Does the negotiation involve a transaction or a dispute? Is there more than one issue involved? Can new issues be introduced into the negotiation? Are the parties interests short-term or long-term? Are the parties relationships long-term, limited to one negotiation or some where in between?
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MAIN NEGOTIATION STRATEGIES AVOIDANCE STRATEGY COMPETITIVE STRATEGY COLLABORATIVE STRATEGY ACCOMMODATIVE STRATEGY

ELF AKKURT

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MAIN NEGOTIATION STRATEGIES

THE DUAL CONCERNS MODEL How much concern does the actor have for achieving the substantive outcomes at stake in this negotiation? (substantive goals) How much concern does the negotiator have for the current and future quality of the relationship with the other party? (relationship goals)
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1. A VOIDANCE STRATEGY
Reasons of why negotiators might choose not to negotiate: 1. If one is able to meet ones needs without negotiating at all, it may make sense to use an avoidance strategy.

(The Nonengagement Strategy)

2. It simply may not be worth the time and effort to negotiate.

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Avoidance Strategy
3. The decision to negotiate is closely related
to the desirability of available alternatives. Alternatives are the outcomes that can be achieved if negotiations dont work out

4. Avoidance may be appropriate when the negotiator is responsible for developing others into becoming better negotiators.
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Active-Engagement Strategies

Competition Collaboration Accommodation

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2. C OMPETITIVE STRATEGY
Distributive Bargaining Win-Lose Bargaining (I win, you lose)
Zero-sum game : whatever extent one party wins something, the other party losses

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Competitive Strategy
Distributive Bargaining refers to the process of dividing or distributing scarce resources

Two parties have different but

interdependent goals There is a clear conflict of interests

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Distributive Bargaining
The essence of Distributive Bargaining is who gets what share of fixed pie.

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Examples of Distributive Bargaining

A wage negotiation A price negotiation A boundary or territorial negotiation

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Staking Out the Bargaining Zone

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3. COLLABORATIVE STRATEGY

Integrative Bargaining Win-Win Bargaining (I win, you win)

Positive-sum situations are those where each party gains without a corresponding loss for the other party.

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Integrative Bargaining
The law of win/win says Lets not do it your way or my way; lets do it the best way
Greg Anderson
The 22 Non-negotiable Ways of Wellness

Integrative Bargaining is about searching for common solutions to problems that are not exclusively of interest to only one of the negotiators.
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Concepts for Integrative Bargaining

Separate people from the problem Focus on interests, not positions Invent options for mutual gains Insist on using objective criteria

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Distributive versus Integrative Bargaining

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4. A CCOMMODATIVE STRATEGY
Win-lose strategy (I lose, you win) The negotiator wants to let the other win,
keep the other happy, or not to endanger the relationship by pushing hard to achieve some goal on the substantive issues

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Accommodative Strategy
Accommodative Strategy is often used; When the primary goal of the exchange is to build or strengthen the relationship and the negotiator is willing to sacrifice the outcome. If the negotiator expects the relationship to extend past a single negotiation episode.
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 In a successful negotiation, everyone wins. The

objective should be agreement, not victory."

The key to successful negotiation is to shift the

situation to a "win-win" even if it looks like a "win-lose" situation. Almost all negotiations have at least some elements of win-win. Successful negotiations often depend on finding the win-win aspects in any situation. Only shift to a win-lose mode if all else fails.
Professor E. Wertheim, College of Business Administration, Northeastern University
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NEGOTIATION STRATEGIES
1. 2. 3. 4. 5. 6. 7. 8. 9.
No-Concessions No Further Concessions Making Only Deadlock-Breaking Concessions High Realistic Expectations With Systematic Concessions Concede First Problem Solving Goals Other Than To Reach Agreement Moving For Closure Combining Strategies
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 NO-CONCESSIONS NO FURTHER CONCESSIONS MAKING ONLY DEADLOCK-BREAKING

CONCESSIONS

SMEYRA KARATA
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1. NO-CONCESSIONS
A N o- C oncessions S trategy is tough and
dangerous, since concessions usually are expected.

With a no-concessions strategy, the

negotiation becomes a unilateral process.

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NO-CONCESSIONS
A no-concessions strategy is suitable
for aggressive, competitive and self-centered goals. A no-concessions strategy is not suitable for cooperative and defensive goals.

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WHEN TO USE NO-CONCESSIONS

When the balance of power is strongly in
your favor. When you are in a disproportionately weak position. When the dollar amount is too low or time is too short. 1) Cost Efficiency 2) Available Time

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WHEN TO USE NO-CONCESSIONS

When the same terms must be available to

everyone. When bids or written proposals are sought When another party is waiting in the wings.

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DRAWBACKS OF THE NO-CONCESSIONS STRATEGY

Might preclude an
agreement the terms of which, although less favorable, are still acceptable. A strategy shift away from no concessions might be read as a failed attempt at bluffing, a position to be avoided.
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DRAWBACKS OF THE NO-CONCESSIONS STRATEGY

Avoid inadvertent bluffs by rashly
miscalculating the use of this strategy. It may also be helpful to accompany the demand with reasons why your side is notin a position to offer anything else, and to explain how the demand is fair.

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COUNTERING TIPS FOR THE NO-CONCESSIONS STRATEGY

1. Appeal to a higher level of authority in an attempt 2. 3. 4. 5. 6.

to change the partys position. Ignore it and proceed as if concessions are possible. Present cost saving or win-win measures that justfy a concession. As a seller, offer less (such as fewer services), thereby effectively increasing the price. As a buyer, demand more, thereby, in effect, reducing the price. Terminate the negotiating session.
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2. NO FURTHER CONCESSIONS
A N o- F urther- C oncessions S trategy is possible when the other party can be forced to make the final concession, or when the situation has changed.

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NO FURTHER CONCESSIONS
The no-further-concessions strategy is
implemented after some concessions have been made. The countermeasures to this strategy are the same as those for its parent, the noconcessions strategy.

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3. MAKING ONLY DEADLOCKBREAKING CONCESSIONS

A strategy of M aking O nly D eadlockB reaking C oncessions is okay when the risk of no agreement is acceptable. A deadlock is an impasse or standstill, a state of inaction resulting from the opposition of equally powerful uncompromising parties.
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MAKING ONLY DEADLOCKBREAKING CONCESSIONS

The strategy of making a concession only

to break deadlock is the next toughest strategy after the no-concession strategy. This strategy generates an atmosphere of tension and difficulty . Because of this one should be very careful to use this strategy.
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MAKING ONLY DEADLOCKBREAKING CONCESSIONS

A making only deadlock-breaking concessions strategy is viable for aggressive, competitive and self-centered goals. A making only deadlock-breaking concessions strategy is inappropriate for cooperative and defensive goals.

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 HIGH REALISTIC EXPECTATIONS WITH

SMALL SYSTEMATIC CONCESSIONS CONCEDE FIRST PROBLEM SOLVING

TRKAN COKUN

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4. HIGH REALISTIC EXPECTATIONS WITH SMALL SYSTEMATIC CONCESSIONS (HRESSC)

It is the strategy of combining high,

realistic expectations with small, systematic concessions It entails a planned approach both to the objectives of the negotiation and to the compromises that may be employed to reach those objectives Strategy which achieves the best results 56

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HRESSC (cont.)
It has three components: The size of the concessions The use of apparent concessions which actually involve no cost to the negotiators side The advance planning of concessions

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Small concessions depends on:

- the value of that which is being negotiated while the negotiation begins - the value which is put during the negotiation Small concessions after big concessions Advance planning helps to maximize ones results and minimize the pressure to merely respond to the other negotiators actions
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5. CONCEDE F I RST
It is used to reduce tension, create an
atmosphere conducive to reaching an agreement and allow one to demand a reciprocal concession We made an important concession at the outset of this meeting and you still have not given us anything significant in return Difficult and sometimes impossible to withdraw a concession

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CONCEDE F I RST (CONT.)

It is suitable to apply this strategy when the
position of negotiator is too weak It can be used in rare circumstances when any real negotiation may lead the other party to discover information that will harm the negotiators client It is used to achieve competitive, self-centered, or defensive goals, depending on the specific context of negotiation
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6. PROBLEM SOLV I NG
It is a strategy for creating a procedural
agreement to solve a common problem that has been identified It is the most useful strategy after HRESSC It is different from other concessionbased strategies which center on giving up or refusing something of value

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PROBLEM SOLV I NG (CONT.)

It focuses on creating a procedural agreement
that the negotiators will work together to discover and identify problems that are preventing agreement and to determine whether any common interests can be used to resolve those problems It is described in game theory as a win-win strategy

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The Four-Step Problem-Solving Process

1) A procedural agreement to use problem 2) 3) 4)
solving Identification of the problem preventing agreement Determination of any common interests and limiting seperate needs Discussion to discover fair, mutually beneficial solutions
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Laying the Essential Foundations for the ProblemSolving Strategy

There must be an agreement by the parties and
negotiators to work together to identify the problems preventing agreement, and to formulate a mutually advantageous solution To ensure good faith, the parties must have a mutual interest in solving the particular problems in the same way The negotiators must identify the same problems and agree on how to define them Parties and negotiators must realize that a win-win solution is possible and that problems will not be solved by one side yielding to other. Instead the participants will strive to create a previously unconsidered, mutually beneficial solution
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Important Points in Problem-Solving Strategy

Achieving a clear distinction between
objectives and needs Maintaining attitudes of empathy and cooperativeness The related roles of creativity and patience in problem solving

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Keeping the focus on mutual interests

Outside forces to avoid:
o Government action o A jury or a judge deciding the facts at trial so that one side wins totally while the other side loses totally o A competitor gaining an advantage o The expiration of a financing commitment

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Broadening the pie and trading

concessions across issues
It may be useful to consider the distribution of resources in terms of: What will be distributed When it will be distributed By whom it will be distributed How it will be distributed How much will be distributed
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Brainstorming
Brainstorming for problem solving is a process which requires that the participants: Speak spontaneously or think out loud (as long it is relevant and constructive) Retrain from evaluating or criticizing the statements of others until after all initial ideas are elicited Be willing to repeat ones ideas if others want to hear them again Persist in the effort even if there is a prolonged silence
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 GOALS OTHER THAN TO REACH

AGREEMENT MOVING FOR CLOSURE COMBINING STRATEGIES

F. BETL EKREM
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7. GOALS OTHER THAN TO REACH AGREEMENT

Real purpose of a negotiation is to
reach an agreement But in this strategy it is NOT Be careful-An exercise in gamesmanship With cooperative goals

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USAGE OF GOALS OTHER THAN TO REACH AGREEMENT STRATEGY

1. A strategy to delay
For eg: a negotiation team is sure that unionll strike in all conditions. But the team believe that theyll soften and a delayll harm seasonal tasks.

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Usage of Goals Other Than to Reach Agreement Strategy

2. To gather information 3. Negotiating as a forum for expressing views

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Usage of Goals Other Than to Reach Agreement Strategy

4 . Negotiating to influence a third party Public Management of the entity ! Influence of 3rd parties on negotiation is very important
Powerful people or groups, family members, etc

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8. MOVING FOR CLOSURE

To finalize a particular issue or the overall negotiation rather than risk losing the available terms.

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MOVING FOR CLOSURE

A difficult dilemma between Risk of losing an agreement The opportunity of doing better and balancing by evaluating those: * Value * Potential * Risk * Odds
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MOVING FOR CLOSURE

! In negotiations the most important risk
is losing an available deal that your clients may accept ! To avoid this, the ultimate decision should be made by decision maker

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TECHNIQUES FOR MOVING THE OTHER SIDE TOWARD CLOSURE

A proposal should be close to other

partys bottom-line Other party should believe
No further concession is possible Failing to accept may result in no agreement Closure is more advantageous
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TIPS FOR MOVING FOR CLOSURE STRATEGY

Expressing understanding that agreement
exists Concession-based inducement to close Minimizing the danger of cancellation between closure and execution Closing issues within a larger negotiation

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9. COMBINING STRATEGIES
Generally usage of a
single strategy isnt efficient For e.g.: first concession and moving for closure are efficient in specific parts of the negotiation

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WHY CHANGE STRATEGIES?

Tried and failed strategies may

be changed Changing strategies may be the main strategy

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CATEGORIES OF STRATEGY CHANGES

Sequential changes Issue-oriented changes

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E.G. FOR ISSUE-ORIENTED CHANGES

A purchaser has a competitive goal of getting lowest price for machinery,and a self-centered goal of good service production For 1st one, HRESSC and for 2nd one problem solving strategies are chosen.
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A TIP FOR STRATEGY CHANGES

What is important is: If the negotiator doesnt do the change secretly, this change should be clearly defined not to harm trustworthiness.

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 You cannot shake hands with a clenched fist.

Indira Gandhi

[ Clenched Fist - Woodblock by Frank Cieciorka, 1965 ]

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THANKS FOR YOUR ATTENTION

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