Negotiating Effectively Madhu Raman Acharya March 2019 Nepal
- Slides: 60
Negotiating Effectively Madhu Raman Acharya March 2019 Nepal Administrative Staff College
Framework of discussion • • • Concepts Types Process Styles Negotiation techniques Elements and variables Hidden agenda Challenges constraints Strategy for effective negotiation
Example- small role play • • Parties: You and your spouse Subject: Family saving of Rs. 150, 000 Positions: Buy an ornament or a smart phone Arguments on either side Interests versus position (hidden agenda) Options Reaching agreement
Important things to consider in negotiation Not just across the table Before, during and after talks In everyday life and work Formal as well as informal Negotiating environment
What is negotiation? Two or more parties Conflicting Interests and Positions Back and forth communication Seeking to resolve a problem through dialogue, reasoning, compromise Willingness to arrive at a mutually acceptable solution Give and Take
What is negotiation? • Various definitions • Common definition “Give and take process between two or more parties (each with its own aims, needs, and viewpoints) seeking to discover a common ground and reach an agreement to settle a matter of mutual concern or resolve a conflict”
Negotiating Environment • • • Increasingly complex environment Requirement of “trouble-shooter” role Conflicting interests of peers, supervisor and juniors Stakeholder and beneficiary pressure Increasing availability of facts and figures Media chase Political influence /politicization Involvement in diplomatic negotiations Pressure to deliver outputs Changing styles and tools of negotiation
Negotiation Theory • Structural analysis – Analysis of power differential / use of soft and hard power • Strategic Analysis – Cooperation versus defection /Prisoner's Dilemma • Procedural analysis: – Outcome depends upon process/ Bargaining • Behavioural analysis: – Behaviour (rational and irrational) and personality traits affect the outcome of negotiations – Rational Choice Theory • Outcome analysis: – Game Theory/ Mathematical Models – Win-lose models
Win-lose Models (outcomes) Party A Party B Outcome Win Lose Win-lose Lose Win Lose-win Lose-lose Win Win-win
What is win-win? • All creative options for maximizing gains for both exhausted • Negotiation is not a zero-sum game- (one party wins without other getting nothing) • Win-win is a myth- not possible in all situations • Your aim in every negotiation is to gain 100% that is available on the table: that is to win • Winning without other side feeling to be loosing (managing your counterpart's satisfaction, not letting them win)- e. g. buyer's bargain (satisfied if price is lower than expectation)Maximizing your gains without compromising their gains • Make compromises: if only if you have no other options left, or if relation with the other side is more important than winning
Trust (relationship between parties) Power (asymmetry, persuasive power and knowledge is power of the weaker) Variables of Negotiation Information Time (who possesses, can be manipulated) (Deadlines, favourable moment to act, buying time)
Trust • Good relations between parties often results in better negotiation outcome • Negotiation cannot beceome successful in absence of trust and confidence between parties • Good faith is an important element: You negotiate in good faith so that what you agree will be implemented • What is permissible to maximize your interests/ Ends justify means • Possible to use powers at your had: sam, danda, bheda etc.
Power • Bigger power has advantage, but does not always win • Information/ knowledge is power • Soft power important (power of pursuation, dioplomacy) • Art of negotiation is a soft power
Sources of power in negotiations • • • Authority, rule, law Information Rewards Sanctions Good solution / win-win options Personal charisma Commitment Relationship Alternate
Information • • Who possesses Information is source of power Information can be manipulated Evidence/ supporting data/ documents
Time • Favourable moment (to start negotiation, to make a proposal or to concede to a proposal) • Deadlines • Procastrination (buying time) • Postponement
Process Tactics Behaviour Elements of Negotiation Substance Strategy Style
Negotiation Process RADPAC Model Rapport: get to know each other Analysis: know each other’s intentions, interests and positions, and bottom lines Debate: discussion about perceptions, interests, needs and positions to convince the other side Propose: best possible solution acceptable to both sides based on the interests of either side Agreement: best alternate acceptable to both sides, (formal, informal, oral or written) Close: after both sides having agreed to a solution
Negotiation Steps Agenda setting Negotiating Teams Formal Talks Agreement
Negotiation process: important points • • • Sequencing (low hanging fruits first) Confidence building Exploring options Finding common grounds Short-term or long-term gains
Negotiation Styles “Style” is as important as “substance” Accommodating- seeks to accommodate the interests of the other side Avoiding- seeks to avoid outcomes, common in bureaucracy Collaborating- tries to find synergy among interests Competing- views negotiators as competitors Compromising- concedes easily (Each style can be used depending upon circumstances) (A combination of these styles can be applied)
Negotiation styles
Negotiating Behaviour • Rational versus Irrational (e. g. negotiating with a child stealing money) • Adversarial versus friendly (aggressive body language etc. ) • Competition versus cooperation • Attacking-evading-informing- open behaviour- uniting • Avoiding tension versus taking up the challenge • Fast solution versus procrastination • Passive versus active • Hard and soft • Rigid versus flexible
Negotiation ethics • What is permissible to maximize your interests • Ends justify means • Good faith: an important element: you negotiate in good faith so that what you agree will be implemented in good faith • It is possible to use powers at your hand: sam, danda, bheda etc. • Working according to desh kala, paristhiti
Negotiation Techniques • • Ask smart questions Play fair Develop trust, relationship Create creative options and offers Develop bottom line and fallback positions Take third party assistance Try informal negotiations Apply criteria and principles
Negotiation strategy • Clear goals and objectives • Develop bottom lines and options • Rank your priorities (if negotiating for multiple issues) • Quid pro quo and reciprocity –(jacket for jacket) • Step by step, one by one • Know what you can trade-off or give in exchange of something you want • Know when to leave the table
Breaking a negotiation deadlock • • • Informal consultations/ side talks Change the date and venue Change negotiators/ team leaders Change sequence of agenda Use third party role/ mediation
Negotiation Types ◦ Bureaucratic / Diplomatic ◦ Bilateral/ Multilateral ◦ Persuasive versus Coercive ◦ Distributive versus Integrative ◦ Positional Bargaining- parties stick to their positions and bargain as much as they can Hard - participants as adversaries- goal to achieve victory, makes threats Soft - participants as friends, open to making concessions and compromises ◦ Principled Negotiation- Harvard Negotiation Project
Difference between diplomatic and regular negotiations • Core elements of negotiations are same • State parties/ governments involved • More cultural/linguistic differences/ interpretations/ higher risk of misunderstanding • More political in diplomatic negotiations • Need to deal with laws, polices, and authorities in more than one country • Diverse trade-offs/links to unrelated issues
Difference between bilateral and multilateral negotiations • Complexity- variety of interests at stake in multilateral negotiations • Linguistic and cultural diversity • Slow decision-making / difficulty to reach agreement • Decisions usually taken by consensus/ “critical mass” required to arrive at decisions • Involves coalition building • More informal negotiation on the sidelines • Presence of large number delegates
Break! Q&A
Negotiation Types Distributive Integrative Hostile Respectful Hard bargaining Soft bargain Sacrifices relationship Builds long-term relationship Persons Problems Avoids principles Uses principles Conceals interests Describes interests Mislead Truthful Aim to win Aim to solve problem Maintains position Seeks accommodation Divides the cake Expands the cake
Principled Negotiation “Getting to Yes”- Fisher and Ury (1991) –Negotiators as problem solvers –Separate people from the problem –Hard on substance, soft on people – Focuses on interests, not positions (interest-based negotiation) –Invents multiple options for mutual gains – Insists on objective criteria and principles
Best Alternate to a Negotiated Agreement (BATNA) • • Walk away point Find your best alternative (e. g. cheaper car) BATNA increases negotiating power Reduces chances of over compromise Saves you from unwanted agreement Know other side’s BATNA Important in power-based negotiations
Zone of Possible Agreement (ZOPA) Positional Bargaining 500 600 750 900 1000 Reservation Point
Negotiation Skills – Knowing negotiations (what, how, barriers, elements, process, styles, principles etc. ) – Communication skills (articulating, listening, informal communication and messaging, putting your points) – Analytical skills/ problem-solving skills – Interpersonal skills (understanding people, personal rapport - know the interests , reduce stress) – Diplomatic skills (persuasion, winning by influence)
Negotiation Skills • Problem analyzing and solving skills • Team building skills (often held in teams) • Skills to understand your weaknesses and strengths and that of your counterpart • Cross-cultural skills • Skills to leave the negotiation • Skills to implement the outcomes • Situational negotiation skills
Situational Negotiation Skills Take it or leave it situation: Insist on your position (take risks) Stop asking favours Insist on principle or objective criteria When other side does not want negotiation Agree to disagree Third party involvement When other side uses dirty tricks Attack tricks, not persons, insist on fair play Principle of reciprocity (sometimes acceptable) When other side is powerful and does not yield Develop alternate to negotiated solution (BATNA)
Negotiation Tactics • • • Methods to achieve advantage over counterparts Finns out the hidden interest and agenda, uncover Can be deceptive as well as manipulative Consider relationship Good cop, bad cop Use plural (we) as if developing options together Ultimatums, deadlines Control logistics (drafting etc. ) Document all agreements Hard on substance soft on people Control your emotions, use them when necessary Nothing is agreed until everything is agreed
Hidden Agenda in Negotiation • What is the most important information that is hidden from you at a shop? • The Shadow Negotiations (2000)- originally how women could master the hidden agenda • Unspoken attitudes • Hidden assumptions • Good faith versus bad faith • Ask questions/ informal consultations • Know their interests • Understand non-verbal communication
Cross cultural negotiation skills ◦ Avoiding stereotypes (soft, arrogant, informal etc. ) ◦ Understand language differences/ interpretation ◦ “Yes” for “No” ◦ Use non-verbal communications / Body language / Eye contacts ◦ Exchange of gifts (courtesy versus bribe) ◦ Direct vs. Indirect communication (e. g. Outliers) - get the message across
Cross-cultural negotiation skills – Friendship –weakness or strength – Sharp time-orientation in some cultures – Seniority and Gender – High risk taking, low risk taking behaviour – Individualism versus collectivism
Qualities of a good negotiator • Knows what is negotiable and what is not • Capacity to put logical argument • Tact of avoiding conflict/ agrees to disagree • Highlights common values/ common ground • Gives people credit for their ides • Steers conversation away from emotional topics • Makes efforts to understand other's viewpoint • Breaks official talks for informal consultation • Knows when to walk out (BATNA)
Barriers to Successful Negotiation ◦ Structural constraints / mutually exclusive claims ◦ Lack of trust ◦ Information gaps ◦ Communication / getting the message across ◦ Spoilers (within and outside) ◦ Cultural and gender differences ◦ Power differentials, asymmetry ◦ Principal-agent dilemma (mandate etc. )
Common Mistakes • • • Negotiating without a goal/strategy Not listening No best alternate Using emotions/impatience Talking too much Too much indirect communication
Agreement Skills – – – Formal and informal (Gentleman’s Agreement) Art of putting down what is agreed in writing Drafting / Who brings the draft out is important Paragraphing (preamble and operative ) Bracketing / Referring to higher levels Definition of terms Provisions for dispute resolution Interpretation and explanation Mutually binding mechanism for implementation Implementation : schedule and accountability Provisions for ratification, extension, amendment and expiry
Dialogue Skills • Listening (active and passive) • Respecting others (“I resepct your opinion, but I have a slightly different view on this”) • Asking questions • Suspending judgement and assumptions • Understanding their interests (why they are saying something) • Putting the message across • Advocacy (building your case) • Reflecting
Facilitation and Mediation Skills • • • Avail physical space/ logistics for dialogue Presence as a referee/ understand your limits Fix rules of engagement/ ground rules Encourage trust between parties Encourage openness and honesty Encourage participatns to listen to each other Icebreaking/ release tension - humour etc. Help break deadlock Provide secretariat support for agreement drafting Guaranteeing the outcome Facilitating the implementation Managing difficult situation
Some points to consider in multilateral negotiations • Importance of informal negotiations/ consultations • Corridors/ sidelines meetings /coffee breaks /social events, • Art of coalition-building, negotiation between groups (regional, thematic, economic etc) • Decision-making requires “critical mass” • Complex rules of procedure • Lowest common denominator • “Low hanging fruit” first
Some points to consider in multilateral negotiations • • • Annotations- most crucial facts inserted already Secretariat and support staff- influence from behind Role of influential powers/ groups/ chairperson Multi-stakeholder negotiations/ INGOs/Track II etc. Role of non-papers etc. "Constructive ambiguity" common practice Disagreement obscured using vague language “Nothing is agreed until everything is agreed" “outcome is reached when everybody is equally unhappy“
Nepal's negotiation problems ◦ Neglected aspect in bureaucracy ◦ Focus on power, authority, status, position, not expertise and skills ◦ Poor negotiating strategy/ Weak strategic guidance to negotiators ◦ Mandate deficiency/ little flexibility to negotiators ◦ Lack of strong political support/ politicization of administrative issues ◦ Inadequate homework, teamwork and preparations
Negotiation problems… ◦ Lack of institutional memory/ files/ staff continuity ◦ Absence of recorded experience of past negotiations ◦ Rarely backed up with required resources ◦ Poor coordination among various agencies ◦ Weak communication and articulation skills ◦ Too much secrecy / or too much media ◦ “kich” on small details and missing important issues
Negotiation problems… Inadequate specialization Influence of extraneous issues in negotiations National interest / interest of the government (subject to interpretation) Lack of technical expertise/ inadequate specialization Non-implementation of agreed outcomes Inability to adjust during implementation Insufficient dispute solving mechanisms
Nepal's negotiation problems – Asymmetry in power and expertise (negotiating out of fear) - e. g. . with India – Absence of note taking (e. g. one-to-one meetings) – Weak language/ articulation/ communication and professional skills – Weak drafting/legal skills – Non-implementation – Poor follow up and monitoring
Investing in Negotiation skills • Investing in three sets of skills (diplomatic, legal, professional or subject matter expertise) • Enhancing communication skills/ better articulation • Language skills- Chinese, Arabic, others • Cross-cultural negotiation skills • Building upon experience- e. g. with India
Improving Negotiation Skills Give best negotiation skills Support with mandate and resources Improve internal consultation Avoid asymmetrical teams on grounds of seniority and expertise Focus on interests, options and mutual gains than on positions and bargaining Stop asking favours, focus on principles Know to walk away if that is in the best interest Implement all agreements reached during negotiations
Most importantly No theory or principle will work in actual situation You have to work out your own styles and solutions Don't negotiate with yourself Apply commonsense! Think out of box !
End of Presentation Q&A Thank You ! _________
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