1 / 38

Strategic Issues in Negotiation D.C.Singhal IIFT 28.10.14

Strategic Issues in Negotiation D.C.Singhal IIFT 28.10.14. Strategic Issues in Negotiation Session Overview Information gathering and analysis Implication of “first offer” Power in negotiation Negotiation strategy and tactics Study of body language and psychology of negotiator

moorea
Download Presentation

Strategic Issues in Negotiation D.C.Singhal IIFT 28.10.14

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Strategic Issues in Negotiation D.C.Singhal IIFT 28.10.14

  2. Strategic Issues in Negotiation • Session Overview • Information gathering and analysis • Implication of “first offer” • Power in negotiation • Negotiation strategy and tactics • Study of body language and psychology of negotiator • Different styles of negotiation • Annexure 1 – Strategies to Drive-up Prices in M&A • Case 1 – The Tata-Corus Deal • Case 2 – The Arcelor-Mittal Deal • Annexure 2 – Strategies for Negotiating the NSG Waiver • for the Indo-US Nuclear Deal • Annexure 3 – Characteristics of the five Negotiating Styles

  3. “It’s not what we don’t know that gives us trouble; It’s what we know that ain’t so” – Will Rogers. 1. Information Gathering and Analysis ●The pre-negotiation work requires gathering of information and its analysis. ● The information to be gathered is not only about the subject matter of negotiation itself but also the opponent’s negotiating behaviour and his culture in case of cross cultural negotiation. ● Information collected must be evaluated as regards its correctness and usefulness. Sometimes the information is incomplete. As a result one is forced to reason by inference and assumption. Worse still, if the assumption is incorrect leading one to overestimate or underestimate negotiator’s leveraging power. ● Based on the information gathered, one can make a SWOT analysis not only of one’s own party but also that of the opposition. This helps to decide on the strategy to be adopted for the negotiation. ● It is said, “Information is Power”. It is also true in negotiation. Consider the following cases:

  4. Case 1. ● A plastic component supplier was negotiating an extension of his contract with a customer. The buyer was trying to bring down the price and complained to the seller that the breakage of his product was higher than anticipated, one shipment was two days late and the percentage of components with flaws was higher than envisaged. ●Some daysearlier, one of the sales support people had talked to the end user at this company. The end user had said a component breaks now and then, there have been some flaws, but it was nothing compared with what they got from the last supplier. The components broke all the time, the flaws were many and the deliveries were always late. ●This information was helpful to seller in negotiation and was a source of power to him. The buyer was doing his job. His complaints were legitimate. Voicing the complaints was a good way to bring down the prices. But the seller knew that the problems were nothing compared to those with the previous supplier and he negotiated with that in mind. ● An uninformed salesperson could have settled for a lower price and thus “left the money on the table”.

  5. Case 2. • “It is a great misfortune neither to have enough wit to talk well • nor enough judgment to be silent” – La Bruyere. • ● A large aerospace company was negotiating with the federal government • for a $ 500 million contract. • ● The buyer’s people were working to get the price down. The sales • persons hammered the point that the bid price was justified since part of • the project would be extremely difficult to carry out. • ● An engineer, included in the aerospace team for technical reasons, • suddenly commented: “Well it won’t be that difficult”. • ● After this, as expected, the price went down. • ● Whilst the aerospace negotiators did not want the buyers to know that the • phase of the project might not be that difficult, they lost control on the • flow of information and hence lost money. • ● The seller must keep a tight control of the flow of information to the buyer • about himself and his organization. The negotiation strategy must be agreed by the team before negotiation.

  6. Case 3 ● Unique Motors had won an order from Defence Department for supply of 10,000 electric motors over the next 12 months. ● Unique motors urgently needed wiring harnesses to meet the order. Their regular suppliers were backlogged. They located a small supplier, West Manufacturing, who happened to be operating at 40% capacity. Both companies did not know each other and their “neediness”. ● Since the deal had to be concluded quickly, West Manufacturing quoted a price significantly below the market price to get the order. Unique Motors accepted the quote and placed the order. ● Had West Manufacturing known the neediness of Unique Motors, they could have quoted much higher (at least the market price). ● Had Unique Motors known the low order position of West Manufacturing, they could have stillgot a lower price. ● Hence the lack of information worked to each party’s disadvantage.

  7. Information is extremely important in negotiation. The more you know about your product or service and your company, the more you know about your competition, and especially, the more you know about the buyer and his organization, the stronger will be your position. Some of the items (among others) the seller must find out about the buyer before negotiation include: ● What the buyer’s engineers feel about your product or service? ● How urgently the buyer needs your product? ● How important the product is to the buyer? Is it 20% or 80% of his requirement? ● How is the buyer’s purchase system? ● How much of a risk taker is the buyer? ● How is the competition? etc. etc.

  8. ● Such information may be had people working with the buyer and other • people having experience with the buyer. • ● Negotiators working on international negotiations need to find out items • such as: • The history of the country they are dealing with • The form of government of the country • The legal system • The customs in the country • The background of their counterparts. • ● This information can be partly had from published material but mainly • by contact with business people and others who have lived in the target • country.

  9. 2. Implications of “first offer” • ● Negotiation includes trading of concessions, narrowing of gaps and • reaching agreement. After the initial stage of introduction and stating of • issues by the parties, a party needs to make the “first offer” for the other • party to consider and offer a concession. This starts the bargaining • process. • ● The first offer by a party may be close to the final position that the party is • seeking or may be at extreme position away from the final position • sought. • ●Which opening position is more effective? Research shows that in certain • cases extreme position tends to produce better results for the party. • ● Some of the reasons for this are: • It shows the other party that the bargainer will not be exploited • It extends the negotiation and gives the bargainer a better opportunity • to gain information on the opponent • It allows more room for concessions • It modifies the opponent’s beliefs about bargainer’s preferences • It shows the opponent that the bargainer is willing to play the game • according to the usual norms • It lets the bargainer gain more than would probably be possible if less • extreme initial position had been taken.

  10. ● The use of extreme opening position i.e. very low by buyer or very • high by seller, is used as a strategy in certain cases which may lead to • a better final outcome for the party. The Chinese, Arab and Russian • negotiators use this tactic in contrast to the U.S. and Swedish • negotiators whose opening position is fairly close to the one they are • seeking. • ● Example: • For the 1984 Olympic Games in Los Angeles, USA, the Olympic Committee felt that the Japanese should pay $10 million for the rights to televise the games in the country. When the Japanese offered $6 million, the Olympic Committee countered with $90 million. Eventually, the two sides agreed on $18.5 million. By extreme position bargaining, the Olympic Committee got the Japanese to pay over three times their • original offer and about two times the committee’s initial expectation. • Note that in this case the seller has a monopoly.

  11. Making the First Offer • ● As far as possible, avoid making the first offer. Making the opposition make the first offer enables you to gaininformation. Further the opposition’s opening position may be better than anticipated. • ● However, if both sides avoid making the first offer, one of the sides must give in to break the deadlock. The side having the greater need will usually start even though reluctantly. • ● After various attempts to persuade the opposition to make the first offer, you may have to open. Going second is not as important as disrupting a negotiation. • ● Start with the best position you can support (not a ridiculous one). If you start at the target position you expect to achieve, you will have no room to negotiate since you can do no better than your opening position. • ● Hence a negotiating margin needs to be kept i.e. the seller can start at a higher price and the buyer can start at a lower price. The parties can then work towards a settlement. • ● If the opposition exaggerates his position to a ridiculous point, laughter is the best response. It is not necessary to counter similarly. You may ask the basis for support of such extreme position. If the opposition is serious, they will provide their reason or amend the offer.

  12. Power in Negotiation Toward a Strong Negotiating Position… SOURCES OF POWER IN NEGOTIATION 1. The Attitude: High Need = Low Power Low Need = High Power Hence do not show a high need (even if that be the case). 2. The Commitment: Higher Commitment = Higher Achievement. e.g. A plane hijacker willing to die for his demands. Hence he gets what he wants. 3. The Strategy: This is a “road map” before start of negotiation Better prepared strategy = More power 4. Legitimacy: Anything with validates the statement e.g. price list, policy, price tag etc. 5. Information Power: More Information = More Power (but check the correctness of Information)

  13. 6. Time Power: High Time Pressure = Low Power Low Time Pressure = High Power Avoid being placed in “eleventh-hour” situation yourself. 7. Risk Power: High risk taking ability = High Power Low risk-taking ability = Low Power 8. Options/ Alternatives Power: Many Alternatives = High Power Few Alternatives = Low Power 9. Walk Away Power: “I care, but not that much“ 10. Rapport Power: Easy to be tough on a stranger. Hard to be tough on a friend. 11. Competition Power: More Competition = More Power" “I have others I could deal with"

  14. 12. Title Power: Don't be intimidated by titles. Using impressive title, for yourself may make you feel more confident and may intimidate others. 13. Reward and Punish Power: People will be nice to you if you can do something for them. 14. Charisma Power: Use this power if you have it. It can charm persons into doing things. 15. Expertise Power: If you have it, use it. It comes from having (or appearing to have) some unique expertise. 16. Environment Power: Negotiating in a comfortable environment will give you an edge over your opponent. 17. Health and Well Being Power: Never negotiate when you are tired or unwell

  15. 18. Situation Power: Circumstances give powers which when changed removed the power. e.g. An umpire in a cricket match has power in the match because of the situation. 19. Referent Power: Known to be consistent and not wavering even in the face of opposition gives power. 20. Unpredictability Power: Don't be predictable during negotiating otherwise you can be manipulated. (This is opposite of Referent Power) Adapted from: “Negotiating in the Age of Integrity” by Wayne Berry. Nicholas Brealey Publishing, London) dcs-neg-sop

  16. Negotiation Strategy and Tactics • Some Tactics… • PLOYS, GAMBITS AND TRICKS IN NEGOTIATIONS • Reluctant Buyer to Seller - “I care, but not that much", not showing • a great need (even if there is one). • 2. The Nibble – Seller says to buyer after making the deal: "…plus of course • Rs. 500/- for delivery". This brings the “add-ons” after the initial • agreement. • 3. The Flinch – Buyer exclaims to seller: “How much? That's a lot of money!" • This lowers the seller’s expectations. • 4. Higher Authority – Seller says to buyer: “I’m sorry, I can't authorise that" or • “I have to refer this to higher authority”. Also, if one party wants to talk • to the other’s superior, the superior should be well briefed before the • talk.

  17. 5. Bottom Line – Buyer says to seller: "I just don't need everything your offer has … but what is the very lowest price you will take?“ 6. Vice Gambit – Even if the price is lower than expected, the buyer can go lower by exclaiming: "I'm sorry, you will have to do better than that!". 7. Good Guy / Bad Guy Gambit – Good guy says to buyer: "Tell me what you can do, I'll see what I can do sort out with him for you". e.g. The property owner (“Bad Guy”) exclaims, “I am not going to waste more time with this buyer” and walks away. Owner’s agent (“Good Guy”) says to the buyer,” Tell me what you can pay and let me see what I can do for you to sort it out with him”. The bad guy and the good guy are on the same side though not known to the buyer. 8. Set Aside Gambit - "Just set that aside and see what else is important to both of us.“ 9. Hot Potato Gambit – The buyer says to seller: “But I have a budget of just Rs …."

  18. 10. Splitting the Difference – " The difference in your price and my budget is only Rs 1000/-. Can we split the difference?“ 11. Trade Off - "If I do this for you, what can you do for me?“ 12. Funny Money Gambit – The seller says to buyer: "An extra Rs 300/- gives you the extra luxury you would like. Isn't Rs 300/- worth it?“ 13. Walk Away Gambit - " Prepare to walk away to gain power". (Even if you are not stopped, you can always come back!). 14. Delaying and Stalling - Create time pressure. 15. Pre-condition Tactic - “If you make me the sole regional distributor, I start talking with you". 16. Personal Attacks - Don't get emotionally involved and lose your cool. It is a tactic to put the party off balance to make him agree to things he would normally not.

  19. 17. Precedent Tactic – “Smith did not have to do this, Why should I have to?“ 18. The Withdrawn Offer Tactic – Seller says to buyer:" We've misquoted with too low a price. I am going to withdraw the offer". 19. Fait Accompli - Already gone ahead assuming the agreement was made. 20. Decoy Tactic - Asking the impossible to gain smaller concessions. e.g. Buyer asks seller for 30 days delivery period, which is impossible. Seller flinches. Then the buyer says he can accept 90 days delivery if 5% discount is given (which was what the buyer required). 21. Puppy Dog Tactic - Take it now, try it out, and bring it back if you are unhappy. This creates emotional involvement and commitment. 22. Call Girl Principle - Value of service diminishes after being rendered. Negotiate the fees up front, rather than afterwards. Adapted from: “Negotiating in the Age of Uncertainty” by Wayne Berry. (Nicholas Brealey Publishing, London.) dcs-neg-tact

  20. Use of “Tricks” in Negotiations • ● Whilst one may use “tricks” in negotiations in “one-off” transactions in • which there will be no ongoing relationship in the future, the constant • use of tricks may result in long-term repercussions such as bad • reputation, lack of trust etc. • ● Where long-term relationships are concerned, tricks can have a negative • impact. For successful business relationship, both parties must feel that • they have achieved a satisfactory outcome, which is necessary for • successful implementation. • ● Using tricks to achieve a one-sided agreement may result in: • Dissatisfaction of the “tricked” party • Spoiling of relationship including negative impact on future business. • Likelihood of poor implementation • ● Hence tricks are mentioned here so that one can recognize them when • encountered and successfully counter them. Their use is not to be • advocated for long-term relationships. Tricks are no match for sound • skills, good planning and a professional approach to good negotiations.

  21. Study of Body Language and Psychology of Negotiators • NON-VERBAL COMMUNICATION IN NEGOTIATION • ● Communication comprises not only a verbal content but also a • non-verbal content. • ●Verbal content consists of spoken words, that is, the actual words used, • the way they are put together, length of sentences, syntax and • punctuation. • ●Non-verbal content consists of facial expressions and body movements. • ● Main areas of concern include eye contact, facial expression, gestures • and posture. The verbal content can be reinforced by non-verbal content • to make the communication more effective. On the other hand, if the non- • verbal signals are incongruent in relation to the words, the recipient can • be confused. Whilst the words can conceal the real meaning, the body • signals are more difficult to control. Hence, a negotiator who is able to • interpret non-verbal signals is in a better position in regard to • communication (and negotiation).

  22. Interpreting Non-Verbal Signals. ● This requires experience. The interpretation should be verified, verbal and non-verbal signals must point in the same direction. The interpreter should observe aside from words, the tone of voice, facial expression, body tension etc. ● Different cultures have different signals that need to be understood. People exposed to cross-cultural influence may use different signals and it may be difficult to know from which culture the signal has originated. ● Body Movements (or kinesics) is the most widely known non-verbal communication. In kinesics, by far, the face largely conveys our feelings. Within the face, the eyes tell much more than other facial features. ● In the study of body language, we are searching for attitudes, perceived relationships, moods, deception, warmth, needs for interaction and the like that the body symbols and activities express. We look for these feelings in eyes, face, posture, gestures and physical appearance. Some examples of kinesics are given below.

  23. Table 1. Body Language Signals and Common Interpretations. (This Comprises Facial Expressions, Postures and Gestures.)

  24. WIN-LOSE Competitive Attitude: “I want it all” “You don’t matter” WIN-WIN Collaborative Attitude: “Let’s find a solution best for both of us” COMPROMISE Attitude: A "split the difference” approach ASSERTIVE (ensuring negotiator’s needs) LOSE-WIN Accommodating Attitude: “I want you happy.” “I’ll put my needs aside” LOSE-LOSE Avoiding Attitude: “What you want is not acceptable to me” Opposite of Competitive Style RESPONSE(to opposition’s needs) FIGURE 1. DIFFERENT NEGOTIATING STYLES (Also See Annexure 3

  25. Annexure 1 – Strategies to Drive-up Prices in M&A Case 1. The Tata Corus Deal In the Tata Corus deal, the original agreed price on October 20, 2006 which Tata was to pay was 455p per Corus share. This was agreed by the boards both companies but was subject to approval of Corus shareholders. But the Corus shareholders wanted a better deal. The strategy was to introduce a competition. Corus asked CSN of Brazil to bid against Tata. CSN upped the bid to 475p per Corus share to which Tata responded by 500 p per Corus share. This was trumped by CSN by a price of 515p per share. This resulted in a deadlock in further bidding. On December 19, 2006, UK Watchdog , the Panel on Takeovers and Mergers, announced that the last date for deal finalization was January 30, 2007 otherwise they would begin an auction Finally, an auction was arranged on January 30, 2007. The auction was controlled by the Panel and each party was asked to bid. There were to be nine rounds with each bid to be at least 5 pence per share higher than the previous. For the ninth round each bidder was asked its maximum price not to be revealed to the other party. CSN said 603p while Tata gave its price as 5p above the last price of CSN subject to a maximum (not publicly declared). On this basis Tata Steel won the bidding with 603+5 = 608p.

  26. To introduce competition, Corus had made a contract with CSN to remain in the bidding for a consideration that Corus would pay CSN 1% of the losing bid. See box below. From : Business Line, February 1, 2007, Page 4.  CSN claims payment from Corus New Delhi, Jan. 31, 2007 CSN said it is entitled to a payment from Corus equal to 1 per cent of its losing offer. The payment is an “incentive” included in a December 10 agreement with Corus for CSN bidding to continue, the Brazilian steelmaker said in a statement sent to the securities regulators. The payment may be worth as much as 61.5 million pounds ($119.9 million), based on Bloomberg calculations and figures provided by CSN. The company also said in the statement that it has the right to sell 34.1 million shares of Corus that it owns to Tata at 608 pence per share. – Bloomberg. Whilst having more competition is a good strategy, the ethical (and legal) aspects of paying a bidder to continue bidding to drive-up the bidding price could be debatable.

  27. Case 2. The Arcelor-Mittal Deal After a five-month hostile takeover battle between Arcelor and Mittal Steel, the Arcelor-Mittal deal was finalized on June 25, 2006 at a cost of $ 32.2 billion (some 40% higher than the first bid ). Here also the competitor helping to enhance prices was Severstal of Russia (acting as a “White Knight”). The strategy that is usually employed by the hostile firm is making an offer more lucrative than the White Knight's, so that the shareholders consider rejecting the White Knight's bid. This, however, can lead to bidding wars and finally to overpaying, by one or the other, for the target firm.

  28. Arcelor fought hard against Mittal’s hostile bid, complaining about the company’s corporate governance. Arcelor also said that Mittal’s original offer of $23.75 billion undervalued the company. Mittal had subsequently offered to raise its bid to $33 billion. Meeting in Luxembourg on June 30, 2006, shareholders Arcelor SA voted to endorse the merger of Arcelor with Mittal Steel to form the world's largest steel company, rather than to go ahead with a previously agreed merger between Arcelor and the Russian Severstal, the "Financial Times" reported on July 1, 2006. Arcelor would pay Severstal 140 million euros ($179 million) in compensation for backing out of the previous deal, under which Severstal would have invested 14 billion euros in assets in the merged company in exchange for 32 percent of the total shares. Severstal said it is exploring legal options Arcelor and Mittal Steel merged to form a new company Arcelor-Mittal. Of the 49.4% shares in Arcelor Mittal, the Mittal family holds 43%. Mittal family had agreed to a ceiling of 45 per cent of the then issued company shares.

  29. Annexure 2 – Indo-US Civilian Nuclear Deal – Strategies for Negotiations for NSG Waiver The Indo-US Nuclear Deal signed in October 2008 was to enable civilian nuclear supplies to India. It was a multi-national, multi- staged, strongly contended deal of recent times overcoming several deal breakers at different stages. One of the critical stages was the Waiver required from the 45-nation Nuclear Suppliers’ Group (NSG). The negotiations took place in Vienna in August-September 2008. India was not present at the negotiating table since it was not a member of the NSG (though a strong Indian diplomatic contingent led by Foreign Secretary, Shivshankar Menon, was present at Vienna during the proceedings for the waiver). The deal had to be approved by consensus (rather than by voting) as per the practice of NSG. Hence even one member could block the deal. The US negotiated the case for India with the member countries of the NSG (as had been agreed earlier by the US and India). Whilst Germany was in the Chair, the principal negotiator for the deal was the US.

  30. The reasons for opposition to the Deal (i) It was viewed as a “major blow” to non-proliferation efforts. The NSG was created to prevent proliferation of nuclear weapons. (ii) It would be unfair to countries giving up the nuclear weapon-making option by signing the NPT. (iii) China (and Pakistan which was not a member of NSG) did not want India to be better off by having the deal. Country wise Polarization on Support for the Deal At the NSG meeting, the main countries – US, UK, France, and Russia (except China) spoke strongly in favour of the Deal. The resistance was led by six "like-minded" countries (the “six dwarfs”) – Austria, Ireland, the Netherlands, New Zealand, Norway and Switzerland. China was a supporter of the Six Dwarfs whilst the Chinese themselves remained on the background. The topmost leaders of the U.S., India and their allies worked the telephone lines to mount pressure on dissidents. A critically timed telephone call from president Bush to Chinese president Hu Jintao did the trick with China which quickly fell in line. Finally, on the third day (September 6, 2008) the deal was cleared with a clean waiver by consensus .

  31. There was also time pressure to complete the deal during the tenure of President Bush and be in time for ratification in the final session of US Congress beginning September 8, 2008. Prolonging the negotiation could thwart the deal. The strategies by US for deal approval The exemption text was drafted by US in consultation with India. Whilst Germany was in the NSG chair, the Americans took charge of the meeting for getting the exemption. The strategies were: 1.The NSG Meeting was preceded by intense lobbying by the US and India putting forward various points of support: (i) India’s impeccable record on non-proliferation. (ii) India as an emerging super power and hence not to be gone against. (iii) Commercial advantage of nuclear commerce with India. (Some estimates said the deal will generate new business worth $100 billion for companies at home and abroad over the next decade.)  (iv) India’s unilateral voluntary moratorium on testing (and no first use) (v) Reduced carbon dioxide emissions if India adopts nuclear power. Hence advantage in global climate control in future. (India’s greenhouse gas emission would using conventional fuels would be cut to half using nuclear energy)

  32. 2. The top leaders and diplomats of US and India were in constant touch with the leaders of NSG countries. 3. During the NSG negotiations, the US held separate parallel consultations with the dissidents (including China) to sort out the differences and win their support. 4. As a last resort, the US could use its “muscle power” to get the dissidents to agree. This included hard influencing techniques such as crude pressure, coersion, intimidation, threats, and induced fear of “isolation”. The NSG Proceedings The First Round (August 21-22, 2008) – This presented each country’s position in regard to the Deal and identified their concerns. The first draft of the waiver had been circulated earlier. The main countries – US, UK, France, and Russia (except China) spoke strongly in favour of the Deal. The resistance was led by six “like-minded" countries (the “six dwarfs”) The Second Round (September 4-5, extended to 6) – This took up the matter of discussing and convincing the unconvinced members on the deal based on the second draft intended to address the concerns of dissenters. India also circulated on the second day it’s unilateral moratorium on testing and no first use (announced in 1998 after Pokhran II). Incorporating this in the draft effectively split the “six dwarfs".

  33. The Final Day (September 6, 2008) – Finally, on the third day (September 6, 2008) after the critical telephone call from president Bush to Chinese president Hu Jintao, China fell in line and the deal was cleared with a clean waiver by consensus in just one hour after the start of the meeting. China’s Behaviour The Chinese strategy was to remain in the shadows and not appear to actively dissent but help the countries resisting approval. The Chinese did maneuvers in a procedural way in order to support the six opposing countries. For example they suggested that the waiver decision should not be rushed. They also mentioned that it might open a door for "other States" (i.e., Pakistan) to seek a similar waiver. They did their best to dissuade some members from approving the deal on grounds of proliferation Apparently the Chinese wanted the six dwarfs to do the heavy lifting and block the dealfor them what they did not want to appear to do. The Chinese erred in their underestimating of India's ability to hold firm to its demand for an unconditional waiver and for dissidents to resist the juggernaut of US pressure in the eleventh hour. After the waiver came through, the Indian government made its displeasure at Beijing's role publicly known as well.

  34. Conclusion The negotiations for the NSG Waiver (as well as the making of the entire Indo-US Nuclear Deal) offer a fascinating study of different methods used in deal making. These include using suitable strategies such as intense preparation and planning, adopting appropriate tactics such as soft influencing by lobbying and persuasion, hard influencing by pressurizing and coercion as required under different situations. It also offers interesting study of the counter-techniques used by the opposing parties and how these were overcome. The successful completion of negotiation was indeed a diplomatic triumph for the US and Indian negotiators against challenging odds. It was well negotiated and the best nuclear deal that India could have got.

  35. Annexure 3. Characteristics of the five Negotiating Styles Viewed in a matrix as a negotiator securing his needs as against the negotiator meeting the other party’s needs, the five negotiating styles are presented in Fig. below: Fig 1 Different Styles of Negotiation

  36. 1. Competitive Style (Win-lose) • ● Aggressive style – “win-lose” • ● Intimidation, threats, hostility • ● May be used if quick decision is required • ● The objectives are mutually exclusive • [Mutually exclusive means things related in such a way that each thing makes the other thing impossible: not able to be true at the same time or to exist together e.g. war and peace ] • 2. Accommodating Style (Yield-lose) • ● Values relationship over objective • ● Sacrifice now and gain later • ● Not used for key issues • ● Not used if the other party is lying • 3. Collaborative Style (Win-win) – “Make two pies” • ● Working together to expand the pie • ● Time consuming • ● Problem solving / brain storming • ● Not used for minor issues 

  37. 4. Avoiding Style (Lose-lose) ● Creates frustration ● May be used on minor issues ● Can be used if you would lose ● Not used in complex situations 5. Compromising Style (Splitting the difference) ● Uses cooperation ● Concedes minor objectives ● Divides the pie to satisfy both parties ● Mutually exclusive objectives No negotiation is purely of one style. Rather negotiators may move back and forth between the styles based on the situation.

More Related