1. UNIT V
NEGOTIATION

2. DEFINITION
According to Robert Fisher &William Ury:” Negotiation is the process of getting what you want from others” According to Herb Cohen, “ Negotiation is a field of knowledge and endeavour that focuses on gaining the favour of people from whom we want things” According to Fowler, “Negotiation can be defined as a process whereby parties or groups attempt to resolve matters of dispute by holding discussions and coming to a mutually agreed decision”

3. CHARACTERISTICS OF NEGOTIATION
1)There are two or more parties-
That is, two or more individuals, groups, or organizations. Although people can "negotiate' with themselves - as when someone debates whether to spend the afternoon studying, playing tennis, or going to the football game - we will discuss negotiation as an interpersonal or inter-group process.
2. There is a conflict of interest between two or more parties 
That is, what one wants is not necessarily what the other one wants and the parties must, therefore, search for a way to resolve the conflict.
3. Negotiation is largely a Voluntary Process:
The parties negotiate because they think they can use some form of influence to get a better deal that way than by simply taking what the other side will voluntarily give them or let them have. Negotiation is largely a voluntary process. It is a strategy pursued by choice; seldom are we required to negotiate.

4. CHARACTERISTICS OF NEGOTIATION
4) There is a Notion of Give and Take:
When we negotiate, we expect give and take. We expect that both sides will modify or give in somewhat on their opening statements, requests, or demands. Although the parties may at first argue strenuously for what they want, each pushing the other side for concessions, usually both sides will modify their positions and each will move toward the other.
5.Successful negotiation involves the management of intangibles as well as the resolving of tangibles (e.g., the price or the terms of agreement). Intangible factors are the underlying psychological motivations that may directly or indirectly influence the parties during a negotiation.

5. CHARACTERISTICS OF NEGOTIATION
6) There is a mutual Fulfillment of Needs:
Needs fulfilment is the very purpose of negotiation. Each party is dependent on the other for something. Both parties want their needs to be met.
7)There is Use of Strategies to Influence the Other Party:
Strategies of negotiation need not be devious schemes to manipulate or deceive. More often than not, they are merely well conceived plans and preparations' developed prior to the face to face interaction of a negotiation

6. PROCESS OF NEGOTIATION
Negotiation process which is made up of five steps. Negotiation permeates the interactions of almost everyone in groups and organizations.
Negotiation permeates the interactions of almost everyone in groups and organizations. In today’s loosely structured organizations, in which members work with colleagues over whom they have no direct authority and with whom they may not even share a common boss, negotiation skills become critical. 1)Preparation and Planning
Before the start of negations one must be aware of conflict the history leading to the negotiation the people involved and their perception of the conflict expectations from the negotiations etc  

7. PROCESS OF NEGOTIATION
2)Definition of Ground Rules Once the planning and strategy is development one has to begin defining the ground rules and procedures with the other party over the negotiation itself that will do the negotiation. Where will it take place? What time constrains, if any will apply? To what issues will negotiations be limited? Will there be a specific procedure to follow in an impasse is reached? During this phase the parties will also exchange their initial proposals or demands. 3)Clarification and Justification When initial positions have been exchanged both the parties will explain amplify, clarify, bolster and justify their original demands. This need not be confrontational.

8. PROCESS OF NEGOTIATION
Rather it is an opportunity for educating and informing each other on the issues why they are important and how each arrived at their initial demands. This is the point where one party might want to provide the other party with any documentation that helps support its position.
4)Bargaining and Problem Solving
The essence of the negotiation process is the actual give and take in trying to hash out an agreement. It is here where concessions will undoubtedly need to be made by both parties.
5)Closure and Implementation
The final step in the negotiation process is formalization the agreement that has been worked out and developing procedures that are necessary for implementation and monitoring. For major negotiations – this will require hammering out the specifics in a formal contract.
Negotiation Process has five stages. In all steps of negotiation process the involved parties bargain at a systematic way to decide how to allocate scarce resources and maintain each other’s interest.

9. TYPES OF NEGOTIATION
DISTRIBUTIVE INTEGRATIVE

10. TYPES OF NEGOTIATION 1) Distributive Negotiation
The most distributive feature is that it operates under a zero sum game
the gain made by one person is loss incurred by the other person.
Each person involved in the negotiation defines ultimate point where the settlement will be made.
The sellers goal is to negotiate as high a price as possible; the Buyers intention is to negotiate as low a price as possible
Win –Lose Situation

11. Distributive Verses Integrative

12. TYPES OF NEGOTIATION 2)Integrative Negotiation :
Parties cooperate to achieve maximize benefits by integrating their interests
Both parties involved in negotiation process jointly look at the problem, try to search for alternatives and try to evaluate them and reach a mutually acceptable decision or solution.
Win-Win Situation

13. ESSENTIAL NEGOTIATION SKILLS
Essential negotiation skills are as follows: 1)Problem Analysis Effective negotiators must have the skills to analyze a problem to determine the interests of each party in the negotiation. A detailed problem analysis identifies the issue, the interested parties and the outcome goals. For example, in an employer and employee contract negotiation, the problem or area where the parties disagree may be in salary or benefits. Identifying the issues for both sides can help to find a compromise for all parties. 2)Preparation Before entering a bargaining meeting, the skilled negotiator prepares for the meeting. Preparation includes determining goals, areas for trade and alternatives to the stated goals. In addition, negotiators study the history of the relationship between the two parties and past negotiations to find areas of agreement and common goals. Past precedents and outcomes can set the tone for current negotiations.

14. ESSENTIAL NEGOTIATION SKILLS
Essential negotiation skills are as follows:
3)Active Listening
Negotiators have the skills to listen actively to the other party during the debate. Active listening involves the ability to read body language as well as verbal communication. It is important to listen to the other party to find areas for compromise during the meeting. Instead of spending the bulk of the time in negotiation expounding the virtues of his viewpoint, the skilled negotiator will spend more time listening to the other party.
4)Emotional Control
It is vital that a negotiator have the ability to keep his emotions in check during the negotiation. While a negotiation on contentious issues can be frustrating, allowing emotions to take control during the meeting can lead to unfavorable results. For example, a manager frustrated with the lack of progress during a salary negotiation may concede more than is acceptable to the organization in an attempt to end the frustration. On the other hand, employees negotiating a pay raise may become too emotionally involved to accept a compromise with management and take an all or nothing approach, which breaks down the communication between the two parties.

15. ESSENTIAL NEGOTIATION SKILLS
Essential negotiation skills are as follows:
5)Verbal Communication
Negotiators must have the ability to communicate clearly and effectively to the other side during the negotiation. Misunderstandings can occur if the negotiator does not state his case clearly. During a bargaining meeting, an effective negotiator must have the skills to state his desired outcome as well as his reasoning.
6)Collaboration and Teamwork
Negotiation is not necessarily a one side against another arrangement. Effective negotiators must have the skills to work together as a team and foster a collaborative atmosphere during negotiations. Those involved in a negotiation on both sides of the issue must work together to reach an agreeable solution.
7)Problem Solving
Individuals with negotiation skills have the ability to seek a variety of solutions to problems. Instead of focusing on his ultimate goal for the negotiation, the individual with skills can focus on solving the problem, which may be a breakdown in communication, to benefit both sides of the issue.

16. ESSENTIAL NEGOTIATION SKILLS
Essential negotiation skills are as follows: 8)Decision Making Ability Leaders with negotiation skills have the ability to act decisively during a negotiation. It may be necessary during a bargaining arrangement to agree to a compromise quickly to end a stalemate. 9)Interpersonal Skills Effective negotiators have the interpersonal skills to maintain a good working relationship with those involved in the negotiation. Negotiators with patience and the ability to persuade others without using manipulation can maintain a positive atmosphere during a difficult negotiation. 10)Ethics and Reliability Ethical standards and reliability in an effective negotiator promote a trusting environment for negotiations. Both sides in a negotiation must trust that the other party will follow through on promises and agreements. A negotiator must have the skills to execute on his promises after bargaining ends.

17. IMPORTANCE OF NEGOTIATION
Negotiation is important due to the following reasons:
1) Helps in Conflict Resolutions:
Conflict occurs when people have separate and conflicting interests at the time or the needs and interests of their constituents. When managers and employees know how to negotiate workplace conflicts, general morale and productivity will improve. People deal with problems early, before they can escalate to unmanageable proportions. The organization thus gains a precious commodity time to do higher potential things such as attract new business, create innovative products, and anticipate and satisfy customer’s needs.
2) Helps in Cost Reduction:
When companies develop competence in negotiation, they can reduce the cost associates with flawed contracts and the use of legal counsel to resolve conflicts that have escalated needlessly. Negotiation is a useful method of maintaining value for money in a single source situation i.e., where there is no real situation

18. IMPORTANCE OF NEGOTIATION
Negotiation is important due to the following reasons:
3)Strengthen and Maintain Better Relationships:
When people negotiate effectively, they exchange something of value to achieve mutually agreeable purposes. Successful negotiations thus strengthens relationships and builds a sense of trust that each party has the other’s interests . Mutual benefits and trust in turn create a feeling of quality and satisfaction in workplace.
4) Provides a Competitive Advantage:
As people in an organization forge mutually beneficial agreements with others inside the company, they free up energy to identify and leverage new opportunities to improve processes and system. As they negotiate successfully with others outside the company, they create valuable synergies

19. IMPORTANCE OF NEGOTIATION
Negotiation is important due to the following reasons:
5) Find Solution to Problem:
The purpose of negotiation in organization is to persuade an opponent and a the same time find a solution to the problem that is satisfactory to both parties. Negotiation also helps to develop new procedures for handling problems.
6) Helps in finding Alternative:
Conflict must be avoided at the work place as it only leads to negativity all around. Negotiations help to reduce conflicts at the work place. Conflicts arise when individuals are too rigid and are just not willing to compromise with each other. Negotiations help in finding an alternative which benefits all.

20. BARRIERS TO EFFECTIVE NEGOTIATION
Barriers to effective negotiation are;
1)Structural Barriers:
The structure of the negotiations can prove to be a barrier in reaching an agreement. Structural barriers refer to the parties, issues, interests, linkages and so on. An example of structural barrier may relate to parties refusing to recognize one another. For eg: It is very difficult to get negotiations going in any situation where one party refuses to recognize the validity or legitimacy of the other) refusal to deal with the core issues to a conflict, refusal to communicate honestly and a basic lack of faith in negotiation. All these will of course lead to continued conflict rather than resolution
2)Strategic Barriers:
One of the most significant issues that negotiations have to deal with is uncertainty. In circumstances, where there is a high level of uncertainty about intentions and the parties feel vulnerable. Strategic barriers may arise. This means that negotiations make rational strategic choices that may lead

21. BARRIERS TO EFFECTIVE NEGOTIATION
Barriers to effective negotiation are;
Impasse or sub optimal agreements. In order to overcome strategic barriers and to develop trust, parties have a number of options. They can arrange to observe each other’s actions as a way of reducing mutual uncertainty, or they can make credible mutual commitment to devastating retaliation in the event of non compliance. They may choose to proceed in series of small and mutually verifiable steps, making future gains contigent on meeting current obligations and embedding current negotiations in a larger context to avoid end game effects. Another possible option is to involve external guarantors of the agreement who will ensure the parties comply with their predetermined obligations.
3) Psychological Barriers:
Common psychological barriers include rigid mental models,overconfidence, loss aversion, partisan perception and groupthink. Within this grouping, mental models link observation to interpretation and allow people to make Sense of their experience. These mental models reflect the beliefs regarding cause and effect relationships,

22. BARRIERS TO EFFECTIVE NEGOTIATION
Barriers to effective negotiation are;
Intentions of others and the way in which history is understood. Overconfidence rests on the desire to feel component and secure, resulting in negotiators belief that future uncertainties will be resolved in their favour.
4) Institutional Barriers;
This become especially significant in protracted and intractable conflicts where “hardliners” or ‘spoilers” invariably seek to thwart the moderates attempt to reach a negotiation settlement. Terrorists attacks by extremist groups for eg: can effectively undermine the negotiation process . When this is the case, leaders and moderates at all levels have to work hard to foster and sustain public support for the “peace process”. It is also crucial for a negotiation team to be well organized and to have the authorisation to device the necessary resources to the process. Being ready and well organizes helps the parties, strengthens their strategic capabilities and is therefore Very important to the negotiation process.

23. BARRIERS TO EFFECTIVE NEGOTIATION
5) Cultural Barriers:
Culture plays a considerable role in the negotiations and bargaining process, and negotiators have recognized the importance of paying attention to cultural sensitivities and symbols. Although culture may serve as a resource to resolve conflicts For eg: In cultures with authentic mechanism and value systems that may promote peace. Culture may also pose a barrier to a negotiated agreement. Conflict situations often enhance group cohesion, give rise to narratives of victimhood, and cement hostile images of the others that justify the use of violence. In this case, culture in the form of ethnocentrism(having or based on the idea that your own group or culture is better or more important than others) becomes one of the main obstacles to overcome in negotiation and bargaining processes.