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NEGOTIATION STRATEGIES

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

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NEGOTIATION GOALS
PROCESS OF STRATEGY DETERMINATION

BURCU MEK

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

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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.

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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.

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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.

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AGGRESSIVE GOALS

Aggressive goals seek to damage an


opponent.

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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.

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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. AVOIDANCE STRATEGY
(The Nonengagement 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.

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. COMPETITIVE 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. ACCOMMODATIVE 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. No-Concessions
2. No Further Concessions
3. Making Only Deadlock-Breaking Concessions
4. High Realistic Expectations With Systematic
Concessions
5. Concede First
6. Problem Solving
7. Goals Other Than To Reach Agreement
8. Moving For Closure
9. 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 No-Concessions Strategy 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


to change the partys position.
2. Ignore it and proceed as if concessions are
possible.
3. Present cost saving or win-win measures that justfy
a concession.
4. As a seller, offer less (such as fewer services),
thereby effectively increasing the price.
5. As a buyer, demand more, thereby, in effect,
reducing the price.
6. Terminate the negotiating session.
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2. NO FURTHER CONCESSIONS

A No-Further-Concessions Strategy 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 no-
concessions strategy.

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3. MAKING ONLY DEADLOCK-
BREAKING CONCESSIONS
A strategy of Making Only Deadlock-
Breaking Concessions 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 DEADLOCK-
BREAKING 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 DEADLOCK-
BREAKING 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
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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 FIRST
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 FIRST (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 SOLVING
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 concession-
based strategies which center on giving
up or refusing something of value

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PROBLEM SOLVING (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
solving
2) Identification of the problem preventing
agreement
3) Determination of any common interests
and limiting seperate needs
4) Discussion to discover fair, mutually
beneficial solutions

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Laying the Essential
Foundations for the
Problem- Solving 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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