Negotiations & Conversations

• This chapter discusses conversations and negotiations, including when to negotiate and the various strategies for negotiating.

Negotiating Salary

• Raman, an experienced professional, negotiates his salary with an HR manager.
• The HR manager initially offers Raman ₹500,000 per annum, but Raman asks for ₹700,000, citing his experience and industry standards.
• The HR manager counters, pointing out that the offered salary is more than twice Raman's previous college salary.
• Raman justifies his expectations based on industry standards and the value he can add to the organization.
• After internal discussions, the HR manager increases the offer to ₹600,000, which Raman accepts, recognizing the value of the opportunity and the company's brand name.
• The HR manager welcomes Raman aboard.

Introduction to Conversations and Negotiations

• Negotiation is a daily activity, occurring with clients, managers, and colleagues.
• People gain the power to negotiate through experience.
• Negotiations extend beyond salary and include department preferences, colleague interactions, and supplier relations.
• HR managers also negotiate with employees on matters such as bonuses.
• Negotiating with managers, business deals, tie-ups and mergers may require a CEO.
• Employees negotiate promotions, pay hikes, and task assignments.
• Negotiations range from simple to extremely complicated and can take minutes to years.
• Sales, marketing, and customer service heavily rely on conversations and negotiations.
• Roles that involve client and customer interaction require effective conversation and negotiation abilities.
• Business conversations should be interesting and meaningful.
• Business conversations are more formal than casual ones, offering opportunities to make a positive impression.

Characteristics of Conversations

• Company managements see conversations as a way to engage people in the sharing of views and opinions.
• Key characteristics of conversations:
• Conversations should follow a structure, especially when an agenda is in place.
• Conversations are more structured than casual talks.
• Conversations also require a moderator to control the flow.
• All key people need to be involved to make the conversation meaningful.
• People involved must feel that they are in a risk-free environment.

How to Converse

• Conversation is an art requiring practice and the ability to engage others meaningfully.
• Steps, suggestions and guidelines for better conversation:
• Research the person's likes, dislikes, and work-related information to build rapport, avoiding overly personal or offensive topics.
• Listening and encouraging others with positive reinforcement.
• Acknowledge the other person's ideas, and avoid countering their ideas.
• Maintain positive body language, including eye contact and avoiding distracting fidgeting.
• Make conversations interesting using jokes and breaks to add liveliness.

Arguments: Managing Conflicts in Conversations

• Arguments arise from differences in views and opinions, escalating from minor conflicts.
• Arguments can stem from ego clashes, visibility struggles, differing opinions, personal conflicts, forced changes, and personal space invasions.
• Arguments are extensions of conversations.
• To manage arguments one should channelize them appropriately, and exit gracefully if needed.
• Steps for help during arguments:
• Understand others' views and acknowledge all differences.
• Don't argue for the sake of arguing.
• Use supporting facts for data.
• Remain calm.
• There should be calm and silence.

Being Assertive

• Assertiveness involves stressing one's point while seeking the best possible solution.
• For example, being assertive can help in leave requests or dealing with team members.
• Strategies include:
• Avoiding "you" statements to prevent defensiveness.
• Repeating your position calmly, like a broken record.
• Empathizing with the other person's perspective.
• Deciding on the preferred outcome with ideal, realistic, and fallback options.
• Offering an alternative solution or postponing the task, providing a "rain check."

Negotiations: The Process of Reaching Agreements

• Professionals from all walks of life negotiate daily, in both small and big ways.
• Being a good negotiator is essential, including for sales to reach a deal.
• Negotiating is distinct from merely making a sales pitch, but rather the skill of striking a win-win deal.

Negotiations in the Workplace

• Negotiations can happen for better pay, project deadlines, budgets, and worker demands.
• Every negotiation seeks a consensus on conflicting or common goals.
• It brings people together and it helps in bargaining.

Relationship between Communication and Negotiation

• Negotiation is linked to communication skills.
• Sumit: an MBA graduate wanting a preferred location due to home issues, requiring the training manager to negotiate due to staff shortages.
• Necessary Skills:
• The negotiator needs to practice listening to understand other view points.
• Articulate ideas and present them logically.
• Good conversational and argumentative skills.
• Figure 11.1 shows the communication process for negotiation.

The Need for Staying Away from Negotiation

• The main reasons people avoid negotiating include the fear of failure, rejection, and relationship repercussions.
• Negotiating for a solution that benefits both parties is important.

Characteristics of Negotiation

• Negotiation is a two-way process or more to reach a consensus.
• Example is two employees were issued a notice over funds.
• Parties then try to reach consensus.

The Best Alternative to a Negotiated Agreement (BATNA)

• Exhibit 11.5 is an insight into BATNA.
• BATNA is your backup plan if negotiations fail, serving as a trump card.
• A strong plan for negotiation or weak.
• In first scenario you are a buyer but have no fallback.
• In this scenario the buyer has a fallback and competitors ready for needs.
• The second illustration of BATNA is the need to analyze all options, estimate the other side’s alternatives, and remain flexible. Key factors include cost, feasibility, impact, and consequences.
• Overestimating one's BATNA and underestimating the strength of your counterpart's is common.

How to Improve a Weak BATNA:

• Strengthen your own BATNA.
• Be creative.
• Improve your options.
• Use Experts.

When to Negotiate

• Exhibit 11.6 is the creative solving for negotiations.
• Only do so with right authority while not in wrong way or wrong situations.
• Example used, Rajan has no authority for negotiation on cement.
• It involves agreement and is flexible.

When Not to Negotiate

• This includes reasons such as when the is nothing available and the other party is a unreasonable.
• This leads to walkout.

Approaches to Negotiation

• There are two basic approaches to negotiation, one being win-win and the other win-lose.

Win-Win vs Win-Lose Approaches

• Win-win aims for mutual benefit, while win-lose seeks advantage for one party.
• Win-win is collaborative, using positive communication.
• Win-lose is competitive, breeding misinformation.
• Deadlocks may occur if both parties stick with their positions.

Different Approaches to Negotiation

• Figure 11.4 is different approaches to negotiation.
• An Indian IT example of how they agreed to a win-win solution.
• Also an example showing how strikes can lead to win-lose situation.

The Win-Lose Approach and Fixed Pie Syndrome

• The win-lose approach is the negotiator is very clear of what they want.
• As high bargaining, will lead to higher success.
• Also look at Exhibit 11.6 which shows example on "creative solution solving".
• An example is when Mr Borman could not reach an agreement with unions and then airline shut down.

Deadlocks and Selecting your Teams

• Exhibit 11.8 is about handling deadlocks.
• In events where matters are not moving ahead and things are sticking.
• The team, must be balanced and in harmony.
• Teams should have expertise.

Successful Negotiation Tips

• Clarify objectives, prepare thoroughly and provide time for parties.
• Exhibit 11.11 is an show body language is important.
• Understand cultural backgrounds and team strengths.
• Listen, ask questions, and understand nonverbal cues.
• The ability to negotiate is a rare skill.