1. What is negotiation?

Negotiation is a social process by which interdependent people with conflicting interests

determine how they are going to allocate resources or work together in the future to achieve
their desired outcomes.

2. When do people negotiate?

• When we believe we can achieve more with others than without them
• When we interact with someone because we want something from him or her or we
want him or her to take something from us

3. Why has negotiation become an important skill?

• Technology:
o The rise of e-commerce, especially online auctions, and trading, has created a
new realm for buying, selling, and otherwise doing business.
o Technology brings customers much closer to organizations, thus increasing the
incidence of negotiating to secure and maintain productive relationships with
them.
• Workplace:
o Organizations have become less bureaucratic and flatter with fewer layers of
managers and employees in their hierarchies.
o People change jobs, and even careers, more often than ever before.
o Domestically and internationally, organizations are increasingly using team-
based work processes, and many of these teams are devoid of formal leaders.
o The workforces in the U.S. and other countries are becoming more diverse, and
demographic trends suggest this will continue.
o The decline of union membership in the U.S. (Budd, 2010) means that unions
are now negotiating employment packages for far fewer employees.
o Managers spend a substantial amount of their time at work dealing with
employee conflict or helping other managers deal with conflict.
o Like conflict, organizational change is ubiquitous and must be managed to be
successful.
 o When businesses expand their operations overseas, they sometimes do so by
forming joint ventures or strategic alliances with a company in the host country.
o We negotiate with others if we need their cooperation and we cannot command
them to do something.

4. How people negotiate – The Dual Concerns Model

Five different approaches for handling conflict:

• Competitive or ‘win-lose’ strategy - People who attach substantially more importance

to their own outcomes than they attach to the other party’s outcomes This strategy is
typically called distributive, positional, zero-sum, or win-lose negotiating.
• Accommodation is a ‘lose-win’ strategy. It is used by those who place greater
importance on the other party’s outcomes than their own.
• Avoid conflict. This is a ‘lose-lose’ strategy - Those who have little concern for either
party’s outcomes.
• Compromising is what people to do if they are only moderately concerned about both
parties’ outcomes.
• Collaboration is the strategy of choice for people who seek a ‘win-win’ outcome – they
attach great importance to both parties’ outcomes. integrative, principled, interest-
based, mutual gains or win-win negotiating.
5. When not to negotiate

• If you may lose everything by negotiating.

• If you do not have time, are inadequately prepared or have no stake in the outcome.
• If waiting will improve your ability to satisfy your needs.
• If the other party’s demands are unethical or illegal.

6. What does a negotiation look like?

7. Shadow Negotiation

• The subtle games people play, often before they even get to the table.
• It is not about the ‘what’ of the negotiation but the ‘how.’
• It involves jockeying for position. This includes:
o using strategic moves to ensure that the other party comes to the table and gives
your interests and proposals a fair hearing
o using strategic turns to reframe the negotiation in your favour if it turns in an
unproductive direction
o using appreciative moves to build a stronger connection with the other party to
develop a shared and complete understanding of the situation and a more
productive negotiation

8. Strategic planning: establishing the framework

Strategic framework entails:

 • defining the situation - ensure that any outcome that you negotiate satisfies all your true
needs, and perhaps those of the other party; thoroughly investigate the situation by
gathering relevant information; other factors include nature of the interaction, other
negotiations, obligations to negotiate with this party, relative power, resources and
constraints, others who may affect or be affected by the negotiation, environment, or
context
• establishing the goals you hope to achieve – effective goals are clear, specific,
measurable, and challenging yet attainable, guide behaviour, clarify expectations and
determine priorities, suggest what information is needed
• formulating your strategy for achieving them – strategy is the plan or process by which
negotiators attempt to achieve their goals while tactics are the specific, short-term
actions that serve to implement the broader strategy; it includes identifying and defining
the component parts of the plan for yourself and for estimating them for the other party,
the component parts being issues, positions, and interests
• deciding how you will implement it

9. Aspiration levels or target points

• What you realistically hope to achieve for each issue

• Determining target points - what is required to satisfy your interests and set that as your
target
• Setting targets should be based on research and emphasize your own needs

10. Best Alternative to a Negotiated Agreement (BATNA)

• BATNA is the basis for determining reservation prices

• Reservation price - breakeven point or the worst acceptable outcome for each issue
• Reservation prices set limits that preclude us from settling for less than what we could
have achieved without negotiating with this party
• Resistance points are significant drivers of final outcomes

11. Bargaining Power

 • Having a good BATNA increases your bargaining power
• Bargaining power is a function of relative dependence
• An alternative conception of bargaining power is the ability to work effectively with
the other party
• Having more power enables you to establish more ambitious aspiration levels and
reservation prices, and these lead to better outcomes

12. Analysing the other party

• Identify the settlement ranges or zone of possible agreement (ZOPA) (the range
between your resistance points)
• Understanding the other party’s perspectives helps anticipate objections to your
proposals
• The dilemma of trust - the other party may take advantage if you believe too much of
what he or she tells you, but you may not be able to reach an agreement if you believe
too little
• The dilemma of honesty - the other party may take advantage if you share too much
information, but you may not be able to reach an agreement if you share too little

13. Rapport building and testing assumptions

• Negotiators who chat share more information, make fewer threats, and develop more
trust and respect than pairs who do not
• Discussing matters that are indirectly related to the issues you plan to raise will help
you complete your foundation
• Efforts to analyse the other party involve making estimates, assumptions, educated
guesses or even hunches
• We are susceptible to making and being influenced by first impressions

14. Conclusions and implications for practice

Before beginning your negotiation, consider the following suggestions:

 • be prepared
• explore and understand the situation you are negotiating
• identify all the issues
• identify interests for each issue
• work hard to understand and improve your BATNA
• take time to get to know the other negotiator

15. Distributive Bargaining

• A competitive process for determining how to distribute or allocate scarce resources

• The strategy to use to claim value for yourself but you are not very concerned about the
relationship or the other party’s outcome

16. Distributive vs. Integrative Bargaining

17. Preparation of distributive bargaining

• Positions are the primary focus of distributive bargainers

• Reservation prices or resistance points set limits
• Aspiration levels or target points are what you realistically hope to achieve
• Distributive bargainers make offers and counteroffers between their opening offers and
their reservation prices
• Alternatives define your resistance points and your power – your ability to walk away
18. Tactics of distributive bargaining

• Estimate the other party’s resistance points

• Understand your BATNA and improve it
• Set your targets high: be optimistic but not outrageous
• Ask for more than you expect to get
• Make the first offer if you are prepared
• Plan your concessions
• Provide objective support and explanations for your offers
• Do not say yes to the other party’s first offer
• Use silence
• Use time to your advantage
• Appeal to norms of fairness
• Be willing to walk away

If your preparation and testing of assumptions have given you a reasonably clear understanding
of the ZOPA, or if the situation you are negotiating is so familiar that you have a reasonable
understanding of it, you should be able to make an accurate estimate of the other party’s
resistance points.

• First offers anchor the negotiation and these anchors are strongly correlated with final
outcomes
• If the other party does make the first offer, respond immediately but thoughtfully
• Most people bargain distributively
• The final outcome of any negotiation is typically the midpoint between the first two
offers that fall within the ZOPA
• Opening offers are rarely accepted in negotiations

19. Managing concessions in distributive bargaining

Concessions are important for several reasons:

• They reflect the expected give and take of distributive bargaining

• Signal that the parties are willing to adjust their differences to reach an agreement
• You acknowledge the other party and recognize the legitimacy of his or her position
 • When one party makes a concession the other will reciprocate
• The amount you concede should be significant, but not so much that you materially
change the value of the deal
• Negotiators who make fewer and smaller concessions fare better than those who make
larger and more frequent concessions

20. Hardball tactics and dirty tricks

Hardball tactics are used to pressure negotiators into doing things they otherwise would not do:

• Bogey
• Good Cop-Bad Cop
• Intimidation and Other Aggressive Behavior
• Lowball-Highball
• Nibble
• Snow Job
• Selective Presentation, Deceiving and Bluffing
• Concealing and Distorting Information

21. Conclusions and implications for practice

The following suggestions can help when you execute the distributive negotiation strategy:

• estimate the other party’s resistance points

• understand your own BATNA and cultivate other offers to improve it
• prepare well, make the first offer, and support it with objective information and
explanations
• when the other negotiator makes an offer, remain silent
• avoid using dirty tricks and tactics
• focus on positions, not interests

22. The essence of integrative negotiation

• Used when you want to solve problems in a way that works for both sides
 • The strategy to use when highly concerned with your outcomes and those of the other
party

23. Preparation of integrative bargaining

• Defining the situation, interests and rapport building assume greater importance when
you negotiate integratively
• Defining the situation helps determine what you will be negotiating, your goals and all
the issues that must be addressed to produce a complete solution
• The other party must develop a shared understanding of the situation
• Interests - the primary focus of integrative negotiators
• There is only one way to satisfy a position – you get it or you do not
• Building rapport also assumes greater importance
• Cooperation and information sharing help negotiators develop:
o a shared understanding of the situation
o identify interests
o invent solutions that satisfy them

24. Myths about integrative negotiation

• People seem to think it is about being soft or nice

• They have negotiated integratively if they maintain or improve the relationship
• The integrative part of the negotiation is the value creation component
• The assumption of a fixed pie

25. Tactics of integrative bargaining

• Separate the person from the problem and the role of communication - ‘Separating the
person from the problem’ requires negotiators to create a free-flowing exchange of
information that helps them gain a clearer and deeper understanding of the situation. To
achieve this:
o Ask open-ended and probing questions to gather information and to clarify what
has been said
 o Engage in active listening
o Talk about the impact of the problem on you
o If you disagree with something that is said, critique its merits
o If the other negotiator does not seem to understand what you are
communicating, reframe it
o Look forward - not back
• The role of emotions - Negative emotions cause negotiators to:
o pay less attention to the other party’s interests
o diminish the accuracy of their judgments about these interests
o lead to the use of less cooperative strategies and the creation of less favourable
outcomes
o less compliance with the terms of the agreements that are reached
o less interested in having future interactions with the other party

Managing emotions:

o Recognize and understand that emotions are an inevitable part of the bargaining
process
o Do not attack the other side even if you think it might feel good to do so because
of the way he or she is behaving
o If the other party is very emotional, allow him or her to vent his or her
frustrations but do not react to them
o If your emotions are strong, do the same things
o If he or she attacks you, recast it as an attack on the problem and not you
o Taking a short break might help
• The role of perceptions:
o Our own point of view makes it very difficult to process and evaluate
information objectively
o Viewing the situation from the other party’s perspective is very beneficial
because it enhances problem solving and facilitates efforts to achieve integrative
agreements

26. Integrative bargaining – focus on interests not positions

 • Interests are a negotiator’s fears, concerns and unmet needs. They are the motives
underlying stated positions
• Confusing issues, positions and interests is problematic because it stifles the creativity
needed to invent solutions that work for both parties
• Interests can pertain to the substantive terms of the negotiation, the relationship, the
process, or principles
o Substantive interests pertain to the tangible issues being negotiated
o Relationship interests pertain to the nature of the relationship you want to have
with the other party
o Process interests are about how a deal is made or how a dispute is settled
o Principle interests are intangible. They pertain to strongly held beliefs
o Intrinsic interests – you value or need something in and of itself
o Instrumental interests – you value or need something because it will help you in
the future
• It is important to identify your interests for each issue
• Unmet needs or unsatisfied interests are one of the main reasons people object to and
reject proposals
• Sharing your interests with the other party is advised
• Negotiators who ask the other party about his or her priorities are more likely to reach
integrative agreements than those who do not

27. The essence of closing deals

• One of the critical ingredients for getting to yes is helping the other party understand
why or how your offers satisfy his or her interests
• Closing begins when you prepare because you are likely to craft at least some of your
proposals while you are preparing

28. The most common objections

• “It is not my idea”

• Unmet interests of the other party
• The other party is losing face
 • Too much information too fast
• “It is too expensive” or “I cannot afford it”
• “It does not work for me” or “I do not want it”
• “I want to think about it” or “I need more time”
• “I do not believe you will comply”

29. Closing deals – when you should attempt to close

• It is appropriate to close the deal when you are confident the other party understands
that the value of your offer exceeds its cost
• Asking open-ended questions about your proposal, or more specific questions about
particular features of your proposal, will help you discern where he or she stands
• A decrease in the number or intensity of objections provides more insight
• If he or she acknowledges that your proposal has potential after initially indicating it
would be impossible to accept it
• If the nature of the other party’s questions changes from concerns about whether your
proposal will satisfy his or her interests to how it will actually work when it is
operational, it may be possible to close the deal
• Comments such as, “I like that size,” or “That will get the job done,” or “The price is
lower than I thought it would be” or “I did not realize you delivered every day” are all
signals that the other party may be ready to close

30. Closing tactics

• Ask the Other Party to Agree

• Split the Difference or Compromise
• Comparison
• Cost-Benefit Analysis or Balance Sheet
• Multiple Equivalent Offers
• Sweeteners
• Default Options
• Assume the Close
 • Exploding Offers
• Sequential Questions

31. The essence of ethics in negotiations

• Trust and integrity are important components of both ethical business practices and
ethical negotiations
• Negotiation is a process of potentially opportunistic interaction by which two or more
parties with some apparent conflict seek to do better through joint action than they could
otherwise
• Ethics is the study of interpersonal or social values and the rules of conduct that derive
from them, manipulation, truth telling and withholding information are at the core of
what is or is not ethical in negotiation

32. What might cause negotiations to behave unethically?

• How much we value our personal integrity will influence the ethicality of the tactics we
use
• Most ethically questionable behavior in negotiation is about withholding information
and truth telling
• Deceptive or other ethically questionable tactics may enhance a negotiator’s power
• Negotiators who have more to gain by lying are more likely to do so, and those with
less power use more deceptive tactics and lie
• Personal motives:
o Negotiators with a competitive orientation are more likely to misrepresent
information
o Negotiators misrepresent or omit information more if the other party appears to
be trustworthy because the chances of being caught are small, and the costs if
they are caught are low
o Those who have failed in prior negotiations will use whatever means are
available, including deception, to redeem themselves
o Negotiators who have been victimized by the other party’s use of unethical
tactics will be disappointed with the loss, angry and embarrassed at being duped
 o The prospect of positive reinforcement probably explains why negotiators who
expect to be rewarded for using unethical tactics do so
• How ethicality is assessed:
o Utilitarianism argues that an action is ethical if it produces the greatest good
(happiness) for the greatest number of people affected by it
o Social contract ethics argues that an action is ethical if it is consistent with or is
grounded in the community’s social norms that govern the interaction
o Advocates of these two frameworks are more likely to use ethically questionable
tactics
• Ethical frameworks:
o The rights and duties framework - People are governed by certain universal
rights, and these rights impose upon themselves and others a corresponding
duty. Breaching these rights and duties is unethical.
o The fairness and justice framework - Similarly situated people should be treated
similarly in terms of the allocation of rewards and burdens, and in terms of the
process that is used to determine the allocation.
o Advocates of these more rule-based frameworks are less comfortable with, and
less likely to use, ethically questionable tactics.

33. Unconscious or unknowing ethical breaches

• Overlooking the Unethical Behavior of Others

• Overlooking the Actions of Those who Delegate Unethical Tasks
• Overlooking Indirect Unethical Behavior
• Overlooking Gradual Unethical Behavior
• Overlooking Unethical Processes Until the Outcome is Bad
• In-Group Favouritism

34. 15 Rules of Negotiation

• Do not underestimate the importance of likeability – anything you do in a negotiation

that makes you less likeable reduces the chances that the other side will work to get you
a better offer.
 • Help them understand why you deserve what you are requesting – never let your
proposal speak for itself; always tell the story that goes with it.
• Make it clear they can get you – people would not want to expend social or political
capital to get approval for a strong or improved offer if they suspect that at the end of
the day, you are going to say, “No, thanks.”
• Understand the person across the table
• Understand their constraints – know where the other party is flexible and where no
amount of negotiation can lead to anything.
• Be prepared for tough questions – answer honestly without looking like an unattractive
candidate and without giving up too much bargaining power.
• Focus on the questioner’s intent, not on the question
• Consider the whole deal – think not just about how you are going to be rewarded but
also when.
• Negotiate multiple issues simultaneously, not serially – you are usually better off
proposing all your changes at once, but also signal the relative importance of each to
you.
• Do not negotiate just to negotiate
• Think through the timing of offers
• Avoid, ignore or downplay ultimatums of any kind – avoid giving ultimatums, ignore
ultimatums received.
• Remember, they are not out to get you
• Stay at the table – what is not negotiable today may be negotiable tomorrow.
• Maintain a sense of perspective – your satisfaction hinges less on getting the negotiation
right and more on getting the job right.

35. Nine Steps to a Deal

• Consider what a good outcome would be for you and the other side
• Identify potential value creation opportunities
• Identify your BATNA and reservation price, and do the same for the other side
• Shore up your BATNA
• Anticipate the authority issue
 • Learn all you can about the other side’s people and culture, their goals, and how they
have framed the issue
• Prepare for flexibility in the process – do not lock yourself into a rigid sequence
• Gather external standards and criteria relevant to fairness
• Alter the process in your favour

36. Approach to answering a case

• State the case facts

• State the best course of action and the BATNA
• State the reservation points of both parties and draft the ZOPA
• State the way forward
 PAST QUESTIONS

1. Assuming any situation, explain the concept of interest-based negotiation and position-
based negotiation.

Ans. Interest-based negotiation or integrative negotiation:

Integrative negotiation is a type of negotiation strategy where both parties work together to
create a mutually beneficial solution to their problem. It involves collaboration, active listening,
and the identification of common interests to maximize the value of the negotiation.

Example - Let us say two companies are negotiating a partnership deal. Company A wants to
gain access to Company B's customer base, while Company B wants access to Company A's
technology. Instead of taking a competitive approach where they only focus on their own
interests, they engage in integrative negotiation. They discuss their priorities and identify
potential areas of collaboration that could benefit both companies. They decide to create a joint
marketing campaign that leverages Company A's technology to target Company B's customers.
This way, both companies gain access to new customers and technology, and they both win.

Position-based negotiation or distributive negotiation:

Distributive negotiation is a negotiation strategy in which two or more parties try to divide a
fixed amount of resources or assets. In distributive negotiation, one party's gain is the other
party's loss. This type of negotiation is also known as "win-lose" negotiation because the goal
is to get the largest possible share of the available resources.

Example - Imagine two companies are negotiating the sale of a commercial property. The
property is worth $2 million, and the buyer has offered to purchase it for $1.8 million. The
seller is asking for $2.2 million. In this situation, both parties are in a distributive negotiation
because there is a fixed amount of money available for the sale of the property. To reach a deal,
the parties will negotiate to find a mutually acceptable price. The buyer may try to get the seller
to lower their asking price, while the seller may try to get the buyer to increase their offer. The
negotiation will continue until the parties reach a point where they are both satisfied with the
price.
2. Joyleen needs a car and is negotiating with Shalini to purchase her car. Shalini offers
to sell her car to Joyleen for rupees 2,00,000. Joyleen scours through Quickr and finds a
similar car to which she assigns a value of rupees 1,75,000. Joyleen’s BATNA is rupees
1,75,000 – if Shalini does not offer a price lower than rupees 1,75,000, Joyleen will
consider her best alternative to a negotiated agreement. Joyleen is willing to pay up to
rupees 1,75,000 but would ideally want to pay rupees 1,50,000. Explain the concept of
BATNA and ZOPA with a diagram from the caselet.

Ans. BATNA stands for Best Alternative To a Negotiated Agreement. It refers to the course of
action an individual would take if the current negotiation fails to reach an agreement. In this
case, Joyleen's BATNA is to buy a similar car on Quickr for rupees 1,75,000.

ZOPA stands for Zone of Possible Agreement. It refers to the range of options between two
parties where an agreement can be reached. In other words, it's the area of overlap between
what one party is willing to pay and what the other party is willing to accept. In this case, the
ZOPA is between Joyleen's willingness to pay rupees 1,50,000 and Shalini's asking price of
rupees 2,00,000.

3. “The more rigorous you are in preparing a detailed, specific understanding of the other
party and their perspectives, the better your negotiated results are likely to be” – Justify.

Ans. Preparing a detailed and specific understanding of the other party and their perspectives
is a crucial component of effective negotiation. This understanding allows you to identify their
interests, concerns, and priorities, and helps you to craft proposals that are more likely to be
accepted.

When you take the time to research and understand the other party, you gain insight into their
needs and preferences, which enables you to identify potential areas of agreement and
disagreement. This understanding also allows you to anticipate their responses to proposals and
to adjust your negotiation strategy accordingly. For example, if you know that the other party
places a high value on a particular issue, you can offer concessions in that area to increase the
likelihood of reaching an agreement.

In addition, a detailed understanding of the other party and their perspectives helps to build
trust and rapport, which are essential components of successful negotiation. When you
demonstrate that you have taken the time to understand the other party's concerns and priorities,
you signal that you are invested in finding a mutually beneficial solution. This can help to build
a positive working relationship and reduce the likelihood of impasses or breakdowns in
communication.

4. Explain the different strategies to follow in a job offer negotiation by a candidate when
the employer is better positioned.

Ans. When a candidate is negotiating a job offer with an employer who is in a better position,
it can be challenging to achieve the desired outcome. However, there are several strategies that
a candidate can use to increase their chances of success:

• Research the market: Before negotiating, research the market to determine the typical
salary range for the position and industry. This information can be used as a benchmark
during negotiations and can help the candidate make a more informed decision.
• Focus on value: Instead of negotiating solely on salary, focus on the value the candidate
can bring to the company. Highlight the skills and experience that the candidate brings
to the role and how they can help the employer achieve their goals.
• Be flexible: While it's important to have a clear idea of what the candidate wants, it's
also important to be flexible during negotiations. Consider alternative forms of
compensation, such as stock options, bonuses, or additional benefits.
 • Demonstrate enthusiasm: Show enthusiasm for the position and the company. This can
demonstrate to the employer that the candidate is committed to the job and can help
build rapport during negotiations.
• Be prepared to walk away: If negotiations are not going well, be prepared to walk away.
While it may be difficult, it's important to recognize when the offer is not in line with
the candidate's expectations and to be willing to move on to other opportunities.

5. Why is it important to identify the real parties in a negotiation?

Ans. Identifying the real parties in a negotiation is crucial because it enables the negotiators to
understand the stakeholders involved and their interests, goals, and constraints. Without
identifying the real parties, negotiators may overlook the key decision-makers, influencers, and
stakeholders that can significantly impact the negotiation outcome.

Knowing who the real parties are can help negotiators develop an effective negotiation strategy
that addresses the interests and concerns of each party. It can also help them anticipate the
bargaining power and leverage of each party, which can inform their negotiation tactics.

Moreover, identifying the real parties can help prevent misunderstandings and
miscommunications that can derail the negotiation process. By engaging with the right
stakeholders, negotiators can ensure that all concerns are heard and addressed, and agreements
are more likely to be implemented successfully.

6. ‘Negotiators must manage the tension between creating value and claiming value’.
Explain.

Ans. In negotiation, creating value refers to the process of expanding the resources available
to both parties so that they can reach a mutually beneficial outcome. Claiming value, on the
other hand, refers to the process of dividing the resources that are already available between
the parties.

Negotiators must manage the tension between creating value and claiming value because these
two objectives often conflict with each other. If negotiators focus too much on claiming value,
they may overlook opportunities to create value, which could result in a suboptimal outcome
for both parties. Conversely, if negotiators focus too much on creating value, they may fail to
claim their fair share of the resources, which could result in an outcome that is unfavourable to
them.

Therefore, negotiators must find a balance between these two objectives, managing the tension
between them to achieve a mutually beneficial outcome. This requires a deep understanding of
the interests and priorities of both parties, as well as strong communication and negotiation
skills. By managing this tension effectively, negotiators can maximize the value that is created
in a negotiation while ensuring that each party claims its fair share.

7. “In an integrative negotiation all parties get what they want.” Do you agree? Give
reasons.

Ans. I do not agree that in an integrative negotiation, all parties necessarily get exactly what
they want. While integrative negotiation is focused on finding mutually beneficial solutions for
all parties involved, there may still be compromises and trade-offs that need to be made in order
to reach an agreement.

In an integrative negotiation, the goal is to identify and address the underlying interests and
needs of each party involved in the negotiation, rather than simply bargaining over positions.
This can lead to more creative and collaborative solutions that may satisfy the needs of all
parties to some extent. However, it is unlikely that everyone will get everything they want, as
there may be some conflicting interests or limited resources that cannot be fully satisfied for
all parties.

Additionally, in some cases, parties may have fundamentally different goals or values that
cannot be reconciled through negotiation. In these situations, it may not be possible for all
parties to get what they want, and a compromise or partial agreement may be the best outcome.

For example, let us consider an example of a company and a labor union negotiating a new
collective bargaining agreement. The company wants to reduce labor costs to improve
profitability, while the union wants to maintain or increase wages and benefits for its members.

In an integrative negotiation, the parties would explore each other's interests and try to find a
solution that meets the needs of both parties to the greatest extent possible. For example, the
company could agree to maintain current wages and benefits in exchange for increased
productivity from workers, or the union could agree to wage freezes or reduced benefits in
exchange for job security guarantees or improved working conditions.

However, it is unlikely that both parties would get everything they want in this negotiation.
The company may still have to make some concessions in terms of labor costs, and the union
may have to accept some reductions in wages or benefits. Ultimately, the goal of an integrative
negotiation is to find a solution that benefits both parties as much as possible, but it may not
result in everyone getting exactly what they want.

8. What are some of the ways in which framing can be used for better negotiations?

Ans. Framing is a powerful tool that can be used in negotiations to shape the way the parties
involved perceive the issues at hand. Here are some ways in which framing can be used for
better negotiations:

• Reframing the issue: Often, the way a problem is framed can affect the way people view
it. By reframing an issue, negotiators can change the way the other party views the
problem, making it easier to find a mutually acceptable solution.
• Highlighting common ground: Framing can be used to emphasize the common ground
between parties, which can help build trust and establish a shared sense of purpose. This
can make it easier to find a solution that benefits both parties.
• Shifting the focus: By changing the focus of the negotiation, negotiators can draw
attention away from contentious issues and focus on areas of agreement. This can help
reduce tension and lead to a more productive negotiation.
• Emphasizing the positive: Framing can be used to highlight the positive aspects of a
proposed solution, making it more appealing to the other party. This can help overcome
resistance and lead to a successful negotiation.
• Using language to influence perception: The language used in negotiations can affect
the way the other party perceives the issues at hand. By using positive language and
avoiding negative framing, negotiators can create a more positive perception of the
negotiation.

9. What are the four strategies the negotiators can adopt to set the stage for a successful
negotiation?
Ans. The four strategies that negotiators can adopt to set the stage for a successful negotiation
are:

• defining the situation - ensure that any outcome that you negotiate satisfies all your true
needs, and perhaps those of the other party; thoroughly investigate the situation by
gathering relevant information; other factors include nature of the interaction, other
negotiations, obligations to negotiate with this party, relative power, resources and
constraints, others who may affect or be affected by the negotiation, environment, or
context
• establishing the goals you hope to achieve – effective goals are clear, specific,
measurable, and challenging yet attainable, guide behaviour, clarify expectations and
determine priorities, suggest what information is needed
• formulating your strategy for achieving them – strategy is the plan or process by which
negotiators attempt to achieve their goals while tactics are the specific, short-term
actions that serve to implement the broader strategy; it includes identifying and defining
the component parts of the plan for yourself and for estimating them for the other party,
the component parts being issues, positions, and interests
• deciding how you will implement it

10. What could be some of the advantages of dealing with someone who does not have
authority? What would be the cautions required?

Ans. Advantages of dealing with someone who does not have authority:

• Fresh Perspective: People who do not hold authority often bring fresh perspectives and
new ideas to the table. They can offer unique insights that those in authority may not
have considered.
• Greater Flexibility: People without authority are often more flexible in their approach
to problem-solving. They are not bound by bureaucratic protocols or hierarchy, so they
can be more creative in finding solutions to problems.
• Lower Risk: People without authority are less likely to take actions that would put the
organization at risk. Since they do not have the power to make major decisions, they
are more cautious and may avoid taking risks that could result in negative
consequences.
 • Improved Communication: People without authority often have to rely on their
communication skills to get things done. They are more likely to be good listeners,
collaborators, and communicators, which can lead to better relationships with
colleagues and stakeholders.

Cautions required when dealing with someone who does not have authority:

• Miscommunication: Without the proper authority, misunderstandings can occur.

Communication should be clear and concise, and it should be ensured that everyone is
on the same page.
• Misinterpretation: There is a risk that those without authority may misinterpret policies
and procedures, leading to improper actions. It is important to clarify what is expected
of each individual and ensure that they understand their limitations.
• Potential Lack of Accountability: Those without authority may not feel the same level
of accountability as those with authority, which can lead to a lack of responsibility or
follow-through. It is important to establish clear expectations and provide feedback to
ensure that everyone is accountable.
• Overstepping Boundaries: There is a risk that those without authority may overstep
their boundaries, potentially causing harm to the organization. It is important to
establish clear boundaries and ensure that everyone is aware of their limitations.

11. What are the features of distributive negotiation? What are the critical success
factors?

Ans. Distributive negotiation is a type of negotiation where parties are focused on dividing a
fixed number of resources, such as money or goods. The main features of distributive
negotiation are:

• Fixed pie: In distributive negotiation, there is a limited number of resources available,

and each party's gain comes at the expense of the other party's loss.
• Competitive: Parties in distributive negotiation have opposing interests, and each party
is trying to maximize their share of the resources.
• Short-term focus: Distributive negotiation is usually focused on the immediate outcome
and is often a one-time transaction.
 • Positional bargaining: Parties in distributive negotiation take a firm stance on their
position and use tactics like anchoring, bluffing, and conceding to reach an agreement.

The critical success factors in distributive negotiation are:

• Preparation: Adequate preparation is necessary to understand the other party's position,

interests, and priorities.
• Information: Having accurate information about the value of the resources being
negotiated is essential.
• Power: Each party's power to influence the negotiation outcome is crucial, and they
should use it strategically.
• Flexibility: Being flexible in the negotiation process can lead to a win-win outcome,
even in a distributive negotiation.
• Communication skills: Effective communication skills, including active listening and
clear articulation of interests, are critical for success in distributive negotiation.
• BATNA: Having a Best Alternative to a Negotiated Agreement (BATNA) gives each
party a fallback option if the negotiation fails.
• Persistence: Negotiations can take time, and it is essential to be persistent in the pursuit
of an acceptable outcome.

12. Explain the nine steps to a deal.

Ans. The nine steps to a deal are:

• Consider what a good outcome would be for you and the other side
• Identify potential value creation opportunities
• Identify your BATNA and reservation price, and do the same for the other side
• Shore up your BATNA
• Anticipate the authority issue
• Learn all you can about the other side’s people and culture, their goals, and how they
have framed the issue
• Prepare for flexibility in the process – do not lock yourself into a rigid sequence
• Gather external standards and criteria relevant to fairness
• Alter the process in your favour