Negotiations

                                   Negotiations

1. Negotiation is the process of communicating back and forth, for the purpose of reaching a joint agreement about differing needs or ideas.

2. It is a collection of behaviours that involves communication, sales, marketing, psychology, sociology, assertiveness and conflict resolution.
3.  A negotiator may be a buyer or seller, a customer or supplier, a boss or employee, a business            partner, a diplomat or a civil servant. On a more personal level negotiation takes place between spouse’s friends, parents or children.

 Note : Negotiation is not Bargaining.

•    Win-Lose
•    Lose-win
•    Win-win
•    (Lose-Lose)*

Types Of Negotiation

      1.     Distributive Negotiation

      2.     Integrative Negotiation

1.  Distributive Negotiation

(a) Parties compete over the distribution of a fixed sum of value. The key question in a distributed negotiation is “Who will claim the most value?” A gain by one side is made at the expanse of other.

(b) The Seller’s goal is to negotiate as high a price as possible; the Buyer’s goal is to negotiate as low a price as possible.

(c) Thus, the deal is confined: there are not much opportunities for creativity or for enlarging the scope of the negotiation.

   2. Integrative Negotiation

(a)  In Integrative Negotiation, parties cooperate to achieve maximize benefits by integrating their   interests into an agreement. This is also known as a win-win negotiation. The key questions is: “How can  the resource best be utilized?”

(b)  Integrative negotiations tend to occur in following situations:

         • Structuring of complex long-term Strategic Relationships or other collaborations.

         •When the deal involves many financial and non-financial terms.

(c)  In an integrative negotiation,, there are many items and issues to be negotiated, and the goal of each side is to “create” as much value as possible for itself and the other side.