Business negotiation and

decision making
Stages in the negotiation process
Principles of negotiation
1) Separate the person from the issue.
2) Negotiate not position focused but interest oriented.
3) Develop a criteria that a solution must fulfill.
4) You should have different options to choose from.
1. Separate the person from the issue

• In order to avoid that the quality of the relationship interferes on the

negotiation.

Easy said hard to achieve

• Strong emotions can become wrapped up with the substantive issues
in a negotiation and complicate it even further.

• Work to deal with emotions and personality issues separately from

the issues at stake.
• You can Negotiate very hard, but you should never be hard on the
person.

• It is on your interest to understand the interests of the other people.

• The other party is not your enemy is actually your partner.

Actions to separate the person from the issue:

Imagine yourself in the other person’s shoes.

Allow the other person to let off steam.
Recognize the source of any strong emotions.
Use active Listening Techniques.
Aim to be understood, not to win.
Build your relationship.
• If two department heads are locked in a heated battle over resources,
they or their leaders would confront the strong emotions underlying
their dispute through active listening and other communication
techniques.
• The goal is not to “win,” but to reach a better understanding of each
party’s concerns. 
2.Negotiate not position focused but interest oriented.

• Negotiators look beyond such hard-and-fast positions to try to

identify underlying interests—their basic needs, wants, and
motivations.
• Negotiators often waste time arguing over who should get their way
or, alternatively, trying to find a compromise point in between the
two firm positions they have staked.
Imagine that two siblings disagree about where to host their parents’
anniversary party.
• One wants to have it at a restaurant, while the other wants to have it
in her home. They only make headway when they identify their
deeper interests: the former doesn’t have a lot of time to devote to
preparation, while the other is concerned about the cost.
• Armed with this understanding of each other’s interests, they do
some research and decide to host the party at a relatively inexpensive
restaurant
Actions to Identify the other party’s interests

When the other side expresses a position, ask ¨why?¨

Ask ¨Why not?¨ when the other side rejects one of your proposals
Create a list of interests for both sides
Acknowledge the other side’s interests
3) Develop a criteria that a solution must fulfill

• Generate options for mutual gain

• What conditions must a good solution that you could say yes to fulfill?
Negotiators often settle for the first agreement they reach, relieved to
have hit upon an outcome that both sides can live with.

In principled negotiation, negotiators devote significant time to

brainstorming a wide range of possible options before choosing the
best one. In negotiation, options refer to any available choices parties
might consider to satisfy their interests, including conditions,
contingencies, and trades.
• Actions to generate options for mutual gain

Separate the creation of ideas from the judgment of them

Try to broaden your options
Try to Identify mutual gains
Look for ways to make the other side’s decision easy.
• For example, imagine a job negotiation where the candidate values a
higher salary, while the hiring organization is concerned about being
fully staffed. If so, the job seeker might be willing to make a
concession on vacation days in return for the promise of a higher
salary.
• Reconcile differences when interests don´t allign nicely
4.You should have different options to
choose from

• It’s common in negotiation for parties to argue back and forth about
whose “facts” are correct. This type of argument is likely to end in
either impasse or an inefficient compromise.
• In principled negotiation, negotiators rely on objective criteria—a fair,
independent standard—to settle their differences.
• Insist on using objective criteria

• Objective criteria are facts that are independent of the people

involved in the negotiation
• For example, they might agree to abide by standards such as market
value, expert opinion, industry protocol, or law. Importantly, parties
should agree in advance about which objective criteria to consult and
agree to abide by the outcome.
• Think about a negotiating situation in you life , how it could have been
improved by the Harvard Negotiating principles?
•Negotiation process
Stages of the negotiation process
It is useful to examine the negotiation process in 5 phases:

1. Preparation
2. Introductory
3. Initiation
4. Intensification
5. Closing

• The more complex the subject of the negotiation, the more will be
the process.
Preparation

• Preparation requires research, consideration, careful analysis, and

creativity.

• It is possible to identify the checklists of the steps to follow during the

preparation stage.
• Gather as many details as possible about the transaction.
• Determine what you want and what you need.
• Rank your wants and needs in order of importance.
• Try to determine what your counterpart wants and needs.
• Determine your BATNA.
• Determine the alternative negotiated solutions that would be
acceptable to you.
• Good preparation is the surest way to reach a successful negotiation.
What we do or don't do before we get to the negotiating table will be
reflected in what we do when we get there.

• An ill-prepared negotiator will have to limit himself to reacting to

events, but he will never be able to direct them. His opponent will
realize this, gain self-confidence and raise the level of demands on
him. The preparation phase is the right one to define what needs to
be achieved and how to achieve it.
In this first phase we can distinguish these four aspects:

a) The objectives
b) Information
c) The strategy
d) Tasks : direction, synthesis and observation
• You should know your overall goal well enough to be flexible about
how you get there. If you follow your plan despite recent information
and changing circumstances, your counterparty will benefit from your
tunnel vision, or negotiations will break down without agreement.
• Where and when you collect information will vary depending on the
nature of the transaction as well as the parties involved.

• Go to everyone, secretaries, assistants and anyone who has dealt with

this person in the past. Listen to third parties, such as suppliers,
competitors, and customers, and publicly available financial data is a
great source of information.
• No matter how well prepared you are, there will be additional
information you can gather once in-person meetings begin. You must
remain open to new information and resolution ideas.
• If the preparation reveals that negotiation is not likely to result in a
better outcome than a non-negotiated alternative or that you do not
feel comfortable beginning the negotiation, then you are not ready to
negotiate.
• Negotiation Preparation is easy to ignore, but it’s a vital first stage of
the negotiating process.

• To prepare, research both sides of the discusión, Identify any possible

trade-offs, determine your most-desired and least-desired possible
outcomes.

• Make a list of what concessions you’re willing to put on the Bargaining

table, understand who in your organization has the decision-making
power.
• Preparation can also include the definition of the ground rules:

• Determining where, when, with whom, and under what time

constraints the negotiation will take place.
Introductory
• This is the part of the negotiation when both parties exchange they
initial positions. Each side should be allowed to share their
underlying interests and concerns uninterrupted, including what
they aim to receive at the end of the negotiation and why they feel
the way they do.
• The development of the discussion phase must affect the progress
and outcome of the negotiations. The discussion stage can provide us
with access to all kinds of information about the objectives,
commitments and intentions of our opponent, this stage allows us to
contrast the hypothesis that we made about him during the
preparation.
• When we speak we have to try to use the time we have available
effectively and one way to achieve this is to ask positive questions
that encourage our opponent to explain and reason his position.
Initiation
• During this step, both sides continue the discussión that they began
when exchanging information by justifying and bolstering their claims.
• If one disagrees with something the other side is saying, they should
discuss that disagreement in calm terms to reach a point of
understanding.
• Sooner or later, the negotiators have to discuss their proposals, since
it is the proposals that are negotiated and not the discussions.
• In this phase the language of the proposal must be exploratory and
non-committal. Proposals will need to be more specific in the
exchange phase, but cautious advances are needed in the discussion,
not risky and unequivocal offers.
• It is not convenient to start near our upper limit, since it would barely
leave us room to move, nor to start very far from that limit, since this
would force us to move a lot, thus giving the appearance that we are
giving in too much. It is advisable to start realistically and move
moderately.
• One way to improve the presentation of a proposal is to separate it
from explanations and justifications of the same, exposing the
content of the proposal and explaining or justifying that content later,
but never mixing both things, the explanation or justification may
seem like an apology. .. the other party will try to force us to make
concessions.
 Tactics
Start with big or small issues

• It will depend on the particular case and the individuals involved.

Dealing with small issues that proceed relatively quickly often
promotes action and goodwill. Resolving the biggest issue first
reduces overall anxiety.
Tentative resolution

• It is advisable to confirm at the outset that full agreement is the goal

and that each resolved issue is tentative until the entire issue is
addressed.

• This tactic will give all parties the flexibility to find solutions and
trade-offs in the end. It will also protect one party from the other
party's unscrupulous tactics.
About the first offer

• Don't make the first offer unless it's unavoidable. If you allow your
counterparty to open negotiations, you will get information. Often the
other party's start is better than you anticipated.
• When there is a deadlock, whoever has the greatest need to resolve
the issue will usually initiate it.
• Being second isn't important enough to upset a cooperative
negotiation tone.
Extreme postures

• If the offer is exorbitant or ridiculous, laughter is an appropriate

reaction. If the other party does not have an answer, one response
tactic is to ask about the basis or support for that offer. If your
counterpart is seriously interested in negotiating, he will give you his
reasoning or correct the offer.
Reluctance

• It is the tactic of appearing hesitant or less than enthusiastic in order

to enter into negotiations. The party using this tactic hopes that the
other will take action or make offers to raise interest. It's quite a
competitive technique to use reverse psychology. Don't take the bait
and don't be too anxious either.
The pressure

• Telling the other party to offer something better is pressure. An

effective response is to request a counter offer. Responding to this
tactic with a concession is a common mistake.
Blocking

• It is the act of ignoring all but one part of a question or proposal.

Blocking is also giving a general answer to a closed question or
answering a different question than the one that was asked.
Answering one question with another is another blocking tactic.
Counter offers

• The positions and parameters for the negotiation are established by

the initial offers of each party. Once each side has set its own, the
moves are known as concessions. Counter offers are concessions. The
positions must be founded, reasoned and supported.
Review
• Jobs and Markkula negotiating the investment deal – Jobs (2013) – Yo
uTube

• Jobs Negotiating (2013) Movie Scene – YouTube

• Analysis of Negotiation Scenes From Movie “Jobs (2013)” by Maggie R

osalina. – YouTube

• https://www.youtube.com/watch?v=lB-PRuHxbOs
Intensification

• The escalation stage is when momentum for a point or issue has

increased, parties are heavily involved, and bids are nearing targets.
• Here it is about getting something in exchange for giving up
something else. It is the most intense part of the negotiation process
and both parties have to be very attentive to what they do.

• Here the most important rule is that all proposals and all concessions
are conditioned. Nothing should be given for free, but every
concession we make must be followed by a concession from the other
party.
The package
• The assembly of the package will be the one that leads to the field of
exchange. It is the bridge between the opening movements and the
final sharing of the negotiators.

• Pack mounting is a studied activity in response to opening moves

made in the course of trading.

• The interesting thing about package assembly is that as a whole, a

package doesn't usually offer new concessions, but presents
variables from the other party.
• Tactics
• Distraction

It is an attack on the weakest point of the other party. The intention is

to distract attention from the counterparty's strengths when you know
that the position may be well supported.

If they try to use it against you, acknowledge the strength of the

position and don't be distracted or misled.
• Patience

Patience is postponing a decision, not asking for time.

• Extrapolation

Extrapolation is providing enough information for members of the

other party to draw their own conclusions without actually answering
a question directly.
• Intense pressure

It is about maintaining that you have done your best or that the other
party has not given their best.
• Request

When someone requests, you should ask them to explain and support
with facts and/or concepts why they should accept the request.
• Limited authority

One party may claim limited authority as an excuse, hoping the other
will give up. Do not fall prey to this tactic, ask to speak with the person
in authority.
• Transfer

It is an attempt to pass the problem onto the other party. "It's your
decision" is an example of translating. Don't accept it. Refocus the
other party on the fact that you both need to solve the problem.
• Interval

It is asking for time to think, it is possible to ask for time to cool down
hot tempers.
Closing

The two most common and most successful closure techniques are:

• Closing with Concession: Finish the trade phase by offering a concession

to get a deal.
• Closing with summary: End the exchange phase by summarizing all the
agreements reached.
•Tactics
• Create time pressure

Give indications that there is no disposition to have more meetings.

• Feint

Feinting means raising another issue. After some negotiations on this

new issue, the party that raised it relents.
The tactic is designed to make the other feel compelled to
compromise on the issue in order to close the deal. Sometimes the
new issue was not the one actually in dispute.
• Revocation

A party revokes its prior consent on a prior matter in response to failure

to reach agreement on the current proposal. As long as the party has
made it clear early in the process that nothing is final until all issues
are resolved.
• Retraction

We all tend to want what we can't have. With this tactic, the proposal
that is on the table is withdrawn. Sometimes the intention is to make
the other party want what is being withdrawn.
• Silence

Silence is the most difficult argument to refute. Refute silence with

silence, however to avoid reaching a dead end... you can use questions
like ¨Is there anything we haven't covered?¨ ¨What else is needed?¨
• Ultimatum

Giving an ultimatum is a dangerous tactic, unless you are truly willing to

end negotiations and walk away. Looking for creative alternatives and
changing the subject are appropriate responses to an ultimatum.
• Small requests

It is requesting a little more or one additional thing after the parties

have just finalized an agreement.

An alternative response is to laugh and accept it as a good attempt at

joking. It is recommended not to go too far... deals have been broken
for asking for just a little more.
Sources
1. Grados Jaime, 2006, Toma de decisiones , Trillas 1° ed.
2. Budjac Barbara 2011, Técnicas de negociación y resolución de
conflictos, Pearson 1° ed.
3. https://www.masterclass.com/articles/how-to-negotiate
4. https://online.hbs.edu/blog/post/steps-of-negotiation
5. https://www.pon.harvard.edu/daily/negotiation-skills-daily/principl
ed-negotiation-focus-interests-create-value/