Module 3

MODULE 3

PRE-CONTRACT NEGOTIATIONS- SKILLS, STYLES AND
TACTICS

“Negotiating in the classic diplomatic sense assumes parties more anxious
to agree than to disagree”

-Dean Acheson

3.1 DEFINITION

The biggest reason behind this is in today’s fast-paced world nobody has
time to sit back and fight, in the case of a disagreement everyone looks for
the best possible solution in less time. Today everybody is focusing on the
principles of fairness, seeking mutual benefit and maintaining a
relationship. This is what negotiation gives. Negotiation is one of the most
important aspects in an individual’s life. Being able to negotiate well plays
a key role in the overall career of a person. But what is negotiation?

Negotiation can be understood as a discussion between individuals to
determine a disagreement and collectively reach an understanding on the
point of discussion that satisfies the interests of the parties in dispute. It is
a process where people rather than fighting among themselves sit together,

evaluate the pros and cons and then come out with an alternative which
would be a win-win situation for all.1

Negotiation is one form of dispute resolution mechanism which has a wide
scope of happening in a formal setting like in business, government
branches, legal proceedings, NGOs etc. or in an informal setting like a
dispute among friends, marriage, divorce, parenting and everyday life.

3.2 SKILLS, STYLES AND
TACTICS

Negotiation is all about dealing with Negotiation means a series of ability that a
people tactfully or diplomatically to negotiator uses while doing the negotiation
make them reach a solution that is

beneficial to both of them

to reach the goal that is intended for the

negotiation. Negotiation is all about persuading and influencing parties.

3.2.1 STYLES

Every person has there one negotiation styles. There are no
particular parameters according to which negotiation styles can be
defined. However, broadly speaking there are three major
negotiation style that can be identified:

This is more on individualistic line. The party tries

Win-Lose style to persuade a party in a manner that the other

party does what they want ignoring their own

interest. This at times can be threatening. According to studies of

1 http://www.managementstudyguide.com/models-of-negotiation.htm

businesspeople and students, about half of U.S. negotiators have an
individualist style. Individualists tend to claim value rather than
create it, argue their positions forcefully, and, at times, make
threats.2 This style can be beneficial in the short run, but ruins the
chances of future as no one would ever want to deal with such
people again.

This is what major corporations try

to do. They try to search for a middle Win-Win style
way to the problem where the

interest of both is protected. The parties mutually agree to solution

best for both of their interest. Both the parties compromise equally,

without burdening anyone of them. This is which is best for the long

run as well as in short run.

In this the negotiation is done in a manner

Mixed style where the needs of all the parties are tried to be

met to the best of the possible options. And

finally, after all, the available options are put forward one of the

party claims the best share.

3.2.2 TACTICS

There are many tactics available for a person to choose from but it
should highly depend on the fact that who is the other party and the
relationship that the parties have. These are:

2 http://www.pon.harvard.edu/daily/negotiation-skills-daily/identify-your-negotiating-style/

v SALAMI TACTIC: Salami tactics, also known as the salami-
slice strategy or salami attacks, is a divide and
conquer process of threats and alliances used to
overcome opposition. With it, an aggressor can influence and
eventually dominate a landscape, typically political, piece by
piece. In this fashion, the opposition is eliminated "slice by
slice" until it realizes, usually too late, that it is virtually gone
in its entirety. In some cases it includes the creation of
several factions within the opposing political party and then
dismantling that party from the inside, without causing the
'sliced' sides to protest. Salami tactics are most likely to
succeed when the perpetrators keep their true long-term
motives hidden and maintain a posture of cooperativeness and
helpfulness while engaged in the intended gradual subversion.3
For eg: When a person buys a second-hand car from a well-
known dealer. Is it just the car the person negotiates for? It’s
actually the car, getting the damaged parts replaced, getting a
free service for one year, getting the petrol tank filled for the
first time for free, etc. all of this the person negotiates the
price of the. It’s a fact that no dealer will want to lose out on
the deal just because of not getting the tank filled. Thus, the
technique works here.

v WALK AWAY: This is a tactic where the party tries to
pressurize the other party by walking away from the table.
This generally happens in a situation where the party is not

3 https://en.wikipedia.org/wiki/Salami_tactics

happy with the compromise which the other party tries to do.
While opting for this, the party is well aware of the fact that
the other party is in a need of a deal and the party walking out
is at a position to renegotiate slightly above of what they were
doing originally. It is not what you want to pay or receive; it is
what you need to receive or can afford to pay.4 For eg: A has a
house in the middle of the plot where B wants to construct a
five-star hotel. Only the house of A is stopping the
construction. In this situation, it’s A who is at the higher
platform then B and can use this technique to negotiate the
terms of the deal.

v USING SILENCE AND TIME5: Never respond too quickly to
an offer. Pausing or even suspending negotiations can convey
that you’re not desperate to close the deal and that you have
other options. Silence can force a surprising amount of
pressure on the other party as well.

v ACCEPT DEFEAT: This tactic is used generally in a situation
where the ties between the parties are more important than the
deal being negotiated. In this situation one of the parties
accepts the terms which at times are against his interest. For
eg: Negotiation to save marriage ties.

4 http://www.how-to-negotiate.com/tactics/
5 http://www.moneycrashers.com/negotiation-techniques-to-score-a-great-deal/

v TAKE IT OR LEAVE IT: This is when the deal that the person
gives is so attractive which is hard to say no to. And this is
when the party giving the deal offers to either accept the deal
or to deny it, no other option is offered. Such types of deals are
so appealing that success is ensured in most of the cases. For
eg: Apple CEO Steve Jobs’ main closer strategy was to offer
an insane amount of money compared to other contenders.
Jobs perfected the take-it-or-leave-it approach and effectively
rendered his subjects blind to any other offer.6

v POKER FACE ATTITUDE: This tactic is generally used by
buyers. In this rather than making the other party aware of the
fact that the buyer has got the exact product he is looking for,
the buyer keeps a straight face. He pretends that though the
product is good but it’s lacking son something maybe
something like a great bargain. He shows that he is keeping his
option open, but at the same time maintains an attitude that he
is interested in the product but if an amazing deal is given. For
eg: a person going to buy a television. As a buyer, you should
never fixate on a single product; always shop around and keep
your options open. As a seller, you should always be prepared
to seek more potential buyers.7

v PROLONG NEGOTIATION8: This is an Iranian style of
negotiation. Several of the speakers say that Iranians have an

6 http://www.ceo.com/strategy/9-negotiation-tactics-from-famous-ceos/
7 http://www.moneycrashers.com/negotiation-techniques-to-score-a-great-deal/
8 https://www.cna.org/news/events/2006-04-19

amazing capacity to prolong negotiations. In this regard, they
are good at exploiting the willingness of people to accept
process instead of substance. For example, Iranians may
create a virtual issue, begin negotiating, and then create a
scenario in which everyone is talking about something that
was not on the original agenda, thereby stalling the
negotiations. Like, Iranians will negotiate the terms of a
contract and then will insist on negotiating the implementation
of those terms. That way, they can expect a concession at each
step in the negotiations while at the same time wearing down
their opponents.

These are just several of the tactics used by negotiators. When faced
with tricks and tactics, it is vital to remember some key points:9

o If you prepare and plan your negotiations, you will be more
equipped to deal with tactics. You will always know where
you are going, where you are in the process, and will know
what you can do if negotiations are unsuccessful.

o The objective of the negotiator is to obtain, efficiently, an
agreement that is fair to both sides. We want to keep the
relationship intact.

o Remember you can only correct and control the situation, not
the other person. Our focus has to be on the problem and the
process.

9 http://www.negotiations.com/articles/negotiation-tactics/

o A negotiator may not only require negotiating the issue, but
also the ground rules of the negotiation process.

o Recognize when a tactic is being employed. Address the tactic
with the other party. Do not personalize it ("You are lying to
me!").

o Always have sufficient confidence to stop proceedings if they
are not going well. This can be via a caucus, or even
rescheduling for another day or venue.

o Always know what you will do if an agreement cannot be
realized. Having that knowledge can and will prevent you
from proceeding in a negotiation where tactics are muddying
the issue. Know where you are in relation to what you will do
if negotiations are unsuccessful, throughout the negotiation
process. Do not allow the use of tactics cause an agreement to
be worse that what could have been done on your own.

3.3 THE PREPARATION

Preparation is the most important aspect of negotiation. To win it, one
needs to get ready just like a tiger. One needs to plan strategically to be
on the winning side. There is no particular mantra for a successful
negotiation, but going unprepared will surely lead to failure. Being
prepared will increase the chances of winning. One should make sure that
before sitting for actual negotiation one takes out time to prepare. Even if
it’s just for few minutes sitting in the car.

Some steps that can be helpful in preparing for negotiations can be:

Ø UNDERSTAND YOURSELF10: Before we even begin to understand
and apply best and leading practice negotiation, it is imperative that
we first invest in understanding ourselves. The idea is to optimize
your strengths and find ways to minimize the impact of weaknesses.
In negotiation, it is important that we make use of personal profiling
tools to highlight our areas of preference within the context of
negotiations. It enables us to have a reference point from which to
plot our skills development.

Ø KNOW THE CONTEXT OF THE DEAL: It is important to have an
idea about the circumstances and environment in which the
negotiation is taking place. The context differs in every negotiation.

Ø NEGOTIATION POINT CHECK: As Sun Tzu, the author of "The
Art of War", said hundreds of years ago, "Engage only when it is in
the interests of the state; cease when it is to its detriment. Do not
move unless there are advantages to be won."11 Try to figure out
beforehand that will the negotiation be advantageous to you or not?
If the answer to this is NO, then there is no point negotiating.

Ø SET A TARGET: Clarify in your mind what is the solution you intend
to reach at. Make a detailed picture of what you are exactly looking
for? Having an aim will help one negotiate accordingly. Being
specific with one’s negotiation goal will make one more confident,

10 http://biznegotiation.typepad.com/jan-potgieter-blog/2010/04/the-top-5-components-of-preparing-for-a-
negotiation.html
11 http://www.businessknowhow.com/growth/negotiations.htm

giving an edge over the other party. Consequently, will help to
achieve the objective one wants.

Ø CORRECT INFORMATION: After setting an aim, the next and the
most important is to do deep research on the point, to collect the
information needed. The information collected should be about the
interest of both the parties, necessary resources and possible
alternatives and solutions. It’s good to know the other side’s
situation and modify it to favor you. Throughout a negotiation, you
should do tons of listening, clarifying and checking. And when your
turn comes to put over your case, you should use every skill you can
muster to make sure they understand.12

Ø Get a BATNA: A BATNA is your “Best Alternative to a Negotiated
Agreement” and is the only certain way to be successful in
negotiations. By preparing for negotiations with one party by
sounding out an alternative deal with another party gives you walk
away power. It means that, even if the alternative isn't quite what
you want, you are still prepared to go there, if need be.13

Ø BE READY WITH QUESTIONS: How? Where? When? Why? Who?
What? Always be ready with answers to these questions beforehand.
These are the most common question that arises in most
negotiations. Also, many times solution to the problem comes out
from these questions itself.

12 http://www.businessknowhow.com/growth/negotiations.htm
13 http://www.managetrainlearn.com/page/preparing-for-negotiations

Ø MENTALLY PREPARED: Getting into the right frame of mind is
very important for a successful negotiation. Some preparation steps
could be:
o Being in awe of something is OK, but don’t show it.
o Be calm, composed and easygoing.
o Be in a business mood: attentive, sturdy and firm.
o Never wear your heart on your sleeve.
o Never underestimate or overestimate yourself.
o Go with an open and clear mind.
o Be a good listener first, and then a speaker.

Ø HAVE NEGOTIATION POINTS: One should always plan the
possible negotiation points. The best way is by preparing a list. After
doing that write down the contentions to deal with each issue. Also,
with that try and think from the other side and see how they will deal
with the issue. This will help counter the other party’s points during
the negotiation in a better way. Since, one will already have an idea
of the other side.

3.4 NEGOTIATION MODELS
There are various models of negotiation:

Win-Win Model In this model, each and every individual involved in
negotiation wins. Nobody is at loss in this model and

everyone is benefited out of the negotiation. This is the most accepted
model of negotiation.

In this model one party wins and the other party Win-Lose Model
loses. In such a model, after several rounds of
discussions and negotiations, one party benefits while
the party remains dissatisfied.

As the name suggests, in this model, the outcome of
Lose-Lose Model the negotiation is zero. No party is benefited out of this

model. In this model, generally, the two parties are not
willing to accept each other’s views and are reluctant to compromise. No
discussions help.

For Eg: Mike got selected with a multinational firm of repute. He was
called to negotiate his salary with Sara- the HR Head of the organization.

Case 1 - Sara quoted a salary to Mike, but Mike was not too pleased with
the figure. He insisted Sara to raise his salary to the best extent possible.
After discussions, Sara came out with a figure acceptable to Mike and she

immediately released his offer letter. Mike got his dream job and Sara
could manage to offer Mike a salary well within the company’s budgets - A
win-win Situation (Both the parties gained)

Case 2 - Sara with her excellent negotiation skills managed to convince
Mike at a little lower salary than he quoted. Mike also wanted to grab the
opportunity as it was his dream job and he was eyeing it for quite some
time now. He had to accept the offer at a little lower salary than expected.
Thus in this negotiation, Mike was not completely satisfied but Sara was -
A win-lose negotiation

Case 3 - Mike declined the offer as the salary quoted by Sara did not meet
his expectations. Sara tried her level best to negotiate with Mike, but of no
use.-A lose-lose model of negotiation. Nobody neither Mike nor Sara
gained anything out of this negotiation.

RADPAC Model of Negotiation is a widely used RADPAC Model
model of negotiation within corporates. Let us
understand it in detail. Every alphabet in this model
signifies something:

R – Rapport: As the name suggests, it signifies the relation between parties
involved in negotiation. The parties involved in the negotiation ideally
should be comfortable with each other and share a good rapport with each
other.

A – Analysis: One party must understand the second party well. It is
important that the individual understand each other’s needs and interest.

The shopkeeper must understand the customer’s needs and pocket, in the
same way, the customer mustn’t ignore the shopkeeper’s profits as well.
People must listen to each other attentively.

D – Debate: Nothing can be achieved without discussions. This round
includes discussing issues among the parties involved in the negotiation.
The pros and cons of an idea are evaluated in this round. People debate
with each other and each one tries to convince the other. One must not lose
his temper in this round but remain calm and composed.

P – Propose: Each individual proposes his best idea in this round. Each
one tries his level best to come up with the best possible idea and reach a
conclusion acceptable by all.

A – Agreement: Individuals come to a conclusion at this stage and agree to
the best possible alternative.

C – Close: The negotiation is complete and individuals return back
satisfied.

CONTRACT 3.5 THE PROCESS
PROCESS
Process is the procedure that should be
PHASE 1: Planning followed for a peaceful and fruitful
PHASE 2: Doing negotiation. During the negotiation, there are
PHASE 3: Ending a lot of twists and turns involved. One needs
to make certain choices, compromise at few
places, to achieve the desired outcome. To
make the correct choices, it’s very important
to be aware of the negotiation process.
Negotiation process involves three phases:

Ø Planning
Ø Doing

ü Discussion
ü Clarifying goal
ü Negotiate
Ø Ending
ü Agreement
ü Implementation of plan of action

PHASE 1: PLANNING: Planning talks about the preparation steps talked
about in the above section. One needs to plan communication style and the
tone they will use. To know what to plan exactly, here’s a recap of the
points one needs to be ready with:

CONTRACT • Know
PROCESS yourself and the other party

PHASE 1: Planning • Have a
PHASE 2: Doing clear agenda to negotiate
PHASE 3: Ending
• Look into
the interest of both the parties

• List out the
negotiation point

• Be ready
with a proper in-depth research

• What to do
if negotiation fails

PHASE 2: DOING: This phase starts as soon
as the parties enter the room to negotiate. The
person should keep in mind following tips to
ride through the negotiation process easily and
walk out with a content feeling after finishing the negotiation successfully.
This phase can be further divided into:

• Discussion: It is during this stage that the parties open up with their
version of the dispute. In a way, they put forward their
understanding of the situation.

• Clarifying goal: This stage as the name suggests is to explain the
interest, agendas and perspectives of the parties to each other.
Clarification is an essential part of the negotiation process, without it
misunderstandings are likely to occur which may cause problems
and barriers to reaching a beneficial outcome.14

• Negotiate: This stage marks the end of the phase. After the
discussions and clarification, the parties together try to reach to an
outcome which would be fruitful to both of them. Alternatives,
compromise situations etc. all are given at this stage.

To sum it up:

Ø Start by introducing and putting forward the agendas you plan to
negotiate on.

Ø Make the first offer, if not then never accept the first offer of the
other party. It is proven that people who take the first proposal are
less satisfied and regret their haste.15

Ø Be calm, composed and confident throughout the process.
Ø Develop an understanding of the other party’s frame of mind, how

they are negotiating and what they are aiming at, during the process.
Ø Discuss thoroughly each point, whether it’s their or yours.
Ø Keep on giving alternatives and listening to their options.
Ø Give and take.

14 http://www.skillsyouneed.com/ips/negotiation.html
15 https://www.business.qld.gov.au/business/running/managing-business-relationships/negotiating-
successfully/negotiation-process

PHASE 3: CLOSING: This phase starts at the end. It is all about
wrapping up the process. As they say, all’s well that ends well. Thus, after
a successful negotiation it vital to close the deal correctly. This phase can
be further divided into:

Ø Agreement: This is when a possible outcome is reached and agreed
by both the parties. It should be clear so that both the parties have a
clear picture of whatever has been decided and there is no confusion.

Ø Implementation of the plan of action: This is the last stage of the
process. Whatever is decided is implemented.

To sum it up:

Ø After everything is done look back and go through the agenda
and the contentions once again.

Ø Get the agreement in writing signed by both the parties.
Ø Follow up.

3.6 TIPS FOR SUCCESSFUL NEGOTIATION

It's time to negotiate! Here are a few golden rules to successful
negotiations:

v Always try to negotiate for at least 15 minutes. Any less than
that and it is unlikely that either party has had enough time to
fairly consider the other side. Generally, the size or
seriousness of the negotiation determines the amount of time
needed to negotiate it. Setting a time limit is a good idea.

Approximately 90% of negotiations get settled in the last 10%
of the discussion.

v Always offer to let the other party speak first. This is
especially important if you are the one making a request for
something such as a raise. The other party may have
overestimated what you are going to ask for and may actually
offer more than what you were going to request.

v Always respect and listen to what your opponent has to
say. This is important even if he or she does not extend the
same courtesy to you. Do your best to remain calm and
pleasant even if the other party is displaying frustration or
anger. Remember some people will do anything to intimidate
you.

v Acknowledge what the other party says. Everyone likes to
know that what they say is important. If the other party opens
first, use it to your advantage, by paraphrasing what you have
heard. Repeat their important ideas before you introduce your
own stronger ones.

v Pay attention to your own and your counter partner’s body
language. Review the chart below to learn how to interpret
body language during the negotiations. Make sure that you
aren't conveying any negative body language.

Language to use to Language to use for
show understanding/ objection on a point or
agreement on a point: offer:

ü I agree with you on ü Understand where
that point. you're coming from;
however,...
ü That's a fair
suggestion. ü I'm prepared to
compromise, but...
ü So what you're
saying is that you... ü The way I look at
it...
ü In other words, you
feel that... ü The way I see
things...
ü You have a strong
point there. ü If you look at it
from my point of
ü I think we can both view...
agree that...
ü I'm afraid I had
ü I don't see any something different
problem with/harm in mind.
in that.
ü That's not exactly
how I look at it.

ü From my
perspective...

ü I'd have to disagree
with you there.

ü I'm afraid that
doesn't work for me.

ü Is that your best

offer?

Body Language Possible meaning

Avoiding Eye Contact • Lying
• Not interested
• Not telling the whole truth

Serious Eye Contact • Trying to intimidate
• Showing anger

Touching the face/fidgeting • Nervousness
• Lack of confidence
• Submission

Nodding • Agreeing
• Willing to compromise

Shaking the head/turning • Frustrated
away • In disbelief
• Disagreeing with a point

3.7 TROUBLESHOOTING

The negotiation process is all about solving the dispute by sitting across
the table and discussing. It is obvious that the road will not be easy as the
parties coming will already have opposite opinions on the same points.
Therefore, there are certain hitches that can be faced during the process.
These can be:

§ COMMUNICATION: one of the most common issues during the
negotiation process. Communication means putting across your
point of view exactly the way you think. If communication is not
done properly it can create misunderstandings, thereby giving rise to
an unproductive negotiation.

§ BEHAVIOR: Negotiation becomes a tough job if the parties, or even
any one of them, have antagonistic behavior. This makes the whole
process very negative and unproductive. Bullying, sarcasm, guilty
feeling, bribe, showing superiority, insulting words etc are some of
the signs of an aggressive behavior.

§ TIME BOUNDATION: This is one of the strategies that a lot of
people try to use in negotiation to bring the ball in their court. They
may try to pressurize the party by putting unnecessary and
unexpected time pressures. They try to push the other party a step
behind and compel them to take the decision in their favor.

§ LAST-MINUTE WAVERING16: Just when you think that negotiations
are over and you have reached the agreement, the other party begins
wavering over some seemingly trivial point. The other party knows
that your defenses are down as the negotiation nears completion and
they ask for another concession. Actually, the other party can waver
several times, squeezing several additional concessions from you
each time.

§ UNDERSTANDING OF THE ISSUE: there are times when
negotiations are not successful; the reason behind this can be not
understanding the real and correct agenda. If the root cause is not
figured, negotiation process will be completely off beat and
consequently an unproductive negotiation.

§ HINDERING PROGRESS17: Negotiations must move forward in
order to reach a decision. If one side is being obstinate with no room
to concede, you may need to take a more drastic approach. Ask him
if he wants to continue with the discussions. Perhaps he would like
to speak with someone else. Ask him if he is uncomfortable and if
there is anything he needs to make him feel at ease with the
negotiation. By reaching out to let him know that you are putting his
needs first, you may find progress with the negotiation

§ NO PLANNING: Going to negotiation unprepared is the worst thing
that a person can do. Planning is the first and most crucial step of

16 http://www.tero.com/negotiationchallenges.html
17 http://www.ehow.com/info_7978779_problems-faced-during-negotiations.html

negotiation, without this the negotiation will only be a failure. One
should never underestimate the other party.

§ WRONG ATTITUDE: one should never be too rigid, or too flexible
or overconfident, or under confident. It is very important to have a
balanced attitude. One should be clear-cut and definite in
communicating while negotiation process.

This is not an exhaustive list but some of the most common issues that
arise in almost all the negotiations. To get a fruitful negotiation, with other
steps, it’s also very important to figure out these troubleshooting issues
and handle them effectively with patience.

3.8 GLOBAL NEGOTIATION MODELS18

18 http://www.businessinsider.sg/communication-charts-around-the-world-2014-3/#.VPV4j3zoRYo









3.9 CONCLUSION

As Jim Hopkinson says, “There is an opportunity to make thousands of
dollars within few minutes, you have to take advantage”. Negotiation in
almost all the businesses and spheres of life is a norm and not an
exception. Doesn’t matter that a person is signing a deal in the fast paced
city of New York or in a backward area of Amazon Jungle or in a
traditional city or Jerusalem or in a developing city like New Delhi, a
common step is negotiation. Therefore, knowing negotiation and
developing this quality is a must in today’s world.