NEGOTIATION PLANNING

AND POWER IN
NEGOTIATION

Vikas
BE Chemical + MBA 5th year
CM14233
NEGOTIATION PLANNING:
 1. Develop Specific Objectives:-
 Develop the objectives sought from the negotiation.

 Companies separates its objectives into ‘must have’

and ‘would like to’ categories.
 2. Analyze each party’s strengths and weakness:-

 Requires an assessment of relative strengths and

weaknesses.
 Influence the strategy and tactics taken at the
bargaining table.
o 3. Gather relevant information:-

 Gather information from sources like business

publications ,govt. reports or from internet.
 4. Recognize your counterpart’s needs:-
 Identify issues critical to the supplier.
 Try to reach an agreement for long-term success.

 5. Identify facts and issues:-

 Differentiate between facts and issues.
 Debate on issues not on facts.

o 6. Establish a position on each issue:-

 Establish positions that offers flexibility.
 Bargaining zone is the heart of negotiation.
 Develop a range of positions.
 7. Developing a negotiation strategy and tactics:-
 Tactics include current set of action plans to achieve
the objectives.
 Have a well developed strategy with tactics that
support the strategy.

o 8. Brief other personnel:-

 Brief other parties of the company to make sure that
are aware and in agreement with objectives.

 9. Practice the negotiation:-

 Have a practice negotiation session.
 Other issues may arise that were not addressed
earlier.
POWER IN NEGOTIATION:
 Power relationship between parties is important.
 It can influence the outcome of a negotiation.

 Use of power is a part of negotiation strategy.

 Diff. sources of power can be used which are as

follow:
1. Informational Power:-

 Relies on facts , data and other arguments.

 May present only favorable information that

supports a position.
2. Reward Power:-
 Party may offer something of value such as a
purchase contract,
 It is a direct effort to exert control.
3. Coercive Power:-
 It is the ability to punish an organization or
individual financially.
 Can damage long-term relationships.
4. Legitimate Power:-
 Position that an individual holds is the basis of
legitimate power.
 Positions like ministers, managers and political
officeholders.
5. Expert Power:-
 Special form of informational power.
 It involves retention of knowledge.
 Expert’s depth of knowledge is used in making a
negotiation strategy.

6. Referent power:-
 Depends on personal qualities and attributes of an
individual.
 It includes characteristics such as honesty,
friendliness and sensitivity.