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IILM

NEGOTIATION PROJECTS
SUBMITTED TO: Ms. GARIMELLA RAMANI

Submitted By: Name : SAURABH SHARMA Section: D

NEGOTIATION

Negotiation is a dialogue between two or more people or parties, intended to reach an understanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce an agreement upon courses of action, to bargain for individual or collective, to craft outcomes to satisfy various interests of two people/parties involved in negotiation process. Negotiation is a process where each party involved in negotiating tries to gain an advantage for themselves by the end of the process. Negotiation is intended to aim at compromise Negotiation is a process of exchanging proposals toward the voluntary settlement of a dispute involving two or more parties. In negotiation, the parties must communicate with each other, either directly or through representatives, and must agree to the final outcome. There are two primary kinds of Negotiation Distributive:- In this type of negotiation parties compete over the distribution of a fixed sum of value. In this type of negation, a gain by one side is made at the expenses of the other. Also referred to as Win Lose, or Fixed Pie negotiation because one party generally gains at the expense of another party. Integrative:- A negotiation in which the parties cooperate to achieve maximum benefits by integrating their interests into an agreement. is often referred to as 'win-win' and typically entails two or more issues to be negotiated.

Distribution negotiation:- In a purely distribution negotiation ,the value at stake is fixed, and

each sides goal is to get as much of its possible. Ex: The sale of a carpet, where the buyer and the seller do not know one another. There is no relationship; all that manners is the price, and each side haggles for the best deal. Every gain by one party represents a loss to the other. Wage negotiation between business owners and their union employees.

The key points that have to remember in the negation progress Do not disclose any significant information about your circumstances including why you want to make a deal, your real interests. Information about the other side can benefit you. Learn as much as possible about the other side circumstances. First offer can become a strong psychological effect.

Integrative negotiation:- In this type of negotiation parties cooperate to achieve maximum benefit by integrating their interests into a agreement. Integrative bargaining requires: An adversarial approach

A problem solving orientation. An ability to bluff effectively. An ability to ignore the other sides interests and priorities .

Another types of negotiation are as follows Multiphase negotiations :- In the multiphase negotiations if you are looking for future offers advantages and future dealing .In this situation early phases allow the parties to build trust by performing their agreement as promised. If your negotiation is multiphased, use the early phases to build trust and to become familiar with the other parties.

Multiparty negotiation:- In the multiparty negotiation there is more than two party. If many party are involved, considered the benefits of forming a coalition to improve your bargaining power.

NEGOTIATION WRITE UP ON COGNITIVE DISSONANCE

SUBMITTED TO: Ms. GARIMELLA RAMANI

Submitted By: Name : SAURABH SHARMA Section: D

Cognitive dissonance

The term cognitive dissonance is used to describe the feeling of discomfort that results from holding two conflicting beliefs. When there is a discrepancy between beliefs and behaviours, something must change in order to eliminate or reduce the dissonance. Dissonance is the disturbance caused when we do the task against to our belief. When we see the other people behaving differently to our images of them, when we hold any conflicting thoughts, then we experience dissonance. Then psychological pressure happens due to this dissonance is called cognitive dissonance. Cognitive dissonance can occur in many areas of life, but it is particularly evident in situations where an individual's behaviour conflicts with beliefs that are integral to his or her self-identity. Dissonance is often strong when we believe something about ourselves and then do something against that belief. If I believe I am good but do something bad, then the discomfort I feel as a result is cognitive dissonance. Cognitive dissonance is a very powerful motivator which will often lead us to change one or other of the conflicting belief or action. The discomfort often feels like a tension between the two opposing thoughts. To release the tension we can take one of three actions: Change our behaviour. Justify our behaviour by changing the conflicting cognition. Justify our behaviour by adding new cognitions. A common example of cognitive dissonance occurs in the purchasing decisions we make on a regular basis. Most people want to hold the belief that they make good choices. When a product or item we purchase turns out badly, it conflicts with our previously existing belief about our decision-making abilities. It will happen in day-to-day life in most of the situations. For ex: A person wants to smoke but he knows that smoking is injurious to health. So there is conflict in his thought process. Dissonance is most powerful when it is about our self-image. If an action has been completed and cannot be undone, then the after-the-fact dissonance compels us to change our beliefs. If beliefs are moved, then the dissonance appears during decision-making, forcing us to take actions we would not have taken before. Cognitive dissonance appears in virtually all evaluations and decisions and is the central mechanism by which we experience new differences in the world. When we see other people behave differently to our images of them, when we hold any conflicting thoughts, we experience dissonance. Dissonance increases with the importance and impact of the decision, along with the difficulty of reversing it. Discomfort about making the wrong choice of car is bigger than when choosing a lamp.

How to reduce dissonance: Focus on more supportive beliefs that outweigh the dissonant belief or behavior. Reduce the importance of the conflicting belief. Change the conflicting belief so that it is consistent with other beliefs or behaviors.

NEGOTIATION WRITE UP ON PHILIPS CASE STUDY

SUBMITTED TO: Ms. GARIMELLA RAMANI

Submitted By:

Name : SAURABH SHARMA Section: D

Philips India Ltd- Indian subsidiary of NV Philips Gloempenfabrieken with its head quarters in Mumbai. They deal with electronics range from electronics lamps to television. The companys turnover was approximately Rs.400 crore in the 1980s. The brand enjoyed a strong market presence. Philips brand overseas was exceedingly strong in Television in both Black & White and colour. The CE division distribution system was typically a 3-tier channel system: manufacturer distributor (wholesaler) dealer (retailer or sub dealer) end consumer. The distributor provided after sales service to the products sold by them to their sub-dealers. In Southern region, Philips India had higher brand equity compared to the rest of the country and dealers were more loyal. Philips also faced competition from grey market comprising imported brands like National, Sony, etc. In 1991 the restrictions on Industrial licensing and use of foreign brand in Audio and Tv were removed. The de-licensing opened the gateway for a large number of foreign brands such as Panasonic, Sony, LG, Samsung, etc and slowly these brands were emerging as Philips competitors. The management of H.O felt that the distribution system that Philips followed needed restructuring in this emerging market.QRS was essentially a wholesaler for Philips CE products, Whirlpool refrigerators and washing machines, kitchen appliances, Crompton fans and a host of other consumer durables. QRS had a network of 78 sub-dealers spreaded over entire districts of South Kerala. The sub-dealers were totally dependent on QRS since they had the exclusive agency for these product lines. QRS marked up their distribution margin without seeking permission from Philips India by eating into the sub-dealers margin as they were not allowed to sell up the products higher than the MRP. The sales personnel of Philips could not match MR. Arunachalams business acumen and he never took them seriously. He preferred talking to only senior managers of the company. ERC was a wholesaler of Philips CE products, branded refrigerators and washing machines, summit kitchen appliances, etc. The head quarter of ERC was in Emakulam. The ERC had a network of 95 sub-dealers spread across the districts of North Kerala. Following QRS, ERC jacked up the distribution margins as well. Their MIS system was also good.

MR Abhijit Sen had moved during when the company was doing well in 1990-91 as RM South and came under pressure from the H.O managers of the CE division. Tamil Nadus sales declined from 18% to 29% of the regional sales. Kerala had grown only marginally. MR Abhijit Sen decided to take up the matter with MR. Menon (ERC) and MR Arunachalam (QRS) at their respective offices in Emakulam and Kollam with his sales team. Now the Abhijit Sen has to decide to stay with QRS or to distribute it to sub-dealers.

Issues:
Philips
Falling Market share Introduction of new products Fear of competitors Small growth in a high growing market Deteriorating relationship with distributor Increasing product promotion expenses Mr. Arunachalam Maintain his style of business His hold has been questioned Finding new business opportunity if Philips strategy is implemented Falling Revenue and increasing cost Threat of loss to his business

NEGOTIATION WRITE UP ON CURRENT NEGOTIATION ISSUES AND CLASS SESSIONS

SUBMITTED TO: Ms. GARIMELLA RAMANI

Submitted By: Name : SAURABH SHARMA Section: D

Negotiation course summary


Session1- Principle of negotiation
In the first session we learned about the basic concepts of negotiation , methods of negotiations , principle of negotiation .At the time of negotiation we need to remember that To whom we are negotiating At which point we are negotiating Where we hope to end up What we really want from the negotiating process

Negotiation is a dialogue between two or more people or parties, intended to reach an understanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce an agreement upon courses of action, to bargain for individual or collective, to craft outcomes to satisfy various interests of two people/parties involved in negotiation process.

Type of the negotiation: there are two type of the negotiation a)Distributive negotiation: claiming value(win-lose situation) b) Integrative negotiation: Creating and claiming value (win-win situation) through information sharing and collaboration.

In the multiparty negotiation process we learn that if many party are involved in the negotiation process we should consider the benefit of forming a coalition to improve our bargaining power and In the multiphase negotiation process we should use the early phase to build the trust with other and to become with the other partys.

In the negotiators dilemma what types of the situation faced by the parties and which game in the negotiation process should be play.

Session2- Negotiation process and method


In the negotiation process we discussed on various process and methods of negotiation Structure of negotiation process:Stage 1: Evaluate and Select a Strategy to Guide Problem Solving Stage 2: Make Contact with Other Party or Parties Stage 3: Collect and Analyze Background Information Stage 4: Design a Detailed Plan for Negotiation Stage 5: Build Trust and Cooperation Stage 6: Beginning the Negotiation Session Stage 7: Define Issues and Set an Agenda Stage 8: Define Issues and Set an Agenda Stage 9: Generate Options for Settlement Stage 10: Assess Options for Settlement Stage 11: Final Bargaining Stage 12: Achieving Formal Settlement

Hard & soft type of negotiation: Soft negotiation is wanting to avoid conflict, making concessions and ending up feeling exploited or bitter or with an agreement that doesn't work. Hard negotiation is seeing every disagreement as a contest of wills, a battle, taking an extreme position and holding out, deceiving the other party as to your true views, dragging your feet, stonewalling, threatening to walk out and making small concessions only as necessary. Hard negotiation produces an equally hard response, exhausts everyone and harms the relationship.

Session3-Focus on interest not position


In most instances, we tend to become fixated on our respective positions, attempting to find agreement on a particular position which rarely works.

Rather, what we need to understand and determine are the real interests which are the basis and substances for the positions adopted by both the party . these fundamental issues are our real interests that can be both conflicting and compatible in kind.

Session4- BATNA(Best alternative to a negotiated agreement)


BATNA means 'Best Alternative to a Negotiated Agreement'. This is your alternate plan when the talks start to wobble out of control. It can also be your trump card to make the deal happen to your advantage, or walk away from it altogether. In the BATNA we understand the value of reaching on alternative and the value addition from alternatives to the negotiation activity, When creating a BATNA a negotiator should keep in the mind following: a) Brainstorm the entire alternative that might be considered should the negotiation fail to render a favourable agreement. b) Chose the most promising alternatives and analysis & evaluate the all of the promising alternative. c) Identify the best of the alternatives and keep it in reserve as a fall-back during the negotiation. In negotiation process if we have strong BATNA we should disclose it because this would prevent to other party if they have not strong BATNA and if we have not strong BATNA it would be better do not disclose it. If both of the parties have the strong BATNA the negotiation would seem fruitless in this situation it would be better off to seek elsewhere to pursue to pursue the business. If a negotiator knows more about alternatives of the other party he will be more able for negotiation because he can use this information for lower the other party negotiation expectation.

Session-5 Cognitive Dissonance


Cognitive dissonance is an uncomfortable feeling caused by holding conflicting ideas simultaneously. Cognitive dissonance proposes that people have a motivational drive to reduce dissonance. Dissonance is the disturbance caused when we do the task against to our belief. When we see the other people behaving differently to our images of them, when we hold any conflicting thoughts, then we experience dissonance. In cognitive dissonance has two words first is cognitive that means what mind thinks and the second word is dissonance that mean conflict. So if we add both of the word the meaning is psychological conflicts from holding two or more incompatible thought or the perception simultaneously. Dissonance arises when if we believe something is good and we do the wrong thing and increase the discomfort So reason behind this increase is following:

How much importance we give to the thought. How strongly the dissonant thoughts conflict. Our inability to rationalize and explain away the conflict.

Key strategies to reduce or minimize cognitive dissonance: a) Focus on more supportive beliefs that outweigh the dissonant belief or behavior. b) Reduce the importance of the conflicting belief. c) Change the conflicting belief so that it is consistent with other beliefs or behaviors

Session-6 conflict resolution process


To solve the negotiation conflict of two party so there is a five way of addressing the conflict Accommodation: Surrender ones own needs and wishes to accommodate the other party Avoidance: Avoid or postpone conflict by ignoring it changing the subject, etc. Avoidance can be useful as a temporary measure to buy time or as means of dealing with very minor non-recurring conflict. In severe cases conflict avoidance involves severing a relationship. Collaboration: Work together to find a mutually beneficial solution. Collaboration is as a only win-win solution to conflict, collaboration can also be time-intensive and appropriate when there is not often trust and respect among participants. Compromise: Bring the problem into the open and have the third person present. The aim of conflict resolution is to reach agreement and most often this will mean compromise.

Session-7 Investigative Negotiation


Points that comes in investing negotiating Ask what the other side wants. Mitigate the other partys constraints. Interpret demands as opportunities. Investigate even if the deal seems lost.

To be an effective negotiator we should focus less on the selling of the position on the issue, instead of selling our position we should pose the question to uncover information about the other party interest, constraints etc. by this we can expand our agreement. So regarding this we understand the principles of investigative negotiation.

Session-8 Cross border negotiation


In the cross-border negotiation deal we must know exactly who is involved in the larger decision making process and what types of roles they play. So cross-border negotiation/deal is not a easy job in that situation we should break down the decision process into several constituents like: Who are the players? Who decides what? What are the informal influences that can make or break a deal? What is the negotiation structure in cross-border? Which types of culture they adopt?

Cross border negotiation that involved cultural differences. Cultural differences can influence business negotiation in significant and unexpected ways. In any cross border negotiation you are always interacting with individuals, but your purpose is to influence a larger organization. In the cross-border negotiation we should discard the home-market presumption and developed clear map of the player who influence the formal and informal decision process and we must design strategy and tactics so that we can reach the right people with right argument, In a way that allow us maximum impact on the process to yield a sustainable deal.

Session-9 Game theory


Game theory has been one of the dominant research paradigms for studying conflict, bargaining, and negotiation for almost fifty years.The Prisoner's Dilemma game has been a primary method for studying bargaining and negotiation from a game theory perspective. Tit for Tat has emerged as one of the stronger game theory strategies

If you move first, cooperate. If you move second, reciprocate (if the other party cooperates, respond cooperatively; if the other party competes, respond competitively). Communicate your reciprocal move clearly; do not get "cute."

Game theory is a branch of applied mathematics that is used in economics and other science. Game theory attempts to mathematically capture behaviour in strategic situation, In which an individuals success in making choice depends on the choice of others. Zero sum game: The benefit and losses of all players add up to zero that means one can get the benefit at the expenses of the players. So if I gain more other will loses more.

Positive-sum-game: every one win something Negative-sum-game: everyone loses this will happen only when parties involve in the conflict spent more and more on the time, money, energy in their attempts to prevail without actually reaching a settlement.

Session-10 Industrial dispute


In this session we negotiate the case study between the two groups and learn the negotiation practically how we should negotiate, what types of technique should we apply, how much importance we should give to the particular point, at which point we should accept the deal.

Session-11 The Chinese negotiation


To do a negotiation with the Chinese we need to understand the broad context of Chinese culture and values and their impact on the Chinese negotiating style. There is a deep cultural difference have created seemingly incompatible contrast between Chinese and western approach to negotiation. Negotiation elements Personal connections The intermediary Social status Interpersonal harmony Holistic thinking Thrift

Current Negotiations thatve happened:-

Eaglewood Energy deals with Esso and Exxon Mobil. 14 nov Eaglewood energy has announced two deals with the Esso and Exxon Mobil.

2011

After the negotiation for 30% stake in PPL 260. After the negotiation completed energy wood make agreement that they will see 20 % go to Esso for $ 7 million and 10% has been embarked for Exxon Mobil. Under this agreement Energy wood will receive $2.1 million up front and remaining will be paid once it has registered its interest in the license. CEO of the energywood Brad Hurtubise said that this agreement make good sense because it gives the opportunity to monetise a license where we are no longer active and the cash generated from this deal will be put into PPL259 for drill its second well in the last six months of 2012. Citi strikes deal to sell Citibank Belgium to CMNE

December After the negotiation between Cite bank and CMNE Citi bank Belgium has been 27 taken over by the CMNE (credit mutual nord Europe) in the second quarter of 2012. In that agreement value of the deal was not made but CMNE will be acquiring with a half million customer.700 members,198 of sale. The value of a half million customer and assets will be $ 4.1 million. City bank said the agreement shows its success in reducing the assets and business within Citi holding in a economically rational manner. While working to generate longterm profitability and growth from the core business with in citi group. Vattenfall involved in two energy deals After the permission from the Polish competition watchdog UOKIK vattenfall has sold parts of its stake in both Poland and Germany which is acquire by the PGNiG. Official said that after completed antitrust proceeding there will be no threaten competition to the customer. In that deal PGNiG will have 98.84% stake in vattenfall Poland Heat. After that deal vattenfall secured deal with the city of Hamburg that will see it distribute electricity as partner. This partnership will allow it to make positive contribution to the further development of the German energy industry at a time of the radical changes. In that agreement the city of Hamburg will take on a 25.1% share in the electricity producer, which has been priced at 398 million. 29 Terbium agrees share purchase deal with Usiminas NOV.2011 28 nov. Steel maker Ternium has completed its negotiation for purchasing of stake in 2011 Usiminas control group at 41 percent premium on the six month average of Usiminas price. This agreement will give it 27.7 % of the voting capital. Offer 36 Brazilian real. In agreement 139.7 million shares have been purchased by the Siderar and Confab industrial subsidiary of ternium. These agreement seals a strategic alliance in Latin America among Nippon Steel, Usiminas and Ternium that will create value for all companies involved. Currently Usiminas is a biggest steel producer in the Brazil and it is hoped that this deal will make the firm more competitive.
25 Nov.2011

Russian steelmaker Magnitogorsk iron and Work (MMK) is acquiring Flinders Mines limited for AU$554 million. After that MMk will get high quality iron ore

development project and also add to the resource base it has. This transaction represents another important step forward for MMK to become a highly efficient vertically integrated international metals and mining company. Sales negotiations see Jumbo takeover C1000
24 Nov 2011

Retail group jumbo is to acquire 1005 stake in the rivals C1000 from CVC capital Partners. In that deal financial term has not been disclosed. This deals will make Jumbo the Largest retailer in the Netherlands, with an annual turnover of 6.5 billion pound and 725 stores.The CEO of jumbo Mr. Frit van Eerd said that it was a unique opportunity and so one cannot turn down and together we will successful. CEO of C1000 Mr.Tom Heidman said that he is sure that entrepreneurs association with his company will be comfortable working under Jumbo. ING Groep 'abandons sale of insurance business As ING Groep could not get a good enough prices for its insurance arm so company has abandoned plans to sell its Belgian insurance arm so there is a need of the business negotiation to go in a different direction. In the future if a deal had gone for another firm to acquire the Belgian insurance business, the transaction would have been worth between 420 millionpound. Major utility providers strike deal

28 Dec 2011

27 Dec 2011

In that deal A2A and EDF have secured deals to take over Edison and Edipower. In that deal merger and Acquisition advisor play a major role in the deal that will see reorganization o the share. The agreement has been reached between Delmi.EDF, Edison and Iren. In that deal EDF would acquire an 80.7 % stake, while Delmi, Iren and A2A would take control of Edipower, splitting the share 70%, 10% and 20 % respectively. This agreement will allow the emergence of two energy champion in Italy and contribute in the growth of the Italian economy. Edison will supply Edipower with a minimum of 50% of the gas it need for the next six year. China Three Gorges acquires part of EDP China Three Gores has been named as the buyer for Portugals 21% stake in EDP. In that deal china enterprise won the right to purchase for 2.24 billion pound. In that deal According to the Portuguese treasury this move will provide an 8 billion euro investment in the country. This move has been welcomed by the European nation due to debt crisis in the country. According to the Three Gorges it will increase its financing in EDP in a bid to

23 Dec 2011

boost expansion plans in renewable energy projects and pay down its debt SandRidge Energy oil exploration company enters into deal with Repsol 22 Dec 2011 SandRidge Energy is selling 363636 net acres to repsol YPF for $1 billion with $250 million to be paid in cash and the remainder to be paid in the form of a drilling company. 25 per cent non operated working interest will be sold in the extension Mississippian play in west Kansas, and 16% non-operated working interest in the firms original Mississippian play. Chairman of the enterprise said we are leader in that industry and drilled more than 195 horizontal wells, which is half of the all the horizontal well till that time. HB Fuller announces takeover of Forbo's industrial adhesives unit The worth of the deal was 370 million Swiss francs which is paid in the cash. This deal will enable to HB Fuller to cement its status as a leader in the adhesives industry and gain product technology. The sector of Forbo group it is acquiring operates 17 manufacturing facilities across ten countries. According to the CEO of the HB Fuller after the closing of the transaction HB Fuller will be $ 2 billion and it will targeting Europe, China, North America with its expansion plans.

21 Dec 2011

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