1 Fundamentals in NegotiationModule 5 Fundamentals in Negotiation Every one of us do negotiation all the time with a varying degree of success?? In fact, you’ve probably negotiated a couple of times every day??? Let’s watch this 3 mins video and share with us what are the key elements that would help us to describe “what is negotiation” ? Open

2 Fundamentals in Negotiation Presenter’s IntroductionName: Paramaswaran Suppiah (Param) OPU: PETRONAS Carigali Current Job: JV Manager, Africa & Middle East Exploration, Exploration International Previous Experiences: >8 years experience as Business Development Manager in PCSB Business Development Dept. >15 years in Exploration Dept. Every one of us do negotiation all the time with a varying degree of success?? In fact, you’ve probably negotiated a couple of times every day??? Let’s watch this 3 mins video and share with us what are the key elements that would help us to describe “what is negotiation” ? Open

3 Look at the chart and say the COLOR not the wordBrain Teasers Look at the chart and say the COLOR not the word Within 15 secs Open Open

4 Look at the chart and say the COLOR not the wordBrain Teasers Look at the chart and say the COLOR not the word Within 15 secs YELLOW BLUE ORANGE GREEN PURPLE BLACK RED Open Open

5 Look at the chart and say the COLOR not the wordBrain Teasers Look at the chart and say the COLOR not the word Within 15 secs YELLOW BLACK BLUE WHITE GREEN ORANGE PURPLE Open Open

6 Look at the chart and say the COLOR not the wordBrain Teasers Look at the chart and say the COLOR not the word Within 15 secs PURPLE YELLOW RED ORANGE BLACK GREEN BLUE Open Open

7 Look at the chart and say the COLOR not the wordBrain Teasers Look at the chart and say the COLOR not the word Within 15 secs BLUE RED PURPLE YELLOW GREEN ORANGE BLACK Open Open

8 Right Brain – Trying to say the COLOR YELLOW BLUE ORANGE GREEN PURPLE BLACK RED Right Brain – Trying to say the COLOR Left Brain – Trying to say the WORD Open Open

9 Which side of foot YOU step on???Open

10 ARE YOU A RIGHT OR LEFT BRAINER?Video Clip Open Open

11 Left Brain vs Right Brain QuestionnaireQuestion 1: 1. Are you better at maths and science than art and literature? A. Yes B. No Question 2: Do you love playing sports outdoors over reading indoors? Yes B. No Question 3: Do you prefer verbal communication over physical communication? Question 4: Would you rather draw pictures freehand instead of putting together a model airplane? A. Yes B. No Question 5: Do you like being in groups more than being alone? Open Open

12 Left Brain vs Right Brain QuestionnaireQuestion 6: When given instructions, are lots of pictures easier to understand than lots of text? Yes B. No Question 7: Have you noticed that you're better at providing the details and necessary information for a project than coming up with the initial idea? Question 8: Do you need a quiet environment when you are working? Question 9: Would you enjoy helping someone solve a relationship problem more than a math problem? Question 10: If you were a writer, would you prefer to write nonfiction books instead of fiction? Open Open

13 Left Brain vs Right Brain QuestionnaireQuestion 1: A. Yes (L) B. No (R) Question 2: A. Yes (R) B. No (L) Question 3: A. Yes (L) B. No (R) Question 4: A. Yes (R) B. No (L) Question 5: A. Yes (R) B. No (L) Question 6: A. Yes (R) B. No (L) Question 7: A. Yes (L) B. No (R) Question 8: A. Yes (L) B. No (R) Question 9: A. Yes (R) B. No (L) Question 10: A. Yes (L) B. No (R) Open Open

14 Cognitive Characteristics Intuitive CharacteristicsWhich Brainer Are YOU? Cognitive Characteristics Intuitive Characteristics Cognitive Negotiator: Relating to, or involving conscious mental activities (such as thinking, understanding, learning, and remembering)-Analytical Intuitive Negotiator: Based on having the ability to know or understand things without any proof or evidence : having or characterized by intuition. Cognitive negotiator is referred to an individual who is “left brain” dominant Left brainers can be trained in the skill of active listening and empathy to become effective negotiators. Intuitive negotiator is identified as individual who is "right brain" dominant. Right brainers have more innate ability to recognize & articulate affective cues. Open Open

15 Right or Left Open Open

16 Natural emphatic talent and excellent cognitive skills …Cognitive negotiator is referred to an individual who is “left brain” dominant Left brainers can be trained in the skill of active listening and empathy to become effective negotiators. Intuitive negotiator is identified as individual who is "right brain" dominant. Right brainers have more innate ability to recognize & articulate affective cues. Forebrain is where we think The limbic system consists of a number of structures, including the fornix, hippocampus, cingulate gyrus, amygdala, the parahippocampal gyrus and parts of the thalamus. Limbic system - a group of interconnected structures that mediate emotions, learning and memory. Amygdala - limbic structure involved in many brain functions, including emotion, learning and memory. It is part of a system that processes "reflexive" emotions like fear and anxiety. Individuals with higher EQ (emotion & empathy) can naturally “get” the other person and can adjust their position accordingly. Open

17 Are you a Cognitive or Intuitive Negotiator?2Left Brainers can be trained in the skill of active listening and empathy to become very effective negotiators 1Cognitive negotiator is referred to an individual who is “left brain” dominant 3Intuitive negotiator is identified as individual who is "right brain" dominant 5Individuals with higher EQ (emotion & empathy) can more easily become good or excellent negotiators. Hence best negotiators are those who have both a natural emphatic talent and also excellent cognitive skills 4Right Brainers can be trained in the same skills, but because they have more innate ability to recognize and articulate affective cues, hence they become great (better) negotiators 6They can naturally "get" the other person and can adjust their position accordingly Cognitive Negotiator: Relating to, or involving conscious mental activities (such as thinking, understanding, learning, and remembering)-Analytical Intuitive Negotiator: Based on having the ability to know or understand things without any proof or evidence : having or characterized by intuition. Open Open

18 Are you a Cognitive or Intuitive Negotiator?Intuitive negotiator is identified as individual who is "right brain" dominant Cognitive negotiator is referred to an individual who is “left brain” dominant Left Brainers can be trained in the skill of active listening and empathy to become very effective negotiators Right Brainers can be trained in the same skills, but because they have more innate ability to recognize and articulate affective cues, hence they become great (better) negotiators Cognitive Negotiator: Relating to, or involving conscious mental activities (such as thinking, understanding, learning, and remembering)-Analytical Intuitive Negotiator: Based on having the ability to know or understand things without any proof or evidence : having or characterized by intuition. Individuals with higher EQ (emotion & empathy) can more easily become good or excellent negotiators. Hence best negotiators are those who have both a natural emphatic talent and also excellent cognitive skills Open They can naturally "get" the other person and can adjust their position accordingly Open

19 Are you a Cognitive or Intuitive NegotiatorCognitive negotiator is referred to an individual who is “left brain” dominant Left Brainers can be trained in the skill of active listening and empathy to become very effective negotiators Intuitive negotiator is identified as individual who is "right brain" dominant Right Brainers can be trained in the same skills, but because they have more innate ability to recognize and articulate affective cues, hence they become great (better) negotiators Individuals with higher EQ (emotion & empathy) can more easily become good or excellent negotiators. Hence best negotiators are those who have both a natural emphatic talent and also excellent cognitive skills They can naturally "get" the other person and can adjust their position accordingly Open Open

20 Fundamentals in NegotiationWhat is your negotiator style ? Administer the questionnaire Open Open

21 Are you …. What is your negotiator style ? A Donkey ? A Fox ?Administer the questionnaire Are you …. A Donkey ? A Fox ? A Sheep ? An Owl ? Open Open

22 So which profile reflect you ….Who are you ? Answer So which profile reflect you …. Please answer the questionnaire provided in the manual. Open Open

23 Who are you ? Answer Question 1A. Accept his offer without further ado? SHEEP B. Tell him to wait until the boat is advertised? DONKEY C. Haggle? FOX Question 2 A. An offer you cannot refuse? SHEEP B. A lousy situation? FOX C. An occasion to celebrate your bargain? DONKEY Question 3 A. Tell the producer to ‘offski’? FOX B. Agree, as she has to start somewhere? SHEEP C. Demand top rates if she is to do a top job? OWL Open Open

24 Who are you ? Answer Question 4 A. Offer to discuss your prices? SHEEPB. Warn him that in-house manufacturing of these components would be more expensive when tooling, casting dies and quality controls are considered? OWL C. Suggest that you discuss the problem with him? DONKEY D. Say ‘Fine’, wish them the best and to come back if they experience problems? SHEEP Question 5 A. Ask what size of premium the priority customers are paying & offer to match it? SHEEP B. Ask what size of premium the priority customers are paying & offer to beat it? SHEEP C. Urgently take your business elsewhere? DONKEY Open Open

25 Who are you ? Answer Question 6A. Suggest that you re-negotiate the current contract price? SHEEP B. Ask for details of their costings and profit requirements? OWL C. Check for availability of capacity and prices from other extruders? FOX D. Tell them that you are well aware of the negotiating ploy she is up to? FOX Question 7 A. The wedding day only? SHEEP B. Two weeks? FOX C. Three days? SHEEP Question 8 A. Suggest, say, 55–45 in your favour? FOX B. Say you can't afford to split the difference? OWL C. Agree to their offer? DONKEY D. Agree, if it is 75–25 in your favour? FOX Open Open

26 Who are you ? Answer Question 9 A. A fair and equal transaction? SHEEPB. Compromising? SHEEP C. Making a joint decision in which you get some of what you want and they get some of what they want? FOX Question 10 A. Note the concession but otherwise ignore it? FOX B. Reciprocate with a concession of your own? DONKEY Open Open

27 Who Are You ? We usually behave like a Donkey when we don't know what we can possibly gain in negotiating. Donkey-like behavior is often found in someone who has a predictable capacity for stubborn defiance and a large ego. What he or she gets (usually not a lot) is not good enough to consider the negotiation a success. All the negotiating decisions the person makes are based on his or her deep, sometimes irrational "principles." We must understand the short and long-term implications of our decisions. You are behaving like a Sheep when you think that whatever you get is acceptable and when you easily accept the other parties' choices as your own. There is some pragmatic flexibility in you, but too often you are influenced by others and don't know how or don't wish to fight for your own interests. You prefer to agree with the other party to the negotiation rather than annoy or disappoint that person. You value the relationship more than the outcome of the negotiation. Sheep negotiators are scared of their own shadow and are known to withdraw when the negotiation gets heated. "Like the proverbial goose, a 'boo' sends you scampering for cover." Open Open

28 Who Are You ? A Fox truly knows what is going on and deeply believes he deserves what he demands. Some Foxes only succeed because of their sharpness and even ruthless cruelty. On top of that, Foxes love to look smart and sometimes misread the game because they are too arrogant and excited about the process. There are few limits to a Fox's pragmatism and he or she is amazing at exploiting the soft bellies of the Sheep. People who make Donkey-like decisions are of course easy prey for the Fox. "Devious is as devious does." But in the long-term the Fox negotiator fails to build trust, resulting in a failed relationship. As a negotiator, you will choose not to negotiate with the Fox again. Owls are those who are wise enough to spot the long-term benefits of building genuine relationships and trust that those relationships will in the future provide them with the results they truly deserve. As an Owl, the negotiator is always aware and prepared for the opportunities and threats that result from the choices he selects when negotiating. You earn respect from your peers for what you do and how you do it (you certainly don't exploit Sheep, Donkeys and Foxes). Be careful, "All negotiators should beware: many Owls are closet Foxes!" Open Open

29 MARIANA ONAN ( MARYYAH ABDULLAH) Affiliate Learning FacilitatorMariana Onan is an Affiliate Learning Facilitator of PLC. She is a certified coach in the Solution Focus Coaching, and a certified counselor of Motivational Appraisal of Personal Potential. She has had wide experience in the areas of coaching and counseling by applying several psychometric instruments include among others DiSC, HBDI and MAPP. She is an experienced business planner/analyst with a wide span of knowledge on the integrated upstream and downstream value chain. She had been serving PETRONAS for more than 30 years. She has had more than 8 years of experience in PMU of E&P. Among her important responsibilities include secretary to EPMI and Shell OCM, WP & B executives for PSCs, CTC secretary, head of vendor development and secretary to few CORAL initiatives. She was one of the MC members for PRSB sometime in early part of year As a planner, she has had opportunity to lead some negotiations with PSCs, Licensed Vendors as well as downstream joint partners ie Mitsui, BP Amoco and Dow Chemicals. Expertise Customized Core Leadership Development learning interventions Guiding and counseling individuals for career management Change agent to MD/CEOs Research Areas PETRONAS Technology Development Framework, 2008 Group wide Project Risk Management situational survey 2007 Certification Certified Solution Focus Coach, CSFC Certified counselor on MAPP Certified training expert on pre and post training evaluation programs MBA, University of Miami, 1987 Open

30 Fundamentals in NegotiationModule 5 Fundamentals in Negotiation Every one of us do negotiation all the time with a varying degree of success?? In fact, you’ve probably negotiated a couple of times every day??? Let’s watch this 3 mins video and share with us what are the key elements that would help us to describe “what is negotiation” ? Open

31 Have little or no knowledge of the identified areaSurvey Responses AREAS AWARE Have little or no knowledge of the identified area KNOWLEDGE Have knowledge and understanding of the identified area but have never applied the knowledge at work SKILL Have applied the knowledge at work however application is limited and on non-complex situations EXPERT Have applied the knowledge and skills in various work contexts and levels of complexity STRATEGIC PLANNING XXX XXXXXXX X LEGAL XXXXXX XXXX FINANCE XXXXXXXX PETROLEUM ECONOMICS NEGOTIATION XXXXX Open Internal Open

32 These topics will be covered under Fundamental in NegotiationStrategy Acquire Manage Exit Part 1: Introduction to Negotiation Negotiation skills Negotiation styles Negotiation strategies Part 2: Applying Negotiation Techniques Case Study/ Role Play Open

33 Observe shaking hands and distance of standingICE BREAKING SESSION Observe shaking hands and distance of standing Open

34 Open Source : Slideshare Mohamed Mahmoud , Teaching Assistant at Egyptian E-learning University

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43 At the end of the Module, you will be able to …Introducing Fundamental in Negotiation Learning Objectives and Assessment Criteria At the end of the Module, you will be able to … Describe common negotiation skills, styles and strategies in achieving successful negotiations Apply negotiation techniques to enhance individual competency in deal making Every one of us do negotiation all the time with a varying degree of success?? In fact, you’ve probably negotiated a couple of times every day??? Let’s watch this 3 mins video and share with us what are the key elements that would help us to describe “what is negotiation” ? Open

44 Fundamentals in NegotiationLesson 5 Lesson 4 Lesson 3 Apply Lesson 2 Post Lesson 1 During Preparation Introduction Apply negotiation techniques to enhance individual competency in deal making. Describe common negotiation skills, styles and strategies in achieving successful negotiations Every one of us do negotiation all the time with a varying degree of success?? In fact, you’ve probably negotiated a couple of times every day??? Let’s watch this 3 mins video and share with us what are the key elements that would help us to describe “what is negotiation” ? Open

45 Fundamentals in NegotiationDefinitions Of Negotiation A formal discussion between people who are trying to reach an agreement. Source: Cambridge Dictionary Online Bargaining (give and take) process between two or more parties (each with its own aims, needs, and viewpoints) seeking to discover a common ground and reach an agreement to settle a matter of mutual concern or resolve a conflict Source: .com Key Elements In Negotiations Discussion Parties Agreement Open Open

46 Chaos reigns in the New York City subway system when heavily armed criminals, led by a mastermind named Ryder (John Travolta), hijack a subway train and threaten to kill everyone on board unless a large ransom is paid. Dispatcher Walter Garber (Denzel Washington) uses his extensive knowledge of the transit system in a bid to outwit the hijackers and save the hostages 3 mins video watching 7 mins paxs to brainstorm and list what are the key learning points you observe and hear from the video that will describe the term “negotiation” 2 parties involved Rapport building Lead negotiator Type of negotiation style Opening negotiation Conflict management Power of Silence Negotiation preparation Negotiation type ie collaborate, avoid etc…. Reflecting on all those key learning points that you have shared,. Whether you realized or not we apply negotiation skill constantly every day of your life be it at personal or formal relationship. That’s why knowing how to negotiate is important for our professional development and success. Think about it??? Most successful people in professional and personal life share a common traits that is their ability to negotiate successfully. Successful negotiation is a skill that can be learned and improve. With that Let me share with you what are the key contents of this module on Fundamental in Negotiation. In general it’s basically a persuasive communication between two or more parties working towards reaching a mutually beneficial goals. In this eg in a marriage relationship we may often avoid speaking out what are the things that we need to agree in resolving marriage conflicts. By avoiding negotiations, everyone loses as in marriage relationship The Other Side party who never voice his or her needs may be taken for granted and may lead to a win lose situation. In fact at the formal relationship, these basics key factors Open

47 GENERAL DISCUSSION What can you learn from the Video?How would you define negotiation? What are your observations about this negotiation that are relevance to E&P Core Commercial negotiation? Explain the concept of observer able behaviors. What are the observer able behaviors that is demonstrated by the characters ? Reiterate : what did the characters ‘DO’ or ‘SAY’ that constitutes as observer able. What constitutes as leadership behaviors. 5. Recognizing factual vs non factual observation. Notes : Sacrifice - , the father is very calm, decisive vs fast decision. Decision should be based by facts. Why do you think the decision was not fast enough. Emotional attachment vs being objective. One role relate to other, domino effect. “leader without a title – Robin Sharma” Q= leader is nature or nutured? Eg of good leader, why? E.g Tun Mahathir Open

48 OBSERVATIONS 2 parties or more Small Talk (Breaking the Ice)Discussion/Negotiations Proposals & counter proposals Demands Profiling Threats Bluffing Power of Silence Seeking Mandates Explain the concept of observerable behaviors. What are the observer able behaviors that is demonstrated by the characters ? Reiterate : what did the characters ‘DO’ or ‘SAY’ that constitutes as observer able. What constitutes as leadership behaviors. 5. Recognizing factual vs non factual observation. Notes : Sacrifice - , the father is very calm, decisive vs fast decision. Decision should be based by facts. Why do you think the decision was not fast enough. Emotional attachment vs being objective. One role relate to other, domino effect. “leader without a title – Robin Sharma” Q= leader is nature or nutured? Eg of good leader, why? E.g Tun Mahathir Open

49 Fundamentals in NegotiationWhat is negotiation ? NOTE : According to Gerard Nierenberg, Founder and President of Negotiation Institute “ In a successful negotiation everybody wins” Time : 5 mins Refer to flipchart that each group has drawn from the earlier video Use different marker pen to denote which is the key element for “What “ and “Why” negotiation. And add in with the any points if need for “what” and “why” by using the designated color pen Time : 5 mins presentation Note : Any key points covered by earlier speaker the following speaker will present only on key points that need to be add on Open Open

50 Negotiation Key ElementsA joint decision making process between 2 or more parties Each party has something The Other Side wants Involves a process of resolving conflicts between parties The intent is to reach a mutually agreed solutions or mutually satisfactory objectives NOTE : According to Gerard Nierenberg, Founder and President of Negotiation Institute “ In a successful negotiation everybody wins” Open

51 Persuasive CommunicationPersuasion and negotiation are forms of communication Communication Persuasive Communication Negotiation Start Conclusion Open of Interaction TIME

52 Fundamentals in NegotiationWhy do we negotiate ? Open Open

53 Fundamentals in NegotiationWhy do we negotiate ? Contribute to business success Build better relationship Reach mutually agreeable solutions Open Open

54 Characteristics of a Good NegotiatorKnowledge Skill Listening Effective Communication Problem Solving Rapport building Commercial Savvy Influence Technique Conflict Management People Management Attitude In any negotiation, the following three elements are important and likely to affect the ultimate outcome of the negotiation: Attitudes Knowledge Interpersonal Skills All negotiation is strongly influenced by underlying attitudes to the process itself, for example attitudes to the issues and personalities involved in the particular case or attitudes linked to personal needs for recognition. Always be aware that: Negotiation is not an arena for the realisation of individual achievements. There can be resentment of the need to negotiate by those in authority. Certain features of negotiation may influence a person’s behaviour, for example some people may become defensive. The more knowledge you possess of the issues in question, the greater your participation in the process of negotiation.  In other words, good preparation is essential. Do your homework and gather as much information about the issues as you can. Furthermore, the way issues are negotiated must be understood as negotiating will require different methods in different situations. Good interpersonal skills are essential for effective negotiations, both in formal situations and in less formal or one-to-one negotiations. These skills include: Effective verbal communication.  See our pages: Verbal Communication and Effective Speaking. Listening.  We provide a lot of advice to help you improve your listening skills, see our page Active Listening. Reducing misunderstandings is a key part of effective negotiation.  See our pages: Reflection, Clarification and The Ladder of Inference for more information. Rapport Building.  Build stronger working relationships based on mutual respect. See our pages: Building Rapport and How to be Polite. Problem Solving.  See our section on effective Problem Solving. Decision Making.  Learn some simple techniques to help you make better decisions, see our section: Decision Making. Assertiveness.  Assertiveness is an essential skill for successful negotiation. See our page: Assertiveness Techniques for more information. Dealing with Difficult Situations.  See our page: Communicating in Difficult Situations for some tips and advice to make difficult communications, easier. Professional and credible Assertive and decisive Self discipline and creative Patient and careful listener Open minded Self Discipline Flexible Highly ethical Open Open

55 Fundamentals in NegotiationRemember the acronym… A. S. K. Open Open

56 Fundamentals in NegotiationAt which stage of the upstream working arrangement does negotiation happen? Open Open

57 Fundamentals in NegotiationPSC SIGNING PROCESSES DIRECT NEGOTIATION OR COMPETITIVE BIDDING OFFER FOR BLOCKS OPEN / CLOSE BIDDING PROPOSAL EVALUATION BID SUBMISSION BY DUE DATE RECOMMENDATION TO EXCO EVALUATION NEGOTIATION RECOMMENDATION TO EXCO PSC FINALISED NEGOTIATION PSC FINALISED EXCO & BOARD APPROVAL Open PSC SIGNING Open

58 Fundamentals in NegotiationPSC/ Concession JOA JOC Operatorship Contracts - operational Sales Point of Sale - Delivery Sale 3rd Party Tie in Joint Operation Upstream working arrangement Draw from participants on their experience of which level do they apply negotiations and share of complexity or issues paxs encountered Open Open

59 Differentiating PSA from Joint VentureProduction Production Cost Oil Profit Oil Royalty Cost Oil Profit Oil Royalty IOC share Govt Share from PO JV share Govt Share from PO IOC After-Tax Share Tax IOC Share Govt Share from JV IOC After-Tax Share Tax Total IOC Share Total Govt Share Total IOC Share Total Govt Share Open

60 TEA BREAK Open

61 Fundamentals in NegotiationLesson 5 Lesson 4 Lesson 3 Apply Lesson 2 Post Lesson 1 During Preparation Introduction Apply negotiation techniques to enhance individual competency in deal making. Describe common negotiation skills, styles and strategies in achieving successful negotiations Knowledge Skill Attitude Open

62 Fundamentals in NegotiationWhat are the Essential Rules of Negotiation? Open

63 Essential Rules of Negotiation1. Aim for the best deal Lesson 2 Lesson 2 Open

64 Essential Rules of NegotiationVideo Clip What was the conversation about? How is the above conversation of relevant to 1st Essential Rule of Negotiation “ One day Alice came to a fork in the road and saw a Cheshire cat in a tree. “ Which road do I take?” she asked the cat. “ Where do you want to go?” was his response. “ I don’t know”, Alice answered. “Then , it doesn’t matter” said the cat By Lewis Carroll, Alice in Wonderland Know your objectives and the bottom line i.e. 3 categories of best deals. Invest time and resources in rigorous background research and detailed planning Open Internal 64

65 Essential Rules of NegotiationAim for the best deal The musts:- What you feel you must take from the table if the deal is going to be acceptable to you. The ideals :- What you intent to achieve to make the ideal deal The loss leaders:- Those things you are prepared to trade in order to agree a deal (even if you would prefer to keep them) Realistically, because negotiation is about trading concessions, you MUST have items/takeaways in all three categories. When you are able to aim for the best deals then you make yourself ready with good alternatives so as to reach a mutually acceptable solutions. Source: Selling with emotional intelligence According to Director of Wharton Executive Negotiation Workshop, G Richard Shell, and author of “Bargaining for advantage negotiation for reasonable people” asserts 6 foundations for effective negotiation:- You bargaining style Your goals and expectations Authoritative standards and norms Relationship Other people’s interest ( include shareholders and the other side interest) Leverage Write on Flip chart Open

66 Essential Rules of Negotiation1. Aim for the best deal 2. Get the other person’s ‘shopping list’ Lesson 2 Lesson 2 Open

67 Essential Rules of NegotiationGet The Other Person’s ‘Shopping list’ The more you know about The Other Side the better you will do. (Eg, Japanese Personality Profiling) How much can you intelligently anticipate about the views of The Other Side? To find out and keep both sides of the discussion in mind, use: Your preparation Prior knowledge Experience Questioning Prepare properly by gathering enough info about your other party. NOTE: that every nego is unique even if one new face in the team can affect the process. Be cautious of not being trap of applying same tactics that had worked successfully before. In gathering info about the other side ‘s company’s profile use secondary data through:- internet on Company website such as Vision, Mission, Shared Values, Financial reports, organizational charts etc. This could help you to watch any kind of mismatch between what they say and what they claim in the website so during the negotiation this will be your leverage platform. Also, browse through Annual Report to scan on company’s financial target, health position, debt situation , expansion plan etc.. Search in Linked In or other social media ie facebook , twitter to discover their key stakeholders’ interest hobbies etc => good source to start a common ground on rapport relationship as what the “intouchables” movie term as icebreaker. Also this will help you to fit names quickly and give you a level of comfort Scan through their list of customers, partners etc . If there are some that you know then make effort to contact them to get more insights about the company May also keep regular informal engagement with TOS as all the above will help you to identify their possible interests or wants All of the above may help you to make an educated guess of their interests. Preempt an objection by countering it in advance. Also able to share benefits realized if reach a successful negotiations. Open

68 Essential Rules of Negotiation1. Aim for the best deal 2. Get the other person’s ‘shopping list’ Lesson 2 Lesson 2 3. Keep the whole package in mind. Open

69 Essential Rules of NegotiationKeep the whole package in mind Do not underestimate the complexity of negotiating. It is the interrelationship between all the elements that makes negotiation works. You need to keep all the elements in mind all the time. As mentioned earlier that every nego is unique & avoid underestimate the complexity of the negotiation. Pls add more….. Open

70 Essential Rules of Negotiation1. Aim for the best deal 2. Get the other person’s ‘shopping list’ Lesson 2 Lesson 2 4. Keep Searching for Variables 3. Keep the whole package in mind. Open

71 Essential Rules of NegotiationKeep searching for variables Remain flexible Do not wear your plan or initial intentions like a strait-jacket. Everything is negotiable and a few more things besides. Good negotiators are quick on their feet. Remain flexible would need you to think various options in advance and also working to meet own and TOS needs/wants. Here at this stage you may need to agree among your team what are the discreet signals to use when you need to communicate among yourselves about some impt changes. Practice them together until you can decipher with confidence. At the movie how the lady and the lawyer behave. This will put you in a confidence and presentable position. Timeliness: Agree on the exact time to arrive few minutes early as this will give you a grip of the surroundings. Try to speak to staff at the venue to further get more insights and enhance your ability to establish common interests and hinder aggression from the TOS. Warren Buffet says need to dry run-prepare. Open

72 Fundamentals in NegotiationLesson 5 Lesson 4 Lesson 3 Apply Lesson 2 Post Lesson 1 During Preparation Introduction Apply negotiation techniques to enhance individual competency in deal making. Describe common negotiation skills, styles and strategies in achieving successful negotiations Knowledge Skill Attitude Open

73 Persuasive CommunicationFundamentals in Negotiation Persuasion and negotiation are forms of communication of Interaction 73 Communication Persuasive Communication Negotiation Start Conclusion TIME Internal Open

74 Fundamentals in NegotiationResearch revealed 3 elements… Words ( content) Non Verbal /Vocal ( tone, pitch, pace) Visual body language ( gestures, postures, facial expressions) Open

75 Fundamentals in NegotiationResearch revealed 3 elements… Words ( content) Non Verbal /Vocal ( tone, pitch, pace) Visual body language ( gestures, postures, facial expressions) 93 % of our message is conveyed through body language Body language speaks louder than words Open

76 ‘Body language’ is core forrapport building “SOFTEN” S : O : F : T : E : N : Smile Immediate signal that your purpose is not to do harm Open body posture make you appear relax and accepting others Forward lean Proximity sends a message of liking and responsiveness Touch Appropriate pat indicate empathy and can bolster negotiations Smile: send message that you care about them. It has been used since prehistoric times to tell strangers we won’t harm them. Note:- Smile too long indicates falseness Open: Eg Arms behind your back, arms loose at your sides, palms open, standing face to face indicates relaxation and responsiveness. Forward lean: signals your interest to communicate. Leaning away, turning your back or turning to your side indicates partial interest in the conversation Touch: A handshake, a squeeze , a hug ( when approriate) , a pat on the back can reduce conflicts when words don’t seem to work Eye contact: When you look away from others, people believe they are not important to you. Refuse to make eye contact may indicate that a person is not telling the truth or has something to hide. If you disagree with someone and look out the window while she talks, you send a signal that you’re not interested in her. When she ask questions and you refuse to look at her, you suggest that you’ve something to hide. Note : Positioning of the negotiating team members is an important consideration REMEMBER: ASK Eye Contact Reflect that you are trustworthy, believable and responsive. Nod Shows you are listening , processing and encouraging the deal conversations. Open Source: Successful Negotiation by Ginny Pearson Barnes, Ed.D.

77 Fundamentals in Negotiation4 Tips for reading body language in a negotiation Dr Carol Kinsey Goman, Author of the silent language of leaders i.e. How body language can help or hurt how you lead. Open

78 Fundamentals in Negotiation4 Tips for reading body language in a negotiation Key Observations/Discussion: Pay Attention Identify A Baseline Consider the Context Evaluate Gestural Clusters Open

79 Non Verbal Negotiation GesturesThinking Nervousness Alertness Acceptance Expectancy Confidence Suspicion Frustration Suspicion Open Thinking Frustration Suspicion Boredom

80 Non Verbal Negotiation GesturesNervousness Acceptance Frustration Suspicion Frustration Suspicion Boredom Open

81 Fundamentals in Negotiation Non Verbal Negotiation GesturesObservable Signs Dominance and Power Placing feet on desk Making piercing eye contact Putting hands behind head or neck Placing hands on hips Giving a palm-down handshake Standing while the other side is seated Stippling (fingertips touching) Submission and Nervousness Fidgeting Making minimum eye contact Touching hands to face, hair, etc Using briefcase to “guard” body Giving a palm-up handshake Clearing throat Open

82 Fundamentals in NegotiationBody Language – Do’s & Don’ts/Good Manners Open

83 Fundamentals in NegotiationBody Language – Do’s & Don’ts/Good Manners Key Observations/Discussion: Position Of Shoulders Hands/Fingers Actions Standing Still/Stationary Feet Position. Open

84 Open Source : Slideshare Mohamed Mahmoud , Teaching Assistant at Egyptian E-learning University

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92 Fundamentals in NegotiationBridges of Rapport… Open discussion on neutral subject When holding back, assure The Other Side (TOS) that efforts are made to reach a mutually agreeable turn-out. Respect The Other Side’s experience and expertise Frame the task positively, “ as a joint effort “ Emphasize your openness to The Other Side’s interests and concerns. Present clear explanation for any complex issues Source : Selling with Emotional Intelligence Some people instantly think of confrontation when they think of negotiation. This posture diminishes any hope for rapport. For a negotiation to be successful, both sides need to get something they want both in material terms and emotional terms. Before entering negotiation, reflect on the followings:- What are we trying to achieve? What kind of emotional environment do we want to create? What are the other party trying to achieve? What are the emotional payoffs they need? What problems are likely to arise? How will we approach these potential problems? Negotiation tactics that fail to address the emotions of the other party are risky and sabotage the possibility of a long term relationship The only way to detect the pivotal points that define winning or losing in negotiation is having the emotional radar turned in to tone and non verbal response - by asking good questions and listening with vigilance/attentiveness Open

93 Fundamentals in Negotiation3 types of behavior being displayed or encountered when in negotiating situation Aggressive RED Assertive BLUE PURPLE Taking Trading Giving Your 1st encounter with your opponent what would be the signs/ actions that would help you to perceive the kind of person your opponents are? Gavin Kennedy is a Professor at Edinburgh Business School, and Managing Director of Negotiate Limited, the international negotiating skills training and consultancy company, with subsidiaries and licensees in Australia, Malaysia, Portugal and South Africa. Since 1971 he has been researching, training, practising and consulting in negotiation for many companies and state organisations worldwide. He is a bestselling writer with 11 books on negotiation, which have been translated into Swedish, Finnish, Dutch, Italian, Spanish, Portuguese, Chinese (Mandarin), Japanese, Indonesian, Hebrew and Arabic and his more recent works include Everything is Negotiable!, and Kennedy on Negotiation. Gavin Kennedy describes 3 types of behaviour that we can display and encounter when in a negotiating situation NOTE: Gavin Kennedy, Prof at Edinburgh Business School and MD of International negotiating skills training and consultancy company. Also bestselling writer with 11 books on negotiation; which have been translated into more than 10 languages. He had been doing research since 1971 on many companies and state organizations worldwide. Open

94 Fundamentals in Negotiation GROUP ACTIVITY BEHAVIOURTaking Trading Giving RED Aggressively competitive Prefer to dominate Seek to win All deals are one off Use ploys and tactics Favour bluff or coerce (threats or force) Takers- Exploit the submissive BLUE More for me means more for you –non zero sum gain. Assertively competitive Prefer mutual respect Seek to succeed All dealPrefer to be open and non manipulative Doesn’t bluff or coerce Givers – seek cooperatios lead to other deals PURPLE Give me some of what I want (red) I’ll give you some of what you want (blue) Deal with people as they are not how you think they are Good intentions Two way exchange Purple behaviour incites purple behaviour Tit for tat strategies Open People know where they stand Determination to solve problems by both sets of criteria of the merits of the case and/or the terms of a negotiated exchange Open

95 Fundamentals in Negotiation GROUP ACTIVITY BEHAVIOURTaking Trading Giving Taking Please insert the phrases in the right category above Trading Giving Manipulation Aggressive Domination Two way exchange Tit for Tat Exchange Open All deals lead to others Open and empathetic for person you are negotiating with Both parties know where they stand All deals are once off All deals are based on merits of the exchange Cooperation Win win approach Mutual respect No concern for person you are negotiating with Peacemaking (succeed) Exploitation(Win) RED Aggressively competitive Prefer to dominate Seek to win All deals are one off Use ploys and tactics Favour bluff or coerce (threats or force) Takers- Exploit the submissive BLUE More for me means more for you –non zero sum gain. Assertively competitive Prefer mutual respect Seek to succeed All dealPrefer to be open and non manipulative Doesn’t bluff or coerce Givers – seek cooperatios lead to other deals PURPLE Give me some of what I want (red) I’ll give you some of what you want (blue) Deal with people as they are not how you think they are Good intentions Two way exchange Purple behaviour incites purple behaviour Tit for tat strategies Open People know where they stand Determination to solve problems by both sets of criteria of the merits of the case and/or the terms of a negotiated exchange Open

96 Fundamentals in Negotiation GROUP ACTIVITY BEHAVIOURTaking Trading Giving Taking Trading Giving RED Aggressively competitive Prefer to dominate Seek to win All deals are one off Use ploys and tactics Favour bluff or coerce (threats or force) Takers- Exploit the submissive BLUE More for me means more for you –non zero sum gain. Assertively competitive Prefer mutual respect Seek to succeed All dealPrefer to be open and non manipulative Doesn’t bluff or coerce Givers – seek cooperatios lead to other deals PURPLE Give me some of what I want (red) I’ll give you some of what you want (blue) Deal with people as they are not how you think they are Good intentions Two way exchange Purple behaviour incites purple behaviour Tit for tat strategies Open People know where they stand Determination to solve problems by both sets of criteria of the merits of the case and/or the terms of a negotiated exchange Open

97 Fundamentals in Negotiation GROUP ACTIVITY BEHAVIOUR RESULTSTaking Trading Giving Manipulation Two way exchange Win win approach Aggressive Tit for Tat Cooperation Domination Open Mutual respect Exploitation(Win) Exchange Peacemaking ( succeed) All deals are once off All deals are based on merits of the exchange All deals lead to others No concern for person you are negotiating with Both parties know where they stand Open and empathetic for person you are negotiating with Taking Trading Giving RED Aggressively competitive Prefer to dominate Seek to win All deals are one off Use ploys and tactics Favour bluff or coerce (threats or force) Takers- Exploit the submissive BLUE More for me means more for you –non zero sum gain. Assertively competitive Prefer mutual respect Seek to succeed All dealPrefer to be open and non manipulative Doesn’t bluff or coerce Givers – seek cooperatios lead to other deals PURPLE Give me some of what I want (red) I’ll give you some of what you want (blue) Deal with people as they are not how you think they are Good intentions Two way exchange Purple behaviour incites purple behaviour Tit for tat strategies Open People know where they stand Determination to solve problems by both sets of criteria of the merits of the case and/or the terms of a negotiated exchange Open

98 The following are the possible negotiation terms: Price of Land Scenario: PETRONAS to purchase an acreage of 50 ,000 sq ft of land for petrol station from owner The following are the possible negotiation terms: Price of Land Land conversion incl Land clearings Scope of work from the seller Comparison of last/nearby selling transaction price Prospect of volume generated Difficulty in land conversion % of payment disbursement Scenario 1: Buyer/PETRONAS Strategic location ie 5 km frm KLCC and along the main road Owner Have few potential buyers Want 20% above market price Scenario 2: Location at new development area in Damansara and gazetted as part of the masterplan township In need to sell the land Scenario 3: Location at the main “PLUS” Highway next to existing SHELL station with anticipated of high volumes of sales Open

99 Fundamentals in NegotiationGroup Activity: Examples of phrases used RED BLUE Within your group, identify which phrases in the envelope represent the “RED” or “BLUE” behaviour. Your 1st encountered with your opponent what would be the signs/ actions that would help you to perceive the kind of person your opponents are? Gavin Kennedy is a Professor at Edinburgh Business School, and Managing Director of Negotiate Limited, the international negotiating skills training and consultancy company, with subsidiaries and licensees in Australia, Malaysia, Portugal and South Africa. Since 1971 he has been researching, training, practising and consulting in negotiation for many companies and state organisations worldwide. He is a bestselling writer with 11 books on negotiation, which have been translated into Swedish, Finnish, Dutch, Italian, Spanish, Portuguese, Chinese (Mandarin), Japanese, Indonesian, Hebrew and Arabic and his more recent works include Everything is Negotiable!, and Kennedy on Negotiation. Gavin Kennedy describes 3 types of behaviour that we can display and encounter when in a negotiating situation Open Internal Open

100 Please categorise the following statements accordinglyExamples of phrases used in negotiation Please categorise the following statements accordingly into the right group RED Assertive BLUE Aggressive Language Assertive Language -We understand your thoughts behind the proposal. Allow us to explain our rationale for disagreeing. -You’re not listening to me! -What are you going to do about it? -Excuse me, may I speak now? -Will you stop interrupting? -Could you clarify, what it is about the proposal that you find unacceptable? -The offer is unacceptable and we need to talk it over. -Your offer is disgusting. -Can I make a suggestion about how we can solve this? -Why are you’re objecting to the proposal? -Please let me finish -Your proposals are totally ridiculous Your 1st encountered with your opponent what would be the signs/ actions that would help you to perceive the kind of person your opponents are? Gavin Kennedy is a Professor at Edinburgh Business School, and Managing Director of Negotiate Limited, the international negotiating skills training and consultancy company, with subsidiaries and licensees in Australia, Malaysia, Portugal and South Africa. Since 1971 he has been researching, training, practising and consulting in negotiation for many companies and state organisations worldwide. He is a bestselling writer with 11 books on negotiation, which have been translated into Swedish, Finnish, Dutch, Italian, Spanish, Portuguese, Chinese (Mandarin), Japanese, Indonesian, Hebrew and Arabic and his more recent works include Everything is Negotiable!, and Kennedy on Negotiation. Gavin Kennedy describes 3 types of behaviour that we can display and encounter when in a negotiating situation Open Internal Open

101 Examples of phrases used in negotiationRED Assertive BLUE Aggressive Language Assertive Language You’re not listening to me! Excuse me, may I speak now? Why are you’re objecting to the proposal? Could you clarify, what it is about the proposal that you find unacceptable? What are you going to do about it? Can I make a suggestion about how we can solve this? Your offer is disgusting The offer is unacceptable and we need to talk it over. Will you stop interrupting? Please let me finish Your proposals are totally ridiculous We understand your thoughts behind the proposal. Allow us to explain our rationale for disagreeing Open Internal

102 Fundamentals in NegotiationLesson 5 Lesson 4 Lesson 3 Apply Lesson 2 Post Lesson 1 During Preparation Introduction Apply negotiation techniques to enhance individual competency in deal making. Describe common negotiation skills, styles and strategies in achieving successful negotiations Knowledge Skill Attitude Open

103 A Light Moment A man ( Mr Lim) was riding in a train and saw another man eat a fried mackerel and put the fish head in his pocket. Mr Kamal then asked the man why he keeps the fish head in his pocket. Mr Lim replied “ The head is the most valuable part of the fish – it’s where the brain is. If you eat the head, it will make you smarter. I take home and feed them to my children”. Mr Kamal asked “ Oh if that’s true, how much will you sell me the fish head then?” Mr Lim “ 12 Ringgit” Mr Kamal without thinking further paid RM 12 and eat the fish head. After a few minutes had passed, Mr Kamal become angry and said to Mr Lim “ Wait a minute, this is just a tengiri fish head. If I were to bought the whole fish it cost less than RM 12” “ See,” Mr Lim said “ it’s working. You’re smarter already.” Recap on what are needed in managing the negotiation process??? Open

104 Fundamentals in NegotiationManaging Negotiation Process (EEPC) Open

105 1 2 3 4 Manage Negotiation Process (EEPC) Explain stage Explore stageClose deal stage 1 Explain stage 2 Explore stage 3 Propose stage 4 Open

106 Manage Negotiation Process(EEPC) Explain stage 1 Open

107 Manage Negotiation Process (EEPC)Explain Stage Scene setting Agree on __________ and ________ Explain _________ to be reached Explain __________ and ___________ for mutual benefits. Apply “_________” to enhance rapport SOFTEN Procedure Opportunities Agenda Situation Objective Open

108 Manage Negotiation Process (EEPC)Explain Stage Scene setting Agree on procedure and Agenda Explain objectives to be reached Explain situation and opportunities for mutual benefits. Apply “SOFTEN” to enhance rapport Source: Selling with emotional intelligence You can counteract negative emotional ploys with these responses:- When they use anger, calmly ask why they are angry When they act insulted, ask what kind of offer would not be insulting When they use guilt, continue to focus on the issues When they express exasperation, express understanding When they use false flattery, offer thanks and bring focus back to the negotiation Open

109 Manage Negotiation Process(EEPC) Explore stage 1 Explain stage 2 Open

110 Manage Negotiation Process (EEPC)Explore Stage Ask __________ questions for clarifications Ask ____________ question at a time _____________and get feedback __________ effectively and concentrate Stay ______ and react to ideas not the person Be fairly _______ with your intention Watch for “______” signals Apply the power of ________ Silence Open end Positive One Open Paraphrase Calm Listen Open

111 Manage Negotiation Process (EEPC)Explore Stage Ask open end questions for clarifications Ask one question at a time Paraphrase and get feedback Listen effectively and concentrate Stay calm and react to ideas not the person Be fairly open with your intention Watch for “positive” signals Apply the power of silence Open

112 Manage Negotiation Process (EEPC)Quick win tips – “ Done Deal” Micheal Benoliel, Ed.D Asking questions is an art form in itself. It is an essential skill for a negotiator. Generally, start with broad, open end questions, and then narrow subject with close end questions to elicit specific information. Ask questions and do active listening more. Defense Attorney Gerry Spence, who has never lost a criminal trial, says that if pressed to choose the single skill that enables him to produce a winning argument, it would be the ability to listen. Skill of understanding the real meaning of the message is important too. Open

113 1 2 3 Manage Negotiation Process (EEPC) Explain stage Explore stagePropose stage 1 Explain stage 2 Explore stage 3 Open

114 Manage Negotiation Process (EEPC)Propose Stage Make ____________ & express concerns Revise __________ and consider options Get TOS to ________ and search for common interests Always ________what is already agreed before addressing unresolved issues When asked for a ________, ask for a ______ Trade off Proposals Concession Strategies Confirm Commit Open

115 Manage Negotiation Process (EEPC)Propose Stage Make proposals & express concerns Revise strategies and consider options Get TOS to commit and search for common interests Always confirm what is already agreed before addressing unresolved issues When asked for a concession, ask for a trade off Quote- KNOC in Nigeria – acquired good blocks by counter offering constructions works in country Open

116 1 2 3 4 Manage Negotiation Process (EEPC) Explain stage Explore stageClose deal stage 1 Explain stage 2 Explore stage 3 Propose stage 4 Open

117 Manage Negotiation Process (EEPC)Close Deal Stage Acknowledge Record everything As a project Check anything Treat In writing Positive note Confirm End ____________ that was agreed ______________ that is not clear. ________ the agreement _______ at a later date _____ on a “______” note _____ the agreement as a ______ in itself ____________ the completion of every action point. Open

118 Manage Negotiation Process (EEPC)Close Deal Stage Record everything that was agreed Check anything that is not clear. Confirm the agreement in writing at a later date End on a “positive” note Treat the agreement as a project in itself Acknowledge the completion of every action point. Think about CP’s to close deal. Eg security issue- need to close separately Open

119 Fundamentals in NegotiationToll of not preparing Not studying up on all the issues and procedures necessary to accomplish the negotiation goals can be very costly. 3 out of 4 corporate acquisitions fail because the acquiring company either:- Buys the wrong company Buys it at the wrong time Pays the wrong price for the acquisition Inadequate preparation can leave the negotiation team with an information deficit, which The Other Side party may be only too happy to take advantage of the situation. Example: Andrew Carnegie ( King of Steel ) and JP Morgan (King of Banking) NOTE: Skilled negotiators should always be ready to alter their planned strategy/tactics in light of new information. Source: Micheal Benoliel, Ed.D “ Done Deal” – Insights from interviews with World’s Best Negotiators Write on Flip Chart Example: Andrew Carnegie ( King of Steel ) and JP Morgan (King of Banking) Morgan interested in buying the Andrew’s Steel Company. Carnegie put a selling price of $ 480 million & Morgan jumped at the deal Carnegie excitement was not long as when he re-examine the steel market value, he realised that he had sold $100 million less than the company was worth. Open

120 LUNCH BREAK Open

121 Fundamentals in NegotiationThe Art of Negotiating Negotiation strategies Snippets of negotiations strategies that can be applied for the negotiation exercise. What do we learn from the video? Open Open

122 Fundamentals in NegotiationThe Art of Negotiating Participation Technique - Getting The Buy-In - Explain Benefits- Win-win proposals Changing Levels - Flexible & Adaptability Snippets of negotiations strategies that can be applied for the negotiation exercise. Open Open

123 Fundamentals in NegotiationLesson 5 Lesson 4 Lesson 3 Apply Lesson 2 Post Lesson 1 During Preparation Introduction Apply negotiation techniques to enhance individual competency in deal making. Describe common negotiation skills, styles and strategies in achieving successful negotiations Knowledge Skill Open Attitude Open

124 Fundamentals in NegotiationApplication Classroom Activity Open Open

125 Guiding Principles Characteristics of a Good Negotiator SkillKnowledge Skill Listening Effective Communication Problem Solving Rapport building Commercial Savvy Influence Technique Conflict Management People Management Attitude In any negotiation, the following three elements are important and likely to affect the ultimate outcome of the negotiation: Attitudes Knowledge Interpersonal Skills All negotiation is strongly influenced by underlying attitudes to the process itself, for example attitudes to the issues and personalities involved in the particular case or attitudes linked to personal needs for recognition. Always be aware that: Negotiation is not an arena for the realisation of individual achievements. There can be resentment of the need to negotiate by those in authority. Certain features of negotiation may influence a person’s behaviour, for example some people may become defensive. The more knowledge you possess of the issues in question, the greater your participation in the process of negotiation.  In other words, good preparation is essential. Do your homework and gather as much information about the issues as you can. Furthermore, the way issues are negotiated must be understood as negotiating will require different methods in different situations. Good interpersonal skills are essential for effective negotiations, both in formal situations and in less formal or one-to-one negotiations. These skills include: Effective verbal communication.  See our pages: Verbal Communication and Effective Speaking. Listening.  We provide a lot of advice to help you improve your listening skills, see our page Active Listening. Reducing misunderstandings is a key part of effective negotiation.  See our pages: Reflection, Clarification and The Ladder of Inference for more information. Rapport Building.  Build stronger working relationships based on mutual respect. See our pages: Building Rapport and How to be Polite. Problem Solving.  See our section on effective Problem Solving. Decision Making.  Learn some simple techniques to help you make better decisions, see our section: Decision Making. Assertiveness.  Assertiveness is an essential skill for successful negotiation. See our page: Assertiveness Techniques for more information. Dealing with Difficult Situations.  See our page: Communicating in Difficult Situations for some tips and advice to make difficult communications, easier. Professional and credible Assertive and decisive Self discipline and creative Patient and careful listener Open minded Self Discipline Flexible Highly ethical Open Open

126 Essential Rules of NegotiationGuiding Principles Essential Rules of Negotiation 1. Aim for the best deal 2. Get the other person’s ‘shopping list’ Lesson 2 Lesson 2 4. Keep Searching for Variables 3. Keep the whole package in mind. Open

127 1 2 3 4 Guiding Principles Manage Negotiation Process (EEPC)Close deal stage 1 Explain stage 2 Explore stage 3 Propose stage 4 Open

128 ‘Body language’ is core for rapport buildingGuiding Principles ‘Body language’ is core for rapport building “SOFTEN” S : O : F : T : E : N : Smile Immediate signal that your purpose is not to do harm Open body posture make you appear relax and accepting others Forward lean Proximity sends a message of liking and responsiveness Touch Appropriate pat indicate empathy and can bolster negotiations Eye Contact Reflect that you are trustworthy, believable and responsive. Nod Shows you are listening , processing and encouraging the deal conversations. Open Source: Successful Negotiation by Ginny Pearson Barnes, Ed.D.

129 Guiding Principles Open

130 Role Play…continue A group of 3 members will be :-Assigned either as Buyer/PETRONAS and Seller/Owner Each individual will be expected to behave as per what is written on the play cards . The negotiation team plan schedules are:- 5 minutes - pre negotiation strategy ( 4 essential rules of negotiation) 10 minutes - Negotiation process ( persuasive communication & EEPC ) 15 minutes – post negotiation ( group discussion & feedback) Open

131 PETRONAS to purchase a piece of land for petrol station from ownerScenario: 1,2,3 PETRONAS to purchase a piece of land for petrol station from owner The following are the possible negotiation terms: Price of Land Land conversion incl Land clearings Scope of work from the seller Comparison of last/nearby selling transaction price Prospect of volume generated Difficulty in land conversion % of payment disbursement Scenario 1: Propose for who is to be Red or Blue person (aggressive/giving) Acreage: Proposed land for sale is 5 acre with a rectangular shape . Buyer only require 1 acre and land should be at street level. Buyer/PETRONAS A parcel of land along the “BESRAYA” highway heading towards Putrajaya road Owner Have few potential buyers Want 20% above market price Scenario 2: Acreage: Land area is 46,000 sq ft and rectangular shaped with minimum of 400 ft frontage. Land is 10 ft below street level ie require land fill and retaining wall works Location at new development area in Damansara and gazetted as part of the masterplan township Only want to lease the land for a minimum of 30 years Scenario 3: Acreage: 1 acre of old Oil Palm plantation and owned by Sime Plantation Sdn Bhd. There may a need to replace the current peat soil land with non peat soil earth + need to strengthen with mangroves logs + other pilings Location at the main “PLUS” Highway next to existing SHELL station with anticipated of high volumes of sales Note: According to the Law the proposed land has to be converted as petrol station land. Open

132 Essential Rules of NegotiationAim for the best deal The musts:- What you feel you must take from the table if the deal is going to be acceptable to you. The ideals : What you intent to achieve to make the ideal deal The loss leaders:- Those things you are prepared to trade in order to agree a deal (even if you would prefer to keep them) Realistically, because negotiation is about trading concessions, you MUST have items/takeaways in all three categories. When you are able to aim for the best deals then you make yourself ready with good alternatives so as to reach a mutually acceptable solutions. Source: Selling with emotional intelligence According to Director of Wharton Executive Negotiation Workshop, G Richard Shell, and author of “Bargaining for advantage negotiation for reasonable people” asserts 6 foundations for effective negotiation:- You bargaining style Your goals and expectations Authoritative standards and norms Relationship Other people’s interest ( include shareholders and the other side interest) Leverage Open Source: The Negotiator’s pocketbook by Patrick Forsyth,

133 PETRONAS to purchase a piece of land for petrol station from ownerScenario: 1 PETRONAS to purchase a piece of land for petrol station from owner Acreage: Proposed land for sale is 5 acre with rectangular shape Location: A parcel of land along the “BESRAYA” highway heading towards Putrajaya Road Buyer/PETRONAS requires the following:- Only require 1 acre of land. Land should be at street level Owner/Individual Have a few potential buyers Want 20% above market price Scenario 1: Acreage: Proposed land for sale is 5 acre with a rectangular shape . Buyer only require 1 acre and land should be at street level. Buyer/PETRONAS A parcel of land along the “BESRAYA” highway heading towards Putrajaya road Owner Have few potential buyers Want 20% above market price Scenario 2: Acreage: Land area is 46,000 sq ft and rectangular shaped with minimum of 400 ft frontage. Land is 10 ft below street level ie require land fill and retaining wall works Location at new development area in Damansara and gazetted as part of the masterplan township Only want to lease the land for a minimum of 30 years Scenario 3: Acreage: 1 acre of old Oil Palm plantation and owned by Sime Plantation Sdn Bhd. There may a need to replace the current peat soil land with non peat soil earth + need to strengthen with mangroves logs + other pilings Location at the main “PLUS” Highway next to existing SHELL station with anticipated of high volumes of sales Open

134 PETRONAS to purchase a piece of land for petrol station from ownerScenario: 2 PETRONAS to purchase a piece of land for petrol station from owner Acreage: Proposed land for sale is 46,000 sq ft and rectangular in shape with minimum 400 ft frontage. Land is 10 ft below street level ie require land fill and retaining wall works Buyer/PETRONAS requires the following:- Location at new development area in Damansara Already gazetted as part of the master plan township Owner/Individual Only want to lease the land for a minimum of 30 years Scenario 3: Acreage: 1 acre of old Oil Palm plantation and owned by Sime Plantation Sdn Bhd. There may a need to replace the current peat soil land with non peat soil earth + need to strengthen with mangroves logs + other pilings Buyer/PETRONAS Location at the main “PLUS” Highway next to existing SHELL station with anticipated of high volumes of sales Open

135 PETRONAS to purchase a piece of land for petrol station from ownerScenario: 3 PETRONAS to purchase a piece of land for petrol station from owner Acreage: 1 acre of Oil Palm plantation owned by Sime Plantation Sdn Bhd. Need to replace the current peat soil land with non peat soil earth Need to strengthen with mangroves logs and other pilings Buyer/PETRONAS requires the following:- Location at the main “PLUS” Highway next to existing SHELL station Anticipated high sales volumes Owner/Sime Pantation Sdn Bhd Open

136 Essential Rules of Negotiation ( Scenario 1)Aim for the best deal (PETRONAS) The musts:- Price. The ideals : Land is already converted and land fill at street level The loss leaders:- Pay for conversion fee, land fill and retaining wall costs Open Source: The Negotiator’s pocketbook by Patrick Forsyth,

137 Essential Rules of Negotiation ( Scenario 2)Aim for the best deal (PETRONAS) The musts:- Price. The ideals : Land is already converted and subdivided with different titles The loss leaders:- Pay for conversion fee and the subdivided costs Open Source: The Negotiator’s pocketbook by Patrick Forsyth,

138 Essential Rules of Negotiation ( Scenario 3)Aim for the best deal (PETRONAS) The musts:- Price. The ideals : Land is already converted and cleared Grant title & direct access from highway The loss leaders:- Need to bear all the necessary treatments for the one acre soil Open Source: The Negotiator’s pocketbook by Patrick Forsyth,

139 Scenario 1: TEAM A Buyer/PETRONAS Seller/Owner Open

140 Role Play A group of 3 members will be :-Assigned either as Buyer/PETRONAS and Seller/Owner Each individual will be expected to behave as per what is written on the play cards . The negotiation team plan schedules are:- 5 minutes - pre negotiation strategy ( 4 essential rules of negotiation) 10 minutes - Negotiation process ( persuasive communication & EEPC ) 15 minutes – post negotiation ( group discussion & feedback) Open

141 Fundamentals in NegotiationRole Play Andalusia Oil Pty won a bidding offshore block of E45 in waters of Vietnam. Upon the award of the block, Andalusia management realized that the production block straddles to the water boundary of Vietnam’s neighboring country, Laos. Laos is one of the world oil producer country and Halinger International Co has been the main operator for all its onshore & offshore E&P activities since early 1980s. The E45 Block estimated proven reserves was 50mil bbls and its daily average production was expected at 150k bbls/day. Every year, the Joint Steering Committee (JSC) will meet to discuss on its exploration and operation activities . The JSC will meet alternatively at Vietnam or Laos Open Open

142 Fundamentals in NegotiationRole Play…continue Shelly is a junior business executive at Andalusia Oil Pty and her job is to manage the WP & Budget for Vietnam offshore Block 45. Shelly has been working for 2 years in the company. She is being assigned to lead the negotiation team with Halinger International Co of Laos. The followings are information that Shelly discovered :- Halinger Int Co negotiation team are highly experienced technical specialist Shelly’s negotiation team members comprised 1 technical staff and 1 finance staff. All of them have less than 5 years experience. The JSC Chairmen were unhappy with the progress of the meeting. 3 years had lapsed and there were no successful effort made by the joint technical operators to officially opened up Block 45. Open Open

143 Fundamentals in NegotiationRole Play…continue The followings are the challenges that Shelly and her team need to resolve in order to successfully negotiate for the opening of Block E4 before the next JSC meeting which is to be held at Vietnam. Her team are given 3 months to finalize the negotiation before the official signing of the opening block agreement . Both Chairman of the JSC are expected to attend the ceremony. Halinger Int Co negotiation team are not in a hurry with the joint operating activities as their main focus is on its onshore production activities. Block E45 is an offshore exploration activities and it constitutes only 10 % of Halinger Int Co total annual production volume. All Halinger Int Co Senior Technical personnel has had an experienced of more than 10 years in oil and gas industry worldwide. Halinger Int Co meetings are usually held at top ranking hotels and they are given VIP treatment. Apparently Vietnam has only one top ranking hotel and is situated 500 km away from Andalusia Head Office. Open Open

144 Fundamentals in NegotiationRole Play…continue A group of 3 members will be :- Assigned either as Andalusia staff for Vietnam or Halinger operator for Laos Each individual will be expected to behave as per what is written on the play cards . The negotiation team plan schedules are:- 5 minutes - pre negotiation strategy ( 4 essential rules of negotiation) 10 minutes - Negotiation process ( persuasive communication & EEPC ) 15 minutes – post negotiation ( group discussion & feedback) Open Open

145 Fundamentals in Negotiation Interest: Probe for Underlying InterestsIn the left hand column , list the more interests for you and The Other Side counterpart that you are able to identify. Ask yourself “ why “ & “ for what purpose?” Any deeper interest list in the 2nd column. Finally , rate your own interests by allocating 100 points Important Interests Basic or Underlying Interests Ask yourself “Why “ and “ for what purpose?” Relative Importance ( 100 Points) Own Interest Musts Ideals Loss leaders The Other Side Wants Their Priorities Their Wants Their Barriers TOS/ Seller Scenario 1 MUST: Min 30% of payment upon signing of S&P WANT/Ideal: 20% above market Price Takeaway : 10% above market price Scenario 2 Seller Must: Leasing period maximum of 30 years Ideal : Lease according to market price + 10% mark up/ inflation rate Takeaway: Leasing period another 5 years extension Scenario 3 Must: Market price Ideal : Market price + 5% mark up. Takeaway : Absorb the cost of land replacement without piling work Open Open

146 Fundamentals in NegotiationAlternative 1: Create Options to meet Interests Look at your interests and list all possible ways to meet the interests on both sides. List interests in order of their relative importance. Your Interests Possible Options Their Interests Open Open

147 Fundamentals in Negotiation Possible AlternativesAlternative 2:Think of my Alternatives to the Negotiated Agreements My key interests:- What could you do to satisfy your interests if you could not reach an agreement Possible Alternatives Pros Cons Open Open

148 REFLECTIONS….. Characteristics of a Good Negotiator Skill KnowledgeListening Effective Communication Problem Solving Rapport building Commercial Savvy Influence Technique Conflict Management People Management Attitude In any negotiation, the following three elements are important and likely to affect the ultimate outcome of the negotiation: Attitudes Knowledge Interpersonal Skills All negotiation is strongly influenced by underlying attitudes to the process itself, for example attitudes to the issues and personalities involved in the particular case or attitudes linked to personal needs for recognition. Always be aware that: Negotiation is not an arena for the realisation of individual achievements. There can be resentment of the need to negotiate by those in authority. Certain features of negotiation may influence a person’s behaviour, for example some people may become defensive. The more knowledge you possess of the issues in question, the greater your participation in the process of negotiation.  In other words, good preparation is essential. Do your homework and gather as much information about the issues as you can. Furthermore, the way issues are negotiated must be understood as negotiating will require different methods in different situations. Good interpersonal skills are essential for effective negotiations, both in formal situations and in less formal or one-to-one negotiations. These skills include: Effective verbal communication.  See our pages: Verbal Communication and Effective Speaking. Listening.  We provide a lot of advice to help you improve your listening skills, see our page Active Listening. Reducing misunderstandings is a key part of effective negotiation.  See our pages: Reflection, Clarification and The Ladder of Inference for more information. Rapport Building.  Build stronger working relationships based on mutual respect. See our pages: Building Rapport and How to be Polite. Problem Solving.  See our section on effective Problem Solving. Decision Making.  Learn some simple techniques to help you make better decisions, see our section: Decision Making. Assertiveness.  Assertiveness is an essential skill for successful negotiation. See our page: Assertiveness Techniques for more information. Dealing with Difficult Situations.  See our page: Communicating in Difficult Situations for some tips and advice to make difficult communications, easier. Professional and credible Assertive and decisive Self discipline and creative Patient and careful listener Open minded Self Discipline Flexible Highly ethical Open Open

149 THANK YOU Open