negotiation weeks 8, 9 & 10 powerpoint summary of: key negotiation concepts

Negotiation

Weeks 8, 9 & 10

PowerPoint Summary of:Key Negotiation Concepts

Announcements & Reminders:

No class this Thursday—good time to work on group projects!!!

Draft group projects are due November 4, finals are due Nov. 11.


Negotiation

1. How would you define it?


Negotiation – My DefinitionA discussion between two or more disputants

who are trying to work out a solution to their problem.

2. When is it done?


It is done when…

…neither side can get what he/she wants on its own.

3. What is the purpose of negotiation?

There are two possible answers.


Purpose of Negotiation To win. (Competitive) To reach a good agreement. (Cooperative)

4. How would you define a GOOD agreement?


What is a good agreement?Fisher and Ury argue that a good agreement is: wise

satisfy the parties' interests is fair is lasting.

efficient Cost effective, Time conserving

improves parties' relationship.


Negotiation… Can be cooperative or competitive.


Term Confusion

Competitive Negotiation

Win-lose Zero sum Positional Distributive Hard

Cooperative Negotiation

Win-win Positive sum Interest-based Integrative Principled

Benefits & Costs There are benefits – and costs – of each

approach.


5. What are the characteristics of competitive negotiation?

6. What are the benefits?

7. What are the costs?


Competitive Negotiation…8. Based on your knowledge of conflict styles

…when do you think competitive negotiation is best used?


Competitive Negotiation is best used when…

Situation is short term and not repeating. The agenda is more important than the

relationship, You HAVE to win The other party is expecting you to be

competitive. The primary issues are tangible and/or

splittable—money, time, dates, etc.


A classic competitive situation: Buying a car

Who has recently bought a car?

Describe the negotiation…how did it go?

Who started the negotiation? Did they get what they asked for initially?


Competitive Negotiation…Starts with the solution.

Parties propose solutions to one another and

Make offers and counter-offers until

They find a solution that is acceptable to both (it falls within their ZOPA or “bargaining range.” )



ZOPAs

= Zone of Possible Agreement Otherwise known as “bargaining range” Tells you whether or not an agreement is

possible. B below = buyer; S below = seller OO = opening offer; WAP = walkaway pt

B - OO $10,000

S- WAP $12,000

B-WAP $12,500

S - OO $15,000

Competitive Negotiation…Or, if they can’t find a ZOPA, they consider

whether they’d be better of exercising their “BATNA”.

BATNA is the

Best ALTERNATIVE TO a Negotiated Agreement


BATNA Is your “plan B”

It is what you do when the other side tells you to go “jump in a lake!”

or they insist on a ridiculous agreement.


Why do you care about BATNAs?


Why do you care about BATNAs?

They tell you what you should agree to and what you should walk away from. They also give you negotiating power.


Often confused:

BATNA and WAP (Walk-away point) What’s the difference? Your walk-away point is the offer the other

side makes that is so low (or so high) that you WALK AWAY from the negotiation, and

Go with your BATNA instead!


For instance

You want a Jeep, but your parents will let you have their old Toyota for $5,000.

You decide that if you can get a used Jeep for $7500 or less, you’ll go with that.

If you can’t, you’ll go with your parents’ Toyota.

What is your WAP? What is your BATNA?

They are

related…but

they are not the

same!

Competitive negotiation—typical attitudes

The “pie” is limited—my goal is to get the biggest piece.

A win for me = a loss for you Negotiators are opponents or enemies There is one right solution—mine!


Competitive negotiation -typical strategy:

Extreme opening position Argue for its “fairness” or why it is “right” Intend to give in a little, but try to give in as

little as possible.


Positional negotiation—typical strategy

Stay on the offensive Avoid concessions whenever possible—they

are a sign of weakness. Avoid compromise If you must compromise, give in as little as

possible.


Typical tactics of competitive negotiation:

Bluffing Wearing down the other side Devaluing other sides’ offers Threatening Softening them up, then squeezing them


Let’s try it!

Buying…and selling a used car.


Debrief

Buying…and selling a used car.


Try again!

Negotiating over Prunes!


Debrief


Cooperative Negotiation(Also called integrative or principled)


The “Principles” of Principled Negotiation

1. Separate the People from the Problema. Focus first on the relationship and identity

issues

b. Then on the topic issue issues



2. Attend to the communication issuesa. Acknowledge and manage emotionsb. Avoid the blame gamec. Listend. Use I-messages, active listening, etc.



3. Focus on Interests, not PositionsPositions: Simple statements about what you want. No reasons, no subtlety, no justification. Just a demand:

I want the orange!

Interests: The reasons underlying the position

—what you really want or need

—the answer to the question WHY. I need the rind to bake a cake.

I'm hungry. I want to eat the orange.

Interest-based Strategy

Considers alternative routes to the goal.

Positional Political Framing

If time..

Consider the positions and interests in the D’s and R’s debate about … (you fill in)

What are the positions? What are the interests? Why does it matter?


4. Generate many options & look for Options for Mutual Gain

Brainstorm options by listing all possibilities first,

Evaluating options second. Look for ways to meet

everyone's interests at the same time.



5. Find Legitimate Criteria to Guide Decisions What's been done before? What's “fair”



6. Analyze the Best Alternative to a Negotiated Agreement (BATNA)

BATNA = Walk Away Point—when you tell the other person you are not interested in their offer because you can do better in another way.



7. Work with Fair and Realistic Commitements

Is agreementReasonable?Doable?Face-saving?Practical?


So…to review…The “Principles” of Principled Negotiation

1. Separate the people from the problem & deal with “people problems” first.

2. Attend to communication issues

3. Focus on interests, not positions

4. Generate lots of options; focus on mutual gain

5. Identify objective criteria

6. Compare with your BATNA (better deal elsewhere, walk-away point)

7. Assess quality of the decision in terms of fairness, implementability.



Negotiation – Exercise 3 – The Print Shop Scenario


When to use what?

Integrative bargaining is best when: There is a possibility of “expanding the pie.” When the agenda and the relationship are

important. When this is a recurring relationship or event. When you don’t have a good “BATNA.” But keep in mind….


When to use what?

Distributive bargaining is best when: There is no possibility of “expanding the pie.” When you need to get your way/as much as

possible. When the agenda is much more important than

the relationship. When this is a one-time event. When you have a good “BATNA.”

Distributive and Integrative Bargaining

Are not mutually exclusive!

• Eventually even expanded pies have to be divided

• A form of distributive bargaining is the last step of an integrative approach

PowerPoint Summary of: Distributive Bargaining

Hard, Soft, Principled Negotiation I

Be soft on the people, hard on the problem

Be hard on the people and the problem

Be soft on the people and the problem

Separate the people from the problem

Demand concessions as a condition of the

relationship

Make concessions to cultivate the relationship

The goal is a wise outcome reached

efficiently and amicably

The goal is victoryThe goal is agreement

Participants are problem-solvers

Participants are adversaries

Participants are friends

PrincipledHard Soft

ProblemPositional Bargaining:

which Game Should You Play?

SolutionChange the Game-

Negotiate on the Merits

Hard, Soft, Principled Negotiation II

Proceed independent of others

Distrust othersTrust others

Insist on using objective criteria

Insist on your positionInsist on agreement

Develop multiple options to choose from; decide

later

Search for the single answer: the one you will

accept

Search for the single answer: the one they will

accept

Invest options for mutual gain

Demand one-sided gains as the price of

agreement

Accept one-sided losses to reach agreement

Avoid having a bottom line

Mislead as your bottom line

Disclose your bottom line

Explore interestsMake threatsMake offers

Focus on interests, not positions

Dig into your positionChange your position easily

PrincipledHardSoft

Hard, Soft, Principled Negotiation III

Try to reach a result based on standards of

independent will

Try to win a contest of will

Try to avoid a contest of will

Reason and be open to reasons; yield to

principle, not pressure

Apply pressure Yield to pressure

PrincipledHardSoft

Source: Getting to Yes

negotiation weeks 8, 9 & 10 powerpoint summary of: key negotiation concepts

Documents

key negotiation conceptszopas

key negotiation conceptswhat

key negotiation conceptsit

key negotiation concepts5

good agreement

competitive negotiationor

s wap

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