02 Strategy in Negotiation Flashcards
Direct effects of goals on strategy
- wishes are not goals
- goals are often linked to the other party’s goals
- there are limits to what goals can be
- effective goals must be concrete/specific
Indirect effects of goals on strategy
forging an ongoing relationship
Strategy Definition
The overall plan to achieve one’s goal in a negotiation
- Unilateral: made without the active involvement of the other party
- Bilateral: considers the impact of the other’s strategy on one’s own
Tactics Definition
- Short-term, adaptive moves designed to enact or pursue broad strategies
- tactics are subordinate and driven by strategy
Planning Definition
The “action” component of the strategy process, i.e. how will I implement the strategy?
Four pillars of effective negotiation
I. Build a productive relationship
II. Pursue outcomes, not points
III. Seek solutions, avoid blame
IV. Focus on fairness
Pillar I. Build a productive relationship
- have their interests in mind
- they do not necessarily care about what you want
- understand, anticipate, connect
Pillar II. Pursue outcomes, not points
- Why do I want this? What will it help me to achieve?
- Does it conflict with any of my goals?
- Can these terms be implemented?
- If these terms became public, what negative repercussions might they set off?
Pillar III. Seek solutions, avoid blame
- problem-solving is a great asset
- both/and solutions rather than either/or contests
Pillar IV. Focus on fairness
- most agreements fall because one of the parties feels they were taken advantage of
- at different levels (outcomes, process, relationship)
Dual concern model
- Avoidance: Don’t negotiate
- Competition: I gain, ignore relationship
- Collaboration: I gain, you gain, enhance relationship
- Accommodation: I let you win, enhance relationship
Avoidance
- non-engagement strategy
- if one is able to meet one’s needs without negotiating at all
- if it simply may not be worth the time and effort to negotiate
- decision to negotiate is closely related to the desirability of available alternatives
Accommodation
- active-engagement strategy
- involves an imbalance of outcomes (I lose, you win)
- focused on building/strengthening the relationship
- short-term strategy
- can encourage increased interdependence
Competition
- active-engagement strategy
- distributive, win-lose bargaining
- Critical factors:
- well-defined bargaining range
- a good alternative
- tactics used (e.g. bluffing, being aggressive, threatening)
- Drawbacks:
- costly and time-consuming
- often comes with underestimation of the other party
- may lead to self-fulfilling prophecies
Collaboration
- active-engagement strategy
- integrative, win-win negotiation
- Critical factors:
- understanding the other party’s goals and needs (what & why)
- providing a free flow of information (willing to give) - finding the best solution(s) to meet both parties’ needs
- Obstacles: If a party…
- … doesn’t see the situation with a potential for cooperation
- … is motivated only to accomplish its own ends
- … is historically (wants to be/is accountable to) competitive
Compromise
- active-engagement strategy
- most situations are mixed
- is usually seen as ‘adequate for most occassions’
- Reasons to adopt:
- when a true collaborative strategy does not seem possible
- when parties are short of time or other critical resources
- both parties gain something (or not lose something)
When to choose which strategy?
Decisive factors:
- situation
- preferences
- experience
- interactions between styles
- perceptions and past experience
Key Phases in Negotiation
Phase 1. Preparation - What are the goals and how will I work?
Phase 2. Relationship building - What are the differences and similarities? Can we commit to a mutual benefit?
Phase 3. Information gathering - What can I learn about the issue at stake?
Phase 4. Information using - assemble the case
Phase 5. Bidding - Opening offer. Give and take process
Phase 6. Closing the deal
Phase 7. Implementing the agreement
Planning Process
- Define the issue
- Assemble the issues and define the bargaining mix (bargaining mix = combined list of issues; what are the most and least important issues and are they linked?
- Define your interests (why you want what you want)
4/5. Know your limits (resistance point) and alternative (BATNA)
- Set your objectives (targets) and opening bids (where to start) (target - outcome realistically expected; opening - best possible settlement)
- Assess constituents and the social context of the negotiation (who is on my side, who is on the other side, who is watching)
- Analyze the other party (e.g. how can I present my case clearly and refute the other party’s argument?)
- Define the protocol to be followed in the negotiation (e.g. what might be done when the negotiation fails? how will I keep track of what is agreed on?)
- Present the issue to the other party
Principled Negotiation Model
