Chapter 3 Flashcards
What are the 7 steps to agreement in negotiations sited by Harry Mills?
- Ready your self
- Explore needs
- Signal for movement
- Probe with proposals
- Exchange concessions
- Close the deal
- Tie up loose ends
Remember, the mnemonic to use: RESPECT
What is meant by Anchoring during negotiation?
People place a tendency to give price too much weight to the first price put forward and then adjust from that position.
Make sure you know the difference between Persuasion (push) and Influence (pull)
Push (directive) - individual driven style whereby person doing the influencing declares their own ideas/ views in the expectation it will be accepted and followed. i.e. pushy, and abrupt. This can be affective when time is tight, that person is a subject expert, other people are inexperienced etc. Drawback is that not using this style correctly can lead to the influencers being known as heavy handed, pushy, dictator.
Pull (collaborative) - team orientated style whereby the person doing the influencing involves other party/ stakeholders in decision making process. This can be affective when the influencers needs commitment from others, the influencers needs innovative ideas, there is no clear solution etc. Drawback is that not using this style correctly can lead to the influencer being known indecisive.
What type of questions are available during negotiations?
Open -“What do you think about X?” Inhibits conversation and fact finding
Closed - “Can you offer 24 hours delivery” seek a specific response, answer, seek special info and bring discussions to an end. It is risky to use closed questions too early
Probing - “tell me more about X” seek more info when the first question wasn’t answered as expected.
keep chasing a response when other party be being evasive
Hypothetical - “if” question, “if we gave you X, could you give us Y” enables testing of waters, doesn’t commit you to anything, gets he other party ready for a potential closed question.
Risk of asking closed question too early - imagine the question “can you offer 20% discount and the other party already knows 25% is their max discount, as 20% is asked so early and is so final, the other party could give it but knows that saying yes so early, means they will likely be expected to give further discount as talks progress. therefore, the other party will likely response with 10 or 15% so it is then an uphill battle to get back to 20% or even 25%. Not asking closed questions to early allows small non threatening increases to incur and allow buyer to offer up their small tradable to encourage a higher discount.
Hearing is passive, listening is active
Albert Megranbian suggest what % of what you say is interpreted by other party vs your body language and tone of delivery?
7% words
55% body language
38% tone of voice
This means that your words could be significant i.e. a great counter offer, however, the way in which you deliver it is more key that the actual topic.
What is are personal and interpersonal intelligence and what the difference?
Personal intelligence - positive self regard, self ware and managing your behavior well, self regard
Interpersonal intelligence - positive self regard for others, aware of others, managing relationships well
Why is it important for a buyer and team to debrief and reflect after each negotiation?
If reflection/ review is part of the negotiation process then teams members may be more motivated to perform as it is going to be analysed later.
Lessons can be learned and skill gaps can be targeted and filled.
Forms part of professional development
CIPS recommend this form part of all negotiations.
CIPS preferred negotiation style is the principle approach also known as win win. This should leave both parties feeling satisfied.
What Tactical Ploys exist?
Good cop/ bad cop - 2 negotiator, one is tough the other is warm. Idea is that it emphasises the warm negotiator position as someone to make a concession with
Thank and bank - when offered a concession immediately say thank you and move on. It’s awkward and hard for TOP to take it back. Counter argument could be nothing is agreed until everything is agreed.
Lack of authority - advise you can only sign off up to X amount with our board approval. Could encourage TOP to concede to get deal done there and then
Declaration of public stance - state publicly that you expect to achieve X, which then pressures TOP to concede as you have rallied the stakeholders and they want it too. i.e. union leader negotiating with employer and states publicly a 10% pay rise before meeting. Counter is that anything stated outside of negotiation is not allowed on the table no more.
Getting peanuts - suggest the TOPs offer is low value to you, in return for you have traded in return
Salami (one slice at a time) - Your first demand is big/ exceptional one off. Once achieved the precedent is set and should be easier to do again. Counter is that only this one exceptional concession will be made and make a purpose note to all stating no more will be granted.
Outrageous initial demand - your first offer/ counter offer is so big that you shock the TOP into thinking they are so far off the mark you pressure them to quickly come to your level. Risk here is that you offend them. win-lose. Best do you price research before stating it. Linked to anchoring and ZOPA
Add-on - sneaky extra haggled after what was thought to be the final negotiation. Idea is that TOP has committed so much resource they may just give you those extra so quickly end process
Broken record - keep repeating what you want, your position until you get what you want.
One more thing - same as add on but done before ‘just’ before final negotiations are due to wrap up. Same idea that TOP may concede as they want the process to be over
