EXAM 1 Flashcards
1
Q
What are the 3 Fundamental Needs?
A
Competence, Autonomy & Relatedness
2
Q
What is the difference between negotiation & persuasion?
A
Persuasion (give someone reasons to do something)
Negotiation (give them concessions)
3
Q
What are the two systems we have for processing info?
A
Emotional Brain & Logical Brain
4
Q
Emotional Brain
A
Powerful, impulsive, concerned with the now
5
Q
Rational Brain
A
Logical, concerned with planning, higher level thinking
6
Q
80% of your efforts should be directed to
A
Preparation and research
7
Q
Principal Negotiation
A
You make deals based on facts, objective value and standard prices not feelings.
8
Q
BATNA =
A
Best Alternative To Negotiated Agreements
9
Q
When forming a BATNA, you must think of the
A
ZOPA (Zone of Possible Agreement)
10
Q
3 things to do when you cannot prepare adequately for a Negotiation:
A
Cancel, Postpone or borrow research
11
Q
If you aren’t prepared you might get a
A
Bad deal OR walk away from a good deal
12
Q
Specifics to ask yourself before negotiating:
A
What do they want? What are my Alts? What is an appropriate range of prices? What’s the nature of the relationship? Who are the people affected?
13
Q
What are issues?
A
What you want (THE GOAL), ask why or why not
14
Q
What are Interests?
A
Why you want it (HOW to reach the goal)
15
Q
6 Critical Rules to Negotiating:
A
- No free gifts
- Start high
- Have a concession plan
- Krunch
- Nibble
- Only make agreements in totality
16
Q
RULE 1. No free Gifts
A
“I’ll agree to x if…”
- every time yo give you should get
- when someone else wants something see it as an opportunity
- if other side rejects the “if” they must reject the concession too
17
Q
3 ways to say no
A
- I’ll agree on x but I can’t agree to y
- Bolkan No
- Japanese No
18
Q
Bolkan “No”
A
Do not make the “if” so bad they won’t do it, just bad enough to be worth your time
19
Q
Japanese “No”
A
Don’t say no, change it to a “yes, if” then extreme concession
20
Q
RULE 2: Start High
A
The most important moment,because it will anchor and define the outcomes
21
Q
RULE 3: Have a Concession Plan
A
Have 3 prices aka envelopes
Opening, target & bottom line prices
22
Q
If there is an overlap between buyer and seller’s envelopes =
A
ZOPA (zone of possible agreements)
23
Q
The Rule of Halves
A
When negotiating concessions, cut values in halves between opening and target. then baby steps
EX: $3000, $2500, $2200,2080
24
Q
RULE 4: KRUNCH
A
When someone gives you an offer, instead have them give you another offer rather than giving a counter offer
25
KRUNCH EXAMPLES
“What else can we do with that?”
“Not what I was expecting, can you do better?”
“Eh anything else?”
26
RULE 5: Nibble
A concession gained at the very end of a negotiation, right before the deal is closed
27
RULE 6: Make agreements in totality
Never settle issues one at a time. Instead say “ we are good on that if we can agree on other things too”
Gives you leverage and you can list priorities
28
Why not start off at a fair price?
Better to start high and work your way to a fair price
29
Should you accept the other person’s first offer?
No because it is important to build rapport and you might offend the other side by accepting it
30
Having emotional intelligence of others leads to
Higher trust and willingness to work
31
Building rapport helps
Establish good relationships and a pleasant first impression
32
Who should make the first offer?
You should! Make it reasonably aggressive
33
First offers are one of the best predictors of the
Final price
34
25% of the initial number offer influences our
Final estimates
35
If I know the price of something, you can’t anchor me as much as when I
Don’t know
36
Aggressive first offers hurt:
When shopping on Craigslist or job prospecting with salary
37
Precise first offers lead to better outcomes because they are seen as more
Plausible and well thought out
38
Why do first offers work?
Inability to move away from initial frame/anchor, taken as a sign of the true price of a product, allows room for concessions, makes negotiator seem reasonable.
39
First offers work best when the price is
Ambiguous or vague
40
Example of a Bracketing Offer
If you want $100
As a Buyer: ask for $80-$100
As a seller: ask for $100-$120
Gives off illusion of flexibility
41
Making extreme first offers can
Offend people and they can walk away
42
What happens if the other person makes the first offer?
It can either benefit or hurt you, people tend to fixate on initial number of negotiations
43
Best Types of Price Range
Bolstering Range (if you want $100,you ask for $100-$120)
44
Worst types of price ranges
```
Back Down Range (you want $100, you ask for $80-$100)
Bracketing Range (you want $100, you ask for $90-$110)
```
45
Dual Concerns
1. What I’m getting
| 2. the others outcome & relationship
46
5 different approaches to negotiating:
1. me+,you- (what I’m getting)
2. me-, you+ (other persons outcome)
3. me-, you- (don’t care at all)
4. me eh, you eh (sorta cares)
5. me+, you+ (cares about both)
47
5 Major Types of Negotiation
1. competition/distributive
2. Accommodation
3. Avoidance
4. Compromise
5. Collaboration
48
Competition/Distirbutive
Competes for best concession
49
Accommodation
Doing what the other side wants
50
Avoidance
Only good if both agree to it
51
Compromise
Both sides give up something
52
Collaboration/integrative
Creates value so both people feel good
53
Distributive bargaining
Individual bargaining where you compete for scarce resources
54
Distributive Bargaining primary focus:
Opening Offer: be aggressive
Bottom Line: get to their bottom line
BATNA: strength your envelope
55
In distributive bargaining it is important to be thought but
Friendly in nature (keep environment positive)
56
Before you start in distributive bargaining, find out other person’s
Bottom line
57
Deadlines in negotiation affect both people
Equally (if you have a deadline, share it)
58
In the offensive stance of distributive bargaining:
- highlight losses (make something seem scarce)
- disaggregate gains, bundle losses (give gains spaced out, combine losses)
- use reciprocity
- make your problem their problem
59
Defensive Stance in Distributive Bargaining
- prepare
- gain outside opinion
- BATNA
- contingency contacts
60
Contingency Contract
Make contract to where you can find out if the other person is lying.
61
Example of contingency contract:
“I’ll take a low salary, but if I perform ata certain level in 5 months, I get a bonus plus a raise.”
62
When to negotiate distributively:
Never (you should focus on building good rapport and good will) but always
63
Top concerns in integrative bargaining
Outcomes, others outcomes, relationship, coming up with multiple issues, working together
64
Myths about integrative bargaining
You need to improve the relationship, you can’t be aggressive, you should compromise, there is a fixed pi
65
Two important things in integrative bargaining
Separate person from the problem and focus on interests
66
(Int. Bargaining) Separate person from the problem
Be careful of negative emotions. It prevents you from paying attention, you are less cooperative and less likely to honor the deal.
67
5 things to do when separating person from the problem
- Give them the benefit of the doubt
- Relax
- reframe situation
- stop negative spiral
- be sensitive to your words
68
(Int. bargaining) focus on interests
Focusing on interests gives flexibility to meet needs. (ACT LIKE YOU CARE)
should you share interests? YES
69
4 Common Problems in Intergrative Bargaining
Premature judgement
Searching for a single answer
Thinking their problem is their problem
Not using principled negotiation
70
3 aspects of finding solutions in integrative bargaining
1. Log rolling
2. Nonspecific compensation
3. Have multiple equivalent Offers
71
People say yes when
Their needs are met and there is nothing left to get from you
72
6 Common Objections
```
Lack of ownership
Unmet interests
The other party losing face
Complexity
Too expensive
People need more time
```
73
Objection 1. lack of ownership
Invent opportunities to provide them with choices (ask questions, ask for feedback)
74
Objection 2. Unmet Interest
Show people how their outcome will be better with your deal (called relative advantage)
75
4 types of relative advantages
Economic, social prestige, convenience, satisfaction
76
Objection 3. When other party loses face
People need to feel CAR (competent, autonomous and respected)
77
Objection 4. complexity
Just keep it simple
78
Objection 5. Too expensive
Show the other person the value of your proposal
79
Objection 6. people need more time
Ask them why they need more time (giving them more time is not good for you)
80
5 Closing Deal Tactics
1. just Ask
2. flip a coin
3. Commitment (if I solve x issue, do we have a deal?)
4. Sweetener (one last concession for the yes, opposite of nibble)
5. Exploding offer (limited time only with sweetener)
81
What are signs that suggest you should be ready to close the deal?
Decrease in objections, person admits that proposal has merit, if person switches from concerns to how it will work, positive comments
82
In distributive bargaining what do you care about? When is this type of bargaining appropriate?
Care bout my outcome, and it’s appropriate in one time interactions
83
What does the old brain do for us?
Reptilian brain results in direct behavior that is constant, instant and you can’t control. Exposes us to our 3 fundamental needs
84
Why can’t Americans negotiate?
There are more options, we are a culture set to shop. We view it as impolite
85
Are objections to your final position bad?
No, it means they are still with you/the negotiation
86
Log rolling
Trading issues of importance
87
Nonspecific compensation
Pay people off
