Exam 1 - Negotiation Flashcards
Why is negotiation important?
- Resolve conflicts
- Improve communication between parties
ABC Analysis
The planning and controlling of inventories in order to meet the competitive priorities of the org
A-Items/Strategic Items require most negotiation
C-Items/Non-Critical Items require the least
Situations where negotiation may provide value
- Any written contract
- The purchase of time’s made to certain standards
- Changes in specifications
- Problems with packaging
- Changing economic or market conditions
Aspects of Negotiation
Quality
Support (data sharing, packaging, warranty)
Price
Supply (lead times, delivery schedule, cancellation)
Transportation
Basic Steps of Negotiation Strategy
- Analyze the positions of strength for both parties
- Set the buyer’s position on each issue and estimate the seller’s position
- Plan the negotiation strategy
- Brief all persons
- Conduct a dress rehearsal
- Conduct the actual negotiations
BATNA (Best Alternative)
Your best choice if negotiation fall through
ZOPA (Zone of Potential Agreement)
Range in which both parties can possibly agree
Distributive Negotiation
Someone wins, someone loses
Integrative Negotiation
Win-Win scenario
The Power of Silence
Allow the other person to do the talking
Allow counterparts to negotiate with themselves
Anchoring Effect
Setting the parameters with opening offer/counteroffer
The use of time
Hard time limits can be an effective pressure
Beware of sniping: coming in at last second
Brinkmanship
Hard charge - get what you want or just walk away
The Nibble
Asking for one last thing right at the end
Good Cop / Bad Cop
One person takes extreme position to make actual desires seem reasonable
Snow Job
Intentionally overwhelming the other party with info/jargon/specifics
Important to know your needs
Free Market
Market where goods/services are bought and sold based purely on demand
Seller’s Market
Market where seller’s have an edge
Demand > Supply
Buyer’s Market
Market where buyers have an edge
Supply > Demand
Sources of Negotiation Power - Legitimate
Formal structural authority
Ex. Boss
Sources of Negotiation Power - Referent
Based on charisma/interpersonal skills
Ex. Celebrities
Sources of Negotiation Power - Expert
Power from knowledge/skills
Sources of Negotiation Power - Reward
Ability to trade for some sort of benefits
Sources of Negotiation Power - Coercive
Use of negative influence - threats/punishment
Ex. Fear
