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
