introduction Flashcards
When do we negotiate?
We negotiate with ourselves
We negotiate with our friends and family
We negotiate in our professional lives
Commercial , managerial, labor, salary, M&A
Public affairs
Governments (Local, national, international)
What is negotiation?
The interactive process of reaching an agreement between
parties by combining their different positions into a common final position.
Negotiation Process
Differences in interests, goals, needs, resources, etc.
creating exchanges, conflict or value
Distributive
A gain by one side is typically at the expense of the
other side (zero sum negotiation).
Integrative
A gain by one side is not necessarily at the other side’s
expense.
Work cooperatively to create value, exploring
possibilities and inventing options.
The process is a sequence of activities
It is non-deterministic
It is two sided
Choices have to be made
It Is an exchange of information
It is effort
Except in the most straight forward of cases, the negotiators
are acting on behalf of their companies.
The negotiator is given a mandate (scope and limits)
that gives him proper authority.
Sometimes negotiators are tied up by their stakeholders.
The communication with the stakeholders must be
maintained during negotiations.
This is often team negotiations.
Best Alternative To a Negotiated Agreement (BATNA)
Best Alternative To a Negotiated Agreement
The BATNA defines what you are going to do…
… if you do not make a deal with the other side.
Benefits of BATNA
You should avoid entering in negotiation unless you have a
BATNA:
Introduction BATNA
It protects you against making agreements you should not make.
The better your BATNA, the greater your power.
It gives you the ability to walk away from the negotiation.
As pat of your preparation, you need to develop your
BATNA, as alternatives are not always sitting there
waiting for you.
The other side’s BATNA
You should not expect success in negotiation unless you
are able to make the other side an offer they
find more attractive than their BATNA.
The more you can learn about the other party’s
alternatives, the better you are prepared for the
negotiations.
If their BATNA is so good, consider what you can do to
change it.
Relational Positioning
Open communication channels
Exchange of information
Identify interests ; Priorities ; Power assessment
Influence - Persuasion
Exchange of concessions
Reaching an agreement
Negotiation outcomes
Win/Win
Win/Lose
Lose/Win
Lose/Lose
Four Basic Strategies
Competitive: Negotiation outcomes.
Cooperative: The goal is to get as good a deal as possible
for both sides.
Compromise: When each party accepts to give up part of
its demands (real concessions) in order to reach a deal.
Concede: Bring the negotiations to an end by agreeing with
the other party
Dual Concern
Importance of the issue.
Importance of the relationship
Two levels of relationships
Relationship between the negotiating organizations.
The relationship between the negotiators across the table
to reach an agreement.
The dual concern model is over simplifying.
It portrays the idea that there is a single choice of
strategy.
However, negotiations are likely to involve sequential choices of strategy as negotiators exchange
information.
It is single sided. It does not take into account the other
party’s Choice of strategy.
The negotiator’s dilemma
competitive or cooperative
Benefits of Team negotiations
Team members reinforce each other’s strengths
Broad base of knowledge
Teams are more creative than individuals
Teams are involved in better planning and better thinking
Teams set higher targets for negotiations
Team Negotiations and things to consider
Implement a shared strategy
Align your own team’s interests and objectives.
Designate a team leader
Assign roles for each member
Based on skills, experience, function.
Concessions
Based on the idea that negotiations are a matter of
give-and-take.
Each party is willing to make concessions in order to get
concessions in return, until a deal is found.
Target point, Opening point, Walk away point (limit).
-Your ideal goal
-First announced price
-Buyer: how much you are willing to spend
Vendor: how much you can accept
Could be determined by your BATNA
Zone of Potential Agreement (ZOPA)
It is the range between the buyer’s limit and the seller’s
limit.
Concession Tactics
Offer a price first
High-ball (negative effect)
Meeting half way
Contigent concessions
Contigent concessions
When a party states that he can make a concession
only if the other party agrees to make a specified
concession in return.
Negotiation Decoy
A negotiator fabricates a requirement and then later
offers to drop that requirement if you forget about one of
your own requirement.
Bogey
A negotiator pretends that an issue of little or no
importance to him is quite important.
Later on, he trades that issue for something that is
important to him.
Negotiations Nibble
Just when you think you have agreed and are ready to
sign the contract, there is an additional (small) request by
the other negotiator.
Typically there is a powerful urge to make this final
concession for the sake of signing the contract.
The request can seem too small to loose the deal over it.
Elements of Negotiations
-Commitments
-Agreement Standards
-Alternatives
-Process
-Interests
-Culture
-Communication
-Relationship
-Trust
