L4M5- Chapter 3- How negotiations should be undertaken Flashcards
There are multiple ways you can dissect the steps in a negotiation, one of which is the RESPECT acronym from Harry Mills. What does it stand for?
Ready yourself
Explore needs
Signal for movement
Probe with proposals
Exchange concessions
Close the deal
Tie up loose ends
What is conditioning?
The art and process of setting expectations within the mind of the other party as well as making the right first impression
What is anchoring?
Cognitive bias in negotiation whereby people have a tendency to give too much weight to the first number put forward in a discussion and then to anchor from that
It is done by sellers to create an expectation of a higher price through suggesting, stating or advertising very high prices initially
Then there will be a bias for individuals to rely on this initial piece of information when making decisions
What are some examples of conditioning?
Before the meeting:
suppliers reputation
Experience from written comms
Job titles
On the day of a meeting:
Punctuality
Appearance
Last minute changes
layout
Welcoming
Why may the buying side normally have a head start in the negotiation phases?
Buyer can set or influence the agenda (as the seller wants your business)
Use of silence- the seller is selling so needs to speak
You go first- again the seller will need to open with their proposal
What are the key stages of the negotiation?
Open (setting the tone for the meeting, initial stages)
Test (scope out each others positions following presentations and questions)
Move
—-> propose (asking ‘if’, tentative proposals)
—-> bargain (this is the bulk of the meeting where parties trade concessions, bargaining mix, MIL, ZOPA, tradeables)
Agree/close
How can you protect the relationships in a negotiation?
Seek win win
Use mutual Non Disclosure Agreements
It is ok to agree to disagree and express your wishes
Leave open options to future business
Do not lie
Do not publicly criticise
Do not make personal criticism- remember it is one organisation goals vs anothers
What are the typical behaviours at the opening stages of a negotiation?
Punctual
Well presented
Small talk/ break the ice
Visual aids prepped (ppt, whiteboard etc)
Start conditioning
Check authority (can a deal be agreed today with the stakeholders present)
Check agenda
Employ the warm with the person, tough on the issue approach
What behaviours should be avoided during opening stage of negotiation?
Using strong, pushy, cold or a tough style (e.g. litigation talk about a dispute, threat of losing business)
Putting down any markers (e.g. drawing a line on max price that you cannot reverse out of)
Criticism of other organisations, previous parties or third parties
What are the typical behaviours at the testing stage of a negotiation?
purpose is to check assumptions and confirm understandings
Ask appropriate questions to get missing information
Asking open questions like why what how to elicit deeper insights into needs, interests and expectations
Develop new options (to share with the team subsequently)
Check key assumptions
Clarifying both party’s perceptions (e.g. lead time means elapsed time from order send to receival of delivery)
Show concern for the other party’s needs and interests
Summarise regularly
Listen
Seek to identify and confirm common ground
What behaviours should be avoided during testing stage of negotiation?
Interruption, blaming, sarcasm, threatening, point scoring
Talking too much
Being embarrassed by long pauses
Confusing conflicts of interest with antagonism between people (focus on the conflict not the person)
Making firm proposals in the room
Being drawn into an argument
What are the typical behaviours at the proposing stage of a negotiation?
this is where tentative proposals are introduced
Try to get the other side to propose first (get an idea of what the other party is looking for)
Make tentative suggestions (what if we agreed to…)
Present with confidence
Aim high with initial proposals
Acknowledge any other proposals
Always use ‘if’
Expect counter proposals/objections
Introduce new ideas/suggestions
Summarise regularly
Ask questions
Consider moments for time outs to recess and confer
What behaviours should be avoided during proposing stage of negotiation?
Interrupt
Use irritating phrases
Use multiple points (try to do things one at a time)
Use only your strongest point (try to save using your biggest concessions)
Reject proposals instantly
Immediate make counter proposals
What are the typical behaviours at the bargaining stage of a negotiation?
This stage is where both parties begin to trade concessions
Lead with conditions before offering tradeable (if you guarantee a 48hr lead time we can consider reducing the payment period)
Trade things that are easy to give but valuable for them
Take small steps (don’t give away big concessions too soon)
Make notes on all tradeables and concessions to record progress
Observe body language (inc non verbal)
Manage your own body language
Use time tactics to your advantage
Focus on all variable (not just price)
Use silence to get the other party to move first
Summarise regularly
What behaviours should be avoided during bargaining stage of negotiation?
be surprised if this stage ends quickly
Lose sight of your objectives
Get greedy and blow the deal
Make unplanned concessions
What are the typical behaviours at the agreement and closing stage of a negotiation?
Check to ensure all issues have been resolved
Consider using visual aids to summarise
Use ‘summary close’ (where you, not the other party, summarise all that has been agreed
Make a decision to conclude/close (verbal agreement, handshake)
Seek agreement in principle if the other party does not have final authority
Make your own notes on the final agreement (capture any behaviours from the other party)
Leave the meeting shortly after (no need to continue to discuss or lead to any benefit if you stay and celebrate)
What behaviours should be avoided during agreement and closing stage of negotiation?
Force an agreement by making ‘final offers’ (e.g. due to extreme time pressure, coercion etc- the other party will likely look to make concessions in other ways if so)
Get greedy (asking for more concessions)
Get careless with information (e.g. during social events after negotiation)
Never accept ambiguity or uncertainty about terms
Yielding to pressure (e.g. late calls to split the difference on final points)
Tell the other party they could have got a better deal
Gloat publicly
What is ‘push’ in relation to a negotiation?
Action where pressure is exerted to try and push the other party into making a decision
Can also be referred to as persuasion
Encouraging someone to do something that you want them to do for you
What is ‘pull’ in relation to a negotiation?
Where the negotiator tries to lead the other party into making a decision themselves, a pull action tends to be more lasting
Can also be referred to as influence
affecting the manner of thinking of another
What are the 6 bases of power? Which are push and which are pull?
PUSH
Legitimate
Reward
Expert
Coercive
PULL
Informational
Referent
What are the 2 main objectives of tactical ploys in negotiation?
Strengthen your perceived position in the eyes of the other party
Influence the other party’s view of their own position
Ploys should be used sparingly, and their effectiveness will decrease over time (as the other party becomes aware and counters). What are some examples?
Good cop Bad cop
Thank and bank- take a concession and bank it so they cannot take it back later
Lack of authority- e.g. say you have approval up to a value to get it signed off
Declaration of public stance- e.g. trade union leader announcing to the public what the goal is to try and get emotional pressure
Getting peanuts- pretending something that you need is not important
Salami- one slice at a time- asking for exceptional one off concessions which are normally hard to get but will then be easier
Outrageous initial demand- go in so high with your first offer that the other party is shocked
Add on- unexpected extras added after negotiation ends
Broken record- keep repeating the same thing
One more thing- you wait until the very last moment to get a concession you know is contentious
What are the different types of questions?
Open- start conversation e.g. what do you think about this?
Closed- specific responses e.g. can you offer 24hr delivery?
Probing- get more info if the first is insufficient (think about 5 whys) e.g. tell me more about feature Y on product X
Hypothetical- Try to get the other party to see things in a different way e.g. if we wanted to buy globally, could you supply?
Multiple- used to get multiple pieces of information or fluster the other party to give more info that they planned to
What is directive (push) negotiation style?
person seeking influence another declares their own idea in the expectation that it will be accepted and followed by the other
Useful when:
Influencer is an export
the people being influenced are new/ inexperienced
Need speed
There is a strict deadline
What is persuasive (push) negotiation style?
Get buy in to the influencers ideas through impartial, objective, logical and rational ways
Useful when:
Influencer has knowledge and high creditability
Buy in to an unpopular decision
Research has found the ‘best’ answer
What is collaborative (pull) negotiation style?
Influencer involves the other party in the decision making and all invited to share views on an issue
Useful when:
The influencer needs commitment from the other party
Actively seeking innovation
No clear immediate solution
What is visionary (pull) negotiation style?
Understanding the other party’s emotions and stimulating that party’s imagination to visualise the desired future goal of the influencer
Useful when:
Organisation has just gone through complex change
Attract others attention
Current situation demands innovative thinking
What is non verbal communication? Give examples
In negotiations it is what we do that is not explicitly verbalised but can still have meaning
Kinesics- gestures
Paralanguage- intonation, pitch, speed
Proxemics- space
Chronemics- time
Haptics- touch, physical contact
What is Mehrabians findings on the split of non verbal communication?
7% is the words you say
38% is how you say it
55% is body language/facial expressions
What are the 6 cultural dimensions identified by Hofstede?
Power distance index (PDI)- hierarchical e.g. military
Individualism versus collectivism (IDV)- communities vs individual
Masculinity vs femininity (MAS)- heroism, assertiveness vs cooperation, modesty
Uncertainty avoidance index (UAI)- rigid codes of belief vs relaxed
Long term vs Short term normative orientation (LTO)- Modern education vs time honoured traditions
Indulgence vs restraint (IND)- allowance of gratification and natural human decisions to have fun vs restraint and suppress for the belief in strict social norms
Outside of cultural differences what will impact working with an international company?
Trust and payment issues
Currency risk
Legal and contracting
Communication
Logistics
Ethical
Political
What is EQ?
Emotional quotient- a measure of a persons emotional intelligence and refers to a persons ability to perceive, control, evaluate and express emotions
Need to:
- Identify emotions
- Evaluate how others feel
- Control your own emotions
- Perceive how others feel
- Use emotions to facilitate social communication
- Relate to others
What are the 2 parts of emotional intelligence?
Personal intelligence- having a positive self regard, being self aware and managing your behaviour/ Self management, self aware, self regard
Interpersonal intelligence- having a positive regard for others, being aware of others and managing relationships effectively
