Negotiations Flashcards
What is a negotiation
can be conflict between two parties trying to come to an agreement
What is distribution negotiations?
Negotiate one element, typically price. Benefit can only be obtained at the expense of the other party. The characteristics of power and negotiation determine everything
What is integrative negotiations?
Negotiate several elements. Cooperation will lead to better solutions and lead to a win-win situation for both parties. Still divided interests even if one tries to cooperate.
When should you do the negotiations?
Investment purchase
Purchase with large financial scope
Raw materials
What is important to do when you should negotiate?
Come prepared, know the market and your strategy
What’s the three stages in negotiations
Pre stage
procurement process
* information search
* mandate
* negotiation team
* tactics
Negotiation process
prepare contact
* agree on procedures
* explore opportunities
* agreement or breach
After stage
inform own organization
* implementation
* performance measurement
* changes in agreement
* new agreement?
Why is information so important in negotiations?
Information is power. If you know a lot about the supplier and the market, you have a greater chance to get a better deal.
(Think also about your own weaknesses, not only supplier)
Reservation point?
Your max price you maybe want to pay.
The negotiation team?
Negotiator, leader, summarizer, observer, subject experts
ZOPA?
Zone of potential agreement
” It is the overlap between the seller’s and buyer’s settlement range.
BATNA?
Best alternative to negotiate agreement
It is defined as the most advantageous alternative that a negotiating party can take if negotiations fail, and anagreementcannot be made..
What is ASK
Aware?
Skills
Knowledge
Typical errors in negotiations ?
Inadequate Preparation:
Failure to prepare adequately might result in protracted discussions or needless re-negotiations.
Aggression:
When one negotiator is overly aggressive and reluctant to compromise on any issue, the relationship as a whole suffers.
Details:
Failure to pay attention to all of the flaws may result in an agreement that appears to be fine on the surface but contains several loopholes and details that will ultimately harm the organization.
Emotions:
Because business talks are ultimately between groups of people, it’s easy for emotions to take precedence over other factors.
Ethics:
Being ethical pays off in every situation. It might be quite tempting to take a clear shortcut, but this can have a negative influence on the business relationship.
