Task 7 - Negotiation Flashcards

1
Q

Negotiation

A

Discussion between two or more parties with the aim of resolving a divergence of interests

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2
Q

Four domains of Power in Negotiation

A

Alternatives (BATNA)
Information
Status
Social Capital

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3
Q

Power in negotiations

A

Power that negotiator has to achieve success in bargaining situations
-> probability that negotiator will influence negotiation in direction of desired outcomes

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4
Q

BATNA

A

Best alternative to a negotiated agreement

  • > if you have a n altenative, you don’t depend as much on the outcome of the current bargain
  • > power comes from value or diversity of alternatives
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5
Q

Information

A

Having negotiation-relevant information

  • market information
  • knowledge of cultural practices
  • insight into counterparties anxieties or expertise
  • > gives bargaining power
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6
Q

Status

A

Extent to which a negotiator is respected by the counterparty
-> high status: get more value for same offerings, appear more competent and trustworthy

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7
Q

Social Capital

A

Power in negotiation arising from having established and maintained a large or strong social network
-> facilitates other sources of power

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8
Q

Cultural Differences in negotiation

A

Western: more likely to rely in information exchange strategy
East and South Asian: more likely to adopt persuasion and offer-making strategy

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9
Q

Trust tendencies

A

High trust: direct information sharing

Low trust: persuasion and offer-making

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10
Q

Social Identity Theory (intercultural negotiation)

A

Intercultural negotiations as having highly competitive outgroup-dynamics

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11
Q

Triangle Hypothesis (intercultural negotiation)

A

Cooperative negotiators will remain cooperative unless facing a competitive opponent (then competitive)

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12
Q

Effects of cultural differences

A

Can undermine value creation in intercultural negotiations

-> e.g. bank loans have higher interest rates, more guarantee requirements and are smaller interculturally

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13
Q

Trust

A

Psychological state indicating intention to accept vulnerability based upon positive expectations of the intentions or behaviors of another
-> enables parties to rely on each other in future

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14
Q

Effects of trust

A
  • Strengthens cooperative intentions
  • Reduces uncertainty
  • Minimizes transaction costs
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15
Q

Trust Propensity

A

Expectancy that the counterparty can be relied on, even without prior contact, shaped by prior experiences

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16
Q

High trust propensity negotiation behavior

A

more likely to take leap and signal counterparty about their high expectations of trustworthiness

17
Q

Integrative/cooperative bargaining

A
  • Q&A: sharing info about interests and priorities
  • > risky, only high trust propensitve negotiators engage in it
  • > contributes to trust development
18
Q

Distributive/competitive bargaining

A

S&O: substantiations and offers

  • > about position and influence
  • > used by low trust propensity negotiators, might induce reciprocal wariness
19
Q

Substantiations

A

All influence attempts that negotiators use to justify own positions and challenge counterparty’s logic, assumption or facts

20
Q

Trust influences

A

Signalling vulnerability and using Q&A contributes to trust development
S&O (especially substantiations) jeopardize trust development)
-> trust propensity directly and indirectly predicts trust development in negotiations

21
Q

Decision-Analytic Approach to Negotiations

A

Structure of negotiations determiend by:

  • BATNA
  • each party’s set of interests
  • relative importance of each party’s interests
22
Q

Reservation point

A

Point of value in bargaining below which a party would not accept an agreement

23
Q

Positive bargaining zone

A

Zone in which bot parties would agree

-> overlapping reservation points

24
Q

Negative bargaining zone

A

No resolution can occur between the parties since the reservation points do not overlap

25
Claiming Value in Negotiation
Determination of each other's reservation point and aiming for a resolution that is barely acceptable for the other party
26
Creating Value in Negotiation
Trading issues of differential value to different parties based on preferences; creating value through bets -> contingent contracts
27
Contingent contracts
Bets built on differences to create joint value - > help manage biases: parties can make bet on own biased beliefs - > diagnose disingenious parties: identifies bluffs and false claims
28
Tools of value creation in Negotiation
- Building trust and sharing information - asking questions - Strategically disclosing information - negotiate multiple issues simultaneously - make multiple offers simultaneously - search for post-settlement settlements
29
Post-Settlement Settlements
Adjusting/improving settlements after having agreed on them
30
Pareto-superior agreement
Mutually beneficial agreement done after an initial agreement - > still during bargaining, not after settlement - > often done by employing third party
31
Negotiation Cultures
- dignity cultures: self-worth based on individual achievements (USA) - face cultures (China) - honor cultures (Qatar)
32
Key aspects of negotiation
- Competitive aspiration (desire to gain at expense of counterparty) - Information sharing - Insight (level of awareness of counterpart's concern - Joint gains (sum of negotiation outcomes)
33
Significant cultural differences
- Americans: strongest in joint gains - Chinese: most competitive, use most influence - Qataris: used more influence than US
34
Negotiation Biases
- Fixed Pie Assumption - Framing - Escalation of conflict - Overestimating own value - self-serving bias - Anchoring bias
35
Fixed Pie Assumption
When negotiators only think of win-lose but do not consider possible win-win - > no desire to reach agreement together but both want more than counterpart - > don't consider that there might be "multiple pies" that can be divided
36
Cognitive Trust-Building
Trust based on (objective) attributes - > e.g. trusting a professors because you believe he/she has been highly educated - > also built by perspective-taking
37
Affective Trust-Building
Trust based on personal connection | -> e.g. trusting you mom because she's your mom