Negotiation 1 Sem

Negotiation

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* Win-win situation 

Bargaining

competitive win-lose situation

Tangibles

eg. price

Intangible

physiological motivations and Personal values and emotions 

Independant Parties

 meet their own needs without the assistance of others

Dependant Parties

rely on others for what they need

Competitive situation/Zero Sum/distributive situation

interconnected goals where only one acheives the goal

* claiming value

**Mutual gains/ Non zero sum**/ integrative situation

interconnected goals where one persons goal achievement helps others to achieve their goal

* creating value

An example of creating and claiming value

the price of a product including stakeholders of the consumer, employees, manufacturers and the competitive industry

BATNA

best alternative to a negotiated agreement

BATNA example

only one job offer or if you have many job offers

Mutual Adjustment

both parties influence the others outcomes and decisions

* should predict responses

DIlemma of honesty

how much of the truth you tell the other party

Dilemma of trust

how much should you believe the other party says

* **Perceptions of the process** - signal fairness and reciprocity in proposals and concession 
* **Perceptions of outcomes** - manage how receiver views the proposed result

Conlfict

sharp disagreement or opposition as of interests

* perceived incompatible goals

Level 1 of conlfict

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* intrapersonal/intrapsychic conflict 
* Within an individual 
* Ideas, thoughts, emotions, values, predispositions or drives

Level 2 of conflict

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* Interpersonal conflict 
* Between individuals 
* Co workers, spouses, siblings, roomates or neighbours 

Level 3 of conflict

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* Intragroup conflict 
* Within a group such as familes, classes, living units and tribes 
* Affects the ability for the group to make descions, work productively, resolve differences and continue achieving goals

Level 4 of conflict

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* Intergroup conflict 
* Between organizations, ethnic groups, warring nations
* Large number of people involved and multiple ways they intercat 

Elements of destructive conflict

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* Competitive goals and competitive processes to obtain 
* Perceptions become distorted with stereotype and bias 
* Emotional charged 
* Decrease in productive communication 
* Central issues become blurred and less defined 
* Parties become more locked in their positions

Function and benefits of conflict

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* Cope with problems more 
* Adaptation 
* Strengthens relationships and heightens morale 
* Self awarness 
* Personal development (physchological)

Basis of Dual conerns model

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* People in conflict have 2 independant types of concern 
* Concern about others outcome 
* Concern of their own outcome

Dual Concern Model - 5 stratergies

* contending
* yeilding
* inaction
* problem solving
* compromising

Dual Concern Model - contending

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* competing or dominating 
* Maintain their own aspirations and try to persuade other party to yield 
* Includes threats, punishment, intimidation

Dual Concern Model -problem solving

* 2 parties join to pursue approach to maximise their joint outcome from the conflict

Dual Concern Model - compromising

* Can be seen as half hearted and a cop out

Dual Concern Model - inaction

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* avoiding 
* Withdrawal or passivity 
* Retreat, be silent or do nothing

Dual Concern Model - yeilding

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* accomodating or obliging 
* Lowering ones own aspiration

7 steps to prepare

* goals
* issues
* intrests
* BATNA
* resistance point
* target
* opening offer

Goals

Must be:

* specific
* feasible
* clear
* can be tangiable or intangiable

Issues

to acheive the goal certain outcomes for the issues must be acheived

Interests

Why you want certain outcomes for the issues

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Bargaining Zone

Bargaining zone = the range between the two parties resistance point

* outcome will most likely be in the middle

Target

most favourable point that is specific but acheivable

Opening bid

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* Anchoring effects 
* Face to face negotiation 
* Start with higher 
* Auction 
* Start with lower
* More competition with more people to enter the negotiation

3 ways how to gain information about the other side

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* Speak to other parties and third parties who have dealt with him 
* Look at business history, negotiation history 
* Collect data 
* Media 
* Financial reports

Deadlines cause…

whoever feels a great sense of urgency will make greater concessions

field analysis

A - direct actors (our side)

B - Opposition actors

C - indirect actors (not negotiating eg. stakeholfers)

D - interested observers (watching and can step in eg. gov)

E - Environmental factors (cultural or ecenomical)

How does a prior relationship effect the negotiation

* use tit for tat stratergy
* dilemma of trust and honesty
* their stratergies and tactics
* know if the party had higher authority
* consult in advance

7 phases to ideal negotiation process

1. preperation
2. relationship building
3. info gathering
4. info using
5. bidding
6. closing deal
7. implementing agreement

stratergy defenition

overall plan to reach goal

* tactic must align with the same style

Unilateral stratergy

one that is made without the active involvement of the other party

Bilateral

one where both parties agree on one strategy

Non engagement stratergy

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* no bargaining zone
* Meet ones needs without negotiation 
* Not worth time and effort 
* Related to available alternative

active engagement stratergy

* competition(distributive)
* collaboration(intergrative)
* accomodation (imbalance of outcomes

7 planning protocol

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* Agenda
* Who will be there 
* Where will it take place 
* Time period 
* Failure plan 
* How to keep track of agreements 
* How to determine a good agreement 
* Check with resistance points

Forbearance Tactic

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*  requires patience 
* Cares about relationship 
* Scared of tit for tat

silence

demonstrates self control, confidence, discipline and calm

surprise

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* a sudden shift in the course you have taken 
* Competitive situation

Fait Accompli

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*  take a chance and then work on settlement 

Apparent withdrawal

requires forbearance, self discipline and deception

Probing/testing

identity other parties BATNA, target, resistance point

Setting limits

conditions under which you will negotiate

Feinting

change directions

Association

with reputable parties and disassociation with negative parties

Bracketing

set a range

Salami

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* one issue at a time 
* When you prioritize an issue 
* More integrative

**Quick Close**

urgency and neither will walk away

Agent of limitied authority

I do not have enough authority to make a higher demand

**Pareto efficient**

* **there is no agreement that would make any party better off without decreasing the outcomes of any other party** 
* **Creating value should precede claiming value** 

Negatives/limits of distributive bargaining situation

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* People might back out of the negotiation 
* Costly and ineffective 


* Focusing too much on differences and negate thing they have in common

Elements of distributive bargaining situation

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* Goals of one party conflict with the other 
* win/lose - zero sum 
* Resources are fixed and limited 
* Maximizing ones share of resources is the goal for both parties

**Positive settlement range**

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when there is overlap between the aspiration ranges of the two parties

**Negative settlement range**

when there is no overlap between the aspiration ranges of the two parties

Fundemental info in distributive bargaining stratefy

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* information to gather 
* Target point 
* Resistance point 
* Settlement range

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Distributive bargaining Tactical tasks

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* Assess
* The outcome values and the cost for termination 
* Manage
* Other parties impression of you 
* Modify 
* Other party's perception of their own situation 
* Manipulate 
* Cost, delay or termination 

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Good cop/Bad cop Distibutive barganing tactic

**play on emotions**

lowball/highball Distibutive barganing tactic

start ridiculously high or low

Bogey Distibutive barganing tactic

play up an issue of little importance

Nibble Distibutive barganing tactic

ask for a number of small concessions

Chicken Distibutive barganing tactic

force the other party to chicken out

Intimidation Distibutive barganing tactic

good when you have power

Aggressive behavior Distibutive barganing tactic

Things you say or tone of voice 

Snow Job 

Overwhelm other party with information

4 options about how to deal with hardball tactics

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* Ignore
* Discuss
* Respond in kind 
* Befriend the other party

3 properties of commitment

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* Finality - ensure its the final offer 
* Specificity - be clear with the terms 
* Consequences - if you deviate from the offer there as consequences

4 ways to create commitment

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* Public announcement 
* Link with another party
* Ensure the importance of the demands 
* Reinforce threat or promise 

4 ways to abandon commitment

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* Plan a way out 
* Keep compensation ready 
* Dont bring up the issue 
* Generalise the terms and conditions 
* Make it up to them with relationship

5 ways to closing the deal

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* Provide 2 or 3 alternatives
* Assume they want to buy - start the paperwork 
* Split the difference 
* Time offer 
* Deal sweeteners

Intergrative negotitation

* all parties can gain more than they had


* intangibles are really important
* exchange ideas and BATA
* create value and expand the pie

Steps for intergrative negotiation

1. identify and create value
2. understand problem
3. generate alternative solution
4. evaluate and select among alternatives

Intergrative step 1

state problem in a mutual way and identify obstcles

Types of 4 interests

substantive - key issues

process - mechanism used to settle the dispute

Relationship - dont wanna damage relationship

Principles - ethics

position acheivement

each party gets exaclty what they want

* expand
* modify

Alternative expand

expand the circuimstances and resources

alternative modify

modify operations and constraints

position accomodation

each party receives a portion of their intial demands

* compromise
* log rolling

acheiving underlying intrests

each parties intrests are met

* bridging
* cost cutting

Alternative log rolling

exploit the fact that parties have diffrent high priorities

alternative Bridging

diffrent way of meeting their needs

alternative cost cutting

compensate for the higher cost (remburstment)

Alternative Non specific compensation

* repay using any method

alternative superordination

focus on somthing else completely

alternative substitute underlying intrests

underlying intrests are substituted, modified or changed

person based alternative

making concessions and changing positions on the issue

issue based alternative

involves making adjustment to the issue under discussion

6 Factors that facilitate a sucessful intergrative negotitation

* trust
* collaboration
* communication
* faith in own problem solving
* understanding of the process
* belief in ones position and other parties perspective

2 reasons to seek power

* has less power than the party
* wants more to gain advantage

2 perspectives on power

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* Power over - dominate and control other 
* Power with - work togather

6 sources of power

* information
* personal orientation
* position in organisation
* networks
* relationships
* contextual sources