SPMA 4P96 Mid Term

Week 1 

  • Negotiation  

    • Process by which two or more parties who perceive a difference in interests or perspective attempt to reach agreement.

    • A basic means of getting what you want from others.

    • A back-and-forth communication designed to reach an agreement when you and the other side have some interests that are shared and others that are opposed.

  • Conflict  

    • Situation in which people have competing interests or divergent perspectives. 

  • Ugly Conflicts 

    •  Formidable obstacles, including mistrust, animosity, complexity,or a history of hostility.

  • Soft Negotiations

    • Seeks to avoid personal conflict.  

    • Makes concessions readily in order to reach agreement. Problem is the potential to be exploited is high with this strategy/demeanor 

  • Hard Negotiations 

    • Every situation is a contest with winners and losers.  

    • Belief that the more extreme position and willingness to “hold out” will ultimately succeed.  

    • Problem is this technique may produce equally hard responses from negotiation partners leading to deadlocks

  • Principled Negotiations 

    • Every negotiation is different but the basic elements do not change.

    • To negotiate on the merits, consider these four points: 

    • 1. People: separate people from the problem 

    • 2.Interests:focus on interests, not positions 

    • 3. Options: generate a variety of possibilities 

    • 4. Criteria: insist that the result be based on objective standards

    • View participants as co-problem-solvers rather than adversaries  

    • Be soft on the people and hard on the problem.

    • Explore interests (rather than positions) by asking WHY questions  

    • Invent options for mutual gain (as many as you can)  

    • Use objective criteria (e.g., industry standards,etc.)

  • Positional Bargaining 

    • Each side takes a position, argues for it, and makes concessions. 

    • Maybe you reach agreement and maybe not (e.g., buying tickets outside an arena).

  • Successful Negotiations 

    • It should produce a wise agreement if agreement is possible. 

    • It should be efficient. 

    • It should improve or at least not damage the relationship between the parties.

  • Positional Bargaining benefits 

    • Tell the other side what you want.  

    • Provides an anchor in an uncertain and pressured situation.  

    • Can eventually produce the terms of an acceptable agreement

  • Positional Bargaining drawbacks 

    • The more time that is paid to positions…  

    • The less attention is devoted to meeting the underlying concerns of the parties.  

    • Agreements may simply ‘split the difference’ rather than meet the legitimate interests of the parties.

  • Problems with positional bargaining 

    • Arguing over positions is inefficient. 

    • Arguing over positions endangers the relationship. 

    • Multiple parties can make positional bargaining even worse.  

    • Soft negotiators are especially vulnerable in positional bargaining.

  • Stages of negotiation

    • Analysis 

      • Diagnose the situation  

      • Gather information and think about it  

      • Identify your interests and the interests of others

    • Planning 

      • Re-consider 

      • 1.People,2.Interests,3.Options, and 4.Criteria.  

      • Anticipate questions you expect from your negotiating partner. How will you respond?

  • Separate the people for the problem 

    • A working relationship where trust, understanding, respect, and friendship are built up over time can make each new negotiation smoother and more efficient.  

    • From preparation to discussion to follow-up – are you paying enough attention to the people involved?

    • Substantive interests and relationship interests.  

    • Base the relationship on accurate perceptions, clear communication, appropriate emotions, and purposive outlook.  

    • Deal with people's problems directly; don’t try to solve them with substantive concessions.  

    • Be prepared to educate and listen to your negotiating partner

    • Put yourself in their shoes.  

      • The ability to see the situation as the other side sees it is one of the most important skills a negotiator can possess. 

      • Keeping in mind that understanding a point of view is not the same as agreeing with it.

    • Don’t deduce their intentions from your fears. 

    • Don’t blame them for your problem.  

    • Discuss each other’s perceptions.

    • Look for opportunities to act differently from their perceptions.  

    • Give them a stake in the outcome by making sure they participate in the process.  

    • Regarding saving face – make your proposals consistent with their values.

  • Emotional Regulation 

    • Recognize and understand your emotions (e.g., nervousness, anger, fear,etc.).  

    • Make emotions explicit and acknowledge them as legitimate.  

    • Allow the other side to let off steam. 

    • Don’t react to emotional outbursts.


  • Communication 

    • Make sure you are talking to your negotiating partner.  

    • Make sure your negotiating partner hears you (and that you hear them).  

    • Make sure you understand and that you are understood.  

    • Seek to build a working relationship that lasts.

  • What kind of people are effective negotiators 

    • Personal Background Characteristics  

      • Can invoke stereotypes in negotiating partners…  

      • For example: partners feel worse when [negotiating] against older or more attractive people (Elfenbein et al., 2018)

    •  Abilities

      • Cognitive intelligence (IQ)  

      • Emotional intelligence (EQ) 

      • Creativity & Cultural Intelligence 

      • Each tends to improve win-win outcomes (see:Fulmer & Barry,2004; Imai & Gelfand,2010;Kurtzberg,1998)

    • PersonalityTraits  

      • Most studies have found no effects of these traits on negotiation effectiveness. 

      •  However – extraversion and agreeableness can be liabilities in strictly competitive situations. 

    • Expectations & Beliefs 

      •  The single best predictor of negotiation performance is positive expectations.

  • 22 Negotiation tips 

    • 1. Have a strategy meeting 

    • 2. Don’t reward people for coming up with the right strategy 

    • 3.Assess what happens if there’s “no deal” 

    • 4. Negotiate process before substance 

    • 5. Normalize the process 

    • 6.Think about all the questions you need to ask the other side 

    • 7.Ask the right questions 

    • 8. Prepare in advance for the toughest questions they may ask you 

    • 9. It has been said that whoever makes the first offer loses – should you make the first offer? 

    • 10. Never let your offer speak for itself. Always tell the story that goes with it.

    • 11. Label your concessions 

    • 12.Avoid mindless haggling 

    • 13. Make multiple offers simultaneously 

    • 14. Initial reactions matter 

    • 15. Understand and respect their constraints 

    • 16.What looks like irrationality is usually ignorance or interests you don’t understand 

    • 17.Write their victory speech for them 

    • 18. Ignore ultimatums 

    • 19. Only make ultimatums if… 

    • 20.Don’t let negotiations end with“no” 

    • 21. Follow phone calls and meetings with an email 

    • 22.Always tell the truth

  • Get in the right state of mind 

    • The heart of emotional intelligence is self-awareness…  

      • The capacity to sense the first stirrings of anger or anxiety/nervousness 

    • Wheeler (2015) interviewed seasoned negotiators…  

      • They were concerned re: the unpredictability of the process  

      • They were worried about the other persons intentions (re: win-win vs. hard negotiations)  

      • They were concerned about their own performance (self-doubt)

Week 2 

  • Interests define the problem 

    • The basic problem in a negotiation lies not in conflicting positions, but in the conflict between each side’s needs, desires, concerns, and fears.

    • Interests motivate people. 

      • Your position is something you have decided upon. 

      • Your interests are what caused you to decide that way

  • Identifying interests 

    • Communication 

    •  Ask “Why not?”  

    • Identify the basic decision that your negotiating partner sees you asking for  

    • What interests of theirs stand in the way? 

    • If you’re trying to change their minds, the starting point is to figure out where their minds are now…and then analyze the consequences.

  • The most powerful interests 

    • Security  

    • Economic well-being  

    • A sense of belonging 

    • Recognition  

    • Control over one’s life

  • Sharing interests 

    • Put the problem before your answer. 

      • If you want them to listen and understand your reasoning, give your interests and reasoning first and your proposals later.

    • Look forward not back

      • `You will satisfy your interests better if you talk about where you would like to go rather than about where you have come from…

    • Be concrete but flexible 

  • Invent options for mutual gain 

    • Premature judgment 

    • Searching for a single answer 

    • The assumption of the fixed pie  

    • Thinking “solving their problem is their problem”

  • Before Brainstorming process 

    • 1. Define your purpose 

    • 2. Choose the participants

    • 3. Change the environment 

    • 4. Design an informal atmosphere 

    • 5. Choose a facilitator 

  • During brainstorming 

    • 1. Seat participants side by side 

    • 2. Clarify the ground rules 

    • 3. Brainstorm 

    • 4. Record the ideas in full view

  • After brainstorming 

    • Define your purpose 

    • Choose the participants 

    • Change the environment 

    • Design an informal atmosphere 

    • Choose a facilitator

  • Circle chart 


  • Make their decision easy 

    • Write a “yesable proposition”  

      • A proposal in which the other side may respond “yes” and that would be sufficient, realistic, and operational.

  • Insist on using objective criteria 

    • Using Precedents 

      • You will almost always face the harsh reality of interests that conflict. 

      • An agreement consistent with precedent is less vulnerable to attack.  

        • E.g., a lease that contains standard terms 

        • E.g., a sales contract the conforms to industry standards

  • Fair standards 

    • Market value 

    • Precedent 

    • Scientific judgement 

    • Professional standards 

    • Efficiency 

    • Costs 

    • What a court would decide 

    • Moral standards 

    • Equal treatment 

    • Tradition 

    • Reciprocity

  • Three points too remember 

    • Frame issues as a joint search for objective criteria 

    • Reason and be open to reason (re: objective standards, precedents, market value, etc.) 

    • Never yield to pressure, only to principal.

Week 3 

  • Negotiating against power 

    • No method can guarantee success if all the leverage lies on the other side  

    • Develop your Best Alternative To a Negotiated Agreement (BATNA)

    • The most any method can do is to meet two objectives: 

      • 1. Protect you against making an agreement you should reject 

      • 2. Help you make the most of the assets you have…so that any agreement you reach will satisfy your interests as well as is possible

  • Protect yourself 

    • Establishing in advance the worst acceptable outcome 

      • Buyers: the highest price you’re willing to pay 

      • Sellers: the lowest amount you’re willing to accept

    • However, there are costs associated with adopting a bottom-line strategy: 

      • A bottom line can inhibit imagination 

      • A bottom line is by its nature rigid…maybe too rigid 

      • A bottom line is likely to be set too high

  • Best alternative to a negotiated agreement (BATNA)

    • In most circumstances, however, the greater danger is that you are too committed to reaching agreement.

    • Not having developed any alternative to a negotiated solution, you are unduly pessimistic about what would happen in negotiations broke off.

  • Know your BATNA 

    • Formulate a “Trip Wire” 

      • A far from perfect agreement (better than BATNA) 

      • If you find yourself negotiating in this space…consider taking a break.

  • Sources of power

    • Coercive Power – confrontational and has significant negative connotations. Involves threatening or punishment in order to achieve results. Connection 

    • Power – when people use their relationships with important people to influence others. 

    • Reward Power – the ability to provide things in exchange for desired behaviours. 

    • Legitimate Power - authority ascribed to a social position within a group. It can be delegated by an organization or through election, royalty, birthright etc.

    • Referent Power – popularity or charisma is most often used to describe referent power. The person who is liked and respected can wield a great deal of influence over others. 

    • Informational Power – people who have knowledge and data that other need have informational power. 

    • Expert Power – individuals with the most knowledge or ability in a task become the influential member of the group.

    • Power is not a one-way street. Power is almost always distributed or decentralized, even if it does not look that way on the surface. 

  • Power 

    • Often people think it has to do with resources… 

    • In fact, the relative negotiating power of two parties depends on how attractive to each the option of not reaching agreement is – that’s power.

  • Developing your BATNA 

    • Generating BATNAs requires three distinct operations: 

    • 1. Inventing a list of actions you might take if no agreement is reached 

    • 2. Improving some of the more promising ideas and converting them into practical alternatives 

    • 3. Selecting, tentatively, the one alternative that seems best

  • Take criticism and advise 

    • A lot of time in negotiations is spent criticizing Rather than resisting the other side’s criticism, invite it 

    • Or, consider asking for advice. Ask them what they would do if they were in your position.

  • In positional bargaining 

    • If you fall into positional bargaining…  

    • Perhaps a third party can help solve your situation.

  • Tricky bargaining 

    • Tactics and tricks people can use to try to take advantage of you: 

      • E.g., Lies and psychological abuse 

      • E.g., Pressure tactics

    • They may be illegal, unethical, or simply unpleasant, and people generally respond in one of two ways: 

      • 1. They put up with it

      • 2. They respond in kind

  • Negotiate the rules of the game 

    • When the other side is using dirty tricks

      • Recognize the tactic  

      • Raise the issue explicitly 

      • Question the tactics legitimacy 

      • Negotiate over it

  • Common tricks 

    • Tricky tactics can be divided into three categories: 

    • 1. Deliberate deception 

      • Phony facts 

        •  Making a knowingly false statement 

      • Ambiguous Authority 

        •  After you’ve been pressed as hard as they can and you have worked out what you believe to be a firm agreement, they announce that they must take it to someone else for approval

    • 2. Psychological warfare 

      • Stressful Situations 

        •  E.g., meeting location…should you meet at their place or yours? 

      • Personal Attacks 

        • Verbal/nonverbal communication to make you uncomfortable

    • 3. Positional pressure tactics

      • Good guy bad guy routine 

        • Threats 

          • Threats are pressure…and instead of making a decision easier for the other side, it often makes it more difficult

  • Pressure tactics 

    • Extreme Demands •

      • Undermines their credibility, and such an opening may also kill the deal; if they offer you too little, you may think they are not worth bothering with. 

      • Lock-In Tactics…e.g., one country says it won’t withdraw troops

      • A Calculated Delay…e.g., postpone until a favorable date

    • Positional pressure tactic 

      • Refusal to Negotiate 

        • E.g., I’ll see you in court 

        • Recognize the tactic as a possible negotiating ploy: an attempt to use their entry into negotiation as a bargaining chip to obtain some concession on substance later on…

Week 4 

  • Interpersonal issue

    • Once negotiations begin, you will find yourself dealing with constantly shifting dynamics and frequent surprises as you engage with at least one other party across the table. 

    • Therefore, understanding:  

      • How to build trust  

      • How to use proven persuasion methods 

      • How to deal with power differences can help




  • Building rapport 

    • Build Rapport Slowly  

      • Try to fit in (at least) a minute or two of friendly conversation 

      • In Western cultures, small talk can foster a relaxed atmosphere and promote collaboration 

  • Cultivate healthy skepticism 

    • Even when you feel you can trust a new negotiating partner…you are wise to maintain some degree of skepticism about his/her motives and claims

    • In half of the pairs, one negotiator was encouraged to feel distrustful before negotiating In the other half, one negotiator was encouraged to feel trusting

      • Those who had been encouraged to be distrustful were: • More likely to test their assumptions about their counterpart than were those who were feeling more trusting • As a result, distrustful negotiators gained a more accurate understanding of their counterpart’s interests • Created more value in the negotiation than the trusting pairs Take home message – test the other party’s claims and promises…even in trusting relationships

  • Protect yourself 

    • Research your negotiating partner  

    • Reach out to people in your network Consider providing references of your own (make it a two-way-street) Build/negotiate safeguards into the contracts themselves: 

    • E.g., insurances, warranties, and guarantees for services, etc.

  • Three persuasion strategies 

    • 1. Frame losses and gains to your advantage 

      • People are motivated to avoid losses (loss aversion) 

      • Consider highlighting the losses the other side may suffer...

      • Rather than listing all the benefits the other side may gain

      • People are motivated to avoid losses (loss aversion)…and people tend to prefer gaining money in multiple installments but losing money in one lump sum 

      • E.g., people are happier if they find $10 on back-to-back days than if they find $20 only once 

      • Conversely, people are unhappier when they lose money on multiple occasions rather than all at once

    • 2. Give a token gift to activate the norm of reciprocity (NOR) 

      • The NOR compels people to reciprocate generous behaviours  Consider making concessions that are easy for you to give What are some examples of token concessions?  

      • Negotiation time and place; consider buying coffees; etc.

    • 3. Capitalize on Social Proofs 

      • We look to others (precedents) for guidance re: how to behave Robert Cialdini – Persuasion

      • In Negotiations, consider highlighting the popularity of a given option 

      • E.g., share a list of satisfied clients; consider enlisting the partners peers for support, etc.

      • E.g., in sales “operators are standing by” versus “if operators are busy, please call back”

      • Social Proofs are particularly effective when: 

        • 1. People are in an unfamiliar situation 

        • 2. People see many others behaving in a similar fashion 

        • 3. And those people are very much like them…

  • Psychological traps 

    • Anchoring trap 

      • The mind gives disproportionate weight to the first information it receives. Initial impressions, estimates, or data anchor subsequent impact thoughts and judgements

    • Framing trap

      • Decision researchers have documented two types of frames that can distort decision making: 

        • 1. Frames as gains versus losses 

        • 2. Framing with different reference points

      • Framing with different reference points 

        • As a negotiator, don’t automatically accept the initial frame 

        • If others recommend decisions, examine how they frame them

    • Overconfidence trap 

      • Overly confident about the accuracy of their predictions, most people set too narrow a range of possibilities…[and] if managers underestimate the high end or overestimate the low end of a crucial variable, they may miss attractive opportunities or expose themselves to far greater risk than they realize

    • Recallability trap

      • Even if we are neither overly confident nor unduly prudent, we can still fall into a trap…because we frequently base our predictions about future events on our memory of past events…we can be overly influenced by dramatic events