Negotiation/MGT 355 - Final exam

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Negotiation

An interactive process between two or more parties seeking to find common ground on an issue or issues of mutual interest

Third party intervention

Arbitration Mediation Settlement Facilitation

When is arbitration used

Arbitration is the most common form of settling disputes when negotiation and mediation have failed to produce a settlement

Don't Bargain Over Positions

Arguing over positions produces unwise agreements Arguing over positions is inefficient Arguing over positions endangers an ongoing relationship

Negotiation Jujitsu is required when your opponent is:

Asserting their position forcefully Attacking your ideas Attacking you

The strategy that has little concern for relationship and outcome

Avoidance

Why do we focus on interests versus positions?

Because only focusing on what people say we lose out on the actual needs, wants, and desires of why they want something

BATNA

Best alternative to a negotiated agreement

Directive Mediation

By allowing each party to address the mediator with their concerns in a joint session the other party needs to intently listen to the presentation and hear the opposing parties concerns in hopes of gaining an opportunity for settlement.

In the story of the orange and the two girls, what is the lesson relating to negotiation?

By understanding the interests of each party you create a win-win conclusion

Why is the BATNA so important?

What is the cost of not reaching an agreement? The only reason to negotiate is to produce better results Not all negotiations end with an agreement When do you walk away? Ask yourself what will you do in the absence of an agreement? Know the alternatives List pros and cons The stronger your BATNA the more confident you will be to negotiate When your BATNA is strong you will know that whether you reach agreement or walk you achieved the best outcome

Define arbitration

When both parties agree by contract to submit unresolved issues to a neutral third party whose decision shall become final and binding Parties must sign a contract to agree to settle any unresolved disputes through arbitration Arbitrator is a neutral third party with no conflict of interest on either side

Chilling Effect

When negotiators sense that they may not reach settlement and as a result will likely lead to arbitration; they deliberately cool down the negotiation process if they believe that an arbitrator will split the difference or side with their party

What is ADR

When parties have declared an impasse and the negotiation but have a true desire to reach a settlement parties may turn to third party intervention

Collaborative Mediation

When parties share a long term positive relationship this form of mediation works best; the mediator will in joint sessions strive to get the parties to understand each others view and position.

In Getting to Yes Ury uses the "architect" ( Wife wants two-story house with a chimney and a bay window, Husband sees a modern ranch-style house, with a den and a garage with a lot of storage space) for what?

When you can't get past positional bargaining who is the third party you need to take control? Third party intervention

For a group project which conflict handling style would be the optimal?

Collaborative

Types of mediation

Collaborative Evaluative Directive

We claim value when using an integrative negotiation process

False

You should always inform your desired salary to the HR recruiter

False

Ethnocentrism

the belief that your culture, your religion, or your views are the "right" ones and that those who do not share your perspective are somehow "deviant"

Cultural sensitivity

the extent to which individuals are aware of cultural norms, and belief systems of the individuals with whom they are interfacing.

Mediation

the third party assists the parties in crafting a settlement agreement that parties voluntarily accept. There is no authority to enforce the agreement. The mediator strives to maintain open communication with both sides and assists them in developing mutually acceptable solutions.

Unlike distributive bargaining which opens with a number, integrative bargaining should begin

with asking questions

Globe

1. Performance 2. Assertiveness 3. Future Orientation 4. Humane Orientation 5. Institutional Collectivism 6. In-group Collectivism 7. Gender Egalitarianism 8. Power Distance 9. Uncertainty avoidance

Emotions can be an obstacle in a negotiation because:

All of the above

Relationships in negotiation require you to do the following

All of the above

Mediation process

1. Request: Parties involved request the services from an agency and after an interview agree on a mediator 2. Initial Conference: Parties meet the mediator and the roles and responsibilities are defined 3. Schedule Sessions: Mediator designs a schedule of meeting some private sessions and other joint party sessions 4. Formal Retainer: Parties sign a fee sharing agreement 5. Information Gathering: Parties submit their information about the issues and their positions 6. Facilitation: Mediator identifies areas of agreement, defines unresolved issues, and assists in negotiating possible resolution 6. Settlement Proposal: Mediator summarizes a proposed settlement and the parties decide if they agree. Mediator drafts an agreement. 7. Agreement: A formal document is submitted to attorneys and signed by the parties

Five functions of mediation

1. Sets the ground rules 2. Ringmaster 3. Educator 4. Communicator 5. Innovator

Mesos successful when

1. The other party made the first offer and you need to reframe the negotiation terms of the issues and options important to you 2. When the other party is a novice or unskilled negotiator who can't easily package and compare all of the issues 3. When you realize that you are in a lower position and need a strategy that may level the playing field

Distributive Negotiation

A process that assumes a fixed pie single issue negotiation

Which of the following demonstrate a Communication skill?

Actively listen

What are the four outcomes of Impasse and Alternative Dispute Resolution

Agreement is reached with both parties gaining something of greater value than if no agreement were reached No agreement was reached or one or both parties opted for their BATNA Negotiations reached an impasse and neither party seeing how to move forward Both parties realize they are at an impasse but are willing to find a method of moving discussion by either using a third party or some other alternative method of dispute resolution.

When only the outcome matters- use the ______________ strategy

Competitive

ADR components

Costs Time Complexity issues: Judges and jury members do not have the expertise to necessarily understand and make a ruling based on knowledge of technical issues Confidentiality: ADR process can provide private and confidential means of settling negotiations that a court can not provide. Avoiding Disastrous Decisions: Because parties are not forced to accept the decisions in mediation parties can avoid a really bad decision.

Successful mediation tactics

Create a positive atmosphere Maintain neutrality Absorb conflict Provide reality checks No conscience

Polychromatic time

Cultures that are comfortable focusing on the big picture and are less concerned with process. They can skip from one thing to another without being concerned about time.

Monochromatic time

Cultures that see time as linear fashion and do things sequentially. Western cultures

Common tricky tactics

Deliberate deception Psychological warfare Positional pressure tactics

Before beginning any negotiation the most critical step in the process is:

Determine your BATNA

List all of the characteristics of a distributive negotiation and explain when you would use a distributive process and why

Distributive negotiation is the process of dividing up the pie of value in negotiation. Distributive negotiation can be thought of as haggling—the back-and-forth exchange of offers Zero-sum game in which parties are in a state of competition Whereby each party seeks dominance over the other and tries to maximize its own self-interests Win - lose Resolving differences between parties with mutually exclusive goals Strategy to distribute fixed resource; such as money

Positional bargaining is typically seen in:

Distributive negotiations

Solution for negotiation jujitsu

Do not push back Don't defend Don't counterattack REFUSE TO REACT - Silence

Why is small talk something that should not be overlooked in a negotiation?

Establish rapport Set a cooperative tone Provide important clues about the other party's style

Negotiation styles

Goal - Contract vs. relationship Attitude - Win/lose vs. win/win Personal Style - Informal vs. formal Communication style - direct vs. indirect Time sensitivity - high vs. low (mono or poly) Emotionalism - high vs. low Form of agreement - general vs. specific Building an agreement - top down vs. bottom up Team organization - one leader vs. consensus Risk taking - high vs. low

Competitive (Win-Lose)

High importance of outcome Low importance of relationship

Collaboration (Win-Win)

High importance of relationship High importance of outcome

Accommodating (Lose to Win)

High importance of relationship Low importance of outcome

Reasons for reaching an Impasse

Interests were not met Never true intentions of reaching a settlement

What are some of the disadvantages to e-negotiation?

Internet issues Tone and body language limitations

Time dimensions

Monochromatic time Polychromatic time

In thinking about opening offer strategy what is the difference between a low ball and a kiss?

Justification for the price

Tips for active listening

Keep your eyes on the speaker Take notes as appropriate Don't allow yourself to think about anything but what the speaker is saying Resist the urge to formulate your response until after the speaker is finished Pay attention to the speaker's body language Ask questions to get more information Reframe- repeat in your own words what you've heard to make certain you understand and to let the speaker know you've processed their words

What is the Salami Effect?

Like a salami that has many components donâ t break down what's in the deal

In the rules of negotiation "you have two eyes, two ears, one mouth" - what negotiation tip is referenced?

Listen more talk less

The cheapest concession you can make in a negotiation:

Listening/respect

Avoiding (Lose-Lose)

Low importance of relationship Low importance of outcome

Evaluative Mediation

Mediator meets separately in an effort to gain understanding and show the parties the relative weaknesses and strengths of their positions on the issues.

Playing god

Mediators and Arbitrators have different skill sets and while Mediators need to be empathetic and accommodating and Arbitrator is the decision maker and is totally in charge of the process and outcome

Interests

Needs, desires, fears that drive our negotiations. The things you really need or care about.

If you were negotiating to buy a car and used the Kelley Blue Book as a guide you would be demonstrating

Objective criteria as a basis for the price

Integrative Negotiation

Often referred to as a win-win and typically entails more than one issue to be negotiated

Distributive bargaining (what)

One primary issue, often money Win -Lose Strategy: Maximize share of "fixed pie" One time-no future relationship Keep interests hidden One expressed option(for each issue) Keep information hidden

In Getting to Yes there is a method to how to get to win- win negotiations it is:

People, Options, Criteria, Interests

Deliberate deception

Phony facts Ambiguous authority

Hofstede's cultural dimensions

Power distance Uncertainty avoidance Masculinity - fem Individualism - collectivism Long Term orientation

Stages of a successful negotiation

Preparation Rapport building Information trading Deal making Closing

Integrative Negotiation

Principled Negotiation Creating Win-Win Outcomes The orange

Integrative negotiations are also known as

Principled negotiations

Positional bargaining

Principled: Participants are problem solvers Separate the people from the problem Focus on interests not positions: Explore interests. Avoid having a bottom-line. Invent options for mutual gains Insist on using Objective Criteria

Arbitration different from mediation

Quasi formal atmosphere Win-lose process One person decides the outcome Final and binding

In the rule of norms which norm means "a response that is equal to the action of the one in the counter offer"

Reciprocity

Positional pressure tactics

Refusal to negotiate Extreme demands Escalated demands Lock in tactics Delays

When the miner initially asks the supervisor what he plans to do about the stolen boots what approach to dispute resolution was he using?

Rights

When Ury says be hard on the problem and soft on the people what did he mean?

Separate the people from the problem and solve for the issue

Integrative Bargaining (what)

Several important issues, some economic, some non-economic Win-Win "Expand the pie" by searching for mutual gains options Continuing, long term future relationship Share interests with the other party Many options-offer new options for maximum gain Share factual information

Saudi negotiations

Slow pace More physical Coffee Yes means possibility Arabic right to left

India negotiation

Slower Lots of hospitality Do not say word no Take refreshments Present business card Expect delays

What are four obstacles that inhibit inventing options of mutual gains

Solving there problem is their problem Fixed pie assumption Premature judjement Searching for a single answer

Venezuela negotiations

Start by getting to know everyone Slow pace Do not mention attorney until negotiation complete Longterm Individual rather than a team

Psychological Warfare

Stressful situations Good guy/bad guy Threats Personal attacks

ZOPA

The distance between the seller's reservation price and the buyer's reservation price

Reservation price

The least favorable point at which one will accept a negotiated agreement. A walk away point.

In a salary negotiation what are the important things to know beforehand?

The range of salaries for that position in the market place

Objective criteria

The standard by which an agreement is defined as fair

Position

The things people say they want

Settlement facilitation

The third party has only one goal- to reach an agreement between the parties. The facilitator may put pressure on parties to agree.

Arbitration

The third party is empowered by the parties to make a written decision on all unresolved issues. The parties agree that the arbitrator's decision is final and binding. The parties lose their ability to reject final offers.

Framing

The way information is organized to emphasis a selling point or to highlight an issue

The Winner's curse happens when?

The winner gets their price on the first round

Impasse and Alternative Dispute Resolution

Third party solutions Mediation and Arbitration

Anchoring

This is the official defined stance or standpoint which will be strongly defended by a negotiator

Mesos Technique - Multiple Equivalent Simultaneous offers

Three basic steps Identify and then prioritize three or more issues in the negotiation and determine their weights or relative value to the parties Identify the different outcomes or options for each issue establishing one as the standard and thus worth 100 points Create three different but approximately equal offers but multiplying the weighted by the values and generating the point total of the offer

The integrative negotiator generally strives to achieve two goals:

To create as much value as possible for both sides To claim as much value as possible for their own interests

Why do we need to invent options?

To expand the pie and create value

What is the main reason we negotiate?

To get something better than we had before

What does it mean to put yourself in the other person's shoes?

To see things from their point of view

A divided pie represents the distributive process

True

An avoidance strategy would be used most effectively when:

You don' t want to negotiate

What happens when you disclose your bottom line?

You turn a win -win to a win-lose

Surface Bargaining

half hearted efforts at the negotiation table when they sense that an arbitration will occur or prematurely call an impasse.


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