Negotiation/MGT 355 - Final exam
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.
