Getting to Yes VFW
There are 3 stages to Principled Negotiation:
- Analysis: try to diagnose the situation - Planning: plan and come up with additional options and additional criteria - Discussion: the actual communication and negotiation back and forth, looking toward agreement
Invent Options For Mutual Growth
- Creative options can make the difference between deadlock and agreement
So...According to the normative model (if we go through the conflict phases) what is the best route to take when going through these phases? - I.e., what is the Ideal Model for Conflict Management?
- It has 2 phases 1) Consists of Differentiation & - parties bring out differences - become aware that the other party will not give in 2) Integration - at a certain point these differences begin to be addressed - work on a mutually beneficial solution
12 Negotiation factors 2. are the parties monolithic or is there potential of disagreement?
-attacking the party and split -undermining group
How do you "go to the balcony"
1.Separate Yourself from the Problem 2.Separate the Other People from the Problem
3 ways you can help them focus their attention on the merits of the negotiation
1: You yourself can concentrate on the merits, rather then positions. 2: Negotiation Jujitsu 3:Third Party
How much notice must a landlord give a delinquent tenant, in writingm before filing an action to evict?
3 days
Contract phase
????
Collaborative Negotiations
AKA integrative negotiations
What is the first of the three stages of principled negotiation?
Analysis: Diagnose the situation
Key for determining your opening price
Apear overreaching or undervaluing If you overreach-> party may refuse to continue, which would end the Negotiations Try to come up with a modest offer, well thought through, so that you can reach your realistic expectations
Examples of LDCs
Asia and Latin America
Turning soviet, what should you do?
Ask for someone else to speak to and do not start talking again until your request is granted
The decision in an arbitration is called a/an
Award
BATNA
Best Alternative To a Negotiated Agreement
Two Types of Arbitration
Binding: The judgment is final. -when parties contractually agree to arbitration -the judgment is enforceable in court Voluntary or non-binding: Allows for further arbitration, or the initiation of a court case if parties do not accept the judgment.
equal sharing
Closer relationships lead to:
What always lies behind opposed positions?
Compatible interests conflicting interests
Three types of people problems
Differences in perception, emotions, and communication
Discrimination is prohibited in lending practices under:
ECOA- Equal Credit Oppurtunity Act
Who is the largest purchaser in the secondary market?
Fannie Mae
Interests:
Focus on interests, not positions
In principle negotation what should should you strive to do in terms of options?
Generate as many options as you can
Regional Cooperation Groups
Govts agree to participate jointly to develop basic industries beneficial to each economy Each helps in financing and has a share of output
Forgivness
Granting of pardon and the decision to transcend resentment toward the transgressor.
Conflict is ________ Industry
Growth
Putting workers out of jobs
How the expansion of the EU worries existing members when it comes to cheap labor
Negotiators are what first?
People
Negotiation judged by three criteria: #1
Produce a wise agreement if agreement is possible.
competitive and selfish
Relationships between strangers are typically more (2):
Why would a mortgagee (beneficiary) have an appraisal on the property?
To assure the property value is suffcient to cover the loan.
Pareto improvement
a change from one allocation to another that can make at least one individual better off without making any other individual worse off
Break off the relationship
a common reaction when the person says no high costs--you can lose your client, career, broken family If getting into a pattern of this you are always starting over
Give in
a common reaction when the person says no rewarding the opponent for their bad behavior Gives you reputation of being weak
Necessary to describe consequences with appropriate...
accuracy, precision and completeness
A mortgage broker:
arranges loans between borrowers and investors
Cite 4 "cons" of On-Line Dispute Resolution
b. CONS i. No body language or voice cues ii. Harder to reality check iii. Mediator has less control over process iv. Harder to build rapport
The maximum permissible "loan to value ratios" are:
based on sale price or appraised value, whichever is lower
Decisions with multiple objectives cannot...
be solved by looking at any one objective. thats why we have tradeoffs!
Why, Arguing over positions produces unwise outcomes
because it eliminates lots of options from being locked into positions
Why, Arguing over positions is inefficient
because it wastes time due to stubbornness and hurts relationships
Insist on using objective criteria
by discussing some fair standard such as market value, expert opinion, custom, or law determine the outcome.
Position bargaining
by stubbornly holding to it, by deceiving the other party as to your true views, and by making small concessions only as necessary to keep the negotiation going.
how do deal-minded and implementation-minded negotiators differ on: info sharing
deal-minded negotiators hold back info and fail to correct mistaken impressions
Legitimate power
derived from holding office or title and using that power
Informational power
expertise, presenting data to change the other person's mind
What lesson was taught in the sunflower book?
forgiveness cannot be offered by one person on behalf of another
Multinational market regions
groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers
what approach do principles of effective negotiation take?
integrative approach
12 Negotiation factors 8. what kind of threats can the other side do to you?
interpret these threats can you counter them etc?
Focus on interests, not positions
is designed to overcome the drawback of focusing on people's stated positions when the object of a negotiation is to satisfy their underlying interests.
12 Negotiation factors 3. repetition
is this a one shot deal like a care dealership or is it a relationship with repetitive negotiations? -must worry about your reputation
Physical deterioration is considered curable whenever:
it costs less to correct than the resulting value increase.
In an installment land contract, what type of title did the seller retain?
legal
The discount points charged by a lender on a federal VA or FHA loan are a percentage of the:
loan amount
Developing messages
most daunting task in international advertising
Brazil negotiation styles
most likely to touch others while negotiating
12 Negotiation factors 5. How well can issues be linked?
negotiated in a bundled fashion allows you to look for creative solutions allows threats to linked issues
Invent options for mutual gain
offet constraints by setting aside a designated time within which to think up a wide range of possible solutions that advance shared interests and creatively reconcile differing interests.
2 types of games 1. distributive (zero sum)
one gains the other loses
Standard technique of good listening
pay close attention to what is said, to ask the other party to spell out carefully and clearly exactly what they mean, and to request that ideas be repeated if there is any ambiguity or uncertainty. Make it your task while listening not to phrase a response, but to understand them as they see themselves. Take in their perceptions, their needs, and their constraints.
state soverignity
states are in exclusive control of the people and property within its borders don't want to lose control to be in a union
All good negotiation occurs on 2 levels:
substance and procedure
In valuing a single family residence by the comparison approach, an appraiser would make adjustments to:
the comparable properties.
"Separate the people from the problem" means:
the participants should come to see themselves as working side by side, attacking the problem, not each other focus on the issue what you want to change, not who is causing the problem. Other negotiators are also people.
By separating relationships from substance you deal directly with what problem?
the people problem
Fractionate
the problem into smaller and perhaps more manageable units.
The Poker School
the rules are defined by law; conduct in the rules is ethical
economic level of a country
the single most important environmental element to which a marketer must adjust the marketing task
Normative Leverage
the skillful use of standards, norms, and coherent positioning to gain advantage or protect a position
Bottom Line
the walkaway point
MDCs, LDCs, LLDCs
three categories of the UN classification of a country's stage of economic development
purpose of a side conversation in negotiation
to straighten out a translation problem
Personal care, automotive, food
top three industries when it comes to spending on global advertising
logroll
trade off priorities ( I give the other person something I dont care about
Maastricht Treaty
treaty that created European Union
Treaty of Rome
treaty that established the European Economic Community (EEC)
negotiator's motto
vive la difference
Reason and be open to reason
what makes the negotiation a joint search is that, however much you may have prepared various objective criteria, you come to the table with an open mind.
deception
when your opponenet is not acting in good faith or telling the truth
Negotiation checklist 1. Boulwarian Strategy
worst strategy imaginable just stay firm with a reasonable offer
Should you frame each issue as a joint search for objective criteria?
yes
Soft or hard negotiation
• Neither. •Change the Game. • Principled Negotiation or Negotiation on the Merits •"The Negotiator's New Clothes"
What does it sound like?
•"How did you arrive at that number?" •"What standard do you think we should use to determine the price?" •"Do you want more than is fair?"
What question establishes dialogue based on reason?
"Please correct me if I am wrong" -ASK QUESTIONS don't just give statements
Reservation price
"Walk away" Your reservation price is the least favorable point at which you'll accept a negotiated deal.
Should you ever raise your voice or use poor body language?
NO
Should you ever yield to pressure? What are some examples of pressure?
NO -Brines and threats
threat
Negative leverage is ___-based.
Is understanding the other side's point the same thing as agreeing with it?
No
Should you ever blame someone even if it is justified?
No
Should you ever treat any of the concerns of the other party as not important even if they do really concern you?
No
Should you stop people on the other side form expressing their emotions?
No
Sculpting or Choreography
Non-verbal method of demonstrating the structure of a conflict. -Acting out a conflict scenario (roleplaying) -Place people in postures, spatially, to demonstrate where people seem to be in conflict situations. -Provide a series of pictures that represent the conflict.
One of the most important skills a negotiator can possess is:
The ability to see the situation as the other side sees it, as difficult as it may be.
Submission
The act or process of referring an issue to arbitration
What is the legal biew of dower and curtesy in Texas?
They are not recognized
Which is true about restrictive covenants?
They are placed by private parties in a deed.
What often happens to the relationship and the problem?
They get entangled with each other
The interest underlying a person's position are often not clear, why is this?
They may be unexpressed or inconsistent with a clearly stated opinion
Value Creation through Trades
This occurs when goods or services are traded that have only modest value to their holders, but exceptional value to the other party.
Rather than compromising between positions also works because behind opposed positions lie many more interests than conflicting ones.
True
Express your interests with passion in a negotiation
True
Is it true that issues are really just the tip of the iceberg?
Yes
What should you be hard on and what should you be soft on?
-Be hard on the problem -Be soft on the people
What type of options should you try to invent?
-Invent options that are for mutual gain
three principals of speech
1: Speak to be understood 2: Speak about yourself, not about them 3: Speak for a purpose
Characteristic: Outcome Distributive: Integrative:
Distributive: Win-Lose Integrative: Win-Win
Psychological Warfare
Stressful Situations Personal Attacks Good-guy/Bad-guy Routine Threats
Frame each issue as a joint search for objective criteria
"Look, you want a high price and I want a low one. Let's figure out what fair would be."
Prior to issuance of an inspector's license, a newly approved inspector must remit what amount to the Real Estate Inspection Recovery Fund?
$200
Criteria for selecting a conflict style
- Importance to self - Importance to other - Importance of maintaining positive relationship with the other - Time pressure - Degree of trust in the other
Bargaining Zone
- the are in which parties to a negotiation are willing to trade, barter, or negotiate their positions, within which parties can find an acceptable agreement - Venn Diagram, it would be middle bubble
What does positional bargaining do?
-It puts both sides in a conflict
communication
-problems of communications -giving up on talking to each other -misinterpreting -not be hearing you -overcome by listening -speak to be understood -Use I statements -build a working relationship
Invent options for mutual gains
-see p. 68 (or 69) "Decision Making Process" -Know about inventing options for mutual gains. -Focus on shared interests and point those out -When we find shared interests, we all benefit
Cheap Grace
...
Identify the 4 traits of an effective negotiator
1. BATNA (best alternative to a negotiated agreement) 2. Reservation price/ "walk away" 3. ZOPA (zone of possible agreement) 4. value creation through trades
Steps for generating options for mutual benefit
1. Brainstorm 2. Throw ideas out there and record them but there is no criticism 3. Put a start to each idea that is promising 4. Criticize to press in if it is the best idea
What are the most powerful interests? List two.
1. Security 2. Economic well being
What are 4 of the 6 principles of Coalitions?
1. Coalitions begin for good reasons 2. Coalitions become the problem 3. Coalitions predict future conflict 4. Change a system by softening the coalition
Different forms of "no"
1. An attack 2. Rigid decisions(stone walling) 3. Does not see how saying yes is a benefit 4. fear of losing face 5. not his idea but only your idea
Full assessment of a conflict can best be accomplished by which three steps? What are the three key concepts of system thinking?
1. Assesing the workings of the overall system 2. Determining recurring patterns inside the system 3. Identifying individual contributions
four kinds of problems in international business negotiations
1. Language 2. Nonverbal Behaviors 3. Values 4. Thinking and decision making processes
What are the two levels that negotiation takes place at
1. Substance 2. procedure
A square is 1/8 of a mile by 1/8 of a mile. How many acres is this?
10 acres One-eighth of a mile square is the same as 10 acres. Multiply 1/8 X 1/8 = 1/64 divided into 640 acres = 10 acres
what are the 5 negotiation tactics discussed in this article?
1. surprise 2. info sharing 3. closing techniques 4. realistic commitments 5. decision making and stakeholders
Position and association
1.Build a relationship with someone in a position of power 2.Join Associations •Shared Interests - Pooling of resources and a Stronger Voice
What are the three stages in Principle negotation?
1: Analysis 2: Planning 3: Discussion
Crisis Management
1: Stop Action 2: Be Active 3: Be agreeable 4: Set up ground rules 5: Define structure 6: Engage in shaping 7: Stop acting out 8: ABCD analysis (Antecedents something before, Behaviors, Consequences, Do differently 9: Negotiate a temporary agreement
2 kinds of interest with negotiator
1: Substance 2: Relationship
What two types of interests do negotiators have?
1: Substance 2: Relationship
3 Constructive Communication Practices
1: The dialogue process 2: Fractionation 3: Reframing
Conflict Containment Stages
1: Trigger Stage 2: Reflex Stage 3: Reflex Fatigue Stage 4: Commitment Stage 5: Reconsolidation Stage 6: Reapproachment Stage
3 difficult types of apologies
1: compelled or insincere apology 2: Expedient Apology 3: Delayed Apology
Dimensions underlying the classification (figure 9.1) 4) Manifest
4) Conflict is enacted through communication. Interaction might involved cycles of escalation and de-escalation as various strategies are used
Dimensions underlying the classification (figure 9.1) 5) Conflict Aftermath
5) Conflict episode has both short-term and long-term effects on the individuals, their relationship, and the organization
A house sold for $42,000. The buyer mad a 20% down payment. Monthly interest on the loan was $252. What was the interest rate on the loan?
9% With a 20% down payment of $8,400, the buyer had a mortgage of $33,600. Since interest is expressed in annual terms, multiply the monthly payment of $252 times twelve. That yields an annual interest cost of $3,024, divided by the principal balance of $33,600, yields an annual rate of 9%.
According to the Department of Justice, ________ of tort cases filed in the U.S. District Court are settled prior to trial?
98%
Estimating the value of a house by taking the reproduction or replacement cost of the building, minus depreciation, plus the value of land would be classified as what type of approach to valuation?
A Cost Approach
Mandatory arbitration
A form of resolving a dispute, as an alternative to litigation, that is required by a statute.
Which of the following negotiation styles has the highest degree of assertiveness
Accommodation
Positive Strategies for Managing Conflict (Part 1)
Agree to follow the rules for fair fighting. Adopt a Win-Win orientation. Set a time for the "fight." Don't argue when you are emotionally upset. Know when to stop. Try to lower the emotional beltline of your partner.
When to agree with your opponent
Agree with your opponent whenever you can if you want your opponent to listen to you, listen to him first. Same works with wanting your opponent agree with you
What happens if the other side becomes familiar with the contents of the book Getting to Yes?
All the better
Hard Negotiation
Always want to win, no matter what you have to do. Not willing to give in to the other sides proposal.
Know which country's negotiators tend to make early concessions - apparently expecting their foreign counterparts to reciprocate (and then tend to get frustrated when they do not).
America
Which of the following describes a mortgage that requires principal and interest payments at regular intervals and is called the liqiudation of debt by periodic installment until the debt is satisfied?
Amortized Loan
Moral emotion
Anger
2 prominent emotions in conflict
Anger and Fear
Frustration
Anger may also be based on our frustration over unmet goals or desires. We fear our needs won't be met.
Simon's Normative Model
Based on the premise that decision making is NOT rational Characterized by: 1) Limited information processing -tendency to acquire manageable rather than optimal amount of data 2) Use of judgmental heuristics 3) Satisficing
The most important interests
Basic human needs
What are the most powerful type of interest?
Basic human needs
Competitive Negotiation
Antagonistic and adversarial; One sided gains is other sides loss "Face to Face" Negotiations
4 stages of the 'cycle of conflict'
Appearance of conflict Absences of Hope Occurrence of Creativity Emergence of Stability
If you want the other side to appreciate your interests begin by demonstrating that you what?
Appreciate theirs
Negotiators are what first?
Are people first
Strategic implications for marketing
As a country develops, incomes change, population concentrations shift, expectations for a better life grow, new infrastructures evolve, social capita investments are made, market behavior changes, and eventually a group of consumers with common tastes and needs arise
checklist to ensure proper preparation for international negotiations
Assessment of the situation and the people facts to confirm during negotiation agenda best alternative to negotiated agreement (BATNA) concession strategies team assignments
What are the three stages of brainstorming?
Before, During, after
Stages of Brainstorming
Before: 1: Define your purpose 2: Choose few participants 3: Change the environment 4: Design an informal atmosphere 5: Choose a facilitator During: 1: Seat the participants side by side facing the problem 2: Clarify ground rules, including no criticism rule 3: Brainstorm 4: Record Ideas in full view After 1: Star the promising ideas 2: Invent improvements for promising ideas 3: Set up a time to evaluate ideas and decide
BATNA Definition
Best Alternative to Negotiated Agreement
stereotypes
Both men and women bring ____ to the bargaining table, creating self-fulfilling prophecies blinding them to what's going on.
By what date must the current year's real estate taxes be paid in order to avoid a penalty and interest on the taxes?
By January 31 of the next year.
Know the problems involved in measuring success by counting how many issues have been settled, and know the important signals of progress in negotiations that are given in the chapter.
Can be a problem because Americans for example like to move in a sequential order and "cross things off" but the Japanese like to discuss all issues at once so it can be hard to tell the progress. Americans also tend to think of negotiation as a "problem solving" situation with a solution where the Japanese think it is a time to build a relationship. Important signals of progress can be: - Higher-level foreigners being included in the discussion - Questions beginning to focus on specific areas of the deal - A softening of attitudes and positions on some of the issues - "let us make some time to study the issue" - At the negotiation table, increased talk among themselves in their own language, which often may mean they are trying to decide something - Increased bargaining and use of the lower-level, informal, and other channels of the communication
Postdispute arbitration clause
Can be applicable to arbitration, mediation, or other methods of ADR; such a clause is signed by parties that are already in dispute
Compromising
Can only compromise on issues that aren't completely important. -Some things just not worth fighting about. -Partially satisfies both Requires trade-offs and exchanges.
Examples of MDCs
Canada, Englad, France, Germany, Japan, US
Examples of LLDCs
Central Africa and parts of Asia
Rex Kinsella has received two offers on his ranch and acreage. The sprawling Sheffield estate, replete with large Spanish colonial manor house, horse barn, several smaller outbuildings, and several acres of cleared land is a steal at only $216,500. The first offer, from Clara Walters, a young woman who wants to start a horse riding academy, is for $211,900 cash. The competing offer from the Millhouses, a middle-aged couple who need plenty of room for their grandchildrens' visits, offers $215,000 with 10% down and a request that Rex pay 2 points on their mortgage loan. Which offer would be most lucrative for Rex?
Clara Walters' offer because she is paying cash and not asking for Rex to pay any points
Principled Negotiation
Collaborative. -This method focuses on mutual gains and a fair negotiation process -All parties will walk away feeling good about the negotiation and their opponents -Focuses on merits. Shows you are open to your opponent's point of view, and helping them meet their needs. -Everyone truly gets a fair shot at what they deserve
Without __________________ there is no negotiation.
Communication
Two Principle Theories of Negotiations
Competitive Thoery; Problem Solving Theory(Interest Based Theory
When the other side starts to rant or let off steam what should you do?
Continue to listen
The lender is not insured or guaranteed against a loss, by reason of the borrower's default in repayment, under which type of loan?
Conventional
Communication Patterns of Collaborative Negotiations (AKA how to spot a collaborative negotiator) (Part 2)
Cost Cutting: an attempt to minimize the other person's costs for going along with your request Bridging: when you invent new options to meet the other person's needs "Here's what I can do to help you meet your needs." -ex. Offer to shovel snow to reduce cost of rent Parties brainstorm to invent new and creative options that will meet everyone's needs and provide joint benefits -attempts to look for creative ways to package an agreement and invent new options
Countries in DR-CAFTA
Costa Rica, El Salvador, DR, Guatemala, Honduras, Nicaragua, and the US
Which is not a reason to arbitrate a dispute
Costlier than litigation
What can make the difference between deadlock and agreement?
Creative options
Metaphor/Dramatic Analysis
Creatively present an accurate description of the conflict using vivid descriptive language.
(1) complexity, (2) potential misunderstanding
Cultural issues have more to do with form than substance; they add (2):
TOOL #1 Cultivate an Abundance Mentality
Cultivating Abundance Suppose two heirs have been left equal shares of an estate that contains exactly one object: a very valuable painting. What options are available to them? (HINT: I can list at least eight...) Eight Solutions: Source: Young, H. P. (1995) "Dividing the Indivisible", The American Behavioral Scientist, 38: 904-920. •Physical division - cut the painting in two •Lottery - use chance to determine who gets •Rotation - hang painting in heirs' homes for alternating years. •Common ownership - hang painting in a common hallway in heirs' home, office, etc. •Subtraction - Destroy it or donate it to a museum. •Sale - Sell the painting and divide the money or exchange it for two other paintings •Compensation - One heir pays the other for exclusive possession of the painting. •Unbundle entitlements - One heir gets exclusive enjoyment of the painting, after which the painting goes to a museum who pays the second heir now for the right to acquire it later. Developing an Abundance Mentality: Check Your Thinking Watch Out For These Mental Traps 1."Fixed Pie Perception" - negotiators enter negotiations expecting the other party's interests to be completely opposed to their own. (The good news is that more balanced expectations also led to better outcomes.) Developing an Abundance Mentality: Check Your Thinking Watch Out For These Mental Traps 2. "Abundance Denial" - a phenomenon where millions of women and men construct elaborate mental rationales for considering themselves materially deprived, and in doing so only succeed in causing their life experience to be unhappy. 3. "Collapse Anxiety" - a widespread feeling that the prosperity of the United States and the European Union cannot really be enjoyed because the Western lifestyle may crash owing to economic breakdown, environmental damage, resource exhaustion, terrorism, population growth, or some other imposed calamity.
Characteristic: Relationship length Distributive: Integrative:
Distributive: Short-term Integrative: Long-term
Lack of knowledge based noise •Data Overload •Assumption
Data Overload •party is overwhelmed with too much information too fast. •too technical or intellectual for their full comprehension •Or it makes no sense
how do deal-minded and implementation-minded negotiators differ on: closing techniques
Deal-minded negotiaters create artificial deadlines, threaten escalation, and make "this day only" offers
Interests
Desires or concerns -example of Israel and Egypt -basic human needs are the most powerful interests -realize each side has multiple interests -explain to the other side how important and legitimate your interests are -acknowledge their interests
Give an offer/counter enough room to maneuver without having to stretch
Determine the offer Give rationale to your offer/counter offer Make an offer that is 10%-33% away from the realistic expectation ➢ Or better yet 10%-25%
Invent options for mutual gain
Develop multiple options to choose from, decide later
Blame •Direct Blame •Indirect Blame
Direct Blame •Assigning blame for the party's own behavior or circumstances directly to the other party in the conflict, or on their words and/or actions. Indirect Blame •Assigning blame for the party's own behavior or circumstances to anyone or anything besides the other party in the conflict or their words or actions.
DR-CAFTA
Dominican Republic and Central America Free Trade Agreement
What should you always do with dirty tricks?
EXPOSE THEM
A common error of assumption in diagnosing a negotiating situation is to assume what about the other side?
Each person on the other side has the same interests
Positional bargaining
Each side takes a position, argues for it, and makes concessions reach a compromise.
Common Market
Everything from customs union plus removes all restrictions on free flow of capital and labor among member nations
Negotiators are what first?
Emotional people
A buyer bought a property without telling the seller of his intended purpose for the property. The contract contains no contingency clauses and it is a properly executed contract. After the closing, the buyer is unable to obtain the zoning he needs for his commercial project. What is the contract at this stage?
Enforceable
What are the Dynamics of Anger?
Fear Frustration
Aspects of Forgiveness
Forgive for yourself as well as others OK to forgive, not forget Attempts to forgive transgressors can help future relationships Caution, not immediate forgiveness, is the appropriate response to apology because apologies may be used as a form of manipulation rather than a genuine expression of remorse. -you want to look for a change in behavior before you renew your trust
What two words are often used simultaneously that are really different
Forgiveness and reconciliation
Customs Union
Free trade area's reduced or eliminated internal tariffs and adds common external tariff to outside countries
Active Listening
Half of the negotiations deal with this Listen on two levels: 1. Intellectual: words being said to you 2. Emotional: emotions the other person is expressing(watching the person's eyes; Listen to the other person's tone of voice; look at body language; think about what they are not saying)
What are the two types of Positional bargaining?
Hard and soft
What is a third Way to negotiate?
Hard and soft or principled negotiation
Problems With Bargaining Over Positions: Being Nice= No Answer
Hard beats soft negotiation
When asked about being a hard or soft negotiator the authors suggest neither, rather we should do what?
Hard on the merits, soft on the people
Dilemma people see negotiation as:
Hard or Soft
Examples of BEMs
India, China, Brazil, Mexico, Poland, Turkey, South Africa
Know which aspect may eventually determine legal jurisdiction if a dispute arises during the negotiation.
In most countries other than America legal systems are not depended upon to settle disputes Japan- Contracts contain comments on principles of the relationship China- Contracts are more a description of what business partners view their respective responsibilities to be Many foreign CEOs expect a formal contract signing ceremony Follow-up communications are very important
(1) the situation, (2) your leverage, (3) your counterpart's style
In opening and making concessions, strategies should be determined by 3 main elements:
Treaty of Amsterdam
Increases the authority of the EU and is designed to accomodate the changes brought about by the monetary union and the admission of new members
Power based noise -influence assertion -revenge
Influence Assertion •Party asserts his own or someone else's credentials, affiliations or abilities in order to gain recognition for his own perspective. Revenge •Revenge: party expresses a commitment, in any small or large scale, to righting what they perceive is wrong. Commitment to action or even just faith creates a noise factor that will impede the productive flow of communication.
Major sources of power
Informational Personality and individual differences Position-based power Relationship-based power Contextual power
What criteria should the result meet?
Insist that the result be based on objective standard
Criteria:
Insist that the result be based on some objective standard
Collaboration Management Style: - Involves - Benefits - Disadvantages
Involves: - Focus on problem and issues - Acknowledge differences - Generate solutions jointly Benefits: + Meets parties needs + Often leads to creative solutions + Builds relationship Disadvantages: - Takes time and effort - If it fails, may give up on future compromise/problem- solving efforts
Often, during a negotiation, we often conclude too quickly that our interests are what?
Irreconcilable
Advantages of Arbitration
Is good when parties can no longer communicate and solve their own problems Can be used in a wide variety of content areas -ex. Insurance industry, sports, union contracts, etc.
3 of the core values that lead to best practices
Kindness Compassion Respect Forbearance Avoid distancing and objectifying people
Know the differences between the Japanese and the Korean negotiation styles in international commerce especially when it comes to the use of punishment. (Also, see Exhibit 19.1)
Koreans use considerably more punishment (same as reward except that the consequences are thought to be unpleasant) than the Japanese.
What can be done about these three problems?
Listen actively and acknowledge what is being said, Speak to be understood, speak about yourself, not about them, Speak for a purpose.
Know what the single most important activity of negotiations is and why that is so.
Listening- because the negotiators primary job is collecting information with the goal of enhancing creativity and to understand the needs and preferences of the client
What can be changed about a conflict?
Make the other person change. -Unlikely Alter the conflict conditions -Change the conditions then you can change the outcome. -Approach the conflict differently Change yourself, your communication, and your perceptions -Take responsibility for the direction of the relationship -The only thing you can absolutely control is your reactions.
Face-saving
Make your proposals consistent with their values. o Maintaining ones self-image o Reconciling an agreement with principle Face-saving involves reconciling an agreement with principle and with the self-image of the negotiators. Its importance should not be underestimated
Do not lie
Many of statements could mislead other party ➢ Puffery- not illegal, part of the game ➢ You draw the line-> do not misrepresentation a material fact that is a part of the subject matter of negotiation Does the nature of what is said ➢ The more specific the statement-the more likely of deception ➢ The more general the statement - the less likely for deception
key provisions of NAFTA
Market Access Nontariff Barriers Rules of Origin Customs administration Investment Services Intellectual Property Government Procurement Standards
Fair standards
Market Value Precedent scientific judgement professional standards efficiency costs what a court would decide moral standards equal treatment tradition reciprocity
If each side, during a negotiation have strong and attractive BATNA's the best outcome may be what?
May be to not reach an agreement
What is natural, inventing options or not inventing options
Not inventing options is not advised but it is natural
A buyer assumes the mortgage. How is the owner relieved of the liability?
Novation
What should you use to decide on an agreement, basis or objective criteria?
Objective criteria
Four values held by Americans that cause issues in International Negotiation
Objectivity Competitiveness Equality Punctuality
What to do when someone is angry with you (Part 3)
Offer something hopeful in the dispute. -Demonstrate you want something positive to happen. -Bring the focus back to the importance of the relationship. -Indicate you want a future for the relationship. The end goal is to analyze and act instead of reacting without thinking.
Why is being nice not the answer?
Often accommodates so that there will be agreements
Try to identify unfair tactics
One of the lements for going to the balcony Stonewalling Attack Deception The add on trick
What is a third Way to negotiate?
Principled negotiation
Jess and Celia Bickford are a young, newly-married couple trying to buy their first home in McKinney. The home they would like to buy is selling for $143, 500 and they have $8,500 saved for a down payment. Taking closing costs and down payment into consideration, an online calculator estimates that their monthly mortgage payments on a 6.1% loan would be around $846.43 - an amount that would be manageable for the couple on their $84,000 (annual) income. However, an affordability calculator rated their housing expense-to-income ratio as 28% and their debt-to-income ratio as 36% Would the Bickfords be likely to qualify for a conventional mortgage?
Probably not; they are on the borderline of the maximum housing expense-to-income ratio and debt-to-income ratio limits necessary to qualify for a conventional loan. An FHA loan would give them a little more flexibility in these ratios and in down payment requirements.
What was the lesson of the ship wreck to sailors?
Rather than fighting over what is left from the shipwreck, work together and help each other.
Living Way
Remember the harm that we experienced without letting the memory create momentum towards revenge
Listening to what your opponent is saying
Requires active listening and letting the other party have time to vent, give them the complete attention to process out loud, when they are finished venting (Exception: speak up by summarizing/paraphrasing what you heard)
Active listening
Requires listening at two leves: Intellectual level and the emotional level
Confrontation
Root meaning: with strength
Be able to characterize the negotiation styles of Russian, German, and French managers especially when it comes to the use of threats. (Also, see Exhibit 19.1)
Russian- not many threats, more positive (like Japan) German- center/middle ground in all areas including threats French- very high in threats
Split the difference?
Say I cannot afford to do this
communication protocols that helps shape future behavior
Schedule Talks Talk about tough topics in private Be direct and specific Use all the skills of respect and kindness Assume the best not the worst Only use humor when appropriate Offer to activley help solve the problem Thank the person for the talk
TOOL #6 Search for Post-Settlement Settlements
Search for Post Settlement Settlements At the end ask: "Is there any way you see that you can be better off without me being worse off?" Or more simply: "Is there a better agreement for both sides?
Basic human needs
Security Economic well being A sense of belonging Recognition Control over one's life
Infrastructure
Social overhead capital, those capital goods that serve the activities of many industries
One dilemma that people face is that they see negotiation as either ______________________ or ___________________.
Soft or Hard
Goal is agreement, will make concessions, insist on agreement, disclose bottom line, trust the other, and make offers
Soft positional bargaining
Generate Options for Mutual Benefit
Sometimes finding a solution is like a needle in a hay stack But neither solution stands alone on one party's Interest-> it is within the universe of the polar position sof the parties This requires creativity and thinking outside the box ➢ How to find options • Brainstorm • Throw ideas out there and record them but there is no criticism • Put a start to each idea that is promising • Than criticize to press in if it is the best idea
Mercosur
Southern Cone Free Trade Area Common market that would eventually allow for free movement of goods, capital, labor, services, among member countries under a uniform external tariff with no central institution
In most states, by paying the debt after a foreclosure sale, the mortgagor has the right to regain the property. What is this right called?
Statutory Right of Redemption
Go to the balcony
Step 1(controlling your behavior tactic) Detaching yourself from the conflict
MORE
Studies prove that cooperative strategies are MORE/LESS effective than competitive strategies.
defer
Studies show that humans are inclined to ___ authority.
One breakthrough strategy Benefits of trying in their shoes
Suggest to them that they might feel the same way if they were in your shoes. "Do you have children? How would you feel if trucks were hurtling at forty miles per hour down the street where you live?" • It can help you to understand the other party's position • It can help you see the similarities between the two positions • Can improve the outcomes if the two points of view are compatible • It may reduce distortions in communication.
Complementary Patterns
Tactics or styles that are different from one another, but mutually reinforcing. -Tendency to reinforce the other person's bad habits. -One person want to confront, the other avoid. The more the confronter moves ahead, the more the avoider runs away.
Trip Wire
Take a break and reexamine the situation. A limit that should provide you with some margin in error.
An estate that is owned by three siblings with no rights of survivorship is an example of which of the following?
Tenancy in Common
Marcy Weyor, Nacogdoches homeowner, has just received a promotion that requires her to relocate to Atlanta, Georgia within two months. She would like to have the proceeds from the sale of her house to finance her move. At the suggestion of her real estate salesperson, the house is listed as having an "assumable mortgage." What does this mean?
That the buyers can assume Marcy's mortgage on its current terms, as long as the lender approves
Interests define what?
The problem
Negotiation
The process used to persuade or coerce someone to do or to stop doing something.
Which of the following would usually occur in a sale-and-leaseback transaction?
The property is sold on the condition that the new owner lease it back to the seller at the time title passes
A VA loan may be granted for the purchase of a one-family to four-family property if:
The veteran agrees to live there
Second Wound
The wound we receive when people do not receive our story of transgression, our identity comes into jeopardy
Broker Carr, with ABC Real Estate Company, listed the property with a seller. Broker Smith, with XYZ Real Estate Company, called Broker Carr, and disclosed that he was a Buyer Agent. Broker Smith wrote a contract with a buyer for the sale of the property. What, if any, is the relationship between the buyer's broker, the seller and the listing broker?
There is not a relationship between the parties. Broker Carr represents the Seller and Broker Smith represents the Buyer.
Both sides can always be worse off than they are now.
True
Why is the RESPA closing statement allowed to be examined on or before closing?
To check for mathematical errors
The first step in an appraisal is:
To define the problem.
How to generate more options:
To generate more options don't look for the one best answer and designate brainstorming times. the circle chart, look through the eyes of different experts, invest agreements of different strengths, and change the scope of proposed agreements
"Never yield _______ _______________________, only ________ ______________________."
To pressure, to principle
What is the purpose of Regulation Z?
To provide full disclosure of loan terms
What do we call triangles that form in relationships that lead to destructive behavior? Draw a triangle with conflicting dyads, alliances, and isolates
Toxic triangles.
Two negotiators, each pushing hard for their interests, will often stimulate each other's creativity in thinking up mutually advantageous solutions
True
When there are many parties, positional bargaining is even worse.
True
You can be just as hard in talking about your interests as any negotiator can be in talking about their position.
True
Shriver's Four-Strand Cable (reconciliation)
Truth: Want to acknowledge and hear the truth. Forbearance: No thought of getting even. Empathy: Recognition of the other person's humanity (fallibility) Commitment: Specifically the commitment to work with people that we cannot afford to discard.
Recognize when you get upset
Try to determine why Go to the balcony when you get this way Be aware of your biological indicators(face getting hot, butterflies, palms starting to sweat, heart beat fast(Ask: why am I reacting this way? What is making me react that way?)
Solution to Perception
Try to put yourself in other persons perception 1. Don't blame other party for your problem 2. Discuss perceptions without blaming other side 3. Be inconsistent with other perception 4. If they perceive you being difficult, consciously be cooperative
other tactics regarding disarming your opponent
Try to say "yes" as much as possible try to observe your opponent's communication techniques Dress similarly
Speak so that you can be what?
Understood
4. Use reason and be open to reason, focus on criteria and don't give in to pressure. Have reasonable standards for these.
Use objective criteria
Accomodation Management Style: - Variations - Benefits - Disadvantages
Variations: - Open - Not acknowledged Benefits: + Preserves relationship + When you are in a position of weakness Disadvantages: - May lose face - Others perceive you as weak or unresponsive
When should you start to involve the other side in the talks
Very early
What is a negotiator's motto?
Vive la differencia
Commonwealth
Voluntary form of Political Union
(1) the poker school, (2) the idealist school, (3) the pragmatist school
What are the three frameworks of thinking for ethical issues?
Book Contract
WE are the ones who should make first offers. First offers are so important because it allows you to establish the anchor. There is a HIGH correlation between the anchor and the final price
What are substance interests?
Wants to reach agreement that satisfies substantive interests
A mortgage company makes a number of loans to be assembled into one package and sold to permanent investors. This process is an example of interim financing to the mortgage company and is called:
Warehousing
Why use third party intervention?
We need to have someone assist in the dispute who does not have a vested interest in what happens or a specific outcome.
Why should we ask "why not?"
We need to think about their choice
(1) be reliable and trustworthy, (2) be fair to those who are fair to you, (3) when people treat you unfairly, let them know about it
What are the three rules in the code of conduct in relationships?
(1) identify the decision maker, (2) look for common ground, (3) identify interests that might interfere with agreements
What are the three steps to focus on other side's interests?
(1) positive, (2) negative, (3) normative
What are the three types of leverage?
(1) cooperative, (2) competitive
What are the two basic types of personal inclination?
(1) split the difference, (2) accommodation
What are the two best ways to close relationships?
(1) problem solving/collaboration, (2) compromise
What are the two best ways to reach a concession in balanced concerns?
(1) social ritual, (2) public announcement, (3) accountability, (4) simultaneous exchange
What are the four degrees of commitment?
(1) leverage and power are the same thing, (2) leverage is a constant that doesn't change, (3) leverage depends on the facts
What are three misconceptions about leverage?
(1) we see the world from our own interests, (2) every brings a competitive attitude to a negotiation, (3) process of negotiation works against finding common interests
What are three reasons why it is so hard to get into the other person's head?
(1) the similarity principle, (2) the role of gifts and favors, (3) trust and relationship networks
What are three strategies of building trust in working relationships?
(1) trusting too quickly, (2) reciprocity traps, (3) negotiating with friends when the stakes are high
What are three traps in relationships?
Mediation
When the disputing parties get to decide. -When a neutral 3rd party who has no power to make a decision facilitates disputing parties to help them reach an agreement -People empower themselves to make the decision -Help the parties with the negotiating process -Creates an opportunity for a package put together by both sides
Responsible reactions to anger
When we feel threatened, have hurt feelings, and if our self-esteem is damaged we don't need a fight we need to be understood, loved, and supported. Our anger needs to be validated rather than dismissed.
What is the prescription method
When you work to -Separate inventing from deciding -Look for mutual gains -And make their decision easy
What questions must you ask to define interests?
Why and why not
Soft Negotiation
Willing to compromise and looks out for the relationship factor when negotiating with the other side.
Deeds of conveyance should be recorded within what period of time after closing?
Within a reasonable period of time.
Positional Bargaining (stay away from this beastly method of negotiating):
Your ego becomes identified with your position. You now have interest in "saving face". - As more attention is paid to positions, less attention is devoted to meeting the underlying concerns of the parties. - Dragging feet, stonewalling, threatening to walk out, and other such tactics become commonplace and all increase the time and costs and the rish of no agreement at all - Bitter feelings generated by one such encounter may last a lifetime - Choosing a soft and friendly position makes you vulnerable to someone who plays a hard position - hard always dominates soft
When the amortized payment of a mortgage remains constant over the period of the loan but leaves an outstanding balance to be paid at the end, this payment is called:
a balloon payment
The 2 general ADR forms: Adjudicative and Non-Adjudicative...example of each
a. Adjudicative: arbitration b. Non-Adjudicative: mediation or negotiation
Compromising
a strategy/negotiating style; each person agrees to share gain equally between them; fast, easy, fair strategy but does not fully solve the problem
Collaborative/Problem-Solving
a strategy/negotiating style; finding a way too let everyone win; it is the most imaginative strategy and most difficult to implement
Prospect Theory
a theory associated with negative leverage that says that potential losses looms large in the minds more than gains do
Patty rents a storefront in downtown Arlington for her day spa, Boundless Beauty. She pays $1,500 a month in rent, plus a portion of the landlord's taxes, maintenance, and insurance (which fluctuate). What type of lease does Patty have?
a triple net lease
Economic obsolescence in a property is generally:
a type of depreciation that is incurable.
Cite four examples of how an arbitration decision may be appealed.
a. fraud b. a strong error made by arbitrator c. arbitrator has a conflict of interest d. omits a material fact
Cite 2 "dirty tricks" negotiators may use
a. threats b. deliberate deception
Cite 4 differences between interpersonal and international conflicts.
a.The exit strategy b. culture variations c. number of issues d. number of parties
The zoning commission of Jefferson County requires that all new construction in a specific area adhere to a specific type of architecture. What type of zoning is this?
aesthetic
12 Negotiation factors 6. is agreement required?
both sides need it neither needs it one needs it & other doesn't....one is screwed
Restrictive covenants that run with the land:
apply to and bind all successive owners of the property.
Threats
are
Positions
are demands, proposed solutions, or other fixed outcome statements.
When to determine your BATNA
before you begin negotiating
What does BATNA stand for?
best alternative to a negotiated agreement
What is a dominate strategy?
best strategy fir a player to follow regardless of the strategies of the other person
The appraisal market approach most likely to be used in valuing a public library building would be:
cost
Coercive power
derived by being able to punish others for not doing what needs to be done
Reward power
derived by being able to reward others for doing what needs to be done
Before making a significant statement
know what you want to communicate or find out, and know what purpose this information will serve.
Rational Model
logical 4 step approach to decision making 1) Identify the problem 2) Generate alternative solutions 3) Selecting Solutions 4) Implementing and evaluating the solution
Transaction
low importance, high conflict
sales promotions
marketing activities that stimulate consumer purchases and improve retailer or middleman effectiveness and cooperation
12 Negotiation factors 10. should the negotiation be in private or in public?
public is more difficult -forces commitment -creates criticism
2 types of games 2. integrative (non-zero sum)
outcome could end up both positive or negative
Three steps in negotiating the rules
recognize the tactic, raise the issue explicitly, and question the tactic's legitimacy and desirability — negotiate over it.
When an appraiser correlates the three approaches into a final estimate, he:
reconciles the differences according to the type of property being appraised and the quantity and quality of data available.
A feature found in a comparable property that is not present in the subject property will result in a:
reduction adjustment to the comparable's selling price.
Face-saving
reflects people's need to reconcile the stand taken in a negotiation or an agreement with their existing principles and with their past words and deeds.
The Adams family purchased the largest and most expensive house in a new subdivision. Five years later, when they were ready to move, they discovered the monetary value of the home had gone up proportionately less than the other houses in the neighborhood. This phenomenon is an example of the principle of:
regression
Positional bargaining strains and shatters...
relationships
Creating Value
result of non-zero-sum or integrative situation where object is to have both parties do well
Claiming Value
result of zero-sum or distributive situations where the object is to gain largest piece of resource
Marketing
serves as an arbitrator between productive capacity and consumer demand
Behind opposed positions lie...
shared and compatible interests, as well as conflicting ones
Listening
single most important activity of negotiations
Getting to Yes
single most important book on topic of negotiation
The more extreme the opening position...
the more time and effort it will take to discover whether or not agreement is possible.
Is it okay to talk openly about your interests?
yes, this is encouraged
Analysis
you are simply trying to diagnose the situation---to gather information, organize it, and think about it.
Planning Stage
you deal with the same four elements and second time, both generating ideas and deciding what to do.
BATNA-
your Best Alternative To a Negotiated Agreement? That is the standard against which any proposed agreement should be measured. That isthe only standard which can protect you both from accepting terms that are too unfavorable and from rejecting terms it would be in your interest to accept. (what you walk away to)
Leverage
your power not to just reach agreement, but to obtain an agreement on your own terms; a dynamic factor in bargaining
How do we identify their interests?
• First we have to ask! •Ask them "why?" or "why not?" •Ask yourself "why?" or "why not?" •Helps to discover their BATNA
What if you use threats or make false verbal commitments?
●"That's the best I can do" or "that's the lowest I can go" when you are not at an impasse? ●If you continue negotiating after making threats or statements such as these: ● you will lose credibility ● threats will have no informational value in the future.
If/then threats
●An if/then statement about what a party will do if the other party will not do ●(e.g., If you will not offer a price of x, I will walk away from this negotiation.) ●Did anyone use threats? ●Were threats more likely in negotiations where the seller had a high RP, when impasses occurred? (Should be.) ●Is it wrong to make threats in negotiation? ●Not at the point of impasses. In general, threats should be used strategically to further a party's negotiation goals. If the other offer on the table after significant negotiation is no better than a party's RP, then a threat provides relevant information to the other negotiator. ●Is there any alternative but to threaten the other party when at the point of impasse?
the payback phenomenon
●Exists when win-lose negotiators settle with very lop-sided deals (i.e., split the pie 95%-5%). ●The possibility of "payback" should motivate you to split the pie more evenly.
Can you claim more from the other party if you are tough and offensive?
●Research suggests "no." The risk is that they will walk away rather than have to deal with you. Also, people are more accommodating to others whom they like than whom they dislike.
Targets
●What does having a Target do for you? ●It keeps you motivated to continue negotiating and trying to improve your outcome, even after you have an offer that is better than your Reservation Price. ●(a.k.a. aspiration)
Bargaining Zone (z.o.p.a.)
●What is the Bargaining Zone? ●A.K.A.: Zone of Possible Agreement, (ZOPA) ●Area of overlap between parties' Reservation Prices ●What is the effect of a narrow versus a wide Bargaining Zone? ●In a Narrow Bargaining Zone ●Likelihood of Impasse Increases ●Use of Contentious Tactics Increase
Mutually agreeable objective criteria
1. Frame each issue as a joint search for objective criteria 2. Reason and be open to reason as to which standards are most appropriate and how they should be applied 3. never yield to pressure, only to principle.
How do you go about discussing objective material with the other side?
1. Frame each issue as a joint search for objective criteria. 2. Reason and be open to reason as to which standards are most appropriate and how they should be applied. 3. Never yield to pressure, only to principle. In short, focus on objective criteria firmly but flexibly. Frame each issue as a joint search for objective criteria.
Key steps in an integrative negotiation process
1. Identify and define the problem 2. Understand the problem fully -dentify interests and needs on both sides 3. Generate alternative solutions 4. Evaluate and select among alternatives 1 - 3 are about Creating Value 4 is about Claiming Value
Steps at the balcony
1. Identify your interests-what do you want to accomplish 2. Identify your BATNA(your walk away option if you cannot reach an agreement) 3. Decide whether you should negotiate at all 4. Go to balcony to keep you focused on your goal 5. Try to Identify unfair tactics 6. Recognize what gets you upset-try to determine why 7. Take time to think clearly when you are detached.
Acknowledge your opponent's authority and confidence
1. If your opponent has a big ego, stroke the ego but do not overdo it. 2. If you overdue it it is a sign of weakness 3. Invite the opponent for coffee and for lunch 4. Invite for small talk at the beginning or the end
seven steps in the international communication process
1. Information source 2. Encoding 3. Message Channel 4. Decoding 5. Receiver 6. Feedback 7. Noise
What are the three steps of developing your BATNA?
1. Inventing 2. Improve the best ideas 3. Select from the best ideas
What are two of the three principals of speech that will assist in negotiation? ( Speak -----).
1. Listen actively 2. Speak to be understood
Disarm your opponent
1. Listen to what your opponent is saying 2. acknowledge your opponent's point 3. Agree with your opponennt whenever you can--if you want your opponent to listen to you, listen to him first. Same works with wanting your opponent to agree with you
How you should react when other side makes an initial offer
1. Make a reasonable yet strong reaction 2. Always be ready to act and counter 3. Every time you give a counter, make sure you are sending the right message ➢ But if you do not react-> you still may be sending the wrong message. 4. Set the stage for your counter proposal
Please list three to six principles of Talking about Interests.
1. Make your interests come alive 2. Put the problem before your answer 3. Look forward, not back
Name 4 of the 8 inductive approaches to conflict assessment.
1. Making observations 2. Conducting interviews 3. Identifying system rules 4. Listing microevents
Chapter five discusses fair standards and fair procedures. Please list five (pre-existing) types of fair standards.
1. Market value 2. Professional standards 3. Costs 4. Efficiency 5. Tradition
What are 4 of the 8 steps or elements in Wilomot and Hocker conflict assessment guide.
1. Nature of the conflict 2. Interests and goals 3. Power 4. Styles
Types of Leverage
1. Necessity 2.Desire 3. Competition 4. Time
What are the three big problems in communication?
1. Negotiators are not talking to be understood 2. The other side is not hearing you 3. Misunderstanding
Four stages of business negotiations
1. Nontask sounding 2. Task-related exchange of info 3. Persuasion 4. Concessions and agreement
Steps in inviting constructive criticism and feedback
1. Once you have allicited ideas, create a joint draft of both yours and his ideas 2. help your opponent satisfy his own interest 3. Expand the pie 4. Help your opponent "Save face"
Never yield to pressure
"Pressure can take many forms: a bribe, a threat, a manipulative appeal to trust, or a simple refusal to budge. In all these cases, the principled response is the same: invite them to state their reasoning, suggest objective criteria you think apply, and refuse to budge except on this basis. Never yield to pressure, only to principle." (p. 91)
Should you ever associate the person you are arguing with with the problem you two are speaking about?
-NO -Always separate the people from the problem
What can sometimes happen if 3rd parties are in the room?
-Negotiators may not be talking to one another but instead to other parties in the room
Are quick solutions always the best? Why?
-No -These are likely a little to premature
Should you ever cause the other party to lose face?
-No -Do not do this as this often may lead to a reasonable solution to be rejected
Should you ever blame the other side for your problem?
-No do not do this
What type of criteria should you insists on using?
-Objective criteria
What often happens when you are positive during a negotiation?
-Often find good trade offs so each side can enjoy gains -Joint gains are the highest level of value
Insist on using objective criteria
-Try to reach a result based on standards independent of will -Reason and be open to reason; yield to principle not pressure
Give 4 solid reasons why one should never negotiate over positions?
-Unwise agreements -Inefficient -They endanger long term relationships -Being a nice person is no help
What type of language should you use when being attacked?
-Use more questions and make fewer statements
Objectives
-What do you really want? -Why are the important?
Should you allow you and the other side to discuss emotions?
-Yes this is allowed
Dual concerns model
-Yielding, inaction, problem solving, contending, compromising -X axis concern about your outcome -Y axis concern about other's outcome
Perception Problem
-You must put yourself in the other person's shoes to understand the problem from their way of thinking. Feel the emotional force with which they believe in it. - Understanding is not the same as agreeing - one can understand perfectly and completely disagree - Don't deduce their intentions from your fears - Don't blame them for your problem: separate the symptoms from the person you are talking - Discuss each other's perceptions: often negotiating parties will dismiss concerns on the other side perceived as not standing in the way of negotiation - don't do that! - Look for opportunities to act inconsistently with their perceptions - Give them a stake in the outcome by making sure they participate in the process: in a sense, the process is the product - Face-saving: Make your proposals consistent with their values
Four Steps of Principled Negotiation
1. Separate the people from the problem 2. Focus on interests, not positions 3. Invent options for mutual gains 4. Insist on using objective criteria
Personal Conflict Philosophy
1: Nonviolence 2:Personal authenticity, reasonable self disclosure, and truth telling 3: Use compassion 4: Develop boundaries and know what they are 5: Stay involved in the dialogue as long as you can, and know when to end it
People problems usually fall under these categories
-perception -emotion -communication
Position-based power
-power based on your position in an organization -results with leverage with legitament power and resource control
What are the three categories of people problems?
1: Perception 2: Emotion 3: Communicating
4 major obstacles that inhibit inventing of options
1: Premature judgment 2: Searching for single answer 3:Assumption of fixed pie 4: Thinking that solving their problem is their problem
four steps in the circle chart
1: Problem 2: Analysis 3: Approaches 4: Action Ideas
3 points using objective criteria is important
1: Protects the relationship 2: Keeps it efficient 3: Produces wise agreement
4 things to prevent destructive avoidance
1: Put them at ease 1: Provide safety 3: Change the mode of communication 4: frame the conversation as relationship building
2 common responses when we encounter others using dirty tricks
1: Put up with it 2: Respond in kind
What are the two ways you can respond to dirty tricks?
1: Put up with it 2: Respond to it
5 suggestions for dealing with the emotions
1: Recognize and understand emotions, theirs and yours 2: Make emotions explicit and acknowledge them as legitimate 3: Make sure to allow other side to let off steam 4: Dont react to emotional outbursts 5: Use symbolic gestures such as gifts, notes etc.
3 steps in negotiating the rules of the negotiation game
1: Recognize the tactic 2: Raise the issue explicitly 3: Question the tactics legitimacy and desirability
4 principles of principled negotiation
1: Separate the people from the problem 2: Focus on interests, not positions 3: Invent options for mutual gain 4: Insist on using objective criteria
Reaction to hearing no
1. strike back 2. give in-if you give in you lose; you reward the person for their bad conduct and you are presumed weak 3. break off the relationship-especially f you are being taken advantage of
know the checklist (homework) that is given in the chapter to ensure proper preparation and planning for international negotiations.
1.) Assessment of the situation and the people 2.) Facts to confirm during the negotiation 3.) Agenda 4.) Best alternative to negotiated agreement (BATNA) 5.) Concession strategies 6.) Team Assignments
Know and be able to discuss the four kinds of problems that may arise in international business negotiations because of cultural differences.
1.) Language 2.) Nonverbal behaviors 3.) Values 4.) Thinking and decision-making processes
Know and be able to explain the seven aspects of the negotiation setting that should be manipulated ahead of time if possible
1.) Location 2.) Physical arrangements 3.) Number of parties 4.) Number of participants 5.) Audiences (news media, competitors, fellow vendors, ect.) 6.) Communications channels 7.) Time limits
What are the three things the other side will do when attacking you?
1: Assert their position forcefully 2: Attack your ideas 3: Attacking you
How to you counter this type of attack (4 steps)?
1: Do not attack their position, look behind it 2: Do not defend your ideas (invite criticism) 3: Recast any attack on you as an attack on the problem 4: Ask questions and pause
dos and donts of negotiation jujitsu
1: Don't attack their position, look behind it. 2: Don't defend your ideas, invite criticism and advice. 3: Recast an attack on you as an attack on the problem. 4: Ask questions and pause.
3 Approaches of Conflict Containment Model
1: Emphasizing a present orientation 2: Adopting a conciliatory set (others behavior positive, not focus on winning) 3: Seeking solutions in small steps
Collaborative Communication Practices
1: Expanding the pie: expand the resources 2: Nonspecific compensation: paid of in creative way 3: Logrolling: trade off issues that are the top priority for the other 4: Cost Cutting: Minimize costs 5: Bridging: invent new options to meet other sides needs
3 step model of forgiveness
1: Injured innocence 2: Obsession 3: Transcendence
What are three steps in developing your BATNA
1: Invent list of actions if no agreement 2: improve more promising ideas 3: Select best
3 steps in developing BATNA
1: Inventing list of actions you might conceivably 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
Collaboration Checklist
1: Join "with" the other 2: Control the process, not the process 3: Use principles of productive communication 4: Be firm in your goals and flexible in your means 5: Assume there is a solution
six principles of Talking about Interests.
1: Make your interests come alive 2: Acknowledge their interests as part of the problem 3: Put the problem before your answer 4: Look forward, not back 5: Be concrete but flexible 6: Be hard on the problem, soft on the people
What four things does negotiation presume?
1. Parties engage in conflict rather than avoid it. 2. Parties resist using domination or power-over tactics. -we will follow ground rules of fairness 3. All of the elements of a conflict situation are present. 4. Parties engage in an active problem-solving phase in which proposals are traded.
What are the four principles of principled negotiation?
1. People 2. Interests 3. Options 4. Criteria
Objective criteria should have both fair standards and fair procedures, what are these two things?
Fair standards: Need to be independent of each others will and must apply to both sides Fair Procedures: Cake cutting (one cuts the other chooses)
Problems
Fall into 3 categories 1. Perception 2. Emotions 3. Lack of Coummunication
A home improvement company was negotiating with a homeowner to add on two rooms to a home. The company agreed to take a second mortgage as long as the homeowner also included the rest of the property in the loan. The company and the homeowner agreed to a price and the company provided the necessary disclosure form on Monday and the homeowner signed the agreement at noon the following day. Assuming that the week had five business days, until what time could the homeowner rescind the loan?
Friday, midnight. Because agreement was reached and SIGNED documents were provided on TUESDAY, Friday midnight ends the THREE-business-day period
2 steps in the conflict dance.
From out to in Large to Small
6 "skills for dispute resolution one-on-one"
Gather information or advice from others Initiate a conversation as opposed to avoiding it Approach the other party as soon as possible without brooding Employ a calm, cooperative style of communication, using an informal tone while listening Treat the other party fairly and with respect Maintain the privacy of the conversation
3. The brainstorming stage, where you come up with general approaches or specific actions.
Generate options
Four largest EU countries
Germany France UK Italy
Waiting time
Getting stuck in positions: • increases the time and costs of reaching agreement •Increases the risk that no agreement will be reached at all." (Getting to Yes pg. 6)
Use the four principles of this to avoid positional bargaining, to gain a wise agreement, and is a method for reaching good agreements
Getting to Yes
Dont bargain over positions
Getting to Yes -endangers an ongoing relationship
Insist on using objective criteria
Gives you a fair standard on which to judge what is being offered to you
Jake Warrant rents his above-garage studio apartment to a college student on a month-to-month basis. When Jake decides to terminate the rental agreement and convert the apartment into a private studio for his artwork, how much notice is he required to give his tenant?
30 days
Benefit of a 3rd Party Negotiator/Mediator
3rd party mediator can use this to resolve differing positions (example of architect w/ couple designing home) - instead of what you want? why you want? e.g. not bay window but bay window for light and sun - method - list interests & needs of ppl and ask them to criticise the list -iterate - final yes or no
On an 8% straight term loan of $6,071, the borrower paid total interest of $1,700. How long did he have the loan?
42 Months. Eight percent of $6,071 is $486 per year or $40.50 per month. $1,700 divided by $40.50 means the borrower held the loan for forty-two months.
Define the Dynamics of Anger
A secondary emotions. Often stems from either feelings of Fear or Frustration.
Arbitration
A third party (an expert) is empowered to decide the outcome of a conflict. -may be ordered by a judge, a manager, or is required by contract -both parties enter arbitration voluntarily (in theory)
Non-zero bargaining
A type of Integrative Bargaining A win-win solution is the most desirable way to solve the problem
If advertised alone, which would be in violation of Truth in Lending?
A) "FHA financing available" B) "assumable loan" C) "No down payment required" (Correct) D) "easy financing terms"
Which type of loan will result in the largest reduction of the principal balance most quickly?
A) 10% over 30 years B) 11% over 20 years C) 13% over 15 years (Correct) D)14% over 20 years
Recent changes to law require the Texas Real Estate Commission to provide an online system for license application and renewals. Which of the following is NOT required for an electronically submitted license application?
A) A fee for evaluation of educational records B) A complete application form, filled out on the web site C) A signature submitted to the commission before the license can be issued D) A state-authorized photo for purposes of definitive identification (Correct)
Which statement best describes a VA loan?
A) A loan funded through the U.S. Department of Veterans Affairs for qualified veterans on approved properties B) A loan backed by the U.S. Department of Veterans Affairs which offers veterans and service personnel the opportunity to buy a home with favorable terms, often with no down payment requirement (Correct) C) A variable adjusted rate mortgage that adjusts monthly to reflect the prevailing legal interest rate D) A loan insured by the Department of Housing and Urban Development which offers low-income people the chance to become a homeowner
In which of the following situations can licensee Craig Lovelace legally and ethically accept a net listing?
A) Only when the principal understands current market values and requires a net listing (Correct) B) Anytime the seller agrees, as long as Craig earns no more than ten percent of the sale proceeds C) Whenever the sale price exceeds the owner's asking price by at least twenty-five percent D) Only when he is representing both parties of a transaction
All of the following scenarios involve illegal activity EXCEPT which one?
A) P.J. Hamilton, a busy physician who enjoys rehabbing and reselling homes, asks her sister Rae, an elementary teacher with the summer off, to locate vacant houses that have been on the market for at least 3 months and need some renovations. In return for her sister's help, P.J. promises to pay Rae 5% of the purchase price of each suitable house. Rae considers this an excellent summer job! B) Chris Baker, a New Mexico resident and entrepreneur, maintains an Internet business which assists New Mexico buyers in acquiring Texas property, primarily for investment purposes. Although Chris and all of his employees are licensed realtors in the state of New Mexico, none of them holds Texas licensure. All preliminary business is conducted electronically, either via email or conference call, but Chris or one of his designees always meets clients in person at the property before closing to ensure that final details are handled appropriately. C) Kelsey Benn, an elderly widow, approaches Martin Whaler, a young attorney who is a member of her church, and asks for his assistance in finding a small home of her own. She's been living with her daughter since moving to the area a year ago. She knows she can trust Martin and hopes his legal expertise will prevent anyone from taking advantage of her. He agrees to help and tells her she does not need to engage a real estate salesperson; in return, she agrees to pay Martin a commission. (Correct) D) Kurt and Jeanne Blain decide to put their small bungalow on the market as "For Sale By Owner." They need a larger house now that they have a second child on the way. Jeanne's sister, Angela, is the Office Manager of a large real estate agency in Waco. Although Angela does not yet have her real estate license, she feels confident that her 6 months of work experience will enable her to help her sister and brother-in-law find a bigger house and negotiate all the hurdles of the process. The Blains will pay Angela $1,000 for assisting them with both the process of selling their home and finding a new one.
Which of the following belongings is an example of a fixture?
A) Portable dishwasher unit B) Space saver, stackable clothes washer and dryer set C) Window air-conditioner bolted to a window frame (Correct) D) Oriental floor rug that covers the entire floor surface of a room
Which of the following actions would be mandated by RESPA?
A) Provision of a good faith estimate (Correct) B) Protection of the ownership rights to minerals contained in a particular parcel of land C) Full disclosure of hidden material/structural defects D) Full disclosure of the terms of a loan
Which of the following is NOT true of an easement along the Gulf Intracoastal Waterway?
A) Real estate agents should advise buyers that the public has obtained an easement to the public beach areas. B) If no clearly marked natural vegetation line exists, there is no easement. (Correct) C) It is illegal to interfere with the public easement to the public beach areas. D) The state of Texas retains the right to tear down any structures built seaward of the easement line.
What kind of the industry is conflict?
Growth
What should you be hard on and what should you be soft on?
Hard on the problem soft on the people (attack the problem aggressively but support the person)
Goal is victory, will demand concessions, insist on position, mislead about the bottom line, mistrust, and makes threats
Hard positional bargaining
Recognize the tactic
Hardest one to detect is the lie 1. Compare his words with facial expressions: sometimes their words are not symmetrical with wha they mean(especially watch their eyes) 2. Listen to the tone of their voice
In terms of the number of interest you need to make sure you realize that both side has what?
Has multiple interests
Harvey Lipman, a masonry subcontractor, is owed $5,000 for work on a custom-built home in Sulphur Springs. How can he give constructive notice when his invoices to the customer continue to go unpaid?
He can obtain a mechanic's lien against the property
An optionor and an optionee make a contract for an option on a commercial piece of property. If the optionee decides to exercise his option, when must he perform?
He must exercise his option under the terms of the option contract
Signals of progress in Japanese negotiation
Higher-level foreigners included in discussions Questions beginning to focus on specifics Softening of attitudes and positions Increased talk among themselves in own language Increased bargaining and use of informal communication
Under an FHA graduated payment mortgage, which of the following fluctuates over the term of the loan?
A) interest rate B) monthly payments (Correct) C) finance charge D) annual rate
Which transaction requires a securities license?
A) leasing a commercial building B) selling a commercial warehouse C) selling shares in Fannie Mae (Correct) D) arranging a sale-leaseback on a commercial property
The finance charges recorded on the Truth in Lending statements would include all of the following EXCEPT:
A) loan fees charged by the lender B) insurance premiums for mortgage insurance payment C) discount points and service fees D) recording fees and title insurance premiums (Correct)
Usury MOST nearly means:
A) making loans without the benefit of co-signors B) lending money at fluctuating interest rates C) being capable of multiple usage D) illegal interest (Correct)
In which of the following markets may a lender sell a loan that a mortgage banker has previously originated?
A) primary market B) secondary market (Correct) C) mortgage market D) consumer market
Which is the best example of functional obsolescence?
A) residential home built next to a factory B) peeling paint C) steep, narrow stairway in a 1 and 3/4 story home (Correct) D) residential home with central air conditioning
Who is NOT an originator of primary loans?
A) savings and loans B) credit unions C) commercial banks D) FHA (Correct)
RESPA would prohibit which of the following acts?
A) steering B) paying of kickbacks (Correct) C) blockbusting D) redlining
A listing agent must disclose which of the following facts to a prospective buyer?
A) values and features of area comparables B) the lock-in rate C) covenants, conditions, and restrictions (Correct) D) existence of an open listing
How do you win?
Achieve a better process for dealing with you differences
What to do when someone is angry with you. (Part 2)
Acknowledge or validate they have a right to be angry. Invite the other to work with you toward resolution. -Focus on the issues to resolve the conflict -Open a dialogue Check how intense the situation is. -Figure out the importance of the issue. -Suggest a cooling off period.
What if they are creating purposely stressful situations, what should you do?
Acknowledge the stressors and ask for some adjustments
Acknowledge your opponent's point
Acknowledge three things: Point of View; opponent's feelings; acknowledging them as a person
A.C.E
Acknowledge what has been said: -you appear to be very upset -it seems like you feel very strongly about this. ask Clarifying questions: -am I hearing you say that...? -why specifically are you upset? Explore options for moving forward from the situation or disagreement: -what needs to happen at this point? -if this were to happen again in the future, what would we do differently?
Opponent's feelings
Acknowledging by letting them express their feelings "I Understand why he feels as he does" It signifies strength on your part
Lots of questions? China and Japanese
Add questions to all of their responses
Types of third party resolution
Adjudication Arbitration Mediation
Free Trade Area
Agreement bw two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partners while individuals maintain tariff schedules for externals
Solution to Emotions
Anger and frustration can easily throw off negotiations(Nerves, clammy hands) Ask yourself, "Why? Why am I nervous? Angry?"Why are they angry?--are they seeking revenge for mistreatment 1. Listen but do not preach as other side is vending 2. Try to build relationship before party even begins 3. Do not be judgmental if they are especially acting irrational
Predispute arbitration clause
Applicable to ADR systems agreed to by contracting parties prior to a dispute arising; usually this clause is a part of the original contract between the parties.
Technique for identifying interests
Ask "Why?", Ask "Why not?" Think about their choice. Realize that each side has multiple interests, The most powerful interests are basic human needs. In searching for the basic interests behind a declared position, look particularly for those bedrock concerns which motivate all people, Make a list
Bring in the dance (someone talks for a long time without saying anything substantive... intended to distract)
Ask what does this have to do with the present issue
How to Define Interests
Ask why? Ask why not? Analyze the consequences
How do you identify interests?
Ask why? Or, ask why not?
Common error in diagnosing a negotiation situation
Assume the other side has same interests
Assertiveness
Capability to initiate, maintain, or disengage from conversations, and stand up for oneself without attacking the other person. -respectful of other person's thoughts and feelings
What is the opposite view of the Collaborative Approach, and what is the focus of this approach? What is an alternate name for this approach?
Competitive approach or Distributive approach
Controlling Styles
Competitive.
What are the two types of Interaction Dynamics?
Complementary Patterns Symmetrical Patterns
.which style is appropriate
Complexity of issues If you need to synthesize ideas to come up with better solutions Commitment / buy-in from other party absolutely necessary How important your outcome is to you How important their outcome is to you How important relationship is Speed is critical (or have lots of time) You have no power (you have all the power, power is equal) Whether goals mutually exclusive Can't come to consensus Other styles not successful
What must you make sure you concentrate on?
Concentrate on communication
Unassisted Processes
Conciliation Collaborative Problem Solving Negotiation SEE HANDOUT
Passive aggressive interruptions?
Confront them on the tactic and suggest that your time is valuable... maybe reschedule
Integrated Styles
Cooperative and collaborative styles -See other people as using controlling or aggressive styles
extremely effective negotiators
Cooperative people have a strong potential to be:
When asked about being a hard or soft negotiator the authors suggest neither, rather we should do what?
Change the game, principle negotiation
Perceptions of Fairness in Negotiations
Distributive Justice Interpersonal Justice Procedural Justice
Characteristic: Motivation Distributive: Integrative:
Distributive: Individual gain Integrative: Mutual gain
Characteristic: Solution Distributive: Integrative:
Distributive: Not creative Integrative: Creative
Characteristic: Ability to make trade-offs Distributive: Integrative:
Distributive: Not flexible Integrative: Flexible
Characteristic: Interests Distributive: Integrative:
Distributive: Opposed Integrative: Congruent
Characteristic: Issues involved Distributive: Integrative:
Distributive: Single Integrative: Multiple
What is the most basic task 'in this chapter' is to structure what? What are two destructive ways to achieve this task?
Establish an even playing field Dominance and manipulation
Solution to lack of communication
Establish two-way communication Keep lines of communication open One party not having what other party is saying- it could be that you are so busty thriving about a rebuttal; write down a key word to refresh your memory Party hears but lacks understanding; Ask questions to bring clarity 1. Pay close attention to what is being said 2. Describe impact on you- "I statements" instead of "You statements" • Ex: "I feel let down," instead of "You broke your word" 3. Speak only for a purpose-sometimes problem is TOO much communication • Say what you have to say instead of talking
Bluffing
Even if bluffing is not unethical you should not bluff ➢ If the other party believe the bluffer and concedes... ➢ IF the other party believes the bluffer and does not concede, both parties lose ➢ If the other party believe the bluffer-> Bluffer loses credibility and or negotiation If you do bluff... ➢ Save your bluff for significant issues-don't squash it ➢ Bluff at the end of the process ➢ Make your bluff consistent with what you have been saying ➢ Make sure you come up with a plausible explaination why there is no give in your position ➢ If opossible- couple your bluff with flexibility in some other issue ➢ Make your blufff in such a way to becom what you bear does not go away ➢ If you are forced to back down-> have a story reeady to explain in order lessen harm to credibility • If the other side is bluffing... ➢ If you don't like the deal-> call the bluff ➢ If you like it-> counterbluff by going along with it
Which of the following is not one of the seven elements that should be the focus of negotiators as identified in the book, Getting to Yes
Evidence
Example of Determining the Parties' Interest
Ex: two sisters fight for an orange • "It is mine, I saw it first" • "It is mine, I have possession of orange" • You find the party's interest asking, "Why?" • Interest-based does not "split the baby" like Solomon • One sister says I want to eat it • Another sister says I want the orange peel to bake • Much better than splitting the orange ➢ Ex: Two people sitting at a library • One lady opens window, another closes the window • Librarian asks, "Why?" to both: one wanted fresh air, the other did not like the draft • Librarian opens next window over to satisfy both parties ➢
Expanding the pie
Example of creativity in negotiation Look for sanity that the high value to one party and low cost to another
Communication Patterns of Collaborative Negotiations (AKA how to spot a collaborative negotiator) (Part 1)
Expanding the Pie: expands the possible resources -consider some new alternatives that you didn't think of before Non-specific Compensation: a process in which one of the parties is paid off with some creative form of compensation that works to everyone's benefit Log Rolling: parties find multiple issues in conflict then determine their top priorities and make sure those get met, but have to give in on lower priority items -each party gets top priority met, but probably not all lower priorities -requires both parties to make a list of all demands
Describe the 2 of the following Collaborative Communication patterns:
Expanding the pie- Expanding the resources Nonspecific compensation- One of the parties is paid off Log rolling- Shuffle the issues until the top priority issues comes to the top Bridging- Inventing new options to help other sides needs
weight and conviction
Expectations are what we give ___ and ___ to in a bargain.
French & Ravens Sources of Power
Expert power Reward Power Coercive Power Legitimate power Referent Power
How do you create value
Exploit value difference between negotiators Differences in interests Differences in judgments about the future Differences in risk tolerance Differences in time preferences
Focus on interests not positions
Explore interests Avoid having a bottom line
TOOL #4 Identify Value Creating Trade-offs
Identify Value Creating Trade-offs •The search for trade-offs helps you avoid compromise. •Trade-offs occur when you exchange your lower priority issues for your higher priority issues. •Key Diagnostic Question: "Where do our interests differ?" Resources Do you and the other side have different assets that you could trade? Examples: Exchange lawn mowing for lower rent Exchange higher home price for a new roof Relative Valuations Are there things that are valuable to you but less valuable to the other side, and vice versa? Examples: Trade 10% Financing for 30 Month Warranty Trade a better title for a windowless office Time Preferences Do you have different needs concerning when things happen or don't happen? Are there differences in short-term versus long-term interests? Examples: Buyer cares more about the present. Seller cares more about the future. Installment Plan: Buy item now, pay more in the future! Forecasts Do you have different predictions about some future event that you could bet on? Examples: Unproven author and publishers Exchange lower advance for larger royalties
_________________________, "done properly, may in fact be the heart and soul of modern-day interpersonal problem solving and conflict management." According to Bennoit it means what?
Interpersonal conflict, that we do not personally attack someone and maintain a nice environment for an exchange of ideas.
What should you state first your interests and reasoning or your conclusions and proposals
Interests and reasoning
What should you do with the old friends one?
Keep a distance between them that reflects the true nature of the relationship
Determine your starting point
Keys for determining Opening Price: 1. appear in overreaching or undervaluing ` 2. Give an offer/counter enough room to maneuver with out having to stretch 3. The number has to feel right 4. Who should make the first offer?
Example of how sides can have same interest?
Land lord vs tenant: Both want stability, well kept accommodation
Describe the difference between system rules and Micro events
Micro events are repetitive communication patterns that carry information about the underlying conflict structure. System rules Underlying communication structure of the interaction
Political Union
Most fully integrated multinational cooperation complete political and economic integration, either voluntary or enforced
Problems With Bargaining Over Positions: Others Involvement
Much harder to win bargain/negotiation when more people are involved
Effects of aspirations
Myth: know your walk away number and focus on it Science: your aspiration is FAR MORE IMPORTANT in value claiming Higher aspiration= larger slice of the pie
Bottom Line
Negotiators commonly try to protect themselves against such an outcome by establishing in advance the worst acceptable outcome---their "bottom line."
Looking at shopping centers in the appraisal process, the social fiber of the community and distances from schools is called:
Neighborhood Analysis
Principled Negotiation
Neither hard or soft. Decide issues based on merits, look for mutual gains
Never yield _______ _______________________, only ________ ______________________."
Never yield to pressure, only to principle
Should you ever believe their intentions are evil and out to get you? Why?
No -This will not allow you to work with the other side at all
No matter how many people...involved in a negotiation...decisions....typically made-
No matter how many people are involved in a negotiation, important decisions are typically made when no more than two people are in the room.
Should you ever negotiate over positions?
No, DO NOT negotiate over positions
Grant Parks, a general contractor, and his partner Sam Davis, a licensed broker, decide to buy a rundown apartment building in downtown Houston for which Sam is the listing agent. The property has been on the market for over nine months and has not attracted any offers. Grant and Sam plan to rehab the building and seek a change in zoning to make it more marketable. Can Grant buy the property from the seller without disclosing his partnership with Sam?
No, Sam should inform the seller of his partnership with Grant
Are good negotiators simply born?
No, they are self made
Usually, are negotiators really listening to the other side?
No, they are simply thinking about their next argument
In doing a market analysis, an appraiser found a recently sold property where the owners had just gone through a divorce. The property had been listed for $60,000 for 3 months but was purchased for $40,000 by one of the spouses. Should the appraiser use this as a comparable?
No--because of the divorce it was not an "at arms' length" transaction.
An owner advertised "beautiful acreage; only $5,000 down; owner will personally finance down payment." Would this be a violation of the Truth in Lending Act?
No. Owners are not covered by Reg. Z.
Emma Johnson's efficiency apartment is unlivable since the furnace quit working three weeks ago. Emma has called her landlord repeatedly, with no response. She also tried e-mailing him and even went so far as to send a written letter by certified mail, return receipt. She has yet to hear from him or to see any signs of attempted repairs. After enduring chilly nights for 3 days where the temperatures dipped near freezing and catching a bad cold that turned into bronchitis, she packed a suitcase and moved in with a friend until the situation is remedied. She only returns to her apartment each day to check mail and messages and see if any repairs have been made. Rent is due in 4 days; must Emma pay her rent while such conditions exist?
No; since she brought the problem to the landlord's attention but received no response, she can claim constructive eviction.
Why is prevention of conflict a "paradoxical task"?
One its one of the normal states of human communication but we would like to do what we can to prevent it
Advocate for your interests but be flexible
One of Three Possible Outcomes: •Discover compatible interests. •Discover differing, but complementary (tradable) interests. •A clear mismatch.
Decide whether you should negotiate at all
One of the elements for going to the balcony f your BATNA is better than any agreement, go with your BATNA and do not waste your time expending energy on the agreement ii) Sometimes you get so involved in the trees, you forget to look at the forest
Identify your interests
One of the elements of going to the balcony What do you want to accomplish? Try to also find other person's interests, ask them and then ask what is wrong with doing what I am suggesting Usually it is a two way, both sides interests must be satisfied
what to do if your opponent does not give you feedback at all
Part of Creating a joint draft of both yours and his ideas Give him options: we could bring in an appraiser if price is the issue OR pay the difference over a period of time
Price Phase
Part of Raising the issue in determining the offer if the issue is really important - negotiate it at front • Ex. Warren Buffet and 94 year old women with the noncompete
Discussing further options
Part of changing the game 1. Brainstorm 2. Ask open ended questions, it only takes one good answer to change the process of the game
The number has to feel right
Part of determine the offer If the number fits but you don't feel right->err on the feeling, not the number
When to Raise the Issue
Part of determine the offer Two Phases: Price phase and contract Phase
Expand the pie
Part of problem solving with the opponent 1. Look for something that has high benefit to your opponent and low cost to you OR high benefit to you and lost cost to your opponent 2. Use the "if..then" formula(Conditional Statements) "If I do something that benefits you, then you do something that benefits me" "But you are taking a risk because if it does not benefit the person then you are not offering anything fair"
one-text procedure
Starting with one plan by a third party and adjusting it a few more times until it cannot be adjusted any more. Then the answer is either yes or no
Solutions to get past no
Step 1: Control you own behavior Step 2: Disarm your opponent Step 3: Change the game Step 4: Actively involve your opponent in advising a solution Step 5: Use power to educate, not to defeat
Determine Realistic Expectations
Stick with an outcome you are good with; Need to determine a comfortable resolution 1. Look for objectives; look at what a reasonable outcome is comfortable but not your bottom line 2. Determine the other party's expectations 3. Consider Leverage Factors Ex: If you are buying a house-> you look for fair market value, appraised values, comparable value, depreciating value, insurable value of the new home
strands of the cable that span the chasm of forgiveness and alienation
Strand of Truth Strand of Forbearance (forbear from revenge) Strand of Empathy Commitment to the relationship out of awareness of our interdependence
Fear based noise •Stress over changes in tradition •Stress over acceptance •The Victim Syndrome •Blame
Stress Over Changes in Tradition •When a party is worried about changes in established procedures, modes of thinking and/or acting, or basically, anything that threatens to disturb their comfort zone Stress over acceptance •When a party is concerned he will not be accepted by 1) a group of fellows outside of the negotiation if he is able to communicate with the other party, 2) by the other party if the party's position is honestly expressed. The victim syndrome ●When the party is absorbed in self-pity. ●Or when he/she feels persecuted because he/she believes that being called to a meeting he/she has done something wrong.
TOOL #5 Structure Provisional and Contingent Contracts
Structure Provisional Contracts •"All or Nothing" thinking demands that all contracts be permanent, comprehensive, and final. •Break this mental roadblock by creating agreements that are "provisional", "partial", or "experimental." •Sounds like: "Let's try this for one month/one quarter/one year just to see if it works...." Structure Contingent Contracts Trading "Forecasts" is really building a contingent contract. Structure Contingent Contracts 1997 Contract •$4.5M guaranteed, $10.5M possible •$1M for making all playoff games •$500,000 for winning rebound title •$185,000 for each game played after 59th game in the season •$100,000 for positive assist-to-turnover ratio Structure Contingent Contracts Contingent Contracts Allow You To: 1.Move forward in spite of speculative disagreements about the future. 2.Makes "Can we trust Dennis?" a non-issue. 3.Share risk among all parties involved (and risk sharing motivates risk taking). 4.Motivates performance by "building success into the agreement."
4
The best negotiators spend up to ___ times more thinking in a strategic way that is concerned with the other party's interests than the average negotiator.
Dispute
The circumstance when a party in conflict claims the right to do or have something and the other party denies, rejects, or ignores the claim.
Conflict
The common occurrence in life when two or more points of view exist
Award
The decision announced by an arbitrator
attitude
The difference between a simple goal and a genuine expectation is:
secure commitment
The goal of all negotiations is to:
Arbitrator
The individual or panel members authorized by disputing parties to resolve a dispute through the arbitration process
What are Interaction Dynamics?
The interaction of two or more people determines the outcome of the conflict. We have to both be involved in working things out for it to produce a constructive outcome.
Their interests
To maximize the pie You must first determine the other side's interests.
Positional Bargaining
Traditional type of negotiation. Usually competitive. -People lock themselves into a position and a contest of wills occurs which can jeopardize the relationship. -Usually a waste of time and stalls the negotiation process
Separate People from the Problem
Treat substance/problem on it merits At the same time, be soft on the problem on the person with understanding, compassion Problems fall into 3 Categories • Perception • Emotions • Lack of Communication
Acknowledge your opponent as a person, not an adversarial party
Treat them as a friend or a colleague That creates cognitive dissonance: This is the conflict that arises the person's perception and reality. 1. To perceive a thing to be one way, and what is reality, then they try to reconcile those two 2. If you know the party is an adversarial party, but you treat them as a friend, that creates cognitive dissonance. 1. They have battle within trying reconcile the two
Trip Wire
Triggers to show you if it is worse then your want or better then your BATNA
Arguing over positions is inefficient
True
Arguing over positions produces unwise outcomes
True
Being nice is no answer
True
For every interest there usually exists several possible positions that could satisfy it.
True
It is your job to have the other understand exactly how important and legitimate your interests are
True
(1) money, (2) control, (3) risk
The three most important factors in cultural issues are:
When the lender under a deed of trust requires title insurance, who would be the most likely person to pay for it?
The trustee
salary and promotion
There is solid evidence that women choose to negotiate less than men do in important areas such as ____ and ____.
LESS
There is solid evidence that women chose to negotiate MORE/LESS than men do in important areas such as salary and promotion.
Why do you negotiate
To agree on how to share or divide a limited resource To create something new that neither party could attain on his or her own Come to terms on a "sale" or "contract" To resolve a "problem" or "dispute" between parties You only do this when you think you can find a better outcome by negotiating
(1) commit yourself to specific and justifiable goals, (2) transform your targets into genuine expectations
To be an effective negotiator, you must (2):
Reacting to Subsequent offers
Parties are really there to know where they are asking Try to keep other party's expectations Do not get angry-it polarizes the party Sometimes the other side will make the same move ➢ Do not blow your cover- keep the other side surprised
Logrolling
Parties have conflicting interests and more than one issue is involved Parties try to solve the problem by giving up on certain issues Ex. Israel and Egypt Sinai Land Egypt wanted the Sinai b/c they had once owned it Israel wanted it for security Resolution: Egypt got the Sinai but it had to be de-militarized
Deadlock
Party fails ro reach the agreement Buyer/Seller concedes on the other Parties reach compromise ➢ Either parties begin to dig in (should you compromise, conform or concede
Leverage
Party of Determining Opening Offer When a party gets advantage over party can be in your favor or against you 4 Types
Deliberate Deception
Phony Facts Ambiguous Authority
What is deliberate deception? How do you react?
Phony facts or not telling you who is in charge. Unless you have good reason do not trust the other side. Also at beginning make sure you find out who on the other side is actually in charge of making the decisions
Know why and how physical arrangements can affect cooperativeness in negotiations.
Physical arrangements can affect cooperation in subtle ways. In high-context cultures, the physical arrangements of rooms can be quite a source of embarrassment and irritation if handled improperly. Americans tend to be casual about such arrangements. Who should attend and not to be outnumbered is another factor to consider.
What is the second of the three stages of principled negotiation?
Planning: Generate ideas and decide the strategy
stock phrases
Please correct me if I'm wrong; We appreciate what you've done for us; Our concern is fairness; We would like to settle this on the basis of independent standards, not of who can do what to whom; Trust is a separate issue; Could I ask you a few questions to see whether my facts are right? What's the principle behind your action? Let me see if I understand what you're saying; Let me get back to you; Let me show you where I have trouble following some of your reasoning; One fair solution might be...; If we agree....If we disagree...; We'd be happy to see if we can leave when it's most convenient for you; Its been a pleasure dealing with you.
PrOACT
Problem (the thing you must decide) Objective (what you want out of the decision?) Alternatives (what are all the options?) Consequences (how well does each alternative meet objectives?) Tradeoffs (look at tradeoffs amongst objectives)
People Problems: Communicating
Problems - negotiators won't talk to one another in way to be understood - ppl may not hear you - misunderstanding
How does one determine the gross rent multiplier?
Property value divided by the monthly rent.
TOOL #2 Provide Information and Ask Diagnostic Questions
Provide information and ask diagnostic questions "A good negotiator will have thought in advance about information she does not want to disclose, and will have decided how to deal with requests for that information. It is the unprepared negotiator who often discloses inadvertently or lies because, on the spot, he can think of no other way to avoid disclosing sensitive information." - Bruce Patton, co-author of Getting to Yes Provide Information and Ask Diagnostic Questions •Share information about your interests and concerns. •Ask about their interests and concerns •Key Question: Where are our shared concerns? *See deal relationship cycle in notes*
What is a trip wire?
Provides a margin in reserve
Suggestions to help you understand the other side's thinking (perceptions):
Put yourself in their shoes, Discuss each other's perceptions, Look for opportunities to act inconsistently with their perceptions, Perhaps the best way to change their perceptions is to send them a message different from what they expect, Give them a stake in the outcome by making sure they participate in the process. & Face-saving: Make your proposals consistent with their values.
What if they are using personal attacks, what should you do?
Recognize it and call it to their attention
What if they are using threats, what should you do?
Recognize it and call it to their attention, treat it like pressure (do not give into it)
Steps in dealing with unfair tactics
Recognize the tactic Recognize what gets you upset Take time to think clearly when you are detached
Countering Dirty Tricks
Recognize their unfair tactics and call them on it Question the legitimacy and fairness of the tactic Many of these tactics can be avoided by: -state the rules of the negotiation clearly before concessions begin -make sure all parties agree to follow the rules
Positional Pressure Tactics
Refusal to Negotiate Extreme Demands Escalating Demands Lock-in Tactics Hardhearted Partners
five sorts of multinational cooperation
Regional Cooperation Groups Free Trade Area Customs Union Common Market Political Union
An appraiser is usually paid:
a fee based on the amount of time and effort.
Authoritative Standards and Norms
a foundation that directs attention to our psychological drive to maintain a consistency and fairness in our words and deeds
Two brothers, Mike and Austin Dunn, want to buy a townhouse together in Texarkana. Both men are recent college grads with professional-level jobs. Their lender has suggested a mortgage that offers lower monthly payments in the beginning that gradually increase at predetermined times over the life of the loan. Given that they expect their incomes to increase annually, they feel this type of loan might be a good choice because they'll be able to afford a larger townhouse. What type of loan does this describe?
a graduated payment mortgage
Competitive
a strategy/negotiating style; do all in your power (lying or not) to get your way
What If They Wont Play?
a) what you can do? principled negotiation -> contagious b) what they may do? counter with negotiation jujitsu c) 3rd party intro
Cite 4 reasons why On-Line Dispute Resolution may increase in the future
a. Extraordinary growth of e-commerce b. Evidence of it being able to be conducted large scale c. Greater acceptance of traditional marketplace d. More concern by government over ODR
Business conflict tips: Cite 2 things a customer wants to hear from a customer service rep.
a. Immediate action b. Taken seriously and treated with respect
Cite reasons why interpersonal conflicts do not get solved.
a. Incompatible interests b. Fundamental differences in values c. Different versions of the truth d. Both parties too angry
Ombuds
a. Intermediary who works out problem before escalation or litigation, paid by company...controversial because loyalties lie with company, impartiality questioned
Cite 2 examples of how conflict can be a positive force in the workplace.
a. May lead to constructive problem solving skills b. Stimulus for positive change
Cite 4 "pros"of On-Line Dispute Resolution
a. PROS i. Inexpensive ii. Available worldwide 24/7 iii. Convened quickly iv. Connects parties unable to meet face to face
. There are 3 general categories that divorce mediation is not recommended. Cite them.
a. Parties who come to seek vengeance b. Those who use mediation to maintain contact c. Those no up to negotiating for themselves because of drugs, past violence, emotional abuse
four advantages for using divorce mediation.
a. Private b. Continuing relationships c. Costs and time d. Agreements modified as situations change
The Taylor Law
a. Public Employees Fair Employment Act b. Prohibits employees from going on strike c. Employees represented by organization of their choice d. Binding arbitration if dispute not solved in mediation
4. ENCORE QUESTION: Hint- Getting to Yes (Fisher and Ury)
a. Separate people from the problem b. Focus on interests instead of bargaining over positions c. Invent options for mutual gain d. Insist on objective criteria
Gen X moving back home may create "conflict". List 4 strategies that may avert conflict.
a. Set a move out date b. Take on some responsibility c. Work together to restructure debts d. Respect boundaries
List 4 "tips" for mediators when communicating with non-native speakers of English
a. Speak clearly, avoid slang b. Summarize what each has said so you understand c. Clarify and confirm d. Avoid yes or no questions
Research question: Of negotiation, mediation, arbitration, or summary jury trial, which is the most formal process?
a. Summary jury trial - arbitration - mediation - negotiation
Cite 2 disadvantages critics of arbitration have cited.
a. Takes decision making power away from parties involved b. Doesn't help parties learn to solve future conflicts or improve relationships
Name the four basic variables in interpersonal conflict resolution.
a. The people involved: personality, history, dna, temperament b. The problem itself c. "Time": conflict exists in time d. Power dynamics: someone try to use power imbalance
Cite four applications or venues that arbitration may be used.
a. When parties are angry or hostile b. Parties cannot communicate or cooperate with each other c. When interpreting law or determining facts is required d. Business situations
What is triangulation?
a. When there are multiple parties to a conflict, some may band together to exclude others in the group
two disadvantages of divorce mediation.
a. You may negotiate your rights away b. Women usually ranked different than men
Cite the four distinct roles of an arbitrator.
a. conducts hearing b. arbitrator is decisive c. writes decision d. has knowledge of the process and subject matter
lesson of the ship wreck to sailors
not see each other as adversaries but disentangle the objective problems from the people
What happens when more attention is paid to positions?
less attention is devoted to meeting the underlying concerns of the parties.
The most productive response to an emotional outburst
listen quietly without responding to their attacks and occasionally encourage them to get it all out Releasing emotions can prove risky if it leads to an emotional reaction. If not controlled, it can result in a violent quarrel. One unusual and effective technique to contain the impact of emotions was used in the 1950s by the Human Relations Committee, a labor-management group set up in the steel industry to handle emerging conflicts before they became serious problems. The members of the committee adopted the rule that only one person could get angry at a time. This made it legitimate for others not to respond stormily to an angry outburst. It also made letting off emotional steam easier by making an outburst itself more legitimate: "That's OK. It's his turn." The rule has the further advantage of helping people control their emotions. Breaking the rule implies that you have lost self-control, so you lose some face.
The seller and the buyer agreed to a purchase price of $103,500 with the closing to occur on June 15. The seller's loan balance after the June 1 payment was $39,440. with an interest rate of 10%.The monthly payment was $440 principal and interest. What was the loan balance the day of closing, and how much interest did the seller owe the bank?
loan balance $39,440; interest due $164.33 Although many types of loans can become more complex in their calculations of remaining principal and interest at a particular point in time, in this case the interest portion of the payment is calculated simply by multiplying $39,440 by 10% and dividing by twelve. That results in monthly interest of $328.66, with half that amount, or $164.33 added to the principal payment at closing.
seven aspects of negotiation setting that should be manipulated
location physical arrangement number of parties number of participants audiences communication channels time limits
A recorded subdivision plat is used in the:
lot and block system
Tactic Coordination
low importance, low conflict
Three criteria by which negotiation should be fairly judged:
o It should produce a wise agreement if agreement is possible. o It should be efficient. o It should improve or at least not damage the relationship between the parties.
Negotiation jutitsu-
o Not reacting to any attacks o Do not push back o Sidestep their attack and deflect it against the problem. focuses on what they may do...counter their basic moves of positional bargaining by directing their attention to merits. refusing to react
reasons why international communication may fail
media inadequacy cultural interpretations marketer did not correctly assess the needs and wants or thinking process of the target market
12 Negotiation factors 11. group norms
negotiation styles
NICs
newly industrialized countries, rapid industrialization of targeted industries and have per capita income that exceeds other developing countries, have moved away from restrictive trade, attract trade and foreign direct investment
For the past 30 years, the Ls have operated a neighborhood grocery store. Last week the city council passed a zoning ordinance that prohibits packaged food sales in the area where the Ls' grocery store is located. The store is now an example of a/an:
nonconforming use.
Help your opponent save face
part of problem solving with the opponent You never want your opponent to lose face There is always a constituency for them(employer, client, themselves) Always leave a door open if they need to back down for any reason HOW do you do this? Reason through with the opponent Bring in a third party and ask them to make a recommendation, A mutual boss, friend, mediator, expert Point to a standard of Fairness Help your opponent Do not throw too much at your opponent too fast--guide your opponent step by step IF your opponent is skeptical, propose a "test drive" for a definite period Do not ask for a commitment until the end. So that he could see all of the concessions he made throughout Do not rush to the end, slow down, back off and give him a chance to think Encourage opponent to discuss the agreement with your constituents
Help your opponent satisfy his own interest
part of problem solving with your opponent As long as you can make a connection between his interest and his conduct Continue to put yourself in your opponents shoes Do not overlook the human basic needs--There are intangibles that are more important of money
Separate the people from the problem
participants should come to see themselves as working side by side, attacking the problem, not each other
Know what skill is at the top of almost everyone's list of negotiator traits
preparation and planning
The primary survey line running north and south in the rectangular survey system is the:
principal meridian
When developing objective criteria you might consider:
procedural solutions, look at other basic means of settling differences (taking turns, drawing lots, letting someone decide)
Basic Human Needs
security, economic well-being, sense of belonging, recognition, control over one's life
problem with direct mail in Chile
sender pays part of the mailing fee and receiver has to pay the other part
Noise
step in the international communication process that is related to uncontrollable and unpredictable influences that can confuse or distract from the process
Know the usual purpose of side conversations that occur when American managers are making a presentation in a foreign country.
straighten out a translation problem
Apartment houses in an area were selling for $100,000 and a buyer offered $100,000 for an apartment building. The buyer is operating on the principle of:
substitution
The most common form of negotiation depends upon:
successively taking — and then giving up —a sequence of positions.
Compromise Management Style: - Variations - Benefits - Disadvantages
Variations: - Openly acknowledged - Tacit coordination Benefits: + Each party gets something they need + Can build relationship + Others perceive you as competent Disadvantages: - May lead to lower levels of commitment to the solution - Glass half empty
Recognizing the lie
Watch for inconsidtencies for what the person is telling you, do his current words match his previous words, do his words match his actions?
(1) understand your bargaining instincts, (2) acquire a willingness to prepare, (3) set high expectations, (4) have the patience to listen, (5) make a commitment to personal integrity
What are five points of the bargaining style checklist?
(1) think carefully about what you want, (2) set an optimistic but justifiable target, (3) be specific, (4) writing down your goal and get committed, (5) carry goal with you into negotiaton
What are five steps to setting goals?
(1) avoiding, (2) compromising, (3) accommodation, (4) competitive, (5) collaborative or problem-solving
What are five strategies and negotiating styles?
(1) your goal sets the upper limit, (2) goals trigger striving mechanisms, (3) we are more persuasive when committed to achieving a specific purpose
What you aim for is what you get; therefore (3),
Adjudication
When an outsider decides. A process in which parties go before a judge and jury. It assumes; Parties are unable to solve their own conflicts The judgment can be put into motion without mutual consent -you can be sued, charges placed against, etc.
Symmetrical Patterns
When our styles mirror each other. -Works well when both parties are collaborative, not so much when both are competitive.
A principled negotiator can deal with each of these.....: Don't attack their position, look behind it
When the other side sets forth their position, neither reject it nor accept it. Treat it as one possible option. Look for the interests behind it, seek out the principles which it reflects, and think about ways to improve it. Don't defend your ideas, invite criticism and advice, Recast an attack on you as an attack on the problem. When the other side attacks you personally — as frequently happens — resist the temptation to defend yourself or to attack them. Instead, sit back and allow them to let off steam, Ask questions and pause
Model X-Y-Z
When you do X, in situation Y, I feel Z.
Why should we ask "why not?"
Why: put ourselves in their shoes, examine the position they take Why Not: What interests of theirs stand in the way
Where should you open a Distributive negotiation
With a number that is very favorable to you; that gives you room to make concessions before reaching your RP.
Negotiating without determining your BANTA is like negotiating with what?
With your eyes closed
fairness and follow more
Women rely more heavily on ____ and ___ ___ than men in negotiations.
WATNA
Worst Alternative To a Negotiated Agreement. If you have not thought carefully about what you will do if you fail to reach an agreement, you are negotiating with your eyes closed.
Cite the "Five Core Concerns" that researchers have said are critical in creating disputes and resolving them.
a. Autonomy: person's right to decide for him/herself b. Acknowledgement: all want to be acknowledged on some level c. Affiliation: being treated as an equal especially in spousal relationships d. Status: Respect e. Having roles that are fulfilling
Two types of arbitration.
a. Binding b. Non-binding
Cite 4 of the 9 steps or parts of the process for resolving workplace disputes.
a. Call a meeting and define the problem as factually as possible b. Generate strategies to achieve objectives c. Measure cost of non-compliance d. Summarize, reiterate, encourage
Cite 4 advantages of arbitration as alternate dispute resolution mechanism
a. Cheaper and faster b. Parties can select their arbitrator c. Less formal d. for the most part final
Conflict among group members can take several forms. Cite two.
a. Chronic bickering b. Verbal abuse
Cite 4 sources of violence in the workplace
a. Competitors' pressures b. Victimization by non-employees c. Changing workplace demographics d. Domestic dysfunction overspill
Common Dirty Tricks
a. Deliberate deception: i. phony facts: unless you hv gd reason to trust someone, don't ii. ambiguous authority: not decision marker therefore find decision maker @ start, if they ask to renegotiate 'agreement' also do so yourself iii. dubious intentions: get contingent agreement (e.g. equity in house if don't pay child maintenance) b. less than full disclosure/deceit c. psych warfare i. stressful situation: physical (heat/cold/seat) say if don't like & offer to swap tomorrow ii. personal attacks: recognise & bring it up iii. gd/bad cop: ask same question to both - why is your offer reasonable? what's the principle? iv. threats: warnings are more effective d. positional pressure tactics - refusal to negotiate: find out why they won't negotiate, discuss principles, offer other channels (3rd party)
Cite 2 examples of how conflict can be a negative force in the workplace.
a. Deplete your resources b. Negatively affect psychological well-being of employees (stress)
The authors of the text suggest that you separate what two steps in the prescription stage?
act of inventing options and the act of judging them
4 principles of Principled Negotiation (or negotiation on merits):
[P] People: separate the people from the problem [I] Interests: focus on interests, not positions [O] Options: generate a variety of possibilities before deciding what to do [C] Criteria: insist that the results be based on some objective standard
Distributive Negotiation
a competitive and adversarial negotiation approach in which each party strives to get as much as it can, usually at the expense of the other party aka zero sum
Integrated Marketing Communications
advertising sales promotions trade shows personal selling direct selling PR
Mark Whittaker is selling his house near Wimberly so he can relocate to Florida for a new job. Unfortunately, he has been in the house only slightly longer than 2 years and has not built much equity. Two years' time has increased the house's value by $2,500 -- the same amount that he has paid towards the principal of his loan. The balance on his mortgage is about $87,900. Mark's lender calls the balance due at the sale of the property, What is this action called?
alienation clause
Why, When there are many parties, positional bargaining is even worse.
because too many people leave the table, and
Why, Being nice is no answer
because you will always be meeting the other's needs, not yours
Without __________________ there is no negotiation.
communication
Some common tricky tactics include:
deliberate deception,less than full disclosure is not the same as deception,psychological warfare,stressful situtations, personal attacks, good guy/bad guy routine,threats,position pressure tactics, refusal to negotiate,extreme demands, escalating demands,lock in tactics,hardhearted partner, calculated delay,take it or leave it, o Deliberate Deception o Psychological warfare o Positional pressure tactics Deliberate deception (phony facts, ambiguous authority, dubious intentions) Psychological warfare (stressful situations, personal attacks, good guy/ bad guy routine, threats) Positional pressure tactics (refusal to negotiate, extreme or escalating demands, lock-in tactics, hardhearted partner, a calculated delay, "take it or leave it")
Hard bargaining emphasizes
dominance over a soft negotiator. sees any situation as a contest of wills in which the side that takes the more extreme positions and holds out longer fares better. He wants to win; yet he often ends up producing an equally hard response which exhausts him and his resources and harms his relationship with the other side.
Interests
each side's needs, desires, concerns.
The MacArthurs own a two-family flat in a declining section of Houston. Each section of the flat has 2 bedrooms and 2 bathrooms in addition to ample storage space and an "extra" room (8' x 10') that could be used for storage, laundry, or a small office. An electrical tower was erected on the lot adjacent to the flat about one year ago. The MacArthurs need to find a new tenant to lease the second side of their flat and are afraid the electrical tower will deter potential tenants with children as well as those who consider the tower to be an unsightly affront to the landscape. Which term best describes this situation?
economic obsolescence
Brownsville boasts a paved 2 mile hiking and bicycle trail that is popular with fitness enthusiasts all year long. Recently, the state legislature voted to approve a 3 mile extension to the trail. The path of extension will run through the east side of Windemoor subdivision, the only private property affected by the development plans. Most of the property owners have already sold land to the city to support the project, but one homeowner is holding out, grousing that losing the small strip of land on the east side of his property will make his landscaping look lopsided and decrease the overall desirability of his property. What can the city do if the disgruntled owner absolutely refuses to sell?
expropriate it
The most any method of negotiation can do are to meet two objectives:
first, to protect you against making an agreement you should reject and second, to help you make the most of the assets you do have so that any agreement you reach will satisfy your interests as well as possible.
An owner was building a house for himself. Due to personal preference, he decided not to put in a bathtub. This would result in:
functional obsolescence
Industrialization
fundamental objective of most developing countries
Big Emerging Markets (BEMs)
geographically large significant populations represent sizeable markets for a wide range of products have strong rates of growth or the potential for significant growth have undertaken significant programs of economic reform major political importance "regional economic drivers" further expansion in neighboring markets
Nontask sounding
getting to know the people you are negotiating against
Know which book, according to your text, is considered the single most important book on the topic of negotiation.
getting to yes
French negotiation styles
highest percent of threats and warnings in negotiation
MDCs
industrialized countries with high per capita income
LDCs
industrially developing countries just entering world trade with relatively low per capita income
LLDCs
industrially undeveloped countries, agrarian, subsistence societies with rural populations, extremely low per capita income and little world trade involvement
Maximizing Leverage
when the standards, norms, and themes you assert are viewed as legitimate and relevant to the resolution of your differences by the other party
Stonewalling
when your opponent refuses to budge
"Add on Trick"
when your opponent throws in additions when you close the deal
Objective criteria
•Market Value •Precedent •Scientific Judgment •Professional Standards •Efficiency •Costs •What a Court Would Decide •Moral Standards •Equal Treatment •Tradition •Reciprocity •Etc.
Negotiating talent pays
•Men who negotiate receive 4.3% higher salaries than men who do not. •Women who negotiate receive 2.7% higher salaries than women who do not. •Assume $50,000 base pay, 3-4% raise each year for 50 years...and the difference? •Negotiating men receive $1,714,779 more. •Negotiating women receive $1,040,917 more.
How should you deal with people problems?
-Address people problems directly
How does principled negotiation protect the relationship?
-Mutual hunt for an objective basis
Should you ever react to emotional outbursts?
-NO
Should you ever yield to pressure?
-NO
What is the third of the three stages of principled negotiation?
Discussion: Communicate back and forth
The typical attack has three parts, what are they?
-Aggressively asserting their own position -Attack your ideas -Attack you
Put their problem ahead of your what?
-Ahead of your answer
How should you go about identifying their interests?
-Ask why and ask why not -Also ask what their other choices are
Prior to entering the room what must you do about your emotions?
-Be aware of them and identify what you are feeling
What should you make sure to build or at least work to build immediately with the other side so that problems do not arise
-Build a working relationship
What can emotions create during the talks? How should you treat this?
-Can create an impasse -Must recognize your emotions and the emotions of the other side
Why are principled negotiations smarter?
-Cause it works to find data and info that helps inform a better decision for both parties
Things you should not say when determining the offer
"This is my first offer and it is non-negotiable" "This is my best offer" "This is my first and final offer" **Do not apologize for the number-> give reasoning before numbers ➢ You should always give clean round numbers
The Idealist School
"do the right thing even if it hurts;" rejects the idea that negotiations are games; people must be held responsible for all decisions
The Pragmatist School
"what goes around comes around;" avoiding lying and deceit not because it is wrong but because it will not benefit company in the long run
The seller and the buyer finally agreed to a purchase price of $203,500 with the closing to occur on June 15, 2011. The taxes for the year 2011 in the amount of $2,500 have not been paid by the seller. (Taxes are paid in arrears). How much would the tax proration amount to, and how would it appear on a full settlement statement? Base your answer on a 365 day year, and the buyer is responsible for the day of settlement.
$1,130.14 debit the seller and credit the buyer The seller would owe money, and the buyer would receive money, because the seller has not paid the taxes. $2,500 divided by 365 is $6.849315 times the actual days of 165 is $1,130.14.
The Pickets are purchasing a home for $78,000 and the lender is giving them a 90% loan at 10% interest, plus a 2% loan origination fee. How much is the loan origination fee?
$1,404 A loan for 90% of the $78,000 purchase price results in a $70,200 mortgage. Since the origination fee is based on the amount of the mortgage, not the price of the home, the fee is 2% of $70,200 or $1,404.
Canyon Properties in Killeen, Texas owns a two-family dwelling that generates a 12.5% return on its value, or an annual return of $17,000. What would the value of this property be in terms of an income approach to value?
$136,000 An income approach estimates the value of a property based on its monetary returns (or the returns it could be expected to generate). In this case, the calculation is completed by multiplying the amount of investment returns ($17,000) by the multiplier 8 (because 100% is divisible by 12.5% exactly 8 times). The product, and estimated value of the property, is $136,000.
After breaking up, Don Kranz and his girlfriend Maggie Stuart sold their ranch in Uvalde for $230,000. After paying off an existing loan balance of $78,000 and remitting a 7% commission to their real estate salesperson, Don and Maggie each walked away from the transaction with proceeds of $66,200. How much did the realtor earn in commission (to the nearest dollar)?
$16,100 The real estate agent's 7% commission is calculated by multiplying the total sale price of the ranch before any deductions are made for loan payoffs, closing costs, or seller proceeds ($125,000) by a factor of 7% (or .07). The product is $16,100.
Susannah Hudson is expecting Premier Mortgage to underwrite the mortgage loan for her beachfront bungalow in Galveston. The maximum housing expense-to-income ratio is set at 35% of gross monthly income. Susannah's annual salary as a Physician's Assistant is $98,000, which is expected to continue and increase at a cost-of-living rate. What would be the maximum monthly PITI for Susannah?
$2,858.33 To calculate the maximum PITI (principal, interest, taxes, and insurance) allowed for Susannah under the underwriter's maximum housing expense-to-income ratio, take the amount of her annual salary and divide by twelve to obtain her gross monthly income ($8,167). Then multiply her gross monthly income by a factor of 0.35 (35%) to determine the maximum monthly PITI.
A scale drawing shows a room to be 3 inches by 4 and a half inches. Carpet, which is $15 per square yard, is to be installed in the room. If the scale is 1 inch to 4 feet, how much would it cost to install the carpet?
$360 At a scale of 4' to the inch, the room measures 12' x 18' or 216 square feet. Since there are nine square feet to one square yard, the room will require twenty-four square yards of carpet at $15 per yard.
A tenant leased 3000 square feet at $10 per square foot and 8% of gross income. The total annual rent she paid was $60,000. What was the gross income on which she paid percentage rent?
$375,000 At $10 per square foot, the tenant's base rent is $30,000. Since the total rent was $60,000, that means the remaining $30,000 was due to the gross sales percentage. Since that figure is 8%, simply divide $30,000 by .08 to arrive at $375,000.
Jane and Ryan Vandenbrenner obtain an FHA loan to purchase their first house. The home they wish to buy is listed for $82,800 but the sellers accept the Vandenbrenner's offer of $81,500. They will make a down payment of 3% on the house. Closing fees, will total $1,630. The lender requires an upfront MIP of 1% which the Vandenbrenners will pay at closing along with their down payment and closing costs. For what amount should they make the cashier's check for closing?
$4,866 At closing, the Vandenbrenners will need to present a cashier's check for $4,866. A 3% down payment on the purchase price of $81,500 comes to $2,445. An upfront mortgage insurance premium (MIP) of 1% on the amount financed (purchase price - down payment, or $79,055) comes to $790.55 (rounded to $791). The cashier's check will total $4,866 when $1,630 (closing costs), $2,445 (down payment), and $791 (upfront MIP) are added together.
Payments from the Real Estate Recovery Fund are limited to what aggregate amount for claims arising from a single transaction?
$50,000
On a $50,000 loan the borrower is required to pay two points. How much does the borrower have to pay the lender?
$51,000 One point equals one percent; thus two points are two percent of $50,000, or $1,000, which becomes part of the buyer's total obligation to the lender
The sellers listed their property for six months on February 26 for $104,500. They agreed to pay the listing broker a 7% commission at closing on the agreed upon sale price. A buyer made an offer on the property on March 29 for $102,000. The seller countered the offer on April 1 at $103,500, and the buyer accepted the counter offer with the closing to occur on June 15. How much commission did the seller owe the listing broker, and how would it appear on the settlement statement?
$7,245. Debit the seller.
What should you make your proposals consistent with?
-Make them consistent with their values
The buyer and seller agreed to a purchase price of $103,500. The buyer received an 80% loan. How much was the buyer's loan and how did it appear on the settlement statement?
$82,800. Credit the buyer only. Mortgage monies are credited to the buyer's side of the ledger as a portion of the funds he or she will use to complete the transaction. Once all the funds have been accounted for, the monies (less appropriate deductions) transfer to the seller.
When talking about your interests...keep in mind...interests come alive
*When talking about your interests, keep in mind that you need to explain them in detail (be specific) + demonstrate appreciation for their interests in return
An alternative model of conflict management:
- A feminist view of conflict - e.g., their model replaces concepts from the exchange model such as trades, mutual gain, settlement, and information exchange with alternative feminists concepts of "mutual inquiry" "mutual understanding" "transformation" and "sharing experiences"
With this Ideal model of COnflict management, what does the graph look like? - Explain Degree of Convergence (how similar or close their positions are
- Begin at Differentiation Phase i.) There is an initial Degree of Convergence in Parties' Positions (start with some differences) ii.) corresponds to latent, perceived, and felt, conflict phases iii.) this degree slowly gets larger until it reaches its maximum point at the very end/Beginning of D/I iv.) when trigger happens--> conflict out in the open--> more and more divergence happens v.) at a certain point we acknowledge there are differences and that they need to be addressed to move on (this is at the maximum point of difference) - Then Move to Integration Phases i.) in order to get here, must differentiate and understand differences (which may be unpleasant) ii.) also must realize you cannot force your opinions on one another iii.) this allows them to reach a mutually benneficial solution
Emotion Problem
- First recognize and understand emotions, theirs and yours - Make emotions explicit and acknowledge them as legitimate - Allow the other side to let off steam - Don't react to emotional outbursts: adopt the rule that "only one person can get angry at a time" - Use symbolic gestures
Separate the people from the problem
-Be soft on the people and hard on the problem -Proceed independent of trust -Deal with the people problems directly -educate innacurate perceptions -if people are mad, let them let off steam
Phases of conflict (5 phases that conflicts go through): A Descriptive Model
- It is a cycle 1) Latent : grounds for a conflict exists because parties have incompatible goals - the two parties are not aware that there is an issues - once conflict is perceived --> 2) Perceived Conflict Phase - eventually begins to feel it (personalize)--> 3) Felt Conflict: beginning to work out in ones head the emotion - what ones interfering behavior implies for the other - there will be some sort of triggering incident --> Manifest 4) Manifest Conflict: - could take form of a shouting match - 5) Restabilization (this is the aftermath) - can have 2 possible routes out (Aftermath) 1) Has a Resolution 2) or back into Latent/Perceived Conflict Phase (continuous cycle)
A Positive Approach to Negotiation: "Getting to Yes" - Criteria for good negotiation
- 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
There are 3 Basic People Problems:
- Perception - Emotion - Communication
Walmart and Rubbermaid
- Rubbermaid relied on Walmart - reason for huge profit - reisn price increased, Rubbermaid had to increase - Walmart refused to accept the price - Walmart put the "hammer" to Rubbermaid, not going to tell "Walmart" what to do - lost LOTS of revenue, products dropped tremendously impacting the compay - big corporaions can be bullies - unequal bargaining power
Principled Negotiation: Interests:
- The difference between interests and positions is crucial: interests motivate people; they are silent movers behind the hubbub of positions. Your position is something you have decided upon, while your interests are what caused you to decide. - You can ask for another's position, making clear that you do not want justification, just a better understanding their needs, hopes, fears, or desires that they serve. - The most powerful interests are basic human needs: security, economic well-being, sense of belonging, recognition, control over one's life - If you want the other side to take your interests into account, explain to them what those interests are - Make your interests come alive - be specific! - Acknowledge their interests as part of the problem - be sure to show your appreciate their interests if you want treatment in like kind - Put the problem before your answer: give your interests and reasoning first and your conclusions or proposals later - Look forward, not back: instead of asking someone to justify what they did yesterday, ask "Who should do what tomorrow?" - Be concrete but flexible: treat the opinion you formulate as simply illustrative - final decision to be worked on later - Be hard on the problem, soft on the people: show you are attacking the problem, not people - give positive support to the humans on the other side equal in strength to the vigor you emphasize the problem - this causes cognitive dissonance and in order for the other to overcome it they will be tempted to disassociate from the problem in order to join you in doing something about it
Communication Problem
- Whatever you say, you can expect that the other side will almost always hear something different - Sometimes, parties give up and talk merely to impress 3rd parties on their own constituency - Do not busy yourself with thinking of the next thing to say - if you are not hearing what the other side is saying, then there is no communication - Listen actively and acknowledge what is being said - Speak to be understood - put yourself in the role of being a co-judge working toward a common verdict - Speak about yourself, not about them: describe a problem in terms of its impact on you ("I feel let down" instead of "you broke your word") - Speak for a purpose: know the purpose of your outcome
Negotiation: Explain the Distributive Approach
- Win-lose - Maximize individual gains and minimize losses - Fixed sum (only limited amount of resources) - Communication consists of: i.) Information seeking; I try to find out things about what the other person really wants to use as a lever ii.) Selective misrepresentation of information; (not telling person exactly how much money you need) iii.) withholding (do not let people know true desires) - Fairly rigid relationships (not close friends within bargaining situations) - Outcomes include compromises, tradeoffs, win-lose outcomes (there are winners and losers) - Prejudice toward own group (you focus on yourself mainly)
Negotiation: Explain the Integrative Approach
- Win-win - parties Maximize joint gains - Variable sum; issues shaped by overlapping positions - Open communication and accurate disclosure of needs and information i.) so we can know what both parties want - More flexible relationship - Outcomes include creative solutions and joint satisfaction of needs - Focus on both groups' positions
Supremacy Clause
- a clause in Article VI of the US Constitution that declares federal law supreme, which means that in the event that federal and state law conflict, federal law trumps state law
Mandatory Arbitration Clause
- a contractual clause that requires the parties to a contract that contains such a clause to submit mandatory arbitration in the event of a dispute arising under contract - frequently forclose any possibility of appealing arbitration awards in court
Judgment
- a court decision that sets forth the rights or duties of parties to a dispute - many times arbitrition awards are converted into this by the court
Federal Arbitration Act (FAA)
- a federal statute that requires parties that have entered into contracts with mandatory arbitration clauses to submit to arbitration to resolve disputes arising under such contracts if the contract involves commerce - the US Supreme Court interpreted this act as Congress's declaration of a national policy in favor of arbitration - requires mandatory arbitration clauses to be enforceable for virtually any transaction involving interstate commerce, very broadly constructed - Southland v. Keating= state power to create judicial forums to resolve claims when contracting parties enter into a mandatory arbitration agreement has been preempted - Congress should change this and make ADR optional rather than mandatory for some disputes
Mediation-Arbitration (med-arb)
- a hybrid of alternative dispute resolution (ADR) in which elements of mediation and negotiaition are used in tandem - essentially mediation followed by arbitration - know dispute will be resolved - win win outcome - hope that mediation phase works because arbitration will essentially follow if it does not
Federal Preemption
- a judicially developed doctrine that recognizes the federal government's power, derived from the Supremacy Clause of the US Constitution, to control a particular area of law, either expressly or impliedly, and to take priority over state law or state attempts to regulate in a particular area
Prayer for Damahes
- a litigant's request for remedy or judgement - for instance, in Oregon, state courts require mandatory arbitration for cvil suits where this is less than $50,000, exclusing attorney fees and costs
Mediation
- a method of ADR in which parties work to forma mutually acceptable agreement - authority invested in the parites themselves who can terminate this method if it is not working - seeks a win-win compromise and is confidential - unlike negotiations, use a third party mediator who is neutral who helps the parties come to fair terms - very common in business, B2B, B2E, B2C - benefits include relative expediency fo reaching resolution, cheaper than litigation, unable to cimmunicate but can resolve dispute using nonadversarial process, rules set by mediator, private, voluntary - drawbacks include unwillingness to participate, one party liking the mediator and the other does not
Negotiation
- a method of ADR that retains power to the parties involved - often seen as a win-win ADR strategy, where both parties try to reach a mutually satisfactory outcome - no outside parties involved - benefits include potential for a speedy resolution, inexpensive nature of participation, and voluntary participation - drawbacks include there are no set rules and ither party my bargain unfairly or even unethically - tent supplier gives you wrong type of fabric - "hiccup" in regular business relationship because you will probably wish to continue doing business with them in the future- least formal type of ADR
Why is positive best?
-Being positive allows you to have more ideas and to be more creative
Arbitration
- a mothod of ADR in which parties vest authority ina third-party neutral decision maker who will hear their case and issue a decision - may be madatory if arise out of a legally binding contract involving commerce in which the parties agree to submit to this - binding and nonbinding - less formal then litigation but more expensive than negotiation and mediation - Circuit City Stores Inc. v. Adams noted that avoiding the cost of litigation was a major benefit
Reservation Point
- a party's "bottom line"
Mediator
- a person who facilitates a mediation to achieve an acceptable, voluntary agreement between parties - do not provide advice on the subject matter of the dispute - requirements vary by state - choosen by the dusputants, based on expierence, reputation, cost, traning, and avialiabilty - may lay out a mediation agreement to outline his or her role and what the parites hope to achieve
Policy
- a plan or course of action that directs or influences decisions or processes to desired outcomes or objectives
Summary Judge Trial
- a procedure similar to litigation, though the jury'd verdict is nonbinding and advisory only - it is designed to present the merits and weaknesses of each case, after which the parties seek to reach an agreement through negotiation or mediation
Uniform Arbitrition Act and Revised Uniform Arbitrition Act
- a uniform statute adopted in whole or in part by some states, which seeks to create uniformity in arbitration proceedings between states
BATNA
- acronym for the best alternative to a negotiated agreement - discussed in Getting to Yes - used by negotiators to ensure that favorable terms are not rejected and unfavorable terms are not accepted
WATNA
- acronym for worst alternative to a negotiated agreement which is a concept used by some negotiators - discussed in Getting to Yes
Nonbinding Arbitration
- an arbitration in which the arbitration award can be appealed to a court - can have dangerous outcomes - for example, in Washington, if appeal an arbitration award and lose, will have to pay your costs and the opposing parties
Binding Arbitration
- an arbitration whose outcome is binding on the parties, without possibility of appeal to the courts
Arbitration Award
- an arbitrator's decision rendered after hearing the cases presented by the parties to an arbitration - can be confirmed or converted into a judgement by a court
Ethics Hotline
- an in-house program in some companies that seeks to redress disputes and observed ethics violations before they escalate to permeate the institutional culture, damage a company's reputation, or rise to criminal or civil offenses - usually anonymous
Open-Door Policy
- an in-house program that allows company employees to go directly to any level of management to file a complaint or grievance without threat of retaliation for their reporting - open atmosphere of trust - breaks down class barriers between groups of employees - may be uncomfotable
Jamie Lee Jones
- arbitration - sent to Iraq, drugged, severley beaten and rapped - sued in civil court, so brutalized, but MUST GO TO CIVIL COURT - Halabrant (company worked for) so uncompantionate - leading advocate for Arbitration reform
Getting To Yes
- book written by members of the Harvard Program on Negotiation - goal is viewed as win-win - BATNA - WATNA - barganing zone
B2B
- business to business dispute - relatively power between businesses if they are the same size - not as focused on powerful social and ethical questions
B2E and B2C
- business to employee and business to consumer - issues of fairness often arise in these situations, particularly where parties with unequal bargaining power have entered into a contract that contains a manditory arbitration clause - weaker party has relatively no negotiating power to change clause and therefore must agree to it - credit card comapanys - much more expierenced, more money, lawyers on staff putting at huge advantage if ever were a dispute (home court) - sexual assault claims held under ADR are unfair - Tracey Barker, claim denied because under maditory arbitration clause in contract, awarded 3 mmillion dollars - Jamie Leigh Jones, gang raped in Iraq, origninally not allowed to sue because of clause by 5th Circuit Court of Appeals ruled the case may in fact be brough to court because nothing in employment contract about rape, law trying to be passed - Public Citizen, argues in B2C cases that arbitration is unfair to consumers and litigation is more fair
Talking About Interests
- chance of serving interests improves when communicate them (be specific) - acknowledge their interests & frame as part of the problem your trying to solve - put the problem before your answer: interests & reasoning before concl & proposal - look forward not back: talk about where want to go not what's happened in past - be concrete but flexibly: hv specific options that meet your criteria but be flexble - be hard on the problem, soft on the ppl
Insist On Using Objective Criteria
- deciding on basis of will is costly, use objective criteria - case for objective criteria: principled negotiation produce wise agreements amicably & efficiently: less relationship threat, quicker sol - developing objective criteria - fair standards: need to be independent of each side's will, legitimate & practice. Must apply to both sides - fair procedures: e.g. cake cutting - one cuts & other chooses (biz e.g. mining companies vs. Enterprise), agree visiting rights pre custody battle
Negotiation Jujitsu
- do not push back if criticise/reject principled negotiation - attacks normally manifest in 3 ways i. asserting position forcefully ii. attack your ideas iii. attacking you
Alternative Dispute Resolution
- encompasses many different methods of dispute resolution other than litigation or trial - outside of judicial process for most cases but others may require a formal judgement - negotiation, meditation, and arbitration - resolve disputes B2B, B2E, B2C - faster, less expensive, and more private
Ombudsmen
- generally hear complaints from stakeholders, such as employees or customers - in-house intermediary or office in which disputes or grievances against a company can be brought - investigate grievances and work with parties to resolve disputes
Conforming Goods
- goods that conform to the buyer's order - correct
Nonconforming Goods
- goods that do not conform to the buyer's oder - under the Uniform Commerical Code (UCC), non conforming goods can be rejected by the buyer - supplier may have given you this tyoe of goods, such as non water resistent fabric when you indeed wanted the opposite - may reject these goods if not up to standards
Any method of negotiation may be fairly judged by 3 criteria:
- it should produce a wise agreement if agreement is possible - it should be efficient - it should improve or at least not damage the relationship
Waffle House and EEOC
- man worked as cook at Waffle House - had seizures and was fired - had a disability, very unfair - cant go to trial, must go to arbitration - EEOC= equal employment act - man went to them, because of disabilities - EEOC agreed to sue them, they had never signed a contract and can do what want under the law - ended up winning
Cauceses
- mediation - gives the party the run down - pulls one party aside and explains whats happening
Private Judging
- process allows judges to hire out privatelt, to conduct private trials, and to reach a rapid resolutioon overseen by an experienced judge - essentially private litigation - just is expierenced, expert - benefit huge benefit if can afford this, more private - drawbacks include the sometimes questionable nature of enforceability of the judgements rendered
Confirmation
- process by which a court converts an arbitriation award int a judgement
Minitrial
- similar to mediation and arbitration, where parties present their case to a panel of decision makers who are involved in the dispute (like mediation) and then work with mediators or other neutral decison makers to reach an agreement
Barganing Power
- the relative power of a party with respect to another party or parties that influences abilities to set agendas, influence outcomes, and negotiate terms during bargaining - party with weakest power is very vulnerable
How does the alternative model differ from the traditional approach?
- this feminists model shifts the emphasis in conflict negotiation from one tat values exchange, problem solving, and rationality to one that considers considers, collaboration, dialogue, and emotion
Problems With Bargaining Over Positions: Inefficient
- time: take extreme position & hold giving small concessions despite true feelings - effort: many small decisions need to be made on each concessions
Unequal Bargaining Power
- when parties possess different power relative to each other, and this difference creates opportunities or obsticales with respect to setting agendas, influencing outcomes, and negotiating terms during. - when supplier and retailer are both small business that depend on each other, they both have relatively the same power - however if tent supplier is a huge company that sells to many retailers, they have much more power - Wal Mart and Rubbermaid, Rubber maid increased prices and Wal Mart didnt want to pay them; nded badly for Rubber Maid because Wal Mart did not depend on them but Rubber Maid did
Arbitration Fairness Act of 2009 (AFA)
- would invalidate mandatory arbitration clauses in employment and consumer disputes, as well as in disputes arising from civil rights violations
All of your speech during the talks should have what?
-A purpose
Systems Rules
-A rule is a followable prescription that indicates what behavior is obligated, preferred, or prohibited in certain contexts. -Rules are the way things are done -Some rules are not stated outright (implicit), but we all follow them -Sometimes the rules are discussed (explicit) and we all agree to follow them because they are important to the survival of the relationship -Analysis: Come up with a list of rule the characters seem to follow. -can come up with new rules for conflict to follow to resolve
What should you base relationships on?
-Accurate perceptions -Clear comms -Forward looking outlook
What should you base a relationship on?
-Accurate perceptions -Clear communication -Appropriate emotions -A forward looking outlook
What If They Are More Powerful?
-Benefits: a) protects you vs. making agreement you shouldn't b) help you make the most of assets you do hv
Benefits of Good BATNA
-Better BATNA => greater power e.g. salary negotiations w/ a job offer
What is the people problem known as perception? How do we deal with it?
-Both parties may agree as to the facts but disagree on the preferred outcome -Have to be able to see the situation as the other side sees it
You should never yield to any pressure, what are some examples of pressure?
-Bribes -Threats -Stubbornness
An increase in the availability of money would lead to which effect?
Interest rates would go down
If you believe the other side is engaging in escalating authority, what should you do?
-Clarify the decision making process for the other side EARLY -If you have not done this say it sounds like you cannot make a final choice on this perhaps I should talk to the person who can
Examples of fair procedures?
-Coin flips -Taking turns -Letting a 3rd party decide
What are the three categories of interests?
-Compatible -Shared -Conflicting
What type of interests should you focus on?
-Compatible intersts
What most you do in terms of your emotions?
-Control your emotions!!!
What must you do in terms of your emotions?
-Control your emotions!!!
What should you do if the other side begins to get emotional or if someone on the other side has an emotional outbursts?
-DO NOT react
How should you deal with the relationship with the other side when you two are speaking?
-Deal with it as a separate consideration
What are some characteristics of principled negotiation?
-Decide issues on their merits -Look for mutual gains -Where interests conflict use fair standards to obtain a result -Can be used whether one issue or several
What should you do if you feel an attack coming in terms of defending yourself?
-Do not defend your ideas!!!! -Invite criticism and advice
What do you do in good guy bad guy?
-Don not make any concessions -Ignore the ploy and focus on mutual benefits of the potential agreement -Or literally call it out and say "I didn't know anyone still used the good cop bad cop routine" -Flip it back on them "You two don't seem to be on the same page let's take a 10 min break"
What if they are using deliberate deception, what should you do?
-Don't trust them -Check facts and assertions
Main points of getting to yes
-Dont bargain over positions -Separate the people from the problem -Focus on Interests, not positions -Invent Options for Mutual Gain -Insist on Using Objective Criteria -BATNA
What exactly are interests
-Each sides needs, desires, concerns, and fears
When we treat the people and the problem as the same person what often gets involved?
-Egos
Objective Criteria needs to be what 4 things?
-Fair standards -Fair procedures -Criteria needs to be independent of each sides will -Needs to be both legitimate and practical
When one is angry in a negotiation what often happens?
-Few good trade offs happen and this causes the least value in terms of the negotiation
Although you should be concrete in terms of what you want to happen, what else must you be?
-Flexible
Two dimensions of conflict style & types
-Focus on own agenda/focus on other's agenda -Focus on relationship or not focusing on relationship Directing, Harmonizing, Accommodating, Cooperating, Compromising
Sometimes a perfect win win solution is not available at the time of a negation so a partial solution may be agreed upon, what can successful partial solutions build?
-Form the basis for more comprehensive solutions down the road
What if you have questionable doubts about the other side, what should you do?
-Make your doubts known -Negotiate assurances in the agreement
What do you need to do about your perceptions?
-Manage them!
Examples of fair standards
-Market value -Precedent -Sci judgments -Equal treatment
Principled Negotiation
-Midway of soft and hard -negotiates based on principles which generally leads to better outcomes -"win win"
What are some issues that arise when trying to communicate with the other side?
-May not understand each other -May not fully listen to each other
How do you look for mutual gains?
-Identify shared interest
What should you do as soon as possible in terms of the other sides interest?
-Identify them
What is the second step in creating your BATNA?
-Improve some of the more promising ideas and convert them into practical alternatives
Should you focus on interests or positions?
-Interests
Focus on interests, not positions
-Interests are really your needs: what really matters to you. -Positions are the stance that you take on an issue -Be flexible and open to suggestions and acknowledge their interests -Be rational in your own proposals
What is the first step in creating your BATNA
-Invent a list of actions you might take if no agreement is reached
Assumptions about Competitive Negotiations
-Is a win/lose orientation -Often called a fixed pie mentality or a zero-sum mentality -Parties have an bargaining range they won't go beyond -Distributive bargainers are not concerned about a future relationship with the other party. -Limited resources exist -One can make independent choices because tomorrow's decisions have no influence on today's. -You want to win as much as you can, particularly more than the other side
Why is deciding based on strength of will bad?
-It is too costly to the relationship -Someone will eventually have to back down and this is bad cause it causes a loss of face and that leads to irrational choices
How can a working relationship with the other side be good?
-Less chance for miscommunication -More openness -More trust between each side
How to you avoid these problems with communication (4)?
-Listen actively and acknowledge what is being said -Speak to be understood -Speak about yourself not them -Speak for a purpose
How should you listen to the other side?
-Listen to them actively and acknowledge (repeat what they say.... this makes them feel as if you are truly listening)
How do you look for mutual gain?
-Look at your shared interest and make use of them
How do you show the other side you are listening?
-Look attentive -Use positive paraphrasing
What should you do if you feel an attack coming in terms of interests?
-Look behind their attack for motivating interests
In order to broaden your options what can you do?
-Look for help from a variety of experts -Invent agreements of different strengths -Change the scope of a proposed agreement -Multiply your options
How do you make sure to separate inventing from deciding?
-Make sure you invent options first and then decided which ones are best
How should you react to their interests?
-Make sure you show concern for their interests
What defines a problem, interest or positions?
Interests
Communication Patterns of Competitive Negotiations (AKA how to identify a competitive negotiator)
-Oftentimes parties will withhold (or even hide) information and data so their opponent can't predict what they will ask for next. -Will make high or extreme opening demands and then concede slowly. -Try to maximize tangible resources (and gains) for themselves -Exaggerate the value of concessions that are offered -Will sometimes use threats, confrontation, argumentation, and forceful speech -Orientated to quantitative and competitive goals rather than relational goals.
Most importantly what are negotiators?
-People
What is the most common style of negotiation and what is wrong with it?
-Positional bargaining: Each side takes a position and argues for it and makes concessions to reach a compromise -It locks people into their position and egos become involved -Takes a lot of time and effort -Becomes a contest of wills
What three things can you do if the other side will not play?
-Principled negotation -Counter with negotiation jujitsu -Introduce a 3rd party
What if they are have unclear authority (making you think they have power to decide but do not), what should you do?
-Prior to beginning the talks make sure to ask them how much authority they have to make the decisions
Instead of bargaining over positions what should you do what three things?
-Produce wise agreements -Be efficient -Improve relationships
Advantages of Mediation
-Promotes a mutual stake in the resolution because it relies on active negotiation and involvement -The solutions are usually more integrative and creative, giving parties power to generate new solutions -Mediation is cheaper than most other solutions
What if the other side is more powerful, what should you do?
-Protect yourself from making a bad decision -Make the most of your assets
If you feel pressure what must you do?
-Question the process, look for objective criteria -Remember that you have a BATNA
What should do with the attacks on you?
-Reframe them as attacks on the problem
What type of table is the best for win/win negotiations and why?
-Round table -Shape is associated with equality
What are the two things a negotiator wants out of an agreement?
-Satisfy his substantive needs -Foster valued relationship with the other side
How should you search for objective criteria?
-Search for it together
What is the final step in creating your BATNA?
-Select tentatively the one alternative that seems best
What are four ways one can invent creative options?
-Separate the act of inventing options from the act of judging them -Broaden the options on the table rather than look for a single answer -Search for mutual gains -Invent ways of making their decision easy
What time of emotions should your face show during a negotiation?
-Should have on a calm and happy face
What type of emotions should your face show during a negotiation?
-Should have on a calm and happy face
If you smile, your smile is often reciprocated by the other side... what to they usually do?
-Show positive feelings and behaviors -This often leads to finding good trade offs and offering concessions
Who should you speak about during the talks?
-Speak about yourself not them
What does each side often do in positional bargaining in terms of the first offer?
-Start with extreme positions (try to hold onto them and make only small changes to keep talks going)
What are some examples of psych warfare?
-Stressful situation -Personal attacks -Good cop bad cop -Threats
What types of gestures should you use?
-Symbolic gestures
What is the best emotional strategy to use? A poker face? Positive? Tough (negiative, angry, and forceful)?
-The best is to simply be positive
Why must you make sure your communication is CLEAR?
-The other side may misinterpret the words you use
What are the two things you should really be interested in, the two basic interest in a negotiation?
-The substance and the relationship
What must you remember about fairness?
-Their is multiple criteria for fairness
Why are principled negotiations efficient?
-There is not time wasted, if you tested each others will there would be time wasted
Principled negotiations are less hostile than testing each others will, why is this good?
-There is simply no need to get angry -Both sides are looking for objective data
How is conflict like water?
-Too much: bad (flood) -Too little: bad (drout)
In terms of where you sit for the talks what should you do?
-Try sitting on the same side of the table, this makes it seem like both sides are working kind of on the same team, you are both trying to fix the problem
What should you focus on instead of positions?
-You should focus on interests
If the other side is more powerful what do you use to protect yourself?
-You use your BATNA as it helps you make the most of your assets
What should you measure all your offers against?
-Your BATNA
Make solving the other sides problem your what?
-Your problem
Relationship-based power
-access to or control over information, resources supply flows, or access, derived from location within flows in a network
Forgiveness and Reconciliation are not the same...
-can forgive someone, to let things go, without continuing with the relationship -reconciliation means an attempt to continue to relationship
Keys to Generating better alternatives
-challenge constraints -set high aspirations -do your own thinking first -ask others for suggestions -create alternatives first, evaluate later -give your subconscious time to operate
A soft negotiator emphasizes
-emphasizes the importance of building and maintaining a relationship ... preserving the relationship & separating people from the problem; compromise -wants to avoid personal conflict and so makes concessions readily in order to reach agreement. He -wants an amicable resolution; yet he often ends up exploited and feeling bitter.
Separate the people from the problem
-focusing on "what" is the problem rather than "who" -recognizes that we are often emotionally tied to the issues -a clear and open discussion about needs, perceptions, values, and the communication process must be involved so we can build a trusting relationship
Integrative bargaining
-long term goals(relationship) -perceived compatible goals -focus on underlying interests -emphasis on intangibles -trust, openness and perceived strength •Expand the pie •The more you create, the less you need to claim to do well •Creating value •How do we create value? •Great potential - less predictable
Distributive Bargaining
-short term goals -perceived incompatible goals -focus on power/rights negotiations -emphasis on tangibles -mistrust, suspicion, defensiveness and perceived weakness •Fixed pie •Predictable Outcomes •Claiming value •How do we claim value?
perception
-there thinking is the problem -overcome by putting yourself in their shoes -dont blame them for your problem -dont deduce their intentions from your fears -discuss each other's perceptions -Save face by making their proposal consistent with their values
emotion
-understand yours and their emotions -allow people to let of steam & dont react to outbursts
12 Negotiation factors 1. the # of parties
-with multiple parties you can have coalition formation - sea negotiations e.x.
Common pitfalls of Alternatives
-you can never choose an alternative you have not considered -common pitfalls (business as usual, incrementalizing, default alternatives, first possible solution, choosing among alternatives presented by others)
"Negotiating Power" Relative power of each side is dependent on one question:
...
Reason and be open to reason. Reason is your friend •Almost everybody wants to appear reasonable. •Humility is the key virtue •Consider that you might be wrong and show you're open to persuasion
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TALENT=POWER
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^what does it sound like(reason) •"I have not yet reached a final decision and I'm open to persuasion." •"Why don't we study the matter and talk again?" •"Would you agree that ____ is reasonable?"
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what are the 5 conflict styles?
1) Avoidance - Low focus on Other's concerns and Own Concerns 2) Accomodation - High Focus on Other's Concerns - Low Focus on Own Concern's 3) Compromise - Moderate Focus on Other's Concerns & Own Concerns 4) Competition - High focus on Own Concerns - Low Focus on Other's Concerns 5) Collaboration - High Focus on Own and Other's Concerns
Which Conflict Styles are the Distributive/Integrative Approach Related to?
1) Distributive: - Competing - Contending i.) go out to defeat other person 2) Integrative - collaboration or problem solving 3) For both: - neither are similar to avoidance or accomodation - can both end up in compromise
Normative Model of Conflict Phases: - Escalation and avoidance cycles versus - middle ground, integrative route
1) Escalation: going through cycles of escalation - e.g., begin with shouting, then fighting during next conflict - very negative - can lead to situations in which conflict spirals out of control - occur because of INTERPERSONAL REFLEX (people method of interpersonal interaction) i.) you match negative with negative responses and positive with positive responses 2) Avoidance Cycles: people are avi - sometimes both parties avoid, sometimes one all with the hope of keeping the conflict into the open--> conflict never addressed and it festers - underlying problem still there--> problems in the future 3) Middle (confrontative) Ground: both addressing conflict and keeping it from spiraling out of control (+ from a normative perspective)
Dimensions underlying the classification (figure 9.1) 1) Latent
1) Grounds for conflict exist because parties are interacting in Interdependent relationships in which incompatible goals are possible
Definition of conflict (3 I's)
1) Interaction 2) Interdependence 3) Incompatible goals - The Interaction of interdependent parties who perceive incompatible goals and interference from each other in achieving those goals
Generating possible BATNAS requires what
1) Inventing a list of actions you might conceivably 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.
How do you know it's objective?
1) Is it independent of each party's will? 2) Does it apply equally to both parties (the test of reciprocal application)? 3) Is it supported by a legitimate theory?
Third Parties: Managerial third-party conflict resolution roles
1) Mediator - doesn't control or have any direct influence over outcome - can influence process by which 2 parties reach a decision - very common in legal system - ultimate goal is to find a solution that is good for all parties 2) Arbitrator - has power to make decision themselves - they work with 2 parties, then either gives ruling/decision or try to get the parties to solve it themselves but if they can't the arbitrator makes the final decision - a common type: managers - very common in sports
Name 3 of the 6 "Practical" principles of systems theory (Papp, Silverstein and Carter, 1973)
1. Cooperation is necessary among system members to keep conflict going 2. Triangles tend to form in systems 3. The conflict serves the system in some way
Third Parties: Process for third party intervention (5)
1) Orientation - get the facts of the conflict in order 2) Background - do some research possibly 3) issue processing - getting parties to tell their story (from both sides) - may write interests and goals of individuals 4) Problem Solving - define goals, generate option, evaluate--> 5) Resolution - get parties together, determine a solution - think about ways to enforce decision - have something formal that finalizes the decision and signifying that parties are expected to live by this decision
4 Major obstacles that inhibit the inventing of abundant options
1) Premature judgement 2) Searching for the single answer 3) the assumption of a fixed pie 4) thinking that "solving their problem is their problem"
To invent reactive options you need to:
1) Separate the act of inventing options from the act of judging them 2) to broaden the options on the table rather than look for a single answer 3) to search for mutual gain 4) invent ways to make decisions more easily
A positive approach to negotiation: Principles of Effective negotiation (5)
1) Separate the people from the problem - avoid focusing on another person, focus on the problem in front of you 2) Focus on interests, not positions - e.g., don't say "i need this amount of money" instead say "I specifically need to do this for my car" 3) Invent options for mutual gain - important to generate a wide variety of options with the other person, get them involved--> they buy into it more, and have more of a cooperative relationship 4) Insist on fair, objective criteria for determining which options should be selected - you should not argue for options based on preference, but rather have objective evidence - e.g., search on google for evidence about which of the options work best (as opposed to personal preference 5) Have a BATNA (best alternative to a negotiated agreement) - this is your alternative if your first negotiation does not work - this provides a way to avoid being pressured into something you do not want
Competition Management Style: - Variations - Benefits - Disadvantages
1) Variations - Contending - Winner take all competition - Passive Agressive 2) Benefits - Own Needs met - Quick - Decisive 3) Disadvantages - Damage to future relationship - Becomes Habitual
Avoidance Management Style: - Variations - Benefits - Disadvantages
1) Variations: - Protecting - Withdrawing - Smoothing 2) Benefits: + When need to calm down (temporary response) + When you are in a position of weakness + May help you save face 3) Disadvantages: - Low levels of satisfaction - Others perceive you as weak or unresponsive
Ask Reality Testing Questions
1) What do you think will happen if you do not have an agreement? 2) What do you think I will do if we do not have an agreement? a) What do you think I will do to protect my interest? i) If your opponent has threatened you, ask how you think you wil responde ii) Use questions to show that you are not as vulnerable to his threats and that you can use your logic to gauge the conversation 3) What will your opponent do if there is no agreement? a) How much will it cost you? b) How will it satisfy your agreements?
"Five steps" to find your objectives?
1) Write down all concerns you hope to address with your decision 2) Convert to succinct objectives -cluster combine when appropriate 3) Separate ends from means 4) Clarify what you mean by each objective 5) Choose the ones that are useful to you
4 Strategies for making concessions
1) label your concessions *rules to labeling - let it be known what you have given up is costly to you(this lets the other party know a concession was in fact made) -Emphasize the benefits to the other side -don't give up your original demands to hastily 2) demand and define reciprocity Let the other party know you have made a Concession, and tactfully demand reciprocity. Identify what concession you need in exchange for the one you made 3) make contingent concessions We can provide additional support but only if you agree to purchase some of the following additional services," or, "This is literally the best we can do on price right now. But if you can adjust some of your demands, we might be able to reopen the price issue." 4) make concessions in installments Instead of covering the difference demanded on a house at once ie:40,000 first make a concession of 30,000 then 10,000. Sometimes the first concession will even be enough!
Major obstacle that inhibits the inventing of an abundance of options
1) premature judgment; (2) searching for the single answer; (3) the assumption of a fixed pie; and (4) thinking that "solving their problem is their problem." In order to overcome these constraints, you need to understand them.
Criticisms of conflict styles (4)
1) the grid approach downplays the extent to which individuals change their tactics during interaction with others in conflict situations 2) the 2 dimensional nature: issues other than concern for others and concern for self may influence a conflict interaction 3) conflict styles has downplayed the important roles that non-verbal and non-rational communication might play in conflict management 4) role of the organizational setting is ignored
Uses of edcuating your opponent
1. Avoid arbitrary deadlines(if you use a deadline, do not take the offer off the table, leave it there) 2. Demonstrate your BATNA 3. Third Party's can be a deterrent 4. Build dispute resolution procedure if there are any problems with the agreement 5. Re-affirm the relationship after the agreement has been reached
Determine Opening Offer
1. Dependent on other party's expectations and leverage factors • If other party expectations are realistic.... • If they are not realistic -> he must have a realistic view of items; of what you are willing to pay; overly optimistic view of third parties will pay of the 2. Make clear that you have limits if he has unrealistic expectations. 3. Leverage(Necessity; Desire; Competition;Time) 4. Let your strengths be known and poker face your weaknesses 5. Try to gauge other party's strength's and weaknesses 6. Discern whether other party's strength/weakenss are realistic • If party thinks he is strong->educate them • If party thinks he is weak-> don't say anything 7. Treat other side with respect/be courteous/ don't be arrogant or glot 8. Express a rationale for your decision • If you have a counter offer, have a reasoning for that counter 9. Do not insist on total victor, leave something on the table • Ex: Silverberg's Friend who was a buyer at NY market ➢ Betting a $1000 margin by flipping a coin, they did this for 35 years prior ➢ Because of Katrina, they could not flip a coin in person. SO that they flipped a coin over the phone
Elements of Interest-based negotiations
1. Determine Parties Interest 2. Generate Options 3. Use objective standards where party's interest direct conflict 4. Separate people from problem 5. Promote two-way communication 6. Determine BATNA
Gameplan for Competitive Negotiaions
1. Determine Realistic Expectations 2. Determine Opening Offer 3. Determine who give 1st on offer 3. Manage your offers/counteroffers
Gameplan for Competitive Negotiations
1. Determine realistic expectations; 2. Determine Starting Point ; 3. who gives 1st on offer; 4. managing your offers and counteroffers
Ways to negotiate the process when interrupted with tactics
1. Discuss the fairness of a tactic Ex. Japanese Baseball player viewd the pitches as an opportunity for the batter
What happens if you are in a disadvantage
1. Don't lose your head 2. Play damage control ➢ Try to get limited objective that are achievable ➢ Choose amongst these from the circumstances and stress it ➢ DO not attack at the other party ➢ DO NOT make requests in a weak/apologetic tone ➢ Appeal to Reason and Logic ➢ Where the party displays "naked power"-> do not walk out and keep your focus on your goals and control your emotions ➢ Kepp your focus on solutions ➢ If negative and positive factors go your way-> do not obsess over positive factors ➢ If negative factors do not go your way-> do not paralyze yourself •
Developing objective criteria
1. Fair standards - applies to both sides 2. Fair procedures - produce an outcome independent of will Example: divide a piece of cake between two children: one cuts and the other chooses. Neither can complain about an unfair division.
What 5 suggestions do the authors of the text give for dealing with the emotions.
1. First recognize their and your emotions 2. Make emotions explicit and acknowledge them as legitimate 3. Allow the other side to let off steam 4. Don't react to emotional outbursts 5. Use symbolic gestures
Use objective standards to come up with solutions
1. Focus the ob objective standard to get to a fair price instead of an arbitrary figure 2. See that more than one objective standard is available • Car accident • Comparable sales of same model/year • Kelly blue book • Depreciation price • Replacement cost • What a court migh award the value 3. Apply the objective standard to both sides 4. Try to get the other side to agree on an objective standard. • It is easier for a party to accept an objective standard than concede • Ex: a party wants to use Fair Market Value vs. Other party uses Appraisal Value • Therefore, find objective basis of using the standard ➢ How has the standard been used ➢ If both are legitimate->negotiate and resolve to split the difference or consider other factors/invite 3d party 5. Do not Yield to Pressure • Threats, bribes, manipulation, refusal to budge • Ask: how did party come up with that figure ➢ Refuse to budge except on the basis of that standard. You can either take it or leave it(but compare by accepting BATNA)
When negotiating with objective criteria it is important to remember three basic points; list two of the three points to remember.
1. Frame each issue as a joint search for objective criteria 2. Reason and be open to reason 3. Never yield to pressure
Seven steps to develop international advertising
1. Perform Marketing Research 2. Specify the goals of the communication 3. Develop the most effective messages for the market segments 4. Select effective media 5. Compose and secure a budget 6. Execute the campaign 7. Evaluate the campaign relative to its goals
[Your Answer to number 1] presumes the following 4 assumptions.
1. Persons engage in the conflict rather thank avoid 2. Parties resist using power-over tactics 3. People use persuasive communication 4. Parties have reached an active problem solving phase
1. What are three of the four major obstacles that inhibit the inventing of an abundance of options?
1. Premature judgment 2. Searching for the single answer 3. The assumption of a fixed pie
What are the four steps in the circle chart?
1. Problem 2. Analysis 3. Approaches 4. Action Ideas
What are the three criteria for judging a negotiation fairly?
1. Produce a wise agreement 2. Efficient 3. Improve relationships between parties
Negotiation Success (3)
1. Produce wise agreement 2. Be efficient 3. Improve relationships
Four steps that lead to more efficient international negotiations
1. Selection of appropriate negotiation team 2. Management of preliminaries 3. Management of the process of negotiations 4. Appropriate follow up
What are the four principles of "principled negotiation"?
1. Separate the people from the problem 2. Focus on interests 3. Generate a variety of possibilities before deciding what to do 4. Insist that the result be based on some objective standard
Interests of Negotiators
1. Substance: wants to reach agreement that satisfies substantive interests 2. Relationship: turn into regular customer, maintain working relationship * Be sure to separate the relationship from substance
What are two of the three points of shared interests that are worth remembering?
1. There are always shared interests 2. They are opportunities 3. Stress your shared interests
Name 3 types of marriages described by Cuber and Haroff (1955). And two elements that determine the different types of couples described by Rands and Levinger (1981)
1. Vital Relationships 2. Total marriages 3. Devitalized Marriages 1. Intimate-aggressive 2. Intimate-nonaggressive
Negotiation checklist 3. getting to yes
1. focus on interest not on position -want Jerusalem because it is where all three religions began - craft a solution that gives all sides their religious interest 2. invent options 3. negotiation has to have objective standard criteria 4. separate people from the problem -disrupt stereotypes --see each other as individuals -realistic empathy -- seeing problem from others point of view
tips on negotiation
1. know yourself and know your opinion -who has leverage -keep track of BATNA -Better alternative negotiated agreement - your BATNA determines your life 2. Always remember that a negotiation is a dance - reciprocating disclosures 3. avoid the dollar auction - e.x. nuclear arms race
Know and be able to explain each of the four stages through business negotiations proceed
1.) Nontask sounding - includes all those activities that might be described as establishing a rapport or getting to know one another, but it does not include information related to the "business" of the meeting. 2.) Task related exchange of information- regards the parties' needs and preferences 3.) Persuasion- involves the parties' attempts to modify one another's needs and preferences through the use of various persuasive tactics 4.) Concessions and agreement- involves the consummation of an agreement, which is often the summation of a series of concessions or smaller agreements.
Know and be able to explain the four values that are strongly and deeply held by most Americans and that seem to frequently cause misunderstandings and bad feelings in international business
1.) Objectivity 2.) Competitiveness 3.) Equality 4.) Punctuality
Know the four steps that lead to more efficient and effective international business negotiations.
1.) Selection of the appropriate negotiation team 2.) Management of preliminaries 3.) Management of the process of negotiations (what happens at the negotiation table) 4.) Appropriate follow-up procedures and practices
BATNA traits
1.Determine your BATNA ---Course of action in absence of a deal 2. Reserve Price ---This is your walk away price 3. Zone of Possible Agreement ---The range in which a deal can take place 4. Value creation through trade ---Negotiating parties can improve their position by trading the values at their disposal
How do I insist on using objective criteria?
1.Frame each issue as a joint search for objective criteria. 2.Reason and be open to reason. 3.Never yield to pressure—refocus their pressure toward finding a solution using an objective criteria
Lists 4 of the 5 principles on the Collaboration Checklist.
1.Join with the other 2. Control the process, not the person 3. Use principles of productive communication 4. Be firm in your goals and flexible in your means
Mistaken views of negotiating power
1.Physical Force = Negotiating Power 2.Start adversarial...you can always go soft later 3.Creating a false impression in the minds of others (bluffing, deceit, misrepresentation)
Sources of negotiating power
1.The Power of Talent 2.The Power of Relationships 3.The Power of Alternatives 4.The Power of Preparation 5.The Power of Legitimacy 6.The Power of Ideas 7.The Power of Persistence 8.Control Over Resources 9.The Power of Time 10.A Seat at the Table
What are the four key points of principled negotiation?
1: Separate the people from the problem 2: Focus on interests, not positions 3: Generate a number of possibilities before decided what to do... invent this options for mutual gain 4: Insist that the result be based on some objectives standard
3 points about shared interests that are worth remembering
1: Shared interests lie latent in every negotiation 2: Shared interests are opportunities not godsends 3: Stressing shared interests can make the negotiation smoother and more amicable
3 Options for Altering Conflict
1: Try to change the other party 2: Try to alter the conflict conditions 3: Change your own communication and/or perceptions
What are five major problems with bargaining over positions?
1: Unwise agreements (locks you into a position) 2: Inefficient (takes a lot of time and effort) 3: Endangers relationships 4: Harder the more people that get involved 5: Being nice is not the answer in this type of negotiation as hard beats soft
3 criteria for judging a negotiation fairly
1: produce a wise agreement if possible 2: Efficient 3: Improve not damage relationship
What four steps can you take to multiply your options?
1: think of problem you dislike 2: Diagnose causes of problem 3: What ought to be done? 4: Specific and actionable suggestions to resolve
Conflict and Emotion
1:Triggering events that result in conflict are emotional in nature 2: Intesnsity of emotion varies through the conflict process 3: We experience emotion as good or bad, positive or negative, pleasant or unpleasant, and helpful or destructive 4: We become emotional because something is at stake for us (our identity) 5: Emotional communication helps define a relationship, and relationships are defined by the kind of emotion expressed
Steps for determining the parties interest
1st Step, "Ask?" If the person will not say why?: "Why don't you do what other person is asking?" ➢ Some interests conflict with each other ➢ Sometimes the interests are the same • Sometimes the interests do not conflict, they are just different 2nd Step determine the Most important needs • Financial Security • Physical Security • Sense of belonging • Recognition • People want to control their own life • Ex: Wife wanting a divorce • Wants $5000/month • You ask why: financial security, control over my life etc. ➢ Some parties will tell you their interests Sometimes they will conceal their interests Sometimes party does not know their own interests ➢ It must be conveyed to other party ➢ If you want somebody to listen to You, listen to them first
Dimensions underlying the classification (figure 9.1) 2) Perceived
2) One or more parties perceive that their situation is characterized by incompatibility and interdependence
Dimensions underlying the classification (figure 9.1) 3) Felt
3) Parties begin to personalize perceived conflict by focusing on the conflict issue and planning conflict management strategies
A real estate licensee has a buyer agency agreement. What is the seller in this situation?
A Customer
A borrower bought a $74,000 house with no down payment. The loan was probably:
A VA loan VA loans are zero-down instruments, while FHA loans permit low down payments in the 5% range.
Integrative Negotiation
A collaborative approach to negotiation that is based on a win-win assumption, whereby the parties want to come up with a creative solution that benefits both sides of the conflict.
What is negotiation?
A formalized mode of conflit management involving exchanged of offers within the framework of shared rules to reach joint setlements
Focus group
A group acting as a mock jury; attorneys present cases to such a group to get the members' feedback on the merits of the various arguments presented
What is a "clique"?
A group of people who band together by virtue of common factors (age, gender, ethnicity, etc.) can be bad when used in negative conspiratorial ways
Positional bargaining
A method of negotiation that focuses on the parties exchanging offers, with concessions being made so that parties find a middle ground. The seller refers to the last offer made as its bottom line, and the buyer refers to the last offer made as its top dollar.
Principled, interest-based, negotiations
A method of negotiation that focuses on the parties' interests as opposed to positions. The language used to describe this bargaining includes options, alternatives, objective criteria, and relationships.
Voluntary arbitration
A method of resolving a dispute, as an alternative to litigation, that the parties agree to utilize. This agreement may be made before or after a dispute arises.
Most negotiations take place between two sides that likely have a what type of relationship?
A ongoing relationship
De novo judicial review
A proceeding wherein the judge or hearing officer hears the case as if it had not been heard before.
Reconciliation
A process of repairing and reestablishing a relationship, settling differences so that animosity and distrust are overcome.
Separate the People From the Problem
Negotiators are emotional people first
Which of the following is true of income earned by separate property in Texas?
A) All earnings from community property and seperate property are presumed to be community property. (Correct) B) The income is considered seperate property. C) The income is not subject to taxes. D) Half of the income is presumed to be community property, while the other half of the income is considered seperate property.
Forms specific to the nature of a wide variety of real estate transactions are promulgated through the Texas Real Estate Commission and must be used in all but a few circumstances. All of the following scenarios EXCEPT which one represent circumstances exempt from the use of TREC promulgated forms?
A) Barnhart licensee Lisa Weimereinner is acting as a principal in the sale of her townhouse. B) Licensee Yon Gutierrez is facilitating a sale of government property for which the government entity requires its own form. C) Millicent Kelly, a homeowner offering property for sale by owner, requires the use of a form prepared by her attorney. D) Orlon Smith, a licensee, is assisting the Murnans in arranging to move into their new house two weeks before the closing. (Correct)
Which best describes why a buyer purchases a home using the market data approach?
A) Buyers buy on impulse B) Buyers buy based on how much income can be derived from other property C) Buyers buy after they compare the house with others (Correct) D) Buyers buy based on current construction costs
A broker can communicate to clients the availability of a trust to pay damages to aggrieved persons in which of the following ways?
A) By informing them verbally at first substantive contact B) Through writing via a receipt for professional services, a sign posted in the licensee's place of business, or on a brochure distributed by the licensee (Correct) C) In writing when a client makes a formal grievance complaint to the broker D) By directing them to the web site of the Texas Real Estate Commission
Which of the following is NOT true of the educational requirements a candidate for licensure must meet?
A) Candidates must complete coursework that includes, at a minimum, courses in promulgated contracts (including use of current forms) and residential inspection (including an overview of electromechanical systems and structures). B) Upon completion of the required number of hours of attendance at the prescribed courses, the candidate must pass a final course examination, either written or electronic, before the candidate can be considered to have passed the course. C) Course credits awarded by an accredited college or university for life experience or by examination are acceptable in lieu of core real estate courses. (Correct) D) Any course offered by alternative delivery methods such as correspondence or computer delivery, must teach to mastery as prescribed by the commission and follow curriculum development guidelines outlined by the commission.
Which of the following is true of a second mortgage?
A) It has priority over a first mortgage B) It cannot be used as a security instrument C) It is not negotiable D) It is usually issued at a higher rate of interest (Correct)
Adam Zappa engages CharTipton of Yellow Rose Realty to list his property in Del Rio. After Char provides a market analysis to determine the estimated value of Adam's house, they decide on a listing price of $117,000 and Adam gives Char an exclusive right to sell. Adam confides to Char that he would be happy to get $115,000 since he bought the property for $95,000 three years earlier. Which of the following actions must Char take?
A) Char must disclose Adam's willingness to accept $115,000 to the broker of any prospective buyer. B) Char must list the purchase price in all advertisements as "$117,000 but willing to negotiate." C) Char must refuse any offers below the asking price in an effort to protect the best interests of her client. D) Char must keep Adam's disclosure confidential. (Correct)
Bill Thierauf is a licensee in Mesquite. Although he is an outgoing and engaging man known for setting clients at ease and smoothing ruffled feathers, he makes constant substantive errors in anything involving mathematical calculations. After a client won a $15,000 award from the recovery fund due to Bill's incompetence, Bill is facing certain discipline. Which of the following options would NOT be available to the commission in pursuing disciplinary action?
A) Charge Bill with a class A misdemeanor for negligence (Correct) B) Revoke Bill's license until he has remitted the full cost of the $15,000 award paid out of the trust account, plus interest at a legal rate C) Limit the scope of Bill's practice to the marketing and showing of properties, ensuring that he doesn't have the opportunity to make any more costly mathematical errors D) Require Bill to report regularly to the commission during a period of probation
Which of the following is considered a conventional loan?
A) FHA insured B) VA guaranteed C) commercial bank's ARM loan (Correct) D) contract for deed
Connie Hart is a licensed real estate salesperson working at a small brokerage in Amarillo. Which of the following functions can she NOT perform without an agency agreement in place?
A) Helping prospective buyers find the right ranch house in Amarillo B) Assisting prospective buyers in obtaining a loan for their desired house C) Preparing a contract for a transaction D) Holding monies for disbursement in escrow until closing (Correct)
Mark Carey is a real estate licensee who works as a residential rental locator for an El Paso property management company. In preparing advertisements of available properties, he must adhere to all of the following guidelines EXCEPT which one?
A) If listing general amenities for a variety of units, the advertisement must include verbiage advising consumers that rent may vary depending upon the specific features and amenities of a given unit. B) Advertisements placed in a publication that receives an advance/contingent fee must include a disclaimer to that end. (Correct) C) For units advertised in general terms, at least one unit meeting the description should be available through the locator at the lowest rent stated in the advertisement within either a time stated in the advertisement or within 30 days after the advertisement is submitted for publication (if no time is stated). D) Advertisements placed where passersby and motorists are likely to notice must clearly and visibly identify the publisher of the advertisement as a real estate broker or agent.
When can a landlord evict a disabled blind or disabled tenant from the premises?
A) If the tenant gets a dog and the apartment policy does not allow pets B) If the tenant insists on a handicapped parking place C) If the tenant makes modifications to his unit at his expense D) If the tenant has loud parties and makes too much noise (Correct)
A landlord of residential property must provide all of the following EXCEPT:
A) Rekeying a unit with seven days of a new tenant occuping the unit B) Ensuring that the smoke detectors are fuctional when the unit is rented C) Providing keyless deadbolt locks for each unit D) Installing a burglar alarm system or other protective apparatus in a unit in a documented high-crime area when the occupant requests the protection. (Correct)
As a broker acting as an intermediary to the sale of a single-family dwelling, Sean Noonan would be acting unlawfully and unethically if he discloses any of the following information EXCEPT:
A) That the seller will accept $5,000 less than the asking price B) That the buyers are able and willing to pay $5,000 more than the asking price C) That the sellers are in dire financial straits, on the verge of bankruptcy, and need to sell immediately even if they have to sell at a loss D) That both parties have agreed to pay a portion of the broker's compensation (Correct)
Standard forms promulgated by the Texas Real Estate Commission exist for all of the following sales EXCEPT which one?
A) The Veterans Administration is asserting entitlement to restoration. B) Construction is not yet finished on a new home. C) Construction is complete on a new home. D) A large lot is intended as a future site for a multi-family (5 or more) residence complex. (Correct)
The Hudson family has listed their 5 bedroom, 3 bath house with Townsend Realty for $175,000 -- an excellent value for the spacious home with eat-in kitchen, formal dining room, finished basement/rec room, 3 car garage, and above-ground pool. The Wright family offers $169,000 because the house will need a new roof within the next year or so. The Hudsons make a counteroffer of $172,250 with the comment that they have just updated the central air and furnace systems in the past six months. The Wrights are considering the counter offer. Which of the following could happen next?
A) The Wrights could reject the counter offer and make one of their own. (Correct) B) The Wrights could reject the counter offer without making a new offer. Then the Hudsons could say they'll accept the previous offer of $169,000. C) The Wrights could reject the counter offer. The Hudsons would then have 24 hours to reconsider the $169,900 offer again. D) The Wrights could reject the counter offer. The Hudson's realtor could then write up the previous $169,900 offer as a back-up contract.
Mortgage "discount" points only apply if which of the following conditions are met?
A) The interest rate on the mortgage loan has been lowered by 1% for each point charged (Correct) B) The interest rate on the mortgage loan has been lowered by 2% for each point charged C) The seller has agreed to pay 1% of the closing costs D) The loan does not close and the buyer owes the lender for services rendered
The Texas Real Estate Commission retains which of the following powers?
A) The power to conduct licensure examinations for candidates seeking salesperson or broker's licenses B) The power to probate, suspend, or revoke a license or reprimand or place on probation a licensee for a violation of the Act or a rule of the commission (Correct) C) The power to recommend individual licensees to the public D) The power to mediate disputes between or among licensees concerning entitlement to sales commissions
A real estate agent should tell the buyer, his customer, which of the following?
A) how long a property has been on the market B) the seller's motivation for marketing his property C) a pending or recent zoning change (Correct) D) the seller is getting a divorce
In judging whether previous felony or misdemeanor offenses committed by a candidate for licensure would render the candidate incapable of acting on behalf of others with honesty, trustworthiness, and integrity, the commission may take into account all of the following pieces of evidence EXCEPT which one?
A) The scope and substance of the candidate's criminal offenses B) The candidate's age at the time the crime was committed C) A comprehensive independent audit of the candidate's financial status to ensure suitability as a fiduciary (Correct) D) Evidence of the candidate's rehabilitation and present fitness, including letters of recommendation from law enforcement and corrections personnel
All of the following are true of conventional loans except what?
A) They are made to the buyer without governmental insurance or guarantee B) The policy requiremets of the lender are not uniform C) The requirements to qualify are uniformly fixed by state law (Correct) D) They require a higher down payment than non-conventional loans
The Hancocks, residents of McAlester, Oklahoma, have a premium parcel of undeveloped land that stretches from Oklahoma into Texas. Which of the following is true if they wish to sell the land?
A) They must engage the services of a licensed Texas real estate salesperson because at least part of the property is located in Texas. B) They must engage the services of a licensed Texas real estate salesperson only if the buyer is a Texas resident. C) Since they are not Texas residents, they are not obligated to engage a Texas real estate licensee to sell the property. (Correct) D) They must engage the services of a real estate agent in the state in which they reside.
A buyer wants to take out an FHA loan. The broker should refer the buyer directly to:
A) any approved lending institution such as a bank or savings and loan association (Correct) B) an FHA appraiser in the area C) the Federal Housing Administration Office D) the Federal National Mortgage Association
Mrs. Jones, an appraiser, is appraising a single family residence for which she has located six closely comparable properties, all sold within the past six months. The subject property is rented for $500 per month. It is a custom-built home, approximately three years old. Mrs. Jones would probably give the most weight in her final estimate of value to which of the following appraisal methods?
A) cost approach B) market data approach (Correct) C) income approach D) gross rent multiplier
Which of the following bears a caveat emptor -- buyer beware -- warning?
A) deed in lieu B) contract for deed (Correct) C) general warranty deed D) grant deed
Ash Mason owns a home with an expansive lawn in the Dallas suburbs and has decided to install an in ground pool for recreational and health purposes. She has chosen non-slip pavers for the perimeter of the pool (to reduce risk of falls and, thereby, her liability as property owner) and plans to add a deck at one end of the pool for lounging. Which of the following factors should she consider most carefully in deciding whether or not to erect a fence around part or all of her backyard?
A) her privacy B) aesthetics and how the fence might make the lawn look smaller C) possibility that the pool might be an attractive nuisance (Correct) D) potential that neighbors might seek an easement to use the pool
Collaboration
AKA Confronting Preference in which parties work toward mutually agreeable and favorable solutions. About maximizing gains -All parties completely satisfied with resolution -Mutually agreeable and favorable solutions -Maintenance by expression
Competition
AKA Forcing Most dominating and aggressive approach. Preference that emphasizes personal goals and needs without considering the opinions or needs of others in conflict. Win/lose.
Problem Solving Theory
AKA Problem-solving negotiation 1. Mutual problem to be resolved jointly 2. side by side negotiations at the table
Accomodation
AKA Smoothing Person sacrifices personal goals in order to maintain relationships or peace. Is a harmonizing approach. -Own interests often don't get taken care of -Tends to be the giver in a relationship
Avoidance
AKA Withdrawing Unlikely to pursue own goals and needs or support relationships and the goals and needs of others during conflict. Sends a message you aren't all that invested in the relationship.
Competitive Negotiations
AKA distributive negotiations, either-or negotiations.
Determine your BATNA
AKA your walk away option Any agreement is always better than your BATNA • If agreement is greater than BATNA-accept it You should determine BATNA before you begin negotiating ➢ Improve your possible ideas into actual offers- select one altenrative that seems best for you ➢ Keep it in your backpocket- do not showcase • It will give you confidence throughout negotiation
A standardized yardstick expressing the true annual cost of borrowing is expressed as the what?
APR
The primary purpose of Truth in Lending is to:
Disclose the true costs of obtaining credit.
The clause in a trust deed or mortgage which permits the mortgagee to declare the entire unpaid sum due upon a default by a mortgagor is called:
An Acceleration Clause
Mediation
An alternative to litigation whereby a third party attempts to assist the disputing parties in reaching a settlement. The third-party mediator lacks authority to impose on the parties a binding solution to the dispute.
The Six Conflict Orientations/Styles
Avoidance Competition Compromise Collaboration Accommodation Confronting
Conflict Specturm
Avoidance-----{Negotiation}--------Dominiation
What is the standard form of negotiating?
Bargaining over positions
Problems With Bargaining Over Positions: Endangers Relationships
Battle instead of working together jointly to find a solution
To be an arbitrator a person must
Be agreed upon by all the disputing parties
Consequences
Be sure you really think and understand the consequences of your actions -utilize a consequences table
Fear
Behind every angry outburst. Make an honest attempt to reduce the emotion, because if ignored it will only intensify anger. Most adults transform anger into this.
Distribute Bargaining
Behind the competitive theory of negotiation One party gains at the other's expense Refers to one in which there are no gains available to share Any proposed solution will result in increase for one party and decease for another Zero sum bargaining Example - Bargaining at a Marketplace
BATNA
Best Alternative To a Negotiiated Agreement. the standard against which any proposed agreement should be measured. That is the only standard that can protect you both from accepting terms that are too unfavorable and from rejecting terms it would be in your interest to accept.
What is BATNA?
Best Alternative to Negotiated Agreement
BATNA
Best Alternative to Negotiated Agreement the walkaway option
BATNA
Best Alternative to a Negotiated Agreement -Know your bottom line -It's your plan B because it protects you against making an agreement that should be rejected because it doesn't represent your best interests
BATNA
Best Alternative to a Negotiated Agreement Your BATNA is what you will do if you do not reach an agreement during a negotiation. 1. BATNA is your preferred course of action in the absence of a deal. 2. Knowing your BANTA means knowing what you will do or what will happen if you do not reach agreement. 3. Without a BATNA you won't know when the deal doesn't make sense 4. One might reject a good offer or accept a weak offer
What is BATNA?
Best alternative to a negotiated agreement
BATNA
Best alternative to a negotiated agreement •BATNA is a source of power •Your BATNA is alive! •It is always in flux •Constantly work to improve it
What does BATNA stand for?
Best alternative to a negotiation agreement
how do deal-minded and implementation-minded negotiators differ on: decision-making and stakeholders
Deal-minded people keep outsiders in the dark. Implementation-minded people ask: what approval is needed? what might interfere with implementation?
Assumptions of Rational Model
Decision makers goal is optimizing. Decision maker has complete info Emotions play no role Decision maker can objectively & accurately evaluate all the alternatives. Decision makers have abundant time & resources
Assumptions of Simon's Normative Model
Decision making is uncertain Not all info is available or known Making optimal decisions is difficult so people just dont do it
Referent power
Derived from the respect or admiration one commands because of attributes like personality, integrity and interpersonal style
The intent of the Seller's Disclosure Notice is to do which of the following?
Disclose any known structural defects
Splitting the difference
Do not split the difference with high extremes involved->make sure it is a small gap Do not jump prematurely to the middle-> that requires hard work Be patient if you made last concession, let the other party respond If other party suggests splitting difference do it the right way(or wait to be patient to accept it) Before you suggest split-> make sure all other issues are resolved. And then the deal will be done • Say let's split the difference.
Splitting the difference
Do not split the difference with high extremes involved->make sure it is a small gap Do not jump prematurely to the middle-> that requires hard work Be patient if you made last concession, let the other party respond If other party suggests splitting difference do it the right way(or wait to be patient to accept it) Before you suggest split-> make sure all other issues are resolved. And then the deal will be done • Say let's split the difference.
Don't Bargain Over Positions
Don't Bargain Over Positions
Negotiation Jujitsu
Don't attack their position, look behind it. Don't defend your ideas, invite criticism and advice. Recast an attack on you as an attack on the problem. Ask questions and pause. See p. 108 Getting to Yes
What to do when someone is angry with you. (Part 1)
Don't be defensive. -Don't ask, "Why are you angry?" Instead ask, "How have I made you angry? Don't try to "reason" someone out of their anger. -Look at feelings as facts.
Yesable Proposition
Drafting a proposal to which their responding with a single word yes would be sufficient
People Problems: Emotion
Feeling may be more than talk
Tradeoffs
Find and eliminate dominated alternatives Make tradeoffs using even swaps
Remedying a deadlock
Find the exact number or element that does work Get the thing right
When dealing with emotions you should
First recognize and understand emotions, theirs and yours, Make emotions explicit and acknowledge them as legitimate. Talk with the people on the other side about their emotions. Talk about your own, Allow the other side to let off steam, don't react to emotional outbursts, Use symbolic gestures.
2. Each party explains their interests and keeps a clear focus while remaining open to options.
Focus on interests
In principle negotation what do you focus on, interests or positions?
Focus on interests
Define the words
Forgiveness: process undertaken by one person in relation to another, with or without interaction with the person Reconciliation: process of reestablishing relationship, renewing trust, setting differences so that cooperation and a sense of harmony are restored.
"$10,000 club" issue
If a company fails to appreciate the strategic implications of it, it will miss the opportunity to participate in the world's fastest growing global consumer segment
If a single parent is applying for a real estate loan, when would the fact have to be revealed that part of the parent's income is from child support?
If the parent was relying on the income for repayment of the loan
how do deal-minded and implementation-minded negotiators differ on: Surprise?
Implementation minded negotiaters don't like surprises.
how do deal-minded and implementation-minded negotiators differ on: realistic commitments
Implementation minded negotiators consider "if they fail to deliver, then we don't get the value we expect"
probe first, then disclose
In obtaining information on interests, issues, and perceptions, you should...
Every Negotiator has two kinds of interest: name them.
In the substance and relationship
Layton's 3-Step Process of Forgiveness
Injured Innocence: We believe if we are good we'll never have to suffer. Obsession: Feel fully victimized Transcendence: Through your own suffering, you become more deeply acquainted with the suffering of others.
Warn the person
Instead of threatening the opponent(The key is frame it not as a threat) This makes a statement of what will happen if there is no agreement Let your opponent know what you intend to do This may be useful than your BATNA Try to avoid arbitrary deadlines Demonstrate BATNA Use Third Parties
Change the Game
Instead of trying to win, satisfy the interests Change the game by doing the opposite of what you are attempting to do Do not be afraid to ask "Why?" then if they are non responsive ask "Why not do what I suggested?" Discuss further options Make a reasonable test by placing him the dilemma Negotiate the process and revisit it when it is interrupted with tactics
Window story
Integrative
The Federal Arbitration Act covers any arbitration clause that involves
Interstate commerce
Assisted Processes
Intervener or Third Party Neutral Conciliation Facilitation Mediation Arbitration SEE HANDOUT
Options:
Invent multiple options looking for mutual gains before deciding what to do
2. The authors of the text suggest that you separate what two steps in the prescription stage?
Inventing from deciding
Advantages of Adjudication
It balances power, and gives access to a resolution for all parties It provides rules for fairness -including admission of evidence It uses professionals to speak for all the parties
When dealing with a third party who is reluctant..."stock phrases"
It helps to have stock phrases like "It's not a question of trust" to turn aside ploys like Mrs. Jones's plea for trust. When dealing with a party who is reluctant, try using a one-test mediation procedure-a third party
o Costs of using a bottom line:
It limits your ability to benefit from what you learn during negotiation. Inhibits imagination, keeping you both from inventing and agreeing on a wise solution for both parties. Limited ability to benefit from what you learn during a negotiation Inhibited imagination Likely set too low or high while adopting a bottom line may protect you from accepting a very bad agreement, it may keep you both from inventing and from agreeing to a solution it would be wise to accept. An arbitrarily selected figureis no measure of what you should accept.
An arbitrator's award is valid when
It settles the entire controversy and states which party has to pay
Negotiation judged by three criteria: #2
It should be efficient.
Negotiation judged by three criteria: #3
It should improve or at least not damage the relationship between the parties.
Japanese vs. Korean negotiation styles
Japanese are least aggressive, more promises, never use punishment Koreans use more punishments and commands than Japanese, interrupt more
Integrative Bargaining
Joint gains parties can share from negotiation Non-zero bargaining Two Types of Integration:Brainstorming; Logrolling
A seller listed his home for six months on February 26. On April 29, a buyer made an offer on the property. The listing broker presented the offer to the seller on April 30. The seller accepted the offer on May 1, with the closing to occur on June 15. Assuming the closing took place on June 15, when did the listing expire?
June 15, 2004
What should you do, Left at the alter?
Let the deal drop and go through a quite period. Try resurrecting the deal after 30 days or more or wait for them to call.
The walkout, what should you do?
Let them walk out If they do not come back leave Do not call them for a month
Where do interests lie?
Lie behind positions
Problems With Bargaining Over Positions: Unwise Agreement
Lock yourself into position. The more you defend it, the more you are forced to commit to it.
If you believe they have bad perceptions of you what should you try to do?
Look for times to act that are inconsistent with there bad perceptions of you
What is dovetailing?
Looking for items of low cost to you but high benefit for them and vice versa
Med-Arb
Med-Arb An abbreviation for an alternative dispute resolution system that involves parties going through mediation and agreeing to resolve as many issues as possible. These parties agree that any matters not resolved in the mediation process will then be arbitrated
Mediator
Mediator An individual who assists disputing parties in their efforts to resolve their differences. Mediators must rely on their persuasive abilities since they have no authority to settle the dispute
Types of assumptions •Negative Prediction •Misinterpretation •Inherited Misinformation •Fragmentary Facts
Negative Prediction •A belief about a person (especially the other party) or an outcome based on anything but reality as it is revealed in the NOW communication exchange. •Belief that people are able to read each other's minds, especially their negative thoughts. •Belief that he/she can foretell the future, especially negative outcomes. •Why wait to see what would happen in reality? Examples of Negative Prediction •"Nothing is going to change." •"Why should I believe he will honor his agreement?" •"I have tried to talk to him on several occasions and he just won't listen." Misinterpretation •misunderstood due to the lack of immediate research of the receiver. •words hold many meanings •Mistaken belief that people can accurately read minds without confirming up truth •Reasons common words and phrasing may be misunderstood: •Colloquialisms •Regional Accents •Experience •Emotional Issues •Incomplete on Nonexistent Research of the Word or Phrase Examples of Misinterpretation •"When you said----, I thought you to mean...." •"What would you think if you were me?" •"I saw that look you gave me." Inherited Misinformation •When misinterpretation (unresearched information) is taken as fact and is passed on to others who have not bothered to research. Fragmentary Facts •When a party thinks or acts on partial information. They in essence jump the gun. Impatience is usually at the root of this category.
Avoidance -{ _____________ } - Domination. What is another word you could use synonymously for your answer?
Negotiation
The story of Wallace and Liz and the cheap statue is designed to illustrate what principle in the chapter?
Negotiation is different with every single person.
What happens if the other side becomes familiar with the contents of the book Getting to Yes?
Negotiation will get easier
Does your conflict style reflect your personality?
Not necessarily. -Not a trait behavior -Avoiders may actually care about relationship, but are afraid to deal with problems -The motivation may be for other things that will emerge in the interaction
Identify your BATNA
One of the elements of going to the balcony Your walk away option if you cannot reach an agreement i) Best Alternative To a Negotiated Agreement ii) You want an agreement that satisfies better than your BATNA One. If your BATNA is better, walk away and choose BATNA iii) Make sure your BATNA is strong and keep it in your back pocket- it makes for confidence within the negotiation iv) It may be that you need to find another option, or do something directly to your opponent, or bring in Third party One. Another Option: finding another buyer, seller Two. Directly to your opponent: "going to war" Three. Third Party: Mediation, Arbitration, Court to try the case v) If you BATNA is not very strong, make sure that you make an effort to make it stronger.
Chuka chuka negotiation
Only 1 issue and it was a compatible interest.
Which of the following types of real estate licensees is required to display their license prominently at their place of business?
Only licensees who are residential rental locators are required to display their licenses
People Problems: Perception
Other side's thinking is the problem, differences defined by gap between your and their thinking.
The Smiths' purchased a residence for $75,000. They made a down payment of $15,000 and agreed to assume the seller's existing mortgage, which had a current balance of $23,000. The Smiths' financed the remaining $37,000 of the purchase price by executing a second mortgage whereby the seller became a mortgagee. This type of loan is called a:
Past Purchase Mortgage
Take time to think clearly when you are detached
Pause and say nothing remember you are trying not to eliminate your feelings, but disconnect the weight of your feelings and emotions with your reactions slow down the conversation and take a breath Digest the information when you feel overloaded
Examples of Infrastructure
Paved roads, railroads, seaports, communication networks, financial networks, energy supplies
Tammy Doherty, a licensee found to be in violation of the Act, has been ordered to pay an administrative penalty of $1,000. Tammy has 30 days to:
Pay the penalty, stay the penalty, or contest the decision
In principle negotation, who do you separate from the problem?
People
Cognitive dissonance
People feel inconsistency and try to eliminate it
What is the theory of cognitive dissonance?
People look to eliminate inconsistency
Cautions About Styles
People most often see themselves as trying to solve the problem using integrative styles. -Tendancy to see self as the victim -Social Desirability Bias
Three big problems in communication
People not talking, People not listening, people not understanding each other 1) Negotiators may not be talking to each other, or at least not in such a way as to be understood. (Many talk to the peanut gallery) 2) People don't pay enough attention to what the other side is saying. (Instead they focus on their next point they're planning on making) 3) Misunderstanding.
Principled negotiation (negotiation on the merits)...boiled down to four basic points:
People: Separate the people from the problem. Interests: Focus on interests, not positions. Options: Generate a variety of possibilities before deciding what to do. Criteria: Insist that the result be based on some objective standard.
Economic Growth Factors
Political stability in policies affecting development Economic and legal reforms Entrepreneurship Planning Outward Orientation Factors of Production Industries targeted for growth Incentives to force high domestic rate of savings and direct capital to update infrastructure, transportation, housing, education, and training Privatization of state-owned enterprises that had placed a drain on national budgers
____ is what you have decided on, ____ is what caused you to decide that way.
Position, interest
Each party stakes out a position, bargain from opposite positions, and these people argue away from each other.
Positional bargaining
This causes poor and inefficient agreements, leads to stubbornness and causes harm to the relationship
Positional bargaining
Negotiation using a competitive style in which high and low numbers are exchanged as the parties move toward an agreeable middle ground is called
Positional negotiation
The Problem
PrOACT -Define the problem -What triggered this decision
Conflict Triangle
See back of System, Style and Systems Theory handout -Called a "dyad plus one" -Depict that a third party is often involved in conflict situations -Victim: Needs help, thinks they are helpless, people are doing something to them -Prosecutor: Blames or punishes the victim -Rescuer: Take care of people who are in trouble, save the victim
Soft and Hard Positional Bargaining
See p. 13 of Getting to Yes.
Systems Styles and Systems Theory
See the Systems Styles and Systems Theory handout.
Putting your responses on the table
Send other party a message that hopefully will change other party's expectations Show party that your second offer makes more forward movement ➢ If your offer is too close to your expectations->it does not leave much negotiating room Review back to the problem
1. Get a clearer view of the problem and remember it isn't personal
Separate people and issues
What are the 4 principles of getting to yes?
Separate people and issues, focus on interests, generate options, and use objective criteria
People:
Separate the people from the problem
4 suggestions for de-escalating spirals
Set and keep ground rules for interaction Limit the issues instead of expanding them Look for ways to reframe the others behavior in positive ways Meta-communicate about the spiral
What always lies behind opposed positions?
Shared and compatible interests
Often behind positions lie what type of interests?
Shared and compatible intrest
Internal Locus of Control
Show self-control; take full responsibility for yourself and the outcomes of your behavior. Don't blame the situation or everyone else for your problems.
In a repayment of a mortgage loan, which type of interest is used?
Simple
Arbitration
Submission of a dispute to an extrajudicial authority for decision
Positive Strategies for Managing Conflict (Part 2)
Take Responsibility for you feelings. Describe the action you want changed. Stay in the here-and-now. Following conflict, do something fun together. SEE HANDOUT
The lender is required, under RESPA, to provide a detailed "Good Faith Estimate" statement at the time of loan application or within there business days to:
The Buyer
An impound or reserve account MOST benefits whom?
The Lender
The Morgans paid last year's property taxes of $2,015 in arrears on January 31, the last day to pay without penalty. Now, they are selling their property to Rowena Fyler with the closing date set for May 13. To the nearest cent, calculate who owes whom -- and what amount -- using the calendar year method of prorating and charging the day of closing to Rowena. Assume that it's not a leap year.
The Morgans owe Rowena $728.64.
When met with power
The Most any Negotiation Method can do: •Protect you against making an agreement you should reject; •Help you make the most of the assets you do have so that any agreement you reach will satisfy your interests as well as possible.
The seller under a land contract is called:
The Vendor
Negotiation
The active phase of conflict resolution when people generate many options, brainstorm ideas, give-and-take, and attempt to get their mutual goals met.
Most state statutes authorizing voluntary arbitration require
The agreement to arbitrate must be in writing
setting and negotiating towards legitimate goals
The key factor in bargaining success is:
THe better BATNA you have the more what you have?
The more power you have
Caucus
The name used for a private meeting between a mediator and one of the parties involved in a mediation
Principled Negotiation: People:
The ongoing relationship is far more important that the outcome of any negotiation - If there are psychological problems, use psychological tactics. - If perceptions are inaccurate, look for ways to educate. - If emotions run high, then find ways to let all involved let off some steam. - If misunderstanding exists, work to improve communication.
Party who makes the first offer
The other side make the first move- so that you know that the other side is coming from ➢ Ex. Richard Branson and Virgin Records If you feel that you don't know the value of your company or they don't know--it may be better for you to make the offer first ➢ Exception: do not raise the first offer if you want the party to know it is important to you or it will eventually come up anyway
What are relationship interests?
Turn into regular customer, maintain working relationship
Brainstorming
Type of Integrations Get together with the other party and throwing out ideas WITHOUT criticism After all the ideas are on the table then go back and narrow ideas to realistic ones Then work to improve the idea before attempting to implement it
Desire
Type of Leverage If someone wants something so much you are willing to take anything • Ex. Mark Cuban wanted the Mavs so badly, He would pay anything, but the former owner knew that Mark Cuban overplayed for Mavs
Competition
Type of Leverage other potential lawyers or 3d parties against you
Time
Type of Leverage party under a deadline that does not affect the other side has leverage against you • Ex. American goes to Japan and the Japanese wasted 4/5 days of his trip with entertainment. So they had leverage
Necessity
Type of Leverage seller that is forced to sell his house • Ex. Think about a job offer in Chicago but must move next week, but you cannot sell your home
TOOL #3 Unbundle, Add Issues, and Repackage
Unbundle, Add Issues, and Repackage BUYING A NEW CAR EXAMPLE •Buying a car •Financing - Air Bag Levels •Extras - Color •Warranty - Delivery Date •Audio - Price •Career negotiations usually resolve around a single issue: SALARY. Unbundle the issues! •What other issues could be added to a salary negotiation that create value for both parties? Unbundle, Add Issues, and Repackage Another Helpful Tip: Make multiple offers simultaneously whenever possible. THINK: "Here are 3 'yes-able' propositions..."
At what point should the landlord apprise the tenants of the rules and regulations of the lease?
Upon entering the leasing agreement -- or when the rules are adopted (if lease has already begun)
So if these are all the problems with the standard form of negotiation what should you use instead?
Use principled negotiation
What should you do, crunch time.
Use the flinch tactic by showing shock and amazement that this issue has been raised. Repeat the offer.
negotiation jujitsu
Using your skill to step aside and turn their strength to your ends. Rather then resisting their force channel it into exploring interests, inventing options for mutual gain, and searching for independent standards.
For every interest how many possible outcomes could satisfy it usually
Usually several
(1) look at the situational matrix, (2) combine situational analysis with your own stylistic preferences, (3) imagine how the other party views the situation, (4) decide how to best communicate with the other side, (5) develop plan using info gathered and the 6 foundations
What are five things you should do in preparing your strategy?
(1) a willingness to prepare, (2) high expectations, (3) the patience to listen, (4) a commitment to personal integrity
What are four key habits to effective negotiations?
(1) which side has the most to lose from no deal? (2) for whom is time a factor? (3) can I improve my alternatives or make another party's worse? (4) can I gain control over something the other party needs? (5) can I commit the other party to norms that favor my result? (6) can I form a coalition to improve my position?
What are six things on the leverage checklist?
(1) deadlines, (2) walkouts, (3) final offer, (4) split the difference, (5) appraisal
What are the five best ways to close transactions?
(1) preparing your strategy, (2) exchanging information, (3) opening and making concessions, (4) closing and gaining commitment
What are the four steps in the negotiation process?
(1) preparation, (2) information exchange, (3) explicit bargaining, (4) commitment
What are the four steps of negotiation?
(1) locate the decision maker, (2) think about how it might serve the other party's interest to help you achieve your goals, (3) why might the other party say "no," (4) what low-cost options might remove the other party's objections
What are the four things on the other party's interests checklist?
(1) gain access and credibility through relationship networks, (2) build working relationships across the table with small steps, (3) avoid reciprocity traps like trusting too quickly, letting others make you feel guilty, and mixing big decisions with friendships, (4) follow the rule of reciprocity
What are the four things on the relationship factor checklist?
(1) deadlines, (2) walkouts, (3) final offer, (4) split the difference, (5) appraisal, (6) post settlement
What are the six best ways to close balanced concerns?
(1) bargaining style, (2) goals and expectations, (3) authoritative standards and norms, (4) relationships, (5) the other party's interest, (6) leverage
What are the six foundations?
(1) survey the applicable standards and norms, (2) identify the ones the other party views as legitimate, (3) prepare supporting data and arguments, (4) anticipate the arguments the other side may make, (5) create positioning theme, (6) consider making argument in front of audience
What are the six things on the normative leverage checklist?
(1) accommodation, (2) problem solving/collaboration, (3) compromise
What are the three best ways to reach a concession in relationships?
(1) avoidance, (2) accommodation, (3) compromise
What are the three best ways to reach a concession in tactic coordination?
(1) competition, (2) problem solving, (3) compromise
What are the three best ways to reach a concession in transactions?
(1) establish rapport, (2) obtaining information on interests, issues, and perceptions, (3) signaling expectations and leverage
What are the three main functions of information exchange?
(1) credit card companies, (2) collection agencies, (3) telemarketers
What are three examples of consistency traps?
(1) they may deceive us with unfair terms, (2) interferes with our interests
What are two problems with deference to authority?
coalitions
What are very effective in gaining leverage?
What happens if your leverage factors conflict
What happens if you are in a disadvantage 1. Look at all the relevant facts 2. If leverage tilts against you- keep other party from realizing it 3. Conceal any overt signs of pressure 4. Never behave that you have no other options 5. Appearances can be crucial but watch out for manipulated appearances In terms about Non-price issues • Ex: selling items/buyer wants seller to agree to noncompete agreement ➢ Do no move if the other party insists on it->deal breaker ➢ Second one ➢ It is negotiable but you are willing to give it up ➢ No strong feeling-> willing to throw it away
Use power to educate
What if despite all of your efforts, your opponent will still not budge You switch from listening, acknowledging to threatening Your opponent will then not back down and fight back The harder you make it for him to say no, the harder you make it for him to say yes The key mistake is to abandon the problem-solving and retaliate 1. You want to use problem-solving power, but as minimum power as you can use 2. You want to avoid the negative consequences of power 3) If he refuses to come to terms because he thinks he can win or his BATNA is superior a) You need to have your opponent to accept the choice on the consequences of not having an agreement
positive leverage
What is the most common type of leverage?
splitting the difference
What is the single-most common tactic for closing a negotiation?
a mixture of both cooperative and competitive
What type of people look towards balanced concerns?
cooperative
What type of people look towards relationships and tactic coordination?
competitive
What type of people look towards transactions?
When WE'RE the problem Prevention: know yourself
What would happen if we hit your "hot" button?? •Know your "hot" buttons!! •We all have them! •Self-Awareness is key—so that you can mentally prepare to control or excuse yourself! •Reduce Your Own Noise Factors •Control our own communication •Verbal •Non-Verbal Language
What is a Yesable Proposition?
Writing something down so that they other side would say the simple word "yes"
What is on the x and y axis for the conflict management styles graph
X= Focus on Other's Concerns Y= Focus on Own Concerns
Should you discuss each others perceptions?
YES
1957
Year Treaty of Rome was established
Are people often too unwilling to help the other parties find solutions that meet their needs?
Yes
Should you discuss perceptions with the other side?
Yes
Should you make emotions explicit and talk about them with the other side?
Yes
Should you try to identify the emotions of the other side?
Yes
Should you work to make their decision as easy as possible?
Yes
Is it okay to allow the other side to let off steam? How should you respond to emotional outbursts?
Yes they can blow off steam -DO NOT react to outbursts
Can your conflict style change over time?
Yes, based on life experiences. Life events can change your style.
Marissa Pauls, licensed Texas real estate salesperson in Fort Worth, is browsing real estate websites when she views an ad placed by licensed real estate salesperson Brock Jordan that promises bonus cash payments for client referrals. Brock's office is in Dallas, and Marissa has just met a young couple wishing to relocate to Dallas. Under the law, can Marissa receive cash payments for any referrals she makes to Brock?
Yes, because it is a business referral between two real estate licensees.
An owner was selling his own home. Can he advertise the down payment?
Yes, because it was his own home.
The Rose family owns a home in a semi-rural area, which is about five years old. Recently announced plans for a new regional airport will place their home directly in line with a main runway ending 1 mile before their home. If the airport is constructed, will this diminish the value of the Rose Home?
Yes, because of economic obsolescence.
Robert Weaver's sponsoring broker has asked him to provide an appraisal for one of Odessa Realty's clients. Is Robert authorized to provide an appraisal under the Real Estate License Act?
Yes, but only if he submits the appraisal in his sponsoring broker's name and adheres to the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation -- or, in the case of providing an analysis of market value, includes the mandated written disclosure.
Rob Harrelson and his girlfriend, Ginny Boyer, signed a listing agreement with Eliott Banks of Lubbock Realty a month ago. Since then, Eliott has moved to Lone Star Realty in a neighboring town. Rob and Ginny would prefer to keep their home listed with Lubbock Realty since it's a local agency with a stellar reputation, but Eliott is telling Rob and Ginny that they are now clients of Lone Star Realty and he has an offer to present to them. Is Eliott following the law in attempting to negotiate the sale of Rob and Ginny's house since moving to a new brokerage?
Yes, if Elliot has an agreement with his former agency, Lubbock Realty, that his client's migrate with him to his new brokerage then Rob and Ginny's listing may now be held by Lone Star Realty.
Is it good to know the other side personally?
Yes, this is part of building a working relationship
A buyer wanted to use a promissory note for consideration on the purchase of a property. Can he do this?
Yes. This is acceptable as long as the seller agrees.
Point of View
You are acknowledging the point they are trying to make; you are not agreeing with them "I understand what you are saying" "I know what you mean"
early
You should establish a positioning theme ___ in a negotiation so that the other side can see your interests.
What is the Perception Problem? How do you resolve it (3)?
You think the other sides thinking is the problem, their thought process is the problem -Resolve it by putting yourself in their shoes and no matter what do not blame them and also give them a stake in the outcome
Microevents
You want to describe the behavior that occurs in conflict situations. -Focus on the repetitive patterns that carry information about the conflict structure. -You then figure out what sets the other person off by decoding the underlying structure so that we can predict where, when, and how conflict will occur. -Ex. Bruce Banner getting pissed and turning into the Hulk.
Observations and Interviews
You watch, listen, and then ask structured questions that can give you information about the conflict. -Look for who says what, in what order, about what topics, with what kind of non-verbal communication. -Observe interactions to see how the parties deal with each other. -Create strategies for more productive conflict.
Assumptions about Collaborative Negotiations
You will have a future relationship with the other party The negotiating world is controlled by enlightened self-interest -We get what we need, but help others achieve some of their goals. Common interests are valued and sought -reduces amount of negotiation Interdependence is recognized and enhanced -interest in preserving the relationship The goal is a mutually agreeable solution that is fair to all parties -everyone walks away willing to trust and willing to work together again in the next negotiation
To invent creative options you will need to
You will need (1) to separate the act of inventing options from the act of judging them; (2) to broaden the options on the table rather than look for a single answer; (3) to search for mutual gains; and (4) to invent ways of making their decisions easy.
Why is being nice not the answer?
Your giving into the argument rather than finding an answer
The better the BATNA the greater your what?
Your power
When making a request
Your request should... •Be a question (not a command) •Use the word "because" (NOTE: If senseless reasons get these results, think how much better a good reason will work.)
ZOPA
Zone of Possible Agreement Your ZOPA is the range in which a potential deal can take place, defined by the overlap between the parties' reservation prices.
What is ZOPA?
Zone of possible agreement, area in which both buyer and seller good agree on
The Consistency Princple
a principle in which people have a deep need to avoid the abnormal and favor familiarity of what has been in the past or widely held beliefs
Similarity Principle
a principle which explains that we tend to trust people who are more similar to us
Negotiation is
a process of communicating back and forth for the purpose of reaching a joint decision.
Avoiding
a strategy/negotiating style; a good strategy when you are happy with the status quo; not the best approach
Accommodation
a strategy/negotiating style; complying with someone else's offer, without any benefit to yourself
Between the date of offer acceptance and the date of closing of the sale, what type of sales contract is in force?
an executory contract
One-text Procedure
an initial proposal that we each critique until we come up with an agreement we both can live with
Negotiation
an interactive communication process that may take place whenever we want something from someone else or another person wants something from us
Attack will consist of three maneuvers
asserting their position forcefully, attacking your ideas, and attacking you.
Under RESPA, a copy of "Real Estate Settlement Costs and You" must be given:
at the time of loan application, or within 3 days of application
location
can determine legal jurisdiction if a dispute arises during negotiation
12 Negotiation factors 4. how many issues?
car is one issue sea is multiple issues must realize all issues and consider
Altering positions with many...
creates issues when one of the parties is absent from the table, must nevertheless give their approval.
Positioning Themes
crisp, memorable phrase or framework that defines the problem you are attempting to solve in a negotiation
Negotiation checklist 2. Tit for Tat
help or harm in same way prisoners dilemma cooperate on first move and do whatever they did on the next move
Balanced Concerns
high importance, high conflict
Relationships
high importance, low conflict
How to Negotiate About Rules of the Game
i. recognise tactic ii. raise issue explicitly iii. question tactics legitimacy & desirability
Test of Reciprocal Application
if an offer is good for the receiving party, then it should be equally good for the sending party.
Never yield to pressure
if the other side truly will not budge and will not advance a persuasive basis for their position, then there is no further negotiation.
12 Negotiation factors 7. is ratification required?
in order to have ratification senate must approve labor union-needs the rank in file of labor union approve it can extract out with ratification the last set of agreements
What is the function of "letting off steam":
is to deal with people's negative emotions by releasing those feelings...makes it easier to talk rationally later Often, one effective way to deal with people's anger, frustration, and other negative emotions is to help them release those feelings. People obtain psychological release through the simple process of recounting their grievances. If you come home wanting to tell your husband about everything that went wrong at the office, you will become even more frustrated if he says, "Don't bother telling me; I'm sure you had a hard day. Let's skip it." The same is true for negotiators. Letting off steam may make it easier to talk rationally later. Moreover, if a negotiator makes an angry speech and thereby shows his constituency that he is not being "soft," they may give him a freer hand in the negotiation. He can then rely on a reputation for toughness to protect him from criticism later if he eventually enters into an agreement. Hence, instead of interrupting polemical speeches or walking out on the other party, you may decide to control yourself, sit there, and allow them to pour out their grievances at you. When constituents are listening, such occasions may release their frustration as well as the negotiators. Perhaps the best strategy to adopt while the other side lets off steam is to listen quietly without responding to their attacks, and occasionally to ask the speaker to continue until he has spoken his last word. In this way, you offer little support to the inflammatory substance, give the speaker every encouragement to speak himself out, and leave little or no residue to fester.
what is the "getting past yes" article about?
it is about how negotiations need to consider the practicality of executing the terms after the deal is done. too many people get caught up in getting more out of the zero sum game but don't consider what happens during implementation
Dovetailing
items that are of low cost to you and high benefit to them, and vica versa. Differences in interests, priorities, beliefs, forecasts, and attitudes toward risk all make dovetailing possible.
Expectations
judgments about what we can reasonably accomplish
How do you handle your BATNA
keep it in your backpocket--do not showcase It will give you confidence thought negotiation
Actively involve your opponent in advising a solution
one of the steps in getting past no Your opponent may show resistance: Lack of Interest May try to delay the decision He may renege the agreement He may just flat out say no Reasoning why: It was not his idea and It does not meet his interest He has a fear of losing face for his constituents You are pushing him too fast and too much(overwhelming him) Actively involve your opponent in the agreement Instead of pushing your opponent and start where he is--even if you make a proposal, say, "picking up on what you said earlier..maybe this would work." Make it look like it is his idea by relating it back to something he said DO not announce that you have the solution Select the few ideas from the opponent that seems constructive Ask you opponent for constructive criticism and asking for his feedback
European Court of Justice (ECJ)
organization that serves as the EU supreme court
Personality and individual differences as a source of power
power derived from differences in... -Psychological orientation -Cognitive orientation (ideologies about power) -Motivational orientation (specific motives to use power) -dispositions and skills (orientations to cooperation/compeittion -moral orientation
Contextual power
power derived from the context with negotiations take place -availability of BATNA -organizational and national culture -availability of agents who can affect the outcomes of the negotiation
primary way economic unions enlarge market opportunities
preferential tariff treatment for members common tariff barriers against outsiders
Greatest danger to not realizing your BATNA
that you are too committed to reaching agreement. a major danger is that you will be too accommodating to the views of the other side — too quick to go along. The siren song of "Let'sall agree and put an end to this" becomes persuasive. You may end up with a deal you should have rejected. Your powert to affect the outcome is taken away b/c whether you or not you should agree depends on the BATNAs (its like negotiating with your eyes closed)
level of industrialization
the UN's classification of country's stage of economic development is based on this
When an appraiser uses the phrase "effective age," he is referring to:
the age of the property based on its condition.
12 Negotiation factors 9. Time cost
time may matter more to one party than the other for instance someone buys land and is sued by environment
Norm of Reciprocity
the duties that people owe one another, not as human beings or members of a group, but because of the previous things they have done for us, our previous interactions; based off long and short term memories
The Role of Gifts and Favors
the idea that gifts can serve as a means of building trust and symbolize an under-lying relationship between two parties
Fixed Pie
the less for you, the more for me
Rapport
the mood/atmosphere between negotiators at the table
Cognitive Dissonance
the state of having inconsistent thoughts, beliefs, or attitudes, especially as relating to behavioral decisions and attitude change.
The economic life of an investment can be descrived as:
the time over which value generated exceeds cost of operation.
The "bottom line" is:
the worst acceptable outcome —If you are buying, a bottom line is the highest price you would pay. If you are selling, a bottom line is the lowest amount you would accept.
12 Negotiation factors 12. can a 3rd party intervene?
they can screw you up or they can hurt you
Goal
things we strive for that are usually beyond our range of past achievements; highest legitimate expectation
Dangers of reacting
when people say no Danger of losing track of what real interest are lose your objectivity you become part of the problem
Consistency Traps
when the goal is to pre-commit you to a seemingly innocent standard and then confront you with implications that go against your interests
Negotiation Jujitsu
when the other side announces a firm position, you may be tempted criticize and reject it. If they criticize your proposal, you may be tempted to defend it and dig yourself in.
Discussion Stage
when the parties communicate back and forth, looking toward agreement, the same four elements are the best subjects to discuss.
A window into their thinking. Identifying classic "people problems"
• Noise factors are barriers to communication! • Don't get stuck in a noisy communication environment!
What should Differentiation Look Like (If done properly)- at the end of the period
• Parties are aware of differences • Issues are clarified and defined • Both parties recognize the need to work together • Both regard the other's positions as legitimate (though they may not agree with it)
What should Integration look like (If done properly)- at the end of the period
• Parties develop willingness to work with each other • Parties work toward solution that meets interests of both • Parties stick to their guns and do not waffle or give in • Parties consider multiple solutions
The problem: we argue over positions
• Position: •A Stance. •A statement that doesn't define a concern or an interest. •Doesn't explain the "why", no rationale given, no reasoning is provided. •"Positional Bargaining" • Produces Unwise Agreements • Is Inefficient • Endangers an ongoing relationship •Multi-Party Negotiations • Even Worse
Mirroring
•"Correct me if I'm wrong...." •"Tell me if I am hearing correctly..." •If I understand what you are saying...." •"I want to make sure I am understanding you...when you say---do you mean?"
Validate their interests
•Acknowledge their perspective neutrally •Note: Acknowledgement is not Agreement •Example: •It appears you are having trouble with this issue •It sounds as though your need for the eggs will meet a much larger need
Soft bargaining
•Advantages: •emphasizes the importance of building and maintaining a relationship •can be efficient; •agreement can be highly likely •Makes concessions readily in order to agree •But will it be a wise agreement? Possibly not! •Two problems with "soft bargaining" •If primarily concerned with relationship, agreement could end up sloppy without our interests protected •Makes us vulnerable to someone who plays a hard game of positional bargaining
Why negotiators are inefficient
•Assumptions - most negotiators enter negotiation with a fixed-pie perception •Negotiators who realize potential for joint gain (less biased) earn higher negotiation profits; and •The link between assumptions and negotiation outcomes is present within the first five minutes and remains effective throughout negotiation
Unavailability
•Attention Signed Elsewhere •Mental Defect •Mind Altering Substances (Legal/Illegal) •Engrossment in past, future or concurrent ideas unrelated to what is occurring in the NOW communication exchange, including: •Physical Problems: •Emotional Rushes: •Tangential Thought Voyages Examples: The party looks around uninterested The party looks at his watch a lot. The party says, "I don't have my documentation on that matter."
Build trust to lead with relationship
•Build the relationship before you negotiate (when possible). •Be polite. Show respect. •Signal "win-win" •Say "Thanks." Say "I'm sorry." •Listen and acknowledge. (Remember: A negotiation is really a series of small, incremental agreements.)
OUR GOAL: expand the pie then divide it!!
•COOPERATE FIRST! •Make it a two-step process instead of one! •To fully realize the win-win structure of the task, realize that you NEED to cooperate with the other negotiator in order to expand the pie of available resources: •SCAVENGER HUNT FOR •Find Compatible Interests •Discover Trade-Off Potential •THEN COMPETE with the other on how to divide the pie.
External noise
•Characterized by any barrier to the flow of communication that occurs in the environment around the discussion. Examples include: •Loud Machinery •Babies Crying •Other people talking •Other people interrupting •Annoying tapping or rapping •Barking Dogs •Ringing
What win win does NOT mean
•Compromise •Even Split •Feeling Good •Building a Relationship
Overview of the integrative negotiation process
•Create a free flow of information •Attempt to understand the other negotiator's real needs and objectives •Emphasize the commonalties between the parties and minimize the differences •Search for solutions that meet the goals and objectives of both sides
Your toolkit for expanding the pie
•Cultivate an "abundance mentality" •Provide information and ask diagnostic questions •Unbundle, add issues, and repackage •Identify value-creating trade-offs •Build provisional and contingent contracts •Search for post settlement settlements
Avoid the intention invention
•Disentangle their intentions from •Your fears •Outcomes •Our interpretations
Once you have an offer
•Do not immediately accept the offer •"This looks great. I need to go over everything one last time before we make this official. I will get back with you at [a specific time]." •Get a copy of the offer in writing •"Can I have a copy of it?" • or - write down your understanding of the terms •Be enthusiastic and gracious •Remember: It's not over til it's over....
Objective procedures
•Drawing Straws/Flipping Coin •Taking turns •Auction •Third-party expert •Arbitration •Rock, Paper, Scissors
Core distributive strategies
•Hold firm to your goals and bottom line •Push for an agreement very close to the other party's resistance point (unknown) •Convince them to change their resistance point •Persuade them to believe this is the best agreement possible
Negotiating in the current economy
•How do salary negotiations differ in today's economy? •2012 Survey - 38% of CFOs more willing to negotiate salary than 1 year ago •Possible suggestions •Know what you are worth and current salary ranges •Apply to wide range of jobs •Gauge whether negotiating salary is appropriate •Suggest a contingent contract based on performance •Negotiate salary at the next promotion date
Interests Most powerful interests
•Interests are underlying reasons for positions—Interests get to the question of _________________. •The problem lies not in conflicting positions, but in conflicting underlying ______________. •"Silent Motivators behind the hubbub" •Human Basic Needs •Security •Economic Well-Being •A Sense of Belonging •Recognition •Control over one's life •Very Often it's not just about ______________. •Individuals, Groups, Nations, Industries, etc. Agreement Often Occurs Because Interests Differ
Internal noise
•Interruptions to the flow of communication that occurs inside of a person (in their thought, emotional, or physical processes). Examples include: •Unavailability •Power •Fear •Lack of Knowledge
Alumni survey results
•Issues negotiated •Focal project, duties •Laptop, software, cell phone •Vacation time •Job location •Earlier start date •$4000 in relocation reimbursement •Equity in business Insisting on Using Objective Criteria & Job Negotiations Insist on Using an Objective Standard Loading... "Getting to Yes" Overview THE METHOD: Principled Negotiation •Separate People from the Problem •Focus on Interests, Not Positions •Invent Options for Mutual Gain • Generate a variety of possibilities before deciding what to do •Insist on Using Objective Criteria • Insist that the result be based on some objective criteria. (Not because you say so, but because of an expert opinion, custom, law, market value, etc. Use objective standards both as a sword to persuade others and as a shield to help you resist pressure to give in arbitrarily. 1."I am asking for no more or no less than you are paying others for comparable work." 2."I would like to give you a discount, but the price is firm. It's what ABC Co. paid for the same item last week; here is the bill of sale." Loading... How do you know it's objective? 1) Is it independent of each party's will? 2) Does it apply equally to both parties (the test of reciprocal application)? 3) Is it supported by a legitimate theory? Objective Criteria •Market Value •Precedent •Scientific Judgment •Professional Standards •Efficiency •Costs •What a Court Would Decide •Moral Standards •Equal Treatment •Tradition •Reciprocity •Etc. Something independent of each side's will! How Do I Insist on Using Objective Criteria? 1.Frame each issue as a joint search for objective criteria. 2.Reason and be open to reason. 3.Never yield to pressure—refocus their pressure toward finding a solution using an objective criteria •"How did you arrive at that number?" •"What standard do you think we should use to determine the price?" •"Do you want more than is fair?" What Does it Sound Like? Reason and be open to reason. Reason is your friend •Almost everybody wants to appear reasonable. •Humility is the key virtue •Consider that you might be wrong and show you're open to persuasion •"I have not yet reached a final decision and I'm open to persuasion." •"Why don't we study the matter and talk again?" •"Would you agree that ____ is reasonable?" What does it sound like? Loading... Never yield to pressure. "Pressure can take many forms: a bribe, a threat, a manipulative appeal to trust, or a simple refusal to budge. In all these cases, the principled response is the same: invite them to state their reasoning, suggest objective criteria you think apply, and refuse to budge except on this basis. Never yield to pressure, only to principle." (p. 91) Objective Procedures •Drawing Straws/Flipping Coin •Taking turns •Auction •Third-party expert •Arbitration •Rock, Paper, Scissors Objective Standards Activity Negotiating a Job Offer •Preparation •In vivo process - during the process •Post offer •http://www.ehow.co.uk/video_2279846_expect-job-interview-salary-negotiation.html Job Negotiation •http://www.ehow.co.uk/video_4983812_justify-new-job-salary.html Seeking a salary increase Once you have an offer •Do not immediately accept the offer •"This looks great. I need to go over everything one last time before we make this official. I will get back with you at [a specific time]." •Get a copy of the offer in writing •"Can I have a copy of it?" • or - write down your understanding of the terms •Be enthusiastic and gracious •Remember: It's not over til it's over.... Alumni Survey Results •Issues negotiated •Focal project, duties •Laptop, software, cell phone •Vacation time •Job location •Earlier start date •$4000 in relocation reimbursement •Equity in business •Their advice •"Don't be afraid to ask" •"You have to ask! They won't bring up expenses/negotiable issues" •"It shows initiative to negotiate for something" •"Be sure you are ready to explain WHY you feel you deserve the salary you ask for" •"While it's tempting to make money your top priority, don't miss out on a great opportunity to grow yourself and your company" •"You are worth more than you realize. Businesses love Baylor"
4 common negotiation shortcomings
•Leaving money on the table (lose-lose) •Settling for too little ("the winner's curse") •Walking away from the table •Settling for terms that are worse than the alternative
Listen actively List potential issues as you hear them
•List Interests as you hear them—known and discovered •List key words or phrases that may lead to an Interests—as you let them continue talking, then come back to this later if need be
Integrative/ distributive bargaining in the real world
•Most actual negotiations are a combination of both integrative and distributive negotiation. •Recognize situations that require more of one approach than the other •Be comfortable with both strategies. •We tend to see problems as more distributive/ competitive than they really are
Debunking 6 myths
•Negotiations are "fixed-sum" •You need to be either tough or soft •Good negotiators are born. •Experience is a great teacher. •Good negotiators take risks. •Good negotiators rely on intuition.
Three big problems in communication
•Negotiators may not be talking with one another—or at least not in such a way as to be understood •Negotiators may not be hearing each other •Negotiators misunderstand one another—may misinterpret messages
First offer review: should I open first?
•OPEN FIRST: Anchoring and adjustment research indicates that unless you have very bad information about the other side, you should open first to take advantage of the opportunity to anchor the negotiation in your favor! •TOO FAVORABLE: An opening that is too favorable to the other side (better than their RP, or even their target) is only going to happen when you have very poor information about the other side. •The Winner's Curse
Categories of people problems
•Perception •Emotion •Communication People problems begin with our inability to see as others see
Negotiating a job offer
•Preparation •In vivo process - during the process •Post offer
Why integrative solutions are so desire able
•Reconcile parties' interests and yield high joint benefit •Effectively expand or create a bargaining zone •More stable than distributive, compromise agreements. •Compromises are often unsatisfactory to one or both parties, causing the issue to come up a later time. •Strengthen relationships - mutually rewarding. •Contribute to the welfare of the broader community of which the two parties are members.
Hard bargaining
•Sees any situation as a conflict of wills •Wants to win •Produces Hard Responses •Harms Relationships •Can leave both parties exhausted and worn out
"Getting to yes" overview THE METHOD: principled negotiation
•Separate People from the Problem • (next week's focus) •Focus on Interests, Not Positions •Invent Options for Mutual Gain •Insist on Using Objective Criteria
"Getting to yes" overview THE METHOD: principled negotiation
•Separate People from the Problem •Focus on Interests, Not Positions •Invent Options for Mutual Gain • Generate a variety of possibilities before deciding what to do *•Insist on Using Objective Criteria* • Insist that the result be based on some objective criteria. (Not because you say so, but because of an expert opinion, custom, law, market value, etc. Use objective standards both as a sword to persuade others and as a shield to help you resist pressure to give in arbitrarily. 1."I am asking for no more or no less than you are paying others for comparable work." 2."I would like to give you a discount, but the price is firm. It's what ABC Co. paid for the same item last week; here is the bill of sale."
"Getting to Yes" Overview THE METHOD: Principled Negotiation
•Separate People from the Problem •Focus on Interests, Not Positions •Invent Options for Mutual Gain • Generate a variety of possibilities before deciding what to do •Insist on Using Objective Criteria • Insist that the result be based on some objective criteria. (Not because you say so, but because of an expert opinion, custom, law, market value, etc.
"Getting to yes" overview THE METHOD: principled negotiation
•Separate People from the Problem •Focus on Interests, Not Positions •Invent Options for Mutual Gain • Generate a variety of possibilities before deciding what to do •Insist on Using Objective Criteria • Insist that the result be based on some objective criteria. (Not because you say so, but because of an expert opinion, custom, law, market value, etc.
How to limit your options
•Students loans and consumer credit debt •Strong location preferences •Risk-averse mentality •"Get a job" rather than "create a job" •Working only where they speak English
Two levels of negotiation
•Substance •Procedure for Dealing with the Substance Every Move Effects the Rules of the Game •Your move may keep the game moving at the status quo; or •It may change the rules of the game. • You are negotiating procedural rules with every move you make
Revealing interests pays off
•Those who reveal their interests improve their outcomes by at least 10% •Statements & questions that can expand the pie •"A 15% gain on Issue A is more valuable to me than a 15% gain on Issue B." •"What would give you more value: increasing X or Y?" •Revealing your interests DOUBLES the probability that the other side will reveal theirs
Revealing your BATNA
•Two cases when it's okay to reveal your BATNA: 1.The 11th hour and negotiations are at a standstill •Reveal at the last minute on the chance the other party might meet it or beat it 2.Your BATNA is phenomenal and you'd be happy to have the other party meet it or trivially improve upon it
Getting to yes (pg 22)
•We must separate the people from the problem. •"Their thinking is the problem"
Intro to integrative negotiation
•Win-Win negotiation •All creative opportunities are exploited and no resources are left on the table. •Pertains to how the pie is enlarged (not divided)
Goals of principled/ integrative negotiations
•Wise Agreements •Efficient Agreements •Maintain Ongoing Relationship
Your interests are your own responsibility
•You are responsible for communicating your needs or wants •Make sure they heard you correctly •Be specific—details make needs credible and add impact
Producing wise agreements
● Does it meet the legitimate interests of each side to the extent possible, resolve interests fairly? Is it durable and does it take community interests into account? ● Is this an efficient agreement? (Did it waste resources?) ● Is this an amicable agreement? (Did it destroy any relationships?)
