MGT 4320 Negotiation And Conflict Resolution
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
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?
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.
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)
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
Soft or hard negotiation
• Neither. •Change the Game. • Principled Negotiation or Negotiation on the Merits •"The Negotiator's New Clothes"
A window into their thinking. Identifying classic "people problems"
• Noise factors are barriers to communication! • Don't get stuck in a noisy communication environment!
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?"
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?"
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?
"Negotiating Power" Relative power of each side is dependent on one question:
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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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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?
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
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
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.
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
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.
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)
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
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.
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
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
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.
Advocate for your interests but be flexible
One of Three Possible Outcomes: •Discover compatible interests. •Discover differing, but complementary (tradable) interests. •A clear mismatch.
Chuka chuka negotiation
Only 1 issue and it was a compatible interest.
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!
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
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
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)
How do you "go to the balcony"
1.Separate Yourself from the Problem 2.Separate the Other People from the Problem
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
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?
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
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.
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*
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."
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.
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.
Their interests
To maximize the pie You must first determine the other side's interests.
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..."
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
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
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.
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.)
"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?)
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
