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80 Cards in this Set
- Front
- Back
Key reasons of importance for negotiations |
1) Dynamic nature of business (people leave jobs more frequently now) 2) interdependence (intra-collaboration) 3) economic forces 4) information technology (increased comm) 5) globalization (cross cultural) |
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Four major shortcomings in negotiations |
1) leaving money on the table ("lose-lose") 2) settling for too little ("winners curse") 3) walking away from the table 4) settling for terms that are worse than your best alternative ("agreement bias") |
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Why are people bad negotiators? |
1) egocentrism 2) confirmation bias 3) Satisficing 4) self-reinforcing incompetence |
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What is satisficing? |
settling for something less than they could otherwise have opposite of optimizing |
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Six common negotiation myths |
1) negotiations are fixed-sum (actually win-win) 2) you have to be tough or soft 3) good negotiators are born 4) life experience is a great teacher 5) good negotiators take risks (*research!*) 6) good negotiators rely on intuition |
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How to prepare for a negotiation |
1) Self assessment - what do I want? What are my alternatives? 2) Assessment of other party 3) assessment of situation |
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Target or aspiration point |
Ideal outcome for negotiator |
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Underaspiring negotiator |
sets target too low commonly suffers from "winners curse" |
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Overaspiring or positional negotiator |
"too tough" sets target point too high and refuses to make concessions |
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grass-is-greener negotiator |
doesn't know what she wants and wants what other party can't give; knows little about other party ^called reactive devaluation |
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BATNA |
best to alternative negotiated agreement |
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Reservation point |
quantification of negotiator's BATNA with respect to other alternatives |
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How to develop a reservation point |
1) Brainstorm alternatives 2) Evaluate each alternative 3) Attempt to improve BATNA 4) Determine reservation price |
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Calculating reservation price |
Determine probability of occurrence based on price Multiple probability with original cost (until all probable outcomes represented) Add up final amount to get to reservation price |
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Focal points |
numbers of figures that appear to be valid but have no basis (like anchors) |
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Strategic risk |
riskiness of tactics that negotiators use at the bargaining table. can choose between collaborative or competitive. |
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Contractual risk |
risk associated with willingness of the other party to honor its terms |
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Endowment effects |
the reference point that a buyer or seller approaches with - can create a loss mindset |
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Counterfactual thinking |
thinking about what might have happened but did not occur |
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hidden table |
when there are outside parties involved but not represented at the table |
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consensus conflict |
people disagree with opinions, ideas, beliefs and are trying to seek agreement of opinion |
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scarce resource competition |
people vie for limited resources |
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linkage effect |
cascade effect between negotiations |
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ZOPA |
zone of possible agreements: range between negotiators reservation points. want it to be positive and big. |
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what to do with a negative bargaining zone? |
exercise best alternatives to reach agreement |
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bargaining surplus |
amount of overlap between parties' reservation points |
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negotiator's surplus |
positive difference between settlement outcome and negotiator's reservation |
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how to pie-slice |
with a knife |
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but really, how to pie-slice |
assess batna and improve it determine reservation point research other parties BATNA and res point make first offer immediately reanchor if other party goes 1st plan your concessions support offer with facts appeal to norms of fairness don't fall for even split |
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chilling effect |
when you ask for too much and it sours the relationship |
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boulwarism |
making one's first offer one's LAST offer |
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goal-setting paradox |
focusing on your targets may lead to a great outcome but it may not feel satisfying |
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what to consider with concessions |
1) pattern (aiming for bilateral) 2) magnitude (better to do bit by bit) 3) timing (gradual is best) |
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GRIT |
graduated reduction in tension: based on reciprocity and gradual concessions |
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should i reveal my reservation point? |
No, other party will immediately go for that and offer no more |
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Should I lie about my reservation point? |
You could. But lying is bad (for ethics and reputation) |
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Should I try to manipulate the counterparty's reservation point? |
No. |
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Should I make a "Final Offer" or commit to a position? |
Not normally. Be prepared to walk away if they don't take it |
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Way to use fairness in pie slicing: equality rule |
"blind justice" equal shares for all outcomes distributed without regard to inputs |
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Ways to use fairness in pie slicing: equity rule |
"proportionality of contributions principle" distribution should be proportional to a person's contribution |
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Needs-based rule |
"welfare-based allocation" benefits should be proportional to need |
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Reasons for social comparison |
Self improvement Self enhancement Accurate self-evaluation |
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Types of pie slicers |
Loyalists: prefer to split evenly except in neg. Saints: prefer to split evenly always Ruthless: always want more than other party |
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Cognitive mechanisms that support egocentric judgements |
Selective encoding and memory Differential retrieval Informational disparity |
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Effective pie slicing tenents |
Consistency simplicity Effectiveness justifiable consensus Satisfaction |
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Integrative negotiations |
all creative opportunities are leveraged and no resources are left on the table |
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How do know if a negotiation is win-win? |
More than one issue Ability to bring in other issues and side deals Difference in preference represented in parties |
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Pyramid model of integrative agreements |
level 1: exceed parties' res points level 2: created value by finding another outcome that all prefer level 3: lies in pareto-optimal frontier, no other opportunity exists that could improve without harming other |
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key reasons for lose-lose outcomes |
false (or illusory) conflict: believing interests are incompatible when they aren't fixed pie perception |
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pie expanding strategies that don't work |
commitment to win-win deal compromise focusing on longterm relationship adopting a cooperative orientation taking extra time to negotiate |
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relational accomodation |
when both parties hold highly relational goals of views of themselves |
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pie expanding strategies that do work |
perspective taking asking questions about priorities provide insight into your priorities unbundle issues make package deals, not single issue be aggressive in anchoring gain better info than other party be persistent about value of an offer overcome concession aversion |
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logrolling |
strategy of trading off so as to capitalize on different strengths of preference |
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PReSS |
presettlement settlements: formal, initial, partial |
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postsettlement settlements |
negotiators agree to explore other options with the goal of finding another than both prefer more than the current one |
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Strategic framework for reaching integrative agreements |
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old-fashioned negotiator |
believes in tough stance to negotiate successfully |
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flower child negotiator |
so busy expanding the pie in win-win negotiation that forgets to claim pie |
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enlightened negotiator |
knows to expand and *claim* pie |
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three types of motivational negotiation style |
individualistic: maximize personal gain competitive: maximize difference between personal and other gain cooperative: seeks equality and minimize difference between personal and other gain |
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three models to resolve conflict |
power: use rank, status, threats, intimidation to get their way rights: rely on standards of fairness, contracts, legal rights interests: understand and reconcile differences in interests |
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adjudication |
present items to neutral third party who hands down binding decision |
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when to use rights and power |
other party refuses to come to table negotiations have broken down other party needs to know you have power someone violates a law interests are so opposed social change is necessary |
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emotional intelligence |
ability to understand emotions in themselves and use emotional knowledge to effect positive outcomes |
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distributive self-efficacy |
belief in ability to claim resources effectively |
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integrative self-efficacy |
belief in ability to create resources |
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how to deal with emotions at the table |
understand incidental emotions beware of what you're enforcing reevaluation > valuable than suppression emotions are contagious understand emotional triggers |
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particularism |
how much utility we derive depends on who is providing it |
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concreteness |
how tangible something is |
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deterrence-based trust |
consistency of behavior - people follow through based on sanctions and monitoring |
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reactance theory |
people don't like being told no - take away their freedom and they will act to reassert it |
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knowledge based trust |
based on behavioral predictability occurs when you can predict behavior based on prior knowledge |
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ID-based trust |
grounded in complete empathy with others' desires and intentions |
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cognitive route vs affective route to build trust |
rational and deliberate thoughts vs intuition and emotion |
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personal vs task (or cognitive) conflict |
rooted in emotions and anger vs depersonalized |
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how to build trust: deliberate/structural mechanisms |
agree on common goal capitalize on network connections find shared problem/enemy focus on future |
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psychological strategies to build trust |
similarity mere exposure: more we are exposed to something, the more we like it physical presence reciprocity schmoozing flattery mimicry and mirroring |
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dispositional attribution |
calls into questions someone's character and intentions by citing them as cause of behavior or incident |
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steps to repair broken trust |
arrange a personal meeting put the focus on the relationship apologize and let them vent don't get defensive ask for info and clarify understanding formulate plan think about ways to prevent do a relationship check up |
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three types of relationships in neogiation |
business only friendship only embedded relationships with both |