Negotiations

Front 1

BATNA

Back 1

What you would do if you didn't take the deal. In a dispute it’s the worst thing the other can do to you.

Front 2

Distributive Strategy

Back 2

Set high aspirations (targets; goals)Make the first offer (if you are prepared)The person with the most information should make the first offerImmediately re-anchor if other party makes an extreme opening offerDo not make unilateral concessionsWatch the magnitude of your concessions

Front 3

Integrative

Back 3

1. DON’T FALL FOR THE FIXED PIE BIASShift from your stated positions to a focus on interestsDon’t just ask “why?”, rather ask “What if?”Try to shift focus from single issue to multiple issuesTransforming a single issue into multiple issues and sharing information about interests help generate swift trust and real win-win solutions (if they are available). If not this can be risky.

Front 4

Reservation Point

Back 4

The point where you are totally neutral between walking away and doing this dealThe worst you are going to settle for before walking away from the deal.

Front 5

Aspiration Point

Back 5

Aspiration= what each party is shooting for (best)Negotiators often aim too lowRelationship to reservation point = aspiration is what you are hoping to get, reservation point is when you will walk away

Front 6

ZOPA

Back 6

Zone of potential agreementThe area between your reservation point and the opponent’s reservation point.

Front 7

Integrative Potential

Back 7

Must have more than one issueParties must have different preferences on issuesThey trade so that each side gets more of what they want most.Able to create value / expand the pie

Front 8

Claiming vs Creating Value

Back 8

Moves to claim value tend to block moves aimed at creating value.Claiming is competitive and assertiveThe downside of pursuing a cooperative strategy aimed at creating value is that it often exposes you to exploitation.

Front 9

Positions

Back 9

Positions are stated wants / needs (the tip of the iceberg)

Front 10

Interests

Back 10

Interests are the “why” behind the position (part of the iceberg that is under water)

Front 11

Post-settlement Settlements

Back 11

After you finish your negotiation –check to see if you could both do better by sharing more information

Guarantee each side that no one will do worse.

Ask: “Is there anything else we can do to create value?”

Allows you to maximize value of deal for both parties

Front 12

Job Offers Prep #1

Back 12

Step 1: Assess your BATNA –Best Alternative to a Negotiated AgreementIdentify all plausible alternative optionsEstimate the value of eachSelect the best –including both monetary and non-monetary value. Why do this?Often a BATNA is to find someone else to negotiate with. Estimate the probability. If you have not identified a specific BATNA, your position is weak.A good BATNA gives you power and helps you know when to walk away (Ebay examples)

Front 13

Job Offers Prep #2

Back 13

Step 2: Identify your reservation pointDetermine what the lowest value that would still make it worth doing this negotiationConsider the Other Side’s Perspective

Front 14

Job Offers Prep #3

Back 14

Step 3: Assess the other side’s BATNA

Front 15

Job Offers Prep #4

Back 15

Step 4: Assess the other side’s Reservation PointSteps 3 & 4 are a large part of the difference between mediocre and great negotiators.

Front 16

Ethical consequences of lying

Back 16

A statement is fraudulent when the negotiator makes a knowing misrepresentation of a material fact on which the other party reasonably relies and which causes damage.Loss of trust in negotiation partner.Lawsuit if grave enough

Front 17

Reputation

Back 17

Positive = trust, integrative approach, more value creationNegative = lack of trust, distributive, etc.

Front 18

Agent

Back 18

representative of individual / organization

Front 19

Principal

Back 19

the entity engaging in the negotiation

Front 20

Benefits of using an agent

Back 20

Benefits of using AgentMore experienced (in field/industry) and have expertise They negotiate for you Not as emotionally connected - detachmentExpertiseConfidentialityTactical Flexibility

Front 21

Cons of an Agent

Back 21

RisksShrinks ZOPA (they are going to take a commission) Agree just to agreeIncompatible incentive structure More communication links can result in distortionsOver time, agents become more connected with other agents and want to maintain those relationships

Front 22

To use an agent effectively

Back 22

Know your BATNA before meeting with your agent Have your agent help you improve BATNA without revealing itCommunicate interests without revealing BATNA or RVCapitalize on the agent's expertiseDiscuss ratification and the process of negotiating before sending your agent to negotiate Shop around Interview your agent: negotiating training, retention agreements, terms of service, easy exit clauses

Front 23

Pros of teams

Back 23

Are better at creating value THAN INDIVIDUALS. For example, the USA figure skating team was able to medal, while individuals on the team were unable.Are less likely to assume a fixed-pie (win-lose negotiation/distributive)Ask more relevant questionsShare more information, to have a better understanding of prioritiesThe greater understanding of these priorities create more value

Front 24

Cons of teams

Back 24

Could have conflicting interests/strategies within teamHave to manage logistics (communication, leadership roles, vying time and attention)

Front 25

Mitigating costs of team negotiation

Back 25

Take caucus (break) during negotiation to regroupCoordinate beforehand

Front 26

Collectivism

Back 26

Efforts to maximise the welfare of the group. Source of identity is the groupbelief in strength in numbers,relationship orientedtight social networksIdentity is based on being part of a social grouphigh levels of cooperationBehavior is influenced by shaming those that don’t conformEG. Latin America, Middle East

Front 27

Individualism

Back 27

not collectbelief in selfEG. USA, Germany, Nordic

Front 28

Japanese style

Back 28

Represent their company (collectivist) and don't make decisions without consulting with them.

Take things slow, don't like a time limit.

Overly polite. Can get insulted if you rush them or low ball them

Negotiate in teams- look for consensus.

If blunt or impatient they'd shut down.

Front 29

European style

Back 29

Individualistic, more agressive. Unemotional (?)

Front 30

Polychromic

Back 30

involves approaches of many things and involves many people, most common in Mediterranean and Latin cultures such as France, Greece, Italy and Mexico.

Begin and end meetings at flexible times

Have breaks when they think it's appropriate

Manage very well a high flow of information

Front 31

Monochromic

Back 31

linear, sequential, and involve dealing with one thing at a time. These approaches are most common in the European influenced cultures of the Switzerland, United States, Scandinavia and Germany.

Are used to scheduling breaksReply on detailed, explicit, and specific communicationDon't have a problem with talking in sequences

Front 32

German style

Back 32

Germans and Russian are extremely cold and impersonal. Their style is direct and they almost never allow jokes.

Front 33

Mediation

Back 33

Mediation: The process in which a mediator plays the role of settlement-facilitatorThird party as a neutral party during a dispute.

Front 34

Arbitration

Back 34

Arbitration: Arbitration is an unaffiliated third party who makes a decision for parties within a dispute.Combinations of mediation and arbitration (e.g. med/arb)Mediation with authority/power to make the final decision

Front 35

Grievances

Back 35

Grievances:Disagreements related to discipline, fines, franchise movement issues, injuries and salaries

Front 36

Use of caucuses

Back 36

Allow for third party to identify each parties interests independently and privately, avoiding conflict at the negotiation table and potentially leading to more information being sharedHelps both sides come to a reasonable conclusion

Front 37

Disputes vs Deal Making

Back 37

BATNAs are linked in disputes while BATNAs are not linked in deal-making negotiationsDisputes are when claims by one party has been rejected by the other partyDispute Resolutions resolve underlying problems, preserves relationships, and allows for tradeoffs/ joint gains.

Front 38

Shadow negotiations

Back 38

Understanding the interests of parties before you actually get to the table.How much you might have to bend in order to get your way still.The ability to form coalitions

Front 39

How/Why Coalitions form

Back 39

Interests (know and support)Same interests = very stableDifferent interests = assure them

Front 40

Coalition building strategy

Back 40

Start earlyGet a verbal commitmentThis carries weight. A verbal contract is important. Holding people to a certain expectation.