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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)

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")

Why are people bad negotiators?

1) egocentrism


2) confirmation bias


3) Satisficing


4) self-reinforcing incompetence

What is satisficing?

settling for something less than they could otherwise have




opposite of optimizing

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

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

Target or aspiration point

Ideal outcome for negotiator

Underaspiring negotiator

sets target too low


commonly suffers from "winners curse"

Overaspiring or positional negotiator

"too tough"


sets target point too high and refuses to make concessions

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

BATNA

best to alternative negotiated agreement

Reservation point

quantification of negotiator's BATNA with respect to other alternatives

How to develop a reservation point

1) Brainstorm alternatives


2) Evaluate each alternative


3) Attempt to improve BATNA


4) Determine reservation price

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

Focal points

numbers of figures that appear to be valid but have no basis (like anchors)

Strategic risk

riskiness of tactics that negotiators use at the bargaining table. can choose between collaborative or competitive.

Contractual risk

risk associated with willingness of the other party to honor its terms

Endowment effects

the reference point that a buyer or seller approaches with - can create a loss mindset

Counterfactual thinking

thinking about what might have happened but did not occur

hidden table

when there are outside parties involved but not represented at the table

consensus conflict

people disagree with opinions, ideas, beliefs and are trying to seek agreement of opinion

scarce resource competition

people vie for limited resources

linkage effect

cascade effect between negotiations

ZOPA

zone of possible agreements: range between negotiators reservation points. want it to be positive and big.

what to do with a negative bargaining zone?

exercise best alternatives to reach agreement

bargaining surplus

amount of overlap between parties' reservation points

negotiator's surplus

positive difference between settlement outcome and negotiator's reservation

how to pie-slice

with a knife

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

chilling effect

when you ask for too much and it sours the relationship

boulwarism

making one's first offer one's LAST offer

goal-setting paradox

focusing on your targets may lead to a great outcome but it may not feel satisfying

what to consider with concessions

1) pattern (aiming for bilateral)


2) magnitude (better to do bit by bit)


3) timing (gradual is best)

GRIT

graduated reduction in tension: based on reciprocity and gradual concessions

should i reveal my reservation point?

No, other party will immediately go for that and offer no more

Should I lie about my reservation point?

You could. But lying is bad (for ethics and reputation)

Should I try to manipulate the counterparty's reservation point?

No.

Should I make a "Final Offer" or commit to a position?

Not normally. Be prepared to walk away if they don't take it

Way to use fairness in pie slicing: equality rule

"blind justice"


equal shares for all


outcomes distributed without regard to inputs

Ways to use fairness in pie slicing: equity rule

"proportionality of contributions principle"


distribution should be proportional to a person's contribution

Needs-based rule

"welfare-based allocation"


benefits should be proportional to need

Reasons for social comparison

Self improvement


Self enhancement


Accurate self-evaluation

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

Cognitive mechanisms that support egocentric judgements

Selective encoding and memory


Differential retrieval


Informational disparity

Effective pie slicing tenents

Consistency


simplicity


Effectiveness


justifiable


consensus


Satisfaction

Integrative negotiations

all creative opportunities are leveraged and no resources are left on the table

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



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

key reasons for lose-lose outcomes

false (or illusory) conflict: believing interests are incompatible when they aren't


fixed pie perception

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

relational accomodation

when both parties hold highly relational goals of views of themselves

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

logrolling

strategy of trading off so as to capitalize on different strengths of preference

PReSS

presettlement settlements: formal, initial, partial

postsettlement settlements

negotiators agree to explore other options with the goal of finding another than both prefer more than the current one

Strategic framework for reaching integrative agreements


old-fashioned negotiator

believes in tough stance to negotiate successfully



flower child negotiator

so busy expanding the pie in win-win negotiation that forgets to claim pie

enlightened negotiator

knows to expand and *claim* pie

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

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

adjudication

present items to neutral third party who hands down binding decision

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

emotional intelligence

ability to understand emotions in themselves and use emotional knowledge to effect positive outcomes

distributive self-efficacy

belief in ability to claim resources effectively

integrative self-efficacy

belief in ability to create resources

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

particularism

how much utility we derive depends on who is providing it

concreteness

how tangible something is

deterrence-based trust

consistency of behavior - people follow through


based on sanctions and monitoring

reactance theory

people don't like being told no - take away their freedom and they will act to reassert it

knowledge based trust

based on behavioral predictability


occurs when you can predict behavior based on prior knowledge



ID-based trust

grounded in complete empathy with others' desires and intentions

cognitive route vs affective route to build trust

rational and deliberate thoughts vs intuition and emotion

personal vs task (or cognitive) conflict

rooted in emotions and anger vs depersonalized

how to build trust: deliberate/structural mechanisms

agree on common goal


capitalize on network connections


find shared problem/enemy


focus on future



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



dispositional attribution

calls into questions someone's character and intentions by citing them as cause of behavior or incident

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

three types of relationships in neogiation

business only


friendship only


embedded relationships with both