2011.02.negotiation 02
TRANSCRIPT
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Dysfunctions
Dysfunctions Competitive processes. Misperception and bias. Emotionality Decreased
communication. Blurred issues. Rigid commitments. Magnified differences,
minimized similarities. Escalation of the
conflict.
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The Dual Concerns Model
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Discussion: Fisher Questions What are 2 standard negotiating strategies? According to Fisher, what is a wise agreement List 3 reasons and explain them why the author
rejects arguing over positions as a way to negotiate. How can the human element help or harm
negotiations? How will perception of the other side help in
negotiations? How can your own perceptions influence negotiations?
Why should you give your interests and reasoning first and your conclusions and proposals later?
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Argumentation vs. Persuasion
• Argumentation.– Presenting facts and
data in logically sound ways in order to persuade someone to change belief or behavior.
• Persuasion.– A delicate mix Of:
• Rational argument;• Social forces;• Psychological
forces;• Rhetoric.
• Argumentación. – Presentación de hechos y
de datos de maneras lógicamente sanas para persuadir alguien de cambiar creencia o comportamiento.
• Persuasión. – Una mezcla delicada de: – Discusión racional; – Fuerzas sociales; – Fuerzas psicologicas; – Retórico.
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Ting Toomy
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El modelo dual de las preocupaciones
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Poco Mucho
Preocupación por yo mismo
Pre
ocu
paci
ón
por
otr
a
Poc
o
M
ucho
AccommodatingAdaptarse
Problem SolvingColaborador
ContendingCompetetivo
CompromisingCompromiso
Inaction/AvoidEvitar
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Face (Cara)
• Saving face is avoiding embarrassment.
• You might work to save your own face.
• You might work to help save another’s face.
• Face is an important concept in conflict negotiations.
• La ahorra cara está evitando la verguenza.
• Usted puede ser que trabaje para ahorrar su propia cara.
• Usted puede ser que trabaje para ayudar excepto cara de otra persona.
• La cara es un concepto importante en negociaciones del conflicto.
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Two Types of Cultures
• Collectivism. – “we” oriented
perspective that emphasizes relationships.
• Individualism– “I” oriented
perspective that emphasizes individualism.
• Different ways of defining self, goals and duty.
• Collectivism. – “nosotros"
orientamos la perspectiva que acentúa relaciones.
• Individualismo – "I" orientó la
perspectiva que acentúa individualismo.
• Diversas maneras de definir uno mismo, metas y deber.05/09/08
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Facework
• “Face giving” is the facework strategy used to defend and support another’s need for inclusion (collectivism).
• “Face restoration” is the facework strategy used to stake out a unique place in life, preserve autonomy, and defend against loss of personal freedom (individualism).
• “Cara que da" es la estrategia del facework usada para defender y para apoyar la necesidad de otra persona de la inclusión (collectivism).
• “Cara de la restauración" es la estrategia del facework usada para estacar fuera de un lugar único en vida, para preservar la autonomía, y para defenderla contra pérdida de libertad personal (individualismo).
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Revised Conflict Map
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Negotiation Role Play
Ronaldo wants to start a nightclub in an old warehouse near the edge of a residential area with several apartment buildings. Ronaldo has purchased the property and has all of the necessary permits to begin construction on his nightclub. The representative of the residents of the apartments is concerned that a nightclub will play loud music and the patrons of the nightclub might drink too much and become a nuisance in the neighborhood. Ronaldo arranges a meeting with the representative of the residents of the apartments to negotiate terms of an agreement so that he can build his nightclub without causing problems with the residents.
Role 1: Ronaldo Role 2 Alfonso (Representative of Apartment)
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Key Concepts
05/09/08
BATNA.
Reservation Price.
ZOPA.
Fixed Pie
Negation Frame
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Negotiation Case
While on vacation you go into a jewelry store and see an attractive looking watch. You ask the store’s owner how much it costs and he replies $4.095.670
How much would you offer to pay for this watch?
Should you offer anything?
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When should you negotiateWhen should you never negotiate
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Lewicki:When Should You Never Negotiate
When you don’t care.• When you could lose
everything.• When there is nothing
you could gain (the other has nothing you want).
• When the demands are illegal or unethical.
• When they act in bad faith.
• When you don’t have time.
• When waiting would improve your position.
• When you’re not prepared.
Cuando usted no cuida. • Cuando usted podría
perder todo.• Cuando no hay nada
usted podría ganar (el otro hace que nada usted quiera).
• Cuando las demandas son ilegales o inmorales.
• Cuando actúan con maldad.
• Cuando usted no tiene tiempo.
• Cuando el esperar mejoraría su posición.
• Cuando le no preparan. 16
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Distributive Negotiation
• Goals of one party are in fundamental, direct conflict to another party.
• Resources are fixed and limited.
• Maximizing the share of resources is the goal.
• Distributive negotiation is all about who gets (or pays) how much. It is also where more for me means less for you.
• Las metas de un partido están en el fundamental, conflicto directo a otro partido.
• Los recursos son fijos y limitados.
• La maximización de la parte de recursos es la meta.
• La negociación distributiva está todo sobre quién consigue (o paga) cuánto. Está también donde más para mí los medios menos para usted.
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Integrative Negotiation
• 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.
• Cree un libre flujo de información.
• Intente a entender las necesidades verdaderas y los objetivos del otro negociador.
• Acentúe los las cosas en campo común entre los partidos y reduzca al mínimo las diferencias.
• Busque para las soluciones que logran las metas y los objetivos de ambos lados. 18
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Positions and Interests
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Position/Interest
• Positions are concrete things that you say you want.
• Interests are the tangible motivations that lead you to take that positions – needs, desires, concerns, fears and aspirations.
• Las posiciones son cosas concretas que usted dice que usted quiere.
• Los intereses son las motivaciones tangibles que le llevan a tomar que las posiciones - las necesidades, desean, las preocupaciones, los miedos y las aspiraciones.
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Managing simple conflict
Clarify both perceptions of message
Focus discussion on issues
Use facts not opinions
Use structured problem solving
Compromise
Make conflict group concern
Tackle one issue; most important
Find areas of agreement
Postpone decision while conducting additional research
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Managing ego - conflict
Encourage active listening
Keep discussion on key issues
Turn discussion to problem to solve, rather than conflict to win
Seek cool, calm climate
Be descriptive rather than evaluative
Develop rules or procedures that permit differences of opinions
Agree to disagree & return to areas of agreement
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Two Types of NegotiationsCooperativ
e: Long term relationshi
p
Competitiv
e Negotiation: One time deal
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Negotiator's Dilemma
In any negotiation, the parties must decide whether to be competitive, cooperative, or some of both.
David Lax and James Sebenius call this the negotiator's dilemma Joint value Joint gains new developments are considered
improvements by both sides.
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Key Concepts
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Principled Negotiation
• Key Principles – PIOC Model.– People.– Interests.
• (BATNA).– Options.– Criteria.
• Principios Dominantes Modelo de GIOC.– Gente. – Intereses.
• (MANA). – Opciones. – Criterios.
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People
• Partnership in problem-solving, not adversarial.
• Future relationship importance considered.
• Research on Influence.– Normative
Influence.• “peripheral cues”
nonverbal, tone, posture, likable.
– Informational Influence.
• “central cues” – logic, reasoning, facts.
• Sociedad en la solucion de problemas, no adversarial. • La importancia futura de la relación consideraba. • Investigación sobre influencia. • Influencia Normativa.
– "señales periféricas" nonverbal, tono, postura, agradable.
• Influencia Informativa.– “señales centrales" - lógica, razonamiento, hechos.
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Interests
• What you need vs. what you say you want.– Know your own.– Know your
audiences’.• Must prepare, do
homework.• Allows for creative
solutions.
• Qué usted necesita contra lo que usted le dice desee. – Sepa sus el propios. – Conozca a sus audiencias.
• Debe prepararse, hace la preparación. • Tiene en cuenta soluciones creativas.
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BATNA/MANA
• Best Alternative to a Negotiated Agreement.– If you can’t come to an
agreement, what is your walk away alternative?
– Weigh every suggested outcome against your BATNA.
– Example: Jerry McGuire clip.
• El mejor alternativa a un acuerdo negociado. – ¿Si usted no puede venir a un acuerdo, cuál es su
camina alternativa ausente? – Pese cada resultado sugerido contra su BATNA. – Ejemplo: Clip jerry de McGuire.
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Importance of BATNA
• If no BATNA, risk escalating commitment.– example:
negotiating condo, stocks.
• Need to know when it is in your best interest to walk away.
• Si ningunos BATNA, arriesgan el extender de ejemplo de la comisión: – condo de negociación, acción.
• La necesidad de saber a cuando está en su mejor interés camina lejos.
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Improving Your Position
A Weak BATNA
A weak BATNA is not the end of the world. Whatever hand you’ve been dealt, here are three potential approaches to strengthening your position:
Strengthening a BATNA
Improve your BATNA.
Identify the other side’s BATNA.
Weaken the other party’s BATNA.
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Options
• Expand the pie.• Brainstorm solutions.• Involvement in
solution = higher likelihood of persuasion.
• Amplíe la Pie. • Soluciones de la buena inspiración. • Implicación en la solución = más arriba
probabilidad de la persuasión.
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“Expanding the Pie”
• Negotiation is about more than a fixed division of a single resource (Pie).
• “Win-win” situation.• Make the “Pie” bigger
so that you both get.• More than half.
• La negociación está sobre más que una división fija de un solo recurso (pastel).
• "Ganar-gane" la situación. • Haga la " pastel" más grande de modo que usted
ambos consiga. • Más que medio.
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“Expanding the Pie”
• Clear Opportunities for Win-Win.
• Negotiation on more than one issue.
• Possibility of side deals.
• Different issue preferences between.
• Las oportunidades claras para Ganar-Ganar. • Negociación en más de una cuestión. Posibilidad
de repartos laterales. Diversas preferencias de la cuestión en medio.
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Distributive Concepts
• Resistance Point.• ZOPA.• Range.• Frame.• Anchor/
Counteranchoring • Concession. • Leverage.
• Punto de la resistencia. • ZOPA. • Gama. • Marca. • Ancla/Contra Ancla• Concesión. • Palancada.
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Reservation Price/Ultima Precio
• The least favorable point where one will accept.
• The “walk-away”.• Example: you are
looking for larger office space. You set your BATNA at $20 and your Reservation Price at $35
• If owner won’t budge from $35, you walk away and take advantage of your BATNA
• El menos punto favorable donde uno aceptará.
• El "walk-away". • Ejemplo: usted está
buscando un espacio más grande de la oficina.
• Usted fijó su BATNA en $20 y su precio de reservación en $35.
• Si el dueño no bulle a partir del $35, usted camina lejos y se aprovecha de su BATNA
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ZOPA• Zone of Possible
Agreement (ZOPA).• The difference between
the Seller’s Reservation Price and the Buyer’s Reservation Price.
• What happens if positions below are reversed?
• Zona del acuerdo posible (ZOPA).
• La diferencia entre el precio de reservación del vendedor y el precio de reservación del comprador.
• ¿Qué sucede si se invierten las posiciones abajo?
ZOPA
$275k$250k
Seller’s Reservation Price
Buyer’s Reservation Price
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Anchoring / Counteranchoring
Attempt to establish a reference point around which negotiations will make adjustments
If the other side makes the first offer, you should recognize and resist that offer’s potential power as a psychological anchor.
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Anchoring / Counter-anchoring
REMEMBER anchors are
most powerful when
uncertainty is highest
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Concessionary Moves
Negotiation experts generally interpret a large concessionary move as an indicator of significant additional flexibility
The best advice about concessions is to avoid the impulse to make them.
Look to your BATNA before you consider making a concession. If your BATNA is very strong (especially relative to the other side’s), a concession may be unnecessary in making a deal.
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Negotiation
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Isabella has worked as the executive assistant to Martina for ten years. Isabella has worked overtime on many occasions when Martina had special projects to complete. Martina has not given Isabella a raise in her salary for three years and Isabella is thinking about looking for a new position which could pay her more money. Martina is concerned about losing Isabella to another employer but is worried that her own company has not made a profit in the last two years. Isabella and Martina sit down in the conference room to negotiate a possible raise in salary for Isabella.
ROLE #1: ISABELLA ROLE #2: MARTINA ROLE #3: OBSERVER (Take notes and report about
negotation)
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More Theory
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44Reference Text: Contract Negotiations, by Gregory A. Garrett, CCH, Inc. (2005), pg. 13.
Contract Negotiation Competencies
Mark H. McCormack, best-selling author of “What They Don’t Teach You at Harvard Business School,” has stated the perfect negotiator should have:• Faultless people sense
• A strong competitive streak
• A view of the big picture
• An eye for the crucial detail
• Unimpeachable integrity
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Contract Negotiation Competencies
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Negotiation Process
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Negotiation Process 3 Steps (Cronkite)
Find opponents
bottom line.
Find your bottom
line.
Push’s opponent
to lower bottom
line.
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Negotiation Process 4 Steps (Shell)
Negotiation planning and preparation. • Extremely
important.
Beginning to interact• orientation to
situation, • relationship with
other side,
• information exchange.
Initial proposal• offer or demand• making concessions• narrowing of
differences.
Closing• Getting
commitment.
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Seven Stages (Folberg, Golann)
Preparation and Setting Goals
Initial Interactio
n and Offers
Exchanging &
Refining Informati
on
Bargaining
Moving toward Closure
Bridging impasse & make
decisions
Finalizing Agreeme
nt
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Negotiation Considerations
Cooperation
Competition
Enlightene
d self-
interest.
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Negotiation Considerations
Triad of Concerns
Economic
Social Emotions
Social How will others view the
agreement Emotional
How will you feel about the agreement
Successful Negotiations Lewicki and Fisher
Economic Will you be satisfied with
the economic results
Triad of concerns
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Power of Pre-negotiation
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Step #1: Preparing Your Strategy Assess the situation. There are four basic bargaining
situations depending on: (1) The perceived importance of the ongoing relationship and (2) the perceived conflict over the the stakes involved (to what degree do both sides want the same limited resource such as money, power, terms, etc.)
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The Situational Matrix
I: Balanced Concerns (Business partnership, joint venture, or merger)
II: Relationships (Marriage, friendship, or work team)
III: Transactions (Divorce, house sale, or market transaction)
IV: Tacit Coordination (Highway intersection or airplane seating)
HighLow
Perceived Conflict Over Stakes
High
Low
Importanceof Relationship
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Negotiating in the Quadrants Quadrant IV: Tacit Coordination - Calls for tactful
avoidance of conflict, not negotiation. Quadrant III: Transactions - Stakes are
substantially more important than relationships. Leverage counts. Competition, problem solving.
Quadrant II: Relationships - Treat the other party well, generously, the stakes are secondary. Accommodate. (Einstein job offer, e.g.)
Quadrant I: Balanced Concerns - Problem solving or compromise
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Prepare a Bargaining Plan
Make a list of questions you intend to ask at the beginning of the negotiation in order to assess the assumptions of the other side: Is a relationship most important to them? Are the stakes most important to them? Do they believe it is a Balanced Concerns
situation? Prepare your bargaining plan based on
the other side’s assumptions.
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Bargaining Mix
• Set of issues that are or could be considered in the negotiations.
• Often, substantial differences between the parties in the importance of various issues.
• Having multiple items in the bargaining mix and being creative in dealing with them can be very helpful - in both competitive and collaborative negotiations.
• Sistema de las ediciones que son o se podrían considerar en las negociaciones.
• A menudo, diferencias substanciales entre los partidos en la importancia de varias ediciones.
• Tener artículos múltiples en la mezcla de negociación y el ser creativos haciendo frente a ellos pueden ser muy provechosos - en negociaciones competitivas y de colaboración.
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Step #2: Exchanging Information The information exchange step has
several phases: Developing rapport between the individual
negotiators The surfacing of underlying interests, issues,
and perceptions that concern both parties The initial testing of expectations
As we share information, we test our counterpart’s commitment to the norm of reciprocity.
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Developing Rapport
The “liking rule.” We prefer to say “yes” to someone we like
and trust. We like and trust people exactly like
ourselves -- similarity. Research the decision maker’s likes and
dislikes, hobbies, sports, etc. thoroughly Negotiate face-to-face, not online or over
the phone -- tough to build trust, rapport, and understanding.
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Relationships according to Salacuse
Sincere Interest
Human relations
Build working relationships
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Obtaining Information on Interests, Issues, and Perceptions (reconassance)
Exchange information without giving up anything.
Ask questions -- don’t be a blabbermouth -- and remember the cardinal rule of discovery: Probe first, disclose later.
Test for understanding Make sure you understand
Summarize
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Signaling Expectations and Leverage
Deliver bad news (deal breakers, threats) early in a negotiation. Sell all the deal terms early. Indicate where you can and cannot be
flexible (credibility). Signal your expectations and leverage.
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Signaling Leverage
Make confident demands and credible threats. Display your alternatives and leave the decision to the other side.
Emphasize the uncertain future. Bluff (act strong when you are not)
Show the other side you are investing in the relationship. Be generous.
Acknowledge the other side's power and stress the potential gains from future cooperation. Appeal to the other side's sympathy. What would they do in your position?
Strong Weak
Your Leverage as You See It
Firm
Flexible
HowYou
Want toAct
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If You Are Going to Be Flexible, Get Credit for It
Let the other side know what alternatives you have before you show you are not going to use the alternatives (BATNAs). By revealing your alternatives and not
using them, you get credit for being generous and reasonable.
Be fair, but always make sure you get credit for being fair.
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Match the Other’s Side’s Style Tit for tat in style, too.
If the they are screaming, tough, fierce competitors, they will like and respect you if you are like them. Yell back
If they are bullies, confront them early. Once again, the reciprocity principle at
work. Train people to be cooperative.
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Step #3: Opening and Making Concessions
The bargaining stage is dominated by tactics, which depend on the situation. Competitor Vs competitor, relationship
vital, etc. Bargaining formally begins when
negotiators on one side open with a concrete, plausible (in their mind) offer.
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Opening Tactics: Open First?
If you are uninformed about the other side’s business, interests, or demands, never open first.
If you are well informed, always open first: It lets you fix the range -- the zone of realistic
expectations. Sometimes forces the other side to rethink its
goals. Most important, allows you to set the anchor.
We tend to be heavily influenced by first impressions.
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Anchoring
When the other side hears a high or low number, they adjust their expectations (unconsciously) accordingly. The first offer anchors the other side’s perception
of your walk-away price (NBC Super Bowl). First offer must be somewhat reasonable (no more than
50% higher than you will settle for). As high as possible--as close to the other side’s walk-
away as possible (that’s the home run). Outlandish numbers at the beginning can kill the
deal or destroy your credibility if you drastically reduce the offer later.
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Framing
Framing is a process of describing or explaining a situation a particular way.
Framing is the use of analogy, metaphor, or characterization to define the problem or to advocate a solution of that problem.
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Framing
Frame all of your offers. Framing emphasizes the value of your offer. Framing provides justification for the other side to
make concessions. “Just pennies a day” frames an offer.
To those who like to win, frame as a gain, a win -- emphasize benefits.
For those who are afraid to lose (losses loom larger than gains to many), frame as a possible loss -- emphasize the pain and shame of losing.
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Opening: Optimistic or Reasonable
Depends on the situation: Relationship - High, generous Transaction - Open optimistically (high, but
not too high) - the highest for which there is a supporting standard or argument enabling you to make a presentable case. Make the highest opening you can “with a
straight face.” Don’t open high if you have no leverage and
the other side knows it.
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Optimistic Openings
Take advantage of two psychological tendencies: The Contrast Principle and the Norm of Reciprocity. The contrast principle: If I want you to pay me
$500,000 for a schedule, and I open with $750,000 (supported by presentable, “straight-face” argument), my settlement of $500,000 seems reasonable and gives the perception of getting a good deal. If I had opened for $550,000 and only come down to $500,000, the contrast would have been small and the deal not satisfying.
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Optimistic Openings
The Norm of Reciprocity: I make an optimistic opening ($750,000),
and you reject it. I moderate my offer by making a significant
concession ($650,000), and you feel obligated to accept it (reciprocity).
Big then small offer -- “door in the face” -- second offer seems reasonable.
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Concession Tactics
Open optimistically and have room to make concessions.
Concessions are the language of cooperation. They tell the other side in concrete, believable terms that you accept the legitimacy of their demands and recognize the necessity to cooperate and sacrifice to get a fair deal.
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Concession Tactics
To get movement, offer a small trade -- show that agreement is possible. Give a trade or concession in your least important
area.Price to get a desired deal term or payment,
e.g. The other side’s first concession is in its least
important area of concerns. Try not to give the first major concession (it raises
expectations and confuses people). Put the major issues aside, agree on small, easy
issues first.
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Concession Tactics Give small concessions and give them
slowly. The slower you give them, the more value
they have. A fast concession makes the buyer feel
awful and devalues the product. Make them work hard for every concession,
they will appreciate it more. Make concessions progressively smaller.
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Concession Tactics Which tactic is best?
1. 25% 25% 25% 25%2. 0 50 % 0 50% 3. 0 0 0 100%4. 100% 0 0 05. 10% 20% 30% 40%6. 30% 20% 10% 5%
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Split the Difference?
Not unless it’s in your favor. If the other side offers it, it usually isn’t.
Split the split.
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Integrative Bargaining
Tactics for integrative bargaining in which both sides start with a complete bundle of offers, demands, and interests are as follows: After a discussion of all the issues (without
offers), both sides trade issues and try to problem solve.
No issue is closed until all issues have been decided.
Sides trade issues in clusters: “If you give me what I want on issues A and B, I’ll give you what you want on X and Y” -- the “If-Then…” scenario. For example, you can throw away deal points you
don’t need (set this up in advance).
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For next class
Fisher through CH 6 What is a wise
agreement Law of the Sea
Negotiation Kennedy and
Nuclear Test Band Treaty
Nasar and Israel
Fisher through CH 6 One text
negotiation Carter Circle Model for
creating Options Perceptions Sadat and Israel