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NEGOTIATING POWER

PROF KATIA TIELEMAN

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Prof. dr. Katia Tieleman3 © Vlerick Business School

1.NEGOTIATION PARAMETERS

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PARKER GIBSON

HALF

LOT

WILLOW STREET

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Consistently outperforms a low aspiration base.

Yet leaves enough room for necessary concessions to achieve a win more-win more outcome.

Promotes positive psychological energy.

Communicates confidence and negates irrational negotiation behaviour.

Pressurises the other party to use more energy to lower your aspirations, so they concentrate less on promoting their own aspirations.

“Anchors" the negotiation.

Beware, an AB could be seen as a position - use a range rather than a firm number.

Parties must aspire to a shared AB that meets their shared interests best.

Consistently outperforms a low aspiration base. Yet leaves enough room for necessary

concessions to achieve a win more-win more outcome.

Promotes positive psychological energy. Communicates confidence and negates

irrational negotiation behaviour. Pressurises the other party to use more energy

to lower your aspirations, so they concentrate less on promoting their own aspirations.

“Anchors" the negotiation. Beware, an AB could be seen as a position - use

a range rather than a firm number. Parties must aspire to a shared AB that meets

their shared interests best.

ASPIRATION BASE (AB) – A HIGH ASPIRATION BASE

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Point beyond which an agreement is no longer meaningful.

If you don’t understand or know your real base: It will most likely lead to a point where a

mutually beneficial outcome is not longer possible.

It makes it impossible to establish the contracting zone because this rests between the RB’s of the parties.

You can be exploited because you don’t know the point where you should withdraw from a negotiation.

Beware, RB can cause thought closure and a positional stance.

REAL BASE (RB) - MINIMUM REQUIREMENT FOR AGREEMENT

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Reduces dependency on the other party’s agreement. Ensures the other party does not over-inflate its position. The stronger the BATNA the greater the negotiating power. The more readily a negotiator can walk away from a

negotiation, if necessary, the greater the negotiator's ability to influence the negotiation.

Knowing the alternatives available to the other side is essential to prepare for a negotiation.

A BATNA protects a negotiator from

accepting an agreement that is unfavourable

accepting an agreement that is only in the counterparty's best interests

Knowing your BATNA is knowing what to do when the negotiation fails.

The decision to reveal or not reveal a BATNA must be based on the strength of the BATNA and whether disclosing it is likely to weaken the counterparty’s negotiation stance.

BEST ALTERNATIVE TO A NEGOTIATED AGREEMENT (BATNA)

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CONTRACTING ZONE

SELLER

BUYER

Contracting Zone / Zone of Possible Agreement (ZOPA)

ABSellers Best

Scenario

Sellers Worst

ScenarioRB

Buyers Best

ScenarioAB

Buyers Worst

ScenarioRB

BATNA Seller

BATNA Buyer

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TAKEAWAYS

Power

- Information is power.

- Time is power.

- First offers act as an anchor.

Relations- Negotiation as an event is different from

the process of the negotiation.- Victims become aggressors- Walkaways are better when soft.

2.FROM BARGAINING

TO VALUE CREATION

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FROM BARGAINING TO VALUE CREATION

I versus I

Win-Losebargaining

We

Value creation

Win - Win

To achieve value creation one must:

• Verify assumptions• Change positions • Explore interests

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Seemingly opposed positions are not always opposed when it comes to the underlying interests, they could be compatible.

Don’t just split the pie in half. Make concessions on those issues that are not important to you, but valued by the other party.

Joint Problem Solving

Joint Opportunity

Finding

Interests can be:OPPOSITECOMPLEMENTARYSIMILAR

Win more – Win more

We

Value creation Win - Win

TO WIN MORE- WIN MORE: FOCUS ON COMPLEMENTARY INTERESTS

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Negotiating to Create Value (24 April 2013)

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