NEGOTIATION

NEGOTIATION

TWO TYPES OF NEGOTIATION

1.Distributive (Competitive)– Parties have different and independent goals

fixed-sum win-lose positional

NEGOTIATION

Integrative (Collaborative)Parties work together toward common or compatible

goalResolution of conflict

Advancement of shared vision

Recognize Interdependence

Deal constructively with difference

Joint ownership of resolution

NEGOTIATION

Distributive Integrative

Soft Hard Problem solvingAvoid conflict Win Solve the problem

Friends adversaries Professionals

Change easily Dig in Focus on interests

Concede easily Concede Don’t concede ?

---------- stubbornly Invent options

NEGOTIATION

Soft Hard Problem SolvingAvoid contest Win contest Use standards

of will of will

Make Demand Separate people

concessions concessions and problem

Back downMake threats Know others walkaway

Commit early Commit early Draft as you go

draft late draft late commit at end

Integrative Negotiation

Bargain Over Interests Not Positions

Separate People From the Problem

Generate Options Before Deciding

Base Results On Objective Criteria

POSITIONS / INTERESST

POSITIONS INTERESTSThings you say Underlying

you want Motivations

Demands Needs and Concerns

What you will Fears and Aspirationsor won’t do

DISCOVERING INTERESTS

Look behind positions for underlying reason

Put yourself in other person’s shoes

Ask : “Why?”

Ask “Why not? What would be wrong with…”

PERCEPTUAL DISTORTION

A Stereotyping– Assigning attributes based on membership in a particular

group

B. Halo effects– Generalize on a number of attributes based on knowledge

of one attribute.

C. Selective perception– Accepting information that supports prior belief and filtering

out nonconforming information

PERCEPTUAL DISTORTION

D. Projection– Ascribing to others the characteristics you have– Assuming that the other party will respond in the

same manner you would respond.

E. Framing– Subjective evaluation mechanisms to determine

whether to pursue or avoid future actions

Relationships

A. The norm of reciprocity– Duties owned to one another because of prior

actions.– Reciprocity traps

B. The similarity principle– We assume others like us act like us

COGNITIVE BIASES

A. Irrational Commitment– Irrational commitment to positions

B. Fixed-Pie Beliefs– Assumption that all negotiations are zero sum

C. Anchoring and Adjustment– Avoid false or inappropriate anchors

COGNITIVE BIASES

D. Information availability bias– Giving greater weight to easily available

information and established search patterns.

E. Winners Curse– Settling to quickly

F. Overconfidence– Overestimate chance of success– Discount others advice and information

COGNITIVE BIASES

G. Law of Small Numbers– Tendency to draw conclusions from small sample

sizes.

H. Self-serving biases– Fundamental attribution error /False -consensus

I. Ignoring Other’s Cognition's– Failure to consider other party’s perceptions.

COGNITIVE BIASES

J. Reactive Devaluation– Devaluing other party’s concessions

Reduces willingness to respond.

FAIRNESS

Principle 1– Multiple Methods of Fair Division

Principle 2– Fairness is Context Driven

Principle 3– Fairness is Often Based on Comparisons

FAIRNESS

Principle 4– People seek equity

Principle 5– People will attempt to restore equity from inequity.

Principle 6– People need to maintain egos

FAIRNESS

Principle 7– People care about process

Principle 8– Judgments are affected by relationship

Principle 9– Egocentrism taints judgment

Tactics and Techniques

1. Delay: When you have the power, when you don’t , delay

2. Silence and Bracketing: Direct opponent’s attention to a certain topic and then listen.

Gains information

3. Limited Authority: Opponent lacks authority, needs to get approval for agreement.

Tactics and Techniques

4. “No”: Value of a “no” is you can ask why. Answer reveals what he will do.

5. Expectation and control: “This part is not negotiable, but that part is”. Redirects the negotiation.

Tactics and Techniques

6. Rationale: Be able to explain positions and concessions. Gives satisfaction to other party.

7. Message sending: Recognize verbal, visual and written messages. (i.e. nervous laugh, jiggling foot, crying.

Tactics and Techniques

8. Threats: To be effective threats must be believable. Credible if reasonably proportionate to action it is intended to effect. Never make a threat unless prepared to carry it out. Affirmative promises usually better that negative threats

Tactics and Techniques

9. Boulwarism: Named for Lemuel Boulware, former V.P. for labor relations at General Electric. Best offer take it or leave it bargaining. Deprives opponent of participation. Reduces chance of successful resolution.

10. Mutt and Jeff routine: Good guy /bad guy. Reasonable / unreasonable teams

Tactics and Techniques

11. Never accept first offer.

12. Flinch: For most people visual overrides auditory.

13. Avoid confrontation: Especially at beginning of process. Intensifies opponents desire to be proven right.

14. The Vise: “You’ll have to do better then that.” Response, “How much better?”

Tactics and Techniques

15.“Split the difference” : Never suggest, let your opponent suggest. Can be caught by appeal to higher authority.

16. Set aside Gambit: Set aside difficult issues to be decided later. Get agreement on smaller issues which creates momentum.

Tactics and Techniques

17. Avoid last minute “nibbles”: You are most vulnerable after you think negotiations completed, but other side then wants more concessions.

18. Maintain Walk-away power.

Optimize Probability of Success

1. Do your homeworkDo your homework : Prepare

2. Go to the top: Negotiate with those who

have authority.

3. Build relationships whenever possible:

Easier to communicate with a friend

than with a stranger or enemy.

4. Avoid quick concessions

5. Accentuate the positive: Frame negative

points in positive ways.

6. Maintain your composure:

7. Don’t give up: What appears to be a dead end may only be a corner.

Framing

A large car manufacturer is suffering significant financial losses. As a result plants need to be closed and 6000 employees laid off. Four proposals have been developed. You must select one of the plans.

Plan A. This plan will save one of the three plants and 2000 jobs.

Plan B. This plan has a 1/3 probability of saving all three plants and all 6,000 jobs, but has a 2/3 probability of saving no plants and no jobs.

Framing

A large car manufacturer is suffering significant financial losses. As a result plants need to be closed and 6000 employees laid off. Four proposals have been developed. You must select one of the plans.

Plan C. This plan will close 2 of the 3 plants and lose 4000 jobs.

Plan D. This plan has a 2/3 probability of closing all three plants and losing all 6000 jobs and a 1/3 probability of closing no plants and losing not jobs.

A large car manufacturer is suffering significant financial losses. As a result plants need to be closed and 6000 employees laid off. Four proposals have been developed. You must select one of the plans.

Plan A. This plan will save one of the three plants and 2000 jobs.

Plan B. This plan has a 1/3 probability of saving all three plants and all 6,000 jobs, but has a 2/3 probability of saving no plants and no jobs.

Plan C. This plan will close 2 of the 3 plants and lose 4000 jobs.

Plan D. This plan has a 2/3 probability of closing all three plants and losing all 6000 jobs and a 1/3 probability of closing no plants and losing not jobs.