Finance and Administrative Services Department

Negotiations:

It’s All in The Preparation

What is Negotiation?

The art and science of drawing

up deals that create lasting value

The process by which

people deal with their differences

Conferring to arrive at an agreement between different

parties, each with their own interests and preferences

Why Negotiate?

• To reach an agreement

• To compromise

• To settle an argument/dispute

• To make a point

• To create value

Learning Objectives

• Prepare for negotiations

• Identify intelligence-gathering activities

• Apply four key negotiations concepts

• Differentiate two primary negotiations strategies

Negotiation Phases

Pre-Negotiation Negotiation Post-Negotiation

Negotiation Phase Activities

Intelligence gathering

Formulation

Strategy development

Preparation activities

Information sharing

Bargaining

Closing and agreement

Implementation

Monitoring

Post-NegotiationPre-Negotiation Negotiation

Pre-Negotiation Phases

#1 Intelligence

Gathering

#2

Formulation

• BATNA =

• Target or Goal =

• RP =

• ZOPA=

• Creating Value through Trades

Best Alternative to a Negotiated Agreement

Your ideal outcome

Reservation Price/Resistance Point

Zone of Possible Agreement

BATNA

• Knowing it allows you to know what you will do if you fail

to reach agreement

• To develop your BATNA:

1. List your alternatives

2. Evaluate your alternatives

3. Establish your best alternative as your BATNA

BATNA Guided Notes

• Your BATNA tells you when to accept and when to reject

an agreement

– When a proposal is better than your BATNA: ACCEPT IT

– When a proposal is worse than your BATNA: REJECT IT

• Your BATNA is your biggest source of power in a

negotiation!

– Options make you stronger; they allow you to walk away

– Do everything you can to improve your BATNA

Improving Your Position

1. Improve your BATNA

2. Identify the other party’s BATNA

3. Weaken the other party’s BATNA

Target or Goal

Focus on achieving

your Target or Goal

Reservation Price

• Lets you know when to

“walk away”

ZOPA #1

$250,000 $275,000

ZOPA #3

ZOPA #4

#3

Strategy Development

#4

Preparation

Activities

Finance and Administrative Services Department

Negotiations:

It’s All in The Preparation