The Economics & Art of Negotiation…What It’s All About

ENTREPRENEURIAL TOOLBOXLUNCH & LEARN SERIES

The Economics & Art ofNegotiation…What It’s All About.

Presented By:Jerry Zaslow

Chairman, ATD American Co.



Definition

Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution.

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The Beginning

Negotiation…Part of our Daily LifeWorking in my Dad’s storeDiscussions with my FatherWorking both sides

The vendorThe customer


Founded in 1931 by Irving Zaslow as Jaffe’s Art LinensFamily-owned and operated for over 75 yearsInternational manufacturer and distributor of thousands of items

FurnitureSafety and security productsLinens and clothing

Headquartered in Wyncote, PA

Company History


5 Negotiating Styles

AccommodatingIndividuals who enjoy solving the other party’s problems and preserving personal relationships

AvoidingIndividuals who do not like to negotiate and don’t do it unless warranted

CollaboratingIndividuals who enjoy negotiations that involve solving tough problems in creative ways

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5 Negotiating Styles II

CompetingIndividuals who enjoy negotiations because they present an opportunity to win something

CompromisingIndividuals who are eager to close the deal by doing what is fair and equal for all parties involved in the negotiation

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Talent vs. educationSubjective

ExperienceThere’s a ying for every yang

Every negotioation is differentNo special do’s and don’t’s

Judgment & common senseHearsay

The Art & The Science


PsychologyProfile your opponentBe agileGet opponent off guard

Intuition/gut reactionKiller’s instinctWin-win

The Art & The Science II


The Basics

The mark of a successful negotiation is a contract, written or verbal, that signifies that a mutually agreeable solution to conflict has been reached

Good negotiators understand the implications of each item on the table, the consequences associated with various concessions, and where the absolute bottom line of the negotiation lies

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No two negotiations are exactly alikeTreat each negotiation differently

Renegotiation is an option which should be explored if favorable terms are not met

Always assess current market conditions and vendor’s psyche

The Basics II


Do your homeworkThe factsThe strengthsThe weaknesses

Sell to the end user; not necessarily the buyerDon’t sell a Rolls Royce when a Ford will do

Psychologically analyze your opponentCapitalize on the weakness

Axioms


Be daring – nothing ventured; nothing gainedThe Antrim Hardware storyThe Pillowtex griege goods dealThe $600,000 invoiceThe Adirondack story

PressureKnow when to talk & when not to

There are times to talk…other times to say nothing

Axioms II


Negotiate from strengthNot from weaknessWe’ll do better

Never show any evidence of desperation, exceptCase in point –

Don’t be greedyStretch the rubber band, but don’t break itKnow when to give in and when to pull the trigger

Axioms III


Give a little…gain a lotWhen the deal is done

Run away as fast as you can!

Dealing with friends and family…third partiesThat’s a different story

Axioms IV


Rush act…don’t be too hastyThe budget is limited

Reverse psychologyWhen appropriate, be an actor

Go for the Academy Award

Compromise

Strategies


Honey on the Sword/throw out the carrotChore Boy, Reckitt & Coleman

Vendor raised our cost because he found out our selling price

Think of the reaction you want first before respondingCat & mouse…the killer’s instinctThe finale…

A story about Cone Mills

Strategies II


The Art of WarBy Sun Tzu

The Art of NegotiationGerard I. Nirenberg

You Don’t Get What You Deserve, You Get What You Negotiate

Chester L. Karrass

Recommended Reading


Any Questions?

Jerry ZaslowChairman, ATD American Co.

THE END

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The Economics & Art of Negotiation…What It’s All About