Donald G.Gifford “Legal Negotiation:Theory and applications” Chapter 6 Initial proposal Donald G.Gifford “Legal Negotiation:Theory and applications” Chapter 6 Professor: Kim, Jasper BAZAR Munguntuya, ID: 092SIS04 Min Min Htun, ID: 092SIS16 MIN MIN & MUNGUNTUYA 10/7/2009

Content Initial proposal Competitive initial proposal tactics Cooperative initial proposal tactics Problem-solving initial proposal tactics Conclusion MIN MIN & MUNGUNTUYA 10/7/2009

Timing of initial proposal First attempts during negotiation to solve issue Timing of initial proposal After information exchanging If negotiator hasn’t enough information about situation: Evaluate information before making initial proposal Encourage the other party to make the initial offer Make extreme proposal MIN MIN & MUNGUNTUYA 10/7/2009

3. Who should make the initial proposal? Advantages and disadvantages to make initial proposal Advantages Disadvantages Establish probable bargaining range To elicit the other negotiator’s reaction To give other party the opportunity to adjust other party’s first offer MIN MIN & MUNGUNTUYA 10/7/2009

Initial proposal tactics Competitive initial proposal Cooperative initial proposal Problem- solving initial proposal MIN MIN & MUNGUNTUYA 10/7/2009

1.Competitive initial proposal tactics Amount of initial proposal - a high initial proposal Firmness of initial proposal - reluctance to modify proposal Escalation of demands - don’t change amount of initial proposal after sat on the table, MIN MIN & MUNGUNTUYA 10/7/2009

Competitive …… False demand - false demand is trade-bait Initial demand as pre-condition of negotiation - demand is as like beginning of negotiation Responses to other’s initial proposal - visible response MIN MIN & MUNGUNTUYA 10/7/2009

Competitive initial proposal tactics - Disadvantage and advantage Disadvantage Advantage Inviting retaliation Risking deadlock Causing a negative perception of the competitive negotiator - Protect to undervalue case MIN MIN & MUNGUNTUYA 10/7/2009

Competitive initial proposal tactics I don’t know their rental price in this situation. So, I have to listen Chestnut’s proposal!!!. MIN MIN & MUNGUNTUYA 10/7/2009

Initial proposal tactics Competitive initial proposal Cooperative initial proposal Problem- solving initial proposal MIN MIN & MUNGUNTUYA 10/7/2009

How should the negotiator respond to extremely favorable first order? Should choose a cooperative strategy, expressing recognition and appreciation that the other party is approaching the nego: REALISTICALLY… Be aware that more bargaining ahead, other negotiator will think that he has undervalued his case and will respond DEFENSIVELY. MIN MIN & MUNGUNTUYA 10/7/2009

(3)Cooperative Initial Proposals Amount of the opening Offer or Demand fair and just to both parties to develop a relationship based on trust with other negotiating party Two regards from initial competitive proposal (more moderate & reasonable, opening bid by reference to objective stds.) Justifications for Initial Proposal Legitimize the initial proposal and to establish the basis for a fair and reasonable agreement bet: the parties./ Avoid threatening or undermining the other party Cooperative Responses to the other Party’s Initial Proposal Respond with an equally extreme initial proposal (the midpoint bet: the offers is in the range regarded by the negotiator as being fair and reasonable;) Refuse to respond to such an extreme initial proposal until the other party displays reasonableness; Make a fair and reasonable offer MIN MIN & MUNGUNTUYA 10/7/2009

Cooperative cont. Advantage..! Eliminates the disadvantages of the competitive initial bid Establish cooperative behaviors, communicate clearly to other party, cooperative bargaining relationship. To develop trust and a mutually beneficial, To make Concessions - How should the negotiator who wishes to behave cooperatively respond to what she recognizes as a competitive opening bid from the other -negotiator? - How did he arrive at this figure? Can he verify it by references to specific objective criteria? MIN MIN & MUNGUNTUYA 10/7/2009

Initial proposal tactics Competitive initial proposal Cooperative initial proposal Problem- solving initial proposal MIN MIN & MUNGUNTUYA 10/7/2009

(4)Problem-Solving Initial Proposals Timing Positional bargaining proposals Search models (two steps) -generation of potential solution /proposal & evaluation of such proposals Types of Integrative Agreements - Solution which bridge the parties needs and satify both sets of underlying interests; - Solution the trading of concessions on different issues, - Cost-cutting agreements - Compensation agreements Problem-solving tactics, sometimes negotiator is able to initiate a PS approach to the negotiation form the earliest stages. MIN MIN & MUNGUNTUYA 10/7/2009

Models Banana’s Goals Chestnut’s Goals Monthly rental of $60,000 or less for first six months Retail space in Chestnut Mall or other high retail tariff area west of town Lease period of between three and ten years Good security Adequate parking At least 1500 square feet of space Central court area of mall Adequate electrical writing Good management Rent adequate to cover expenses and reasonable profit, e.g., $55 per square foot Uniform rental rate Fully rented space Reputable, solid tenants Protection against escalating overhead Stores that affluent customers to mall. Stores that do not create undue demand on mall services. Variety of retail offerings. MIN MIN & MUNGUNTUYA 10/7/2009

Brainstorming techniques Suggest that to separate the inventive phase of brain- storming from the evalua-tive stage by indicating that neither party is bound by proposal, thus avoiding premature judgement Bridging Proposals We both understand what each other’s requirements and goals are for this negotiation. MIN MIN & MUNGUNTUYA 10/7/2009

Analysis Competitive Cooperative Problem-Solving Timing Amount After information exchanging Amount Extremely fair and just to both parties Bargaining Response Visible response Active listening Repeated Active listening MIN MIN & MUNGUNTUYA 10/7/2009

Conclusion Initial proposal, three chose of tactics competitive, cooperative and problem-solving initial proposal “Well begun is Half-done” and construct in trust forwards to future success achievement. MIN MIN & MUNGUNTUYA 10/7/2009

THANK YOU FOR ATTENTION…. MIN MIN & MUNGUNTUYA 10/7/2009