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 goal Resolution of conflict Advancement of shared vision Recognize Interdependence Deal constructively with difference Joint ownership of resolution

NEGOTIATION Distributive Integrative Soft Hard Problem solving Avoid 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 Solving Avoid contest Win contest Use standards of will of will Make Demand Separate people concessions concessions and problem Back down Make 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 INTERESTS Things you say Underlying you want Motivations Demands Needs and Concerns What you will Fears and Aspirations or 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 B. The similarity principle 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 B. Fixed-Pie Beliefs 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 E. Winners Curse 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 H. Self-serving biases 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 Principle 2 Principle 3 Multiple Methods of Fair Division Principle 2 Fairness is Context Driven Principle 3 Fairness is Often Based on Comparisons

FAIRNESS Principle 4 Principle 5 Principle 6 People seek equity People will attempt to restore equity from inequity. Principle 6 People need to maintain egos

FAIRNESS Principle 7 Principle 8 Principle 9 People care about process 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 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.

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