1. Welcome to class of Negotiations Dr
Welcome to class of Negotiations Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg Canada

2. What is negotiation? Bargaining process b/w 2 or more parties
Each party
Has different viewpoint
Has different objectives
Seeks mutually satisfactory agreement
Has a matter of concern

3. Kinds of Negotiations Simultaneous Sequential Holistic whole package
More information needed
Japanese style
Sequential
Problem solving
Short-term view
American style

4. Why Negotiate? Improve current offer (issue) Bring clarity
Price
Delivery
Currency
Warranty …
Bring clarity
Improve relations
Conflict resolution and build peace

5. Conflict Life Cycle 5

6. When to Negotiate? 6

7. How to Negotiate? 7

8. Making a Deal (One Issue)
ZOPA = Zone Of Possible Agreement
RL= Reservation Level (Min for seller; Max for buyer)
Aspiration Level = Opposite of RL 8

9. Making a Deal ZOPA = Bargaining Range
If outside range  Walk away from the deal 9

10. Anchoring First offer  to begin negotiation
Anchor can influence negotiation
Your objective is to adjust RL to land in ZOPA
You may ask:
basis for the offer, parameters used, assumptions made 10

11. Concession Avoid  zero sum negotiation
Maximize  probability of obtaining maximum advantage
Be reasonable  otherwise you lose trust 11

12. 2 issues: Price and delivery date
Making a Deal (2 Issues)
2 issues: Price and delivery date 12

13. Making a Deal (Complex)
Complex issue  1 day delay costs $10
Liner programming = Maximize objective function 13

14. Before and While Making a Deal
Best Alternative to Negotiated Agreement
If the deal fails, what next best alternative you have
Select your BATNA
Anticipate other party’s BATNA, though difficult
BATNA can be non-quantifiable 14

15. Other points Your goal Be creative to create value for both parties
Negotiate win-win situation
Create value
Reach an agreement
Be creative to create value for both parties
Generate BATNA for both parties
Suppose if it were perishable products
Understand logic of the argument/ other party
Figure out their psychology
Observe negotiation style: aggressive/calm
Break away for private conversation
Do not agree to a bad deal 15

16. The Role Play (US-Japanese)
Sat & Co, NY, USA (Estd. 1931)
Specialist in Industrial Boilers
Price = US$ 2m
Delivery = 6 months
Penalty = US$10,000/month
Cancellation = 10% of contract price
Warranty = Parts and labor for a year
Terms of payment = COD (Cash on delivery)
Other