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Business Negotiation Designed by Tao 2014 Directed by Nancy 2014
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THREE BASIC CONCEPTS BATNA WALK AWAY PRICE ZOPA
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ACTIVITY 2 ROLE PLAY THREE BASIC CONCEPTS
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BUYER SELLER THREE BASIC CONCEPTS
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LECTURE NOTES Back to two questions at the end of Last Chapter How to disclose information? Information THREE BASIC CONCEPTS
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Should we provide hospitality service? Should we pre-arrange certain tactic game? Should we …… BEFORE NEGOTIATION THREE BASIC CONCEPTS
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Detail OVER concerned If negotiator concerned too much about trivial tactic trick, negotiator is easy to forgot that negotiation itself is only one method to secure the interest. All bilateral agreement solution is BETTER than one side action. So BATNA provide an acceptable LIMIT. Feasible agreement can not over that limit. THREE BASIC CONCEPTS
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BATNA is the information negotiator tend to hide. Negotiator must full understand BATNA of BOTH parties Negotiator also need to EVALUATE both BATNA to control Over the entire negotiation. THREE BASIC CONCEPTS
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In some case, BATNA is easy to understand. ( strike, war) Misled by Irrelevant Information THREE BASIC CONCEPTS
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BATNA control over many clause, NOT ONLY BATNA is easy to say, but HARD to accurately estimated, because BATNA is NOT suitable for disclosure even if the mutual trust is solid. Opportunity cost and sunk cost sometime need to be considered while EVALUATION on the BATNA. THREE BASIC CONCEPTS
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BATNA of a certain negotiation CONCLUDE the bargain power of negotiator. BATNA is considered as Marginal Replacement Ratio THREE BASIC CONCEPTS
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Walk Away Price means of each party. In some cases, WAP could cover OVER many clauses. THREE BASIC CONCEPTS
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Zone of Possible Agreement is the OVERLAP region between both bottom line of a particular clause. THREE BASIC CONCEPTS
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2 CASE A young man plan to decorate his studio. A printing machinery company is burdened by heavy debt. There is still some standby equipment which was bought couple of years ago. … BATNA … CHANGED the ZOPA. THREE BASIC CONCEPTS
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In some cases, one negotiation cost years after years. Negotiators need to evaluate the bargaining power changed as the time goes by. It is also common that Timing is CRUCIAL to BATNA. On topic 2, value claimer tend to take fully advantage in this change of balance. Time and BATNA THREE BASIC CONCEPTS
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H STRATEGIC HINT Negotiator need to upgrade his own BATNA, to find more alternative. Negotiator also need to undermine opponent’s BATNA, to put himself irreplaceable. THREE BASIC CONCEPTS
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2 STORY OF MERGE STORY OF MALTA THREE BASIC CONCEPTS
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OVER EVALUATION OF BATNA In business, someone is easy to be confident because the business he is doing must be the field that he is familiar with. So OVER confident is also common.
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STORY OF THE TITLE OVER EVALUATION
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Other Information Harassment 1, Anchoring Strategy 2, Winner’s Curse 3, …… 4, the method that negotiator enter into the negotiation
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! BATNA Disclosure Normal scenario: The METHOD of disclosure: Two stories: Coach Ericson Why we do NOT suggest that negotiator release information about BATNA? The reason is …
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