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Published byFrederica Heath Modified over 9 years ago
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1 CHAPTER FOUR Negotiation: Strategy and Planning
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2 Goals – The Focus That Drives Negotiation Strategy Determining goals is the first step in the negotiation process Negotiators should specify goals and objectives clearly The goals set have direct and indirect effects on the negotiator’s strategy
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3 The Direct and Indirect Effects of Goals on Strategy Direct effects Wishes are not goals Goals are often linked to the other party’s goals There are limits to what goals can be Effective goals must be concrete/specific Indirect effects Forging an ongoing relationship
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4 Strategy versus Tactics Strategy: The overall plan to achieve one’s goals in a negotiation Tactics: Short-term, adaptive moves designed to enact or pursue broad strategies Tactics are subordinate to strategy Tactics are driven by strategy Planning: The “action” component of the strategy process; i.e. how will I implement the strategy?
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5 Approaches to Strategy Unilateral: One that is made without active involvement of the other party Bilateral: One that considers the impact of the other’s strategy on one’s own
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6 Strategic Options Per Dual Concerns Model, choice of strategy is reflected in the answers to two questions: How much concern do I have in achieving my desired outcomes at stake in the negotiation? How much concern do I have for the current and future quality of the relationship with the other party?
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7 The Dual Concerns Model Avoidance: Don’t negotiate Competition: I gain, ignore relationship Collaboration: I gain, you gain, enhance relationship Accommodation: I let you win, enhance relationship
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8 The Nonengagement Strategy: Avoidance If one is able to meet one’s needs without negotiating at all, it may make sense to use an avoidance strategy It simply may not be worth the time and effort to negotiate The decision to negotiate is closely related to the desirability of available alternatives
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9 Active-Engagement Strategies Competition – distributive, win-lose bargaining Collaboration – integrative, win-win negotiation Accommodation – involves an imbalance of outcomes (“I lose, you win”)
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10 Understanding the Flow of Negotiations: Stages and Phases How does the interaction between parties change over time? How do the interaction structures relate to inputs and outcomes over time? How do the tactics affect the development of the negotiation?
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11 Key Steps to an Ideal Negotiation Process Preparation What are the goals? How will I work with the other party? Relationship building Understanding differences and similarities Building commitment toward a mutually beneficial set of outcomes Information gathering Learn what you need to know about the issues
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12 Key Steps to an Ideal Negotiation Process
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13 Key Steps to an Ideal Negotiation Process Information using Assemble your case Bidding Each party states their “opening offer” Each party engages in “give and take” Closing the deal Build commitment Implementing the agreement
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14 Getting Ready to Implement the Strategy: The Planning Process Define the issues Assemble the issues and define the bargaining mix The bargaining mix is the combined list of issues Define your interests Why you want what you want
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15 Getting Ready to Implement the Strategy: The Planning Process Know your limits and alternatives Set your objectives (targets) and opening bids (where to start) Target is the outcome realistically expected Opening is the best that can be achieved Assess constituents and the social context of the negotiation
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16 Preparation: Self- Assessment (I) What do I want (target or aspiration)? What is my alternative to reaching agreement in this situation (BATNA)? Determine your reservation point Be aware of focal points Beware of sunk costs Do not confuse your target point with your reservation point
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17 Preparation: Self- Assessment (II) Identify the issues in the negotiation Identify the alternatives for each issue Identify equivalent packages of offers Assess your risk propensity Endowment effects Am I going to live to regret this? Violations of the sure thing principle Do I have an appropriate level of confidence?
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18 Getting Ready to Implement the Strategy: The Planning Process Analyze the other party Why do they want what they want? How can I present my case clearly and refute the other party’s arguments ? Present the issues to the other party
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19 Preparation: Assessing the Other Party Who are the other parties? Are the parties monolithic? Issue mix Others’ interests and position Other negotiators’ BATNAs
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20 Preparation: Assessing the Situation (I) Is the negotiation one-shot, long-term, or repetitive? Do the negotiations involve scarce resources, ideologies, or both? Is the negotiation one of necessity or opportunity? Is the negotiation an exchange or dispute situation? Are there linkage effects? Is agreement required? Is it legal to negotiate? Is ratification required? Are there time constraints or other time-related costs?
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21 Preparation: Assessing the Situation (II) Are contracts official or unofficial? Where do the negotiations take place? Are negotiations public or private? Is third-party intervention a possibility? What conventions guide the process of negotiation (such as who makes the first offer)? Do negotiations involve more than one offer? Do negotiators communicate explicitly or tacitly? Is there a power differential between parties? Is precedent important?
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22 Getting Ready to Implement the Strategy: The Planning Process Define the protocol to be followed in the negotiation Where and when will the negotiation occur? Who will be there? What is the agenda?
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23 Summary on the Planning Process “...planning is the most important activity in negotiation.”
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