MGT 459 Negotiation

1
MGT 459 - Negotiation

• Instruction 4

2
Think About It

• Whenever two good people argue over principles,
  they are both right. - Marie Ebner Von
  Eschenbach
• My father said, You must never try to make all
  the money thats in a deal. Let the other fellow
  make some money too, because if you have a
  reputation for always making all the money, you
  wont have many deals. J. Paul Getty

3
A Win-Win Negotiation is Not

• Compromise
• Win-win is not how the pie is divided, its how
  the pie is enlarged
• Even split
• Feeling good
• Building a relationship
• Often those with the most interest in the
  relationship fail to reach integrative agreements

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
4
Integrative Agreements

• All creative opportunities are exploited
• No resources are left on the table
• Also known as win-win deals

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
5
Signs of Integrative Potential

• The negotiation contains more than one issue, or
  other issues can be brought in
• Single-issue negotiations cannot be win-win
• Almost always possible to identify other issues
• Side deals can be made
• May increase the size of the bargaining pie
• Parties have different preferences
• Satisfy most important issues, concede on least
  important issues

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
6
Common Barriers to Pie Expanding

• False conflict (illusory conflict)
• Lose-lose effect on compatible issues
• Premature concessions
• Fixed-pie perception
• Repeated in text multiple times because until it
  is overcome, win-win is nearly impossible

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
7
Ineffective Pie-Expanding Strategies

• Commitment to reaching a win-win deal
• Compromise
• Adopting a cooperative orientation
• Taking extra time to negotiate

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
8
Effective Pie-Expanding Strategies

• Build trust and share information
• Transparency is an illusion
• Ask diagnostic questions
• Make package deals, not single-issue offers

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
9
Effective Pie-Expanding Strategies

• Make multiple offers simultaneously
• Multiple-issue offers
• Offers of equal value to you
• Presented at the same time
• Multiple offers allow more favorable anchoring,
  elicit more information, and help overcome
  concession aversion

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
10
Effective Pie-Expanding Strategies

• Structure contingency contracts by capitalizing
  on differences
• Should not create conflicts of interest
• Should be enforceable
• Should be clear, measurable and readily evaluated
• Require continued interaction
• Create pre-settlement and post-settlement
  agreements

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005