MGT 459 Negotiation

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MGT 459 - Negotiation

• Instruction 7

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Think About It

• Power tends to corrupt, and absolute power
  corrupts absolutely. Lord Acton
• Power doesnt corrupt people, people corrupt
  people. William Gaddis
• Power corrupts, but lack of power corrupts
  absolutely. Adlai E. Stevenson
• Power does not corrupt men fools, however, if
  they get into a position of power, corrupt
  power. George Bernard Shaw
• Power corrupts. Absolute power is kind of
  neat. John Lehman

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Power Differences in Negotiations

• The reality of negotiation
• Skill cannot necessarily overcome power
• No method can guarantee universal success

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Two Basic Objectives of Any Negotiating Strategy

• In balanced or unbalanced power situations
• Protect yourself from making an agreement you
  should reject
• Make the most of the assets you do have so that
  any agreement you reach will satisfy your
  interests

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Protecting Yourself

• Pressure to reach a settlement can be powerful
• A bottom line is a commonly adopted safeguard
• Makes it easier to resist pressure
• Constituencys bottom line prevents settling for
  less

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Protecting Yourself

• Bottom lines can be costly
• Limits ability to benefit from what is learned
• Prevents communication
• Inhibits imagination
• Likely to be too rigid
• Likely to be set too high

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Protecting Yourself

• Know your BATNA
• The question SHOULD NOT be...What can I get?
• The question SHOULD beWhat will I do if I cant
  get anything?
• BATNA is the standard that will keep you from
  accepting an unfavorable settlement, or rejecting
  one that is in your best interest

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Protecting Yourself

• Not Knowing Your BATNA is dangerous
• You are negotiating with your eyes closed
• Avoid aggregating your alternatives
• Dont negotiate first, and identify your BATNA
  later
• Consider having a trip wire above your BATNA

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Making the Most of Your Assets

• The better your BATNA, the greater your power
• Develop your BATNA
• Invent a list of actions you might take if no
  settlement is reached
• Improve some of the more promising ideas by
  converting them into practical alternatives
• Tentatively select the alternative that seems the
  best

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Making the Most of Your Assets

• Should I disclose my BATNA?
• YES, if it is better than your target thinks
• NO, if its worse than your target thinks
• Consider the other sides BATNA
• Increases your preparation for the negotiation
• If their BATNA is beyond your reservation point,
  see if you can change it
• Attractive BATNAs may mean no settlement

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BATNAs and Negotiating Power

• Principled negotiation is even more important
  when power is unbalanced
• BATNA not only identifies a minimally-acceptable
  agreement, it raises that minimum

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Negotiation Jujitsu

• Dont push back.
• Dont attack their position, look behind it.
• Assume their position is based on interests
• Seek out and discuss underlying principles

1.
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Negotiation Jujitsu

• Dont defend your ideas, invite criticism and
  advice.
• Recast an attack on you as an attack on the
  problem.
• Ask questions and pause.

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Third Party Intervention

• The One-text Procedure
• Ask both parties about their interests and needs
• Develop a combined list of interests and needs
• Ask each party to criticize and improve the list
• Make a recommendation and ask for criticism

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Common Responses to Dirty Tricks

• Put up with it
• Respond in kind
• Ignore it
• Co-opt the target

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Three Steps to Negotiating the Rules

• Recognize the tactic
• Raise the issue explicitly
• Question the tactics legitimacy and desirability

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Some Common Tricky Tactics

• Deliberate Deception
• Phony Facts
• Ambiguous Authority
• Dubious Intentions
• Less than full disclosure

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Some Common Tricky Tactics

• Psychological Warfare
• Stressful Situations
• Personal Attacks
• The Good-Guy/Bad-Guy Routine
• Threats

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Some Common Tricky Tactics

• Positional Pressure Tactics
• Refusal to Negotiate
• Extreme Demands
• Escalating Demands
• Lock-in Tactics
• Hardhearted Partner
• Calculated Delay
• Take it or leave it

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Some Common Tricky Tactics

• Other tactics (there are dozens more)
• Nibble
• Bogey
• Reactive devaluation
• Highball / lowball
• False flattery
• Martyr
• Poor innocent me