NEGOTIATION/BARGAINING

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NEGOTIATION/BARGAINING
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VIEWS

• DISTRIBUTIVE BARGAINING
• DIVIDE A FIXED AMOUNT
• WIN-LOSE
• INTEGRATIVE BARGAINING
• TRY TO CREATE WIN-WIN

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NEGOTIATION SKILLS

• REMEMBER, IT IS NEGOTIATION
• NOT WAR!
• WE ARE OPPONENTS
• NOT ENEMIES.

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RESEARCH THE OPPONENT

• GOALS
• INTERESTS
• STRATEGY
• PREDICT RESPONSES
• FRAME SOLUTIONS IN TERMS OF HIS/HER INTERESTS

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BEGIN POSITIVE

• BEGIN WITH SMALL CONCESSION
• CONCESSIONS USUALLY RECIPROCATED

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ADDRESS PROBLEMS

• FOCUS ON THE PROBLEM
• DO NOT FOCUS ON PERSONALITIES
• MANAGE EMOTIONS
• MAY WIN THE BATTLE BUT LOSE THE WAR

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FIRST OFFER IS JUST BEGINNING

• INITIAL OFFER IS POINT OF DEPARTURE

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EMPHASIZE WIN-WIN

• LOOK FOR INTEGRATIVE SOLUTIONS
• USE ABUNDANCE MENTALITY

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ACCEPT THIRD PARTY ASSISTANCE

• IF STALEMATE, USE NEUTRAL 3RD. PARTY

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HINDERANCES TO NEGOTIATION

• Robbins, S. (1994). Management, 4th. Ed.
  Englegood Cliffs Prentice Hall, 555-556.

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ESCALATION OF COMMITMENT

• WONT PULL OUT OF A BAD DEAL
• SUNK COSTS CANT BE RECOVERED
• SHOULD NOT BE CONSIDERED

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FIXED PIE

• WIN-LOSE
• MISS TRADE-OFFS THAT COULD BENEFIT BOTH SIDES

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ANCHORS

• GET HUNG UP ON SOMETHING
• INITIAL OFFER
• HAVE TO WIN
• SET ON A SOLUTION
• SET ON A CERTAIN PROCESS
• PUBLIC STATEMENT

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FRAMING THE NEGOTIATIONS

• FRAME OF REFERENCE
• A SEEKS 4 RAISE
• B OFFERS 2
• IS THIS A 2 GAIN OR LOSS TO A?
• B SHOULD TRY TO FRAME AS 2 GAIN.

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AVAILABILITY OF INFORMTION

• READILY AVAILABLE IMPORTANT?
• EXPERIENCE IS READILY AVAILABLE
• VIVID EVENTS READILY AVAILABLE, I.E. REMEMBER
• MUST DISTINGUISH BETWEEN EMOTIONALY FAMILIAR AND
  RELEVANT/RELIABLE

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WINNERS CURSE

• REGRET FELT AFTER CLOSING
• COULD YOU HAVE GOTTEN BETTER DEAL?
• PAY TOO MUCH?
• REDUCE BY GETTING MORE INFORMATION BEFORE YOU
  BEGIN

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OVERCONFIDENCE

• IN JUDGMENT, CHOICE
• EXPERIENCE, MENTAL SETS
• ARE SURE
• IGNORE CONTRADICTORY INFO
• -------------------
• LESSENS INCENTIVE TO COOPERATE