Negotiation strategies

• Negotiation occurs constantly in life, personally and professionally.
• This includes learning core concepts, frameworks, and how special situations and conflict play a role.

Week 1: Integrative and Distributive Negotiations

• Instructor: Michael G. Parker, Ph.D. (Yale University).

Key Texts: Games of Strategy by Dixit, Skeath, McAdams.

Negotiation Definition

• Negotiation is the process by which people settle differences
• It is essential for conflict resolution, relationship management, and decision-making.
• As Herb Cohen says, "Negotiation is the game of life."

Why Negotiate?

• Negotiations occur in everyday life.
• This includes convincing a child to eat broccoli.
• This includes splitting a pizza bill among friends.
• This includes haggling at a bazaar.
• This includes high-stakes political or legal negotiations.

When to Negotiate

• Negotiating is appropriate when there's a need to resolve conflict or create value.
• Negotiate when a mutually beneficial outcome is possible.
• Negotiating is inappropriate when the costs outweigh the benefits.
• Avoid negotiation when other methods (e.g., authority, force, or legal action) are preferable.

Why Negotiate Difficult

• This has to do with different types of conflict.
• Intrapersonal conflict can involve internal struggles such as values and interests.
• Interpersonal conflict can be related to Disagreements between people.
• Intragroup can involve conflicts within teams, families, and partnerships.
• Intergroup can involve disputes among nations and ethnic groups.
• Common causes are misunderstandings, cognitive bias, power struggles, inequality, overconfidence, stereotyping, lack of respect, and emotional blackmail.

Dual Concerns Model in Negotiation

• This involves balancing concern for self vs. concern for others.
• Yielding involves Prioritizing the other party's needs.
• Problem-solving involves Seeking win-win solutions.
• Compromise involves Finding a middle ground.
• Inaction involves Avoiding negotiation altogether.
• Contending involves Aggressively pursuing one's own interests.
• To be successful, assess whether it's a situational discomfort or a fundamental trait.

Negotiation Assignment

• The task is to try negotiating a discount at a retail store.
• The goal is to analyze strategies, tactics, and success rates.

Key Concepts in Negotiation

• Dispute Resolution involves Resolving past conflicts (backward-looking, adversarial).
• Deal-Making involves Creating future agreements (forward-looking, interest-based).
• Decision Trees in Negotiation helps map out the different choices, and their consequences.
• The 2 Dollar Game is a MIT developed game that shows negotiation concepts.

The 2 Dollar Game

• The purpose is to help illustrate negotiation concepts.
• Players negotiate how to split $2 under secret instructions.
• Key takeaways include a deal is possible if the bargaining range has a positive overlap.
• A deal is impossible if the bargaining range has a negative overlap.
• The Reservation Point (RP) is defined as the lowest/worst deal someone is willing to accept.
• Sources of Power in Negotiation come from Information, alternatives (BATNA), and relationships.
• Ethical Considerations involve some may choose to lie or deceive for an advantage.
• Competition strategies are hardball while collaboration strategies involve charming
• BATNA is defined as The Best Alternative to a Negotiated Agreement (fall back)
• Target: what person wishes to get

Distributive Negotiation

• Definition: Zero-sum bargaining (one party's gain = the other's loss).
• Common Examples: Haggling over price (e.g., stores, car sales).
• How to Get a Bigger Slice of the Pie: Assess and Improve Your BATNA using Anchoring.
• First offers tend set the tone and influence the final deal.

Anchoring Facts

• The first offer is called the anchor.
• Anchoring is important after analyzing BATNA and estimating the sides' BATNA and ZOPA.
• Anchor first when you have a good sense of the ZOPA.
• Avoid getting stuck if the other party anchors first.
• Re-anchor or set a new anchor using knowledge of BATNA and estimated ZOPA.
• Anchoring Effect: If the other party knows more about the ZOPA than you do, then this could be a Job interview.
• If both sides have a strong sense of the ZOPA, then this could be a long-standing relationship between suppliers and customers.
• If neither side knows much about the ZOPA, then this could be a hiring candidate for hourly, high-quality work in emerging field.
• If you know more about the ZOPA than the other party does, then this could be selling an asset you know a lot about.

Avoid Common Errors:

• Avoid walking away from a good deal
• Avoid accepting a bad deal due to pressure
• Avoid Anchoring Bias by remembering people tend to stick to the first number they hear.

Tactics

• Anchor first if you know the ZOPA.
• If the other party anchors first, re-anchor to reset expectations.

Integrative Negotiation

• Expanding the pie rather than just dividing it.
• Distributive involves Dividing a fixed amount (zero-sum, competitive).
• Integrative involves Creating mutual value (win-win, collaborative).

Harvard Negotiation Method

• Separate the People from the Problem
• Focus on Interests, not Positions
• Insist on Objective Criteria (standards, norms)
• Create Options for Mutual Gain

Three Approaches to Disputes

• Power involves Using authority or force.
• Rights involves Using rules, laws, or standards.
• Interests involves Focusing on needs and concerns.

Key Terms

• BATNA means Best Alternative to a Negotiated Agreement.
• ZOPA means Zone of Possible Agreement.
• Costs of a Dispute can include transaction costs, satisfaction, relationship effects, recurrence.

Week 2: Strategy and Tactics

• Preparation is key to negotiation success.
• A well-prepared negotiator understands the playing field and can capitalize on opportunities.
• The Negotiation Checklist helps improve efficiency by understanding the playing field and capitalizing on opportunities.
• The Negotiation Checklist is a structured approach to ensure thorough preparation before entering a negotiation.

Negotiation Checklist

• A systematic way to ensure you are well-prepared before your next negotiation.
• The Negotiation Checklist emphasizes the importance of preparation in achieving successful negotiation.
• It helps guide negotiators define goals and indentify key issues.
• The checklist helps rank priorities using a scoring system
• Lastly, it helps systematically maximize efficiency, minimize risks and enhance strategic advantage.

Preparing to Negotiate

• Steps to prepare for negotiating can be used as a checklist.
• Determine the frame or structure of the negotiation
• one-on-one or team
• distributive or integrative
• face-to-face negotiation or via agents
• Prepare an agenda of our issues
• Brainstorm all possible issues
• Prioritize by rank ordering by importance
• Decide which may be more difficult to negotiate
• Determine which issues can be linked together
• Determine our wants and interests
• Wants are positions to be taken
• Interests are why we want or need something
• Any disagreements on needs undermine you
• Establish goals, limits, targets and alternatives
• Rule, the more alternatives the more power
• Resistance point
• Target point
• BATNA
• Determine our resources, capabilities
• Value we bring to the table that can give an advantage in bargaining
• Our weaknesses and vulnerabilities

Constituents

• Determine those that matter and impact our ability to make binding commitments.
  • Bosses, others in authority with decision making power
  • Stakeholders - people with a financial interest
  • Affected parties, e.g., union members
  • The press, public
• Research opponents regarding
• Issues and interests
• Resources, capabilities, weaknesses
• Likely alternatives, including their BATNA
• Constituents
• Likely strategy, tactics
• Here are the key definitions
• Asking price - The publicly stated price.
• Target point – The ideal outcome for a negotiator.
• Fallback position – A secondary, acceptable option.
• Resistance point – The negotiator's absolute limit.
• Reference point – A benchmark for evaluating offers.
• Bargaining mix – The full set of issues in the negotiation.

Harvard Model

• Look at the survey again and put a tick next to the one statement in each row that most closely matches your preferences for or beliefs about negotiating.
• Bargaining for Advantage explores negotiation strategies and different bargaining styles affect negotiation outcomes

Bargaining styles

• Accommodating: Puts relationships first, but can be exploited
• Compromising: Aims for fair and speedy agreements, but can give in too early
• Avoiding: Good at being tactful but may put off deals
• Collaborating: Likes solving problems together but can overcomplicate simple talks
• Competing: Aims to win, but can harm relationships
• Success depends on knowing personal tendencies, grasping the other person's style, and changing tactics as needed.

Glossary of Negotiation Terms

• Active listening, alternatives to negotiation, anchor, anchoring, bargaining table, BATNA, biases, claims etc...
• Cognitive biases, cooperative games, counterparty, distributive strategies, and egocentrism etc...

Week 3: Communication and Psychology of Negotiation

• Empathy, heuristics, fairness, fixed-pie bias all affect negotiation.
• There is also game theory, gender and negotiation, Harvard negotiation project etc...
• Also involves information, asymmetries, integrative strategies, leverage etc
• Important to understand negotiation and persuasion

Negotiation: Communicative Competence

• There are reflective listening techniques to help understand.
• Closed (efficient) vs open (expansive) questions
• Mnookin's empathy loop:
• Inquiring
• Receiving
• Demonstration
• Repeat

Techniques for negotiations

• Important to practice strategic empathy "mirroring," and "labeling"
• Successful negotiators balance empathy with assertiveness to help foster trust and communication.
• Extreme demands with slow concessions
• Commitment tactics claiming limited authority or flexibility is restrictive
• Using take-it-or-leave-it offers is forceful
• Inviting unreciprocated offers is not fair and unequal
• Watch out for personal insults, bluffing, threats, belittling alternatives, or deadlines to name a few

More techniques for negotiations

• Framing emotions, meeting expectations, and addressing concerns are all important
• It helps knowing yourself and your counterpart’s expectations and being able to gauge that.
• Emotions drive behavior in negotiation and understanding these behaviors can influence decisions and reactions
• It is important to acknowledge emotional needs

SCARF Model (David Rock)

• Help to understand emotional triggers Status: Perception of social rank. Certainty: Predictability of future events.
• Autonomy: Control over one's decisions. -Relatedness: Feeling safe and connected. Fairness: Perception of justice. Activating rewards improves negotiation.

Implications for Negotiation

• The goals is to minimise threats and maximise rewards to help improve social interactions indirectly
• Shapiro introduces that conflicts are often driven by deeply rooted emotional and identity-based concerns
• In addition, traditional conflict resolution focuses on rational negotiation and emotional needs

More about emotions in negotiations

• "Tribes Effect”: Groups emphasize identities when threatened.
• RIT promotes flexibility and respects autonomy.
• Emphasize commonalities.

Understanding Rhetoric

• Rhetoric is the art of persuasion.
• Aristotle’s 3 pillars of persuasion:
• Ethos, Logos, Pathos.

Persuasion vs. Influence

• Persuasion is direct and Influences are indirect and longer lasting
• Psychological biases is good for leverage to help understand the counterparty
• Be aware of Robert Cialdini's Six Principles of Persuasion which include
• Reciprocity
• Scarcity
• Authority
• Consistency
• Liking
• Consensus

Applications to Negotiation

• Build trust, test, and be cautious.
• Be ethical and understanding against all manipulation in order to be a great negotiator
• Persuasion is good, coercion is not

Getting to Yes

• Chapter critiques positional bargaining and states that they make concessions to reach compromises.
• Fisher is critical and offers the "principled negotiation" stance.
• Hard negotiators are aggresive/competitive
• Soft negotiators value relationships and compromise easily.

Four Rules of Negotiations

• Separate the people from the problem / focus
• Focus on interests, not positions. Find needs.
• Invent options for mutual gain , consider different perspectives
• Insist on using objective criteria – Use fair, independent standards.

Other important skills

• Understanding stakeholder interests helps find common ground
• Exploring creative solutions leads to a win-win outcome
• Using objective criteria helps emotional disputes.
• Fisher states principled is a method that is MORE SUSTAINABLE AND AVOIDS HARD SHIPS
• In addition, women should be encouraged to negotiate more often
• Lastly, selecting the appropriate closing technique depends a lot on relationship qualities

Week 4: Intercultural Skills and Gender

• Negotiating skills is the method of process of reaching an agreement.
• Its challenges revolve around power imbalances, fairness.
• The alternatives to help resolve is through mediation, arbitration.
• Types of negotiations include distributive (zero sum) and integrative (win win)

Cases

• Leverage, anchoring, and no clear ZOPA are discussed.

Three Approaches to Resolving Disputes

• Outlines three primary ways to resolve disputes: interests-based, rights-based, and power-based that involve negotiation and mediation.
• Effective dispute resolution is measured by time, energy, relationship effects
• The key takeaways on how to engage, encourage, and appreciate are all key features for great leaders.

"Negotiation via (the New) E-mail"

• It is unavoidable.
• Negotiating is now significantly different from face-to-face due to lack of social cues, increased misunderstandings.
• Some advantages include increases in efficiacy.
• Challenges exist in lack of clarity in language
• Be mindful of response times
• Use video to help improve social cues.
• Ultimately try to be strategic and trust will prevail.

"Getting to Sí, Ja, Oui, Hai, and Da"

• Cultural differences in global communication and negotiations is key