Chapter 2 - Language of Negotiations Teaching Slides PDF

Today Review Chapter 1 Concepts Chapter 2 Lecture – Language of Negotiations Negotiation Concept Practice Chapter 2 In-Class Assignment – for marks Question s Textbook Course and Process In-Person and Remote Any Questions??? GETTING TO KNOW YOU  Well Done on average....

Today Review Chapter 1 Concepts Chapter 2 Lecture – Language of Negotiations Negotiation Concept Practice Chapter 2 In-Class Assignment – for marks Question s Textbook Course and Process In-Person and Remote Any Questions??? GETTING TO KNOW YOU  Well Done on average. Getting No right or wrong to know answers yourself! Average 4.5 Self- Evaluatio If you scored lower n. What a great response sounds like.  I believe I can typically be a successful negotiator when it comes to more intangible components or results. I'm not so comfortable negotiating in situations involving prices of Getting items for purchase (e.g. bargaining in a shop). I think this is probably due to not planning to to know negotiate the price ahead of time. On the other hand, I find it easier to negotiate where it yourself! involves a payment for a product or service that I am providing (e.g. a musical performance). I also believe negotiating is more Self- difficult for me when it comes to my parents or my partner, as I really take the relationship into Evaluatio consideration and try to avoid doing damage to that. In the same vein, when I want to n. negotiate with a potential collaborator (e.g. an artist agency that will book me for gigs), I keep in mind the goal to develop a good relationship whilst still avoiding setting a precedent for lower prices than I would actually prefer.  Chapter 1 Review Remember these terms? There must Integrative Distributive be some Negotiation = Negotiation = Interdepende Collaborative Bargaining nce Interests = Issues = Incentives / What you Specific terms Quid Pro Quo hope to you negotiate = give to get accomplish Intragroup Intergroup Utilitarian, Conflict = Conflict = Rights and within the between Justice group groups Approaches Chapter 2 The Language of Negotiation Bargaini ng Mix all of the issues involved in the negotiation Example: For a job offer, could include individual priorities and alternatives, salary level, the ‘package’ including benefits – insurances, bonus, retirement, etc. Bargaini ng Mix Remember: The importance each party places on each issue could be different. Ie. Perspective The more issues = greater chance the parties will walk away happy. Too many issues makes the negotiation unwieldy Expanding the Pie key principle of integrative negotiation – creating more value for everyone involved in the negotiation Initial Offers Also known as: opening offer - anchors the negotiation and sets a boundary to it; can give an advantage to the party who makes it From the seller’s perspective: it is the asking or list price From the buyer’s perspective: it is the first offer made Who makes the first offer depends on the negotiation, usually the seller, except in an auction Good negotiators: v Send a signal with their offer v Leave some room to negotiate v Research their offer Initial Offers Culturally Relevant Affected by the sense of being taken advantage of How do you decide on the right initial offer? Research the true or market value of the product Know the other parties best alternative Be cautious about revealing your actual priorities Target Point Target point (or aspiration) is the best outcome each party can reasonably expect Target points for monetary issues should be quantified in advance and based on researched factual information Target points for non- monetary issues should be based on as much factual information as possible Target Point Good negotiators: Set challenging goals – a target point for each issue Keep their target point quiet at first Share the information strategically  Resistance Point Good negotiators have a resistance point or “reservation” amount below which they will not go It is the reference point during the negotiation to decide whether to reject or consider an offer Typically not revealed to the other party Might be called the “final” offer Not all buyers/sellers will have the same resistance point Resistance Point A person’s resistance point is usually directly related to his/her BATNA Any idea what BATNA stands for? BATNA The Best Alternative to a Negotiated Agreement Literally the most ideal outcome one party could get without negotiating The better the alternatives, the stronger the negotiator’s bargaining position and more likely to make the first offer Thoroughly investigate all alternatives to put yourself in the best possible negotiation position BATNA The Best Alternative to a Negotiated Agreement Think of all alternatives Which is the best one  WATNA Any Idea what this stands for? WATNA The Worst Alternative to a Negotiated Agreement Literally the worst outcome one party could face if they don’t come to a negotiated agreement Always consider WATNA before the negotiation Used most often in conflict resolution Useful when emotions run high  MLATNA Any Idea what this stands for? MLATNA Most Likely Alternative to a Negotiated Agreement Often used in legal disputes Bargaining Range ZOPA – Zone of Potential Agreement Between parties’ resistance points, also known as the settlement zone If there is overlap between the points, the range is positive and settlement is likely if sufficient information is exchanged to indicate this If the resistance points match, the bargaining range is zero and settlement is less likely due to level of information exchange If there is no overlap, the zone is negative and there will be no settlement unless one or both parties adjust their resistance point Bargaining Range ZOPA – Zone of Potential Agreement What What Settl I eme nt you want Zon e want + Bargaining Range ZOPA – Example (Selling an item) Buyer Seller wants to wants Settl pay $100, eme nt $75, but but will zone will go take $80 to up to $80 $90 $90  Settlement Point Is what the parties actually agree upon For multi-issue negotiations there is a settlement point for each issue But, the parties must remember to discuss all the issues Overlooking issues can damage relationships when expectations are mismatched Settlement Point Don’t be in a rush to reach a conclusion, that you miss coming to an agreement on all pertinent issues. Once you’ve researched and identified the issues, opening offer, target points and resistance points, start to think of your approach. APPROACHES TO NEGOTIATING AND RESOLVING CONFLICT Approaches to Negotiating and Resolving Conflict Think about Activity 1 – You as a negotiator Where do you see yourself on the Thomas Kilmann / Dual Concerns Models? Do you see yourself moving out of this position? Does it depend on the negotiation at hand?  Approaches to Negotiating and Resolving Each person approaches Conflict negotiations differently People approach different negotiations differently – changing their approach depending on circumstances Personality also influences the approach Remember the two types of negotiation approaches: Distributive – generally involve more competitive behavior, winner and loser, little concern for the relationship after the negotiation ends Integrative – more cooperation, meeting the needs of both parties, more concern for maintaining the relationship after the negotiation ends Framing The strategy a person employs in a negotiation also depends on how they frame the negotiation. And what their perspective is. See Figure 2-7 (Page 43) in Textbook What do you see? Framing § A frame is the lens through which one views a negotiation § A frame influences negotiation behaviors § A positive frame leads to more successful outcomes § A negative frame leads to less successful outcomes § The more negatively an issue is framed, the more likely there is to be escalating conflict § How a negotiation is framed is related to the final outcome Framing § It is also possible to reframe a negotiation § Example: purchasing a house that needs repairs, but seller maintains that it is in good condition – reframe to focus on repairs that are needed as part of negotiating a discount What approach could you use if the seller refuses to negotiate or view it differently? Reciprocity § The notion that if someone does something for you, then you owe them § According to negotiations expert, Robert Cialdini, it is the most powerful negotiation principle Example: feeling obligated to buy an item that we are given a sample of at the grocery store § Reciprocity can lead to concessions in a negotiation session § A hardline approach or bad behavior can result in mirroring behavior eventually leading to a complete breakdown in a negotiation  A team has been working together for about 4 weeks on a class project. They have had some successes, A Team but also some terrible times. John and Mary just in cannot get their act together. Rob and Ted have Trouble tried to mediate, but it has gotten worse. At this point it seems that alliances are forming. Mary is angry and frustrated. A Team Are they in interdependent? Describe. Trouble  What are some of the interests of the group? A Team (hope to accomplish) in What are some of the issues? Trouble (terms you negotiate) A Team Can you use some in incentives here? Trouble  Let’s talk about Intragroup and A Team Intergroup conflict. in Trouble Intra = Within Inter = Between  Are any ethics being violated here? Could we use one of A Team these negotiation approaches to manage in the conflict? Trouble 1) Utilitarian 2) Rights 3) Justice In-Class Activity 2 Work in Groups or individually, your choice 4 per team maximum Make sure to enter all the names and student numbers of all group members Follow the instructions on the handout document found in Assignments Hand in by end of class today NEXT Class Remote Chapter 2 Quiz due Sep 24th Read Chapter 4 – Integrative Negotiations Ensure you have submitted your in-class activity by end of day today. Have a great week. See you next in Zoom!