Negotiation Tactics and Strategies PDF
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Summary
This document provides an overview of negotiation, covering various tactics like hardball and integrative approaches, bargaining zones, and ethical considerations. Key concepts include value claiming, creating, and the dual concerns model. It explores essential elements for effective negotiation and also discusses the importance of planning.
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) S 2 ilent on how one arrives at the solution (no communications) 3) Player intelligence and rationality are extreme requirements Closing a deal: 1) Provide alternatives (menu) 2) Assume the close (paperwork) 3) Split the difference 4) E...
) S 2 ilent on how one arrives at the solution (no communications) 3) Player intelligence and rationality are extreme requirements Closing a deal: 1) Provide alternatives (menu) 2) Assume the close (paperwork) 3) Split the difference 4) Exploding offers (clock) 5) Sweeteners (give a free pen) HARDBALL tactics 1) Good cop/bad cop- team roll play 2) lowball /hardball- exaggeration- this sets unrealistic expectations and makes the other party ajust 3) Bogey-misdirection- pretending that a particular issue is very important to when its not. 4) Nibble- ask for a sweetener- asking for a small concession after the main deal has been agreed upon. 5) Intimidation/agro/ 6) snow job- overwhelming other party with excessive info, details or complexity to conduse them. RESPONDING TO hardball tactics ) 1 Ignore them- deflate the bravado 2) Discuss them- name and shame 3) Respond in kind- if you can play hardball 4) Co-opt the other party- how to win friends and influence people ELECTIVE NEGOTIATION:This refers to choosing whichbattles to fight during a negotiation. S Instead of addressing every issue, you focus on the most important ones to maximize your gains or maintain a good relationship. Example: When buying a car, you might focus on negotiating the price rather than arguing over minor add-ons like floor mats. This saves time and energy for the most critical issue. NCORING EFFECT:This is a cognitive bias where thefirst offer or number presented in a A negotiation sets a mental benchmark (or "anchor") that influences the rest of the discussion. ositive Bargaining Zone:This occurs when there isan overlap between the minimum a seller P is willing to accept and the maximum a buyer is willing to pay. A deal is possible here. ○ Example: A seller wants at least ○ 15,000foracar,andabuyeriswillingtopayupto ○ 1 5,000foracar,andabuyeriswillingtopayupto17,000. The bargaining zone is between ○ 15,000and ○ 15,000and17,000. Negative Bargaining Zone: This happens when thereis no overlap, meaning no deal is possible. ○ Example: The seller wants at least ○ 20,000,butthebuyerisonlywillingtopayupto ○ 20,000,butthebuyerisonlywillingtopayupto18,000. There’s no common ground for agreement. recision PriceThis refers to using very specificnumbers (e.g., 19,875 instead of 19,875 P instead of 20,000) to make an offer appear more calculated, credible, or justified. It can also signal that you’ve done your research. Indirect assessment:This is a strategy where yougather information indirectly rather than asking direct questions. It helps you understand the other party’s priorities, limits, or motivations without revealing your own.t. HAP 3- C Mutual Benefical trade- Almost always gains from trade- or no need to negotiate because trade in voluntary and there is always more surplus create than both parties realize. utting costs for compliance- process of reducing expenses associated with meeting c the terms, agreed upon during a negotiation. INTEGRATIVE NEGOTIATION 1) Free flow of info 2) Understand other negotiators needs and objectives 3) Stree common grounds and minimize difference 4) Creative search for solution that meet both parties needs Factors for determining the use of integrative negotiations 1) Negotiation that includes more than one issue 2) It is possible to add more issues to the mix 3) Parties have varying preferednce across the issues 4) Renegotiation will likely happen OTE:Claiming value in integrative negotiationinvolvesnegotiators carving out their share N of resources, also known as distributive negotiation. ALUE CLAIMING->disruptive negotiating This is about claiming as much value as possible for V yourself in a negotiation. It’s often seen as a "win-lose" approach, where one party's gain is the other party's loss. ALUE CREATING-> integrative negotiations: This is about expanding the pie by finding ways V to create additional value for both parties. It’s a "win-win" approach, where collaboration leads to better outcomes for everyone. egotiators dilemma-> the tension between behavious that are competitive and behaviors that N are cooperative. “No matter how much creative problem solving enlarges the pie, it must be divided; value that has been created must be claimed” What creates value should preced those that claim value 1) Teamwork is more efficient when focused on collab that who should get what 2) Claiming requires disruptive processes that neeed to be introduced carefully into integrative bargaining otherwise they harm the relationship and derail process Interest: underlying concerns, needs, desires or fears that motivate a negotiator to take a particular position Positions include: 1) Substantive intress-focal issues (econ or financial) 2) Process interest- the way a dispute is settled (people care about winning or being beat) 3) Relationship intress- in the moment or future reputation 4) Principle intress- fairness or ethical and moral consideration Obervations on INTEREST: 1) Almost always more than one issue of importance 2) Interest changes 3) Surface interest by asking yourself and others questions 5 methods to generate alternative scenarios 1) Expand the pie- look for ways nto expand amount of resources for both partys 2) Logroll (trade interest)- trading concessions on issues that are more important to one party than the other. (each side gives up something they value less for something they value more) - Different ways to logroll= difference in risk, time preference and expectation/belief 3) Non specific compensation- one party gets what they want, the other is compensated in a way that dosent directly relate to the issue in hand. 4) Cut the cost for compliance-easier for other party to agree by reducing the costs they would incur by saying yes E.G landlord offers to cover cost of repair if tenant signs a longer lease 5) F ind a bridge solution (genuine innovation)- create completely new solution that satisfies both parties (digging deeper) HOW TO EVALUTE ALTERNATIVES 1) Reduce the set 2) quality , standards and acceptability 3) Agree to criteria in advance 4) Justify personal preferences 5) Consider the influence of intangibles 6) Use subgroup/committee 7) Take time out/cool off 8) Exploit different ways to logroll 9) Keep decisions conditional on final agreement 10)Minimize formality Strategies: 1) Common goals 2) Cooperatemotivate working together 3) Focus on clear communications ltimatum game:key rule: if offer is rejected, bothplayers get nothing U RATIONAL: players should accept any offer because something is better than nothing, in real life people reject unfair offers because they value fairness. ar of attrition:players compete by outlasting eachother to win a prize. The longer the game W goes on, the more costly it becomes for both players. (staring contest) “who wil blink first? the longer you wait, the more it hurts” CHAP 4 - PLanning EFINING ISSUE: D 1)analysis of all possible issues to be decided 2)Previous experience in similar negotiations 3) research 4)consultation with experts DEFINING INTEREST- - Substantive- tangible materials or financial interest - Process - how the negotiation is conducted and fairness/effeiciency itself - Relationship- personal/professional; maintaining trust, respect and collaboration - Principle interest- ethical, morals or ideological values DEFINING LIMITS AND ALTERNATIVE - Resistance points - Alternatives (outside options) Settling targets and Openings - Target point: where we want to end up - range -> pessimistic-realistic-optimistic - specify criteria/ reason for packaging issues and objectives -understand tradeoffs and throw away ASKING PRICE= best we could hope for ECONOGRAPHICS- the goal is to understand some of the fundamental difference in people 1) Fairness 2) Patience 3) Risk preferences 6 components of Econograhphics 1) Generosity (fariness and cooperation) 2) Punishment (enforces norms and deters unfair behaviours) 3) Inequality aversion- discomfort individuals feel when outcomes are perceived as unfair.(fariness and cooperation) 4) WTP (value) 5) WTA(williness to accept)(value) 6) Uncertainty(risk) 7) overconfidence(risk) ASSESSING constituency and social context of negotiation 1) FIELD ANALYSIS - ho is on my team? W - Who is on other team? - Who is on the sidelines - Who is in the stands? - Who else matters in the broader context 2) Analyzing other party - Resources, issues, bargaining mix - Interest, resistance point, alternatives - targets , objectives, reputation, style, constituents - Authority to make an agreement - Likely strategy and tactics 3) Planing issue presentation and defence - Facts to support psoition - Support (experts/assistance) - Comparisons with similar negotiations - Assessment of the other party likely position - Sequencing of communication 4) Protocol- who, what, when, where, how - Note taker - Do not rely on other partys notes - How someone to de-bried with if possible - Keep a journal OVING from plan to action- overall plan to accomplish goals in a negotiation and the action M sequences that will lead there - attern or plan that integrates an organizations major targets, policies and action P sequences into cohesive whole TACTICS 1) Short term, adaptive moves designed to enact or pursue broad strat, whic creates stability, continuity and direction for tactical behaviour 2) DUAL CONCERNS MODEL(unliteral or bilateral) - i)Concern for self - ii) concern for others (how much you care about others outcomes) High concern self/others- focused on achieving your goals or goals of others his model helps to prioritize dimensions of desired settlements T - AVOIDANCE: non-engamenet - Engagement: competition, collaboration or accommodation The Dual Concerns Model describes negotiation strategies based on: C oncern for own outcome: Competition or Accommodation. Concern for other's outcome: Collaboration or Avoidance. Barganing mix- combination of issues, terms and condition. Linkage- connecting or tying together issues ocal issues- issues are the key points or central topics that are the most important. “Primary F concern” CHAP 5 4 approaches to ETHICAL reasoning 1) End result ethics- rightness of an action is determined by considering consequences, action are more right if they promote more happiness. 2) Duty ethics- rightness of an action is determined by considering obligations to apply universal standards and principles. 3) Social contract ethics- rightness of an action is determined by the customs and norms of a community. Laws are important, but morality determines the ultimate standard. 4) Personalistic ethics- rightness of an action is determined by ones conscience. Locus of truth is found in human existence. Ones should follow ones group but also stick up for what they believe. IN NEGOTIATING TERMS 1) End result ethics- you might do whatever is necessary to get the possible outcome 2) D uty ethics- you might perceive an obligation never to engage in subterfuge and might reject a tactic that is a lie 3) Social contract- base your tactical choices on appropriate conduct for behaviours in your community; if someone does this you might aswell do the same. 4) Personalistic ethics- you consult your conscience and decided wether acting dishonestly matches how you see yourself as a moral actor. Interpersona trust- a generalized expectancy held by an individual that the word, promise, orla or written statement of another individual or group can be relied on. RECALL- high trust begets high trust elf monitoring- the extent to which people are responsive to social cues that come from the S social environment achiavelliasnism- tendency to be cynical abou others motives, more likely to behave M unaltruistically towards others, and less willing to change their convictions under social pressure. -> distrust: amoral manipulation; desire for control; desire for status ace threat sensitivity: the degree to which people are more or less sensitive to losing or saving F face The “BIG 5” personality factors ) 1 xtroversion- being sociable, assertive, talkative E 2) Agreeableness- being flexible, co-operative, trusting 3) Conscientiousness- being responsible, organized, achievement oriented 4) Emotional stability- being secure, confident not anxious 5) Openness- being imaginative, broad-minded, curious CAtegories of MArginally ethical negotiating tactics 1) Traditional competitive bargaining- not disclosing your walkaway, making an inflated opening offer 2) Emotional manipulation- faking anger, fear, disappointment; faking elation, satisfaction 3) Misrepresentation- distorting info or negotiation events in describing them to others 4) Inappropriate info gathering- bribery, infiltration, spying 5) Bluffing- insencer threats or promises NOTE; “what they want”= common value mission- failing to disclose info that would benefit the other O Commission- actually lying about the common value issue ognitive ability- general mental capability that, among others things, involves the ability to C reason, plan, solve problems, think abstractly, comprehend complex ideas, learn quickly and learn from experience Incremental theorist- people who believe negotiation ability tends to be malleable rather than fixed TEAM production and relationship specific investments - Agreements are typically the beginning of a relationship - So our game theoretic intuition suggest we should consider actions that take place post agreement - POST-AGREEMENT actions are what determine payoffs NOTE: no agreement is final until payoffs are realized oral hazard- one party to a contract may have incentive to take actions that differ from what M the other party desires - Actions are non-contractible aintaining status quo- admonish the other to be truthful in order to maintain their good name M “what people think”. rojection- tendency of individual to attribute their own thoughts, feeling or motivations P to the other party in a negotiation “Assume the other party thinks or feels the same way they do” Frame - perspective or lens through which a party views the negotiation.
