Negotiation & Bargaining

05/02/2023 1

Negotiate to Win

Win what?

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why N/B ?

Overview?POSITIVE NEGATIVE

PRODUCTS Sale Purchase

DissatisfactionDispute

SERVICES Terms ofReference

BreachDispute

RELATIONSHIPS Courting Maintaining

GrievanceBreak-down

Ransom

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Typical ‘negotiation’Differences in InterdependencyWish to resolveBegins with statements of opening Positions

– most preferred outcomesDefend Position & critique other’sResponse – suggested alterations of other’s

position and proposed changes of own position, with reasons for same

Concessional process, to reduce difference range, and come to common ground

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Anatomy

Resistance Value - RVBargaining Range – Zone Of Possible

Agreement - ZOPATarget Value - Concessions Settlement Point – Agreed ValueBATNA

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Anchoring

who should make the first offer?

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Anatomy

Bargaining MixPriceMode of paymentClosing dateAdvance, if anyRepairs Fittings / accessories includedAny other issues involved

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What is NAB

Claiming Value

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Possible Outcomes

YES NO

NO YES

YES YES

NO NO

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PARTY BPARTY A

What’s the difference?

Negotiation

Bargaining

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Moving (self/other) from NO to YES

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Voluntary Decision-making

What is N/B?

What is N/B

Show the other that his position is not the best&

In fact Your solution is the best !

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Concession Pattern05/02/2023 13

Number of concessions

Size

of c

once

ssio

ns

Goals

Set high GoalsOutcome is directly proportionate

to Aspirations(other things remaining equal)

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Kids Know it all the time !

Hardball tactics

1. Good Cop/Bad Cop2. Lowball/High Ball – ridiculously high or low

offer3. Bogey 4. Nibble – ask for a small add-on5. Chicken – terminal threat6. Intimidation – anger, threat, legitimacy, guilt,

unequal team, 7. Aggressive behaviour – pushy, ask for

explanation, asking for moon, etc8. Snow job – overwhelm with info etc

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Managing Hardball tactics

1. GCBC – tell/ask them, expose2. LBHB – ask for reasonable offer, state your

understanding to contrary, ask them to give reasons, threaten to walk off, respond with extreme counter

3. BG – prepare well, notice shift, suspect BG, question why, check background info

4. NBL – “what else do you want”, counter-NBL5. CHKN – downplay, ignore, reframe, counter6. INTN – ignore, make a team, state the process7. AB – halt & discuss process, team, state merits8. SJ – own preparation, probe – ask questions, look for

inconsistencies

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What is the best outcome?

Both come out of the N/B each thinking that he got the better deal

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No2Yes - How?

Influence,To alter Perception(s)

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The best general is one who never fights (!)

- sun tzu

Best outcome

Results – outcome –By themselves

Do not matter !

Outcome w.r.t. Expectations

Matter !!

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Pareto Efficient Frontier

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IncreasingValue toBuyer

IncreasingValue toSeller

CreatingValue

Claiming Value

Pareto EfficientFrontier

Pareto Efficient Frontier

PEF is the point or locus beyond which there is no agreement that would make any party better off without decreasing the outcome to the other party.Hence Integrative Negotiation can also be defined as the process of identifying Pareto Improvements till Pareto Efficient Solution is reached. To reach PE is to ensure that no money is left behind on the table after the NAB.

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Value creation – preparation strategies

Identify your multiple interestsCreate a scoring system – list all issues,

allocate weights for each (totaling to 10/100), rate each on a common scale, work out the weighted score

Calculate the package RV, using the scoring above

Identify other party’s multiple interests

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Value creationexecution strategies

Negotiate multiple issues simultaneouslyMake package offersLeverage all types of differences to create

value – priorities, expectations, risk-taking, time, outcome vs relationship,

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post-settlement negotiation !!

PSN – when more value can be created.Last Settlement becomes the new BATNANew, P-S-Settlement only if it is an

improved settlement

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Moving (self/other) from NO to YES

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Voluntary Decision-making

What is Influencing?

What is influencing?

Show the other that his position is not the best&

In fact Your solution is the best !

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Outcome - Perception

its not if you are a loser – but if you feel like a loser

the role of REFERENCE POINTS

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Happiness ??

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REALITY - OUTCOME

Positive GAP

EXPECTATIONS

Perspective

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“If you don’t understand the viewpoint,you don’t understand the Price.” The PriceArthur Miller

Be other-directed

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Framing

Perspective – schematic

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Perspective

Stake-holder

Perspective

Perceiver Perceived SubjectivityUnique Spacio-Temporal coordinatesCognitive coordinates

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Cognitive states05/02/2023 33

SPIRIT

INTELLECT

EMOTIONS

BODYMIND

SPIRIT

INTELLECT

EMOTIONS

BODYMIND

Dual Concerns model

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Relational OutcomeImportant?

Yes

Yes

No

No

Substantive outcomeImportant?

Collaboration Accommodation

Competition Avoidance

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substantive outcome

relationship

Relationship mgmt

Commonalities – identification – max. # of denominations

AffinitiesCare & concernLong-term outlook > goodwillMutual respecttrust > faith Affection

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Help Me !

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Do not stereotype

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We like people who like us

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When you get something, you reciprocate

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What & How

How is more influential than WhatBut What is more important

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Be flexible in Howbe rigid on What

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Drivers

Information – other side seems to know more, about you and your needs, than you about them/theirs’

Power – other side always seems to have more power & authority than you think you have

Time – other side seems always to have less org. pressure, time constraints and restrictive dead-lines than you think you have

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Progress

Make concessions on How & TradablesConcessions given without effort is not

valuedKeep the toughest for the lastDeadlines produce actions

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To Know

What we do not know, we cannot controlNot knowing reality is the true source of

powerlessnessTo see reality as it IS, and without

passing judgment, so that subjectivities do not creep in, and you do not think wishfully

To see in terms of POWER, TIME & INFORMATION

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Information How much do you know of the other and

his needs ?How much does he know of you/yours ?Know max, show leastWithout seeming interested

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Time Who is under Deadlines ?Who has all the time in the world ?Who is under pressure ?Who is relaxed ?

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Start

Start with commonalities

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Start

Start SoftUse Socratic Ignorance

To surface Info

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No - is not Never

(Never – has ever)

Final - is not the end

all these are the Beginning!

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