Lewicki_EON_2024Rel_Chap04_PPT_ACCESS (2).pptx

chapter 4 negotiations slides

1. Essentials of Negotiation 2024 Release Chapter 04: Negotiation: Strategy and Planning © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.

2. Negotiation: Strategy and Planning With effective planning and goal setting, most negotiators can achieve their objectives. Without them, results occur more by chance than by effort. Although the model suggests a linear relationship, many begin midway in the sequence and work backward or forward until the steps are aligned. 2

3. Goals—The Focus That Drives a Negotiation Strategy To determine your goals, consider the following: Substantive goals—money. Intangible goals—winning. Procedural goals—shaping the agenda. Effective preparation requires negotiators do the following: List all goals they wish to achieve. Determine the priority among those goals. Identify potential multi-goal packages. Evaluate possible trade-offs among multiple goals. 3

4. Direct Effects of Goals on Choice of Strategy There are four ways that goals affect negotiations. Wishes are not goals, especially in negotiations. Your goals may be linked to the other party’s goals. There are limits to what realistic goals can be. Effective goals are concrete, specific, and measurable. Intangible goals may be maintaining a reputation or setting a precedent. A procedural goal could be that you will believe the sincerity of the other party after they make two concessions. Criteria used to determine goals depend on your objectives and your priorities. 4

5. Indirect Effects of Goals on Choice of Strategy Short-term thinking affects our choice of strategy. We may ignore the relationship with the other party in a concern for achieving a substantive outcome only. Some goals require a long-range plan. Progress may be incremental and require a strong relationship. Such goals should motive a negotiator toward a strategy valuing the relationship as much as the outcome. Relational goals tend to support the choice of a collaborative or integrative strategy. 5

6. Strategy Versus Tactics How are strategy and tactics related? Tactics are short-term, adaptive moves designed to enact broad strategies. Which in turn provide stability, continuity, and direction for tactical behaviors. Tactics are subordinated to strategy. 6

7. Accommodation, Competition, and Collaboration Competition is distributive or win–lose bargaining and collaboration is integrative or win–win negotiation. Like competition, accommodation is a win–lose strategy. Here, the imbalance is opposite—I lose, you win. Used to build or strengthen a relationship. In a long-term relationship, use accommodation early to build trust and to expect “reciprocity” in the future. 7

8. Drawbacks: Accommodation, Competition, and Collaboration Distributive strategies create “we–they” patterns. This leads to distortion in judgment and perspectives. Integrative negotiators may be taken advantage of. They may forget constituencies in favor of the process. Accommodative strategies set a pattern of avoiding conflict. Sets a precedent that is difficult to break. Efforts to restore balance may be met with resentment. 8

9. Getting Ready to Implement the Strategy: The Planning Process Define the negotiating goal. Define the major issues related to achieving the goal. Rank the issues; define the bargaining mix. Define the interests. Know your alternatives (BATNA ’ s). Know your limits, including a resistance point. Understand the other’s goals, issues, and resistance points. Set your own targets and opening bids. Assess the social context of the negotiation. Present the issues to the other party. Assumptions There is only a single planning process. Factors beyond the table may affect strategizing. Negotiations are one-to-one. The steps are linear. 9

10. Step 1. Defining the Negotiating Goal Goals can be substantive (tangible). Goals can be psychological (intangible). Goals can be procedural (how we get to agreement). Goals can have both direct and indirect effects on the choice of strategy. Knowing your goals is the most important step in developing a strategy and executing a negotiation. 10

11. Step 2. Defining the Major Issue Related to Achieving the Goal Single-issues dictate distributive negotiations. Multiple-issues lend to integrative negotiations. Whether to claim-value or create-value is the “negotiator’s dilemma.” Single-issues can be made integrative. Access the text alternative for slide images. Sources : After Lax, D. and J. Sebenius, The Manager as Negotiator: Bargaining for Cooperation and Competitive Gain , (New York: Free Press, 1986); Raiffa , H., The Art and Science of Negotiation , (Cambridge, MA: Belknap Press of Harvard University Press, 1982); Watkins, M., Breakthrough Business Negotiations , (San Francisco, CA: Jossey-Bass, 2002). 11

12. Step 3. Assembling the Issues, Ranking Their Importance, and Defining the Bargaining Mix Assemble all the issues into a comprehensive list. The combined lists from both sides is the bargaining mix. Determine each issue’s importance. Use rank-order, grouping, or weighted measures. Set priorities for both tangible and intangible issues. Specify a bargaining range for each issue in the mix. Determine whether the issues are linked or separate. If separate, they can be easily added or subtracted. If connected, settlement on one is linked to settlement on the others. 12

13. Step 4. Defining the Interests Positions are what a negotiator wants—interests are why they want them. Ask “why” questions to surface values, needs, or principles. Interests may be substantive, process-based, or relationship-based. Interests may also be based on intangibles of negotiation. Surfacing interests may be essential to understanding the other side’s position. 13

14. Step 5. Knowing Your Alternatives (BATNA ’ s) Good preparation requires establishing alternatives and limits. BATNA ’ s allow negotiators to meet their needs in other ways. Alternatives are very important as they define whether the current outcome is better than another possibility. The better the alternatives, the more power you have to walk away from the current deal and still meet your needs. 14

15. Step 6. Knowing Your Limits, Including a Resistance Point A resistance point is where you stop negotiations as any settlement beyond this point is not minimally acceptable. A seller’s resistance point is the least they will take. A buyer’s resistance point is the most they will pay. Clear resistance points help keep people from agreeing to deals that they later realize were not very smart. 15

16. Step 7. Analyzing and Understanding the Other Party’s Goals, Issues, and Resistance Points Find a way to see the negotiation from the other party’s eyes. The goal is to understand their approach and what they are likely to want—then compare against your own. Key information of the greatest importance. Broad, overall goals and objectives. Issues and likely bargaining mix. Interests and needs. Resistance point and alternative. Such information may be difficult to obtain before negotiation; collect as much information as possible during opening stages. 16

17. Step 8. Setting One’s Own Targets and Opening Bids Targets should be specific, difficult but achievable, and verifiable. Target setting requires proactive thinking about your own objectives. Target setting may require considering how to package several issues and objectives. Target setting requires an understanding of trade-offs and throwaways. Similarly, there are numerous ways to set an initial asking price. It may be the best possible outcome, an ideal solution, or a better outcome than last time. Overconfidence leads to unrealistic openings; the other party may laugh, get angry, or walk away before responding. 17

18. Step 9. Assessing the Social Context of a Negotiation One way to assess all the key parties in a negotiation is to complete a “field analysis.” Access the text alternative for slide images. 18

19. Step 10. Presenting Issues to the Other Party: Substance and Process Presenting and framing the issues. What facts support my point of view? How can I present the facts so they are most convincing? Planning the process and structuring the context. What agenda should we follow? Where should we negotiate? What is the time period of the negotiation? What might be done if negotiation fails? How will we keep track of what is agreed to? Have we created a mechanism for modifying the deal if necessary? 19

20. End of Main Content © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.