1 / 18

Building Blocks of Negotiation

Building Blocks of Negotiation. What Is Negotiation?. Leigh Thompson: “An interpersonal decision-making process necessary whenever we cannot achieve our objectives single-handedly” Ex. Buying a car; buying a house; things at work Most people are not great negotiators b/c of: Faulty feedback

chaman
Download Presentation

Building Blocks of Negotiation

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Building Blocks of Negotiation

  2. What Is Negotiation? • Leigh Thompson: “An interpersonal decision-making process necessary whenever we cannot achieve our objectives single-handedly” • Ex. Buying a car; buying a house; things at work • Most people are not great negotiators b/c of: • Faulty feedback • Confirmation bias • Ego-centrism • Satisficing—settling for less • Self-Reinforcing Incompetence

  3. Myths of Negotiation • 1. Negotiations are fixed-sum. • 2. You need to be either tough or soft. • 3. Good negotiators are born. • 4. Experience is a great teacher. • 5. Good negotiators take risks. • 6. Good negotiators rely on intuition.

  4. Preparation Is the Key • Situation & parties • Issues & bargaining mix • Interests • Goals • Bids & tactics • Limits & alternatives

  5. BATNA • Best Alternative to a Negotiated Agreement (Fisher & Ury, 1981) • Good for: • Knowing when to walk away • Testing proposals • Accepting things that are superior to your BATNA and rejecting things that are inferior to your BATNA

  6. BATNA • Realistic, not idealistic • Not static • Stick to it

  7. Example: Car Buying How do you strengthen your BATNA? What makes a dealer’s BATNA stronger?

  8. Car Buying Your AP Dealer’s RP Your RP Dealer’s AP $18,000 $20,000 $22,000 $15,000 Bargaining Zone $19,000=compromise

  9. Example: Job Hunting • Your BATNA • How is it strengthened? • Recruiter’s BATNA • How is it weakened? • How is it strengthened?

  10. Reservation Point • Lowest point you can go • Ex: If BP offered you a job, what would Exxon-Mobile have to offer to match it? • Includes any relevant issues • Determines when you should walk away

  11. Reservation Point – Job Hunting Exxon’s Offer? Shell salary offer BP salary offer $46,000 $50,000

  12. Your RP - BP Exxon’s TP Your TP Exon’s RP $50,000 $52,000 $55,000 $57,000 Target Point • Your ideal goal

  13. Your RP - BP Exxon’s TP Your TP Exon’s RP $50,000 $52,000 $55,000 $57,000 Bargaining Range Exxon’s Bargaining Range Your Bargaining Range

  14. Exon’s Bargaining Range Your Bargaining Range Your RP - BP Exxon’s TP Your TP Exon’s RP $50,000 $52,000 $55,000 $57,000 Bargaining Zone • The range of negotiated outcomes that are acceptable to all parties

  15. Exxon’s TP Exxon’s RP Your RP Your TP $40,000 $45,000 $50,000 $57,000 Negative Bargaining Zone Exxon’s Bargaining Range Your Bargaining Range

  16. So What? • BATNA & Reservation Point • Judge agreements • Improve agreements • No raw deals • Target Point • Something to shoot for • Bargaining Range • Determines flexibility in strategy & concessions • Bargaining Zone • Know if agreement is possible

  17. Anchor Point • Reference point • Adjusted as appropriate • Can be arbitrary • Set your anchor first!…sometimes • (Make the 1st offer w/ a good anchor)

  18. The big idea Preparation is the key. No preparation = no success.

More Related