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CHAPTER 1

CHAPTER 1. The Nature of Negotiation. Introduction. Negotiation is something that everyone does, almost daily. STUDING NEGOTIATION. Within organizations, at one time the study was limited to collective bargaining & to purchasing.

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CHAPTER 1

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  1. CHAPTER 1 The Nature of Negotiation

  2. Introduction Negotiation is something that everyone does, almost daily

  3. STUDING NEGOTIATION • Within organizations, at one time the study was limited to collective bargaining & to purchasing. • By the late 1970s and early 1980s, there was an explosion of research.

  4. Methods • Williams: cooperative & competitive • Menkel-Meadow: problem-solving & adversarial • Lax & Sebenius: value-creating & value-claiming • Fisher: hard bargainer, soft bargainer, principled bargainer • Gifford: competitive, cooperative, integrative

  5. The Sandtraps of Negotiation • Leaving money on the table (“lose-lose” negotiation) • Settling for too little (the “winner’s curse”) • Walking away from the table • Settling for terms worse than your alternative (the “agreement bias”)

  6. WHY ARE PEOPLE INEFFECTIVE NEGOTIATORS? • Faulty feedback • Confirmation bias • Egocentrism • Satisficing • Self-reinforced Incompetence

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

  8. Negotiations • Negotiations occur for several reasons: • To agree on how to share or divide a limited resource • To create something new that neither party could attain on his or her own • To resolve a problem or dispute between the parties

  9. Distributive Zero-Sum Positional Competitive Claiming value Integrated Win/Win “Interest Based” Cooperative Creating value NEGOTIATION METHODS

  10. Interdependence In negotiation, parties need each other to achieve their preferred outcomes or objectives • This mutual dependency is called interdependence • Interdependent goals are an important aspect of negotiation • Win-lose: I win, you lose • Win-win: Opportunities for both parties to gain

  11. Interdependence • Interdependent parties are characterized by interlocking goals • Having interdependent goals does not mean that everyone wants or needs exactly the same thing • A mix of convergent and conflicting goals characterizes many interdependent relationships

  12. Types of InterdependenceAffect Outcomes • Interdependence and the structure of the situation shape processes and outcomes • Zero-sum or distributive – one winner • Non-zero-sum or integrative – mutual gains situation

  13. Alternatives Shape Interdependence • Evaluating interdependence depends heavily on the alternatives to working together • The desirability to work together is better for outcomes • Best available alternative: BATNA (acronym for Best Alternative to a Negotiated Agreement)

  14. Value Claiming and Value Creation • Opportunities to “win” or share resources • Claiming value: result of zero-sum or distributive situations where the object is to gain largest piece of resource • Creating value: result of non-zero-sum or integrative situation where object is to have both parties do well

  15. Value Claiming and Value Creation • Most actual negotiations are a combination of claiming and creating value processes • Negotiators must be able to recognize situations that require more of one approach than the other • Negotiators must be versatile in their comfort and use of both major strategic approaches • Negotiator perceptions of situations tend to be biased toward seeing problems as more distributive/ competitive than they really are

  16. Value Claiming and Value Creation Value differences that exist between negotiators include: • Differences in interest • Differences in judgments about the future • Differences in risk tolerance • Differences in time preferences

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