Now What…..

1. Now What….. • I want the last remaining orange and so do you

2. Focus on interests, not positions: • Behind opposed positions lie shared and/or compatible interests • Each side likely has multiple interests that may be valued differently by each party • Find these compatible interests and then make trade-offs • Complete satisfaction for both parties

3. Mythical Fixed-Pie • Assume that there can only be one winner and one loser (distributive bargaining approach) • However, only a small percentage of organizational negotiations are purely distributive, involving just one resource or just one issue • Consider: • Price, delivery date, financing, service, relationships

4. Continued • Assumption that our interests conflict with the other side • “What’s good for them must be bad for us” • Terms that appear beneficial when suggested by your side often seem disadvantageous when proposed by the other side • The fixed-pie mentality is prevalent

5. SALT (U.S. & Russia) • “I have had a philosophy for some time in regard to SALT, and it goes like this: the Russians will not accept a SALT treaty that is not in their best interest, and it seems to me that if it is in their best interest, it can’t be in our best interest” • Floyd Spence, U.S. Congress

6. Arms Reduction Proposal • The sameproposal was reviewed by two groups of people in the U.S.A. • Group 1: The arms reduction proposal was offered by Russian President Gorbachev • How favorable was it to Russia, the U.S.? • 56% said it strongly favored Russia • 16% said it favored the U.S. • 28% said it favored both sides equally

7. Group 2: The arms reduction proposal was offered by U.S. President Reagan • 27% said it favored the USSR. • 27% said it favored the US • 46% said it favored both sides equally

8. Finding the trade-offs: Easy or not so easy? • Pairs were presented with a negotiation involving multiple issues. On two of these issues, the opposing sides had compatible interests (similar to an interest in the orange peel versus an interest in the fruit) • What percentage of the time did the negotiators fail to trade-off? • 40% • Instead of realizing the gains, they tended to compromise on each one

9. Two students in a library, one wants the window open, the other wants it closed. A loud argument breaks out. • How might this be resolved? • Fixed-pie assumptions and • Anger closes our minds to alternative solutions • Expand the pie • There may be just ONE way to satisfy a position, but there are MULTIPLE ways to satisfy interests. • Inventing options for mutual gain

10. Negotiation & Conflict-handling Styles High Competition Collaboration Compromising Interest in achieving OWN goals Avoidance Accommodation Low Low High Interest in helping the other party to achieve its goals

11. Common Negotiation Styles • Competing (distributive mind-set) • Your gain is my loss • Compromising (the middle ground) • “Let’s split the difference” • Seems like a good strategy: Isn’t it better than no deal at all? • However, the middle ground results in incomplete satisfaction for both parties • “Leaving money on the table”

12. Distributive vs. Integrative Bargaining Distributive Integrative Characteristics Bargaining Bargaining Available resources: Primary MINDSET: Primary interests: View of relationships: Fixed amount of resources to be divided I win, you lose Opposed to each other Short term Variable amount of resources to be divided I win, you win Convergent with each other Long term

13. Principled Negotiation: Reaching Agreement, Without Giving In • Focus on interests, not positions • Do you know your interests? • Identify and value your sides interests • Ranking process is one way to start • Consult with team to help valuation process

14. Presentation Approaches • Option 1: “I want that orange because I am interested in baking an orange cake and I need the peel” • Option 2: “I am interested in baking an orange cake and I need the peel, that’s why I want that orange” • How are these options the same? Different • Which approach will most effectively convey your interests to the other side? Why?

15. Find out the other party’s interests and preferences • Ask questions • Listen to the response!

16. Concessions • Find an issue of lower value to you and offer a concession on that issue • Other party will typically reciprocate • Contingent concessions • I can give here if you can work with me on another issue

17. Make multiple offers simultaneously • Each is different, yet results in the same level of profitability for you

18. Emotional Strategy • Benefits of a good mood • More creative, more ideas • Found most trade-offs for joint gain • Highest level of value • Detriments of anger • Found fewest trade-offs • Least value

19. Expressed emotion • “Put on a happy face” • Your smile is often reciprocated by the other side • Positive feelings and behaviors • Finding trade-offs • Offering concessions

20. Where do we start? A. Start with the easy issues first! B. Start with the most difficult ones first! C. Either A or B: It depends D. None of the above

21. Principled Negotiation: “Getting to Yes” • Separate the people from the problem • Perceive yourself working side by side with the other party to resolve the issue • Resist the temptation to “attack” people • Physically/actually sit on the same side of the table • Together we can attack this problem

22. Insist on objective criteria • Search for a standard such as market value, expert opinion, law • This way, neither party is “giving in” to the other and a fair agreement is possible • We are asking for $200,000 in fees • How did you arrive at that figure? • Is it supported by market data?

23. “It’s company policy – there is nothing I can do”

24. Where do we start? A. Start with the easy issues first! B. Start with the most difficult ones first! C. Either A or B: It depends D. None of the above

25. Issues in Negotiation • Anchoring • Putting too much weight on an initial offer