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Chapter 10

Chapter 10. Closing the Deal. Agree or Walk Away?. 10-2. Classic conflict – at least two interdependent parties, with incompatible goals What to do when negotiating isn’t working. Negotiating Skills. 10-3. Skill 10.1: Create an agreement template

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Chapter 10

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  1. Chapter 10 Closing the Deal

  2. Agree or Walk Away? 10-2 • Classic conflict – at least two interdependent parties, with incompatible goals • What to do when negotiating isn’t working

  3. Negotiating Skills 10-3 • Skill 10.1: Create an agreement template • Skill 10.2: Claim or retain value at the end of a negotiation • Skill 10.3: Identify the causes for stalemate and techniques to move past them • Skill 10.4: Learn how to avoid or eliminate bargaining traps • Skill 10.5: Build a relationship in a negotiation

  4. Chapter Case: To Agree or Not to Agree, That Is the Question 10-4 • Four-party agreement on the operation of a multimillion dollar public hospital came down to final signatures on the deal • Governor wanted one more concession from city and county officials • Parties could not legally agree with final demand, so agreed to use “best efforts” to issue $12 million in bonds • Closing went forward on deal

  5. Agreement Template 10-5 • Document that includes critical issues • Memorializes important aspects of deal and “what-ifs” • Includes: parties, intent, roles, consequences, exit strategy

  6. Put It in Writing 10-6 • Written deal serves three purposes • Communication – make sure all heard the same deal • Commitment– signing the deal shows investment • Contract– evidence of deal may be binding

  7. Tactics at End of Negotiation 10-7 • To avoid concessions • Silence • Walkaway • Promise an exchange • To exact concessions • Nickel and diming

  8. Moving Past Stalemate 10-8 • Review the concessions both parties have already made • Utilize a third party • Handle emotions • Move to informal negotiations

  9. Traps to AvoidHandling Emotions 10-9 • Label your opponent’s behavior to yourself • Acknowledge your own emotions • Recognize emotions may make you uncomfortable • Identify what’s causing the emotion • Express your emotions appropriately

  10. Tactics for Success: Asking the Right Questions 10-10 • Use open-ended questions to elicit creative thinking: “Do you think?” • Use window question that calls for opponent to explain position: “What were you saying about . . .?” • Use series of questions to promote dialogue: “Exactly what . . .? Is there flexibility. . .?” • Question to uncover hidden concerns: “Am I missing something?” • Question to enhance creativity: “Have you considered. . .?”

  11. Bargaining Traps 10-11 • Conflict spiral occurs when one party initiates a contentious communication and the other party responds in kind; which elicits another contentious communication and so on • How to break conflict spirals? • Refocus negotiations by not reciprocating • Respond with mix of contentious and noncontentious • Label behavior as unproductive

  12. Bargaining Traps (cont’d) 10-12 • Psychological entrapment occurs when a party escalates commitment to a previously chosen, though failing, course of action and becomes so invested in reaching agreement, no longer cares if it’s a good agreement • To avoid psychological entrapment • Make sure to establish BATNA at start • Be willing to walk away rather than give into anything less than original BATNA

  13. Joint Problem Solving to Avoid Bargaining Traps 10-13 • Diagnose the problem • Reexamine goals to set realistic target • Reframing a change as “new direction” not as “giving in” • Reduce target

  14. Other Barriers to Agreement 10-14 • Ideologically based conflict • More difficult because tradeoffs and compromises are seen as selling out • One sees one’s own position as “fairer” because based on one’s ideals • Often results from one representing his or her own “group” against others

  15. Other Barriers to Agreement (cont’d) 10-15 • Decision-making conflict arises when parties must • Communicate needs without revealing too much • Assimilate information quickly • Understand the needs of the other party

  16. Barriers to Agreement (cont’d) 10-16 An irrational opponent • Assume your opponent is not really irrational and proceed rationally • Recognize it as a strategy and respond by being cooperative • Treat your opponent as irrational and be prepared to walk away

  17. Building a Relationship 10-17 • Use skilled negotiators • Follow up on agreement after it is implemented • Establish face-to-face meetings as agreement is being implemented • Recognize may need to renegotiate some parts of deal

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