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Negotiation 101

Negotiation 101

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Negotiation 101

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  1. Negotiation 101 Lisa M. Walke, MD Yale University Cynthia J. Brown, MD, MSPH University of Alabama at Birmingham

  2. Objectives • Recognize negotiation is a key component of most personal and professional interactions. • Knowledge of the 5 most common negotiation styles. • Understand personal negotiation styles, how to utilize them effectively, and benefits of mastering more than one style. • Practice negotiation

  3. Defining Negotiation An interactive communication process that may take place whenever you want something from someone else or they want something from you. - Teenager wants the car keys - Couple deciding where to go out to dinner - Family deciding where to go for vacation - You want to change your percent effort

  4. Who appears more confident?

  5. Importance of knowing your bargaining style “Everyone has his or her own negotiating style, and the worst thing you can do is to adopt a negotiating technique that does not feel comfortable because credibility, based on an evident sincerity, is the most important single asset of a good negotiator.” G. Richard Shell, JD

  6. Bargaining Styles Assessment Tool • Take 5 minutes to complete the bargaining styles assessment tool • Select 1 statement per pair that most reflects your position, follow your 1st impression • Record the letter (A, B, C, D or E) in the box to the right of each pair of statements • Tally all of your As, Bs, etc. in the score sheet at the bottom of the 2nd page

  7. Assessment Tool Scoring • A = Competing • B = Collaborating • C = Compromising • D = Avoiding • E = Accommodating • Strong inclination to use that type of behavior when negotiating • Score ≥ 7 (Competing, Avoiding, Accommodating) • Score ≥ 8 (Collaborating, Compromising) • Weak Inclination to use that type of behavior • Score ≤ 5 (Compromising) • Score ≤ 4 (Collaborating) • Score ≤ 3 (Competing, Avoiding, Accommodating)

  8. Bargaining Styles

  9. Balance Concerns • Perceived conflict over stakes & importance of relationship b/w parties both high • Ex: Acquisition, Parent-Child relationship • Best Strategies • Collaboration • Compromise

  10. Relationships • Perceived conflict over stakes is low but perceived importance of relationship b/w parties is high • Ex: Job offer, Research or Clinic team • Best Strategies • Accommodation • Collaboration • Compromise

  11. Transactions • Perceived conflict over stakes is high but perceived importance of relationship b/w parties is low • Ex: House Sale, Political Election • Best Strategies • Competition • Collaboration • Compromise

  12. Implied Coordination • Perceived conflict over stakes & perceived importance of relationship b/w parties are both low • Ex: Airplane seating • Best Strategies • Avoidance • Accommodation • Compromise

  13. Four Stages of Negotiation • Preparation • Information Exchange • Bargaining • Commitment

  14. Four Stages of Negotiation • Preparation • Assess situation, transaction or relationship • Adjust style to situation • Take other side’s point of view • Determine goals • Information Exchange • Bargaining • Commitment

  15. Four Stages of Negotiation • Preparation • Information Exchange • Build rapport • Uncover underlying interests, issues and perceptions • Test expectations • Bargaining • Commitment

  16. Four Stages of Negotiation • Preparation • Information Exchange • Bargaining • Opening • Making concessions • Commitment

  17. Four Stages of Negotiation • Preparation • Information Exchange • Bargaining • Commitment • Do both sides have something to lose if they break their promise?

  18. BATNAs and ZOPAs • Best Alternative to a Negotiated Agreement (BATNA) • Determines course of action if agreement not reached within certain time frame. • prohibits negotiator from accepting unfavorable agreement as it provides better option outside the negotiation. • permits greater flexibility /allows room for innovation. • If have strong BATNA, have more power as possess attractive alternative if acceptable agreement is not achieved. • Zone of Possible Agreement (ZOPA) • Agreement acceptable to both parties

  19. Leverage • Whichever party thinks have least to lose from ‘no deal’ has most leverage and vice versa. • Leverage based on perception as much as reality. • Leverage is comparative across the table. • Do not compare your situation with ideal or worst-case scenario; Compare with theirs. • Leverage is dynamic, can change in an instant as perceptions, conditions and players change.

  20. Time to Negotiate! • “There is no substitute for practice in negotiation. No one ever got better at public speaking just by reading a book and the same is true for bargaining. You must learn from doing.” • G. Richard Shell, JD • Select a partner; decide who will be A & who will be B • On the table are 2 piles of envelopes, select the envelope with your letter • Take 2 minutes to read your instruction sheet • You have 8 minutes to complete the exercise

  21. Let’s debrief • What price did you agree upon for the car? • Did the buyer/seller disclose their true motivation for this purchase/sale? • What bargaining styles did each of you use? • Which style was most effective? • What aspect of this negotiations exercise made the greatest impression upon you?

  22. Summary Bargaining Styles • A = Competing • B = Collaborating • C = Compromising • D = Avoiding • E = Accommodating Four Stages of Negotiation • Preparation • Information Exchange • Bargaining • Commitment