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Chapter 5 Choosing Your Strategy

Chapter 5 Choosing Your Strategy. Win-lose strategies: Recap. Also known as bargaining, haggling or positional bargaining Get what you want using power Power generates resistance as reaction Conditions: big power difference & short-term concern Riskier on average than win-win .

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Chapter 5 Choosing Your Strategy

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  1. Chapter 5 Choosing Your Strategy

  2. Win-lose strategies: Recap • Also known as bargaining, haggling or positional bargaining • Get what you want using power • Power generates resistance as reaction • Conditions: big power difference & short-term concern • Riskier on average than win-win

  3. POSITION A or No Deal • POSITION B or No Deal • Final Offer or No Deal • Final Offer or No Deal • Last Offer or No Deal • Last Offer or No Deal • FinalLast Offer or No Deal • FinalLast Offer or No Deal • Compromise orNo deal The bargaining process • Simple, well-known, intuitive • “TAKE IT OR LEAVE IT” (“Tioli”)

  4. The bargaining styles

  5. The bargaining tension • Hard party: Tries to squeeze the most possible value • Soft party: Tries to build a relationship at any cost Any combination sacrifices value: Still “take it or leave it”

  6. Win-win strategies: Recap • Get what you want independently from power • Collaboration and communication: no resistance • Tit-for-tat: proactive, clear communication towards a value-focused process • Higher value at lower risk than win-lose Value

  7. Win-win processes

  8. Negotiation: More than one • Boulwarism: negotiation strategy from 1950s • Two main steps: • Data analysis to determine maximum wage • Present “first, last and best offer” on a “take-it-or-leave it” basis

  9. NEGOTIATION RELATIONSHIP SUBSTANCE COMMUNICATION Trust Value Process The three negotiations • Boulwarism did not consider all 3 negotiations: Unilateral approaches create a power play perception: RISKY!

  10. NEGOTIATION RELATIONSHIP SUBSTANCE COMMUNICATION Manipulation Power differences Information asymmetry The three win-lose negotiations • Win-lose strategies treat each negotiation as a different power source

  11. NEGOTIATION RELATIONSHIP SUBSTANCE COMMUNICATION Trust Value Process The three win-win negotiations • Win-win strategies explore all three negotiations to unlock their value potential • Independent • Simultaneous • Parallel • Interconnected

  12. The three win-win negotiations Ultimate purpose of relationship & communication negotiation: To maximize the substance negotiation value NEGOTIATION RELATIONSHIP SUBSTANCE COMMUNICATION Trust Value Process

  13. The three negotiations in detail

  14. Substance negotiation

  15. Focus on value • Demonstrates to the other party that there is no need for a race for power • Can be difficult in two situations: • The only thing they concentrate on is power • Easy power moves continuously present themselves

  16. Promote the dialogue pattern • A balancing effort to reduce power differences • Reduces or eliminates unilateral moves • Every move can be a value or power move • When reciprocating value-focused moves: Reward Good Behavior

  17. Relationship negotiation

  18. Negotiate autonomously • Mixing the 3 negotiations rewards bad behavior • Example: FARC in Colombia • The president gave away piece of land (substance) in hopes of starting a relationship + communication process • Established a negative negotiation pattern of unilateral substance demands

  19. Avoid trading between negotiations • Separate and negotiate substance and relationship through different channels “Hard on the problem, soft on the person”

  20. Communication negotiation

  21. Learning reduces information asymmetry and the temptation to bargain. Promote learning • Learn as much as possible from the available data • Boulwarism failed the hardest: Did not learn what the unions’ interests really were

  22. Proactively diagnose • Seek further information to make the best possible decision • DIAGNOSE to clarify before deciding

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